The City of Saint Charles was Missouri’s first state ...



The Role of the

Chief

Information

Officer

What is a CIO?

Chief Information Officers (CIO) are senior executives responsible for all areas of their companies' information technology and systems (16). CIOs support the company's goals by coordinating all information activities. With proficiencies in both technology and business process and a cross-functional perspective, they are highly regarded as the senior managers who ensure the organization uses information management and information technology efficiently to achieve business goals (16). According to the Gartner Group (1999), a CIO’s mission is to provide technology vision and leadership for developing and implementing IT initiatives that create and maintain leadership for the enterprise in a constantly changing and intensely competitive marketplace.

Today, the “information” part of the CIOs job is growing increasingly significant. The effective and strategic use of common enterprise-wide information requires someone with a cross-functional perspective. CIOs have taken a leadership role in reengineering their organizations' business processes and the underpinning IT infrastructures to achieve more productive, efficient and valuable use of information within the enterprise (16). Many also are accountable for knowledge management and the valuation of intellectual capital. Similarly, CIOs are in an ideal position to lead organizations' Internet and Web initiatives (16).

What Do CIOs Do?

Previously, CIOs were known as the corporate insiders who concentrated on internal systems, internal customers and internal IT staff. CIOs today are exposed to the world beyond their organizations’ four walls, taking on jobs that have more similarities with a secretary of state than a systems developer. CIOs are being asked to confront a much wider range of issues today, many that extend past the technical and into the economic, political and even social area of business (16). Many CIOs struggle to make the transition between technologist and business strategist (22). Bobby Cameron, chief technology analyst at Forrester Research Inc. says, “Do they have the title of CIO? Sure. But the job is different now in some places, less tech-oriented and more strategy-focused. The purely technical CIO, as we have known it, is disappearing.”

According to the Positive Support Review (1999), the CIO is accountable for directing the information and data integrity of the enterprise and its groups and for all Information Service functions of the enterprise, including all data centers, technical service centers, production scheduling functions, help desks, communication networks (voice and data), computer program development and computer systems operations. He or she is responsible for maintaining the integrity of all electronic and optical books and records of the enterprise including review of computerized and manual systems; information processing equipment and software for acquisition, storage and retrieval; and definition of the strategic direction of all information processing and communication systems and operations. He or she provides over all management and definition of all computer and communication activities within the enterprise including responsibility for providing a leadership role in the day to day operations of the Information Services functions as well as providing direction as the enterprise grows through internal growth ad external acquisition.

Although job functions are almost similar for every CIO, technology decisions made by even the best IT professionals are often going to be influenced by their cultural background (10). Everyone would like to believe—and nearly everyone pretends—that technology decisions are based on objective assessment of alternatives (10). In reality, such decisions are often culturally influenced and culture bound, but the CIOs’ roles remain constant.

Things You Want to Know About the CIO

The following paragraphs assess the CIO and his/her role in several fundamental categories: demographics, reporting relationships, current challenges, IT spending priorities, career path and salaries. The survey is extracted from the CIO Magazine’s Research Center, The State of the CIO (2002). Five hundred CIOs and equivalent heads of IT were randomly selected to compile the survey.

Demographics

Head of IT Titles

The majority, sixty-three percent, of IT heads carry the title of CIO, while thirteen percent are Chief Technology Officers (CTOs) (5). Roughly nine percent hold EVP, SVP or VP titles and the remaining fifteen percent have other titles.

IT Responsibilities

Eighty-six percent of CIOs oversee IT of the whole organization (5). They not only manage a small division of IT in the company but they use IT as a tool to keep everyone, from the management to the IT staff and to the customers, happy.

IT Budget

Figure 1: Percentage of revenues spent on IT according to size of revenues (5)

Organizations with less than $100 million in annual revenue have IT budgets of $8 million on average (5). CIOs in medium to large organizations (annual revenue between $100 million and $499 million) are responsible for average budgets of approximately $12 million (5). In organizations with revenue of $500 million to $1 billion, IT budgets average $26 million. IT heads at very large companies (revenue of more than $5 billion) report IT budgets of $114 million and higher (5). On average, IT budgets represent approximately six percent of the organization’s annual revenue (5). IT budgets as a percent of total company revenue ranges from 8 percent in smaller companies to 4 percent in very large companies (5).

