Accelerating ITBusiness Alignment in the Midmarket Enterprise

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Accelerating IT/Business Alignment in the
Midmarket Enterprise
Salt Lake City SIM Chapter Meeting, Oct. 12, 2006

• Maryfran Johnson
• VP and Editorial Director CIO
  Decisions Media Group TechTarget, Inc.
  

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The Power and Scope of the Fortune 50,000

• CIO Decisions defines the midmarket as those
  50,000 North American companies with annual
  revenues of 50 million to 1.5 billion.
• Microsoft identifies a worldwide market of 1.4
  million midsized companies.
• Gartner says midsized companies (100M to 1B)
  comprise the fastest growing business segment in
  North America for 2006-2007.

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The Midmarket Leading Brands Across All
Industries and Vertical Markets
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Our Mission

• Give midmarket IT executives an influential new
  voice in the market
• Identify and explore the unique IT challenges
  facing midsized companies today
• Help our readers succeed in aligning technology
  spending with business success

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Overall IT spending by SMBs accounts for 44 of
all U.S. IT spendingand is growing at a faster
pace than spending by enterprise-class companies,
says Forrester Research. SMB spending (374B)
rose 8 in 2005 vs. a 6 increase in enterprise
spending
Tracking the Future of IT
Buying Power
Source Forrester Research, July 06
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Average Annual IT Budgets in the Midmarket
Organization
SourceCIO Decisions Readership Study, Sept.06,
N394
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How does your FY07 operating budget compare to
last years IT budget?
CIO Decisions Readership Survey, Sept. 06, N394
responses
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How does your FY07 capital budget compare to last
years IT budget?
CIO Decisions Readership Survey, Sept. 06, N394
responses
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IT Leadership Challenges for Midmarket Companies

• Dealing with supply chain, integration and
  infrastructure issues
• Responding to regulatory compliance customer
  privacy needs
• Addressing security concerns viruses, spam,
  hackers
• Managing vendors, partners, suppliers and
  outsourcers
• Coping with resource/staffing constraints
• Aligning IT and business for competitive edge in
  their specific vertical markets.

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How Midmarket IT Execs Differ from Their Large
Enterprise Peers

• They struggle with many of the same complexities
  as larger enterprises -- but move more quickly on
  IT implementations.
• They solve problems with smaller staffs and fewer
  resources.
• Their sales cycles are much shorter (3-6 months).
  
• They rely more heavily on partners/service
  providers -- but want direct relationships with
  primary vendors, as well.
• They are innovative yet frugal, intensely
  practical and business-focused on their vertical
  industries.

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SIMs Top 10 IT Management Concerns for 2006

• IT/Business Alignment
• Attracting, Developing and Retaining IT
  Professionals
• Security and Privacy
• IT Strategic Planning
• Project Management Capability
• Introducing Rapid Business Solutions
• Speed and Agility
• True Return on Individual IT Investments
• Measuring the Value of IT Investments
• IT Governance

Source Society of Information Managements 2006
Survey Findings, Sept. 06, N 115 responses.
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What business factors will drive your IT strategy
in 2007?

• Security/Risk Management (46)
• Growth (45)
• Modernization (38)
• Compliance (37)
• Disaster Recovery Needs (36)
• Consolidation (27)
• Merger or Acquisitions (17)

Source CIO Decisions Readership Study, Sept.
06 multiple responses allowed to this question.
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As the fields of IT and law continue to move
closer together, the CIO's responsibilities will
move to a higher level. The future will move more
toward enterprise risk management, which is a
consolidation of all the compliance and risk
functionsCIOs will need to play a big part in
such an organization and figure out how to
establish appropriate governance frameworks to
ensure IT is an integral part of such a
structure
Thornton May, CIO Habitat, Sept. 06 issue
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Strategic IT Priorities for CIO Decisions
Readers in 2007

• Application development (in-house or outsourced)
  (32)
• Security management (patching vulnerabilities
  ID/access SIM/SEM) (29)
• Data backup (redundancy/recovery) (28)
• Business intelligence (data analytics/data
  warehousing) (20)
• IT service management ITIL (IT Infrastructure
  Libraries) (18)
• Enterprise software (ERP, supply chain,
  financials, CRM) (16)

