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5/10/2012
10:03 AM
Chris Murphy
Chris Murphy
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The CIO Wears Two Hats: Isn't IT Enough?

Like Rick Roy, a growing number of CIOs now run IT plus another major business function. Here's why CUNA Mutual Group pointed Roy at procurement, real estate, physical security, and facilities.

Rick Roy, CIO of CUNA Mutual Group, sees several similarities between running the IT and procurement departments, both of which he's in charge of for the financial services company. For starters, your team's help isn't universally welcomed.

If a department's leaders are happily buying, say, temp services from one vendor, they're not necessarily excited to hear that they need to start buying through a centralized group--even if they understand that having one contract probably means leverage to get a better price. That's a lot like the conversations around shadow IT.

"We [in procurement] do run the risk of showing up on someone's doorstep with a message of 'we're from corporate, and we're here to help,'" Roy says. "But that's not so different from what we do in IT."

Roy has been leading procurement, real estate, physical security, and facilities for more than a year, while retaining his CIO duties. It started when the since-retired CFO, Jerry Pavelich, wanted a tighter grip on purchasing and approached Roy about taking over procurement. "He caught me a little bit by surprise," Roy admits.

Putting IT and procurement under one exec can make sense for a number of reasons, Roy says. One is the reality that if there's a procurement project moving forward, there's probably an IT component and IT staff involvement early in the process.. That's particularly true at a financial services company like CUNA Mutual, which provides financial services such as insurance and investments to credit unions. The IT leadership already is involved in negotiations for a lot of contracts for equipment, software, and services, so it has a level of expertise. That includes knowing the right questions to ask about data control, security, and privacy, as well as questions around liability and service level agreements related to uptime and other performance factors.

Thanks to the new arrangement, Roy thinks CUNA has gained better teamwork in a few areas. For example, the IT security and physical security teams have started working more closely, in particular as they think about wireless network security and places in the building where different people--employees, contractors, visitors--might try to access wireless networks.

And yes, of course this kind of teamwork can and does happen without putting one person in charge of two staffs or making any organizational changes, and CUNA Mutual has a strong culture of collaboration. But Roy's a realist: "We all know how it works: When things are hard-wired in an org structure, you are aligned."

Isn't Being CIO Enough?

Roy's in the minority with regards to procurement -- just 12% of the CIOs in our InformationWeek 500 last year also have responsibility for procurement (up from 8% in 2010). Much more common is for CIOs to have formal responsibility for telecom (64%), business process management (32%), or innovation (30%). Nine percent are in charge of global business services. Anecdotally, we've seen a few CIOs recently add a formal "digital" role, usually bringing together the growing opportunities emerging in mobile, e-commerce, and customer analytics.

Among the high profile IT leaders with procurement responsibilities is John Hinshaw, HP's VP of global technology and business processes. Hinshaw, a former Boeing CIO, was brought in by CEO Meg Whitman last year and given a broad portfolio, including procurement, shared services, real estate, and sales operations, as well as IT. Procter & Gamble CIO Filippo Passerini is also president of P&G's Global Business Services unit, which includes more than 170 different services that are used by business units across the company, from human resources to facilities management.

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Such two-hat CIOs are often long-time execs , like Roy and Passerini, who understand the company's business operations and goals far beyond technology. This situation also signifies a deep IT leadership bench--if the CIO can't or won't let go of some of the daily IT operations, neither job will be done well.

But does it also signal that the company takes IT operations for granted? Is "only" running IT not seen as a big enough of a job?

Roy doesn’t think a dual role waters down the importance of IT. Most CIOs take a general manager's view of the whole company while running IT and working as part of the executive team. However, "there aren't a lot of people who are paid to work across the entire organization," Roy says. Shared services like procurement make sense for a CIO to run, because IT itself is one of the biggest shared services, and so the CIO is used to working with every part of a company.

However, CUNA Mutual does have a team dedicated to IT strategy and architecture--and that's essential, Roy says, so that he knows people are focused on the long-term view for technology. "Anytime I start to think IT is on autopilot, I start to get paranoid," Roy says. "What are we missing?"

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