IBM Institute for Business Value

Transcription

1 1 CIO Study India Point of View

2 The IBM Global CIO study is part of our ongoing C-suite study series THE C -SUITE SERIES The C-suite study series is produced by the IBM Institute for Business Value (IBV) The IBV develops fact-based strategic insights for senior business executives around critical industry-specific and cross-industry issues 2004 CEO Study 2006 CEO Study CIO Implication Study 2008 Since our first Global CEO Study in 2004, we have conducted in person research with CEOs and CFOs worldwide This research has given us a unique view into the issues, challenges and opportunities facing the top Executives in public and private sector organizations 2008 CFO Study 2008 CEO Study 2008 CEO Study (II) We extend this discussion today by focusing on the Chief Information Officers 2 CIO Study India Point of View

3 As a part of the Global CIO Study, the IBM team conducted in-depth discussions with CIOs in India across different industries The study represents different-sized organizations in 78 countries and 19 industries 100 interviews in India Industry Region PBT Growth Performance Organization Size Financial Services 27% Communications 7% Public 8% Distribution 31% East 9% North South 35% 24% Low Growth 29% Insufficient Information 11% High Growth 39% > % No Answer 5% < % Industrial 27% West 32% Medium Growth 21% % The team interviewed in-person, 100 CIOs in their offices, during January-April All interviews were conducted by IBM. CIOs represented all six sectors Our analysis used Profit before Tax (PBT) growth, relative to peers in their industries, to associate organizations with one of three growth levels: High, Medium or Low. For organizations where this information was not available, we used statistical correlation to assign levels, based on closest overall similarity of answers. 3 CIO Study India Point of View

4 Successful CIOs blend three pairs of roles to make innovation real, raise the ROI and expand the business impact of IT Insightful Visionary Savvy Value Creator Collaborative Business Leader Making Innovation real Raising the ROI of IT Expanding business impact Able Pragmatist Relentless Cost Cutter Inspiring IT Manager 4 CIO Study India Point of View

5 Making innovation real Insightful Visionary and Able Pragmatist 5 CIO Study India Point of View

6 The Insightful Visionary explores how technology drives innovation, and the Able Pragmatist enables innovative plans Insightful Visionary Truly integrates business and IT to innovate Proactively reaches out to the business to co-create and champion innovation Has a clear view of the top technological priorities that will enhance competitiveness Able Pragmatist Does practical things to help enable the business and corporate vision, as business leaders expect Widely uses collaboration and partnering technologies to get work done Uses third-party business and technology services to allow to focus on the top priorities Innovation is a continuous process, it should take Internal users and vendors into a partnership & be proactive with customers. - CIO, Distribution Sector 6 CIO Study India Point of View

7 Visionary Indian CIOs recognize successful innovation requires the integration of business and technology and leverage of partnering technology CIOs who are integrating business and technology to promote innovation 50% +46% 47% +49% 73% 70% For the IT organization For the entire organization CIOs who use collaboration and partnering technology to drive IT enabled innovation 43% +70% 57% Innovation is a key driver for Business - CIO, FSS Sector 31% +29% 40% For the IT organization For the entire organization Global India 7 CIO Study India Point of View

8 Indian CIOs are actively promoting innovation across both IT and business The way CIOs promote business and technology innovation within their organization Proactively push IT as an Innovation Element 55% 64% Reach out to business to co-create/champion Innovation 55% 57% Encouraging Innovation through awards/recognition 27% 50% Orchestration of Innovation Process 40% 47% India Global Creation of IT Centers of Excellence 35% 44% Collecting Innovative Ideas 34% 43% 8 CIO Study India Point of View

9 Indian CIOs think alike with their global peers in terms of top visionary plans for the future Top Visionary Plans for Indian CIOs Interviewed CIOs could select as many as they wanted Business Intelligence and Analytics Risk Management and Compliance Virtualization Self-Service Portals 83% 83% 71% 76% 76% 74% 70% Global #1 Global #3 Global #2 Mobility Solutions Business Process Management (BPM) Unified Communications 62% 65% 68% India Global Application Harmonization Technology-Driven Innovation 61% 61% SOA / Web Services Green IT 43% 60% 59% Green IT ranked higher as a visionary plan for India CIOs as compared to the global sample Customer and Partner Collaboration 59% 9 CIO Study India Point of View

