by David Baum
As many fundamental IT systems move off premises and into the cloud, the role of the CIO is expanding in tandem. “CIOs can’t isolate themselves in a glass office anymore,” says Ignacio Vera, CIO at Banco de Chile.
Vera, a tenacious business leader at one of South America’s most influential banks, believes CIOs must adopt a commercial mindset to properly support their businesses—especially at a time when critical technologies can change completely every six to nine months. “CIOs have to think about the commercial impact of their technology decisions, especially when their organizations are considering how to deliver new products and services to market,” he says. “Technology must provide solutions. The business is indifferent to how it gets done. They just want results.”
While those results come in many different forms, the CIOs featured in this article know what it takes to deliver. These engaged tech gurus see four ways IT can bring new value to an organization: save (and make) money with the cloud, have a strategy for integrating cloud and on-premises systems, offer expert advice to the lines of business, and advocate for IT as a source of innovation.Cloud: Top Line, Bottom Line
Like Banco de Chile’s Vera, Oracle CIO Mark Sunday believes CIOs must approach technology projects from a business perspective in order to identify opportunities that add value. “Data is the new capital, so ask yourself how can you monetize the data that flows through your world,” he says. “Then go beyond that: be the advocate, be the chief innovation officer, be the one that’s pushing not only the technology, but also the corresponding business models that are enabled by it.”
Increasingly, many of those business models involve cloud deployments. According to Sunday, Oracle is systematically leveraging software-as-a-service (SaaS) functions to augment its massive on-premises environment, including recruiting workers, managing compensation, and managing talent. “The cloud enables us to do some things that we might not have otherwise done,” he notes.
For example, Oracle’s sales associates use Oracle Sales Cloud to construct deals, generate forecasts, and request assistance from coworkers, while Oracle’s marketing professionals use Oracle Marketing Cloud to run their campaigns. Tight connections among these SaaS applications, as well as with Oracle’s on-premises software assets, yield inherent synergies that streamline collaboration between sales, marketing, and service professionals. “We are looking for strategic opportunities where we can use the cloud not just to do a ‘lift and shift,’ but also to add value to what we’re already doing,” Sunday explains. “When something new comes along, we have a cloud-first strategy—not just for software, but for infrastructure and platform services as well.”Connect the Dots
Rick Hassman, CIO at Pella, a privately held window and door manufacturing company, has his own take on the importance of being engaged in the business. “The thing that has really helped me throughout my career is the ability to connect the dots,” he says. “You have to understand how information flows. There’s a core platform that enables every business to function, and that’s what CIOs need to understand.”
Technology must provide solutions. The business is indifferent to how it gets done. They just want results.”–Ignacio Vera, CIO, Banco de Chile
Hassman has spent his entire professional career studying how information extends throughout a business, and learning how smart businesses fully leverage that information to understand their unique stories. For example, one of Pella’s core strategies centers around IT integration. For more than 10 years, this Lean manufacturer has relied on Oracle information systems to connect many aspects of its internal value chain, from sales to manufacturing to distribution. Pella makes the windows, sells the windows, services the windows, and installs the windows—giving Hassman and his team a complete view of how business data moves from function to function. “Having an integrated system is extremely valuable for us because we can leverage information as it flows from marketing and sales to manufacturing, logistics, installation, and service. It’s all connected through Oracle.”
Hassman is another good example of a business-minded CIO. After earning his MBA, he went to work in the manufacturing sector, becoming a plant manager at Ertl Toys before joining Pella. He understands the growing importance of using data to drive business activities. Not surprisingly, he brings this same mindset to evaluating cloud solutions. “That’s where Pella gets into hybrid mode,” he says. “Our cloud applications are interfacing with our on-premises applications to leverage core data in real time. For example, our service activities and some of our marketing activities are in the cloud. The ‘customer’ and ‘order’ data elements connect everything through an on-premises order management system.”
According to Hassman, when it’s time to bring in a new system, the best functionality is often found in a cloud-based application, as validated by Pella’s recent deployments of Oracle Cloud systems for human resources (HR), human capital management, and field service. “Cloud allows you to take advantage of enhancements and capabilities much more quickly than you can with on-premises systems,” he continues. “These apps are configurable and flexible enough to meet our ongoing needs.”
