Category Archives: Making business work

Thought leadership on strategy, execution and business outcomes

The four faces of IT


 Tother_Triumph Triumphs 2CV  Grace 1

 

The times they are a changing, and as businesses adapt to the new reality of technology driven value creation, IT departments are changing too (finally)! The scenarios that I am about to paint are not new; what has changed is the scale and ease of action.

These days almost every business function can be enhanced with cloud based information systems – from rubbish collection to retail. The business unit managers are being approached continuously by salesmen with products, and there are compelling business benefits available.  Managers can sign contracts and have working systems in place in a matter of weeks with no interaction with IT. Everything is available through the browser.

Of course problems arise through time – the cost of the system may escalate as more users are put on; the business department has to manage user names and passwords; the reports from the system are limited unless other organizational data can be added; the supplier may have regular outages; and finally the IT department may upgrade systems or security and the system stops working.

If this happens with just one business department, IT can help to resolve the issues; but when it happens everywhere, IT has real resource limitations and cannot respond effectively. This of course drives a further cycle of bypassing IT (maybe by contracting external help).

So how do we deal with this new reality? The answer is first to get on the front foot and work out between the executives what sort of IT department they want from the choices below:

  • Fixer – The business units drive their own agenda, and only occasionally take advice from IT. Often IT cannot influence the outcomes, but has to resolve issues as they arise. The IT department pours its resources into reactive capability and loses control on strategy and architecture. This is happening to many IT departments today.
  • Governor – In this approach, the IT department takes a governing role, collating a single list of technology projects, identifying interactions and pre-requisites but not holding the budgets. IT may set policies on security and service requirements and is likely to get involved in technical negotiations with suppliers. Depending on IT’s ability to influence (and the quality of its advice) this might improve the outcomes but does not deal with issues such as funding for components to tie the initiatives together.
  • Integrator – Here the organization accepts that businesses do not have the skills to procure and manage IT systems. Executives assign responsibility to various departments and ensure that they have the right competencies. For example procurement may need to develop specialist IT procurement skills; compliance would have staff who could take a close look at the technology; audit may verify supplier performance; and IT would take on integration, service desk and other functions. IT is just one of the team with certain key accountabilities. In this model IT has a clear (but limited) accountability and may have to release resources into other parts of the organization.
  • Orchestrator – In this (somewhat scary) model, IT acts like the conductor of the orchestra, ensuring that all components are identified and actioned. The CIO takes accountability and pulls together all the necessary components in a program approach. The IT department has to be agile to meet the expectations of the business and the CIO needs hefty support to ensure that the business department is serious about delivering on benefits.

The key to success in this whole debate is to decide – then do. If you just drift into a particular scenario, it may be very difficult to change to another model.

So are you ready to have the discussion with your executive on which face of IT they want to see?

What they don’t know

Birthday cake
Surprise!

Have you ever been to a dinner and known that one of the guests is about to get a surprise? The tingling excitement seeing their normal carry on persona until “it” happens and everyone shrieks in laughter. Well I sometimes feel IT / Business meetings are a bit like that – each side sharing what they think is important and when problems happen they ask “how could they have not known about that?”

The big IT decisions are taken in leadership governance forums, structured to get the right level of input about the opportunities and threats from the business, and likewise from technology. The trouble is that they don’t know everything that we know (on either side of the table). In fact often we don’t think they have sufficient understanding of the realities of the world we live in (again common to both sides).

People have to take decisions based on their understanding of the relevance and quality of the information in front of them. And if you want to get good outcomes, you have to take good decisions. So how do you develop effective governance in the organization. I have a few tips:

  1. The business side needs to see technology literacy as a core development requirement of its leaders. This is not about giving them an i-pad, but teaching them about the value of frameworks, the role of enterprise architecture and service models. Formal courses are required here and an increased technology focus in MBA courses would be a good start.
  2. There just has to be less optimism around IT solutions and more realism. Yes they are the free lunch that accounting firms drool over (while the IT folk work through lunch); but miracles don’t happen, they are dragged out by strong leadership teams steering a steady course and holding to realistic business outcomes – just like the team did with the Collins Class improvements.
  3. The people mix has to be right. You need governance teams with perceptive insight. These may not be the operationally focussed IT staff who have been promoted for brilliantly resolving the ceaseless IT outages. More likely it is the analysts or architects who will develop to GOVN7 competencies.
  4. The information that is shared has to be just right! The governance meetings may take up only a few percentage of the working week. What information to share and what to leave under the covers becomes very important. For project governance, this is reasonably well understood. As you move to programme, portfolio and business process governance, it comes down to having the right leaders with the perceptive insights of what is really important.