10 Raising the ROI of IT Savvy Value Creator and Relentless Cost Cutter 10 CIO Study India Point of View

11 The Savvy Value Creator devises solutions to fit customers needs, while the Relentless Cost Cutter is vigilant about trimming expenses Savvy Value Creator Proactively crafts data into information Prepares for end-customers that will continuously explore new channels Knows that end-customers expect no less than world class integration and transparency Relentless Cost Cutter Aims for completely standardized, low-cost business processes Foresees a centralized infrastructure Focuses relentlessly on taking costs out of ongoing technology environment Our main driver is cost. With the economic environment being what it is and the biggest driver being cost, innovation is required to find new ways of lowering cost. - CIO, Industrial Sector 11 CIO Study India Point of View

12 Indian CIOs as well as global CIOs in spending considerable time on cost reduction and through infrastructure and process standardization Indian CIOs spend about 13% of their time taking costs out of the ongoing technology environment Monday Tuesday Wednesday Thursday Friday +13% Of the 60 or so hours per week, some 8 hours are spent cutting costs Cost Effectiveness Aligning Business & IT New System Implementation 26% 33% 39%c 43% 46% 52% Indian CIO Top Performance Evaluation Criterion Many CIOs foresee a strongly centralized infrastructure in five years and think business processes will be completely standardized and low cost 76% 76% Globalization has a huge impact. Some of the outcomes of globalization are standardization, cost reduction, ability to share resources. - CIO, Industrial Sector 53% 64% +21% Global India 12 CIO Study India Point of View

13 Indian CIOs are creating value by truly understanding customer needs and should continue focusing on converting data into actionable information Indian CIOs need to continue focusing on proactively crafting data into actionable information 43% -25% 57% CIOs expect to continuously explore new channels for end-customer interaction and anticipate much greater levels of integration and transparency with customers in the next five years 64% 76% +19% Organizations will scale down over a period of time and this will lead to a shortage of resources. Although automated systems evolve, the human touch in this aspect is essential. - CIO, Industrial Sector 56% 70% +25% Global India 13 CIO Study India Point of View

14 Expanding business impact Collaborative Business Leader and Inspiring IT Manager 14 CIO Study India Point of View

15 The Collaborative Business Leader knows the business and partners well, while the Inspiring IT Manager sharpens IT expertise Collaborative Business Leader Participates in strategy teams Presents the strategy jointly with team members on the senior management team Is often invited to meetings or even sits permanently on the most senior management team Inspiring IT Manager Actively promotes business and technology innovation through creation of IT centers of Excellence Manages IT agenda to allow for multitude of new and inspiring initiatives We strive to move away from the IT function and become more of a business enabler and partner - CIO, Distribution Sector 15 CIO Study India Point of View

16 Indian CIOs are moving beyond the traditional technology provider role to be a business leader CIOs who decide on business strategy as a member of the most senior management team How does business look at the role of IT Global India 33% +70% 56% Business and Corporate Vision enabler Industry Solutions Provider Process efficiency Facilitator 21% 24% 23% 26% 22% 25% 73% CIOs have non core technology objectives CIOs who directly report to the CEO Core technology Services Provider 32% 26% 1% No Answer Available 31% +29% 40% 46% Global CIOs Indian CIOs 16 CIO Study India Point of View

17 As Inspiring IT Managers, Indian CIOs foster IT expertise to extract and preserve critical business data Indian CIOs create IT Centers of Excellence to help realize business and technology innovation 44% 35% +26% Indian CIOs are focused on improving users access to data, as well as its quality Data is readily available for relevant users Data is reliable and secure 67% +14% 59% 73% 76% +4% Global CIOs Indian CIOs 17 CIO Study India Point of View

