In the recent past (at least the last two years that is vivid in my memory), almost every IT solution, vendor, consultant, and CIO has promoted the idea of shifting capital investment to operating expense. Capital investments almost withered away, as the economic challenges dictated cash flow controls. Large initiatives found it difficult to get initial funding. IT companies turned around models to offer almost everything as a service, thus obviating the need for capital expenses. New business models liked payments to outcomes spread over a period.
The operating expense model helped forward movement; in success based engagements, everyone was a winner. For the CFO or the CIO, in the absence of success, it was easy to pull the plug, and stop loss. Yes, there was, and is, an inherent risk of the project or initiative not working, but we have not heard of any such anecdotes as yet — as if success rates now equaled the past’s failure rates. Is this due to the fact that the financial risk is now shared in a different proportion between the stakeholders? Or is there another angle to it?
The answer is probably affirmative when it comes to the shared financial risk. However, I also believe that the vendors now prefer the OPEX model, as it helps their profitability over the long term — with continued revenues and the ability to spread their capital investments over a set of customers. The customer is probably paying more over the useful life of the product.
There is another angle as well. Once any process operates over a shared IT infrastructure, application, or solution, with the data too being stored in the service providers premises (sounds like the Cloud?), the ability to get out of such an arrangement into an independent model will be a huge, if not insurmountable, challenge. Everyone recognizes it, and believes that the changeover is executable, but I would be worried to be in a situation where I could be held to ransom — despite what the lawyers tell me.
I am not propagating the message that we all need to move back to the good/bad old days of big capital expenses. The CIO should be wary of the “too good to be true” deals, and safeguard the enterprise’s interests by reviewing alternatives to disruption of services, or the possibility of a shift should the service levels fall below acceptable limits; and in the worst case scenario, the service provider increasing the fee to abnormal levels. The time and cost of any change in this situation can be very high indeed.]]>
The group had a fair representation across industries from manufacturing, banking, insurance, retail, IT enabled services, and some more. The agenda was fairly simple, with the expectation to understand how different industry segments view VDI and what has been the journey thus far. Of course, it was about market sizing and qualifying leads that could result in some business from the vendor’s perspective.
Discussions started off with differing perspectives on filters that every CIO applied to their business operations to determine the suitability of desktop virtualization in their environment. Some amongst them included the kind of work undertaken (task, analytics, office automation, and graphics intensive work), volume of desktops per location, type of applications used, and not the least, ROI on such an initiative. In the same breath, challenges were also debated listing cost and resilience of connectivity (specifically in the Indian context), licensing impact, cultural issues, and again ROI.
Within some time, it was evident that the vendor and CIOs were talking different languages; the former talking about the technological innovation, and the latter focusing on business benefit. With no translator or moderator, the two conversations found it tough to converge on common ground. Thus, the anchor closed the discussion after about 90 odd minutes — with some CIO doodles labeling VDI as vendor driven initiatives or very dumb idea!
Post panel networking had an interesting insight shared by the vendor CEO with the anchor; the CIOs today are not willing to discuss technology anymore. This is making the task of selling to them a lot more difficult as compared to what it was. For sales persons to get into the customers’ shoes and then have a discussion requires different skill sets than currently available.
My rebuttal to that is “Mr IT Vendor, what else did you expect from the CIOs?” Over the last decade, expectation levels from the CIO have shifted from a technology advisor to a business advisor. CIOs have seized this opportunity (not challenge) and many have gone over the tipping point to take on incremental roles in business. To expect this level of discussion from the same vendors who always have “IT business alignment” as one of the top 3 priorities reflects that they too need to embrace the same change that they have been preaching so far.
The IT vendor evolution is a paradigm that I think CIOs have to start contributing to — else they will continue to be at the receiving end of inane discussions and presentations around technology — not winning with the business. Get started and do your good deed of the day, so that the next CIO they meet will not go through the same pain.]]>
Browsing was at best a chore with the small screen, and unwieldy websites struggled to fit on to the small screens. Corporate IT and the CIO were, and continue to be under pressure to enable business processes on the same handset that earlier provided email.
The same users demanded their personal emails on the handset — that expanded the market to consumers, albeit in a small way, until iPhone came to the party and changed the smartphone market. Consumerization of IT ensured that corporate suits wanted the iPhone, while a large segment of consumers (who were earlier fringe data users) became a large force. This created an industry around micro-applications that did inane stuff at times, but mostly enabled the smartphone user with earlier unimaginable capabilities. Competing platforms played catch, while zillions of applications sought favor — spanning across categories like utilities, travel, education, entertainment, productivity, and finance.
