CIO
Lecture 5


CIO

Today Lecture Summary
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Chief Information Officer profile
- Demographics
- Salary data
- Employment information
- Topic relevance
Important for general managers to understand this
pivotal senior position
Communication, leadership, and people skills – essential
to CIO success


The Office of the CIO?

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Some believe the office of the CIO is so broad it
should be handled by a team
Four ‘positions’:

1. Chief Information Officer
–
Heads IS and works with top management,
customers and suppliers
2. Chief Technology Officer
–
Heads IT planning, which involves
architecture and exploration of new
technologies

2-3


The Office of the CIO?
3.

Chief Operations Officer
–

4.

Chief Project Officer
–

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Heads day-to-day IS operations

Oversees all projects and project managers


IT is so critical to enterprise success and the knowhow needed to run it so deep and wide = management
needs to become a team effort


Whither
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CIOs?

Different periods of recent history have seen
executives with different backgrounds
“running the show”
¨
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Manufacturing = in the early 1900s
Sales and Marketing – 30s to 50s
Finance – 70s to 90s
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Problems and scandals

Future – perhaps now CIOs have the most
appropriate backgrounds to run companies

2-5



Role of the CIO Is Evolving
Quotable quote:
“It is no longer useful or meaningful to talk about
the ‘role of the CIO.’ ”
– Barb Gomolski, senior research director, Gartner,
Nov. 27, 2000 1
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Rationale
¨ No single “one-size-fits-all” position description
¨ CIOs wear many hats; work in various roles
¨ Different types of CIOs
¨ CIOs are driven by background and interests
¨ Industry and organizational differences affect role


Chief Information Officer

CIO

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Job title is commonly given to the senior executive in
charge of information technology and computer systems
that support an organization’s business goals.

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As IT has become increasingly important, the CIO is
typically viewed as a key strategist within the
organization.

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In many companies, the CIO reports directly to the Chief
Executive Officer (CEO). In some companies, the CIO
sits on the Executive Board.

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Usually, a CIO proposes IT strategies to achieve
business goals and works within an established budget.


CIO Demographics
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CIO

87% are male
70% moved up through the IT ranks

5 years, 9 months is average time as CIO
4 years, 6 months is average time in current job
40% report to CEO
85% are responsible for enterprise-wide IT
76% do not plan to outsource outside of U.S.

- Source: CIO Magazine 3


CIO Regional
Salary Comparison
Percentile
Source 4

Midwest:
Chicago

East Coast: West Coast:
New York
Los
Angeles

CIO

Southeast:
Miami

25th
Percentile


$173,434

$186,163

$179,640

$157,841

50th
Percentile

$214,922

$230,696

$222,611

$195,598

75th
Percentile

$272,348

$292,337

$282,093

$247,862



CIO in the Government

CIO

In 1996, President Clinton signed what has become
known as the Clinger-Cohen Act.
n This act required majorFederal Agencies to
establish the position
of CIO.
- CSA High Technology Research Database with
Aerospace 2001 5
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CIO Employment Turnover
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CIO

5 Years: Average tenure of a CIO in a single
position – examples:
¨ Joseph

Eckroth, former CIO of Mattel (Toys), left
position after 5 years. Joined New Century Financial
(Real Estate Investment Trust)
¨ Patricia Morrison, former CIO of Office Depot, left
after 3.5 years to join Motorola
¨ Frank Hood, former CIO Krispy Kreme Doughnuts,

left shortly to join Quiznos 6
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Some CIOs seek resume-building experiences
rather than a long-term career with a single
employer. 7


CIO Turnover
Rate Comparison

CIO

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77 business executives surveyed – majority believe CIO
turnover is equal to other senior positions 8*

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8% – “CIO turnover higher than other senior positions in
the company”

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62% – “CIO turnover is the same”

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31% – “CIO turnover is lower than other senior executive

positions”
* Darwinmagazine.com


CIO Employment Outlook
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CIO

CIO job search during downturn could last as long as 12
to 18 months
Recruiting for CIOs increased in 2005
Nationwide
¨ CIO job listings increased 30% from 2004
¨ Overall IT sector hiring increased 37% from 2004 9
Locally, CIOs are increasing hiring of IT professionals,
according to Robert Half Technology
¨ 11% of CIOs surveyed in St. Louis planned to add to
staff; 10% surveyed planned to reduce staff
¨ Net 1% of CIOs planned to hire in the third quarter of
2005 – increase of 2 percentage points from second
quarter 10


Chief Information Officer
Corporate Case Studies


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Three different companies.
Three unique CIOs.
Three insightful perspectives.

3

CIO


CIO Profile: Centene Corporation
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Glendon Schuster 11
Chief Information Officer
Centene Corporation
Joined company in
company June 2005 on
an interim basis. Became
permanent in October

2005.
Senior Management
Team Member
B.S., Electrical
Engineering

CIO


CIO Profile: Glendon Schuster
Professional IT Background

CIO

Title

Company

Description

Partner

Accenture Consulting

Provider of programming
consultants

Head of Information
Technology


Gamut Interactive

A start-up company
focusing on electronic
couponing interacting
with TV/Print Media

Development Lead

Deluxe Check

Check production

Various roles (designer,
application architect,
development lead, etc)

Walgreens

Pharmacy


Centene
Organizational Chart

CIO
reports
to the
CEO


CIO


Centene Corporate
Overview
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CIO

Managed care provider for Medicaid
Services: claims processing and client reporting
Operates healthcare plans in Indiana, Kansas, Missouri,
New Jersey, Ohio, Texas and Wisconsin
Contracts with other companies to provide special
services including behavioral health and disease
management
288 IT employees – 159 full-time corporate; 79
contractors
Year

Total Company
Revenue

Annual
IT Budget


2004

$1 Billion

Proprietary

2005

$1.5 Billion

Proprietary


IT Culture
at Centene
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159 Full-Time Employees
79 Consultants
Dynamic
Expanding
Reorganizing
Very structured


CIO


The Biggest IT Challenges
at Centene
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CIO

Creating more customer-based reporting
Increasing disease management
Development of “trending” systems
Regional Health Information Organizations
Ability to bring fast reliable information to patients,
doctors and hospitals


What Keeps the Centene
CIO Awake at Night?
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CIO


Balance between controls (security, permissions,
signoffs) and administrative overhead
Giving people more authority to work
on tasks (e.g., migrate code) is
generally more efficient, but can lead
to risks in security, regulatory
procedures, compliance and litigation
Locking down authority tends to tie up the organization in
administrative overhead


CIO Relationship with CEO
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CIO

Reports directly to the CEO
Weekly senior management meetings
Average CIO communication with CEO occurs five times
per week – “IT rules” at Centene.
Redefining the role of the
IT department
Major emphasis on teamwork



CIO’s Biggest IT Success
at Centene
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Major reorganization of the IT department.
Aligned the IT groups within
functional areas.
Quotable quote:
“Change by evolution, not revolution.”
– Glen Schuster, CIO

CIO


How does IT drive business
at Centene?
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CIO

IT drives the business at Centene
IT should be reacting to the business
IT should develop systems that complement the

business
Quotable quote:
“IT should support the business objectives.”
– Glen Schuster, CIO


CIO

Trends Impacting Centene in the Next
Five Years
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Disease management
¨ Design systems that do trending analysis based on
the amount and types of claims received
¨ Develop software that can help predicate a patient’s
predisposition to a disease
Customer-based reporting
Regional health information systems