Source CIO Decisions Readership Study, Sept.
06, email survey, 394 responses.
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Top IT Spending Priorities for CIO Decisions
Readers in 2007

• Storage Area Networks (14)
• Data Center Consolidation (13.5)
• IT Service Management, ITIL (13.5)
• Content/Records Management (13)
• CRM (12)
• Server Virtualization (12)

• Application Development (30)
• Data Backup (27)
• Security Mgt (26)
• Network Infrastructure (24)
• Enterprise Software (21)
• Business Intelligence (21)

Source CIO Decisions Readership Study, Sept.
06, email survey, 394 responses.
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IT leaders listen, delegate, communicate,
collaborate and lead by example. Their businesses
want to expand into new markets, respond faster
to customers and take out costand they use IT to
those ends.
CIO Decisions Midmarket Leadership Awards, July
2006
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Two Big Lessons in Leadership Governance and
Relationships
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"IT Governance The words can send a shiver down
the spines of IT and business leaders alike
CIO Niel Nickolaisen (aka Business Mentor)
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One Size Never Really Fits All

• How does organizational alignment and ITs
  primary role intersect at your company?
• What works best (communication wise) in your
  companys culture?
• Are you centralized or decentralized?
• Who prioritizes the time, money and people
  involved in IT/business projects?
• Is IT strategic or tactical? (Be honest!)

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"Governance depends on where you are as a
company, whether you're in a growth or stability
mode...
Shelly Barnes, VP of IT, Arizona Tile
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Arizona Tile in Tempe, Ariz.

• Family-owned chain with business booming,
  headcount surging, new stores opening.
• IT department in chaos. No governing structure,
  disconnected projects, daily systems crashes.
• Small local reseller providing spotty support.
• SLAs? Never heard of them.
• Business processes engineered around technology.

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You have to tell a story

• New VP of IT implements IT service delivery model
  to measure capabilities and shortcomings
• Charts, color-codes 25 areas of IT
  responsibilities
• Outsources billing and cuts costs 25
• Project management methodologies used to set
  goals and timelines for improvements
• Chart gives company executives a way to assess
  weaknesses and target investments
• "There's a family way of doing business. They
  don't know what they don't know. Shelly Barnes

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"Technology and process are now and forever
married in our company. They used to just date
whenever it suited them.
Arizona Tile President Bob Traxler
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AARP in Washington, D.C.

• Developed an IT Infrastructure Library (ITIL)
  program to standardize change management.
• Improved communication, made SLAs more robust.
• Governance approach includes IT staff serving on
  key business committees.
• Tech investments aligned with specific business
  strategies provides clear picture of what IT
  contributes to the organization.
• In two years, IT doubled the number of projects
  accomplished with the same number of staff.

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• AARPs tech team includes a dozen solution
  managers who divide their time between specific
  business units and the IT department.
• The challenge is getting the right people. They
  have to know that business. And they are the IT
  point of contact for anything that touches that
  area."

Acting CIO Tony Habash
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"Knowing the issues and cycles, we can serve as
consultants to the business." Tony F. Habash,
IT director/acting CIO
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Bristol West Holdings in Davie, Fla.

• Problem One C-level business colleague distrusts
  IT. Black hole that sucks up my resources.
• CIO gambles on embedding IT more deeply into that
  executive's domain.
• reorganizes the way the company employs IT
  personnel
• moves from a centralized model to federated one
• IT staff now have dual dotted-line reporting to
  the CIO and the enemy executive.
• Suddenly both executives under the gun to produce.

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"Before, it was all lobbying. Whoever complained
the loudest got what they wantedNow there's
buy-in. We used to sit on opposite sides of the
fence, but now I've become more of a trusted
adviser."
CIO Jack Ondeck, Bristol West Holdings
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Thanks for your time and your kind
attention!Maryfran JohnsonVP Editorial
DirectorCIO Decisions Media Group
mjohnson_at_ciodecisions.com781 657 1654