EY-CIOs-Born-to-be-digital

Born to be digitalHow leading CIOs are preparingfor a digital transformation

Our acknowledgmentsOur thanks go to the more than 180 CIOs, CTOs and further IT leaders from across theglobe who participated in this study. In particular, we would like to thank those people whotook part in a series of in-depth interviews in which they shared their insights and personalexperiences of the role (listed alphabetically by company name):CIOsDarryl WestCIO, Barclays GroupDiego CalegariSpanish South AmericanCIO Executive, IBMAlexander GornyiCIO, Mail.RuFred SwanepoelCIO, NedbankLars MathiesenCIO, NykreditCelso GuiotokoManaging Director IT/IS, Renault-NissanBruno MénardGroup CIO, SanofiMichael GolzCIO Americas, SAPHerman de PrinsCIO, UCBPhilipp ErlerCIO, ZalandoRichard Alan HerzCIO, ZooplusAnonymous, CIO, leading Chinese insurance companyAnonymous, CIO, leading Chinese telecommunications companySubject matter expertsDavid NicholsAmericas ITTransformationLeader, EYDave RyerkerkGlobal IT AdvisoryLeader, EYBob SydowAmericas ITAdvisory Leader, EYTom VelemaEMEIA IT AdvisoryLeader, EYRob PrestonEditor in Chief,InformationWeekBob ConcannonPartner, KornFerryJonathan BecherCMO, SAPSee demographics for a full overview of the research methodology.

In this reportForeword2Executive summary 4Section 1The rise of the digital business 6Section 2The DNA of the IT-intensive industry CIO 10Section 3A mindset for change: six traits of the digital-ready CIO 18Section 4Routes to the top: the career paths of digital-ready CIOs 30ConclusionPreparing for a digital business 36Demographics38Further reading 401

out this reportIn 2012, our research into the DNA of the CIOdiscovered the essential ingredients of a leading CIO(www.ey.com/dna-cio). It also detailed the careeraspirations that many CIOs have, which largely centeron expanding the scope of their responsibilities andinfluence. During this research, we found that CIOs andCTOs from certain industries tended to embrace moreleading practices, while expressing greater satisfactionand holding a stronger voice within their respectiveorganizations. (Note: for simplification reasons, fromnow on, we use the term CIOs to include both CIOs andCTOs.)We also determined that these leaders were wellpositioned, in terms of their skills and mindset, totackle the digital transformation that many businessesare now undertaking. This formed the basis for our newresearch, which seeks to provide new insights into whatit takes to succeed in a more digital world.To do so, Born to be digital explores three core areas:• How CIOs with the widest remit and greatestresponsibility — those in highly IT-intensive industries— differ from their peers• What lessons CIOs can take from their peers who areleading the digital transformation efforts — in termsof their core tenets and mindset• What career choices CIOs should make to help themfulfill their aspirations for broader roles and greaterinfluenceBorn to be digital |3

IT-intensive industries51% 53% 67% 38%strongly agree thatthey are taking thelead in pioneering newdigital approacheswithin their business.hold a seat at theexecutive managementtable, compared withjust 17% of CIOs in allindustries.show clear potentialto provide a strongerand more strategicengagement with thebusiness on digitaltransformation.of CIOs within ITintensiveindustriesare highly engaged oncore strategic issues.Executive summaryDigital technologies — including social media, the cloud, dataanalytics and mobile — are rapidly emerging as disruptive forces forbusinesses across all industries, from retailers and banks through tocarmakers and energy companies. They are fundamentallychanging the ways in which consumers interact with thesecompanies, while also opening up new business models at the heartof these firms.These changes are already apparent to nearly all of us asconsumers. Just think: when did you last book a private flightwithout going online? Or go into a bank branch to transfer funds?Or use a phone book to find a restaurant’s number? With everymonth that passes, more services go digital: from checking andadjusting your home’s energy usage via a mobile app, to borrowinga stranger’s car for an hour to pick up something urgent, or lendingmoney to a tiny business you’ve never heard of in a foreign countryin exchange for a better rate of return. All of these services nowexist, and more are created every day.This presents a huge opportunity for CIOs, especially those with theaspiration, as detailed in our previous The DNA of the CIO report, tohave a bigger and more influential role within the business. But, asour new report shows, grappling with any digital transformationrequires a shift in the skills, approach and mindset of a traditionalCIO. Of course, given the varying priorities and constraints indifferent companies, some CIOs face a tougher battle to embracedigital than others. Ultimately, though, it is up to each CIO as anindividual to take the proactive action to move their organizationtoward the digital era, rather than waiting to passively to react.To help provide fresh insights and lessons on what it takes tosucceed as a CIO in this digital era, this research sought to identifythose leading CIOs who are most likely to be pioneering on thisissue. To do so, we talked to over 180 CIOs and CTOs from a rangeof highly IT-intensive industries, as a proxy for those who are likelyto be investing in digital, and compared these individuals with thosein other sectors. Most revealingly, a core subset of this group ofIT-intensive IT leaders — those who are most strategically engagedin their jobs — were seen to stand out from their peers — in terms ofboth influence and satisfaction. Career choices these CIOs havemade en route to the top helped to verify the findings.Some of our key findings include:1CIOs2Proactivesee digital as a majoropportunity to fulfill their careeraspirations.From Nestlé’s push into direct online selling as aconsumer brand, to Caterpillar’s creation of new lines ofservices for clients, CIOs at all kinds of firms are usingdigital technology to transform their businesses. Theseexciting possibilities align closely with the careeraspirations of CIOs. However, even in IT-intensiveindustries, only half (51%) strongly agree that they aretaking the lead in pioneering new digital approacheswithin their businesses, showing much scope fordevelopment here.CIOs within IT-intensivesectors are better suited totransform their businesses, andtheir careers.Companies investing the biggest share of their overallrevenue in IT — typically IT companies, telecommunicationsfirms, banks and life sciences firms — ought to be ideallyplaced to take the lead on digital. As might be expected,CIOs at these firms usually have more prominent rolesthan their peers elsewhere. For example, 53% hold a seatat the executive management table, compared with just17% of CIOs in all industries. They also more oftenrecognize the skills needed for success, such ascommunication and leadership, strong strategicengagement, and a clear focus on growth. More broadly,a majority of IT-intensive industry CIOs (67%) show clearpotential to provide a stronger and more strategicengagement with the business on digital transformation.4 | Born to be digital

65%of digital-ready CIOsare highly engaged onhelping develop newproducts and services.How CIOs leading digital transformation think differently:six core traitsOur research shows that the elite CIOs leading digital transformation in their businesses differ in theirmindset and thinking in six key ways. In particular, they:1. Have a strategic vision of how technology willtransform the business — and know how toimplement it2. Are relentless innovators3. Focus closely on driving growth — and therelationships they need to support this4. Ensure their vision is understood5. Move beyond operations and infrastructure6. Are courageous risk-takersSee page 20 for more insights on all of these.3Despitea seat at the top table, notenough CIOs are grasping thepotential for digital transformation.5LeadingCIOs take amultidisciplinary approach to theircareers.4TheDespite the advantages offered to them, and theirgreater influence, many board-level CIOs in IT-intensivefirms appear not to use them to push ahead on anystrategic or transformational issues. They recognize theneed to focus on bolstering growth, but too often fail toreach out to build relationships with the front of thebusiness. Indeed, part of the risk that CIOs face on digitalis that other business managers, or wholly new specialistroles, such as the chief digital officer, take the lead.CIOs most strongly aware oftheir task to develop the businessshow a distinct set ofcharacteristics that help themstand out.In forging a path toward a more strategic leadership role,leading CIOs have made a series of deliberate choicesthroughout their career progression. This starts withtheir education, which more commonly involves abackground in business, science or engineering, alongwith IT. But it also extends through their work experience:they actively seek out opportunities to work in otherparts of the business and in other geographic regions.And they engage extensively outside the business by, forexample, taking on external advisory roles ordirectorships. These CIOs express greater satisfactionwith their career prospects, their status within thebusiness, and their ability to influence corporate strategy.Nearly 4 in 10 (38%) of CIOs in IT-intensive industries arehighly engaged in core strategic issues — deliveringtransformation and driving business model innovation —and they show a set of six unique traits (see text boxabove). These help to frame the mindset of a CIO who isleading the way on digital transformation; an individualwe term the “digital-ready CIO.” For example, theseindividuals have a close focus on the front office andinnovation: 65% are highly engaged in helping developnew products and services, compared with just 50% ofother CIOs. They show a much stronger appetite for riskand a greater ability to influence the rest of the business:90% cite communication and influencing skills as stronglyimportant to their role, compared with 79% of other CIOs.Born to be digital |5

