As the former EVP of Global Services and Chief Information of Merk, Chris Scalet oversaw the centralizing of IT infrastructure, Human Resources, and Finance, but the devil was in the details.
by Peter High, published on Forbes.com
12-17-2012
This is the fifth article in the CIO-plus series, covering CIOs whose roles have been augmented due to the good work they did first and foremost as CIOs, but also recognizing that the good work translated into other areas. (You can access the prior four articles here) I recently spoke with Chris Scalet, the former executive vice president, Global Services, and Chief Information Officer at Merck & Co., Inc. as part of the Forum on World Class IT podcast series. Scalet developed one of the first shared services organizations at Merck when he centralized infrastructure, yielding a nine-figure savings per year in the process. The CEO of the company was sufficiently impressed that he asked Scalet to do the same in other parts of the company. Scalet began with Human Resources and with Finance, but eventually took responsibility for a wider array of functions. Scalet humbly surmises that the path he pursued should be accessible and achievable by most CIOs, no matter the industry, though he readily admits that the devil is in the details.
Peter High: Chris, you began your time at Merck as the company’s CIO. Your role was augmented substantially as your tenure continued. What was it about the CIO role that lent itself well to this augmentation?
Chris Scalet: There are four factors that come to mind. First, most CIO’s have a strong business mindset. They have a strong tendency to focus significantly on the business processes that underpin the operations of the company. Throughout their careers, they have likely digitized the majority of these processes and have developed a broad and deep understanding of how they fit together as well as how they flow to move the business.
Second, CIO’s today are strategic in their thinking. They have been forced to be in both a business and a technology sense. Both business environment and technology are changing quickly, often at paces that are considerably faster than in the past. Reacting to change is no longer acceptable. To be effective today, CIO’s must anticipate where both are going, make choices, and put actions in place that make sure the two are effectively aligned.
Third, CIO’s are operational thinkers who are organized and methodical in their thinking. They can break down complex business problems into simple tasks, and work to solve each simultaneously. They are also effective risk managers who can see around the corners and ensure proper contingency plans are in place to manage the business.
Finally, CIO’s are generally very good influencers up, down, and across the organization. They have developed the appropriate skills to set a vision and sell the vision across the organization.
Additional topics covered in the article include:
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To listen to Chris Scalet’s Forum on World Class IT podcast interview, please click here.
Open Source- more than a business model, it is a culture driven by the CEO.
12-11-2012
Jim Whitehurst, the President and CEO of Red Hat has had an interesting career to date. He was a consultant for a number of years, joined Delta Air Lines right around September 11, 2001, and played a big role in securing the future of that company as its Chief Operating Officer, and now is the President and CEO of Red Hat (NYSE: RHT), the world’s first billion dollar open source company. Whitehurst and I recently spoke as part of my Forum on World Class IT podcast series, and hearing him compare his time at Delta to his current role at Red Hat struck me as an interesting case example in how older generation businesses and newer technology firms differ in terms of culture, hierarchy, collaboration, and the like.
When Whitehurst worked at Delta, a company in an industry that has deep ties to the military, he was literally saluted at times by colleagues of his. He would help formulate the strategy for the divisions under his control, and when those plans were finalized, entire teams were mobilized to see that they were enacted effectively. Airlines require a great deal of planning, given the complexities of managing planes (both flights and maintenance), crews (pilots and flight attendants), and customers. Time is of the essence, but more important still is safety. Add to this the irregularities caused by issues of weather or planes that require unplanned maintenance, and one can understand the need for everyone to be operating together in order to make the operation work effectively.
Red Hat, by contrast, is an open source company. It operates under the assumption that the best ideas require developing a solid kernel of an idea, and then freeing employees, customers, and external partners to help make it better, to prove the value of the idea, and possibly to identify value that was not planned at the outset. Red Hat refers to itself as a “catalyst of communities.”
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To listen to Jim Whitehurst’s Forum on World Class IT podcast interview, please click here.
(In the interest of full disclosure Red Hat is a partner of my Forum on World Class IT podcast series.)
As part of Peter High’s Forbes Technovation Column, this CIO-plus Series interview with Randy Spratt, Chief Information Officer and Chief Technology Officer of McKesson, reveals how the dual technology-centric roles require different skills.
12-10-2012
Randy Spratt runs information technology for the largest company in the largest sector of the largest economy on earth. For most of the last decade, he has served as Chief Information Officer for the $123 billion healthcare behemoth, McKesson Corporation (NYSE: MCK), and in 2009, he assumed the Chief Technology Officer responsibilities. To the uninitiated, the CIO/CTO dual role may seem less dynamic than some other CIO-plus combinations we have covered and will yet cover in this series. However, that analysis would be wrong as Spratt tells us, these are distinct responsibilities, and they reflect both sides of the information technology landscape which become more complex the larger the company is.