IT Structure

When asked about the organization's IT structure, 61 percent of respondents said the company's IT was centralized (large corporate headquarters with in-house application development and support capabilities) (5). A much smaller percent, 22 percent, of survey respondents said their IT is decentralized (independent subsidiaries with application development and support provided locally as well as from a central headquarters), and 14 percent indicated their IT is distributed (small sites with no local application development or support capabilities that rely heavily on a centralized location for these services) (5).

Gender

Ninety-one percent of the survey respondents are male and nine percent are female (5).

Who Does the CIO Report To?

Figure 2: The key figures that CIOs report to

CIOs usually report to the CEO, COO or CFO, and they often have a seat on the executive steering committee or board (or at least have frequent and close access to top officers) (5). The majority of CIOs report to their CEO (51 percent) or COO (12 percent), with only 11 percent reporting to their company’s CFO (5). Having such a direct line to the top has become so important to CIOs that many now demand such a reporting structure as a condition of employment (5). Dysfunctional connections and low rapport between the CIO and other C-level officers and business unit leaders is a highly observable and all too common reason for failure (19). Thus, it is crucial that CIOs establish and maintain a strong understanding, rapport, bond and trust with the C-level officers to ensure continuous growth in the organization.

Common Challenges

Twenty-two percent of respondents listed volatile market conditions among their top four challenges (5). The other major challenges for today’s CIOs: lack of key staff and skill sets, inadequate budgets, and shortage of time for strategic thinking (5). CIOs face the ultimate challenge of having to do more with less in nearly every area of their job. They lack money, time, skilled labor, or market stability – or all of them.

According to Gomolski, the most important IT management issues that CIOs will confront in 2004 are information technology sourcing, project prioritization, security, and continued focus on cost (11). With regard to electronic commerce, Gross, in his article, feels that CIOs should address the problems of Internet sales taxes and create a national agreement for collection of state sales taxes from all online and catalog retailers to provide fair internet taxes for all (12).

Where Are IT Dollars Spent

Where’s the money being spent? Nearly half of IT executives believe their company is spending too much on maintenance and operations, and not enough on strategic initiatives (1). Survey shows that launching new systems did not top the agenda; instead, systems integration projects were cited by the most respondents (36 percent) (5). One quarter of the survey respondents said IT staffing—retaining, hiring and training people—is a spending priority while 24 percent said they would focus on customer service and CRM projects, and 22 percent said simply lowering IT spending was a top concern (5). There was one notable exception: 26 percent of CIOs said investments in new technologies, such as wireless, are a priority (5).

Skills For Success

Figure 3: Essential Skills for a CIO’s Success (5)

Seventy percent picked communication as one of their three most important skills, 58 percent chose understanding the business process and operations, and 46 percent put strategic thinking and planning in the top three (5). CIOs who took the survey say the three skills are interdependent. The top three skills listed indicates that CIOs think they should play a major role in leading the company by shaping and driving broad company goals. Leadership ability is a combination of personal traits and acquired skills and most CIOs believe leadership can be taught (6). Meanwhile, CIOs do not have high regard for hard-core technical skills. Communication, understanding of the business process and leadership are not the only important attributes. There are others, such as treating your staff fairly and the critical importance of personal integrity (17). However, the three stated above can go a long way to helping you achieve your goal of becoming a CIO (17). Only ten percent of the survey pool identified technical proficiency as a critical skill, which is a big change (5). In the late 1980s and early 1990s, the CIO position was much more tactical than strategic, and the CIO was definitely more technical (18).

Career Path

Many of today’s CIOs are influenced by IT, and they want to stay in IT (5). Which isn’t to say there aren’t marketing VPs who have made great CIOs, or that no former CIOs is not among the CEO ranks. But when asked which functional area had the greatest impact on them, the vast majority of survey respondents said IT (5). And when asked what role they would like next, 44% of CIOs surveyed said CIO (5). As Patricia Morrison, CIO of Office Depot puts it, “I love being a CIO. I love the pace of change, the opportunity to work across so many avenues of the business – the capability of bridging business and technology. I have had the opportunity to leave, but I always come back to IT.”

Because of the impact IT has had in the past decade on the way companies have grown and been managed, CIOs today have a unique opportunity to establish and fortify their leadership position in corporate America (24). To secure this leadership position, CIOs will have to do something to give their companies a lasting competitive edge (24).

