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CIO - University of Missouri-St. Louis


									    The Role of the
Chief Information Officer

                   Presentation by
             Eliot Lee and Mark Guthrie
                 November 12, 2005
What Do These People
 Have in Common?
                      3        4
1                                  5


                          11       12

         9       10
     Presentation Overview
Chief Information Officer profile
- Demographics
- Salary data
- Employment information
- Topic relevance
In-depth case studies of 3 CIOs
Best practices: Role of the CIO
     Role of the CIO Is Evolving
Quotable quote:
“It is no longer useful or meaningful to talk
about the ‘role of the CIO.’ ”
– Barb Gomolski, senior research director, Gartner, Nov. 27, 2000 1

    No single “one-size-fits-all” position description
    CIOs wear many hats; work in various roles
    Different types of CIOs
    CIOs are driven by background and interests
    Industry and organizational differences affect role
               Chief Information Officer
    Job title is commonly given to the senior executive in charge of
    information technology and computer systems that support an
    organization’s business goals.

    As IT has become increasingly important, the CIO is typically viewed
    as a key strategist within the organization.

    In many companies, the CIO reports directly to the Chief Executive
    Officer (CEO). In some companies, the CIO sits on the Executive

    Usually, a CIO proposes IT strategies to achieve business goals and
    works within an established budget.

- Definitions 2
                CIO Demographics
   87% are male
   70% moved up through the IT ranks
   5 years, 9 months is average time as CIO
   4 years, 6 months is average time in current job
   40% report to CEO
   85% are responsible for enterprise-wide IT
   76% do not plan to outsource outside of U.S.

- Source: CIO Magazine   3
                 CIO Regional
               Salary Comparison
Percentile     Midwest:   East Coast: West Coast:   Southeast:
  Source   4
               Chicago     New York      Los          Miami

   25th        $173,434    $186,163     $179,640     $157,841

   50th        $214,922    $230,696     $222,611     $195,598

   75th        $272,348    $292,337     $282,093     $247,862
         CIO in the Government
In 1996, President Clinton
signed what has become
known as the Clinger-
Cohen Act.

This act required major
Federal Agencies to
establish the position
of CIO.

- CSA High Technology Research Database
with Aerospace 2001 5
    CIO Employment Turnover
5 Years: Average tenure of a CIO in a single
position – examples:
   Joseph Eckroth, former CIO of Mattel (Toys), left
    position after 5 years. Joined New Century Financial
    (Real Estate Investment Trust)
   Patricia Morrison, former CIO of Office Depot, left
    after 3.5 years to join Motorola
   Frank Hood, former CIO Krispy Kreme Doughnuts,
    left shortly to join Quiznos 6
Some CIOs seek resume-building experiences
rather than a long-term career with a single
employer. 7
            CIO Turnover
           Rate Comparison
77 business executives surveyed – majority
believe CIO turnover is equal to other senior
positions 8*

8% – “CIO turnover higher than other senior
positions in the company”

62% – “CIO turnover is the same”

31% – “CIO turnover is lower than other senior
executive positions”
    CIO Employment Outlook
CIO job search during downturn could last as
long as 12 to 18 months
Recruiting for CIOs increased in 2005
   CIO job listings increased 30% from 2004
   Overall IT sector hiring increased 37% from 2004 9
Locally, CIOs are increasing hiring of IT
professionals, according to Robert Half
   11% of CIOs surveyed in St. Louis planned to add to
    staff; 10% surveyed planned to reduce staff
   Net 1% of CIOs planned to hire in the third quarter of
    2005 – increase of 2 percentage points from second
    quarter 10
      Chief Information Officer
      Corporate Case Studies

 Three different companies.
     Three unique CIOs.
Three insightful perspectives.
CIO Profile: Centene Corporation
Glendon Schuster 11
Chief Information Officer
Centene Corporation
Joined company in company
June 2005 on an interim basis.
Became permanent in October
Senior Management Team
B.S., Electrical Engineering
  CIO Profile: Glendon Schuster
   Professional IT Background
Title                      Company                Description
Partner                    Accenture Consulting   Provider of programming