Typically more engaged on strategicissuesOne of the clearest differences that mark out IT-intensive industryCIOs from typical CIOs is their far stronger focus on businessperformance. One in two (55%) regularly engages with the board onthis topic — well ahead of just 36% of typical CIOs.Take Fred Swanepoel, the CIO of Nedbank, one of South Africa’smajor retail banks, who is a member of the company’s executivecommittee. He provides advice to the board on the strategicdirection of the business and leveraging technology to achievestrategic objectives on at least a quarterly basis.“In IT-intensive industries, you see a more centralized governancemodel, with IT issues pulled together at a board or executivecommittee level,” he explains. In a business such as Nedbank, this iseasy to understand: “We are constantly investigating technologiesto improve client experience and operational efficiency, and tomake sure the bank stays competitive. When you’re talking aboutbanking products today, there are very few products you canactually touch. The computer code facilitates the commitments wemake to clients, so the technology environment is strategicallyimportant to building and maintaining trust in the organization,”he says.Chart 2Areas in which CIOs actively engage with the executivemanagement teamDiscussing business performanceand challengesParticipating in strategicdecision-makingDiscussing mergersand acquisitions*Discussing IT's role in research anddevelopment of services and products*Providing facts as basis forstrategic decisionsDiscussing IT's role inbusiness transformationDiscussing IT budgetary issues andinfrastructure managementStrategic engagement57%55%36%53%45%43%26%27%55%50%59%55%52%IT-intensive industry CIO — board memberIT-intensive industry CIO — overallTypical CIO(Percentage of respondents who have chosen 8, 9 or 10 on a scale from 1 = do not engage at allto 10 = actively engage)* Answer option was not included into typical CIO survey (The DNA of the CIO)64%67%76%72%77%73%12 | Born to be digital

Chart 3Areas in which CIOs feel they create value for companiesAccount for IT issues andrelated costsContribute to operationalagility of businessEnsure compliance withall regulatory requirements*68%67%78%75%81%This more strategic focus is visible elsewhere too. When askedabout the areas in which CIOs create value for the business, typicalCIOs tended to focus on IT budgets and costs (78%). IT-intensiveindustry CIOs do this too — hardly surprising, given the sustainedpressures on the bottom line across businesses of all kinds — butthey also tend to show a clearer focus on supporting growth. Forexample, 51% note that they add significant value through productinnovation, compared with just 45% of typical CIOs. Similarly, 75%believe that CIOs can contribute to the operational agility of thebusiness, ahead of 68% of typical CIOs. Similar gains to the role canbe seen in other areas too, such as in seeking to minimize risks.Minimize possible risksDeliver significant corporatecost efficienciesEnable fact-based decision-making interms of corporate strategyAdd considerable value to overall businessgrowth through product innovation66%59%66%60%55%60%51%45%IT-intensive industry CIOTypical CIO(Percentage of respondents who have chosen 8, 9 or 10 on a scale from 1 = do not add value at allto 10 = proactively add considerable value)* Answer option was not included into typical CIO survey (The DNA of the CIO)Born to be digital |13

Case studyIBM’s global-localIT transformationDiego Calegari, Spanish SouthAmerican CIO Executive, IBMAs might be expected of a leading technology brand, IBMis deeply engaged with digital. The company istransforming itself across the business — including HR,sales and all other functions — around a set of global toolsbased on digital technologies such as the cloud. While itsglobal CIO leads this drive by setting the global strategyand driving the overall rollout, CIOs in every region areadapting and localizing the strategy. One such CIO is DiegoCalegari of IBM South America: “We are in the middle ofthis shift, but the next phase of our local transformationwill be to focus closely on mobile for our market,” he says.All this means that he has far more engagement withbusiness transformation, in stark contrast to many localCIOs that Calegari knows. “I see many who are focused onoperations and infrastructure issues, rather than workingwith the rest of the business to truly transform it,” he says.“This has been a big shift for us over the past few years.Three years ago, I probably spent 30% of my time oninnovation and transformation, and 70% on supportingoperations and the business. It’s now the opposite.”This is not the only practical change. He’s now moreclosely engaged with the front office of the business, actsas the link between the firm’s global IT strategy and itslocal implementation, and keeps a close eye on how thesechanges help to drive growth.More aware of the skills neededto succeedInevitably, when executives are pushed to focus on higher-levelstrategic issues, there is a consequent shift in the skills that theyneed to succeed. IT-intensive industry CIOs acknowledged a greaterneed for softer skills such as leadership, influencing and changemanagement. For example, 90% see leadership as strongly neededto perform best in their role, ahead of 81% of typical CIOs. Thesame pattern is seen for financial skills: 57% of IT-intensive industryCIOs said they strongly needed these skills, whereas only 51% oftypical CIOs said the same. This recognition of the need for abroader palette of skills to draw upon, beyond any core ITcompetencies, is also reflected in the choices that many IT-intensiveindustry CIOs make with regard to their education and jobexperience, which more often shows a broader background thanwith typical CIOs (see section 4 for more).Chart 4Attributes required to perform best in CIO roleLeadership skillsCommunication and influencing skillsProject and change management skillsAnalytical approach andorganizational skillsDesigning and executingbusiness strategyTechnological skills andknow-how on IT trendsFinancial management skillsDeeper insight into the industry or keygeographical markets for your business51%52%48%77%67%64%65%64%57%90%81%87%79%83%74%81%IT-intensive industry CIOTypical CIO(Percentage of respondents who have chosen 8, 9 or 10 on a scale from 1 = not needed at all to 10 =absolutely needed)14 | Born to be digital

However, it is also apparent that many IT-intensive industry CIOsstill struggle to translate this need for stronger communication andinfluencing skills into practical reality. For example, few of themappear to hold stronger relationships across the business thantypical CIOs do. In fact, they often have weaker relationships. Thisis true internally, where they have weaker links with core figuressuch as the CEO or CFO, but also externally, where ties both withregulators and end customers aren’t as strong. For IT leaders whohold as much sway as they do to influence other parts of thebusiness, this is a missed opportunity.“Digital is creating new demands for leadership. Some CIOs areready for that and some aren’t,” notes KornFerry’s Concannon.“This talk about ‘the CIO is dead’ is sort of silly, but it’s clear thatthe role is going to change a lot. I have to be a proactive advisor tothe business, providing solutions and discussing new approaches,”says Zalando CIO Philipp Erler. EY’s Tom Velema adds that thebiggest challenge for a CIO has always been about getting to beseen as a business enabler rather than a business problem. Digitalpresents CIOs with a fresh opportunity to become relevant to thebusiness, but this digital CIO needs different DNA.Inclusive technology?Gender diversity in IT-intensiveindustriesCIOs are not the most gender-balanced group. For the most part,typical CIOs tend to be male: just 4% of IT leaders polled for TheDNA of the CIO were female. In contrast, however, IT-intensiveindustries appear to be rather more inclusive, with three timesas many female CIOs as other sectors. Unfortunately, theyremain a clear minority — at just 12% of the sample — but itsuggests that these businesses are making a greater effort toattract more female executives.The IT industry is the sector that has been the most successful inattracting women to the highest roles in IT: 1 in 5 of the top 25CIOs there are female — including Cisco’s Rebecca Jacoby andLenovo’s Wang Xiaoyan. This is a far cry from the one womanamong the top 25 companies in banking or life sciences, orthe two within telecommunications. Much progress remains tobe made, but the IT sector is clearly doing what it can to pushahead.Born to be digital |15