18 Tuning to context A CIO s Reality 18 CIO Study India Point of View

19 Indian CIOs feel that business model changes, technological factors and security factors are the top external challenges in the future Top external forces that will impact the IT organization over the next 3 years CIO Study 2009 Changes in Business Model 53% 62% Technological Factors 26% 39% 41% Security Factors 24% 36% Globalization Factors 32% 30% 45% Regulatory Concerns 30% 28% 21% Budgets People Skills 22% 28% 29% 45% 5% 79% Macroeconomic Factors 22% 33% 18% Internal Customers 22% 19% Environmental Issues 7% 8% 16% Other 6% 8% Global India Percentage number of respondents (CEOs) as per the CEO Study 2008 for India for the question on the external forces impacting the organization 19 CIO Study India Point of View

20 Indian CIOs are confident about managing change within the IT organization. From the previous C-suite studies, the CEOs expect their support in managing organization wide change CIOs who successfully managed change within the IT organization in the past 52% +37% 71% Past Change Success according to Indian CEOs Not successful Past Change moderately successful 13% 25% 62% 38% CEOs are not fully happy with change success Past Change fully successful Global India India Indian CIO implications From the IBM CEO Study of 2008, CEOs want their CIOs to help drive change across the enterprise Pressure to meet increased expectations while still being cost effective Increased influence in strategic decision making should help the CIOs drive change across the enterprise CEO expectations CEOs expect the CIOs to act as catalyst for change across ENTIRE organization and be an ally of the CEO ~40% of Indian CEOs feel they are not fully prepared for the change Indian CEOs (73%) expect substantial change in future Source: IBM Global CEO Study CIO Study India Point of View

21 The current CIO performance evaluation parameters may not be aligned to being a change agent across the enterprise Performance Criteria used by management to judge the 2009 CIO performance 21 CIO Study India Point of View Cost Effectiveness Aligning Business and IT New System Implementation (Innovation) Project Execution Technical Support Stability Technical Implementation/ M aintenance Resources Optimization Balance Score Card (Customer Satisfaction) Business Development / Transformat ion M anagement (IT) Budget Control M eeting Defined Objectives(KPIs) Organizational Flexibility Corporate Profitability Agility (Responsiveness) 6% 4% 5% 4% 4% 3% 6% 7% 13% 12% 12% 7% 11% 12% 10% 15% 15% 14% 15% 26% 24% 28% 27% 33% 33% 39% 43% 46% 47% 52% Non IT focused criteria Non IT focused criteria Note: Parameters with less than 10 responses have been excluded. (They are Integration, Green IT, Transparency Development, Corporate Strategy, Problem Resolution, Business Intelligence Initiatives) India Global

22 In summary, Indian CIOs have many characteristics, helping them make innovation real, raise the ROI of IT and expand their business impact SL CIO Characteristics CIO Average Rating CIO Objectives 1 Integrate business and technology to innovate for entire organization 0% 100% Making Innovation Real 2 Decide on business strategy as member of most senior management team 0% 100% Expanding Business Impact 3 Successful in managing change within IT organization 0% 100% Expanding Business Impact 4 Expect Business Model to change dramatically in next few years 0% 100% Expanding Business Impact 5 Use collaboration & partnering technology to drive innovation in IT organization 0% 100% Making Innovation Real 6 Expect the organization to be World class integrated & transparent 0% 100% Raising ROI of IT 7 Envision Green IT to be a lever for enhanced competitiveness 0% 100% Expanding Business Impact 8 Transform customer data into actionable information 0% 100% Raising ROI of IT Global CIO Indian CIO 22 CIO Study India Point of View