Hassman advises career-minded technology professionals to move outside of the IT organization and work within the business—to try to get a handle on finance, marketing, HR, and other lines of business. “IT is not just about technology, like it was in the past. If you can’t articulate or truly understand how the technology makes the business better, then you’re not going to be a CIO. I don’t even bring up technology when I’m talking to the CEO. I talk about productivity. I talk about efficiency gains. I talk about the flow of data.”The Technology Whisperer
Michael Sylvester, a CIO with the County of Los Angeles Department of Public Social Services, expands on this point, noting that there are outstanding opportunities for CIOs who learn how to blend IT and business roles. “At some organizations, IT doesn’t necessarily even have a moniker anymore,” he points out. “It has become more of an innovation group—a hybrid organization that blends, for example, marketing people and business folks and technologists. We’re seeing these formulations develop organically inside of businesses and government entities, along with a variety of new titles.”
I don’t even bring up technology when I’m talking to the CEO. I talk about productivity. I talk about efficiency gains. I talk about the flow of data.”–Rick Hassman, CIO, Pella
According to Sylvester, these blended organizations are often formed around departmental cloud initiatives, when line-of-business managers take technology matters into their own hands. “That’s where you need a synthesis within the business to help spearhead and manage and integrate these technology projects,” he notes. “IT’s role has changed quite a bit over the last decade. It has moved away from running data centers, and toward being consultants that help the business figure out how to do something.”
When asked how technology professionals can improve their edge as business strategists, Sylvester recommends looking to other parts of the enterprise. “Look across the landscape and try to identify a project with a business emphasis,” he suggests. “Try to secure a leading IT role on a new business project, because experience is the best teacher. Learn about accounting; learn how to navigate and set up governance processes. This will increase your business acumen.”Drive Innovation—From Inside and Outside IT
Sylvester also sees value in looking outside the IT organization to bolster existing skills and capabilities—a strategy that could naturally complement LA County’s steady adoption of self-service options for citizens. “We’ve enabled interactive voice response systems for people checking their benefit levels, and we’ve created ways to submit documentation online as well as make appointments through a self-service portal,” he explains.
LA County can bring in additional technical depth by leveraging the knowledge of cloud vendors, as well as utilizing its systems integrators differently. “Until now, our integrators have been saddled not only with the full development and delivery lifecycle, but also with the challenge of hosting and maintaining the technology,” he adds. However, as the county leverages more cloud options, these integrators can maintain their role as the prime contractors and retain the overall project responsibility, while overseeing and subcontracting the hosting responsibility to cloud vendors. “Cloud gives the government new options for managing various platforms, components, and resources,” he explains. “It also gives us some flexibility to make choices based on our organizational structure, resource availability, time sensitivity, fiscal climate, and risk tolerance.”
Banco de Chile’s Vera agrees that innovation increasingly comes from the cloud, broadening the bank’s organizational horizons at a time when technology is transforming nearly every quarter of financial services. “In an era when you can transfer money with a few clicks on your phone, technology is an enabler to provide better services to our customers,” he notes. “You need to consider what you can move to the cloud to create a more efficient operation.”
To date, Banco de Chile has put several key business functions in the cloud including HR; finance; procurement; and everything related to compliance, legal, and operational risk. The Chilean banking giant also uses the cloud for some of its development and testing activities. Moving these systems off premises has helped the bank reduce its capital investments in IT.
Oracle’s Sunday says he, too, will continue to look to the cloud for innovation—and his best teachers are often other CIOs. “I spend a great deal of time engaging with Oracle customers,” he explains, recounting a recent visit to the Pella factory in Iowa. “Whenever possible, I like to visit their facilities to see how they deploy Oracle technology and articulate its value, especially when they are advancing the state of cloud technology. We’re standing on the shoulders of giants as we learn how to empower our workforce and modernize how people communicate, collaborate, and get the information they need. It’s an exciting time to be a CIO.”
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