Chart 5How IT-intensive industry CIOs stand outEducational backgroundITThe raceto go digitalAppetite for strategic engagement46 % 48 %Typical CIOfrom any sectorand with manifoldbackgrounds29 %Typical CIO29 %50 %IT-intensiveindustry CIO50 %BusinessThey are typically more engaged in corporatestrategy and developmentIT-intensive industry CIOfrom sectors that have higherthan average ratios of ITspending as a proportionof total revenueTop three skills needed to succeedShare of womenTypical CIOIT-intensive industry CIOTypical CIOIT-intensiveindustry CIO79 %81 % 74 % 87 %90 %83 %4 %12 %Communicationand influencingLeadershipChangemanagementSatisfaction with the externalperception of the CIO role45 %IT-intensiveindustry CIOTypical CIOCareer ambitionsIT-intensiveindustry CIOTypical CIO39 %IT-intensive industry CIOs are moreambitious overall, but especiallywhen it comes to aspiring businessexecutive positions16 | Born to be digital

Discussing business performancewith the executive management teamIT-intensiveindustry CIO55 % IT-intensive industry CIOs are leadingTypical CIO36 %Leading digital transformationIT-intensiveindustry CIO51 %Average ageTypical CIO42. 845. 1IT-intensiveindustry CIOimplementation of digital technologiessuch as cloud, mobile and analyticsAverage time in roleSeat at top tableTypical CIOIT-intensiveindustry CIO53 %Typical CIOIT-intensiveindustry CIO6.2 years 5.3 years17 %IT-intensive industry CIOs are more likely to holda seat in the executive management team, offeringhuge chances to transform the businessRelationships to succeedInvolvement in innovationIT-intensiveindustry CIOFocus on front officeTypical CIO45. 1 17IT-intensiveindustry CIO50 %IT-intensive industry CIOs build closerrelationships with the CMO and clientsBorn to be digital |

Section 3A mindset forchange:six traits of thedigital-ready CIOThose CIOs most engaged in corporate development showstriking differences in how they approach their jobs.We find these attributes to be closest to the core set of skillsand capabilities needed to drive the digital transformation,from vision and storytelling, to courage and a focus ongrowth. However, they’re just as applicable to any CIOwanting to stand out and perform in their role.An IT-intensive company can provide the ideal context for CIOs toembrace digital. But to actually do so still requires the individual inquestion to find the motivation to lead this change. In short, itdemands a different mindset.To delve deeper into this mindset, we assessed the characteristicsof those CIOs most engaged in the strategic elements of their jobs,who are delivering both on business transformation as well asbusiness model-related innovation. These are the two elements thatThe DNA of the CIO identified as the most helpful for CIOs trying tostand out in their role — and they are, as this research reveals,fundamental aspects of driving digital transformation. While allthree sections of the wheel together represent the full remit of anygiven CIO, those IT leaders who push hardest and use innovation tochange and develop their business are the ones most likely to bebuilding a truly digital business.Among the IT-intensive industry CIOs surveyed, nearly one in four(38%) were focusing far more on these most strategic elements ofthe job. These leading CIOs show an ability to reframe their thinkingand present a positive story to the rest of the business about howtechnology can deliver a very different future. “A lot of this is aboutbeing proactive. Being able to walk in and suggest where theopportunities are for the organization. Too many CIOs are simplyreactive, which is why they lose credibility with the rest of thebusiness,” explains EY’s Americas IT Advisory Leader Bob Sydow.This proactive approach is apparent in the wide range of areas inwhich these leading CIOs seek to create value, with strongengagement across everything from product innovation andoperational agility, through to supporting decision-making. At thesame time, they also carefully manage expectations, walking thefine line between keeping the business excited about the potentialof IT, while keeping a realistic sense of what’s truly possible.18 | Born to be digital

In return, they appear to benefit materially from this: 7 in 10 (71%)of these CIOs strongly agree that their standing within the businesshas materially improved over the past three years, well ahead of the54% of IT-intensive industry CIOs overall — and even further aheadof those CIOs who had least prioritized the strategic elements oftheir role and their influence on corporate development (just 43%).In fact, across a broad sweep of areas, these CIOs stood out asnatural leaders. Unsurprisingly, then, they have a far stronger voicein the business overall. But equally, despite already being highlyskilled and well positioned within the business, they remain eager tokeep developing their capabilities. We’ve called them the “digitalreadyCIOs.”By focusing on how their views differed from others, we found thata set of six distinctive traits stood out. Collectively, these mark outthe digital-ready CIOs as role models for any other CIOs seeking tostand out from the crowd and fulfill their career aspirations. This iscertainly true for those CIOs getting engaged in a digitaltransformation, but it’s just as applicable more generally for anyCIOs simply wanting to gain a stronger voice in their organization.After all, these digital-ready CIOs can be seen to hold better careerprospects and are more highly regarded in the business.Delivering transformationDEVELOPMENTBringing business model innovationPreparing anddeveloping theorganizationfor changeShaping the futureof the businesswith the righttechnology561The CIO'srole432Managing costsControlling theimpact of IT spendon the organizationEnsuring theIT and securityneeds are upand runningEXECUTIONKeepinglights ontheSustaining and extending theorganization's strategiesand objectivesTaking ownership of IT governanceENABLEProviding insightto support businessdecisionsActing as anMENTinformation broker“Digital-ready CIOs” are those CIOs who rated 8, 9 or 10 ona scale of 1 to 10 on the corporate development aspects oftheir roles based on the wheel model. As EY’s The DNA ofthe CIO revealed, these qualities are what best enable CIOsto deliver on core business changes, such as the digitaltransformation now underway.Born to be digital |19

Six distinctivetraits ofdigital-readyCIOs1Digital-ready2Digital-ready3Digital-ready4Digital-ready5Digital-ready6Digital-readyCIOshave a strategic visionof how technologywill transform thebusiness — and knowhow to implement it.CIOsinnovate relentlessly.CIOsfocus closely ondriving growth — andthe relationships theyneed to support this.CIOsensure their vision isunderstood.CIOsmove beyondoperations andinfrastructure.CIOsare courageous risktakers.Six distinctive traits of digital-ready CIOs:1Digital-ready CIOs have a strategicvision of how technology willtransform the business — and knowhow to implement it.By definition, all of these CIOs have a clear vision about the futurestate of the business. They have a powerful sense of how andwhere digital can transform product development or sales andmarketing, and how it can open up new lines of revenue. While theCEO knows where the wider business is headed, the digital-readyCIO can show how technology can enable and support that journey.Close to 9 out of 10 (87%) digital-ready CIOs focus tightly onmaking the case to the executive management team for IT’s role inbusiness transformation. That figure is well ahead of the 72% ofIT-intensive industry CIOs. “It’s very important that a CIO has avision for the company that is directly linked to its business model,”says Nykredit CIO Lars Mathiesen. And as InformationWeek Editorin Chief Rob Preston puts it: “You need to be something of avisionary, an innovator and a big thinker, not just an order taker.”All this implies that the digital-ready CIOs have a closeunderstanding of their companies’ underlying business models, andproducts and services. EY’s Dave Ryerkerk notes that, in the past,businesses would draw up a major initiative — setting out therequired processes and the associated operating model — before“throwing it over the fence to IT to set it up and automate it.”Today, digital technologies shape the design of a firm’s processesand operating models. Indeed, Bob Sydow, Americas IT AdvisoryLeader at EY, notes that one of the core capabilities needed fordigital-ready CIOs is an intimate knowledge of the firm’s businessarchitecture, along with the ability to manage and drive compleximplementation programs. “Our technology team has an openprocess creation approach, rather than simply receiving processesand supporting them. We are able to describe the target processes,and define how to go about transforming them,” explains Zalando’sCIO Philipp Erler.20 | Born to be digital

