Verisk CIO Perry Rotella Blogs for Forbes CIO Network

cover imagePerry Rotella is senior vice president and chief information officer of Verisk Analytics, responsible for strategy and execution of IT initiatives supporting the company's business operations. Rotella recently began a blog as part of Forbes magazine's CIO Network.

Below are excerpts from his first three blogs, which focus on the CIO's role as an executive-level leader, the three stepping stones that CIOs should consider, and how first-class CIOs balance their time between operations and strategy. The full entries can be found at www.forbes.com/sites/perryrotella.

Why CIOs Are First-Class Executives
Over the past ten years, information technology has become pervasive throughout our society. We live in a networked world with Internet access from our offices, at coffee shops, at home, and on our mobile devices, including BlackBerrys, iPhones, iPads, Nooks, and Kindles. This rapid advancement has had a dramatic impact on the IT function. Information technology in the modern enterprise has evolved from a back-office component to a core operational imperative that can improve business performance and increase shareholder value.

From my vantage point, IT has a multifaceted role in strengthening the modern corporate enterprise. By implementing an agile development approach, IT organizations can improve time to market for products, thereby realizing business value earlier than traditional approaches. IT also plays a central role in data management and the delivery of advanced analytics, both of which enhance competitive advantage and profitability. IT can improve customer service excellence by implementing solutions that improve the ease of doing business. Centralizing functions such as infrastructure or procurement to optimize economies of scale across the enterprise not only enables more effective expense management but frees up senior management to focus on surpassing the competition.

The strategic importance of IT to an enterprise has evolved to the same level as other disciplines such as finance, marketing, and sales. However, there has been little recognition of the significantly evolving role of the CIO at the executive level. Many industry thought leaders, including Peter S. DeLisi, Dennis Moberg, and Ronald Danielson — who contributed the notable article "Why CIOs Are Last Among Equals" to the Wall Street Journal in the spring of 2010 — have acknowledged that CIOs are sometimes considered "second-class" in the C-suite. Often, weaknesses in leadership perpetuate such misperceptions.

To raise their visibility in service to the enterprise, CIOs should ask themselves:

  • What does it mean for me to be a legitimate contributor to executive-level leadership in the enterprise?
  • Am I actually equal to other executives in the C-suite?
  • What can I do to raise my business impact and value within the organization?

IT is central to an organization's success by providing critical day-to-day operational support and enabling enterprisewide business change. In my next post, I'll dive into best practices CIOs can follow to demonstrate their position as first-class executive-level leaders. I'll note how CIO leadership skills have improved and what areas require more attention.

Operational Excellence Is Paramount
The foundation for any first-class leader is to demonstrate excellence within one's core discipline. To a CIO, that means operational excellence in providing day-to-day business support, including data center operations, help desk, and internal ­tech­nical support for business operations. Operational excellence represents the basic blocking and tackling of any IT function. CIOs must establish an operational function that is reliable and predictable. Networks must always be available, applications must run without fail, and product releases must happen on schedule.

CIOs should establish business metrics to measure the success of the operational component of IT. For example, rather than simply measuring uptime, try gathering metrics on the number of customer transactions supported by the infrastructure. Doing so relates technology support directly to revenue-producing ­trans­actions or customer service excellence rather than technology-based uptime measurements. A CIO must also have a capable operations manager to run day-to-day procedures, enabling the CIO to take on the next two stepping stones toward being recognized as a first-class executive leader.

Integrate IT as a Core Business Function
Outstanding operational support is a prerequisite for being recognized as a first-class executive leader, but it's clearly not enough. Integrating IT into an organization's business fabric is the second stepping stone on the way to C-suite credibility. There's much discussion today about the alignment of IT and business as if they are two separate entities. Does anyone ever talk about aligning marketing or finance with the business?

Rather than spending valuable energy on alignment, a CIO is empowered to make IT an integral business function by keeping the following in mind:

  • Lead from a business perspective. Just as the firm's CFO leverages financial expertise to drive enterprise strategy, the CIO can leverage technical expertise. A CIO who leads from a business perspective gains credibility from C-suite peers and from the CEO. One who leads from a technology perspective is relegated to the secondary role of "the IT guy."
  • Understand the business as well as anyone else in the organization. That means the CIO must be highly knowledgeable about the company's products and services, profit drivers, competition, and organizational dynamics.
  • Develop strategic plans that drive business objectives. It's critical for the CIO to act as a trusted partner of operating unit leadership. Furthermore, the technology vision must be based on the company's business vision.

Demonstrate Influence to Shape Business Strategy
The third stepping stone that cements a CIO's role as a first-class executive is simply the ability to influence the enterprise in a material way. IT grew up in a model of control — centralized application development, mainframe infrastructure — and the function has struggled to transform itself to be influential without direct control. Influence starts with a sound business-focused IT strategy. Educating C-suite peers on how technology can advance the achievement of business objectives is one way to influence enterprise strategy. For example, there are many emerging technologies that can be leveraged to drive innovation in the enterprise, such as creating new products or changing the business model.

As CIOs begin to identify, understand, and articulate their value to the enterprise, true executive-level recognition becomes possible. What factors do you think are most critical in elevating visibility of the CIO among the C-suite? Which of the three best practices that I've outlined is the most difficult to follow, and what are the roadblocks?

C-Suite Credibility
It's not possible for a CIO to exert influence in the C-suite without first having a well-run, professional, business-focused IT organization. First-class CIOs balance their time between operations and strategy. CIOs should free 80 percent of their time to focus on the broader business agenda without losing touch with IT operations.

IT operational support can be broken down into two mission-critical functions: run and build. The IT run function provides day-to-day business support, including data center operations, help desk, and internal technical support for business operations. The IT build function represents project-based work, such as product development and application maintenance. Build also includes projects to enhance the infrastructure, such as database upgrades and implementation of new software tools.

Operational excellence at its core ensures that the run and build functions in IT are reliable and predictable. Networks must be available, applications must run without fail, and product releases must happen on schedule. Here are two best practices that allow CIOs to focus the majority of their time on the broader business strategy:

  • Hire the right people. The CIO must have capable leadership to run day-to-day operations. A CIO that's pulled into day-to-day management issues cannot dedicate the time needed to work with the CEO or C-suite peers.
  • Establish business metrics to measure operational excellence. Not only do solid metrics relate technology support directly to revenue and customers, but they enable the CIO to focus on managing by exception rather than getting caught up in technology management.

Empowering people to run the day-to-day IT function doesn't mean relinquishing personal responsibility to understand and influence operational excellence. It takes focus and a willingness to fully comprehend the details. Managing by exception and reviewing the highest-priority projects — the ones that truly make a difference — are what free up the vast majority of my time to spend on enterprisewide business strategy and performance.