Tag Archives: IT strategy

Unleash the analyst in you

Flying in to do strategy
Flying in to do strategy

I have recently made a big change in my life, leaving a CIO role to join a top notch consulting firm. My business card calls me a Strategic Analyst, I get half the pay and have twice the fun. So how different are the jobs of an analysts and a CIO?

I have come up with 4 areas that highlight the similarity:

  1. The CIO as a strategist – The heart of any strategy is analysing current state, developing a vision of a future state and working out what is needed to get from one to the other. The future state is developed with the help of research, providing insight into trends in customer, marketplace, regulations and technology.The output from this enterprise analysis work may be a strategy and roadmap or a business case, all of which need to be bread and butter for a CIO
  2. The CIO as a builder – Much of the executive focus goes into the projects that IT are working on. While these typically represent only 30% of IT expenditure, projects are exciting and presage business change. While many see the skills of project managers and business analysts as the key to success, the CIO should be thinking at the program level. A well designed program focuses on how to integrate many initiatives to deliver an outcome that furthers the business strategy.Pulling good programs together needs enterprise analysis. CIOs need to be thinking about how all the moving parts of projects, programs and BAU knit together to deliver an outcome. The more components that are in motion, the greater the risk and the more strategic the analysis needs to be.
  3. The CIO as an operator. IT systems are not much use if they are not working! CIO careers can easily come unstuck when outages and security breaches cause embarrassment to the businesses.
    To operate IT systems well, the analysis effort needs to go into the IT processes up front. With a good service management framework in place, the CIO needs to ensure that operations are adequately resourced with skilled people committed to outcomes
  4. The CIO as a leader. One key skill for CIOs is as a leader of their team and as a networker / leader of stakeholders. Leadership is open to analysis. There are management techniques that are known to succeed and some CIOs develop a formal relationship architecture.In the end, relationships are about people and your personality type has a big impact here. You don’t have to be extrovert to be a CIO, but you do need empathy and excellent communication skills.

For me, CIO as an operator was my Achilles heel. I could never see how fixing the CIO’s phone was more important than keeping a mine site running or ensuring the intensive care ward was operating. I can now focus on what I am really good at – enterprise analysis, strategic thinking, business case development and program formulation.

So how many of the areas above does your CIO tick off?

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?

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?

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?

How much should we spend on IT?

Budget evolution
Budget evolution

Times are tough, as everyone playing in the consulting game would know. The March quarter Westpac pulse survey shows business is generally getting more optimistic, but this has not translated into increased sales and revenue. Organizations have streamlined and cut back on costs over the last 3 years and the IT department has participated generously in this (with another 10% cut in overall expenditure last year).

Is it still reasonable for executives to ask whether there are further cost savings available? The answer is of course yes and no. To illustrate I have taken a graph published by MIT’s CISR – a fantastic resource for IT research. The graph represents the IT spend graphed against technology maturity. In this case they measure maturity in the effectiveness of an enterprise architecture.

The baseline is 100% for an IT Department in an immature organization. This is typified by different services being offered to different parts of the business and dispersed infrastructure. If you are in this position you are definitely spending too much on IT.

A solid effort on standardizing hardware and software, consolidating infrastructure and improving procurement will deliver a 15% saving. The next 10% comes from standardizing and simplifying business processes onto core enterprise systems.

The surprising outcome is where businesses go next. Once the IT monster has been tamed inside the IT department and the business, organizations become more comfortable about investing in IT. They actually increase their IT spend as it delivers real business value and the IT budget ends up 20% higher than when they started.

So where do you think your organization is on the maturity curve?

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?

Upgrade or perish

Good old technology
Good old technology

The Voyager 1 spacecraft was launched in 1977 and will continue operating until 2020 (43 years), approximately 18 billion Km from earth. The NASA team built a dedicated control room for this and other deep space missions. This means they can continue to use the original computer and communication systems through the decades without continually upgrading operating systems.

A few years ago I visited the European Space Agency Operations Centre in Darmstadt, Germany where they had developed new approaches to dealing with the technology cycle and were building shared control rooms for their multi year missions like Rosetta and Cluster II. This is a complex challenge as operating systems become unsupported, programming languages change and engineers move on or retire.