At the global software company SAP, for example, Americas CIOMichael Golz is clear on how digital has transformed the innerworkings of the business. “When I look at the sales and marketingorganization, the amount of automation and data-driveninformation that they use in their daily business is magnitudesbigger than just a couple of years ago,” he says. Via mobile appsand analytics, IT provides real-time information about the health ofthe business at any given moment. “If we were to take this away, Iwould not know how we’d run this business. It takes out risk. It takesout a lot of the variations. It gives us insight into new opportunitiesto cross-sell or up-sell,” he says.As this implies, the ability to deliver on this vision is just asimportant as the vision itself. “You shouldn’t talk about your visionif you’re not able to execute on it,” says Nykredit’s Mathiesen. Whenasked what attributes are most needed to help them stand out intheir roles, digital-ready CIOs place far more importance on theability to design and execute business strategy. More than 8 out of10 (83%) place a high focus on this, compared with just 67% ofIT-intensive industry CIOs.Digital-ready CIOs are also far more likely to recognize the breadthof skills needed to succeed in the role: they place more importanceon their close understanding of their market or industry (70%compared with 52% of IT-intensive industry CIOs), on their financialskills (67% versus 57%), and on their technological know-how (75%versus 65%). “Just as importantly, this needs to be backed up withruthless execution, which means CIOs need to really get theirdelivery organization in order,” says EY’s Tom Velema.Chart 6Attributes required to perform best in the CIO roleDesigning and executingbusiness strategyTechnological skills andknow-how on IT trendsDeeper insight into the industry or keygeographical markets for your businessFinancial management skillsDigital-ready CIO52%(Percentage of respondents who have chosen 8, 9 or 10 on a scale from 1 = not needed at allto 10 = absolutely needed)57%67%65%70%67%75%83%IT-intensive industry CIO“When I look at the sales andmarketing organization, theamount of automation anddata-driven information thatthey use in their daily businessis magnitudes bigger than justa couple of years ago.”Michael Golz, CIO Americas, SAPBorn to be digital |21

“I spend at least 30% of my time oninnovation.”Anonymous, CIO, leading Chinese telecommunications company2Digital-readyCIOs innovaterelentlessly.Chart 7Areas in which CIOs actively engage with the executivemanagement teamDigital-ready CIOs strongly see the need to bring innovation both ata business model level and in terms of new products and services —something picked out by 81% of digital-ready CIOs, well ahead ofthe 64% of IT-intensive industry CIOs overall. They’re far more oftenexploring how to create new mobile interfaces or e-commercesolutions, or considering how social media can be used to reinventcustomer service, and uncovering new data-driven insights.“My job is to find interesting new ideas and innovations, and bringthem back to the CEO to discuss which of them could fit into ourbusiness,” says Alexander Gornyi, the CIO of Mail.Ru, the Russianinternet communication and entertainment company. “We don’ttrade in oil; we trade in innovation, so IT needs to be far closer tothe decision-making in our business.” Overall, 71% of digital-readyCIOs strongly affirm that they are responsible for driving disruptivenew technologies — such as cloud, mobile and analytics — within thebusiness, compared with just 51% of IT-intensive industry CIOs.All CIOs focus on issues relating to business performance and ITbudgets, but digital-ready CIOs are far more engaged in the questionof how to open new markets. For example, about two-thirds (65%) ofdigital-ready CIOs are strongly engaged in discussing IT’s role inresearching and developing new services or products with theexecutive management team, compared with just 50% of ITintensiveindustry CIOs overall. “I spend at least 30% of my time oninnovation,” remarks the CIO of a major telecommunicationsoperator in China, who asked to remain anonymous. “I have 100%influence on technology innovation, which requires that I have botha technology background and also an understanding of corporatestrategy and operations.”Discussing business performanceand challengesDiscussing IT's role in research anddevelopment of services and products 50%Providing facts as basis forstrategic decisionsDiscussing IT budgetary issues andinfrastructure management63%55%Participating in strategic57%decision-making 45%Discussing mergersand acquisitionsDiscussing IT's role inbusiness transformationStrategic engagement37%27%55%Digital-ready CIO65%70%72%78%73%87%IT-intensive industry CIO(Percentage of respondents who have chosen 8, 9 or 10 on a scale from 1 = do not engageat all to 10 = actively engage)As CIOs show where and how they can use digital to innovate,innovation then becomes part of what is expected of them. “In ourbusiness, the board’s expectation is that IT is the innovation forcethat can change the business in the future,” explains the CIO of amajor Chinese insurance firm, who asked to remain anonymous.Her work in using mobile and analytics to drive greater sales isrepresentative of where this role is headed (see next trait for more).22 | Born to be digital

Accordingly, digital-ready CIOs are keenly aware that they can addvalue by analyzing and innovating existing business processes.Seventy percent of digital-ready CIOs see this as the area in whichthey create the most value for the business, ahead of 61% ofIT-intensive industry CIOs. Furthermore, in considering where CIOsought to create value for their business, 68% of digital-ready CIOspoint to the need to support growth through product innovation,compared with just 51% of IT-intensive industry CIOs.Of course, all this is also a challenge, as EY’s David Nichols warns:“The questions these CIOs are asking are: how best to handle therapid pace of innovation going through the rest of the business,what it means for them, and how to build an IT organization thatcan react to that. These are the key themes that the digital CIO isgoing to have to be concerned with.”Case studyWhy CIOs and CMOs must learn to loveeach other — not only at SAPMichael Golz, Americas CIO, SAPMichael Golz and Jonathan Becher,respectively the Americas CIO andglobal CMO at SAP, believe theirfunctions have changed sofundamentally with the advent of digitaltechnologies — such as big data, mobile,social media and cloud — that marketingand IT have no choice but to forge evercloser relationships. Becher cites theadage that marketers know that halftheir marketing investment is wasted,but do not have any idea which half.“But there’s no excuse any more. Weknow how to measure the return oneverything we do. The single biggesttrend for marketing is to be verydata-oriented,” he says.Of course, this raises specificchallenges in the interface betweenmarketing, which is seeking this insight,and the IT team delivering it. “ITtraditionally comes from theperspective of improving a businessprocess with an implementation over alonger cycle,” reflects Golz. “Now we’rein a world where things are instant —whether it’s data consumption,acquisition or analytics, people expectanswers immediately. To deal with this,IT and marketing must get closer.”To achieve success, IT and marketingmust learn to communicate moreeffectively and collaborate moreJonathan Becher, CMO, SAPclosely. “There are so many differenttechnologies that I think one of IT’sbiggest contributions right now is toguide on how to integrate these all, andbring these pieces together,” says Golz.Unsurprisingly, this requires a far closerCIO-CMO relationship, so that IT cantruly understand what marketing isaiming to deliver, and ensure that this isproperly joined up with the rest of thebusiness. This is especially true asCMOs spend an increasingly largeproportion of their budgets ontechnology. For most, this is now15%-20%, according to EY research. 615%-20%, according to EY research. 6 23Born to be digital |

“Now we’re in a world where things areinstant — whether it’s data consumption,acquisition or analytics, people expectanswers immediately. To deal with this,IT and marketing must get closer.”Michael Golz, CIO Americas, SAP3Digital-readyCIOs focus closely ondriving growth — and therelationships they need to supportthis.One of the standout points about the digital-ready CIO is that theyare looking toward the front of the business, seeing how technologycan help to drive growth by changing the way the company marketsand sells its wares. The CIO of a major Chinese insurance companyexplains how her firm is working closely with the front office to givethem the mobile tools they need to boost sales. Building on this,she’s working to improve the analysis and mining of data captured,to gain greater customer insights and design more effective salescampaigns. “We’ve seen a clear increase in sales efficiency already,”she says. As a result, the executive management team has nowtasked her with applying data analytics to generate new customerinsights — and then to work with the business to apply thoseinsights to sales and marketing, and even product design. “All ourtechnology will be leaning toward increasing sales productivity, andgiving our agents more tools to use when they are in the field,”she says.Clearly this implies a much closer emphasis on fosteringrelationships with the front of the business, rather than focusingpredominantly on the back office. “We need to understand thecompany’s business operations deeply and both its front- andback-end processes,” says the CIO of a major Chinesetelecommunications operator. Most obviously, while CIOs often failto realize the value of their company’s external clients to theircareers, digital-ready CIOs are far more engaged here. Nearly twiceas many (59% versus 33% of IT-intensive industry CIOs) cite endclients as being strongly important to their career. Many others alsorealize the importance of roles such as the CMO or head of sales totheir career.But this is not just about recognition. Digital CIOs also act on this:59% say they have a very strong relationship with their CMO,compared with just 37% of IT-intensive industry CIOs. Modern CIOsneed to be true partners with marketing and sales, forming analliance whereby the CSO and CMO deliver insights on customerexpectations and interests, and the CIO can deliver on thesethrough new systems and processes that make the most of theseinsights.Herman de Prins, the CIO at Belgian pharmaceuticals companyUCB, explains how he spends a lot of time helping to facilitatemultichannel marketing — and making sure the front officeunderstands what’s possible. “They also need to think differently interms of integrating digital activities into their analog activities. Youneed to get them to look at their business in a completely new way,not just automating a particular process,” he says.The same need for stronger relationships applies outside thebusiness too. CIOs must get closer to the firm’s end customers,their needs and preferences. Half (52%) of digital-ready CIOs placea strong emphasis here, well ahead of their IT-intensive industrypeers (37%). “Whenever we’ve asked CIOs, we find that those whoregularly meet with customers are still very much the exception,”notes InformationWeek’s Preston.24 | Born to be digital

