CIOs and the Shock of the New

The Shock of the NewCIOs and IT Value in 2014

An archestra notebook.

© 2013 Malcolm Ryder / archestra

If not the CIO, then Who?

CIO Responsibilities

The Clinger-Cohen Act of 1996 created the Chief Information Officer position and assigns to the CIO these responsibilities:

1. Provide advice and assistance to senior managers on IT acquisition and management;

2. Develop, maintain, and facilitate implementation of a sound and integrated IT architecture*;

3. Promote effective and efficient design and operation of all major IRM processes for the agency, including improvements to work processes.

* IT architecture - an integrated framework for evolving or maintaining existing IT and acquiring new IT to achieve the agency's strategic goals and IRM goals.

– balancedscorecard.org

It’s good to be the king… of what?Most conventional definitions of the CIO role have been easily agreed, but for the future they constantly remain in debate. Additionally, the label “CIO” is now regularly threatened with being a misnomer. Information is still, by consensus, the lifeblood of the business, but the CIO is neither the primary owner nor primary source of the information assets – much less a legislative controller.

As there is an internal “circulatory system” of the information, it still makes sense that processes, knowledge, and vital functional components are all in the domain of a “chief officer” as the lead manager. However, because of innovations in the field, more and more external systems beyond the enterprise boundary are in use internally. And because of new technologies, the emphasis has actually shifted from what makes systems internal to what makes information internal.

Defining, enabling, and protecting “internal” is the most likely principle underlying the purpose of the CIO and the continuing pathway to that role being strategic. The strategic value comes from successfully “creating” and sustaining the collection of the key resource called internal information.

IT automation is essential to the CIO for realizing that plan, but the risk to the plan comes from the very same thing. Automation’s ability to decentralize control means that a CIO must prioritize information surveillance and information policy above concerns for IT facilities maintenance. Meanwhile, the definition of “internal” must evolve with the business, continually expressing how the “right” information is having the “right” impact at the designated times. Performing that updating and clarification depends on having a consultative relationship with other roles.

Therefore, an additional new threat to the CIO, stated somewhat dramatically, is an increasing tendency of independent Lines of Business to autonomously play the CTO role. Aided by IT automation, the decentralization of the CTO role – which either complicates or compromises the consultative relationship – is likely to be the single biggest threat to the CIO.

The CIO must explicitly project the terms and results of the distinctive value of the CIO role. This means insisting that the view of the CIO’s “effectiveness” is based on the right criteria for a CIO as distinguished from things that belong to other roles. Given the current world of IT evolving and expanding all around the company, the CIO’s most important role in business effectiveness is in managing IT change to sustain the value of internal information.

Internal:StrategicCaptive

Proprietary

Demythologizing Strategy

DECOMPOSING “STRATEGY”

• A decision selecting opportunity from all options

• A logic for the business importance of a related objective

• A plan prescribing the objective, position and impact of an enabling capability

“USING” STRATEGY• Creating• Assessing• Adopting• Executing

The “STRATEGY TABLE”• Propose• Analyze• Authorize• Assign

CxOs “at the Table”© 2013 Malcolm Ryder / archestra

Why Officers? Turn Goals into Reality

Office Of _the CxO_

Function

Accountability Responsibility

Impact

Executive:WhatWhy

Where

Operations:WhenHow

Which

PERFORMANCE EXECUTION

Make It HappenKnow What Happens

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CFO: chief Finance officer heads up strategic accountability for how financial conditions areaffecting internal business outcomes

COO: chief Operations officer heads up strategic accountability for how the organizational structure andbehavior are affecting internal business outcomes

CIO: chief Information officer heads up strategic accountability for how IT infrastructures are affecting internal business outcomes

Future External

Current Internal

PRODUCTS PROCESSES

Ability to ExecuteCompetitive Opportunity Systems and Support

strategy architecture resources

This particular comparison of issues and affinities is one way to explain what value is conventionally expected of certain business roles. It is not a set of exclusive or comprehensive job descriptions for any of the roles.

CTO: chief Technology officer heads up strategic accountability for how IT solutions should affect external business outcomes

CMO: chief Marketing officer heads up strategic accountability for how customer prospecting willaffect business outcomes

HR: chief HR officer heads up strategic accountability for how skills should affect external business outcomes

© 2013 Malcolm Ryder / archestra

New Technology: the Who Cares Test

Field Innovation

R&D

LOB

CTOCIO

Business roadmap

Architecture

Implementation

Performance

Operation

Effectiveness

Deployment

IT Portfolio

utilize

LOB: Necessary (critical to business objective)CTO: Viable (reasonably likely to succeed) CIO: Feasible (currently possible and practical)

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Realization of the Plan

Broker

Agent

New technology that passes evaluations for both viability and feasibility can wind up in the IT Portfolio for business-level management.