I have been a member of a State Government programme board for one of the largest IT projects in the country. We used to receive 300 page board packs, supplemented with consultants’ reports that ran to 100 pages each.  Fortunately we had perspicacious board members who knew where the really important information was – and it was very rarely in the executive summary!

So how do you think we can improve knowledge on both sides of the table?

To interim or not to interim?

Ankor Wat temple
Built to last
There is an approach that is gaining popularity in Australian organizations called “Executive Transition”. This is where the departure of an executive leads the organization to take stock of where it is, where it wants to go and what kind of executive it needs to get there. They might bring in an interim specialist manager who can immerse themselves in the organization, reviewing existing strategies and updating them to reflect contemporary thinking. The interim can then paint a picture of what the replacement executive should look like and assist with recruitment and ongoing support once appointed.

So how well would this approach apply to replacing a CIO?

There are some real positives for the organization:

  1. Many executives have real frustration over the performance of IT in their organization. Complaints are often met with the mantra that IT does not have enough resources, yet they see money being wasted on ineffective IT projects and high third party costs. Getting a reliable and reasoned perspective from an experienced interim CIO is very valuable
  2. There are basic practices in IT that are widely accepted as fundamental to an organization realizing value from technology. These include a business case approach, project management, IT governance, enterprise architecture and service management. An interim can assess the performance in these areas and in a short timeframe restore broken processes.
  3. Different organizations needs different CIOs. In some cases, the CIO is there to keep the infrastructure running – particularly when a business feels that there is little threat from IT enabled market pressures. Where IT is a key part of a transformation agenda, a strategic CIO is needed to ensure that the broader opportunities from IT are leveraged.

Of course there are also down sides to this approach:

  1. Developing an IT strategy involves stakeholders from throughout the organization. To be effective, the stakeholders have to hold a degree of trust in those implementing it. If the replacement CIO does not feel that they own the strategy, the strategy can become a hinderance rather than an enabler.
  2. A critical part of any IT turn around is the IT team. To perform consistently at a high level, the IT department must have the right people with the right motivations, meaning a career structure and associated accountabilities. An interim only has so much influence here as this is the critical work of the permanent CIO.
  3. The time that an interim is in place may seem like treading water. The interim must balance the need to take long term decisions against the reality that they will not be in place to implement them.

I have held roles as interim CIO and as permanent CIO. I believe there is an underutilization of executive transition in Australia. As an interim CIO I can bring a range of experience and knowledge that you would not normally find in the market. Developing strategies, creating relationships with stakeholders and engendering turn-arounds are all high on the list for my “high satisfaction” days.

Do you think your organization could do with an executive transition program for IT?

Innovate in the Cloud

inspiration from the clouds
inspiration from the clouds

One of the hallmarks of the digital world is the ability to innovate. People can convert a good idea into a saleable product with much less investment than 10 years ago. There are all sorts of digital tools being made available in the cloud either for free, or very inexpensively, in every area from knitting to customer relationship management.

Our new generation of digitally enabled workers, see the opportunities from these tools and want to apply them in the business context. Individuals with a passion to improve the quality and quantity of their work will put in the extra discretionary effort to utilize cloud solutions in the workplace. Unfortunately if they ask the IT Department how they can do this, the answer is often “NO!”

In my CIO roles, I was constantly challenged with finding ways to enable these digital evangelists to innovate. Unfortunately we really did not understand the information that might be shared using these tools. It could be as benign as a list of building defects, or as sensitive as the plans for a military base. There are real risks from putting unknown information in the cloud with minimal opportunities for contractual redress if it is shared or stolen.

So how can an IT Department enable cloud innovation and manage the risks? I have a few suggestions:

1. Categorize information. Make sure that the organization has a single categorization of sensitivity (e.g. unclassified, restricted, confidential, and secret). The ideal way to implement this is through an enterprise content management system, but make sure you get an intuitive system that your Grandmother would be comfortable with.