Chart 8Business relationship of CIOs with internal and externalstakeholdersExternalDirect reports and subordinatesInternalChief financial officer (CFO)Department headsChief executive officer (CEO)Chief operating officer (COO)Chief marketing officer (CMO)Chief sales officer (CSO)ClientsRegulatorsAnalystsMedia21%37%44%39%37%44%31%43%33%33%Digital-ready CIO63%75%59%58%63%54%59%52%75%73%94%90%IT-intensive industry CIO(Percentage of respondents who have chosen 8, 9 or 10 on a scale from 1 = needs substantial improvementto 10 = absolutely excellent)“Storytelling is a key skill.”Diego Calegari, Spanish South American CIOExecutive, IBM4Digital-readyCIOs ensure theirvision is understood.The next trait that stands out is the ability to craft a compellingstory about how technology can transform the business. This isvital: digital changes the way many businesses work, opening upwholly new possibilities, but people have to buy into this vision, andunderstand how it might benefit them — in short, CIOs need to bemaster storytellers. Not with the aim of selling a fairytale, butrather in creating an exciting narrative that the rest of the businesscan buy into.Communication is a vital part of any CIO’s role, and one wheremany acknowledge the need for improvement. But the ability tocraft a tale of how the business might look and work after a digitaltransformation further intensifies this need. “Storytelling is a keyskill,” says Diego Calegari, Spanish South American CIO Executiveat IBM, who explains that true storytelling requires a deep grasp ofthe core of the business and how it works, in order to explain how itcan change in future.SAP Americas CIO Michael Golz cites examples of CIOs he meets inhis peer-to-peer customer conversations, like the aerospace CIOwho explains convincingly the impact of harnessing in-flight sensordata to transform their business model, or the medical device CIOwho articulates the impact of information technology on theirproducts to improve the well being of patients, while creating deepcustomer relationships. “These CIOs clearly know their industrybusiness processes, the value of collecting data from theirproducts, the business around monetizing that data, and creatingvalue-added services. They know how to explain these newbusiness models, which may be more profitable than actuallybuilding the physical products,” says Golz. “So it’s a true businessconversation. It’s not about upgrading system XYZ to improveefficiency by 0.5%.”In particular, a CIO should be able to explain the strategy of thecompany, the strength of its products, and its go-to-marketstrategy, using the relevant business terms and KPIs. Digital-readyCIOs more often recognize this need: 9 out of 10 citecommunication and influencing skills as strongly important to theirroles. “Now that technology-driven innovation has become criticalto organizational success, there is more pressure on the CIO tocommunicate that importance,” says Nedbank’s CIO FredSwanepoel. “It’s about your ability to go head-to-head withbusiness executives in discussions about IT’s role in changing thecore of the business. It’s here that I often see the traditional techiesstruggle.”Born to be digital |25

“I spend little time on back office and a loton what you could categorize as digital.”Herman de Prins, CIO, UCBSwanepoel has sometimes engaged external managementconsultants to help bring a fresh perspective on what the core ofthe narrative ought to be: “If you are working in IT all day, you’vegot to concentrate on lifting the conversation to a level at which theboard can be comfortable. But sometimes the story is just toocomplicated, and you need some external help to tell it in acompelling fashion. That was definitely an inflection point for me.”An important factor that can further put weight on CIOs’communication skills is their relative position within the business.This is extremely vital for those CIOs who don’t hold board-levelpositions. With a seat at the top table, you have greater authority topush through changes directly. But others must rely more on theirpowers of persuasion, which makes a closer link to the CEO or otherkey executive stakeholders more vital. At the French-Japanese caralliance Renault-Nissan, Managing Director IT/IS Celso Guiotokomakes use of his strong relationship with the CEO, and of moreinformal approaches, to garner the necessary influence. “The factthat we have the corporate executive cafeteria is very useful forme, because I can sit with some of the corporate officers and talkabout any issues and opportunities, or about how they can getmore value from IT,” he says. “In addition, I have a very goodcommunication line to the CEO: we meet on a monthly basis.”At the same time, digital-ready CIOs are using media channels todrive influence. You can talk up the potential of IT and to help fostermomentum internally. “That is one of the reasons why we go publicon certain things, so that the media can come back and ask wherewe’ve gotten to on this. It puts a bit more pressure on us to getthings done,” says Guiotoko. The use of social media can also helpto build a greater presence both internally and externally, and tomake the CIO more approachable. For example, UCB’s Herman dePrins, who prefers to keep work-related topics out of social media,uses his passion for cycling as a source for non-work-relatedupdates and links them to technology, which in turn has helped himto forge a range of positive connections across the business.5Digital-readyCIOs move beyondoperations and infrastructure.Something common among many of the CIOs interviewed for thisreport is a desire to prevent their roles from being taken over by theoperations and infrastructure elements. As Sanofi CIO BrunoMénard points out, it is a question of CIOs deciding where theyreally want to invest their time. “If you want to run the operationsyourself, that is a huge management demand, so it will affect yourabilities on strategy and innovation. You cannot do both,” heexplains.This isn’t to suggest that leading CIOs think that operations andinfrastructure are not important, but rather that they see these asfoundational elements that should be run as efficiently as possible,to free up their time for the more strategic aspects of their role.“The first thing for digital CIOs is to move spending away from ‘keepthe lights on’ kind of operational stuff that doesn’t make theircompanies any money or serve their customers any better,” arguesInformationWeek’s Rob Preston. “Those who focus solely on this arejust chief infrastructure officers, and that’s not a good long termcareer prospect.”A lot of CIOs agree, noting that many of the traditional IT leadersthey meet at conferences appear to be no more than infrastructuremanagers. “They typically don’t come close to having board-leveldiscussions, and usually lie several layers away from the CEO,”notes Zooplus CIO Richard Alan Herz. Nedbank’s Fred Swanepoeladds: “In our business, sorting out the operational and efficiencyside is just the foundation for reliably delivering excellent clientservice. We build on that foundation by focusing on innovation todrive sales, deliver product breakthroughs, and fine-tune pricingmodels to influence changes in client behavior.”26 | Born to be digital

“I spend little time on back office and a lot on what you couldcategorize as digital,” explains UCB’s Herman de Prins. “I made achoice not to micromanage projects and get caught up in steeringcommittees and so forth. We do 150 projects per year but I trustmy team to manage them well. That frees up my time to dodifferent things, such as being more connected externally andfocusing on a few areas that are transformational,” he says. Evenso, he still finds scope for innovation. For example, UCB’s IT teamdeployed a new flash memory-based system that boosted theoverall performance of the company’s statistical programming by afactor of 20. “Is that a back-office thing? I don’t think so, becauseefficiency is good for everybody and most importantly for patients.”SAP Americas CIO Michael Golz agrees. He sees that embracingdigital has meant a much clearer focus on more radical innovationelsewhere in the business, rather than on trying to squeeze limitedgains from the company’s core IT systems. “You can optimizeendlessly, and it’s going to create some incremental improvements,but the real spending is being redirected into platforms, aroundanalytics, big data, mobility and the cloud or whichever area hasthe highest benefit for your company,” he says.This is borne out in the survey results. While for IT-intensiveindustry CIOs, the most notable increase in their focus has been onissues relating to ensuring basic IT needs are up and running,digital-ready CIOs have been putting more attention on otherissues, such as enhancing business processes and preparing theorganization for change. Even so, they do not forget the operationalelements — understanding that smooth operational running is whatallows them to have other focuses.Nevertheless, digital-ready CIOs do seek out bigger opportunities inIT infrastructure. But with one such opportunity, the cloud, theattraction for many IT leaders is that it has the potential to reducethe time and money spent on systems and infrastructure.Chart 9Priority of tasks compared with five years agoPreparing anddeveloping theorganizationfor change100%DEVELOPMENTShaping the futureof the businesswith the righttechnology100%81%54%55%54%Sustaining and extending theorganization's strategiesand objectives48%52%68%ENABLEMENTDigital-ready CIOControlling theimpact of IT spendon the organization48%61%78%Providing insightto support businessdecisionsEXECUTIONEnsuring theIT and securityneeds are upand runningIT-intensive industry CIO(Percentage of respondents who have chosen 8, 9 or 10 on a scale from 1= much less a priority to 10 =much more a priority)Born to be digital |27

