Legacy Modernization in Banking and Insurance: The Road to Performance

The Role of the CIO

Charles Assaf

Francisco Gonzalez-Meza

Sean Athans

Diego Siri

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Agenda

Introduction

Role, skills and responsibilities for 21st Century CIO

Assessing the performance of the CIO

Real life cases of CIO’s

Recommendations from personal experiences and

insights

Q&A

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istorical Background

Traditional Brick and Mortar

Growth of E-Commerce

Internet Bubble

Cost Cutting and Becoming Lean

‘

The Genus CIO is a Mutating Species

’

External and Enterprise Drivers

Line of business

Complex Business Models

Monolithic business

Business Metrics

IT Metrics

Multiple Responsibilities

Single CIO Role

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Role of the CIO

Business visionary

CIO’s must help business executives to understand and

appreciate challenges of IT enablement for new

business models.

A successful CIO must anticipate and implement the

required changes (short- and long-term), not simply

react to them.

Understand and effectively manage business risk.

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Role of the CIO

Lead – Bridge business and technology

Anticipate – Sense key trends

Strategize – Shape demand and synchronize

Organize – Orchestrate for lighter IS

Deliver – Provide cost-effective and timely services

Measure – Know where you stand and why

LEAD

Measure

Strategize

Anticipate

Deliver

Organize

Six Imperatives Define the Role

of the CIO

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Skills

Required

Flexibility and adaptability

Big-picture oriented

Clear communication of ideas

Personal credibility and leadership

Technical and financial understanding

Broad background

Team approach and team building

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The Effect of Technology Eras

Complexity

Business

Exploitation

of IT

Web

based

Distributed

Mainframe Era

Strategic Contribution

Time

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Management Priorities

E-business process

Embracing the customer

Exploiting ERP, CRM

Sourcing management

M&A management

Managing IT costs

anagem

ent vs. Technology

anagem

ent vs. Technology

Technology Priorities

E-business capability

Business-adaptive IT

designs, CRM

Supply chain management

Legacy migration

Strengthen infrastructure

Support for intangibles

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Criteria for a Successful CIO

Assess the performance of the CIO

•General

•Sample performance criteria

Tactical

Strategy

•Industry/project specific

•Performance Process

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Criteria for a Successful CIO

Is the CIO articulating and linking business and IT maxims

to deliver value ?

Has the CIO implemented an effective IT governance ?

Is the CIO executing upon the enterprise endeavors agreed ?

Is the CIO looking for new IT enabling opportunities across

the business ?

Is the executive team aware of the value the CIO is bringing

to the company?

To what extent is the CIO engaging in peer coaching and

mentoring ?

Strategy

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Sample Criteria

Is the infrastructure delivering according to the

resources invested?

How effective is the relation with IT suppliers?

Are the Service Level Agreements being met ?

Is the ERP project being delivered on time and

within budget ?

Etc…

Perform

ance Process

Perform

ance Process

2. Periodic Assessment

of Performance

Meet

Criteria?

1. Set Performance

Criteria

Tactical

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Sample Criteria

Is the infrastructure delivering according to the

resources invested?

How effective is the relation with IT suppliers?

Are the Service Level Agreements being met ?

Is the ERP project being delivered on time and

within budget ?

Etc…

Perform

ance Process

Perform

ance Process

2. Periodic Assessment

of Performance

Meet

Criteria?

1. Set Performance

Criteria

Tactical

Repeat on a

per phase basis

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Distinctive Features

Demonstration of versatility and preparedness to take

risks

Inclusion of succession planning

Possession of requisite business knowledge and acumen

Vision of enterprise IT impact in 2 to 3 years due to CIO

performance

Achievable performance criteria that will enhance

contribution to the enterprise

Maintaining a level of technical competence

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The E Priorities of the CIO

Energizing enterprise strategy and initiatives

Enabling new business initiatives

Executing cost-effective solutions

Exploiting technologies, sourcing opportunities

and benefits

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The E Priorities of the CIO

Energizing

Enabling

Executing

Exploiting

The Four E’s

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Claude

Cargou

–

EVP of IT AXA Group

CIO of AXA since 1991

‘

The ideal role of a CIO is that of a godfather—someone who runs the IT family.’

Since Cargou joined AXA:

With mergers and acquisitions became largest insurance group in the world ($73.7 billion in

2000).

Transformed IT organization from centralized to an international force

Manages offices in 60+ countries, 11,200 IT professionals and budget of $1.9B

Cargou's implemented IT structure is:

CEO & CIO governance team – 50 business & technology leaders from all 50 AXA's

companies; Plans AXA’s IT Future

Information Services Board - CIOs and CEOs from AXA's 10 largest companies; Decides on

groupwide IT investments

Ninety percent of strategy is in execution, and 90 percent of the execution is in

communication”

"a CIO's job is never done."

Energizing enterprise strategy and initiatives

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Jose Luis Luna

–

CIO CEM

Joined CEMEX in 1987 as Head of technology development

Few industries more basic or old economy than cement

Pre-1985:

Old cement family company.

No differentiated service.

Commodity business.

1987-2002: CIO brought to solve efficient delivery and unforecastable demand.

IT became part of business strategy. IT department built with alignment in

mind.

Processes of firm based on three tools:

Cemexnet

Dynamic Synchronization of Operations

e-CEMEX

This [CEMEX] is not just a good technology application. It's a brilliant business

design. They have taken the ultimate commodity product and showed that

you can achieve differentiation through service.” David Bovet, (VP of SCM

Mercer Management Consulting)

Enabling new business initiatives

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Karl

achs

–

CIO Celanese

Joined Celanese in 2001 – Objective: cut cost. Direct

reports: 0

‘Bigger picture’: Cost cutting is just part of the equation:

Industry commoditizing

Consolidation coming

Centralized management

Today – Driver of the biggest transformation within the

company

OneSAP: Consolidate seven SAP entities into one

Budget: $60 million dollars

ROI estimated: 50%

Executing cost-effective solutions

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Dawn

Lepore

–

CIO Charles Schwab

Promoted from IT department in 1993 to CIO

Relevance - "A CIO is nothing if she doesn't make sure IT continues to

stay responsive to customers and the business overall"

CIO as a people leader - "CIO is as much a people job as it is a tech job.

I want IT to be a place where people can do the best work of their lives."

Charles Schwab challenges:

Before: Struggling with pure players

Response: Led web project to serve 4.3M users

Result: Hands-down leader in on-line trading

Challenges:

Technology? No – Easy part

Creating momentum

Avoiding Outsourcing

Exploiting technologies, sourcing opportunities and benefits

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Typical barriers for a successful CIO

Hierarchical structure of the company

CFO: Budget

CAO: Accountability

Available resources fluctuation

Too many IT genius within the senior management team

Short term planning

Awareness of CIO possibilities

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Recom

endations

Recom

endations

BATMAN DON’T FLY

BATMAN SERVES GOTHAM CITY

BATMOVIL AND GADGETS ARE NOT CHEAP

HE BUYS ONLY WHAT HE NEEDS

THE RED PHONE IS FOR CONTACTING THE

COMMISIONER, NOT HIS SECRETARY

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tio

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