(To read past articles in the CIO-plus series, please click this link.)
Peter High: Randy, you have been Chief Information Officer of McKesson Corporation for nearly a decade. In 2009, you added the Chief Technology Officer role. How do you distinguish between those roles?
Randy Spratt: The CIO role is fairly typical for a large, federated model company. I have overall accountability for the company’s infrastructure and business applications; some of this is discharged directly, such as USA infrastructure and global applications. Some is discharged through governance. Examples include enterprise architecture and business specific applications. Some of this is stewardship with board accountability, like IT risk and IT security. In this role, I set the strategic direction, and am ultimately accountable for the successful operations, of the company’s information assets.
The CTO role is not typical. You will find many different definitions of CTO, usually distinguished as either the CIO’s chief technologist or, for technology companies, the individual that sets the technology direction and charts the future of the company’s technology products. As our CEO said when he completed the market review of CTO roles for the board to consider compensation, “If you’ve seen one CTO, you’ve seen one CTO.” In my role, I am responsible for three major initiatives at the enterprise level, to be accomplished by working collaboratively with each of the businesses that develop and deliver technology products to McKesson’s customers:
To read another article on Randy Spratt, please click here.
To listen to Randy Spratt’s Forum on World Class IT podcast interview, please click here.
In an installment of the CIO-Plus Series in Peter High’s Forbes Technovation column, Chris Laping, SVP of Business Transformation and CIO of Red Robin Gourmet Burgers talks about how to be a change agent from the perch of an IT leader.
12-03-2012
In a recent article, I mentioned the trend in companies around the US and beyond of expanding the CIO’s responsibilities based on the translation of good work done in IT into other divisions and departments in the company. I refer to this phenomenon as the CIO-plus role. I kicked off the series last week with an interview with Puneet Bhasin, the Senior Vice President – Technology, Logistics and Customer Service, Chief Information Officer of Waste Management. (Past articles in the series can be found here) This week, I am delighted to continue the series with Chris Laping, the Senior Vice President of Business Transformation and Chief Information Officer of Red Robin Gourmet Burgers (NASDAQ: RRGB).
Laping has what I believe to be the ideal background for a CIO. He has an engineering degree as an undergraduate, an MBA, he spent time as a consultant, and though he is not yet 40, he has been a CIO for ten years. He joined Red Robin as CIO in June of 2007, and after transforming that organization, added the role of SVP of Business Transformation to his title in February of 2011, noting that the company hoped that his “transformation” activities would not be limited to IT. Now it seems that each analyst call that Red Robin CEO Stephen Carley leads features initiatives that Laping and his team leads or co-leads, such as the development of the Red Royalty customer loyalty program that he oversaw in concert with the company’s CMO, which has contributed substantial sales lift in those stores where it has been fully implemented.
Laping does not hide his desire to take on even greater responsibility in the future, and he pays much more than lip-service to this ambition, as he continues to drive value from his CIO-plus perch within his company.
Peter High: You have been a Chief Information Officer since your late 20s, Chris. When you started as CIO, what did you hope to do in that role?
Chris Laping: If I honestly reflect on my goals at age 29 as a CIO in the GMAC world, it really boiled down to a few things: 1) be a leader that focused more on WE than ME; 2) be transformative and care about my company’s business more than my passion for technology and; 3) innovate in new ways that weren’t just limited to the technology toolbox.
Ultimately though, the number one metric I used to understand if I was succeeding was progress. I’ve never believed that people expect perfection or the total solution overnight; they are happy if you are making meaningful progress on a daily basis.
To listen to Chris Laping’s interview on The Forum on World Class IT, please click here.
A select few CIOs are generating cold hard cash through innovation and collaboration. We rounded up examples of CIOs who generate revenue with IT, either by boosting sales or developing a product or service sold externally.
by Diane Frank, published on CIO.com
11-30-2012
Excerpt from the article:
Top-notch CIOs in various industries are creating new ways to pull in revenue at their companies. The techniques vary widely: Some use IT to boost showroom sales, or sell homegrown software to other companies. Others take the valuable data they produce in-house and turn it into a saleable information service.
These standout CIOs look beyond the company’s walls and are viewed as full peers by the rest of the C-suite. They are at the top of what Ballard and other members of the CIO Executive Council, a global peer advisory service and professional association founded by CIO’s publisher, call the Future-State CIO Journey. CIOs who make their way through the journey’s framework begin with being seen as credible service providers, evolve to being influential and transformational business partners, and finally become strategic business peers who boost the bottom line.