Could emergingmarkets leapfrogon digital?One of the exciting prospects digital technology brings is thatit could potentially allow emerging markets to leapfrogothers. This is most easily seen at an infrastructure level,where adoption rates for mobile connectivity have oftenrapidly overtaken those for fixed-line connections. Indeed,many emerging markets have been pioneers: Kenya has beenthe leading country in developing a wholly mobile-basedmoney system, bypassing traditional banks. 7Across the IT-intensive industries polled, similar potential canbe seen in emerging market CIOs. Across a range of areas,they show greater potential to stand out than their peersfrom developed markets, as our analysis shows:Chart 10The DNA of the digital-ready CIOHe or she (yes, 13% are women - above theaverage for CIOs overall) is typically 45 yearsof age.On average, CIOs have spent a little overfive years in their current roles, althoughalmost half (49%) have been in their currentroles for less than three years.More often they hold either a business-relateddegree (52%) or a science and engineeringdegree (35%).They work hard to foster relationships acrossthe business, and see that as important from acareer perspective.They are happy in their work: 64% plan toremain where they are, or move into abigger CIO position, although 23% hope torun another business unit, or even becomeCEO.1. They’re more focused on the strategic elements ofthe role. About two-thirds (64%) of emerging marketCIOs are highly engaged in using technology to reshapethe future of their businesses, compared with just 50%of their developed market peers. Similarly, they are alsomore strongly interested in gaining the chance toinfluence corporate strategy, whereas developedmarket CIOs are often more interested in personaldevelopment.2. They place less of a priority on the operationalelements of the role, and see the most value ininnovation. Just 55% of emerging market CIOs thinkthey should focus on operational technology as apriority, as opposed to 73% of developed market CIOs.Similarly, when asked where they create most value forthe business, they are much more likely to point tothings such as product innovation (60% versus 46%).3. They focus on a different set of barriers. Whiledeveloped market CIOs worry most about a lack ofresources and head count, their emerging market peersare more concerned about dealing with a culture thatoften lacks a mindset for innovation.4. They realize the need for networking, both insideand outside the business. Across a range of roles,emerging market CIOs show a clearer recognition of theneed for improved relationships, not least in drivingtheir careers, whether that relationship is with the CEO,the CMO, or is an external relationship with regulatorsand the media.5. They’re typically more ambitious. Many developedmarket CIOs appear to be happier with the status quo:73% say they’re very happy with the scope of their role,compared with just 55% of emerging market CIOs.Accordingly, emerging market CIOs are far more likelyto want to move into a bigger CIO role (38% of thosesampled) than to stay in the same position (19%). Thiscompares with 19% and 45% of developed market CIOswith the same responses.Born to be digital |29

Section 4Routes to the top:the career paths ofdigital-ready CIOsThe digital-ready CIOs that are most engaged in the businessshow high levels of satisfaction in their status, careerprospects and ability to influence the corporate strategy.These CIOs also show several key differences in theirapproach to their personal development and career choices,most importantly around ensuring a multidisciplinaryapproach to their education and work experience.It is clear that digital CIOs take a different approach to tackling theirroles. But this research also reveals how they actively plan andshape their career paths — and how much they enjoy their jobs.High job satisfactionThe first thing to point out is that digital-ready CIOs appreciate theopportunity they hold: 64% are either content to stay in theircurrent position, or are simply seeking out a bigger CIO role. This isa similar proportion to other IT-intensive industry CIOs, but diggingdeeper reveals a much stronger core satisfaction with theirpositions and prospects. Across all elements of their jobs, theyexpress greater satisfaction with their work than their IT-intensiveindustry peers do. This is especially striking in three areas:• Their ability to influence corporate strategy, which is vital givenhow much this is a core part of their job: 60% find this stronglysatisfying, compared with 45% of IT-intensive industry CIOs.• The potential for future career development: 54% are stronglysatisfied, compared with 43% of IT-intensive industry CIOs.• Their status: 59% are strongly satisfied with how others in thebusiness perceive their role, versus 45% of IT-intensive industryCIOs. This is unsurprising, given that they are more often calledupon for advice by executives in the rest of the business.30 | Born to be digital

Career lessons from digital-ready CIOsFor other IT leaders seeking to achieve similar outcomes in theircareers, three key points stand out in the approach and careerchoices of digital-ready CIOs:Digital-ready CIOs are far more opento taking advice and trying out newideas.“CIOs have to be open to new practices. To some extent, the CIOhas to showcase new technologies, so it’s a permanent challengefor CIOs to keep themselves occupied on new things,” says SanofiCIO Bruno Ménard. Mail.Ru CIO Alexander Gornyi also keeps anopen mind about new things to learn: “I love what I am doing, and Iam good at it; however, I continually strive for improvement. Ibelieve a willingness to learn is an absolute must,” he says.Furthermore, among digital-ready CIOs, nearly one in two (46%)remark that they could use some advice on their career progression,compared with 36% of IT-intensive industry CIOs. They also show agreater appetite for input from other sources, whether from theirpeers, external consultants, the print media, online webcasts orothers.They are strongly interestedin building their career uponmanagement skills.Forty-nine percent of digital-ready CIOs hold a degree in businessand 24% even an MBA, compared with 14% of IT-intensive industryCIOs. Similarly, a higher proportion of them (35%) hold a degree inscience or engineering. And almost half of them (49%) believe thata business degree or MBA is strongly required for the CIO role,compared with 37% of IT-intensive industry CIOs.Chart 12Discipline of educationBusinessITScienceOther5%5%Digital-ready CIO31%44%38%41%35%49%IT-intensive industry CIO(Percentage of respondents who obtained a level of education in this discipline)Digital-ready CIOs are willing to leavetheir home turf.They show a greater enthusiasm to spend time elsewhere in theorganization to get a deep understanding of the business. Nearlyhalf (48%) believe that experience in another function is vital,compared with 33% of IT-intensive industry CIOs. Similarly, agreater proportion believes that it is necessary to have spent timein other companies, and that it’s important to have been oninternational assignments. The CIO of a major Chinesetelecommunications firm explains how, having initially graduated inengineering, her career path involved her becoming the head of anon-IT department, as well as the CEO of a subsidiary firm, beforemoving into her current role. This is explicitly supported by herfirm: “Our company has a personnel arrangement mechanism thatallows a CIO to switch roles with other executives,” she notes.Chart 13Requirements for becoming a CIOMotivation and hard workInvolvement in supporting majorbusiness projectsDegree and training in ITDegree and training in businessadministration and managementExperience in anotherbusiness functionInternational assignmentsCareer moves in differentcompaniesDigital-ready CIO47%49%37%48%33%38%28%37%25%67%67%56%86%94%IT-intensive industry CIO(Percentage of respondents who have chosen 8, 9 or 10 on a scale from 1 = not required at allto 10 = absolutely required)Not only a CIO’s responsibilityAll of this highlights a further important point in CIOs’ career paths,but one that is less often considered. It is just as much the firm’sresponsibility to find and develop tomorrow’s digital CIOs, as it isthe responsibility of those working in IT to embrace and pursue thispath. “Firms know that many CIOs are not typically the mostflamboyant, outgoing, risk-taking types. So companies may need torethink their hiring processes to seek out a different caliber ofcandidate,” argues EY’s Tom Velema. “If their business focuses onCIOs who keep the lights on, they shouldn’t be surprised thatthey’ve not found their change leaders.”32 | Born to be digital