Let’s Talk Money

CIOs earn $180,000 on average, including stock options and bonuses. 4% receive more than a half million dollars in compensation, most settle in the $100,000 to $250,000 a year range (5). CIOs comfortable earn six figures but they still take home a lot less than other executives. That is especially prevalent at very large companies where CEOs, CFO, and COOs make seven figure salaries (5). At companies with revenues between $500 million and $1 billion, CEOs earn on average six times more ($1.3 million versus $226,000) (5).

Insurance, real estate and legal industries are most lucrative for CIOs, with compensation averaging $250,000 (5). The computer industry ranks second. Health care, education and government sectors are at the bottom ranks (5).

What Job Doesn’t Face Issues?

One issue facing Chief Information Officers and their position is the issue that there currently are no standard credentials for them. There are many other occupations that involve trust and accountability that certify the credentials of their professions. The certifications give the people in these professions “moral rights and authority (9).” Some of these professions include doctors, nurses, dentists, dental hygienists, lawyers, accountants, and real estate salespeople (9). Even truck drivers and hairdressers need to have their skills certified in order to participate and practice in their field. The idea and practice of certifying professionals is not a new idea by any means (9). No one would want a lawyer who hasn’t passed the Bar Exam or an accountant who hasn’t passed the CPA Exam. Not too many companies would hire a lawyer or an accountant who hasn’t passed these exams either for a position beyond entry-level. We can’t measure a CIO alone on just his/her technical, accounting, management or business skills (9). We need guidelines; guidelines to measure their performance. This would help shareholders, executives, and the CIOs themselves, along with some others (9). I find it hard to believe that in this “information revolution” that we live in, where technology is constantly increasing and changing, businesses in the United States surprisingly show little respect for their IT leaders (9).

Where are all the women?

Another issue revolving around the Chief Information Officer deals with women in the position. Men outnumber the amount of women in the IT leadership position. Ninety-one percent of Chief Information Officers are men (5). Fewer women choose technology as a career and more women leave the corporate world to start their own businesses. These are just a few of the reasons why women are not in IT leader positions.

We were fortunate to find one of these few women CIOs. The following Case Studies detail the roles, average day and thoughts of three Chief Information Officers from organizations in the St. Louis Metropolitan Area.

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The CIO of the World’s Largest Brewer Speaks

The world’s largest brewer, Anheuser-Busch Inc., employs over 23,000 full-time people (20). One thousand-two hundred of those employees work for some part of the Information Technology Department. IT represents over five percent of all Anheuser-Busch employees. Anheuser-Busch has several different business operations. The beer operation operates domestically and internationally. Budweiser, the number one selling beer in the world, which is produced by Anheuser-Busch, is sold in more than 80 countries. The Anheuser-Busch Packaging Group, formerly named Metal Container Corporation (MCC), provides low-cost, high-quality materials for Anheuser-Busch’s domestic beer operations (20). In 2003, the Packaging Group provided enough materials for A-B to product 25 billion cans and 29 billion lids. The Busch Entertainment Corporation includes nine theme parks owned by Anheuser-Busch. They include three Sea World locations, two Busch Gardens locations, Discovery Cove, Water Country USA, Sesame Place, and Adventure Island. These theme parks entertained more than 20 million guests who passed through their gates in 2003. As can be concluded from the above, the major characteristics of Anheuser-Busch customers include adult beverage consumer aged 21 and older along with family-oriented people who enjoy various theme parks. Anheuser-Busch has gross sales of $16,320.2 (all figures are in millions) in 2003. The company’s net sales (gross sales minus excise taxes) were $14,146.7, the gross profit (net sales minus cost of sales) were $5,697, and the net income overall $2,075.9. The annual IT budget for Anheuser-Busch is between one and two percent of sales (20).

Pepperdine University Graduate Becomes CIO

Mr. Robert Byrne is the Chief Information Officer and Vice President of the Management Systems Group for Anheuser-Busch. He started working at Anheuser-Busch in 1980 after getting his undergraduate degree in Mechanical and Industrial Engineering from the University of Notre Dame. While working at A-B, he acquired his Master of Business Administration (MBA) from Pepperdine University. He has had eleven different positions at Anheuser-Busch since 1980. Some of these positions include Management Trainee, Industrial Engineer, Assistant to the Vice President of Operations, Manager of Bottling Operations (within the brewery), Director of IT Procurement, Director of Applications Development, and finally Chief Information Officer. He spent seventeen years at Anheuser-Busch before going into the IT division seven years ago. In the twenty-four years he has been at A-B, he has relocated seven times (3).

