Perfect match

Whatever your title, be it CIO, IT manager or some variation, one of the most important business relationships you have is with your CEO. An effective working relationship between the head of the organisation and the head of technology operations is vital to business success. Andrea Malcolm asks chief executives what they want in a CIO.

Whatever your title, be it CIO, IT manager or some variation, one of the most important business relationships you have is with your CEO. In an era in which technology has become a key strategic tool, an effective working relationship between the head of the organisation and the head of technology operations is vital to business success. What do chief executives want in a CIO?

Top cop shop

Lyn Provost (pictured) is deputy commissioner of police resource management. She reports to police commissioner Rob Robinson and has two direct reports looking after IT -- Rohan Mendez manages the IT infrastructure while Murray Mitchell looks after applications.

Currently the police has four major IT programmes – upgrading the network, replacing its law enforcement system (better known as "the Wanganui computer"), the ongoing maintenance of the land mobile radio network and replacing the computer infrastructure replacement over time. Each programme is divided into projects and most are somewhere between projects one and three.

Provost sees IT as a critical part of the operation, regarding it as an enabler rather than a cost centre.

She says chief executives should understand the basics of IT, know about the opportunities it offers, what the organisation’s IT strategy is, and where it’s going. They should be able to discern what is sensible or not sensible, and know the risks so they’re asking the right questions.

“I first got involved in computing in the late 1970s and we did a review of computing in the public sector. After nine months of working on the study we found that the number one thing in determining the success of IT was top management commitment, and that hasn’t changed.

“I keep abreast of IT by talking to staff, input from partner suppliers and thirdly a bit of reading. I also think every chief executive should get regular reporting, at least once a month, of what is happening in their IT area, particularly if they’ve got any large developments going.”

Provost has weekly meetings with Mendez and Mitchell and gets weekly reports on big projects.

“Regular meetings give incremental information that gives me the whole picture.”

What she doesn’t want is detailed technical and legalistic briefings.

“I expect to have expertise around me that will assess that level of risk. The biggest turn off is when boffins start talking in jargon and you see people’s eyes glaze. My people are very good at not doing that. It’s something you always have to be aware of.”

What is the best way to get her ear?

She says everyone gets 60 to 100 emails a day but there are four factors that will keep herreading:

1. Clarity of communication. "If you can get it into less than 10 dot points I have more time to read it."

2. Consistency. "Nothing worries more than one day it’s this way and the next day it’s that way."

3. Useful information. "I don’t need padding."

4. Make it interesting.

Provost says a good CIO is someone who can give the big picture and manage the details, who can manage staff and suppliers and who is respected within the IT industry.

“I measure IT executives against those criteria and whether they smoothly bring their projects in on time and on budget.”

Speaking of being on budget, the police is well known for its budget blow-out with the INCIS programme. Has it reigned in IT spending since Provost joined 18 months ago?

“Obviously we had a big investment in INCIS. We did get an entire network across New Zealand out of it but the software was only partially successful. Since then, we have been trying to move from big investments to a managed process. We put aside an amount of money each year for IT, which includes maintenance, upgrades and enhancements. We now fund IT from depreciation. What we depreciate from the current system we reinvest back into IT. I’m noticing that a lot of organisations want to go in this direction. It’s also a part of the maturing of the management of the IT industry. I think it’s just a part of a lifecycle of development. We are moving to ongoing development, not big bang projects.

“We have also determined that we’ll work in partnerships for longer periods than just one project." The key partnerships are Logical, Telecom, and Ericsson for the network, Unisys for the computer infrastructure replacement and EDS and IBM for business software.

"The partnering concept works for us because we’re a long-term business, we’re here to stay and we’ll be here in 20 years time. It makes sense for us to have partners for 10 to 20 years. The current contracts have different configurations but are all about 10 years. That’s the time frame that we’re looking at.”

Does Provost think that the past decade has been one of IT indulgence?

“I don’t actually. I’d say it’s maturing to become as vital as finance and HR. I thought about the Y2K exercise but largely people thought ‘it’s a process we have to get on with’. It wasn’t like the 70s when enormous projects went in. I wouldn’t call it indulgence. IT has become a critical part of the business.”

Nor does she think that e-commerce has been hyped.

“Some of the technologists did see it as some kind of holy grail but the public looked at what worked and what didn’t and they drove it. The public has largely been right. If they are happy with it they go with it. If not then they reject it. If it is easy to use people pick it up. If they can buy something easier across the net they will do it. We’ve certainly benefited from using e-procurement in the New Zealand police.”

Does she think IT is riskier than other areas of the business?

“Every part of an organisation has risk. I don’t put IT as any greater risk. I think it’s important not to over-emphasise any part of an organisation. You have to get a balance. That’s one of the lessons we have learned from the days of giant implementations – is not to overemphasis IT and to see it as a balanced part of organisation. Some big projects absolutely engulfed organisations.”

Covering the region

Compared with finance and operations, IT is a relatively young field but ARC chief executive Jo Brosnahan (pictured) has put both finance and operations under the control of IT director Tony Darby.

Darby, who goes by the title of director of operations, information and technology, is responsible for all areas of information flow through the organisation.

“I take a slightly different approach from quite a few other chief executives in that I see information driving the organisation,” says Brosnahan. “The director of finance left and it seemed to me that there was an opportunity to combine those aspects of the organisation that largely related to the flow of information. Therefore Tony, who was my IT director, became operations director and financial information flows through him as well.”

