The online trading firm Scottrade has nearly 500 branch offices across the United States, but the bulk of its business is done online. With information technology at the heart of its operations, Scottrade relies on its IT expertise not only for operational excellence but also for strategic direction. In a recent interview with FierceCIO, Scottrade CIO Ian Patterson discussed his evolving role at the firm. Patterson, who is a member of the CIO Executive Council, also talked about the council's Future-State CIO initiative, which outlines steps CIOs can take to develop the skills needed to play a strategic role.

FierceCIO: What are the main steps along the journey to a strategic role, as outlined in the Future-State CIO initiative?

Ian Patterson: We see three tiers of the CIO, starting with a functional person who runs the organization. We see the role then moving to a transformational person, who is really trying to create partnerships, and then finally becoming a strategist, who sits at the table with the rest of the executives.

FCIO: How would you describe your role as CIO at Scottrade?

Patterson: I have the luxury of having been a consultant for about 19 years before I came to Scottrade. I've been in a lot of industries, and I understand the variations of what can be coined a CIO.

When I got here five years ago, they absolutely needed a functional person to build operational excellence, to build a staff, to put processes and procedures in place. Probably about 18 months to two years into the journey here, that really kind of changed because my credibility was established. Even though I was on the executive committee all along, there was a shift where they began looking to IT to fix internal processes throughout the organization. Now it's really moved into that strategic level.  

FCIO: What steps should a CIO take to move from a functional role to a transformational and then strategic role?

Patterson: It's a laddered approach. You are not going to be able to make it to a transformational or strategic role if you don't have the functional role down first. You have to look at it as establishing credibility first. 

You can think of it as all the steps on a Mayan pyramid. You think, oh my gosh, a Mayan pyramid is a long journey up a huge building. That's kind of what this is like. You've got to start with the functional piece. There are many organizations that are only looking for that guy who can help them get to operational excellence, but even in those types of organizations I think it's possible to make it to strategist.

It's about understanding how to assist the company in making business decisions and bringing your knowledge from a technology perspective as the first step. You're going to stay at the table because of your business acumen. 

FCIO: How does a CIO juggle responsibilities for transformation and strategy while sustaining functional excellence?

Patterson: All the other executive directors have depth of knowledge in their areas, but [the CIO] has to have the breadth to look across all the various areas. You have to understand the connections. You are the chief consultant for everyone else in the company. You can't lose the functional capability or you lose credibility.

You need to make sure you have enough associates underneath you who understand the breadth of what's going on. I really haven't changed my direct staff in five years, but their roles have changed. Their roles have expanded, and they have a much larger organization underneath them. When I first got here, my head of development was focused on operational excellence and creating a reliable set of services. They're still driving for operational excellence and quality of service, but they are also brought into more discussions about where we're expanding as a company. 

If you look at the role of CFO, a lot of people see it as just running accounting, but the CFO role is much larger than that. The CFO has to not only run the accounting department, but he also has to understand the ramifications for the marketing department. If you're just purely looking at it from a profit and loss perspective, you're really a comptroller, you're not a CFO. 

FCIO: Are there some verticals that are farther along in seeing the CIO role evolve?

Patterson: Any business tied to online. Anyplace where you're seeing technology take the foothold in driving the business. Also, healthcare, especially when you look at electronic medical records.

If you are more of a traditional manufacturing firm, for example, you are probably seeing less of this taking place. I don't think it's not needed there, I just see more of those organization worried about cost containment. If you're driving the cost containment, you are going to be less focused on the transformational aspect of the job.

FCIO: What other advice can you offer CIOs trying to make the move into a strategic role?

Patterson: Get involved with industry organizations. I had a group that I just finished mentoring. I was surprised at how many IT people were involved with IT organizations but not involved with their own industry organizations. Talk to people outside of IT in the industry. It brings a lot of credibility to an IT person to show that you know what's going on in the industry.

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