Some CIOs Don’t Report Directly to the CEO

Robert reports directly to W. Randolph Baker who it the Vice President of Anheuser-Busch Companies and Chief Information Officer. He also reports to the President and Chief Executive Officer, Mr. Patrick Stokes, and the Chairman of the Board and former President and Chief Executive Officer, Mr. August Busch III. He reports to them through Mr. Baker. He communicates with Mr. Stokes and Mr. Busch III, on average, on a weekly basis. He communicates with them by means of memos, meeting, phone calls, presentations, and business trips (3).

One Large, Constant Challenge

Robert has not met an extremely large challenge while in the position of Chief Information Officer. He has a constant challenge, which is fulfilling the mission of the IT organization (3). He said this includes delivering business solutions that enable the company to grow in sales and reduce operating costs, managing the information technology organization to provide maximum business benefit at the optimized costs, and providing standardized business solutions and excellent customer service (3).

Success=Payroll System affecting A-B employee

Roberts’s biggest success was the replacement of the payroll system for every employee in the corporation. He said the project was extremely large and touched every part of the company, all 23,000-plus employees (3). He said, “It went live in a big bang fashion.” From this project, he learned the importance of creating a cross-functional team to implement the project and then giving them ownership in the projects success (3).

Troubles All Have Similarities

Robert commented that there has not been a specific project that he has found too difficult. He did say that the projects that cause problems have similar characteristics (3). These similarities include poor requirements, lack of business ownership and contribution, and trying to do too much over a lengthy period of time instead of using a “phased approach (3).”

An Average Day for an Average Man

Robert average day includes meetings, and more meetings. He meets with and communicates with customers, vendors, and the IT organization (3). He, on a weekly basis, meets with each of his direct reports to review key projects and strategies (3). Their focus is to help every part of the Anheuser-Busch organization on the mission of business growth, cost reduction, standardization and excellent service (3).

Are Skills Important for a CIO to Possess?

Robert feels that technical skills are an important foundation to successful job performance. He said it is critical to build on these technical skills and business skills (3). Robert stated, “You should hire a business professional with a positive attitude and work to build on that individual’s technical foundation.”

Final Comments from a Great CIO

We like to say there are no IT initiatives in our company. Every thing we do is a business initiative. Our organization is not trying to be an IT company like IBM, Intel, and SAP. We are, and always will be a beer company. Maintaining our business focus is the key to our success. – Mr. Robert Byrne

[pic]The City of Saint Charles was Missouri’s first state capitol, and is currently the seventh largest city in the state. The city is mostly self sufficient and employs nearly 1400 people who provide such services as police and fire protection, public works, and parks and recreation departments (23). The city of St. Charles features a historic “waterfront tourism district” that was founded in 1804. St. Charles is home to Boeing Corporations Missile Defense System. It, also, features the St. Louis Family Arena which is home of several professional and semi-professional sports teams and the sight of several games of the NCAA’s Men’s National Invitational Tournament, and Women’s College Tournament. The City is also home to the metropolitan area’s largest casino, the Ameristar Casino (12).

The City of St. Charles’ day-to-day operations are under the direction of a City Manager and Assistant City Manager. The operational functions of the City are divided into departments and are directed by department heads. The Director of Information Services for the City of St. Charles is Mrs. Edsell Barrios (2).

The Person

Edsell was born in India. She moved to St. Louis to attend St. Louis University where she earned her Bachelor of Science Degree in Management Information Systems. She was hired by St. Charles City in 1996 as an Information Systems Assistant and was appointed Director in 2000 (2).

The CIO

Edsell stated that she reports directly to the Assistant City Administrator, as do all department heads. Generally, she meets with him frequently, but specifically, on a weekly basis during any major project (2). She said that they have a very positive working relationship and that he has an open door policy. She stated that this has allowed her great freedom in implementing IT solutions and projects. She operates the Information Systems Department with annual budget of $120,000. Edsell stated this budget is based upon projects, and the replacement of workstations, laptops and printers.