The CIO position has always had the potential to generate revenue, says consultant Peter High, founder of Metis Strategy and author of World Class IT: Why Businesses Succeed When IT Triumphs. But he estimates that less than 25 percent of all CIOs have taken the leap to becoming revenue producers.
“It’s the particularly clever CIOs who recognize this advantage and grab hold of it,” he says. “It’s not the average CIO by any stretch of the imagination.”
But Hammonds is aware that improving productivity within Boeing is IT’s primary job. Only about 10 percent of her organization currently works on revenue-driving efforts, and the people who do so are mostly dedicated to that role. While that group may grow in the future, the rest of the IT organization is still focused on internal productivity, Hammonds says.
This kind of split is usually necessary, says Peter High. Chasing revenue could easily become a distraction from maintaining the infrastructure of the business. Balance is required. “CIOs must be cognizant of how they are going to divide their time,” he says. Some of the IT leaders he works with assign days to work on core versus revenue-driving efforts, while others pick direct reports to have daily responsibility for each area while the CIO oversees them both. Whatever they do, they can’t forget that IT is still in charge of maintaining the tech infrastructure or they will find that the trust that allows them to work on revenue-producing services disappears, High says.
To read the full article, please visit CIO.com
A growing number of CIOs are working closely with external strategic partners to gain mutual benefits for their company and their partners.
by Peter High, published by CIO Insight
11-30-12
Most IT departments of a certain size engage external strategic partners or vendors for a variety of tasks. Too often, however, CIOs view external partners as fulfillers of work instead of as sources of innovation and strategic advantage. Worse still, these CIOs do not share their plans with the external strategic partners upon whom they rely most heavily. The CIOs tend to think that if too much information is offered, it may fall into the wrong hands. A growing number of CIOs, however, have begun to recognize that creatively segmenting vendors and sharing a deeper level of insight with them not only proves to them the high regard the company holds them in, but puts the onus on the external strategic partners to deliver better products and services for the company. One of the key methods to gain from these executives is setting up “vendor days” with external strategic partners. Other similar best practices include:
Click here to read the remainder of the article on CIO Insight.
As a new CIO, Mohamoud Jibrell built credibility by capitalizing on low hanging fruit and cleaning up the application portfolio
11-28-2012
When Mohamoud Jibrell joined the Howard Hughes Medical Institute (HHMI) as its CIO in March of 2010, he developed a 90-day plan to help guide his transition. HHMI is a nonprofit medical research organization that plays a prominent role in advancing bio-medical research and science education in the United States, and with an endowment of $16.1 billion at the end of fiscal year 2011, HHMI is the nation’s second largest philanthropic organization after the Bill & Melinda Gates Foundation. As he joined an organization with 13 Nobel Prize winners on staff, he realized that innovation was in the cultural DNA of the organization. He challenged himself to transform IT so that it shared that same DNA.
To burnish IT’s credentials in the early part of his tenure, Jibrell realized that he needed to pick some low-hanging fruit that would enable his team to develop momentum. He needed to deliver increased value to the organization while identifying efficiencies wrought through better use of technology, and he focused on two series of activities to do so:
1. Leverage Existing Infrastructure and Data to Accomplish Top Priorities of Other Executives
2. Implement the Deletion Test as a Means of Retiring Old Technology
By focusing on top-line value to readily implement new solutions while reducing costs and the infrastructure footprint at the same time, a new IT leader can set a course for double-barreled value creation that earns him or her status as a true peer to the rest of the c-suite of executives.
To read all pieces from the Technovation column, please click here.
Technology, Logistics, and Customer service under one roof? In the first interview of the CIO-Plus series, Peter High speaks with the Senior Vice President – Technology, Logistics and Customer Service, Chief Information Officer of Waste Management, Puneet Bhasin.
11-26-2012
In a recent article, I mentioned the trend in companies around the US and beyond of expanding the CIO’s responsibilities based on the translation of good work done in IT into other divisions and departments in the company. I refer to this phenomenon as the CIO-plus role, and there are many reasons to believe that it is here to stay.
Today, I am delighted to kick off the series with an interview I recently conducted with Puneet Bhasin of Waste Management. Although Bhasin does have an engineering degree, he did not spend the early part of his career in IT departments. He was a consultant and a business executive prior to becoming CIO of Ryder TRS. Just prior to joining Waste Management, he had held a CIO-plus role of sorts at Monster Worldwide, as he was SVP, Product & Technology & CIO, North America.
Bhasin joined Waste Management in December 2009 as CIO. As he explains in our interview, it was based on some early insights that he determined that Waste Management needed to formalize its logistics business, and he became the first leader of that business. A few months ago, he added Customer Service responsibilities, and thus he is now the Senior Vice President – Technology, Logistics and Customer Service, Chief Information Officer of Waste Management.