Head of Information        Gamut Interactive      A start-up company
Technology                                        focusing on electronic
                                                  couponing interacting
                                                  with TV/Print Media
Development Lead           Deluxe Check           Check production

Various roles (designer,   Walgreens              Pharmacy
application architect,
development lead, etc)
Organizational Chart

           Michael Nierdorf
            President and
    Chief Executive Officer (CEO)

           Glendon Schuster           reports
    Chief Information Officer (CIO)    to the
            Centene Corporate
Managed care provider for Medicaid
Services: claims processing and client reporting
Operates healthcare plans in Indiana, Kansas, Missouri, New
Jersey, Ohio, Texas and Wisconsin
Contracts with other companies to provider special services
including behavioral health and disease management
288 IT employees – 159 full-time corporate; 79 contractors

     Year              Total Company                Annual
                          Revenue                 IT Budget
     2004                  $1 Billion            Proprietary

     2005                 $1.5 Billion           Proprietary
           IT Culture
           at Centene
159 Full-Time Employees
79 Consultants
Very structured
  The Biggest IT Challenges
         at Centene
Creating more customer-based reporting
Increasing disease management
Development of “trending” systems
Regional Health Information Organizations
Ability to bring fast reliable information to
patients, doctors and hospitals
   What Keeps the Centene
    CIO Awake at Night?
Balance between controls (security,
permissions, signoffs) and administrative
Giving people more authority to work
on tasks (e.g., migrate code) is
generally more efficient, but can lead
to risks in security, regulatory
procedures, compliance and litigation
Locking down authority tends to tie up the
organization in administrative overhead
 CIO Relationship with CEO
Reports directly to the CEO
Weekly senior management meetings
Average CIO communication with CEO
occurs five times per week – “IT rules” at
Redefining the role of the
IT department
Major emphasis on teamwork
     CIO’s Biggest IT Success
            at Centene
Major reorganization of the IT
Aligned the IT groups within
functional areas.

Quotable quote:
“Change by evolution, not revolution.”
– Glen Schuster, CIO
   How does IT drive business
         at Centene?
IT drives the business at Centene
IT should be reacting to the business
IT should develop systems that
complement the business
Quotable quote:
“IT should support the business
– Glen Schuster, CIO
Trends Impacting Centene in the
        Next Five Years
Disease management
 Design systems that do trending analysis

  based on the amount and types of claims
 Develop software that can help predicate a

  patient’s predisposition to a disease
Customer-based reporting
Regional health information systems
         The ‘Untold’ Story
     from the CIO Perspective
CIO is not a technology expert.
CIO has more “power” than he actually has.
CIO can install and “fix” software problems.
CIO is not involved with the daily activities of the
IT department.
CIO does not run the business; takes direction
from the business.
CIO Profile: Express Scripts Inc.
 Patrick McNamee 12
 Chief Information Officer
 Express Scripts Inc.
 Joined company in February
 Senior Management Team
 Corporate Resource Council
 M.S., Electrical and Computer
 Engineering and B.S.,
 Biomedical Engineering –
 Marquette University
   CIO Profile: Patrick McNamee
    Professional IT Background
Title                    Company                    Description
President and General    MISYS Physician            Provider of information
Manager                  Systems                    management software
                                                    for physician practices
President and General    Orthopedic Equipment       Surgery X-ray
Manager                  Corp. (General Electric)   manufacturing business
                                                    (GE Medical Systems)
Chief Information and    NBC (GE)                   Television Network
Quality Officer

Chief Information Officer GE Transportation         eBusiness
and General Manager       Systems                   Transportation

