The poor fellow was looking harrowed after week long meetings sans his CIO with the big global IT services company with whom the company had entered into a long-term strategic services contract. Six months having passed since the signing of the contract, he was wondering whether the decision can be changed or penalties levied for not meeting commitments, the contract protected the vendor in the transition phase. The presales team which was a permanent fixture in the office earlier was now trying to avoid coming to the meeting very well knowing the situation not being favorable.
Over a year of courting, discussions, negotiations and going over a long legal contract, it was a sigh of relief for the vendor and the enterprise when they did sign off the deal. As all strategic sourcing deals go, there was an expectation of maintaining business as usual with improved efficiency and lower cost; then move on to transformation driven by tools and technology which was the investment promised by the vendor. Over the decade of relationship, it was expected that there would be efficiency of scale, savings on the table, and investments in innovation with global benchmarking.
The big team arrived soon enough to transition services and fit or change existing processes into their framework, which they managed with some difficulty. Within a few months, unable to scale up to diverse needs across locations, changes in the management team were enforced and that brought welcome improvements though not commensurate to expectations. The first big review meeting was a shocker for everyone. Some milestones achieved, lot of work in progress way past due dates, a few endpoints seemed a long way off; the CIO who was well known for his patient handling of crisis lost his cool.
Opacity in contracts
To begin with, the interpretations of clauses done by the execution team were in conflict to understanding while drafting them into the contract. Stretched timelines became super-stretched timelines; senior consultants attempted to provide solace with no Plan B in case success eluded the team. The ‘high tension’ meeting resulted in change of pace and ‘compromise’ in favor of the customer. With new timelines cast, the pressure was on everyone; avoidable pressure as agreed by everyone present.
Why does delivery rarely match presales promises or timelines? Are sales teams preconditioned to sell unreasonable timelines or commitments to bag orders from unsuspecting and gullible customers? No, I am not calling the CIO names, but admiring the ability of the sales teams to sometimes get away with untenable contracts. I am also bewildered at the ability of delivery teams to squarely make a hash of even normal service delivery expectations. What causes history to repeat itself in almost every engagement?
A communication issue?
In this case, the CIO summed the case up with one phrase: “lack of consistent communication across the ecosystem”. The presales team did not spend adequate time taking the transition team through each and every clause and expectation. The delivery team found significant differences on the ground to their assumptions which required change. The project lead busy fighting fire every day forgot that consistent communication is essential to setting expectation, managing perception and finally success.
I believe that it does not always matter what you do; what matters is how you communicate what you have done or planning to do. No news is not good news when everyone is expecting some change. Otherwise strategic sourcing will become a big tactical pain where real life experience defines success.
The number of IT professionals taking on to consulting after multiple changes is increasing. A lot of them were considered high potential when they worked within corporate IT functions. Some of them were also CIOs who chucked their cushy jobs to explore entrepreneurship. I started tracking down some of them to find what made them take such a step. The answers were surprising and not so surprising when analyzed rigorously.
Now consider that in recent times the lament gaining popularity is the inability to find good talent; with global competition and willingness to relocate, good professionals are always in demand. And the good ones always find it easy to bag the next opportunity. That being the case, why is it that the CIOs are struggling to hire and retain good talent?
Every manager or leader has one key benchmark when interviewing people: themselves. We hire people based on our own competencies. Most (fortunately, not all) managers want to hire staff with equal to or lower skills than themselves especially for senior positions. Maybe, it is their perception of threat to their own positions; maybe, it is a low risk model when you know that the person will not be disruptive by challenging the managers’ decisions. This manager wants to know everything and be part of every meeting thereby becoming the bottleneck to progress. S/he feels insecure when new solutions are presented by others which impact his domain.
A great way to maintain status quo or to keep the lights on, in this case, the CIO will perennially be challenged and discuss BITA (Business IT Alignment). The team at best delivers mediocrity and is relegated as a support function with limited participation in activities outside of their function. Organization culture too contributes to this state compounded by the CIO not reporting to the CEO. I have seen good CIOs get out of such companies as soon as they could.
Challenging the status quo
Now, when you look at high performance teams, the leader acknowledges the need for diversity and challenging status quo. S/he has always hired different skillsets and encouraged open innovation. One of my observations was that these leaders define the direction and then get out of the way leaving the teams to soar to new heights. They do not micro-manage, they facilitate and encourage the team. Making mistakes is acceptable, repeating them is not. Attrition is normally low.
I believe that to create a winning team and not an also ran, the CIO needs to balance command and control with empowerment. Everyone does not need close supervision; neither can everyone be left to do their own thing. Delegation is good; however delegation does not imply abdication of responsibility. Incorrectly delegated work can lead to challenges and success denied; the CIO should own up to equal share of success and failure. After all you cannot be the father of success and know no failures.