23 Our analysis shows that the Indian CIOs are meeting some of the expectations of the CEO and CFO *C-Suite expectations from the CIO CEO Study 2008 suggested that CIOs should be Experts on the Art of Possible Builders of nimble IT Infrastructure Authorities on risk management and information security Catalysts for Change across the enterprise as a service provider and ally of the CEO IT Managers delivering quality Innovators of Green IT Turn Data into Insight In the CIO Study 2009, we find that Indian CIOs Are Able Pragmatists who enable corporate vision 76% CIOs intend to use more centralized infrastructure 76% CIOs plan to raise emphasis on Risk Management & Compliance Are managing change (71%),but CEOs have higher expectation 44% CIOs are creating IT CoE s to a substantial extent 59% of CIOs think Green IT is important for competitiveness Need to more proactively transform data into insights Though CEO s expect the CIOs to be innovators of Green IT and Turn Data into insight, these two (Green Initiatives and Business Intelligence Initiatives) are very low on the performance evaluation criteria for the CIOs CFO Study 2008 suggested that CIOs should Breakdown the barriers to integration Establish global and process standards Improving quality of data that is an input to performance reports, risk insights Over 2/3rd of CIOs work closely with business 74% of CIOs think their org will have completely standardized processes in future Over 80% of CIOs have BI and Analytics as their top future plan Doing well Needs attention Needs substantial focus 23 CIO Study India Point of View

24 Increasing CIO success Stretching to excel in critical roles 24 CIO Study India Point of View

25 Insightful Visionary role is most pronounced for the Indian CIO while the Inspiring IT Manager role is the most subdued Using advanced statistical analysis, CIOs were profiled on the basis of six roles as axes on spider chart Global High and Low Growth India High and Low Growth Inspiring IT Manager Insightful Visionary Savvy Value Creator Indian and Global CIOs score highest on the Insightful Visionary role, primarily driven by prominence of innovation plans in their agenda Inspiring IT Manager Insightful Visionary Savvy Value Creator 3 3 Relentless Cost Cutter 2 Able Pragmatist Collaborative Business Leader Both High growth and Low growth Indian CIOs show similar traits on four of the six roles (except for the Able Pragmatist and Savvy Value Creator Role). While globally the high growth and low growth CIOs seem more divergent Relentless Cost Cutter 2 Able Pragmatist Collaborative Business Leader Each CIO role was scored based on responses to a discrete set of questions. The average overall score for each role was plotted within the three performance categories. With a possible range of 0 to 10, actual scores fell between 3 and 7. Note: Sample Size: Global =2354 (low Growth = 937, High Growth = 743), India =89 (low Growth = 29, High Growth = 39) High growth Low growth 25 CIO Study India Point of View

26 CIOs can further improve upon the visionary and pragmatist roles by co-creating and enabling the corporate vision Current Actions & Plans of Indian CIOs & Future Considerations for the Insightful Visionary Championing innovation by reaching out to the business and by facilitating the integration of business with technology CIOs envision Business Intelligence and Analytics, Risk Management and Compliance and Virtualization as the top future technology priorities for competitiveness Green IT has been rated as top future priority by 59% of CIOs India Push business/technology integration. Offer solutions for colleagues business dilemmas, even when the answer is not directly IT-related Champion innovation. Explain how new processes and technologies can deliver more value to internal and external customers Expand CIO influence. Volunteer to help define the overall business vision and strategy and take on other non-technology leadership roles Current Actions & Plans of Indian CIOs & Future Considerations for the Able Pragmatist Indian CIOs spend 42% of their time executing strategic tasks such as creating buy in for innovative plans and implementing new technology and business initiatives Indian CIOs use collaboration and partnering technology/tools, to drive technology innovation within the organization Indian CIOs are constrained by security and technological factors to leverage third party services India Enable the corporate vision. Increase the flexibility and efficiency of infrastructure and applications to support ongoing business changes Make working together easy. Provide better partnering and collaboration technologies so internal and external customers stay connected and relationships are more productive Concentrate on core competencies. Improve business agility by accessing business services, specialty technologies or IT services through third parties 26 CIO Study India Point of View

