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CEO-CIO Relationship Review

The relationship between the CEO and CIO is pivotal for successful IT-business transformation, especially in high-speed industries like the automotive sector. In a review from the 2010 SIM Detroit conference, insights from Chris Healy and Greg Davidson highlight the evolution of this partnership over three years. It outlines initial challenges, including a lack of alignment and defined processes, and details the stages of growth from forming through norming to performing, showcasing how technology can drive business innovation and competitive advantage.

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CEO-CIO Relationship Review

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  1. CEO-CIO Relationship Review High Speed Business and IT Transformation Takes Off at the Auto Industry’s Premium Transportation Manager SIM Detroit August 31, 2010

  2. Introductions • Chris Healy • President and Chief Executive Officer, AAG • 35 years experience in business operations, planning, logistics management, and customer service • Sr. VP and GM North America FedEx Global Logistics • Executive leadership positions Caliber Systems, Boyd Brothers, Roberts Express, & Emery Air Freight • Member of the Council of Logistics Management • Greg Davidson • Chief Information Officer & Chief Marketing Officer • 27 years of software development, product marketing, IT consulting, and senior management • Recently CIO and Vice President of Professional Services Delivery, Accretive Solutions • Vice President Enterprise Systems Development, Sage Software, Irvine, CA • Vice President Systems Development, Platinum Software (now Epicor), Irvine, CA

  3. Introduction to Active Aero Group Active Aero Group • Essentially two business units • Active On-Demand – specialty 3PL • USA Jet Airlines – cargo and passenger airline • Active On-Demand • Expedited freight services • Air Charter • Ground Express • Air Freight • Full Truckload • 7 by 24 by 365 call centers • Expedited culture! • USA Jet Airlines • MD-83s • DC-9s • Falcon 20s • Began as air charter • Added charter passenger services • 7 by 24 by 365 flight operations • Heavy dependency upon IT systems to operate AOD

  4. AOD BUSINESS MODEL

  5. Key Customers

  6. Agenda • Initial state of IT-Business relationship • Initial state of IT • CEO-CIO relationship evolution over last 3 years • Stages of IT-Business relationship development • Forming: aligning people, process and technology • Storming and Norming: process development for IT and the Business • Performing: IT driving Business innovation & competitive stance • Questions and Answers

  7. Initial State of IT-Business Relationship • CEO and CIO worked closely for 6 months prior to CIO beginning work • IT leadership role did not exist on a peer level with business leadership • Business viewed IT as: • Unable to meet delivery dates • Systems deliveries were of poor quality • Dictating software feature and functionality • Not as a partner • IT viewed the Business as: • Unable to provide functional requirements • Unrealistic relative to delivery and timing expectations • Not as a partner

  8. Initial State of IT • People • Organization lacked structure • Initially “we know more about the business…” attitude was present • Some personnel were not a good fit • Administrative management of resources was not evident • Process • IT organization lacked a defined process • Business roles and responsibilities relative to working with IT were never defined • Business process was largely undefined and lightly documented • Technology • Older technology was in place in production – relatively stable • New technology had performance and quality challenges • Some infrastructure was in need of replacement • Telecom vendors were not managed well

  9. FORMING

  10. Forming: Aligning People, Process and Technology • People • Got “the right people on the bus” (From Good to Great by Jim Collins) • Developed and institutionalized a few documented policies, procedures and processes – involved educating both IT and the Business • Built a culture around quality and working “harder and smarter” • Firefighting was initially the name of the game • Crisis management was continual during the Forming phase • Process • Selected best practices from ITIL and CMMI process sets • Prioritized implementation of best practices due to existing challenges • Implemented Change Management and Release Management first • Policies and procedures were formally documented and trained • Needed a way to implement Change Requests quickly with a high level of quality • Change Management gave us a way to define unique changes and assess impact • Release Management provided a controlled means to bundle sets of Change Requests through the development, testing, and deployment phases

  11. Forming: Aligning People, Process and Technology • Technology • Tactical: triage of new applications and existing infrastructure was then a daily event • Strategic: completed Single Point Of Failure (SPOF) analysis • SPOF then drove significant infrastructure projects • New corporate email system (Exchange) • New network switches, routers and firewalls • New SAN, web servers and database servers • Built out Disaster Recovery data center • Virtualization (VMWare) kept costs down • DoubleTake served as single technology for Exchange and SQL Server data synchronization

  12. Forming: The CEO’s Take on This Phase • General comments on the state of the IT-Business relationship at this time • Crisis situations decreased significantly over this short period of time • Many small, incremental, tactical systems changes went into place (e.g. limit of 5 Change Requests per department) • Business noticed the increased professionalism throughout the IT Release Management cycle – they were now heavily involved! • State of CEO-CIO relationship at this time • IT Portfolio Management increased Business’ awareness that they were dealing with a finite set of resources • Trust was quickly earned via relatively large IT infrastructure investments in a very short period of time • Time working together was spent addressing tactical issues, hoping for a time when strategic issues could be addressed soon

  13. Forming: The CEO’s Take on This Phase • Ultimately what I wanted from IT • Fast • Bulletproof • Scalable

  14. STORMING AND NORMING

  15. Storming and Norming:Process Development for IT and the Business • People • Moved from no structure to an effective, 3-part IT organization • Business Analysis and Quality Assurance (the alpha and omega) • Systems Architecture, Project Management, and Development • IT Operations • Instilled a culture of personal responsibility and accountability • Project postmortem Lessons Learned sessions proved invaluable • Mistakes became learning opportunities • Honesty and openness became woven into the IT team fabric • On the other hand, repeating mistakes became intolerable • Working with the Business was something new for key IT staff • Initial resistance and concerns raised • Immediate value was realized by doubters

