1. Kali Kliethermes Luke Tierney Claire Kim Jamie Young
The Role of the CIO
Kali Kliethermes
Luke Tierney
Claire Kim
Jamie Young

2. Executive Summary Skill Sets of a CIO Organizational Hierarchy
Relationship Builder
Job Stability
Salary
Demographics
Background
Interviews
Lessons Learned

3. Introducing Our CIOs Interviewed 3 CIOs:
Patrick McNamee, CIO, Express Scripts
Interview by Luke Tierney
Steve Becker, CIO, Graybar
Interview by Jamie Young
Jim Tom, CIO, UMSL
Interview by Claire Kim

4. What is a CIO? Wikipedia states the following about a CIO:
“The chief information officer or CIO is a job title for the head of the information technology group within an organization. They often report to the chief executive officer or chief financial officer.”
“CIO is sometimes facetiously ascribed the backronym of ‘career is over’ – implying the average tenure of a CIO is 18 months.”
viewed March 12, 2007.

5. Skill Sets of a CIO…

6. Skill Sets of a CIO Effective Communication - #1 Business Knowledge
Strategic Thinking
Leadership / Ability to Motivate
Ability to Drive Change
CIO Magazine’s “State of the CIO Survey”, CXO Media Inc, , viewed March 12, (Sample Info: Survey was conducted between 8/11/06-8/24/ heads of IT from a broad range of industries including manufacturing (20%), medical/healthcare (12%), federal, state and local government (11%), education (10%), insurance (8%), and finance (6%). 55% of the respondents hold a CIO/CTO title, 28% hold VP/SVP/EVP of IT titles, 11% are line of business technology executives, 6% list their title as “other.” 39% of the respondents are from companies with annual revenue of less than $100M, 36% are from companies with revenue between $101M and $999.9M, and 22% are from companies with over $1B (3% did not answer this question).) Survey sample details for this source will not be repeated on subsequent slides.

7. Organizational Hierarchy
It’s important for CIO to report to CEO if IT organization is going to be aligned with business strategy, yet 59% still report to someone other than the CEO.
Organizational Structure impacts likelihood of the CIO being on the executive committee.
Polansky, M., Inuganti, T., and Wiggins, S., “The 21st Century CIO”, Business Strategy Review, Vol. 15, Iss. 2, Summer 2004, pp
Johnson, A., and Lederer, A., “The Effect of Communication Frequency and Channel Richness on the Convergence Between Chief Executive and Chief Information Officers”, Journal of Management Information Systems, Vol 22, No. 2, Fall 2005, pp
CIO Magazine’s “State of the CIO Survey”, CXO Media Inc, , viewed March 12, 2007.

8. Organizational Hierarchy
Organizational Structure can also impact the IT budget
Reporting to the CEO is key!
“The days of the CIO reporting to the CFO are gone at companies who truly value the impact IT can deliver.”
Jeff Spar, Senior VP and CIO at the Readers Digest Association
Polansky, M., Inuganti, T., and Wiggins, S., “The 21st Century CIO”, Business Strategy Review, Vol. 15, Iss. 2, Summer 2004, pp
Johnson, A., and Lederer, A., “The Effect of Communication Frequency and Channel Richness on the Convergence Between Chief Executive and Chief Information Officers”, Journal of Management Information Systems, Vol 22, No. 2, Fall 2005, pp
CIO Magazine’s “State of the CIO Survey”, CXO Media Inc, , viewed March 12, 2007.

9. Relationship Builder Must be able to sell their ideas internally
CIOs can become unpopular - often forced to say “no” to other business units as a result of limited resources and budgets.
Must have excellent “soft” skills – relationship management / persuasive communication
Persuasive Communication – must be able to sell their ideas internally
Relationship Management – Too often, the business does not know what IT contributes – unless it breaks down.
Raths, David, “CIO to CEO”, Computerworld, December 18, 2006, pp Fowler, Julia, “The Right Ideas for a Bright Future”, Computer Weekly, January 16, 2007, pp

10. Average Time on Job for CIO?

11. Job Stability Big Risks – high turnover rate, but improving
Average time on the job for CIO is now between 5 and 6 years
Has increased since 2004
Is shorter at large companies than at small/medium size companies.
In fact, CIOs may be gaining on other CXO positions from a stability standpoint
Alter, Allan E., “CIO Role Survey April 2006: Achievement is the Issue, Not Survival”, CIO Insight, Ziff Davis Publishing Holdings, April 6, viewed March 12, Source for the statistics in this article is a study by SpencerStuart. SpencerStuart is “one of the world’s leading executive consulting firms.” The firm conducted the study across 25 countries by partnering with clients including Fortune 500, mid cap, and emerging growth companies.
CIO Magazine’s “State of the CIO Survey”, CXO Media Inc,

12. Salary For taking big risks, they make big $$
The larger the company, the larger the salary
Also varies by industry
Retailer / Insurance – highest salaries
Government / Education – lowest salaries
CIO Magazine’s “State of the CIO Survey”, CXO Media Inc, viewed March 12, 2007.

