D2

CIO as chief integration officer
A new charter for IT
As technology transforms existing business models and gives rise to new ones, the role of the CIO is evolving rapidly, with integration at the core of its mission. Increasingly, CIOs need to harness emerging disruptive technologies for the business while balancing future needs with today’s operational realities. They should view their responsibilities through an enterprise-wide lens to help ensure critical domains such as digital, analytics, and cloud aren’t spurring redundant, conflicting, or compromised investments within departmental or functional silos. In this shifting landscape of opportunities and challenges, CIOs can be not only the connective tissue but the driving force for intersecting, IT-heavy initiatives—even as the C-suite expands to include roles such as chief digital officer, chief data officer, and chief innovation officer. And what happens if CIOs don’t step up? They could find themselves relegated to a “care and feeding” role while others chart a strategic course toward a future built around increasingly commoditized technologies.

FOR many organizations, it is increasingly difficult to separate business strategy
from technology. In fact, the future of many industries is inextricably linked to harnessing emerging technologies and disrupting portions of their existing business and operating models. Other macro-level forces such as globalization, new expectations for customer engagement, and regulatory and compliance requirements also share a dependency on technology.
As a result, CIOs can serve as the critical link between business strategy and the IT agenda, while also helping identify, vet,
and apply emerging technologies to the business roadmap. CIOs are uniquely suited to balancing actuality with inspiration by introducing ways to reshape processes and potentially transform the business without losing sight of feasibility, complexity, and risk.
But are CIOs ready to rumble? According to a report by Harvard Business Review Analytic Services, “57 percent of the business and technology leaders surveyed view IT as an investment that drives innovation and growth.”1 But according to a Gartner report, “Currently, 51 percent of CIOs agree that the torrent of digital opportunities threatens both business success and their IT organizations’ credibility. In addition, 42 percent of them believe their current IT organization lacks the key skills and capabilities necessary to respond to a complex digital business landscape.”2
To remain relevant and become influential business leaders, CIOs should build capabilities in three areas. First, they should put their internal technology houses in order; second, they should leverage advances in science and emerging technologies to drive innovation; and finally, they need to reimagine their own roles to focus less on technology management and more on business strategy.
In most cases, building these capabilities will not be easy. In fact, the effort will likely require making fundamental changes to current organizational structures, perspectives, and capabilities. The following approaches may help CIOs overcome political resistance and organizational inertia along the way:
• Work like a venture capitalist. By borrowing a page from the venture capitalist’s playbook and adopting a portfolio management approach to IT’s balance sheet and investment pool, CIOs can provide the business with greater visibility into IT’s areas of focus, its risk profile, and the value IT generates.3 This approach can also help CIOs develop a checklist and scorecard for getting IT’s house in order.
• Provide visibility into the IT “balance sheet.” IT’s balance sheet includes programs and projects, hardware and software assets, data (internal and external, “big” and otherwise), contracts, vendors, and partners. It also includes political capital, organizational structure, talent, processes, and tools for running the “business of IT.” Critical to the CIO’s integration agenda is visibility of assets, along with costs, resource allocations, expected returns, risks, dependencies, and an understanding of how they align to strategic priorities.
• Organize assets to address business priorities. How well are core IT functions supporting the day-to-day needs of the business? Maintaining reliable core operations and infrastructure can establish the credibility CIOs need to elevate their missions. Likewise, spotty service and unmet business needs can quickly undermine any momentum CIOs have achieved. Thus, it is important to understand the burning issues end users face and then organize the IT portfolio and metrics accordingly. Also, it’s important to draw a clear linkage between the balance sheet, today’s operational challenges, and tomorrow’s strategic objectives in language everyone can understand. As Intel CIO Kim Stevenson says, “First, go after operational excellence; if you do that well, you earn the right to collaborate with the business, and give them what they really need, not just what they ask for. Master that capability, and you get to shape business transformation, not just execute pieces of the plan.”