  16. Storming and Norming:Process Development for IT and the Business • Process • Implemented IT Service Continuity Management (ITSCM) for BC/DR • Business had a high level of incentive to make this happen • Provided a ranking of applications in terms of Business importance • ITSCM then became the backbone of the Business Continuity framework • Completed ITSCM build-out, quarterly testing, … Yankee Air Museum Fire, Oct. 2004 Willow Run Airport

  17. Storming and Norming:Process Development for IT and the Business • Process continued, also implemented: • IT Portfolio Management* • Project Management* • Configuration Management • Incident Management • Problem Management • Requirements Management* • Quality Management* • Vast majority of projects were on time and achieved quality objectives * Significant Business involvement

  18. Storming and Norming:Process Development for IT and the Business • Technology • Implemented a Service Management mentality within IT Operations • ServiceDesk software was a key acquisition • Established ITIL Service Desk processes for serving the Business • Began proactively monitoring key systems and servers • Renegotiated telecom contracts • Voice services provider changed • Network circuit providers rationalized and BGP implemented • Costs significant reduced • Software tools and versions updated • Additional new software tools were acquired and implemented • HP Mercury LoadRunner • HP Mercury Quality Center • HP Mercury QTP

  19. Storming and Norming: The CEO’s Take on This Phase • General comments on the state of the IT-Business relationship at this time • Systems stabilized giving IT and the Business more time to collaborate • IT gained a deeper knowledge of the Business • Business gained an insight into what a disciplined IT team could deliver • With IT Portfolio Management in place, and with Change Management/Release Management running well for several months, IT earned a place at the leadership table; the Business and IT were aligned • State of CEO-CIO relationship at this time • This relationship became more strategic in nature • Tactical efforts lessened as crises became rare events • CIO’s knowledge of the Business increased rapidly, earning the respect of peers • CEO began to see CIO as a strategic partner • Tactically, CEO brought CIO into an increasing number of sales pursuits

  20. PERFORMING

  21. Performing:IT Driving Business Innovation & Competitive Stance • People • Performance Management implemented • First goals and objectives defined for team • For many, first performance reviews (manager and self-evaluation) • First Performance Improvement Plan efforts • Educational opportunities arose – investing in our people • The people in turn responded with greater throughput and enthusiasm

  22. Performing:IT Driving Business Innovation & Competitive Stance • People: as CIO, took on additional roles • Informally as “Chief Process Officer” per ISO certification efforts • Formally as Chief Marketing Officer • Began leveraging past marketing experience to assist driving new sales • Began executing upon a number of marketing efforts • Developed detailed marketing plan and strategy • Delivered set of collaterals that leverage technology and services • Began rebranding efforts • Rebuilt marketing websites • Conducted first customer focus group • Conducted first marketing webinar • Initiated direct marketing and telemarketing campaigns • Now poised to build marketing team to expand upon driving quality leads

  23. Performing:IT Driving Business Innovation & Competitive Stance • Process • Workflow development was completed for all Business units • Identified several Business bottlenecks and rework loops • Graduated to running ISO certification effort for entire AOD division • Sales • Operations • Accounting

  24. Performing: IT Driving Business Innovation & Competitive Stance • Technology • Implemented competitive features into mission critical applications • Key selling points for large enterprise customers • Competitive barriers to entry • IT began playing a more active role in team sales efforts • Team of equal partners: Sales, Operations, and IT • Defining technology solutions for new customers • Demonstrating new product features • Collaborating with customer IT organizations on joint projects • Delivered new functionality for customers where required • IT took proactive technology stance • Increased systems monitoring efforts • Instituted monthly reviews • Availability now averages 99.98% per month • Built out Performance Testing Lab to stay ahead of Sales team and company growth

  25. Performing: IT Driving Business Innovation & Competitive Stance • Technology case study • Customer: Celestica • Contract Manufacturer of Blackberry and other devices • High value theft issues • Defined new functionality for mapping and truck movement alerting • EDI-to-XML interfaces with their truckload carriers • Alerts for truck not moving in addition to existing alerts • Detailed mapping app for Celestica and RIM • Became key marketing case study

  26. Performing: The CEO’s Take on This Phase • General comments on the state of the IT-Business relationship at this time • IT grew beyond alignment with the Business, now a growth catalyst • Landing and delighting Customers is our focus and IT plays a key role • IT automation and streamlining of Business processes serves as a catalyst to Business scalability • IT has an interwoven, symbiotic relationship now within: • Business operations planning • Business strategy definition • Sales pursuits and proposal development • Ultimately, IT delivered what I wanted • Fast • Bulletproof • Scalable

  27. Performing: The CEO’s Take on This Phase • State of CEO-CIO relationship at this time • The CIO role has helped move the company into a technology leadership role within our industry • CIO role is vital to continuing company’s growth • CIOs must have the following attributes to become a trusted CEO partner • Vision • Business knowledge and perspective • Leadership • Innovation • Communication • Teamwork • Alignment • Business and customer relationships

  28. QUESTIONS & ANSWERS SIM Detroit August 31, 2010

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