Chief Information Officer GE Power                  Global Power Plants
               Express Scripts
              Corporate Overview
Leading pharmacy benefits management (PBM) company
Services: claims processing, mail pharmacy, specialty prescription
fulfillment, benefit design consultation, drug utilization review, formulary
management, and drug research
Wide range of corporate and organizational clients including Dell Computer,
United States Department of Defense (DoD), Citigroup
Recognized in Information Week’s “500 Most Technologically Progressive
1,030 IT employees – 772 full-time corporate; 258 contract
      Year                  Total Company                   Annual
                               Revenue                    IT Budget
      2004                    $15.1 Billion             $190.4 Million

      2005                    $17.1 Billion             $223.8 Million
  Express Scripts
Organizational Chart
          George Paz
         President and
 Chief Executive Officer (CEO)

       David Lowenberg
 Chief Operating Officer (COO)

                                    to the
        Patrick McNamee              COO
 Chief Information Officer (CIO)
        A ‘Typical’ Day for the
         Express Scripts CIO
4 a.m. – Blackberry buzzes on night stand to alert about
a Severity One “Sev 1” critical systems issue
Joins conference call to discuss troubleshooting and
assess impact on systems and users
Half-hour to get ready for work at the office
Time allocation during the day:
1. Leadership and staff meetings
2. Specific topical meetings (Corporate Resource
   Council, Medicare Part D, Strategy/Planning)
3. Dealing directly with employees (on-on-one meetings)
4. External boards: St. Louis CIO Forum, Community
   Health and Patient Services (CHPS)
What Keeps the Express Scripts
     CIO Awake at Night?
Performance and reliability issues – No. 1
priority of any IT organization
Human resources, staffing – responsibility for
nine direct reports; managing turnover;
developing leadership
Managing change
Communication – ongoing at all levels

Quotable quote: “It’s all about communication
and sharing information.” – Pat McNamee, CIO
   CIO Perspective: Business,
   People, and Technical Skills
People – Behaviors and values around
leadership and teamwork are paramount.
Business – Express Scripts is in a complicated
business; expertise in healthcare is important.
Technology – Technical skills are very
important; however, technology is a
“commodity.” (Nicholas Carr said this too!)
Quotable quote:
“We have accountability and the creation
of teams that are empowered …
non-bureaucratical.” – Pat McNamee, CIO
 CIO Relationship with CEO
Weekly senior management meetings
Weekly meeting with Chief Operating
Officer (COO) – direct reporting line
Average CIO communication with CEO
occurs five times per week – “IT matters”
at Express Scripts.
Single, dedicated operations team
Teamwork underscores everything
      CIO’s Biggest IT Success
         at Express Scripts
In nine months on the job, reduced…
  Severity One “Sev 1” systems alerts – 74%
  Outage minutes – 60%
How success was achieved:
1. Dedicated Sr. Director position created to focus
   on supporting systems performance and reliability
2. Changed responsibility of applications team by
   reallocating infrastructure ownership/accountability to new
2. Heavy investment in performance monitoring – “robots” provide
   early alerts
Lessons learned:
   Goals from IT strategic plan can be achieved with proper
   planning, hard work, appropriate allocation of resources and
   team effort. IT teams can cross the “finish line,” although there
   are always new goals to attain in IT.
     The Biggest IT Challenges
        at Express Scripts
Performance and reliability of systems
Express Scripts is an organization built through
Not well architected – many diverse applications
make it a challenge to sustain the platform
Aligning IT with key industry initiatives such as HIPAA
(Health Insurance Portability and Accountability Act) and
Medicare Part D (prescription drug benefit)
Huge amount of price pressure in the marketplace for
pharmacy benefit management (PBM) companies
Customers have unique program requirements;
differentiation affects IT
Striving for perfect systems performance
  How Does IT Drive Business
     at Express Scripts?
Introducing new technologies tied to
industry initiatives – Example: Consumer-
Driven Healthcare
Work with technology start-up companies
(third-party vendors) to develop lowest-
cost, highest-reliability systems
Quotable quote:
“If IT demonstrates that systems are
reliable, customers will choose us.”
– Pat McNamee, CIO
Trends Impacting Express Scripts
     in the Next Five Years
Price pressure
   Develop lower-cost solution (impacts IT spend)
   Differentiate service (innovation, performance)
   Client and patient service group focuses on
    technology component (number of calls,
    cost-per-call, etc.)
Industry initiatives
   Carve-In Healthcare Programs
   Consumer-Driven Healthcare
   Requires Express Scripts to develop tools that allow
    customers to understand the company’s programs
   Evolve Web portals to let customers truly see the
        CIO’s Most-Important
          Lesson Learned
IT is all about service.
Teamwork – goal of collaboration is to
make others successful
Establish trust
Develop priorities
Quotable quote:
“IT is a service organization. It is not of any
value as an independent entity. Many [IT
organizations] fail because they don’t identify
one role … to serve.” – Pat McNamee, CIO
         The ‘Untold’ Story
     from the CIO Perspective
IT forces people to have a deeper understanding
of business processes (operations, accounting,
strategic planning). It’s not just about
Automating processes takes leadership and
industry acumen.
CIOs are not technology introverts.
Express Scripts’ IT department develops talent.
Goal of CIO is to develop staff and move people
out of IT department and into other areas of the
company. This “spreads expertise” (learned
through IT) among the organization’s key
        CIO Profile: Spartech Corp.
     Michael Lane 13
     Chief Information Officer
     Spartech Corporation
     Joined the company in February 2001
     General management/auditing career