2. Educate the managers. Most managers deal with business risks on a day to day basis. If they are informed of the risks inherent with the cloud, they should be able to balance that against business value, and assume accountability. This is not about frightening managers with worst case scenarios but about realistically assessing and documenting the risk in the enterprise risk framework.

3. Simple business cases. Staff who want to trial cloud based solutions should be encouraged to document the outcomes that they hope to achieve. They should undertake a post implementation review and evaluate whether solution should be maintained, scaled up or discontinued.

The paradigm required to successfully innovate in the cloud is a co-operative relationship between stakeholders. Businesses are using technology to evolve outside the purview of IT, and this isn’t going to stop. There will always be information and systems that require the robust processes of an IT Department. Where this overhead is not justified, the business should be given every opportunity to hop on the digital bus through easily accessible cloud solutions.

Does anyone out there think they have control over innovation in the cloud?

The idiot’s guide to going digital

Hercs the rabbit
clever rabbit

As an independent consultant I work with different sized companies who are all have the same challenges. They are fighting a war to survive and prosper in an environment where every dollar is precious. Meeting targets is a hard slog and at the same time the digital economy is transforming the world they know.

So how can business owners jump on the digital bus when their energy and precious resources are focused on keeping their head above water. The typical IT project would involve a strategy, a business case and one or more projects run by consultants and specialists. While this may be the right way to do things, it does not fit the reality of many businesses.

I was recently asked to put together a cut down digital strategy for an organization of 3 people. It was clear that many of the issues were common to larger firms (unclear requirements, conflicting expectations, lacking policies), but the opportunity to properly address these was limited. In their favour was flexibility and a tolerance for risk. They were looking for a trusted adviser (myself) to give them an answer – an idiots guide to going digital.

Here is what I recommended:

1. Pick a social platform and establish a presence. In their case it was LinkedIn, but other organizations may prefer Facebook, Google +, Reddit, Twitter or some other

2. Develop a web site based on WordPress. Linking this to blogs was important to them. A commercial content management system such as Sharepoint or VistaPrint is another option

3. Start using Yammer for internal collaboration. Knowledge management is a big part of the business

4. Develop an online policy (I start with the ABC Social Media Policy) and decide who decides on content

5. Put in place some basic tools to manage the systems – a password file, documentation, training and backups of core data

The recommendations fitted the capabilities of the organization, as did my bill.

Do you feel like you need an idiots guide to going digital?

The wrong trousers

stylish?
stylish?

You may have seen the Wallace and Grommet animation “The wrong trousers”. It is foolish and funny, but many business leaders feel like their IT systems are the wrong trousers. The technology that is supposed to enable their business is not sufficiently flexible, is not user friendly, takes too long to change and costs too much. So how did we end up here and what do we do about it?

The core reason for this poor fit is mis-alignment. The business wants one thing and the IT systems deliver something else. It is likely that when the systems were purchased they did not properly incorporate the business requirements. Then as the business has changed over time, there has not been an effective feedback loop that modified the systems. Other systems may have been added, with dependencies that make any changes very complex. Once this mis-alignment becomes severe, the system is often replaced rather than modified.

So how do we stop Groundhog Day when we decide on a replacement? Here are a few tips:

1. Business change. Any technology project must be seen as a business change project. The real costs of change will almost be much higher than the cost of the technology.

2. Business process approach. Identify the business processes early on. They will provide clarity for the business case and are critical in selecting the solution.

3. Service management. Ensure that one of the outcomes is a set of IT services. These should have defined performance, cost and governance for future changes

4. Value delivery. Drive change in the business to deliver on the business case benefits. Make this value visible and the CEO may be less likely to chop the IT budget next year.

The core to this advice is that any IT investment must be strategic and not tactical. I have heard business managers railing against the strategic approach – “We just need to do this..” or “Doesn’t such and such a system do what we need?”. It is tough for CIOs to stand up to this and propose a more comprehensive (and more expensive) approach.

I recall a time when a mining executive wanted specific software to manage stocks of tyres. He pushed for an accelerated project to install the software on the basis that it would deliver significant savings. The lite business case stacked up with a low IT investment and a high return.

I insisted that we did a more thorough business analysis. We mapped the business processes and compared the features required against that available on the market. At this level of detail, it was evident that the projected return on investment would not be delivered by the systems available. We could create a better outcome with spread sheets.