The Teacher

On an average day Edsell and her staff respond to the daily needs of the various operational departments (police, fire, public works, etc.). Generally, these needs include malfunctioning equipment, working on current projects and budgeting and forecasting future projects (2). Specifically, Edsell spends her time on education. This is due to the educational variety of the employees of the City of St. Charles. Many employees don’t have a college education, as many of the positions don’t require it. Most of the employees work manual labor type jobs. Even those with higher education don’t have computer skills, as their majors didn’t require it. An example of this is that many police officers major in criminal science, sociology or psychology; parks and recreation supervisors major in recreation (2). These degrees don’t emphasize the computer skills that a business degree would require. However, the use of computers has increased in the City, and Edsell is often called upon for minor technical questions that employees in many other fields would already know the answer to, or have the experience to handle it themselves. As Edsell put it, “I spend a lot of time responding to the word ‘Help!’” Edsell stated that many of the employees “know just enough to be dangerous.” So, educating employees on the use of computers is a very important aspect of her job. The overall technical skills of the average employee are critical to the success of her department. However, she doesn’t mind the fact that there exists a general lack of experience among the employee base, because it keeps her in demand (2).

Because of the time spent on teaching employees Edsell stated she often finds herself in a position of managing department heads, who are her equals in the cities hierarchy. This is largely due to the fact that she must dictate what employees can and cannot do with certain technologies, and she does this by issuing directives to department heads (2). Edsell stated that she is surprised that this does not cause animosity among her peers. She believes that her skills are looked upon as an asset by the other department heads (2).

Let Edsell Do It

Her skills were critical in implementing what she called the largest challenge, and biggest success to date while working for the City of St. Charles. This challenge was implementing a citywide inter/intranet system (2). Edsell stated that it was difficult due to the many departments at different locations, and the fact that she had to stay on budget. An additional challenge was, of course, spending the time to educate the employees on its use, and to set up safeguards to avoid abuse. The most troublesome project for her department was installing a citywide phone system. It was troublesome, again, due to the multiple locations and budget requirement, but also because she has little experience in telecommunications technology (2). Edsell stated that she is given almost all technology related projects and is expected to them on budget, despite her experience. Once again, though, she is not bothered by this fact, as she believes it is something that keeps her in demand (2).

Edsell stated that she enjoys very much the randomness of her job, and that she enjoys more freedom than many corporate CIOs. She stated that she feels her work is important because it positively affects such functions as police and fire protection. Edsell also stated that she enjoys the fact that so many people rely on her on a daily basis, and feels her efforts are appreciated. She enjoys educating people on technology and is encouraged by the fact that she is a critical force in the function of the City (2).

Enterprise Rent-A-Car: IT As a Business Tool

Enterprise Rent-A-Car, the largest local auto rental company in North America, has more than 5,400 offices and 600,000 vehicles worldwide including locations in the United Kingdom, Ireland, and Germany. Enterprise had $6.9 billion in total sales in 2003, a 6.2% annual growth, and has never had an unprofitable year (6). Enterprise employs over 53,000 people and had a 1-year employee growth in 2003 of 7.0% (4). Enterprise is ranked #15 on the Forbes “Largest Private Companies In America” list, named one of “100 Companies Most Likely to Succeed in the Next Millennium” by CIO magazine, and is one of the “100 Best Companies to Work For” by Fortune magazine (7).

The CIO

Craig Kennedy is the Chief Information Officer and a Senior Vice President at Enterprise Rent-A-Car. As the company’s CIO, Kennedy has overall responsibility for all aspects of information technology at Enterprise and its other major operating businesses of Car Sales and Fleet Services. Kennedy oversees a department of 1,200 IT professionals with a total IT budget of $210 million (14).

Kennedy: The Man, The History

Craig Kennedy was born and raised in St. Louis Missouri, the location of Enterprise’s corporate headquarters. Since joining Enterprise in 1989 as a computer programmer, Kennedy has either directly managed or been part of the building of virtually every department in IS, or Information Systems. Kennedy benefited from the mentorship of two previous CIOs and feels that his longevity, experiences, and informal mentorship prepared him well for the role as Chief Information Officer (14).

Kennedy: The Team Player

Within Enterprise Rent-A-Car, Kennedy reports directly to the company’s COO, Don Ross. He has frequent interaction with Ross and the company’s CEO, Andy Taylor. Kennedy’s meetings with Ross are more formal while interactions with Taylor are on a less formal basis (14).

Both Ross and Taylor belong on the company’s IS steering committee with Kennedy. Also included on the steering committee are the CFO, and the Vice Presidents of Corporate Strategy: North American Operations, European Operations, Human Resources, and Chief Administration Officer. The steering committee is charged with formulating the strategies that include a technological component. Being part of that entire thought process from inception to decision helps Kennedy to guide the solution much more effectively, enhancing that part of his role in the company as CIO (14).