Quotable quote: “I never touch the keyboard, I am surrounded by good people.”
– Michael Lane, CIO
  Spartech Corp.
Organizational Chart
           George Abd
          President and
  Chief Executive Officer (CEO)

          Randy Martin
  Chief Operating Officer (CFO)

                                     to the
           Michael Lane               CFO
  Chief Information Officer (CIO)
        Spartech Corporate
Largest plastic-sheet supplier in the U.S.
45 manufacturing plants worldwide
Corporate headquarters in Clayton
25 IT employees
    Year         Total Company          Annual
                    Revenue           IT Budget
    2004           $1.1 Billion          N/A

    2005           $1.4 Billion       $9 Million
         IT Culture at
     Spartech Corporation
“Best in St. Louis”
Consultant-like atmosphere
25 full-time employees – small staff
supports large IT program
   CIO’s Biggest IT Success
          at Spartech
Had upper management recognize IT as
an important department in the
Implementation of VOIP network
through out the company
Implementation of Oracle financial
Provide maximum support with minimum
  The Biggest IT Challenges
   at Spartech Corporation
Proving IT can deliver on it’s promises

Smooth implementation of the ERP project

Keeping up on cutting-edge technology
       How Does IT Drive
      Business at Spartech?
IT is “almost” a partner at Spartech.

4 years ago, IT was a “necessary evil.”
 CIO Relationship with CEO
Reports to the CFO
Weekly senior management meetings
Average CIO communication with CEO
occurs 2 to 3 times per week
“IT is almost a partner” at Spartech.
   Trends Impacting Spartech
     in the Next Five Years
Oil Prices
 - Largest supplier of plastic sheets in America
Healthcare Costs
 - Healthcare costs are rising
 - China becoming a “major player” in the market
       CIO’s Most-Important
         Lesson Learned
Don’t over promise.

Don’t jump the gun on technology.

Under promise, over deliver.