The CFO is part of Darby’s team and also comes to the management meetings. “We haven’t isolated our CFO. He’s still invaluable in giving advice,” says Brosnahan.

Brosnahan regards IT as being about information rather than focusing on technology.

“Information flows from customers and the community. If you look at the key drivers in an organisation they are customers, and information and communication flows. In our case IT is all about being able to identify value and capitalise on information flows really quickly.

“I see IT as a major driver of organisations. In order to survive organisations have to be innovative and innovation usually always involves elements of IT. It’s an inherent requirement.”

Brosnahan says the ARC is very focused on outcomes and is constantly asking, What do Aucklanders care about?

“It comes back to things like clean air, safe places to swim, and protection of the regions natural heritage. Which leads us to ask – how do we connect them with those outcomes? This has lead to programmes like The Big Clean Up which we sent out to 450 households in Auckland and have already had 10% sign up to the programme.

“In order to take those opportunities there has to be an ongoing interaction between ARC and those customers. There are huge opportunities to communicate with them and get programmes going. Inevitably that comes back to IT -- things like our call centres, website and text-to-mobile capabilities. We can start to layer that information so that it’s accessible in all its different forms and contexts.”

Clarity is one of Brosnahan’s main asks of her IT head.

“What does success look like? I want to be shown clarity of process in how to get there. Have all the options been looked at? Is this going to add value? We struggle all the time because we don’t have sufficient resources to do what we’d like to do. We try to ensure every area has enough resources to grow and not go backwards. That’s important for well being of staff and keeps people impassioned.

"Tony’s team is doing a huge direct rating project, which makes the ARC the biggest direct rating agency in Australasia. It has been largely outsourced. The capability to put that together as a project and deliver it with all its risks is huge. That’s been an interdepartmental team. I would emphasise that IT never does it alone. All projects are delivered with teams that go across the organisation. I think its part of our success.”

Does Brosnahan take a big role in IT projects?

“I have amazingly innovative people. I wouldn’t have a clue how they do what they do, but I do understand what they do. I trust them. Our values are about being courageous and brave i.e. taking risks. I encourage them to do that. I just say, ‘If you get it wrong, don’t do it twice’ and they don’t get it wrong very often. We don’t have huge amounts of money available because we’re a public sector organisation. They’re hugely cost effective in what they do.”

Brosnahan says ARC’s IT expenditure has remained fairly level over the past three years, not counting a $15 million direct rating project which the council has just embarked on which has some elements of IT.

She says Darby, with his cynical view, tends to shield her from IT vendor and supplier hype.

“My job is to ask the right questions, make sure they have sufficient resources, and provide support for them. Don’t be afraid to ask for it to get the job done, just be quite clear on why you need it.

I think the IT director needs to be at the senior management table providing expertise and an overview all the time. IT is not just something that happens in the bowels of the organisation.”

Phoning it in

As the chief exec of a telecommunications company Rosemary Howard clearly regards IT as a business enabler.

But she was taken aback earlier this year when it became obvious that not all companies have a similar view. Speaking to a group of about 30 CIOs, Howard learned that about half of those present didn’t report to the head of the company. She says CIOs she spoke to wanted to be better understood by their CEOs and the rest of their executive teams.

“The didn’t feel that the contribution that IT made to the business was well understood. That just couldn’t happen at TelstraClear. It goes without saying that the CIO should be part of the leadership team, not just for high tech companies.”

TelstraClear CIO Jenny Mortimer is part of company’s leadership team of 14 people.

Apart from a weekly leadership meeting, Mortimer updates Howard each week on how projects are going. TelstraClear invests $150 to $200 million per year on capital expenditure, a significant slice of which is on IT.

Howard accedes that as a company that sells solutions based around technology it will obviously have a better understanding of IT but she believes every New Zealand business should understand the opportunities it offers.

Howard says today the value chain is being re-engineered and IT is the key driver.

“How you connect to customers, get information to and from suppliers and distributors and how you transaction with them, even banking. Even if you’re selling a low technology product such as balls of wool, how are you going to do all those things without IT?

“In non-tech companies IT is often in a black box. In some businesses it’s almost like business and IT have got a bit disconnected.”

Howard says rather than have a dichotomy between IT spending and other spending, IT spending decisions should be made based on what business you’re in, what part of the market you want to be in and how you get there effectively.

“Once the business case has been approved and some of that investment is for IT, the CIO will manage that capital investment or operating expenditure and will do that on budget and within the time frame. They might not make marketing decisions but they have to buddy up with the marketing team. They have to get the optimal IT solution for the business case.”

TelstraClear has eight goals and IT underpins them all, says Howard.

“IT will enable customer focused information, efficiency, finishing the integration of our networks and even getting the best people. We need IT for all of that. We don’t think about it differently to any other investment whether it be people, or some sort of equipment.”

In Howard’s opinion there are four main qualities to a good CIO.

1. They should be someone who can understand and who wants to be part of the business. “The mission, the vision, the goals of the company. It doesn’t mean they’re going to be an expert in marketing but they will have shared knowledge about the company business direction.

2. They should be able to demystify IT. “They have to translate what IT can do in terms of solutions to their colleagues and the rest of the company.

3. They should be very disciplined in terms of executing the business case. “They have to be good at managing on time and on budget and to the service levels required.”

4. They have to be attuned to new opportunities available to business through IT developments. “Those have to be brought back to the business for planning and thinking through.

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