• Focus on flexibility and speed. The business wants agility—not just in the way software is developed, but as part of more responsive, adaptive disciplines for ideating, planning, delivering, and managing IT. To meet this need, CIOs can direct some portions of IT’s spend toward fueling experimentation and innovation, managing these allocations outside of rigid annual budgeting or quarterly planning cycles. Business sponsors serving as product owners should be embedded in project efforts, reinforcing integration between business objectives and IT priorities. Agility within IT also can come from bridging the gap between build and run—creating an integrated set of disciplines under the banner of DevOps.4
For CIOs to become chief integration officers, the venture capitalist’s playbook

New boardroom discussions
With digital now a key boardroom topic, companies are addressing new technology needs in different ways. A recent Forrester survey found that “37 percent of firms place ownership of digital strategy at the ‘C’ level, with a further 44 percent looking to a senior vice president (SVP), executive vice president (EVP), or similar role to direct digital plans. However, less than a fifth of firms have or plan to hire a chief digital officer (CDO), meaning that digital accountability lives with an incumbent role.”a CIOs can either fill these new digital needs themselves or serve as the connective tissue

can become part of the foundation of this transformation—setting up a holistic view of the IT balance sheet, a common language for essential conversations with the business, and a renewed commitment to agile execution of the newly aligned mission. These capabilities are necessary given the rapidly evolving technology landscape.
Harness emerging technologies and scientific breakthroughs to spur innovation
One of the most important integration duties is to link the potential of tomorrow to the realities of today. Breakthroughs are happening not just in IT but in the fields of science: materials science, medical science, manufacturing science, and others. The Exponentials at the end of this report shine a light on some of the advances, describing potentially profound disruption to business, government, and society.
• Create a deliberate mechanism for scanning and experimentation. Define processes for understanding the “what,” distilling to the “so what,” and guiding the business on the “now what.” As Peter Drucker, the founder of modern management, says, “innovation is work”— and much more a function of the importing and exporting of ideas than eureka moments of new greenfield ideas.5
• Build a culture that encourages failure. Within and outside of IT, projects with uncharted technologies and unproven effects inherently involve risk. To think big, start small, and scale quickly, development teams need CIO support and encouragement. The expression “failing fast” is not about universal acceptance and celebrating failure. Rather, it emphasizes learning through iteration, with experiments that are designed to yield measurable results—as quickly as possible.6
• Collaborate to solve tough business problems. Another manifestation of “integration” involves tapping into new ecosystems for ideas, talent, and potential solutions. Existing relationships with vendors and partners are useful on this front. Also consider exploring opportunities to collaborate with nontraditional players such as start-ups, incubators, academia, and venture capital firms. Salim Ismail, Singularity University’s founding executive director, encourages organizations to try to scale at exponential speed by “leveraging the world around them”—tapping into diverse thinking, assets, and entities.7
An approach for evaluating new technology might be the most important legacy a CIO can leave: institutional muscle memory for sifting opportunities from shiny objects, rapidly vetting and prototyping new ideas, and optimizing for return on assets. The only constant among continual technology advances is change. Providing focus and clarity to that turmoil is the final integration CIOs should aspire to—moving from potential to confidence, and from possibility to reality.
Become a business leader
The past several years have seen new leadership roles cropping up across industries: chief digital officer, chief data officer, chief growth officer, chief science officer, chief marketing technology officer, and chief analytics officer, to name a few. Each role is deeply informed by technology advances, and their scope often overlaps not only with the CIO’s role but between their respective charters. These new positions reflect burgeoning opportunity and unmet needs. Sometimes, these needs are unmet because the CIO hasn’t elevated his or her role to take on new strategic endeavors. The intent to do so may be there, but progress can be hampered by credibility gaps rooted in a lack of progress toward a new vision, or undermined by historical reputational baggage.
• Actively engage with business peers to influence their view of the CIO role. For organizations without these new roles, CIOs should consider explicitly stating their intent to tackle the additional complexity. CIOs should recognize that IT may have a hard time advancing their stations without a positive track record for delivering core IT services predictably, reliably, and efficiently.
