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Implementing an Office of the CIO

Article

Published: July 2010

The following content may no longer reflect Microsoft’s current position or infrastructure. This content should be viewed as reference documentation only, to inform IT business decisions within your own company or organization.

Learn how Microsoft IT designed and implemented an Office of the CIO in order to enhance management capacity to better address the diverse business, technical and organizational demands, expectations, and responsibilities that compete for the CIO's attention.

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Intended Audience

Quote

This article is designed for Chief Information Officers and other “C-level” executives, IT leadership members, and corporate strategic decision-makers who are looking for ways to enhance their CIO’s ability to contribute to the company’s technical and business needs.

“We use the Office of the CIO at Microsoft as a strategic asset to leverage the knowledge and talent of our employees across many departments. The OCIO leads our governance efforts and provides guidance on how we communicate our corporate vision internally and to our partners and customers. It’s an interdisciplinary team.”

- Tony Scott, CIO, Microsoft

Introduction

Similar to many enterprise-scale technology companies, Microsoft has experienced a continuous increase in the type and scale of services it requires from its CIO.

This article describes the challenges that enterprise CIOs are facing in their efforts to effectively manage the ever-increasing demands for their time and attention. It introduces the concept of an Office of the CIO (OCIO) and discusses the approach Microsoft Information Technology (Microsoft IT) took to determine what type of OCIO model should be implemented in order to best serve the CIO, the Microsoft IT organization, and the company’s business as a whole. It also lists the key benefits that the company has achieved as a result of the creation of the Microsoft OCIO.

Competing Demands for a CIO’s Time

Independent studies[1] have shown that the demands placed on today’s CIOs are both internal and external in nature, that they span business and technical areas, and that they are continually escalating in scale.

Internal demands include the increasing technical complexity of the company’s infrastructure, and interdepartmental issues such as needing to implement corporate technical standards and regulatory compliance measures.

In addition to the internal demands, external requirements also require their share of the CIO’s attention. As more customers adopt cloud-based services and software + services models, their expectations concerning the type and quality of the services rise.

Irrespective of the nature of the demand, perceptive businesses need to watch every dollar spent. As CIOs struggle to address their ever-increasing workload, they are receiving pressure from the business to limit their IT costs.

Although prioritization and time management are beneficial management techniques, the complex and ongoing nature of these demands means that they cannot be resolved solely by streamlining the CIO’s schedule. A realistic, long-term solution requires the company to accurately review the full spectrum of demands placed on their CIO, and then develop an organizational model that can expand the CIO’s management capacities most effectively.

Why an Office of the CIO?

The purpose of an OCIO is to leverage the skills of key employees across the enterprise in order to create an IT-focused organization that has the capacity to address business-critical issues that otherwise would overburden the CIO.

Whereas IT leadership teams are typically hierarchical and reside within the IT organization, a properly structured OCIO is interdepartmental in nature and is therefore well suited to address issues between IT and the business. The OCIO should be comprised of a number of subject matter experts (SMEs) from across the enterprise who are tasked with bringing their collective skills and experiences to bear on the internal and external issues that demand much of their CIO’s attention.

By leveraging the company’s SMEs, the OCIO can increase the CIO’s management capacity to address the internal and external demands. In return, the collaborative nature of the organization can be used to foster the professional development of its members, helping them to gain invaluable experience as they work at a strategic level to support the CIO.

Microsoft IT’s Implementation of the OCIO

Microsoft IT’s guiding principal for the OCIO was to add value. Each decision made concerning the organization’s model and its operation was considered in this light.

Planning for the OCIO

Recognizing that no single model is a perfect fit for a given enterprise, Microsoft IT began the planning process by researching how other large corporations had approached building their OCIOs. Microsoft IT reviewed 23 case studies that discussed how different enterprises structure and govern their IT. By comparing these enterprise OCIO implementations with Microsoft’s existing IT structure and the CIO’s needs, Microsoft IT was able to take the “best of the best” information that was most applicable for Microsoft and could demonstrate strategic added value, and used it to start designing their own OCIO.

Next, Microsoft IT performed an internal exercise to develop its own case study. The results of this internal case study were compared to the other case studies in order to identify gaps in Microsoft IT’s current efforts. Recommendations for filling those gaps were reviewed and vetted by the IT leadership team and the CIO.

The end result of this process was an approved plan for establishing an Office of the CIO that was purpose-built to address the needs of the CIO, the Microsoft IT organization, and the company overall.

Designing the Microsoft OCIO

Microsoft IT took a hybrid approach when designing their OCIO model. As shown in the following illustration, the Microsoft OCIO design combines aspects of both collaborative and coordinating models.

Figure 1: The hybrid Microsoft OCIO model incorporates aspects of collaborating and coordinating models

Figure 1: The hybrid Microsoft OCIO model incorporates aspects of collaborating and coordinating models

The OCIO model was validated by comparing the OCIO structure to Microsoft IT’s Capability Maturity Model (CMM), which identifies all the capabilities that Microsoft IT is tasked to deliver to the company. Because the CMM provides insight into what functions Microsoft IT currently engages and their level of complexity, Microsoft IT was able to identify gaps in their design and allocate headcount to ensure that the OCIO would be able to perform its designated duties effectively and maximize its value to the company.