Develop an efficient team.
         The ‘Untold’ Story
     from the CIO Perspective
The leadership the position requires CIO to have

CIO is salesman

CIO has to hire good people

Loyalty is a “two-way street”
           CIO Best Practices:
              People Skills
IT executives fight image of being too technical,
introverted and tactical
   Santa Clara University study notes that stereotyping
    creates “missed organizational opportunities”
   Study proposes that IT work “provides the best
    possible training ground for senior managers.” 14
Technical skills AND people skills are equally
   University of Dayton study found no differences
    between CIOs with technical backgrounds and those
    with general management backgrounds 15
             CIO Best Practices:
IT innovation is important for leading companies
   CIO Magazine study found 71% of CIOs stated that innovation
    was a key element of their company’s business strategy
   80% of respondents stated that the CIO is responsible for
    corporate innovation 16
   More than half of 83 CIOs in the study said innovative IT ideas
    have increased in the past two years 17
   65% of CIOs in the study said developing innovative IT ideas is a
    “significant or dominant aspect of their roles.” 17
   CIO should be committed to lead innovation; CEO should
    support optimistically for success 18
   CIO should help business units identify IT new solutions 19
   Smart companies partner with CIO to develop innovative e-
    business initiatives 20
   CIO role defined as “teacher” or “prophet” vs. “technologist” 21
           CIO Best Practices:
Clear communication is key. CIO should avoid
“techno-speak” and jargon 22
Organizational communication has a significant
impact on:
  Employee attitudes

  Employee behavior

  Employee perceptions about managing

   change 23
Quotable quote worth quoting again:
“It’s all about communication and sharing information.”
 – Pat McNamee, CIO, Express Scripts
       Lessons Learned:
   Typical CIO Awake at Night
 IT project delays
 Staffing and user demands
 Management changes
Quotable quote:
 "IT is like the CIA. Nobody knows our
 successes, but the failures are public
 – Shawn Schwegman, CIO, 24
       Lessons Learned:
    Status Impacts CIO Role
CIOs in many organizations are
challenged by internal perceptions
IT is often perceived as having a lower
status than other business functions 25
Status can be defined as “recognition from
the organization of the IT function’s
capabilities and value.” 25
Status does matter for CIOs
Corporate culture affects status
                   Lessons Learned:
   Room for outsourcing in non-mission
   critical IT functions
   Outsourcing should only be done on call
   center functions
   Cognizant Technology Solutions is the
   latest offshore services firm to report
   blockbuster year-over-year growth.
- Information Weekly 11/1/2005 26
         Lessons Learned:
          IT Effectiveness
Slow economic recovery created lean IT
Opportunity to determine IT effectiveness
CIOs should have metrics for determining
IT effectiveness
Consequence of not measuring IT
effectiveness is corporate ambiguity and
perception of the CIO “flying blind” 27
       Role of CIO Summary
CIO role is still relevant
Important for general managers to understand this
pivotal senior position
Communication, leadership, and people skills – essential
to CIO success