We saved some costs from cancelling the project early, but more importantly we did not hobble the business with a system that was not adapted to their needs. Of course no-one thanked me for this.

So if your organization is wearing the wrong trousers, will you tackle your next technology investment any differently?

The reluctant CIO

executive lifestyle
executive lifestyle

There is a lot of focus in Queensland right now on getting on board the digital bus. The Chamber of Commerce and Industry completed its digital readiness study and Brisbane City Council has its Digital Brisbane Strategy. These initiatives highlight that Queensland businesses have a long way to go to capitalize on the digital economy. This set me thinking about who should be dragging their organizations into the technology age.

In many organizations this is not the Chief Information Officer; it is either the Chief Executive Officer or the Chief Financial Officer. Very often these people are reluctant CIOs, forced to become the IT strategist because the IT department is 100% focused on day to day issues. So how do reluctant CIOs achieve success?

1. Insist that IT becomes transparent: open up the opaque layers that technologists use to obfuscate issues. Projects running over time and budget, dissatisfied customers and investments with poor or no return must be identified and fixed. The business needs to understand how their actions drive costs through a granular recharge arrangement.

2. Invest well: these days this does not mean servers and data centres. The areas that do need the right investment are strategy, architecture, processes, documentation and training. It is hard to put money to these areas when there are other immediate priorities. In the long run, these areas bring order and discipline to IT spending.

3. Get help: doing things wrong in IT is a very expensive mistake. Selecting the wrong system not only stymies the business, it means the investment must be repeated. In the most extreme cases the cost can exceed the initial investment by factors of hundreds

Many reluctant CIOs would like to find that silver bullet that repositions technology in the organization as a true enabler. While a slick app on an iphone may provide some gratification, the true path to success is through a good IT strategy, implemented with vigour and patience.

It takes a long time to put the right technology in place and create real business value (Gartner believe up to 15 years ). The new cloud based platforms might accelerate this, if you pick the right platforms in the first place.

For the reluctant CIO to become a digital leader they need to identify and realise opportunity for business improvement and value through IT. This might be a whole new set of skills and finding a trusted advisor is the key to success.

Is your organisation likely to get on the digital bus?

Invest to succeed

strategic wrapper
strategic wrapper

As I have described many times in this blog, investing in IT solutions is notoriously risky. Just 1 in 5 projects succeeds and failures can bring down companies and governments. How then do enterprises manage this risk?

The answer is challenging to the project sponsors, who just want IT to get on with the job. With other areas of the business they assign accountability and expect the business unit heads to deliver on outcomes. With IT this approach is ineffective given the number of stakeholders and the limited ability to control events.

One example that springs to mind was when I introduced a recruitment and on-boarding system. The project was well run with a solid business case and good governance. Unfortunately the HR staff were too busy to contribute as a result of a high recruitment load from a major mining project. Rather than delivering a poor product, I slowed the project to allow them to engage. The final system was very successful, but the project ran over budget and over time.

To deliver on time, budget, scope and value, you need a strategic approach. The best way to do this is with a strategic wrapper, run by someone who can bridge the business / IT divide. They should by preference be independent from project delivery.

The wrapper has 4 components as per the diagram above:

1. Framing question. This is probably the most important step and is designed to test the business engagement. In an accelerated workshop format, the key senior stakeholders agree to the high level problem statement and commit to change. A great outcome is an email from the CEO to all staff “We are making this change for this reason and expect it to deliver this”.

2. Business case. A well written business case will surface any inconsistencies between the project and the organization’s strategy. It then sets out the options, scope, benefits, costs, risks and timeframe. Once this is agreed by all stakeholders, you can use the document as a bible for all future steps.

3. Project governance. The people delivering the project will put in a governance process. This needs to be made accessible to senior stakeholders and you need a highly experienced individual to ensure that you make the right calls on the difficult decisions.

4. Value delivery. This step is so often missed out on IT projects. Organizations commit to the investment, they should also commit to the return. An independent analysis of returns against the business is guaranteed to focus the efforts of business unit leaders.

The strategic approach will cost money – typically 10% of the cost of a project. The approach is likely to deliver many times this benefit from a focused project that does not spend money on unnecessary features; cost reductions and quality improvements from best practice processes; and more business value delivered at the end of the project.

Does your business approach IT investment this way?

