Tag Archives: value delivery

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?

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?

Awesome Bill

Bill Gates on Q & A
go Bill

I watched with great fascination the visit of Bill Gates to Australia this week. His session on Q&A was excellent with great questions from a diverse audience. He was also good at the Press Club lunch, although the questions from the press were decidedly average (proving that no journalist can go a lunch and desist from drinking a full bottle of wine).

Bill was spot on the money with his message – that properly targeted resources can make a real difference to the tough problems in the world. He showed us the outcomes, highlighting the reduction in infant mortality as a key indicator of success. He also highlighted the influence that the Bill and Melinda Gates foundation has had in driving towards that success.

This set me to thinking why a “software geek” should be so effective when countless billions of aid money from other sources has done less. I think there are a few imperatives that he has learned as a CEO of Microsoft that stand him in good stead for the task:

1. Outcome driven. There was very clear purpose in the work that Bill presented. The purpose could be expressed simply (eradicate Polio) and no matter how complex the issues, all initiatives could be measured against this target.

2. Information Technology. Bill knows that IT is really about the information and not the technology. You have to gather good information, work out what the problem / opportunity is, postulate a solution, implement and measure, react to the outcomes with new programs or improvements to existing programs. Technology allows you to do this at scale, but information and analysis point you in the right direction.

3. Governance. Bill understands how powerful a force governance is. As the world’s richest man, he must be tempted to decide unilaterally, but evidently that is not his style. His position on GM foods was telling – don’t stop the science, but put in place governance structures for countries to decide whether the risk outweighs the benefit.

I contrast this with my experience as CIO for the International Red Cross. I was besieged by donors wanting to put technology in the hands of the poor. The purpose was to provide wings so the poor could fly! I would emphasise that technology costs resources to operate and unless the value proposition is clear it withers (as happened to innumerable high tech aid projects). Where resources are needed is in the systems and data that can be used to improve livelihoods.

Well done Bill for squeezing $80M from Julia for his cause celeb, and well done for inspiring us to keep trying to make the world a better place. I have just one request – please don’t die before you eradicate polio!

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?

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?