13. Demographics
According to CIO Magazine’s “State of the CIO 2007” Survey:
85% of CIOs are male, and 15% female.
According to a CIO Insight Research Study:
Average Age - 47
Average Hours of Work Per Week - 53
CIO Magazine’s “State of the CIO Survey”, CXO Media Inc, viewed March 12, 2007.
Alter, Allan E., “Meet the Hybrid CIO: Well-Paid and Powerful”, CIO Insight, Ziff Davis Publishing Holdings, April 5, , viewed March 18, (Sample Info: Conducted between 1/31/05 through 2/18/ respondents who identified themselves as their company’s top IT executive. Of those 405, 205 were from companies with 2004 revenues below $100M, 159 were from companies with revenues between $100M and $999M, and 41 were from companies with revenues over $1B. Survey sample details for this source will not be repeated on subsequent slides.

14. CIO Backgrounds… More Business or More IT?

15. Background Business Knowledge IT is primary area of experience (65%)
9% have only business experience
26% have a combination of experiences
CIO Magazine’s “State of the CIO Survey”, CXO Media Inc, viewed March 12, 2007.
Alter, Allan E., “Meet the Hybrid CIO: Well-Paid and Powerful”, CIO Insight, Ziff Davis Publishing Holdings, April 5, , viewed March 18, 2007.

16. CIOs: Up Close and Personal
Interviewed 3 CIOs:
Patrick McNamee, CIO, Express Scripts
Interview by Luke Tierney
Steve Becker, CIO, Graybar
Interview by Jamie Young
Jim Tom, CIO, UMSL
Interview by Claire Kim

17. Company Comparison 1,190 215 80 $226 Million $48 Million $10 Million
# of IT Employees
1,190
215 80
2006 Total IT Budget
$226 Million
$48 Million
$10 Million
Total Revenues
$18 Billion
$5 Billion
N/A
% of Total Revenues
1.3%
1.0%
Type of Organization
Public
Private
Non-Profit

18. Corporate Overview

19. Corporate Overview
One of America’s largest pharmacy benefit managers dedicated to making the use of prescription drugs safer and more affordable. Covers over 50 million members and their families.

20. Key Corporate Facts Operational and Financial Overview
14,000+ employees
57,700 participating pharmacies nationwide
Home Delivery: 39.1 million prescriptions
Participating Pharmacies: million prescriptions
Specialty Drugs: 3.5 million prescriptions
Generic Drugs: 58% of all prescriptions dispensed
$17.66 billion in revenue in 2006 ($16.3 billion in 2005

21. Key Corporate Facts Rankings Rank 134 on Fortune 500 list
Information Week’s 500 Most Technologically Progressive Companies
NASDAQ 100
Subsidiaries
CuraScript — one of the largest, independent specialty pharmacy services companies in the U.S.
ESI Canada — provides PBM services to 5 million Canadians

22. Corporate Overview
Specializes in supply chain management services and is the leading North American distributor of high-quality components, equipment and materials for the electrical and telecommunications industries. Established in 1869, Graybar procures, warehouses, and delivers just about any kind of electrical or communications and data product, component, or related service to its customers. It stocks and sells hundreds of thousands of items from thousands of manufacturers.

23. Operational and Financial Overview
Key Corporate Facts
Operational and Financial Overview
8,000+ Employees
Privately-held and Employee-owned
$5+ Billion in sales in 2006
250 distribution centers throughout the U.S., Canada, Mexico, and Puerto Rico

24. Key Corporate Facts Rankings
#462 on the 2005 Fortune 500 ranking of America’s largest companies
On the Fortune America’s Most Admired Companies list for the fifth consecutive year (2005)
#50 on Forbes’ 2006 ranking of the 500 Largest Private Companies
#12 on the National Center for Employee Ownership’s Top 100 rankings 2006)
On the InformationWeek 500 list of companies with the best technology and business practices for the fourth consecutive year (2005)

25. Key Organization Facts
The University of Missouri–St. Louis is one of four campuses in the University of Missouri. Established in 1963, it is the newest campus and as of 2005, it is the largest university by enrollment in the St. Louis area.
viewed March 12, 2007.

26. Key Organization Facts
Established 1963
Chancellor- Dr. Thomas F. George
Faculty- 1,046
Staff- 1,199 (Fall 2005)
Students- 15,548 (Fall 2005)
Undergraduates- 12,594
Postgraduates- 2,954
Campus-Urban, 300+ acres
viewed March 12, 2007.