• Serve as the connective tissue to all things technology. Where new roles have already been defined and filled, CIOs should proactively engage with them to understand what objectives and outcomes are being framed. IT can be positioned not just as a delivery center but as a partner in the company’s new journey. IT has a necessarily cross-discipline, cross-functional, crossbusiness unit purview. CIOs acting as chief integration officers can serve as the glue linking the various initiatives together— advocating platforms instead of point solutions, services instead of brittle pointto-point interfaces, and IT services for design, architecture, and integration—while also endeavoring to provide solutions that are ready for prime time through security, scalability, and reliability. 
Lessons from the front lines
Look inside IT
When asked recently about the proliferation of chiefs in the C-suite—chief digital offer, chief innovation officer, etc.—and the idea that CIOs could assume the role of “chief integration officer” by providing the muchneeded connective tissue among many executives, strategies, and agendas, Intel Corp.’s CIO Kim Stevenson offered the following opinion: “The CIO role is unique in that it is defined differently across companies and industries. No two CIOs’ positions are the same, as opposed to chief financial officers, legal officers, and other C-suite roles. I don’t like it when people try to rename the CIO role. It contributes to a general lack of understanding about the role—and about what companies should expect from their CIOs.”
Monikers aside, Stevenson occasionally offers the following advice to CEOs and boards who are pondering the future amid tremendous technology-driven disruption: “If you need all those C-suite roles, you probably don’t have the right CIO.”
The “right CIO” is one who first achieves operational excellence by keeping the lights on, all critical IT positions filled, and all systems running at peak performance. At Intel, operational excellence of core business processes—satisfying day-to-day needs—has earned IT the right to collaborate with business leaders to identify solutions needed to achieve their goals.
It is through such collaboration that CIOs can elevate and broaden their roles. That means working with business leaders to not just give them what they ask for but helping them figure out what they really need. “Your internal customers have to want what IT is selling,” Stevenson notes, and to achieve this, CIOs should work with business leaders to create shared objectives and to expand expectations beyond incremental improvements to helping drive transformation. In one meeting with a senior vice president (SVP), Stevenson received the feedback: “We’re happy with everything you are doing right now.” When Stevenson and the SVP discussed where the function was strategically headed, several critical efforts were identified—new capabilities that likely couldn’t be delivered without IT. Because of the trust earned through more tactical collaboration, a more ambitious set of priorities was agreed upon.
Intel also tries to measure IT’s success not on its ability to provide a needed solution by a specific deadline but on the shared outcome of the initiative. The goal is for IT and its customer to be held responsible for achieving the same outcome—aligning priorities, expectations, and incentives.  
Finally, through collaboration defined by shared objectives and outcomes, CIOs earn the right to influence how their companies will take advantage of disruptive change. At Intel, Stevenson recognized such an opportunity with the company’s mobile system-on-a-chip (SOC). The team looked at the product life cycle, from requirements to production, analyzing the entire process to understand why it took so long to get the company’s SOCs to market compared with competitors. Working closely with business units and the organization that oversees SOC production, Stevenson and her IT team identified bottlenecks and set their priorities for increasing throughput. The business units chose 10 SOCs to focus on, and IT came up with a number of improvements, ranging from basic (determining whether there was enough server space for what needed to be done) to complex (writing algorithms).
The outcome of this collaborative effort exceeded expectations. In 2014, the company saw production times for the targeted SOC products improve for one full quarter, in some cases for almost two. “That was huge for us,” said Stevenson. “The SOC organization set high expectations for us, just as we did for them. In the wake of our shared success, their view of IT has gone from one of ‘get out of my
way’ to ‘I never go anywhere without my IT guys.’”
From claims to innovation
Like many of its global peers, AIG faces complex challenges and opportunities as the digital economy flexes its muscles. At AIG, IT is viewed not just as a foundational element of the organization, but also as a strategic driver as AIG continues its transformation to a unified, global business. AIG’s CEO, Peter Hancock, is taking steps to integrate the company’s IT leaders more deeply into how its businesses are leveraging technology. Shortly after assuming his post, Hancock appointed a new corporate CIO who reports directly to Hancock and chairs the company’s innovation committee. Previously, the top IT role reported to the chief administration officer.