CIO careers in focusEY’s analysis of the career paths of CIOs for the top 25 IT-intensive industry companies — determined by revenueor assets — confirms these findings. Although backgrounds and specific career paths vary slightly across eachsector, several overall observations can be made from this global pool of 100 leading CIOs.Multidisciplinary studiesThe majority hold at least a master’s-level degree, butvery often in a field outside IT. Whether it is an MBAor an MSc in engineering, economics or physics, thereis typically a dimension beyond IT to their studies. Forexample, Jeanette Horan, CIO at American IT companyIBM, did a bachelor’s degree in mathematics, beforelater adding an MBA to her qualifications. Similarly, theCIO of a leading Chinese bank holds degrees in electricalengineering and in software, along with an MBA. In thetelecommunications sector, one in five of these leadingCIOs hold a PhD on top of other qualifications.External advisory or directorship positionsIn keeping with digital CIOs’ tendency to actively engageexternally, many of them hold an external post of somekind, or several such posts. Dr. Alan Hippe, the ChiefFinancial and IT Officer of Roche, a Swiss Pharmaceuticalcompany, is an alumnus of the World Economic Forum’s(WEF) Forum of Young Global Leaders and serves on thesupervisory board of German engineering company Voith.Mark Sunday, the CIO at US computer company Oracle, isalso the Vice-Chairman of the Utah Technology Council,and a trustee of the state’s Economic DevelopmentCorporation, as well as an advisor to Epic Ventures, aventure capital firm, and an advisory board member of theDavid Eccles School of Business.Cross-sector experienceMany leading CIOs have spent time working in differentindustries. For example, Adriana Karaboutis switchedfrom a career in automotive, with roles at Ford andGeneral Motors, to become the CIO of Dell, a US-basedend-to-end solutions company. Anders Thulin, the CIO atSwedish telecommunications firm Ericsson, had workedin consulting, at McKinsey & Company. CIOs workingin IT are more likely to have made such switches, butthese switches are common throughout all four of theseIT-intensive sectors. However, CIOs working in bankingare much more likely to have had a prior role in financialservices, rather than in a wholly different sector.Shorter tenuresAs a result of their greater willingness to pursue newopportunities, many of these leading CIOs have been intheir posts for a relatively short amount of time. In theIT sector, for example, over half took up their currentroles in 2010 or later. And this is even more prevalentin telecommunications, where 60% have taken uptheir current roles since 2010. Across the IT-intensiveindustries, over half the CIOs surveyed had been in theirroles for less than three years.Born to be digital |33

Chart 14Career paths of leading CIOsFred SwanepoelNedbankCelso GuiotokoRenault-NissanRichard Alan HerzZooplusMichael GolzSAPPhilipp ErlerZalando2008 – todayCIO, Nedbank2008Divisional Director:Group Software Services,Nedbank2007Advanced ManagementProgramme, HarvardBusiness School2005 – 2007Divisional Director:Project & ProgrammeManagement, Nedbank2004Divisional Director:Finance, Risk &Compliance, Nedbank2002 – 2003General Manager:Programme Integration,Nedbank1996 – 2002Assistant GeneralManager, Nedbank1988 – 1996General Manager, SmallBusiness DevelopmentCorporation1988 – 1996General Manager, BusinessPartners1992 – 1995MBA in InternationalFinance & IT, University ofthe Witwatersrand2009 – todayManaging DirectorIS/IT, Renault-Nissan2006 – 2009Corporate VicePresident GlobalInformation Systems,Renault-Nissan2004 – 2006Vice President, GlobalInformation Systems,Nissan Motor Co.1997 – 2004Head of ConsultingServices, i2Technologies1996 – 1997Director of InformationSystems, ToshibaAmerica ElectronicComponents1986 – 1988Assistant Professorfor IT, UniversidadeEstadual de Sao Paulo1985 – 1986Anderson Consulting1983 – 1985Bradesco Brazilianbank, Civil EngineeringEscola Politecnica,Accounting Science,Universidade de SaoPaulo2012 – todayCIO, Zooplus2007 – 2012Consultant Businessand InformationStrategy, CapgeminiConsulting2007 – 2012Post graduateManagement, Otto-Friedrich-UniversityBamberg2002 – 2006Consultant, Centrumfür betrieblicheInformationssysteme2001 – 2002Product PortfolioManager, Atraxis(Swissair)2000 – 2001Consultant StrategicProduct Management,Lufthansa Systems1993 – 2000Master in BusinessInformatics, Otto-Friedrich-UniversityBamberg and Friedrich-Alexander-UniversityErlangen2003 – todaySenior Vice President& Americas CIO, SAPAmerica, Inc2009 – 2011Head of GlobalApplication Services,SAP AG2002 – 2003Vice President ITInfrastructure, SAPAmerica, Inc1998 – 2002Global IT Director, SAPAG1991 – 1998Head of InformationManagement, OTTOGroup1987 – 1991Bachelor in Business& InformationTechnology, EuropeanBusiness SchoolOestrich-Winkel2010 – todayCIO, Zalando2008 – 2010Geschäftsführer,Kontoblick1983 – 1986B Com (honours)Finance, Accounting & IT,Stellenbosch University34 | Born to be digital

Herman de PrinsUCBAlexander GornyiMail.RuDarryl WestBarclay’sBruno MénardSanofiDiego CalegariIBMLars MathiesenNykredit2009 – todayCIO, UCB2007 – 2009Vice PresidentIT International,Medtronic1995 – 2007Director InternationalIT, Guidant & AbbottVascular2012 – todayCIO, Mail.Ru2010 – 2012Head of ICQ, Mail.Ru2007 – 2010Deputy CEO,Media World (part ofRosBusinessConsulting)2006 – 2006Director of SoftwareDevelopmentDepartment,Rambler InternetHolding2000 – 2006Developer, SeniorDeveloper, Head ofMail DevelopmentDepartment, Mail.Ru1995 – 2000Computer Science,Lomonosov MoscowState University (MSU)2013 – todayCIO, Barclay’s Group2006 – 2013Various positions,including Group CIO,Lloyds Banking GroupAccentureJPMorgan ChaseNational AustraliaGroup (Europe)Fellow, Instituteof CharteredAccountants ofAustralia (ICAA)Bachelor ofCommercewith majors inAccountancy andComputer Science,Deakin University2011 – todayGroup CIO, Sanofi2004 – 2011Vice PresidentInformationSolutions, Sanofi-Aventis2001 – 2004Vice PresidentInformationSystems, Sanofi-Synthelabo1998 – 2001Director ofResources, SanofiWinthrop1995 – 1998General ManagerPhilippines, Sanofi-Winthrop1994 – 1995General ManagerSingapore, Sanofi-Winthrop1983 to 1986Bachelor inAccounting andMaster in FinanceESC Lille School ofManagement2013 – todaySpanish SouthAmerica CIOExecutive, IBM2010 – 2012Latin America HRTransformation ITLeader, IBM2006 – 2010Spanish SouthAmerica IntegratedSupply Chain Leader,IBM2002 – 2006Global LogisticsAmericas IT Leader,IBM1999 – 2002Various leadershippositions in GlobalLogistics IT, IBM LatinAmerica1994 – 1999Various positions inGlobal Logistics IT,IBM Argentina1990 – 1994Bachelor in IT,Universidad delSalvador2002 – todayCIO and ExecutiveVice President,Nykredit1997 – 2002Executive VicePresident RetailBusiness andDevelopment,Nykredit1991 – 1997CEO Nybolig RetailEstate Agency,Nykredit1982 – 1991Various executiveposts at Nykredit,primarily on thebusiness side withinNykredit retailcustomer segmentand Nykredit estateagency services,Nykredit2011 – todayMember, IT think tank“Denmark 3.0”2010 – todayMember, National ITproject counsel2006 – 2010Chairman, CIOInnovation Forum2006 – 2009Chairman, DANSK IT1975 – 1982Master of Economics,University of Aarhus1989MDP program,Cranfield UniversityBorn to be digital |35