27. CIO Background

28. Pat McNamee, CIO & SVP Express Scripts, Inc.
Joined ESI in 2004 with over 20 years of technology and general management experience.

29. CIO Background Professional: Title Company
President and General Manager
MISYS Physician Systems
Orthopedic Equipment Corp. (General Electric)
SVP, CIO and Chief Quality Officer
NBC
CIO and General Manager
GE Transportation Systems
CIO
GE Power
Educational:
Bachelor’s Degree in Biomedical Engineering (Marquette University)
Master’s Degree in Electrical Engineering and Computer Science (Marquette University)

30. Steve Becker, CIO & VP Graybar Electric, Co
Steve has a bachelor of science degree in Marketing, with a minor in Accounting from the University of Colorado.
Steve joined Graybar in 1976 as a shipping clerk after college.
He has 31 year of business experience mostly on the operations side.

31. Dr. Jim S.C. Tom Dr. Jim S.C. Tom CIO & Associate Vice Chancellor
of Information Technology
Dr. Jim S.C. Tom

32. CIO’s Background Wide Educational background:
B.Sc. Physics, Univ. of British Columbia, Vancouver, Canada
M.Eng. Systems Engineering, Carleton University, Ottawa, Canada
Ph.D. Engineering-Economic Systems, Stanford University, California

33. CIO’s Background Broad work experience:
Programmer/analyst -- Transport Canada, Ottawa, Canada
Management policy analyst -- National Oceanic and Atmospheric Admin, Miami, FL
Economist-statistician -- Statistics Canada, Ottawa, Canada
Manager, Strategic Planning -- Imapro Corp, Ottawa, Canada
VP Research and Engineering -- Imapro Corp, Ottawa, Canada
Director, Networks -- University of British Columbia, Vancouver, Canada
Chief Technology Officer -- University of British Columbia School of Medicine, Vancouver, Canada
“The consistent theme has been trying to figuring out ways you can use technologies to enhance business, whatever that business might be whether it is in engineering or universities.” - Jim Tom

34. Organizational Hierarchy

35. Executive Reporting Structure at ESI
“A successful leader is not bounded by reporting relationships. What matters instead is the ability to establish a clear vision and an optimized strategy along with a plan that is then socialized across the organization to gain the support necessary to drive positive change.” -Pat McNamee

36. Executive Reporting Structure at Graybar Electric, Co
Executive Office
Bob Reynolds
Chairman & CEO
Finance
Beatty D'Alessandro
SVP & CFO
Information Technology
Steve Becker
VP & CIO

37. Reporting Structure at UMSL
Dr. Jim S.C. Tom

38. IT Overview

39. IT at ESI Overview 2006 Annual Budget: $226 Million
Full Time Employees: 890
Contractors: ~ 300
Operating Scope: 2 countries (U.S. & Canada), 26 sites

40. Overview of IT at Graybar
IT group made up of 215 professionals
43 professionals involved in requirements definition, business alignment, user support, and testing
69 technologists in the development group with skills in ABAP, Web Applications, Applications Messaging (EDI, Workflow), Business Warehouse
103 technologists in the infrastructure group supporting mainframe, UNIX, Microsoft, Novell networking, Oracle databases, SAP Basis, etc.

41. Graybar IT Continued…
Approximately 10,000 combination desktops and laptops.
Roughly 500 servers managed by only three individuals. More about this later in outsourcing section.
2006 Annual budget was $47.5 Million ($48 Million in 2007)

42. IT at UMSL Overview About 80 people work for CIO
Type of services provided:
- Services that support teaching and learning
labs, classrooms, myGateway.
- Basic services
s, network, telephone systems, infrastructures in datacenters, and web servers.
2 Datacenters
Budget
Around 10 million
Come from technology fees , regular central funding,

43. Top 3 Priorities

44. Top 3 Priorities at Express Scripts
Assure system reliability
Define and deliver innovative applications that drive growth or increase productivity
Develop talent for use within IT and across the business

45. Top 3 Priorities at Graybar
People: Retention of good skilled employees.
Graybar’s continuous improvement strategic initiative to reduce cost, eliminate waste and improve business process.
Technology and ways to move the business forward and make us stand out from the competition. Manage enablers.

46. Top 3 Priorities at UMSL
Enhancing the support of the academic mission to improve teaching, learning and research
Compliance issues - concerns about complying with health care information.
Hiring and keeping good people and getting a better hand on security.

47. What Keeps a CIO Awake at Night?

48. What Keeps the Express Scripts CIO Awake at Night?
“Worrying that IT is not doing everything it can do to help our business win and that we can never most fast enough if we want to win in the marketplace.” –Pat McNamee

49. What Keeps the CIO of Graybar Awake at Night?
Not much on a regular basis. Occasionally, a big projects may keep him up at night.
Why does he sleep so well?
He has extraordinary faith in his team.