An old adage — “People join organizations, people leave their bosses” — holds true today more than ever. It is not an Oscar award speech but many leaders acknowledge their teams as the reason for their success when felicitations come the way of winning teams. The team too holds no grudges against the leader who is held high in trust and respect. The new age CIO is making these choices, are you one of them?
For most companies that got started with their IT journey in the era of the mainframe, their journey through the evolution of technology created problem of the plenty. Client-server was a favorite for department apps, and the browser made proliferation easier beyond the department. With X-base, it was easy to create small specific-purpose apps; even users could churn some code that soon turned mission critical. The ERP attempted to consolidate all processes and apps, but most survived the onslaught citing unaligned ERP processes or mission critical status. The cloud now adds to the complexity by making it easier for new apps to flourish.
Maintaining legacy apps
Every company thus maintains consultants (sometimes ex-employees who developed the apps or maintained them before retiring), vendor relationships, or deadweight to sustain the process these apps enable. Esoteric technologies requiring some antiquated infrastructure continually escapes the axe whenever renewal is discussed. Proportionately, larger the company, bigger the number of apps it has. Examples that I have observed include more than 40 instances of core ERP; another proclaimed build-up of 8,000 apps over a 25 year legacy. Many did the same thing for different people using different technologies, but neither wanted to change to the other.
How do these apps defy all attempts at eradication and survive even the strongest attempt to weed them out? Their patron saints are strongly entrenched in the corporate labyrinth and any change is touted as disruptive to the business. The CIO after a few attempts gives up in favor of bigger battles to fight with higher business impact, thus leaving the long tail of applications wagging the IT function, more often than pleasant. Thus, many people within the enterprise continue to exist to keep the machinery chugging, despite options of a better way of life.
Replacing a redundant app
An interesting phenomenon was recently narrated to me by a much acclaimed CIO of a well-known and progressive company, when his users started defending a not so good a system. This app was a sore point for the functional owner as well as the IT folks because of its unusable interface and complex execution of processes. Everyone hated it and it attracted jest and ire in every management meeting. With no change being pushed from the function heads, the CIO finally decided to do something about it and started an initiative to replace the solution. This is despite the fact that the new proposed app was offering a significantly superior experience and ease of administration.
Is this only about change management or is the issue much larger? I believe that the CIO should delegate the task of systemically going behind the hidden long tail of apps and wiping them off, to some of his/her team members. When they are working, no one is complains; they give sleepless nights to IT when they fail. Is there an easy way out? No, so keep on pushing, nothing good came out of staying put and maintaining status quo. Change is always difficult, but change is the only constant.
If you don’t like something, change it; if you can’t change it, change the way you think about it.
The craze for new gadgets and devices appears to be growing day by day. Emotions run high for some iconic devices and brands, where people are willing to endure cold nights and mornings, waiting for the store to open. The queues are visible across countries, so it is a global epidemic. These are normal consumers vying with the technophiles to be the first to own the product!
I own multiple devices including a few from the company in discussion, but never stood in queues to be amongst the first, though I know a few who did. I have always waited for a couple of revisions or generations to pass by before acquiring the new iconic device; the primary purpose seen seems to be displaying it prominently or announcing it by the footer in the email.
I get carried away; this is not about new devices or the long queues, but about rotten eggs. In China, fans threw rotten eggs at the stores when the company announced to the teeming crowds who had queued up for long hours that they will not be selling the much awaited device. The decision, as the announcement proclaimed, was taken for the security of the customers who turned up in large numbers. Did those customers come armed with eggs waiting for the store to open?
The incident triggered many wild thoughts. Is the idea extensible to other irritating behaviors, from, say, IT vendors who take the CIO community for a ride? What if every time there is a breach of trust, can I shower the vendor sales or support teams with choicest tomatoes (I am a vegetarian, you know!)? Is this a feat worth emulating when projects do not meet timelines or when misunderstanding of basic requirement by ignorant consultants becomes a change request?
It does have finality to the statement it makes: If I don’t like the outcome, I am going to demonstrate my ire. S’il vouz plait, it may aggravate the situation, but it does create a warm, fuzzy and a lighter feeling to have vented out the frustration and anger. Will the slinging match create a better relationship between the CIO and the other parties?
Last week, while working on a few post contract changes to some service delivery benchmarks, I had an urge to pelt a lot of stuff on the negotiating party. My primal fantasy had to be suppressed to stay within defined corporate behavior and work on the issues step-by-step, steering it towards desired outcomes. Civilized acceptable behavior does not provide latitude to hurl objects when events do not take the turn we desire; even when the consumerization of devices brings unwelcome distractions.
Relationships are built over a period of time, but they can be strained for a long time in an unguarded moment. This applies to any relationship, peers, bosses, team, vendors, family, and friends. CIOs forge relationships possibly with a larger set in comparison to some of their peers. Success is highly dependent on setting and managing realistic expectations. Service delivery and change management are key tenets of the IT agenda.
After all we don’t want to be at the receiving end of the rotten eggs.