ConclusionPreparing for adigital businessIn recent years, the rollout of digitaltechnologies has gathered momentum acrossnearly every industry. The early pioneers ofdigital have shown the disruptive potential thatthese tools hold — from new ways tocommunicate with customers, through to whollynew business model opportunities.For CIOs, all this brings new demands andpressures to which they will have to react. Inparticular, successfully dealing with thedigital revolution requires a far strongerfocus on the strategic elements of the role asopposed to the basic execution chores. Thisshift in emphasis can be seen in the way thatdigital-ready CIOs set their priorities. Whilemastering the basic execution, they spendless time on it to free up capacity to do moreon enablement and corporate development.From our interviews with leading experts andCIOs, we gathered advice and guidance onhow to prepare for a digital world — and tostand out from your peers.None of these steps is inaccessible to anysufficiently motivated CIO, or aspiring CIO.The question, as ever, is whether you havethe courage to pursue them. Are you readyto act?Your personal agendaTasks at a strategic levelPushing the digitaltransformation agendaforward requires acompelling and crediblevision, and understandingthe necessary steps toachieve it.Give a detailed visionfor how technologycan transform thebusiness — and a planto implement thetransformationDigital, in particular,provides wide-ranging newopportunities to deliverradically more efficientprocesses, as well as whollynew products and services.But to truly deliver on this,you’ll need a firm grasp ofthe corporate business andoperating model.Prioritize innovationwherever possible, atboth a process and abusiness model levelNo CIO can get awayfrom operational andinfrastructure issuesaltogether. But leading CIOsensure that operationalissues are a side dish, notthe main meal, in whatthey serve up to the restof the business. Freeyourself from these issuesso you can truly focus ontransformation.Don’t let operationalIT overwhelm you36 | Born to be digital

Steps to setting up a digital enterpriseYour technical agenda1Set up the right architectures for growthCIOs taking the lead on digital need to enable the rapid assemblyof new ideas and business initiatives. “You can’t put up theregular hurdles you normally do for any sort of new functionality,so you need a foundational architecture — for mobile, cloud, data,applications, and so on. If you don’t, you wind up connectingone dot to the next, and you get a spaghetti mess,” argues DavidNichols, Americas IT Transformation Leader at EY.2Get control of your dataFor the past two decades, CIOs have been largely focused onapplication and infrastructure delivery, ahead of data. But a shiftinto the cloud reduces the emphasis on the application front, andmakes data far more important again.3Set out the relevant standardsDigital transformation requires to radically simplify the businessand to change the mindset around product development. Newproducts and services should not be introduced unless theunderlying technology is available to efficiently support these.CIOs will have to provide some foundational standards to guidetechnology selection. These will need to cover performancerequirements, along with legal, security and other aspects.4Understand strategic alignment with the rest ofthe businessDigital technologies have a huge potential to change the underlyingoperating model and business processes of the company. Therefore, CIOsmust have a close understanding of these aspects.5Take a fast, multidisciplinary approach tomanaging new projectsAs a wave of new digital ideas emerges, CIOs will have to ensure that alot of different internal functions and third parties can interconnect. “Thisdemands rapid-assembly teams that represent views from across thebusiness, including marketing, finance and IT,” says Dave Ryerkerk, Global ITAdvisory Leader at EY.6Plan the sequencing and pace of changeCIOs need to balance any new digital opportunities against their associatedrisks. While it may make a lot of sense to move email and CRM systemsquickly to the cloud, it’s a much more involved decision to know when todo the same for a company’s core financial systems, such as their generalledgers. Getting the timing right will be vital.Tasks at a personal levelDigital technologies holdthe promise to make IT agenuine source of growth.Getting this right, however,will require you to buildtight relationships acrossthe front office — startingwith the CMO and extendingto the end customers.It is human nature to beswept up by a compellingstoryline and thepossibilities it contains.The best CIOs are able toprovide a narrative about ITthat the rest of the businesscan buy into — and then useit to extend their influenceacross the organization.Embracing new technologyinvolves a leap of faith. But,too often, CIOs get caughtup in the downside to newdevelopments, worryingabout the small chanceof failure, rather than thepotential to transform thebusiness. Have courage.Many leading CIOs rarelyspend their entire careersin one place, but hoparound to gain exposure todifferent experiences andapproaches, developingexpertise along the way. Beopen to these possibilities,including ones that take youinto wholly new sectors.Consider other ways todevelop a more widerangingbackground toshowcase your skills inanother light. Many leadingCIOs take non-executivedirectorships at other firms,or have joined externalcommittees or thinktanks. Others do MBAs towiden their educationalbackgrounds. All these helpto develop a more powerfulcontact book.Build closerelationships withthe front of thebusinessBe a compellingstorytellerBe willing to takerisksBe willing to movearound, acrossboth functions andcompaniesWiden your resumeBorn to be digital |37

DemographicsBoard membership47%NoJob titleChief information officer (CIO)IT directorHead of IT53%Yes7%Gender88%Male12%Female37%41%About the researchThe research draws on a telephone survey of 166(information) technology leaders from a range of IT-intensiveindustries, as these are the firms where CIOs are likely tohave the greatest scope and widest remit in their roles.The global survey, which spanned key markets across Europe,the Americas, Asia, the Middle East and Africa, focusedprimarily on large firms: 27% had annual revenues of betweenUS$500m and US$1b, and the rest were larger, including20% with revenues of at least US$10b.We also conducted detailed interviews with a range of CIOsand IT experts, to add additional context to our data andfindings.We focused on those sectors independently identified asbeing the most IT-intensive, in terms of annual spending on ITas a percentage of revenue. These sectors includedtechnology (including hardware, software and other ITservices), financial services, life sciences,telecommunications, online and e-commerce.In addition to this survey, EY conducted an analysis of thecareer paths, education and background of over 100 leadingCIOs, representing the top 25 largest companies —determined by revenue or assets — in four IT-intensivesectors: IT, telecommunications, life sciences and banking.IT managerChief technical officer (CTO)General manager ITVice president ITOther3%2%2%1%7%AgeTime in current role45%3%21%30%2%8%46%17%18–29 years30–39 years 40–49 years 50–59 years 60–69 yearsLess than 1 year1–3 years 4–6 years12%17%7–9 years10 years and more38

Highest qualificationSectorManagementPhD in management orbusiness administration1%48%Software, hardware and computer services23%MBAMaster's degree in management orbusiness administration15%23%Banking and financial services19%Bachelor's degree in management orbusiness administration9%Telecommunication operators and services14%IT43%PhD in IT1%Chemical, bio- and medical technology8%Master's degree in IT18%Bachelor's degree in IT24%Semiconductors andtelecommunications equipment8%Science and engineeringPhD in science and engineering3%30%Transport and logistics7%Master's degree in scienceand engineeringBachelor's degree in scienceand engineering12%15%E-commerce, internet and social media6%Other7%Media and televison4%Other university degree4%Other non-university degreeOther1%1%Cable operators and services1%No answer1%Other10%Worldwide number of employeesGlobal annual turnoverUp to 2497%US$500m-US$999m27%250–4992%US$1,000m-US$4,999m42%500–9992%1,000–1,9994%US$5,000m-US$9,999m11%1,500–1,9994%US$10,000m-US$19,999m10%2,000–4,99922%US$20,000m and more10%5,000–9,99917%10,000–49,99922%50,000 and more 19%Location of headquarterList of countriesArgentina 1%Australia 2%Austria 5%Brazil 4%Belgium 2%Czech Republic 1%China 1%Canada 6%Denmark 2%Finland 1%France 1%Germany 4%Greece 2%India 6%Iran 1%Israel 1%Lebanon 1%Lithuania 1%Luxembourg 2%Mexico 2%Netherlands 2%Nigeria 1%Norway 1%Poland 1%Portugal 1%Russia 7%Slovakia 1%South Africa 4%Spain 3%Sweden 4%Switzerland 2%Turkey 1%United Kingdom 5%United States 19%39

Endnotes1. “Embracing digital technology,” MITSloan ManagementReview, MITSloan, 2013.2. Hunting and harvesting in a digital world: The 2013 CIOAgenda, Gartner, 2013; Taming the Digital Dragon: The2014 CIO Agenda, Gartner, 2014.3. The digitisation of everything: how organisations mustadapt to changing consumer behaviour, EY, 2011.4. “5 Facts about Chief Digital Officers,” by Dave Aron,Gartner, 6 November 2013.5. The DNA of the CIO, EY, 2012.6. “Marketing’s two-headed beast,” 5 insights forexecutives series, EY, 2013.7. “Why does Kenya lead the world in mobile money?,”The Economist, 27 May 2013.Further reading• Ready for take off? How to make the business fly, EY,2014.• Designing your customer experience using digitalanalytics, EY, 2013.• Digital data opportunities: using insight to driverelevance in the digital world, EY, 2011.• “Predictive analytics: a CIO’s key to the boardroom”,5 insights for executives series, EY, 2013.• The digitisation of everything: how organisations mustadapt to changing consumer behaviour, EY, 2011.40 | Born to be digital

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