AIG’s claim processing system, OneClaim™, is emblematic of the more integrated role IT leaders at the company can play. Peter Beyda, the company’s CIO for claims, is replacing AIG’s many independent claims systems with a centralized one that operates on a global scale. The mandate is to be as global as possible while being as local as necessary. Standardized data and processes yield operational efficiencies and centralized analytics across products and geographies. However, IT also responds to the fast-paced needs of the business. In China, for example, package solutions were used to quickly enter the market ahead of the OneClaim deployment—reconciling data in the background to maintain global consistency and visibility. AIG has deployed OneClaim in 20 countries and anticipates a full global rollout by 2017. The project is raising the profile of IT leadership within the company and the critical role these leaders can play in driving enterprise innovation efforts.
The OneClaim system also forms the foundation for digital initiatives, from mobile member services to the potential for augmenting adjustors, inspectors, and underwriters with wearables, cognitive analytics, or crowdsourcing approaches. IT is spurring discussions about the “art of the possible” with the business. OneClaim is one example of how AIG’s IT leadership is helping define the business’s vision for digital, analytics, and emerging technologies, integrating between business and IT silos, between lines of business, and between the operating complexities of today and the industry dynamics of tomorrow.
Digital mixology
Like many food and beverage companies, Brown-Forman organizes itself by product lines. Business units own their respective global brands. Historically, they worked with separate creative agencies to drive their individual marketing strategies. IT supported corporate systems and sales tools but was not typically enlisted for customer engagement or brand positioning activities. But with digital upending the marketing agenda, BrownForman’s CIO and CMO saw an opportunity to reimagine how their teams worked together.
Over the last decade, the company recognized a need to transform its IT and marketing groups to stay ahead of emerging technologies and shifting consumer patterns. In the early 2000s, Brown-Forman’s separate IT and marketing teams built the company’s initial website but continued to conduct customer relationship management (CRM) through snail mail. As social media began to explode at the turn of the decade, BrownForman’s marketing team recognized that closely collaborating with IT could be the winning ingredient for high-impact, agile marketing. While the external marketing agencies that Brown-Forman had contracted with for years were valuable in delivering creative assets and designs, marketing now needed support in new areas such as managing websites and delivering digital campaigns. Who better to team with than the IT organization down the hall?
IT and marketing hit the ground running: training, learning, and meeting with companies such as Facebook and Twitter. It was the beginning of the company’s Media and Digital group, which now reports to both the CMO and IT leadership. And more importantly, it was the creation of a single team that brought together advantages from both worlds. IT excelled at managing large-scale, complex initiatives, while marketing brought customer knowledge and brand depth. Their collaboration led to the development of new roles, such as that of digital program manager, who helped instill structure, consistency, and scale to drive repeatable processes throughout the organization.
As the teams worked together, new ideas were bootstrapped and brought to light. Take, for example, the Woodford Reserve Twitter Wall campaign, which originally required heavy investment dollars each year with a third party. The close interaction between marketing and IT led to the question: “Why can’t we do this ourselves?” Within a week, a joint IT-marketing team had used a cloud platform and open-source tools to recreate the social streaming display, promptly realizing cost savings and creating a repeatable product that could be tweaked for other markets and brands.
Fast-forward to today. Marketing and IT are teaming to provide Brown-Forman with a single customer view through a new CRM platform. Being able to share customer insight, digital assets, and new engagement techniques globally across brands is viewed as a competitive differentiator. The initiative’s accomplishments over the next few years will be contingent upon business inputs from the marketing team and innovation from IT to cover technology gaps.
The “one team” mentality between IT and marketing has put Brown-Forman on a path toward its future-state customer view. Along the way, the organization has reaped numerous benefits. For one, assets created by creative agencies can be reused by Brown-Forman’s teams through its scalable and repeatable platforms. Moreover, smaller brands that otherwise may not have had the budget to run their own digital campaign can now piggyback onto efforts created for the larger brands. The relationship fostered by IT and marketing has led to measurable return on investment (ROI)—and a redefined company culture that is not inhibited by the silos of department or brand verticals.