27 CIOs can create significant value if they can make the data sing, i.e. translate the data into actionable new business insights Current Actions & Plans of Indian CIOs... Indian CIOs expect their organizations to be world class integrated & transparent in the near future Indian CIOs plan to continuously explore new channels for end-customer interaction... & Future Considerations for the Savvy Value Creator Make the data sing. Surprise the business with unexpected ways to meet customer needs and otherwise profit from enterprise data Reach customers in new ways. Keep looking for more profitable paths to the end-customer Enhance integration and transparency. Address growing end-customer demands by proposing leading-edge technologies to create one version of the truth Current Actions & Plans of Indian CIOs... Most important performance criterion for Indian CIO is cost competitiveness and they spend 13% of their time in taking costs out of the current environment. Indian CIOs are planning for strong centralized infrastructure and standardized frameworks like BPM, SOA to be more cost effective.... & Future Considerations for the Relentless Cost Cutter Standardize to economize. Simplify, then standardize those business processes that are deemed necessary also work to standardize and reuse Centralize the infrastructure. Consolidate and use third-party services whenever it makes financial and business sense, particularly to gain economies of scale Keep cost reduction a top priority. Remain diligent and creative in discovering new ways to lower enterprise costs related to technology 27 CIO Study India Point of View

28 CIOs can take up shared strategic responsibilities with the business and pursue linked initiatives to emerge as stronger leaders Current Actions & Plans of Indian CIOs & Future Considerations for the Collaborative Business Leader Indian CIOs appear to be moving beyond the traditional technology provider role to be a business leader Many Indian CIOs are directly reporting to the CEO India Know the business. Improve your understanding of the organization s most pressing business problems Get involved with business peers in non-it projects. Capitalize on opportunities to expand responsibilities beyond IT to directly influence the business agenda Present and measure IT in business terms. Engender shared responsibility for business success through joint performance metrics based on business outcomes Current Actions & Plans of Indian CIOs & Future Considerations for the Inspiring IT Manager Indian CIOs are promoting delivery excellence in the organization by the creation of IT Centers of Excellence by encouraging ideas through awards/ recognition Indian CIOs are focusing on improving users access to data as well as its quality India Cultivate truly extraordinary IT talent. Identify and grow savvy technologists into thought leaders who can expand the impact of IT Lead the IT forces. Position yourself as a strong leader who makes attainment of existing IT service commitments the top priority Enhance the data. Devote as much attention to data accuracy, availability and integration as to data security 28 CIO Study India Point of View

29 In summary: Our analysis has thrown light on how the profile of Indian CIO has evolved to a visionary and business leader Enabling Innovation Indian CIOs are integrating business and technology to drive innovation across IT and business Indian CIOs are promoting innovation across the entire organization, not just IT In their future plans, apart from IT-centric innovation, business innovation plans rank high on CIO s radar with BI/Analytics occupying the top spot followed by risk management & compliance Expanding business impact beyond IT Indian CIOs are moving away from the traditional technology provider role to be a business leader Indian CIOs are managing change within IT, but some of the Indian CEOs are unhappy with past change success within the organization CEOs expect the CIO to be a change agent across the enterprise The current CIO performance evaluation parameters may not be aligned to being a change agent across the enterprise Increasing CIO Success Successful CIOs blend three pairs of roles to make innovation real, raise the ROI of IT and expand business impact Visionary & Pragmatist - Expand their influence and enable the corporate vision Value Creator & Cost Cutter :- Create significant value by translating the data to actionable insights Business Leader & IT Manager:- Take up strategic responsibilities along with business leaders The priorities and future outlook of the Indian CIOs broadly align to the mandate for smart change 29 CIO Study India Point of View

30 Despite multiple forces in play, our findings show that CIOs are focusing on what matters most for them and their organizations CIOs acknowledged the constant tension of integrating actions that sometimes seem oppositional Over time, we expect CIOs to regularly assess how much emphasis is appropriate on each of the three pairs of roles in order to make innovation real, raise the ROI of IT and expand business impact Continue the conversation at ibm.com/voiceofthecio 30 CIO Study India Point of View