IT organizations on the other hand, continued to work on large projects with reducing timelines and budgets. Enterprises using and deploying monolithic applications have advertently compared the facile microapps with the clunky screen-based complex navigation to conduct business operations. Small applications made their way to corporate phones, largely enabling road warriors and pushing information to the real-time executive — not that it changed business decisions in a big way. Sales force enablement was the quick (and in many cases the only) derived win. Another disruption arrived with the tablet demanding attention with better capabilities than the phone.
It is evident that the era of large applications as the primary interface to business process is on the wane. IT is expected to create mobile enabled micro-process automation. Its starting point may be on the fringes with quick tactical workflow approvals, graduating to complex processes on tablets. CIOs should be exploring options that are able to use the existing infrastructure with microapps.
With multiple competing mobile operating environments, transportability of applications will remain a challenge in the mid-term, but that should not restrict attempts. The multitude of form factors and devices that a corporate user now possesses, also poses a conflict of choice. Scan the various app stores, and endeavor to find a set of applications that may find favor within the enterprise. Security will of course remain a red flag as this trend gains momentum. So the CIO has to work with other CXOs to define “acceptable risk”.]]>
A lot of these are thought up while on the keyboard, some have inane research to justify, a few are meaningful too. CIOs and IT folks love these, and watch them like religion. Or hate and ignore them because the lists only add to the existing chaos. Adding to these is a set that creates lists for internal and/or external consumption.
Over the years, I tracked lists from major IT research houses and publishing companies to ascertain their alignment with what I planned to do. Like with every list (and that applies to horoscopes too), I found that the alignment varied from 10% to 80%. If you put together a list of current buzzwords, hype curve technologies, magic quadrants, waves, or similar research, you are bound to get a few that will resonate with the personal and corporate agenda.
Now the differences are always explained in context of industry, geography, size of company, maturity in the IT adoption curve; you could also include sun spots, solar or lunar eclipses, global warming, or any other metrics that you can think of. So why does everyone continue to invest significant resources, time and manpower towards the creation of such lists? My belief is that they need to pin up something on their (and others) soft boards, put in presentations, or just publish them for others to marvel at.
Reality is that the lists created by surveys and research are self-fulfilling, based on the asked questions. If a list (of say 10 items) is presented and the respondents are asked to prioritize them, that’s what you will get. Rarely does anyone ask for respondents to fill in 10 blank rows with what their priorities may be. That would be chaotic and statistically not tenable in a report, but would make interesting reading.
So here is my list of lists that I do not wish to see in 2011.
1. Top 3,5,10 priorities/opportunities for the CIO/IT organization
2. Top 10 technologies to watch out for
3. Top (pick a number) business priorities/challenges
4. Top (pick a number) challenges for the CIO/IT organization
If you have any others, do put in your comments. If you love the lists, enjoy them, or if you are cynical of them, join the party. However, if you are indifferent about these and have achieved a nirvana state, can I enroll as your student?]]>
In the Board meeting of a large and successful company with multiple manufacturing plants, two agenda items were tabled; first to discuss $400 million investment in a new manufacturing facility, and the second the layout including employee amenities of the same manufacturing plant. The second agenda item was unusual for the board to discuss, but found its way into the chambers since the Employee Satisfaction Index at one of the older plants was low. The financial proposal was tabled by the Head of Manufacturing, with added guidance from the CFO. The resolution was passed unanimously, and done with, in about half an hour.
However, the discussion on amenities took almost two hours — with the longest time spent on the location, structure and type of the bicycle stand. Everyone had an opinion, and disagreements continued until the Chairman of the Board decided to put the debate at rest by appointing a committee headed by the HR Head to review other plants (including those of competitors) and table the recommendations in the next meeting.
Last week, the meeting with fellow CIOs and a few marketing heads veered towards budgeting and ROI. Snide remarks aside, the debate on how these distinct functions justify their million dollar proposals took an interesting turn. When the CIO presents a business case for an enterprise wide system that potentially benefits everyone but requires significant participation and change, it takes immense effort and documentation — in order to get everyone to listen, review and agree. Multiple iterations are the norm, and a chain of signatures essential before the grant of even a tentative approval. Whereas, the CMO sails through in a jiffy citing brand building, customer touch and impact on sales, even when most of them are not necessarily attributable to the discussed campaign or idea.
Why is it so difficult for CIOs to get funding for new projects as compared to, say CMOs? The difference is, I would guess in many parts. To begin with, the language in which these proposals are put across. Another is the change that IT purports to create in a change-averse world. It could also be that marketing as a function always focuses on the end customer, while IT initiatives are predominantly inward focused (though that is changing fast now). The conversation initiated by CIOs when they connect to stakeholders and customers does find traction. So maybe peer learning has to be gained on how to pitch right the first time, every time, and win when every function is competing for the same precious resources.
Scott Adams (of Dilbert fame) in his unique manner put across the marketing formula, “It’s just liquor and guessing”. I have yet to find a good enough one on IT budgeting.]]>