The Future-State CIO: The Rise of the Business Strategist Steve Rovniak Director, EMEA

About the CIO Executive Council Mission Summary  Members are trusted advisors to one another  Members work together on discrete projects aimed at promoting professional excellence, and at advancing the role of the CIO in business. Mission Summary  Members are trusted advisors to one another  Members work together on discrete projects aimed at promoting professional excellence, and at advancing the role of the CIO in business. Founding Date: 1 April 2004 Current Worldwide Membership: 520+ Founding Date: 1 April 2004 Current Worldwide Membership: 520+

Bob Willett, Global CIO Marc West, Louis Ehrlich, CIO The “Blended” CIO: Part technology - part business & VP of Business Strategy & Services & CEO, Best Buy International President, Commercial Markets CIO

Three “Classifications” of CIOs  FUNCTION HEADS  TRANSFORMATIONAL LEADERS  BUSINESS STRATEGISTS

The “Function Head” Focused on running the IT organization, achieving IT operational excellence and providing reliable, effective services Predominate activities include:  Developing IT talent  Sourcing strategy and execution  Improving IT operations  Improving system performance  Security management  Budget management  Managing IT crises

The “Transformational Leader” Focused on creating change for their enterprise through process transformation and close partnerships with business operations Predominate activities include:  Redesigning cross-enterprise business processes  Leading change efforts in IT and across enterprise  Implementing new systems and architecture  Aligning IT initiatives and strategy with business goals/strategy  Cultivating the IT/business partnership

The “Business Strategist” Focused on driving strategy for competitive advantage through activities that face across the enterprise and the external customer Predominate activities include:  Co-developing/refining business strategy with CXOs  Studying market trends and external customer needs and behaviors to identify new IT-enabled products/services  Driving and enabling business innovations  Identifying opportunities for IT-enabled competitive differentiation  Reengineering or developing new go-to-market strategies and related technologies

CIOs represent a “blending” of the three classifications The “typical” CIO 50% 40% 10%

37% 51% 12% “State of the CIO” 2008 survey distribution 758 IT heads across North America & Europe 41% (+4) 49% (-2) 9% (-2) North AmericaEurope

CIO type distribution Current Distribution of CIOs Future Distribution of CIOs

(Page B5) "Half of my job is now product innovation and understanding market opportunities," says Mr. West, 47. In contrast, at his previous CIO job, 75% of his time was devoted to supporting tech systems, he says. The business community is paying attention

Critical indicators …  With whom do they spend the most time?  What are their top management and technology priorities?  Where do they want to have the greatest impact?  What skills do they need to develop? How does the Business Strategist CIO differ from other CIOs?

Who are they hanging out with?

Top 10 management and technology priorities of the Business Strategist  Aligning IT and business goals  IT-enabled process improvement  Revenue-generating services & products  Improving internal user satisfaction  Business continuity/risk management  IT staff development  Controlling IT costs  Improving project management discipline  Data privacy  Measuring and communicating IT value

 Create competitive advantage  Enable business innovation  Enable new revenue streams  Improve customer (external) satisfaction  Reduce business costs  Grow existing revenue streams  Improve security/risk management  Enable global expansion  Supply chain automation/visibility  Enable regulatory compliance Where do they want to have the greatest impact? Top 10

What skills are Business Strategists developing? In collaboration w/ Egon Zehnder International Egon Zehnder International Eight core competencies for executive management

Scoring range of Basic management competence Increasing stretch - Building towards world class competence Transformational, visionary competence Middle ManagementSenior ExecutivesWorld-Class Leaders Egon Zehnder International

“Good” CIOs vs. “Good” CEOs (50-85 th percentile) Egon Zehnder International (n = 25,000 execs across all functions)

“Good” CIOs vs. “Good” CFOs (50-85 th percentile) Egon Zehnder International (n = 25,000 execs across all functions)

Outstanding CEOs vs. CIOs (85 th percentile) Egon Zehnder International (n = 25,000 execs across all functions)

Business strategist “to-do” list  Spend more time with executive peers and external customers and partners; spend less with IT staff and vendors.  Focus more effort on improving external-facing processes such as customer service, sales and marketing.

Business strategist “to-do" list, continued  Shift some of IT’s value proposition from cost- cutting to creating competitive advantage, revenue-generating services and products and new revenue streams.  Prioritize and cultivate the leadership competencies of: » External customer focus » Market knowledge » Maintain strength in strategic thinking and collaboration

Business strategist to-do list, continued  Check your timing. Make sure your enterprise needs and would embrace a business strategist CIO. » Is the company looking to grow, diversify, innovate and differentiate? Is it willing to invest and take risks? » Has the CIO and IT organization earned the trust of its business partners through effective IT operations, project delivery and strategic alignment?

Thank you!