Microsoft IT also uses the CMM as part of an ongoing review process to regularly assess the OCIO’s effectiveness and adjust its direction as needed in order to maintain peak service levels.

Organizational Alignment, Roles, and Responsibilities

Although the number and types of functions the OCIO performs can be modified over time to adapt to changing company needs, the key responsibilities are summarized as follows:

  • Strategy and Planning: Provides the ability to deliver long-term strategic and financial goals, offers next-step guidance to meet strategic initiatives, enables trade-off decisions subsequent to planning processes, and supports multidimensional views for risk management.

  • Governance of IT (includes IT Risk): Provides the ability to establish an effective governance framework, including defining organizational structures, processes, leadership, roles, and responsibilities to ensure that enterprise IT investments are aligned and delivered in accordance with enterprise strategies and objectives.

  • Marketing and Communications: Provides the ability to provide leadership communications both externally and internally. At Microsoft, the CIO spends a significant amount of time with customers and partners. To assist the CIO in communicating his vision, the OCIO operates as a technical marketing organization that generates internal and external IT communications, and provides sales enablement. The OCIO views Microsoft IT as the company’s first and best customer, and is able to tap into its SME resources in order to produce executive briefs and other customer-facing materials that highlight how Microsoft does IT.

  • Sourcing and Supplier Management: Provides the ability to meet need demands, allocate resources accordingly, and formalize supplier relationships.

  • Performance Management: Provides the ability to track performance and demonstrate value delivered to the organization.

  • Product Excellence of Microsoft Products: Provides the ability to quickly verify and provide feedback on scale, reliability, and overall usability of products. This also includes providing strategic input to the design for future enterprise products and immediate, real-world feedback on their intended strategies.

  • Solution and Service Quality Assurance: Provides the ability to prepare a quality management plan that describes the project quality system and how it will be implemented. The plan should be formally reviewed and agreed to by all parties concerned, and then incorporated into the integrated project plan.

One of the unique aspects of Microsoft’s hybrid OCIO model is its role in performing initial research and recommendations for strategic initiatives. This information is passed to the Microsoft IT leadership team for approval and ratification. Once the decision is made to move forward on a particular initiative, the OCIO is tasked with incubating the initiative and evaluating its efficacy. Depending on the results, the initiative can either be moved out to an appropriate owner within the larger IT organization, or if the project needs to be performance-managed at the leadership level, it can reside within the OCIO.

Benefits

The Office of the CIO model enables focused communication and execution excellence directed to the specific expectations of the CIO, to the Microsoft IT organization, to the company as a whole, and to partners and customers. Without the OCIO in place, the CIO would not have a quality engagement or the time to share with each group.

Benefits to the CIO

  • Enhances the CIO’s management capacity

  • Provides recommendations and management support for the CIO’s initiatives

  • Assists in delivering the CIO’s vision to employees, customers, and partners

Benefits to Microsoft IT

  • Streamlines the organization’s operations and enables the organization to deliver on their mandate of acting as the company’s first and best customer

  • Helps the organization implement business strategy

Benefits to Microsoft

  • Ensures that the position of the CIO is understood by employees across the enterprise

  • Helps Microsoft deliver on business requirements that are defined in the business groups

  • Fosters the professional development of its members by working at a strategic level to support the CIO

Benefits to Partners and Customers

  • Increases the amount of time the CIO can spend focusing on customer and partner issues

  • Provides executive communications and IT Showcase documents that give partners and customers insight into how Microsoft does IT

Conclusion

In order to help extend the CIO’s management capacity, Microsoft IT researched, planned, and launched an Office of the CIO. After comparing industry case studies with the company’s Capability Maturity Model, Microsoft designed a hybrid OCIO model that could operate at a strategic level to support the CIO, the Microsoft IT organization, the company, and ultimately Microsoft customers and partners.

The OCIO has successfully incubated several initiatives and is currently managing others that are in various stages of development. Microsoft IT expects the OCIO will expand the number and scope of additional initiatives in the next fiscal year. Although the OCIO is a formal organization, its structure is flexible. When new demands are placed on the business, the OCIO will be able to adjust its direction in order to continue adding value to the company and addressing the future needs of the CIO.

For More Information

For more information about Microsoft products or services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada information Centre at (800) 563-9048. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information through the World Wide Web, go to:

http://www.microsoft.com

http://www.microsoft.com/technet/itshowcase

OCIOMail@microsoft.com

© 2010 Microsoft Corporation. All rights reserved.

This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft is a registered trademark of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

1 Gartner, Inc. “Making Time – The Office of the CIO.” November 2004. Forrester Research. “Evaluating Your IT Operations Organization.” August 14, 2006.

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