Closing quote for discussion:
“The role of the CIO could disappear within 10 years…
it’s only a matter of time until every ‘C’ level officer needs
to have the same level of information as the CIO.”
-- J.P. Rangaswami, CIO, Dresdner Kleinwort
Wasserstein, at the 2005 Triple i Convention 28
                           Reference Sources
1 Gomolski, Barb, “CIOs Face Identity Crisis as the ‘One-Size-Fits-All’ Job Description No Longer Fits”, November, 27, 2000.
(, viewed November 2, 2005).
2 Definitions =,,,sid19_gci213620,00.html, viewed November 2005.
3 Demographs =
10/1/2004, viewed November 2005.
4, viewed November 2005.
5 CSA High Technology Research Database with Aerospace 2001 viewed November 2005
6 Levinson, Meridith, “A Strong Job Market For CIOs” CIO Magazine, October 1, 2005.
7 Strassmann, Paul A., “The Cost of Short-Term CIOs” Computerworld, May 5, 2004, article reprint.
8, Viewed November 7, 2005.
9 Kolbasuk McGee, Marianne, “Help Wanted: CIOs” InformationWeek, October 24, 2005, p. 92.
10 PR Newswire, “St. Louis CIOs Forecast Increase in Third-Quarter Hiring: Survey Measures Employment Optimism Among Local Technology
Executives” June 9, 2005 (Robert Half Technology: Information Technology Hiring Index and Skills Report)
11 Interview with Glendon Schuster, CIO of Centene Corporation, interviewed in person by Eliot Lee, September 30, 2005.
                       Reference Sources
12 Patrick McNamee, CIO of Express Scripts Inc., interviewed in person by Mark Guthrie, October 31, 2005.
13 Michael Lane, CIO Spartech Corporation, interviewed in person by Eliot Lee, November 4, 2005.
14 DeLisi, Peter S. and Danielson, Ron, “Thinking Styles of IT Executives and Professionals” MIT Sloan Management
Review, Summer 2002, Vol. 43, No. 4, p. 11.
15 Kwak, Mary, “Technical Skills, People Skills: It’s Not Either/Or” MIT Sloan Management Review, Spring 2001, Vol.
42, No. 3, p. 16.
16 CIO Research Reports, “IT Enabled Innovation”, April 1, 2005.
(, viewed November 3, 2005).
17 Varon, Elana, “State of the CIO: Reality Check” CIO Magazine, April 1, 2005.
18 Kuczmarski, Thomas D., “What Is Innovation? And Why Aren’t Companies Doing More of It?” Journal of Consumer
Marketing, Vol., 20, 6, 2003, pp. 536-541.
19 Leidner, Dorothy E.; Beatty, Robert C.; and Mackay, Jane M., “How CIOs Manage IT During Economic Decline:
Surviving and Thriving Amid Uncertainty” MIS Quarterly Executive, Vol 2, No. 1, March, 2003, pp. 1-14.
20 Rifkin, Glenn, and Kurtzman, Joel, “Is Your E-Business Plan Radical Enough?” MIT Sloan Management Review,
Spring 2002, Vol 43, No. 3, pp. 91-95.
21 Nolan Norton Institute, “Say Goodbye to the CIO, Welcome to the Business Prophet” Information Management &
Computer Security, MCB University Press, 9, 2001, pp. 123-125.
22 May, Thornton A., “Chief Information Officer ABCs” Information Management & Computer Security, MCB University
Press, Vol. 3, 5, 1995, pp. 23-24.
23 Schraeder, Mike, “Organizational Assessment in the Midst of Tumultuous Change” The Leadership & Organization
Development Journal, Vol. 25, 4, 2004, pp. 332-348.
24,, viewed November 2005.
25 Kaarst-Brown, Michelle L. “Understanding an Organization’s View of the CIO: The Role of Assumptions About IT”
MIS Quarterly Executive, Vol. 4, No. 2, June 2005, pp. 287-301.
26 Information Weekly 11/1/2005, viewed
November 2005.
27 Kurien, Priya; Rhaman, Was; and Purushottam, V.S. “The Case for Re-Examining IT Effectiveness” Journal of
Business Strategy, Vol. 25, 2, 2004, pp. 29-36.
28 Riley, John, “Chief Information Officer’s Role Could Disappear ‘Within a Decade’” Computer Weekly, 9, 2005, p. 10.
                      Photo Credits
Slide 2:
1. Sylvia Steinmann, CIO, Swiss Re
2. Aaron Gibbs, CIO, St. Augustine’s College
3. Dennis Thiebeault, CIO, Curry College
4. Cindy Stoddard, CIO, Neptune Orient Lines
5. Jane Aboyoun, CIO, Reed Business Information
6. Craig Berry, CIO, UGS
7. Beth Brigdon, CIO, Medical College of Georgia
8. Beth Roose, CIO, Pennsylvania Dept. of Transportation
9. Sam Segran, CIO, Texas Tech University
10. Terri Morgan, CIO, Railroad Retirement Board
11. Eric Jackson, CIO, Morehouse School of Medicine
12. Lee Colaw, CIO, Pacific University

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