50. What Keeps the UMSL CIO Awake at Night?
The main issue that keeps him at night is staffing.
Non-competitive salaries due to under-funding.
A lot of choices for jobseekers in this metropolitan region.
Turnover rate has been stable but recruitment has been difficult.

51. Relationship with the CEO

52. Relationship with CEO
Meet 2 -3 times per week with regular /phone as necessary.
Meetings usually revolve around sales opportunities and client issues.
Meet quarterly to review overall performance of IT and 3 time per year with CIO’s direct staff to review IT 3 year rolling strategic plan.
Social Interactions: Play golf often and have dinner with their spouses at least once per month.

53. Relationship with CEO/CFO
Meets formally every other month with the CEO at the IS Committee meeting (which CEO chairs).
Meets formally once a month with the CFO and then informally multiple times a week.
CFO is viewed as a buffer and supporter of the IT initiative at Graybar. He has the ear of the CEO and is a corporate sponsor.

54. Relationship with CEO Do not meet regularly
but, meet socially on occasion.
“ He is a pretty busy guy.” – J.T.
Relationship with other executives?
Do not meet regularly, but works with them time to time.

55. What Makes a CIO Successful?

56. What Makes a CIO Successful?
Understanding of the market, customers and business processes.
Communication and collaboration skills.
Ability to translate market opportunities into business strategy.
Ability to translate business strategy into technological innovations.
Ability to build a strong team of business/technology leaders.
“A CIO with a 100% technical background has a 20% chance of success, but a CIO with a 100% business background has a 80% chance of success.” Patrick McNamee

57. What Makes a CIO Successful?
Business experience is the number one essential item for success.
Also, being a leader and not a caretaker.

58. What Makes a CIO Successful?
Paying attention to business.
Being business focused
“ You have to make the technology work for the business, provide value to the business.” – Jim Tom
Making sure that the system works.
Both operational and strategic side.
“Unfortunately, sometimes people, technical people pay too much attention to operational side and not enough attention to strategic side” - Jim Tom

59. Views on Outsourcing/Offshoring

60. Views on Outsourcing/Offshoring at Express Scripts
“Valuable tool that can have huge benefits when done effectively. Difficult in our our environment with Dept of Defense (current client) and HIPAA regulations.”
Pat McNamee

61. Views on Outsourcing/Offshoring at Graybar
Views outsourcing as a tool. Has investigated (along with consultants) outsourcing disaster recovery as well as call center and other functions in IT.
Discovered that he could not do so as efficiently as he is operating today.
Does have experience in off-shoring (Israel, India and Toronto) developments during our ERP conversion. Described as a terrible experience with substandard quality.

62. Views on Outsourcing/Offshoring at UMSL
Open to outsourcing some functions if external groups can do better with lower cost. Get some offers from external outsourcing groups from time to time. However, most of the time “we can do it more cost-effectively.”
Jim Tom

63. How should IT be Governed?

64. How Should IT be Governed?
“IT should be governed by IT leadership and an internal audit function to assure SOX and SAS-70 compliance. IT leadership should assure no money is spent without functional ownership for process improvement, a clear ROI, and alignment with the IT architecture.”
Patrick McNamee

65. How Should IT Be Governed?
Believes IT should be governed by the business needs
Currently governed logistically by the IS Committee, chaired by the CEO.
Committee consists of CEO, CIO all corporate officers as well as a few non-voting directors both from business and IT side.
The committee sets the priorities for the IT dept. Any project that will take over 500 hours is taken before the IS committee.
Interesting note: He is trying to get the name of the IS Committee changed to the IT Committee to emphasize technology over systems.

66. How Should IT be Governed?
“Most infrastructure decisions can be made by IT organization, with oversight by an executive committee. However, many IT decisions these days are actually quite intertwined with business decisions, so IT needs to be involved in the business decision-making, and not just given the problem of implementation once the decision has been made.”
Jim Tom

67. Lessons Learned
When asked about their top priorities, all 3 CIOs mentioned people/staffing.
Relationships with CEOs vary widely, from fairly social to very formal relationships.

68. Lessons Learned
All said that business experience is biggest factor for CIO success.
With respect to outsourcing/offshoring, all mentioned either that they could do it cheaper internally, or that it’s a “tool” to be used, indicating that it’s only a part of the IT portfolio.

69. In Closing
“There is no defined career path for CIOs, nor is there any certification, degree, or even common body of knowledge that such a person should have mastered to fulfill this kind of position effectively. Like the search for any other executive position, finding the right CIO is more about aligning personal traits, skills, professional orientation, proven success, and vision.”
Hawkins, Brian L., “A Framework for the CIO Position”, EDUCAUSE Review, November/December 2004, pp

70. Thank you!