Unfortunately most organizations do not have the luxury of ignoring the upgrade requirements from the technology cycle. IT departments put significant resources into continually upgrading products, often for no tangible business improvement. One of the biggest challenges around upgrades is the computer operating system. In April 2014 the XP operating system will no longer be supported by Microsoft and yet 38% of computers worldwide still use XP.

So how should organizations still running XP approach the end of support milestone. I believe that there are 3 items to discuss at the very highest level in the organization:

  1. The Risk. The primary risk is that when XP stops being supported, Microsoft will no longer issue security patches for discovered vulnerabilities. So how many vulnerabilities remain in XP and how serious is it when they are exploited? The Stuxnet worm (used to destroy uranium enriching centrifuges) used 4 previously undiscovered vulnerabilities. It is a fair bet that someone out there has discovered more vulnerabilities and is waiting until end of support to deploy them and maximize return on investment.The end of support for XP is particularly attractive to hackers. You could end up with malware that is almost undetectable and provides hackers access to systems long after XP has disappeared from your network.
  2. The resources required. There are 3 areas that will cost (and often dearly) – new licenses (either for the operating system or to update old software that does not run on 7); – testing for all the existing applications (almost guaranteed that some will not work first time); and the change project (including designing and deploying the new components and training). $1200 to $2000 per computer is the Gartner estimate, and I ran a project for 900 seats at $1.2M.
  3. The technology options. It is really too late to start an enterprise upgrade project and have it completed inside a year. Even if you get organized internally, the integrators have their resources fully committed to enterprises that have started before you. The situation is particularly serious if your desktop management systems are not up to date.I suggest that you need to look at procuring a cloud based managed desktop. Talk to a few vendors to get a pilot up and running while you develop your procurement documents. Identify and prioritize application testing and ensure that there are nominated business reps to own the test outcomes. Start working with the HR department on a bring your own computer strategy. Most importantly, write a business case that frames exactly what you are trying to achieve and minimize the scope to tackle the core issues, leaving the “nice to haves” until the new technology is bedded in.

One last piece of advice – if your organization “simply does not have the money” for an upgrade, secure your superannuation and check out Seek.com. In the end, upgrades are non-negotiable for anyone except NASA!

Excuse me CEO, just one question please?

It's tough at the top
It’s tough at the top

Gartner runs a CEO survey every year and in his blog, Mark Raskino asked what questions we should be asking in these surveys. The focus is on how the CEO sees the current state of IT and how it needs to change to support the business.

In my time as CIO, I have often wanted to ask my CEO that killer question that reframes his view of IT. I am not sure that I ever quite succeeded, but the accelerating pace of change driven by technology is probably making some CEOs nervous. Time to hit them with the big one ….

But first I need to frame the state of play as I see it.

The executive and senior management in many organizations are disappointed with IT and do not trust the IT department to deliver the technology that they need for transformation. IT departments provide solutions too slowly; they are too expensive and overly restrictive. The existing solutions are often not fit for purpose. CEOs don’t want to restrict innovation and profit by forcing all technology solutions through IT, so they are allowing the business to buy their own cloud solutions.

The IT departments are frustrated by the way that the business engages with IT issues. Best practice approaches to architecture, IT governance or security are only paid lip service by business leaders. I hear comments like “the business really needs to improve its maturity to be successful with IT”. Furthermore IT budget are constantly under pressure and IT management is having to focus increased effort on supporting products that they had no part in procuring.

A classic Mexican standoff, with the majority of guns pointing at the unlucky CIO!

So how does the CEO think IT should be run in their organization?

Do you believe that following IT best practices would deliver the right IT solutions for your business?

The best practices are there to ensure agility, quality, alignment, risk management and costs control – exactly the problems that organizations are experiencing. IT best practices stretch well beyond the IT department and can only work when the CEO is committed to them. The nexus of the question is who the CEO trusts to fix IT.

If the CEO does not trust the CIO, do they trust ISACA, ITSMF, or PMI (the best practice organizations)? If they don’t trust these industry groups who do they trust? Please let me know your thoughts