The Daily Grind

When asked for an example of a standard business day, Kennedy emphasized the fact that no day is a standard day. Primarily Kennedy must meet with his direct reports and the IS executive management about existing strategies and projects as well as cross-department matters. Electronic communication, whether it is via email, voicemail, or phone calls, takes up quite a portion of his day. Communicating with the people that use the technological solutions within the company fills up a portion of Kennedy’s day. In part to learn their needs but also educate them on IS topics and strategies. Although Enterprise has a methodology for managing their project portfolio and approval process, resource management requires daily decisions and daily attention. As Kennedy put it “There will always be more demand than supply”. The strategic decisions to add investment to meet demand, reprioritizing projects, or reallocating assets are part of his daily concern. Kennedy must also represent IS in matters concerning the whole company. He is a member of many committees, giving IS a voice in the direction of the company on everything from personnel benefits, real estate, to community relations. The rest of Kennedy’s day consists of personnel management and fiscal management of the department. The daily interaction of his team gets attention as well as the constant oversight of the department’s budget and the overall result of projects (14).

Success

The most successful project Kennedy has participated in as CIO was the development of an innovative product that took a labor- and communication-intensive transaction between rental branches and insurance adjusters and automated it. Timesavings for all parties, better customer service, and lower costs were the results. This solution has given Enterprise a substantial lead over competitors, allowing Enterprise to maintain the user-friendliest system for car rental. According to Kennedy, while the technical solution gave them a lead, the entire business model Enterprise uses maintains their lead (14).

Less Than Success: Lessons Learned

The most troublesome project Kennedy has been faced with was an overhaul of the software used to write rental contracts. Initially, the project sought to instill flexibility in the system. However, after a year in development, Enterprise concluded that the system would eventually fall short of their needs. Thus the failure was based on the solution not being far-reaching enough. The second try at the project included the mandate that it should be far-reaching. However, to fulfill their revised vision, the solution became too far-reaching and included a completely re-designed distributed systems method that would be too expensive to implement. Finally, Enterprise balanced new capabilities with what was proven and methods that were already in existence (14).

Challenges and Difficulties

Kennedy believes the biggest challenge facing him as CIO is the implementation of new technology while keeping existing systems functioning in a rapidly changing environment. Systems and solutions are intertwined. Therefore upgrading or replacing them can be like “delicate surgery”. Kennedy has also witnessed solutions becoming much more complicated, made of multiple components, products, and versions bought from multiple vendors. Balancing the implementation of new solutions while controlling costs is a centerpiece of Enterprise’s corporate strategy and one that challenges Kennedy as the CIO (14).

Skills: A Well-Rounded CIO

Between business, people and technical skills needed by a CIO, Kennedy believes the first two easily trump the third. First and foremost, a successful CIO needs business skills. Business “is our reason for being here”. People skills, however, are equally important according to Kennedy. Without a strong team, a CIO can be insignificant and unable to do anything productive (14).

While the technical skills of an executive charged with the management of a companies technology assets would seem intuitive, Kennedy points out most companies do not rely on the CIO as the source of technical knowledge. Kennedy’s background as a computer programmer has helped in his understanding of concepts. But on a day-to-day basis, Kennedy’s technical skills are the least used (14).

Looking Ahead

In the future, Kennedy believes four issues will gain importance for the CIO:

• Privacy - of customers and the compliance with the privacy laws and rules of different states and countries

• Security – not only concerning customers privacy, but strengthening consumer’s confidence and trust towards a company

• Off shoring – globalization, cost-cutting, and the political backlash by consumers towards such policies will force CIO’s to choose technology solutions wisely

• Corporate Governance – not only ethical behavior by the company and its officers, but the infrastructure needed to comply with data reporting required by law.

Technology: A Means Not An End

The results of the troubled project detailed earlier illustrate a lesson Kennedy firmly believes in: no sustainable competitive advantage can be gained from technology. Even though his background is in technology, Kennedy believes a strong business model tops the whiz-bang of technological solutions in today’s business world. “Early adopters will pay a premium and struggle with the immaturities of technology. Late adopters will get off cheaply, but run into implementing ‘me too’ technologies. The playing field then levels, and you have to rely on other, non-technological advantages to differentiate a product or company. If a company has not developed them, they will not compete effectively for very long”. Kennedy believes technology can be a marvelous accelerator of a sound business strategy. However, “implementing technology will simply add cost, nothing more” (14).

