What it takes to become ‘the extended CIO’

The extended CIO role is often the CIO’s first foray into non-IT roles. The title is typically something like “senior vice president and CIO”—a title that reflects both the holder’s primary focus on IT and the additional responsibilities that management has assigned.

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The extended CIO often takes on responsibility for functions or tasks that are related to the CIO role and do not require a full CxO-level role. These may be temporary assignments (such as merger integration) or ongoing responsibility for centralized services that can be managed as infrastructure (such as facilities or physical security). Other CIOs take responsibility for areas that are not usually managed by a seniormost executive, such as business processes or strategy.

The extended CIO role can be a career aspiration for many IT executives who love the challenges of the CIO role but who want the expanded influence on the business that goes with additional corporate responsibilities. The role offers the CIO greater influence on the business as a whole and often helps the CIO transition to a non-IT C-level executive role. It is also a natural progression for IT executives who are comfortable speaking the language of business value.

Common to all extended CIO roles is that the executive’s primary role is CIO. Other responsibilities are usually additional and not primary. Also common to the role is that the new responsibilities are seen as either the next step to a higher business role or an additional set of duties the CIO sought. As noted, most CIOs are already in this role to some extent.

Sometimes the extended CIO role is temporary, although the temporary role may be repeated or indefinitely extended. In 2006, McKesson’s Randy Spratt was asked to manage the integration of an acquired firm, Per Se! Technologies. From the start, he was interested in the project for its potential to provide a template for McKesson’s approach to integrating acquisitions.

I discovered that we had approached every acquisition as a case unto itself. The things you needed to capture and deliver for business integration were left to the individuals who did the job, usually high-potential individuals. It was also usually the first and last time they did such a project, so there was no corporate learning. So we set up a little office of M&A integration that manages the integration of acquisitions, and it’s produced a really great business integration capability— checklists, project plans, toolkits, methodologies to set up a business integration team. This has added to the view that the IT organization can think in terms of business results and outcomes.

Spratt has leveraged the credibility he developed for the central IT organization since 2005 to transform IT operations throughout McKesson. In 2008, he and McKesson’s divisional CIOs agreed to embark on McKesson’s first-ever companywide IT strategy. “We’ve got the infrastructure consolidation in process, so what remains is how IT is serving the business needs of the company, and the leverage we can get for that. So rather than talk about what it costs to replace seventeen general ledger systems, we have to talk about what it costs the business to run seventeen different finance processes, and take it up to the business process reengineering level. That will take us to the next level of operational efficiencies and tie us directly to the performance of the business and its expansion strategies.”

That systematic approach to managing IT’s impact on business performance is now standard operating procedure for merger integration at McKesson. Spratt says, “Instead of leaving them to drift on their own where we do not have a singular strategy—for ERP or sales support, for example—we have a lens to look at them.”

Some CIOs find that extended duties become permanent and welcome additions to their roles. Butch Leonardson is CIO of Boeing Employees Credit Union (BECU). Credit unions, even large ones such as BECU, thrive through customer intimacy and customer service. In his role as CIO, Leonardson has constantly worked to remind his IT staff of that fact. “IT needs to know all the moments of truth with our customers, and make them incredibly exciting,” he says. “You have to be a student of the business.

IT planners become business planners, part of the business conversation. Then the whole idea of an IT strategy doesn’t disappear; it fades into the tapestry of the enterprise’s strategic plan. ‘Here’s our strategic encounter with the customer, and IT is a thread in the tapestry.’

Since 2006, Leonardson has cochaired a BECU customer and employee loyalty initiative called Net Promoter.7 In this role, he is constantly examining ways to measure and improve customer service. By measuring how specific types of interactions affect specific dimensions of customer satisfaction, he and his colleagues can design process changes, information provision, and specific interventions to improve it. “When a BECU employee logs on in the morning, if he’s [customer-facing] staff, he sees our four strategic objectives—the target and where we are,” Leonardson explains. “With Net Promoter we’re supposed to be at 73.5 percent right now, and we’re at 74.6 percent.” This means that a net of nearly 75 percent of customers would recommend BECU to friends, family, or colleagues.

Leonardson continues to seek improvements in the company’s ability to use data to improve performance for customer service. He and his staff are now working with an outside firm to benchmark Net Promoter scores against those of other firms and to take the net promoter metrics down from the overall company to the branch level.

The customer experience role translates to Leonardson’s dealings with colleagues. For example, he is trying to change the way he talks with the board and how board members think of IT’s role. “I believe that boards can evolve, and they need to see IT spend not as IT spend but as customer value spend. I always present to the board from the member perspective, not the IT perspective. One branch manager told me that the stuff we rolled out changed his life.”

CIO guru Bud Mathaisel has played the role of extended CIO at two companies. At Solectron, in addition to his CIO role, Mathaisel was chief process officer, responsible for ensuring that business processes were well designed and that everything possible was done to constantly improve them. In the process role, Mathaisel regularly spent time with customers, seeking ways to make Solectron easier to do business with. He also spent time internally ensuring that the firm’s processes were functioning effectively. Although responsible for processes, Mathaisel was primarily still the company’s CIO. He strove to make IT a focal point for excellent practices that the firm could use elsewhere. For example, his PMO became so highly regarded that business units regularly poached PMO staff to manage projects in their units. Mathaisel felt that was an honor. He could train new PMO managers. But the credibility he gained through excellent processes and people could not be built overnight. He leveraged the performance of his IT unit to improve the performance of Solectron, his own ability to change business processes, and his own personal credibility inside and outside the company. Recently Mathaisel left Solectron for another extended CIO role—CIO and chief operating officer at Achievo, an outsourcing business that leverages its application development offices in China across a network of offices in the rest of the world.

Guido Sacchi, formerly of CompuCredit, extended the CIO role all the way to the CEO’s office at Moneta Corporation. While still a CIO, he described this as a natural next step for many CIOs as the roles converge. “For me, the IT role has changed a lot in the last eighteen months. I’m now seen as a business person, a C-level executive who’s in charge of IT,” he told us in 2008. “But the debate is much livelier about how we make the business better.

“I’m focused a lot more on information, a lot less on technology. Our intellectually challenging problems are around information flows and decision making. Some of our most successful projects recently are about BI, or what we call the ‘data supply chain’— asking ourselves, ‘What kinds of decisions do the leaders make on a daily basis, and how we can improve that dramatically?’” Beginning in 2006, Sacchi served CompuCredit as CIO and vice-president of corporate strategy. He set up a corporate process for innovation management, with an emphasis on funding and launching new business as well as enterprisewide change initiatives.

The role gave him plenty of opportunities to talk about enterprisewide business change with executives throughout the organization. For example, he launched an initiative called Operational Leverage to dramatically improve operational efficiencies in traditional overhead areas such as IT infrastructure, telephony, and call center footprint.

In 2008 Sacchi was asked to serve as acting COO of one of CompuCredit’s IT-intensive new businesses, a mobile phone venture that has a large credit component. In his words, “I’m fortunate enough to have been offered the opportunity to try my hand at a C-level business role with P&L responsibility. It’s definitely of interest to me . . . I’ll try it and see if I can be successful at it. I’ve been a CIO here for almost six years, and it’s probably time to let someone else grow into that role. We have a great team and a clear succession plan, and it’s time to give someone else a chance.” Sacchi’s move to the CEO role at Moneta Corporation shows that there are indeed multiple options for the CIO-plus.

Reprinted by permission of Harvard Business Press. Excerpted from The Real Business of IT: How CIOs Create and Communicate Value. Copyright (c) 2009 Gartner, Inc. and George Westerman; All Rights Reserved.

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