The Executive MindXchange Chronicles provide summaries and valuable take-aways on all sessions post-event. Other insightful sessions include: Becoming a Digital Disruptor: Embracing New Business Models and Opportunities, The CIO as Catalyst for Analytics-Driven Decision Making, Successfully Securing the Cloud, and many more.

A Sample from the Executive MindXchange Chronicles:

ASK THE EXPERTS! PANEL DISCUSSION

IT As A Business…Not A Business Function

Given technology’s extraordinary impact and pace of change, the role of the IT department should also evolve in fundamental ways. This panel explored how CIOs are transforming IT from being a cost center to becoming a value center taking on the character and practices of traditional business structures.

 

MODERATOR
Terry Bradwell,
Chief Information Officer,
AARP

PANELISTS

Nabil Fares,
Director of Information Technology,
City of Stockton, California

Scott Caudill,
Vice President,
Solution Delivery and Business Transformation,

Zimmer Holdings, Inc.

Kim Terry,
Chief Information Officer,
Guthy-Renker, Inc.

TAKE-AWAY

It pays to understand best practices for collaboratively transforming the IT organization and achieving endorsement across the enterprise by better aligning IT with business needs

BEST PRACTICES

Culture trumps strategy every time! What culture is required to make innovation come to life?

Kim Terry: Emphasis before was on outsourcing, and now companies are doing a lot in house. What is appropriate to bring inside? Keep the smart stuff and give the rest to the outsourcers. In the past, we didn’t know where redundancies were among outsourcers. So we established “insourcing” to manage controls of outsourcers who handle cloud-based data centers. We use box.com for file storage. SaaS providers’ entire existence is based on applications running successfully, so they assume that risk.

Scott Caudill: We are applying new technology to joint replacement so we can move the continuum of care beyond the operating room. We are adding computer-assisted techniques to bone cuts to make them more accurate, but that added 25 minutes onto each operation. How do we achieve both goals of precise cuts and quick turnaround time in the hospital? Should we put sensors on the implants?

Nabil Fares: How are we using technology to pull Stockton out of bankruptcy? Government is not allowed to make a profit. We get money from appropriation committees (or not). The public sector doesn’t take on hard problems because they don’t pay. We are trying to turn the city around in three years with almost no money, no policies, and no resources. We started with governance and processes. There are no IT projects; instead everything is a collaborative business project. We are trying to leverage technology from the state. We have a staff of 41 with 5 vacancies. We start with a vision, communicate it, and each employee gets a piece of action.

Caudill: Deep-seated cultural issues are hard to change – how do you do it? Talent is old school, myopic, and typically moves from one orthopedic company to other two in Warsaw, IN. Zimmer acquired Biomet and the cultures are very different. How do you meld blue jeans with edgy hip? It starts with leadership and cascades through the organization. Connect the organization with purpose and conduct IT town halls to communicate business projects so everyone is speaking a common language and has a consistent perspective. 

Terry: We have 140 FTEs in IT. Customers didn’t know how to talk to IT vendors who just took orders, so we started a Program Management Office to gather requirements and put vendors behind the PMO. That strategy has helped control costs and work flow.

Terry: We assigned business relationship managers in IT to every key component of business. Their job is to identify good ideas and make them great for the business. These individuals are in a good position to do this because they know what flows across the whole business. The result is that the business partners pull IT in as solution providers.

ACTION ITEMS

What new roles have you added to your IT organization to support new strategies over the past few years?

Terry: Our infrastructure support is going away with the introduction of cloud providers, so I don’t need a traditional infrastructure group any longer. In their place I have service delivery managers to supervise contractors.

Caudill: I still have data architects, application architect, and other traditional roles, but I also have vendor management needs for cloud services, SaaS, etc. to link all together (i.e., cloud architect).

What do you know now that you wish you knew three years ago?

Terry: People make all the difference! We made the mistake of only focusing on skill set rather than personality and people skills during recruiting. It should be other way around. A 70-80% match on technical skills is good enough because we can train on the rest.

Caudill: It’s important to develop bench strength and move people into stretch positions; otherwise, the wealth of knowledge gets stove piped.

Fares: Keep things simple! Government often tries to build a car with wings, and it isn’t fast and doesn’t fly. It’s either a bird or a car; it doesn’t have to do everything. We have to build everything in house, and we set up the first government cloud in California.

Terry: IT doesn’t support the business; it is the business. CIOs should work on honing business skills, not technical skills. You have experts on staff for the latter.

What are the top three qualities you look for when hiring?

Caudill looks for someone who is a good fit and a team player, meets most of the technical criteria, and has the proper pedigree/work history. 

Terry looks for autonomous style. 

Fares looks for someone who is willing to learn and explore; has the ability to get stuff done; and has solid leadership skills/customer oriented/bedside manner. 

Terry looks for the right cultural fit and adaptability (“disruption shouldn’t be feared, it should be properly engineered.”)

TAKE-AWAY

Concentrate on implementing a cost conscious business approach and measuring, tracking and promoting the value to internal stakeholders.

FINAL THOUGHT

Who does the financial analysis of moving to the cloud? How do you decide what moves to cloud? One idea: price the cloud versus. a data center. Cloud companies’ costs are coming down. What is the preferred model – capital cost with depreciation or a subscription-based model? The size of the IT organization doesn’t decrease with cloud services since they focus on middleware and managing interfaces. With cloud, you know the entire cost of service, whereas with an in-house data center, some costs get buried or are part of another budget like facilities.