Great customer service

a satisfied customer
a satisfied customer

A colleague recently told me of a poor experience she had with the IT department. She was involved in an international video conference and one of the remote sites could not connect. A call to the IT department went to voice mail. When IT was finally roused, they called the remote end, could not make contact so left a message and placed the incident on hold.

The impression this left was of an incompetent IT department, leading to the comment “… if they can’t even set up a video call, why would we trust them with any part of the business strategy?”

So how does an IT Department become excellent at customer service? It may surprise you, but I have a few simple steps (simple to say, difficult to do).

1. Process. The IT department needs good processes to ensure that calls are properly prioritised, escalated, resolved and reported upon. The ITIL incident, problem and change processes are essential. Add in knowledge, service level and configuration management and you’re cooking with gas.

2. People. Staff with a great customer service attitude put their heart and soul into effective communications and getting the customer back up and running. The challenge is to elucidate this talent within the constraints of agreed process. Sometimes front line staff have to go around processes or bend policies, but this must be the exception rather than the rule and non-compliance must be reviewed without blame. It may be an opportunity to improve the process or to re-enforce the reasons why things are done a certain way.

3. Technology. Good people and processes using a well adapted technology is a baseline for any organization to be successful. An IT service desk should have up to date tools – excel spreadsheets only work in small organizations and software as a service applications are available at a very competitive price.

4. Continuous improvement. Every poor interaction with a customer is an opportunity to improve customer service. Measure satisfaction with each interaction, identify underlying causes of dissatisfaction. These can be classified in an improvement register to tackle the high impact, low effort initiatives first. The video conferencing example from above should be solved with changes to process if it is a systemic or high impact event.

There are two qualifications to the above which need to be understood by decision makers. First, customer service improvements are neither free nor immediate. When you invest, the service delivery manager should be held accountable for real improvements in customer service. Second, if the systems that people use are not well adapted to their work, they will be dissatisfied no matter what the IT department does. Effective and timely investment in technology, done correctly, will immediately boost morale in the company.

So how happy are you with your technology?

Don’t get comfortable, the internet of things is coming

Flat out
Flat out

The role of a chief information officer in a large company has its challenges. They have to intermediate between the messy world of business and the even messier world of IT. Their focus is on the risks, costs and opportunities of today and they have few resources to prepare for the future.

I would argue that the next big challenge in IT is something that most CIOs are not ready for. This is the integration of information technology (IT) with operational technology (OT). It is a question of how we manage the internet of things – devices communicating over the internet without human interaction.

To give a personal example, as CIO I supported the operation of a newly purchased ore crushing machine (OT) at a remote mine site. The machine needed to run optimization software that was hosted on the vendor’s computers. This meant connecting the machine through our corporate network (IT) to the vendor. The vendor had no security accreditation and did not offer the security tools that we insisted on from our regular IT suppliers.

The machine had been purchased and the investment in a second communications link was substantial. In the end we accepted an increased security risk, given the costs of mitigation.

There are 3 big challenges with the internet of things:

  1. Security. As soon as we connect devices to the internet, there is massively increased opportunity for malicious attack. Hackers from anywhere in the world may obtain access, as highlighted by Mandiant. Many suppliers of OT do not have the resources to invest in properly secured systems.It is just a matter of time before serious mechanical or safety incidents occur. The Stuxnet virus destroyed hardware used to enrich uranium in Iran, but also infected over 200 Australian based devices. The Australian Government Computer Emergency Response Team found that 35% of attacks were non-targeted and indiscriminate.
  2. Integration. As the complexity of internet of things devices increases, so does the ability to store and utilize data. This data needs to be exchanged efficiently with corporate IT systems, however there are few standards.One example I came across recently was from an engraving firm. They had a web site through which customers could place their orders. To get the details into the connected engraving machine required them to rekey all the data, leading to errors and wasted time.
  3. Purchasing. The people buying OT hardware and software have a focus on the performance of the system. They are often less expert at understanding the license conditions and costs of ongoing support. It is not uncommon to see the same corporate license purchased more than once in an organization.

Some organizations are taking the bull by the horns. At the Australian Broadcasting Corporation, they have put the engineering services for recording and digital editing under the CIO. The critical infrastructure providers such as the utilities and airports have invested in professional approaches to OT. For many however, this is another problem just waiting to happen.

Do you have any plans for the internet of things?