The CIO, having the highest awareness of feasibility, is then in the central position to serve as a business broker for IT implementations while serving as a business agent for IT architecture – from both sides establishing IT fitness to business purpose. The key factors are the quality of requirements analysis, and the control of change.

A semantics of business valueAligning execution and performance is not just a matter of determining “cause and effect”

Business Needs continue to change ahead of the current intentions and means. The complexity of the enterprise comes largely from continually renovating to keep the company fit to its purpose.

Needs are normally translated into defined demand. This definition includes accountability of what is requested and what is provided for. These aspects will be constrained by strategy, including its objectives, policies, and allowances established by management.

Fitness to purpose is a response translated into defined supply. This definition includes accountability of what is produced and what is employed. These aspects will be constrained by competency, including its agreements, and availability established by management.

In the big picture, demand issues concern planning while supply issues concern realization.

The relationship of planned to realized, not cause and effect, is the reason why accountability and responsibility is coordinated within the “Office Of X ”.

Internal Dynamics: the alignments of strategy and competency

Requested

Provided

Produced Employed

DEVELOPING

SUPPORTING

SOURCING

RESOURCING

DEM

AN

D

SUPPLYIn the abstract, strategy and competency aim, respectively, for optimal states of planning and realization. But neither is fixed. Rather, each is a continual “best effort” in progress.

When the company’s intrinsic demand (strategy) and supply (competency) intersect, the resulting configuration of the enterprise, including both internal and external actors, addresses four general requirements. Each general requirement is an area in which distinctive value is generated. Four general types of requests represent the areas of business value generation in IT.

Value Chaining

Requested

Provided

Produced Employed

DEVELOPING

SUPPORTING

SOURCING

RESOURCING

DEM

AN

D

SUPPLYThere is an implicit assumption that a business process can be designed to integrate the four areas of value.

Develop: order and specifySource: contract and buildResource: obtain and deliverSupport: implement and run

Such an integration tends to look like a “lifecycle” (fulfilling initial requirements), or more statically like a hierarchy of dependency (each higher layer needs the one below it as a preconditioning capability). Either way, the question arises of who controls the process and/or the hierarchy layers. Four primary areas of value may be pursued, independently (each with its own processes),

and/or co-operatively (with a common higher-level process).

The requirement for Management

DEM

AN

D

Request

Provide

Produce Employ

SUPPLY

order

run

implement

contract

obtain

build

deliver

specify

An enduring fact of the “enterprise” is that it is a community of entities. The distributions and compilations of work and responsibility change over time and across entities.

Yet the basic logical separations of value never change: asking for the right thing does not cause it to be made; having it made does not cause it to show up; having it show up does not cause it to be used. Instead, each progression must be possible, intended, and driven.

Each primary area of value establishes a difference of a certain significance. The difference is identified by the terms in the area that identify its key executive and operational concerns.

Executive:WhatWhy

Where

Operations:WhenHow

Which

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Snapshot of example related programs

Requested

Provided

Produced Employed

Innovation

IT Services / XaaS

KM / Professional Services

Organizational Change

DEM

AN

D

SUPPLYThis view highlights a landscape of four major internal value programs having increasingly explicit influences on each other.

Each program is in progress to bolster the business’s desired impact of internal outcomes on its external outcomes. A program’s impacts also include both current and future ones.

From the locations in the matrix of demand and supply, each program has a different basic impact, while each also exists in the context of the other three. Each program needs accountability for performance, and needs responsibility for execution. For a

given CxO, the question is whether a given program’s proper scope goes beyond that CxO or not. Additionally, a given program may be constrained by some other program.

The CIO Effect – Incorporate New TechnologyNew technology modifies infrastructure, with replacements, modifications or extensions. But the reason for the modifications must be represented by a business case. The importance of the business case is in its relevance to current and impending demand.

The semantics of Demand emphasize asking for the right thing, and committing to the investment in acquisition

Develop: order and specify

Resource: obtain and deliver

To address the downstream (future) readiness and value of internal information, the CIO should engage CTOs and CMOs to have them present requirements and options. Those data become part of the formulation of the IT Strategy that will need to be supported by programs and decisions focused on meeting Demand and the accountability of demand.

The CIO derives the IT Change Management Plan from the IT Strategy and is the chief change manager.

The IT Change Management Plan is demand-oriented (structured as a development that must be resourced) but it also publishes the sourcing adjustments to the accountable and responsible parties. In this effort, the COO is the natural partner of the CIO, clarifying the operational state of the business for review by other CxOs.

Requirements vetted by CMOs, and technology validation by CTOs, allows CIOs and COOs to manage

internal IT evolution in a rational, continual way.