The CIO Mindset

Finally, Kennedy believes a CIO must not become enamored with technology, or feel that it is important in and of itself. He warns this kind of thinking will “take you down strange paths, in which you may find yourself over investing in immature technologies, following the herd, and driving your costs up and the overall value down. CIOs must always be thinking of IT as a business tool and nothing more” (14).

Here’s What We Think!

From our initial research we feel we have established a working definition or a “text book definition” of a CIO. We have found that most CIOs are responsible for aligning technology with business strategy. Most CIOs work for organizations with centralized information technology departments. Most have no standard credentials and have varying career paths. That is to say that there are no criteria to become a CIO. Many CIOs have non-information technology degrees and come from departments as diverse as sales and marketing. We’ve found that many CIOs have no standard information technology initiatives, but rather use technology to solve the varying needs of their businesses. Almost all CIOs utilize their people skills more than their technical skills, and find they are communicators rather than visionaries.

From interviewing various CIOs we found both differences and similarities. The differences, however, are minimal, and are specific to the companies that each CIO works for. These differences include challenges, successes and budgets. For Mr. Byrne of Anheuser-Busch; his greatest challenge is developing solutions to business related problems, and this is emphasized by his greatest success, which was implementing a new, company wide payroll system. His department’s budget was over $200,000,000. For Ms. Barrios at the City of St. Charles; her challenge was educating a diverse workforce on the use of technology. This is highlighted by the fact that she has brought the City into the 21st century in terms of technology by implementing intra/internet systems and telecommunications, all while operating with an annual budget of $120,000. Mr. Kennedy at Enterprise finds challenging the balancing of new systems with legacy systems but was still able to improve the process of communication between retail branches and insurance adjusters. His operating budget is also over $200,000,000.

The diversity of these CIOs is directly related to what the needs are of the company for which they are employed, and are further demonstrated by the following graph.

| |A-B |St. Charles |Enterprise |

|  |Robert Byrne |Edsell Barrios |Craig Kennedy |

|Greatest Challenge |Developing solutions to |Educating diverse |Balancing old and new |

| |business problems |workforce on new | |

| | |technology | |

|Budget |$244,803,000 |$120,000 |$210,000,000 |

|Greatest Success |New Payroll System |Bringing them into 21st |Communication improvements|

| | |century |among branches and |

| | | |adjusters |

Their similarities fall very much in line with what our research into CIOs as a whole have found. This is apparent in the fact that the three CIOs interviewed demonstrated that communication and people skills are their most valuable assets. Mr. Byrne spends most of his time communicating with upper management, and employs those with people and business skills, and then trains them on the technical aspects of the job. Ms. Barrios spends a majority of her day educating a diverse workforce on technology and credits her people skills with her success in this area. Mr. Kennedy views communications skills for the CIO as vital, because he would be insignificant if he were unable to build strong, team working relationships.

|  |A-B |St. Charles |Enterprise |

| |Robert Byrne |Edsell Barrios |Craig Kennedy |

|Average Day |Communication |Communication |Communication |

|Thoughts On IT’s Purpose |“IT solutions to business|“IT solutions to business|“Business strategies are |

| |initiatives.” |problems.” |accelerated through IT.” |

Their similarities continue, as evidenced in the above graph, on what each believes is the purpose of information technology. Mr. Byrne believes the purpose of IT is to find solutions to business initiatives. He recognizes that his company is a beer company first, not a technology company, and IT exists to support that. Ms. Barrios also feels the purpose of IT is to find solutions. Her organization provides a variety of services, all of which are only enhanced or made more efficient through the use of IT. Mr. Kennedy states that IT’s purpose is to accelerate business strategies. In other words you cannot differentiate yourself from competitors with IT alone. The differentiation exists in how you use IT. These similarities demonstrate the descriptions of what the role of the CIO is as discovered in our initial research.

References

1. Alter, Allan E. “IT Spending.” CIO Insight. 14 Jan. 2003. Ziff Davis Media Inc.

20 Feb. 2004.

2. Barrios, Edsell. Personal interview. 18 Feb. 2004.

3. Byrne, Robert. Personal interview. 13 Feb. 2004.

4. Chester, Jannell. Enterprise Rent-A-Car Company – Fact Sheet – Hoover’s Online.

(2004). 2 Mar. 2004

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