Peter High: Puneet, you do not have a traditional IT background. How did you find your way into IT?
Puneet Bhasin:
Early in my career, I ran a consultancy that focused on developing optimization and decision support systems using Operations Research and Statistical methods. These optimization models were the engine driving key decisions for many of my clients. However, what my clients were also looking for were the “applications” that made these models easy to use and integrate into their operations. It was this client need that introduced me to Information Technology. Over time, the IT component of my consultancy became larger than the modeling aspect and I developed a keen understanding of the power of technology. By the time I became CIO at Ryder, I had led significant IT projects across a wide spectrum of functional areas that had both a top line and a bottom line impact.
Peter High:
If I understand it correctly, you made a significant career decision in joining Waste Management. Is that right?
That’s true. When a recruiter approached me, I was quite happy at Monster Worldwide – in addition to managing Technology I was also running Product Management and Product Marketing. However, Waste Management piqued my curiosity and I met with our CEO, Dave Steiner. We absolutely hit it off. Waste Management is a large, Fortune 200, financially strong company with 22 million customers and 20,000 trucks. In many respects it is a logistics and energy company rather than a garbage company. Dave told me about the business opportunities within the organization, and I talked about the role that IT could play in addressing those opportunities. As we talked more, I realized how interesting a company it was, and the profound role IT could play in taking the company to the next level.
Additional questions in the article include:
Most CIOs wear many hats. The good news is, those hats are getting more strategic.
11-14-2012
As IT leaders become much more business-centric in terms of their skillset, they have been asked to assume additional responsibilities beyond their traditional IT roles. The reasons are varied, but it is at least partially due to the fact that IT is one of the few (some argue the only) departments that understand business processes from end-to-end. Moreover, IT leaders must speak with peers in the c-suite or heads of business units about their plans and strategies. Clever IT executives recognize that this puts them in an ideal position to identify themes from across the organization and suggest single solutions to address multiple needs while fostering greater collaboration across the company. Lastly, as CIOs and their teams develop competencies related to people management, governance, security, procurement, vendor management among many other topics, these are areas of expertise that apply to other parts of the organization as well.
For these reasons, a great number of CIOs have been asked to take on additional responsibilities. I refer to this phenomenon as “CIO-plus.” CIOs are now also Chief Innovation Officers, Heads of HR, Chief Supply Chain Officers, and Heads of Shared Services to name just a few. Beginning the week following Thanksgiving, I will publish interviews with leaders who have assumed these additional responsibilities, including
The reasons these executives and others have given logic to expand CIO’s responsibilities include:
It should be mentioned that more than one CIO-plus executive also indicated that it is attractive for many companies to double a successful executive’s responsibilities without doubling his or her pay.
How can IT and business leaders groom the CIO-pluses of the future?
To read the remainder of the article, please visit Forbes.com
Explore more pieces in the Technovation column here.
Summarizing five ways to drive IT productivity, Peter High references a recent CEB study that suggests how CIOs can get the most out of their teams.
11-19-2012
I recently had a chance to speak with Shvetank Shah, who is the Executive Director, IT Practice at CEB , and he made me aware of a recent study that his team conducted, surveying 23,339 employees at organizations globally regarding how to “Prepare IT to Drive Productivity in the New Work Environment.” (That is the title of a CEB CIO Executive Board analysis that was just released.) I have included the five conclusions in italics below with my own thoughts in regular text:
1. Refocus on Team, Not Individual, Productivity—As opportunities for process automation run low, IT will refocus on enabling teams, not just individuals, to be effective at collaboration and knowledge work.
This is very much in line with where my CIO contacts are focusing a lot of attention these days. As the workforce ages, and key staff retire in greater numbers, and as the market for talented individuals is heating up, effective knowledge management is crucial to ensure that as people leave the corporation, knowledge remains. Moreover, as collaboration across product and service areas, across geographies, and with external partners (vendors or customers) increase, having processes and technologies to facilitate and capture the output from that collaboration will be essential.
2. Shift Support from Tool Usage to Employees Using the Tools—IT and other corporate functions will redefine support, moving away from teaching how to use a tool and instead helping employees build the skills they need to effectively collaborate, apply judgment, and use data for decision making.
In other words, employees need to be taught “skills” in collaboration, analysis, and the like, and to a greater extent centralized functions like IT will play a significant role in these efforts. These will be fundamentally new responsibilities for many IT departments, and will require training and new hiring in some cases in order to meet this imperative.
The remaining three ways are:
3. Separate Flexible Interfaces from Foundational Data
4. Prioritize the IT–Employee Relationship
5. Adopt “Test and Learn” IT Strategy and Budgets
To read the full article, please visit Forbes.com.
To read past pieces in the Technovation Column, please click here.