Kids ask the most interesting questions; they make you scratch your head and think. I had this experience recently when interacting with a gathering of B-school kids. The occasion was an event organized by the students with the industry exploring insights and networking. One such session was around the challenges and opportunities for the CIO. The CIOs present were heartened that the role is one of the aspirational careers.
The question that stumped some of us went something like this. CIOs take decisions on IT strategy and architecture thereby setting the foundation of the technology that will enable the enterprise for a long time. So when selecting an ERP or similar system what are the criteria to select one over the other considering that once a specific technology is chosen, it will stay for a really long time. It’s like a lock-in because no one changes ERP systems normally. How do you then manage cost escalations and support?
ERP implementation and all that follows
Now, as I know, the question is largely an accurate portrayal of reality. At the time of selecting an ERP, every enterprise painstakingly reviews most options before assigning the family jewels to the solution. Such magnitude of projects is always launched with fanfare, with senior management speeches and project naming ceremonies. Committees are formed with best intent and sooner or later the project goes live. I am not getting into the success or the challenges that typical projects face; that’s another story.
Over the years, with increasing licenses and customizations, the sustenance cost starts to hurt; CIOs find ways to reduce support costs or squeeze licenses deployed to keep operating expenses low. The thought of replacement is rarely tabled and considered impractical. How can such a change be ever executed? Who will drive this? Change will be disruptive to the business. The cost of replacement will be extremely high and not worth the effort.
The perils of ERP replacement:
I am sure that these reasons have some echoes for every CIO. Change is indeed a herculean task when it impacts almost everyone in the company; especially so when the change will have the biggest impact on the IT organization. Apart from the change that every employee will have to go through, the IT teams will have to get out of their comfort zones and drive the change from the front while keeping the lights on and business chugging along as usual. So is ERP replacement the peak that no CIO wants to even attempt? Or is it only for the few brave expedition leaders akin to climbing the Mount Everest? Yes the biggest peak has been climbed a few times and so has ERP migrations done with sparse frequency. Why this reluctance in proposing the change or embracing the challenge to climb mountains?
I believe that the vendor lock-in created around the difficulty of ERP change is to some extent promulgated by the CIO. It is time to abandon this myth and start exploring new horizons in the new world being created around us. We can be part of the creators rather than accept status quo irrespective of whether we were part of the original decision or not. Every decision taken is based on facts at the time and is largely a correct decision. Should we allow this to constrain the future? After all, if you keep climbing smaller mountains, no one rejoices with you as much as if you did climb the Mount Everest!
Almost all of my posts are based on personal experience or interactions with people from various walks of life. For a change, while looking for new topics to write about, I started scanning a few Web sites positioned at CIOs and aspiring CIOs. I also decided to look up a few celebrity bloggers and tech writers who have either been ex-CIOs or respected consultants and speakers in many CIO forums internationally.
I do receive and read more than 50 odd newsletters every day across various subjects; industry specific from retail (my chosen industry for the last five years), Human Resources (for people tips and ideas), e-commerce, social media, leadership, current affairs, regional news, politics, and many CIO focused sites. These are supplemented with some internet browsing, five newspapers and some IT magazines daily. The summaries and news briefs keep me updated with information which helps me understand trends and stay current with the world.
Being worldly relevant
Coming back to my search of the sites, the idea was to look at what is the world talking about? Can I pick up a few insights that could help me in creating the next week’s blog? Are my posts still relevant to the CIO or am I living in a world detached from reality? What new innovation have I missed while running on the technology treadmill (see my last week’s post) and getting to be a retailer and a coach to start-up CEOs and future CIOs?
Headlines on new product introductions (tablets, phones, servers) and some of the hyped upcoming technologies took up 70% of the landing page across all the sites. A few links to notable blogs on the sites, vendor advertisements and videos made up another 20%. Desperately, I started scanning for CIO leadership, business challenges, innovation, people management, and customer engagement, anything that was removed from technology.
CIO case studies
On one site I did find some hidden behind a menu option; it was a CIO case study on how she overcame a difficult business situation with her expertise in business. On another site, a menu button offered expert advice; but clicking a few links got me some technology experiments and vendor sponsored white papers. When every publication rues and makes a case for a business savvy CIO, why is the content not reflecting this? Why are these sites still about technology and are they really targeting the CIO?
The CIO and business
Take any IT publication (physical or electronic), irrespective of the target audience (CIO, IT managers, channel partners, broad-based audience), the editorial or one of the cover stories is always about what the CIO should be doing to stay relevant to the business. The underlying theme is always about business before IT. But after the preaching is done, back to business as usual, do you know about the new 64-core server or the next crossover device with zillion pixel screen?
They proclaim, CIOs should evolve, cite surveys from other CXOs, CIOs, vendors … and then publish technology trends, new servers, tablets, smart phone comparisons, stuff that matters to a technology professional, and detached from a CIO who would depend on his/ her team to advise him on the relevant tools required to achieve the defined business objective. Why can they not walk their talk if their defined target audience is indeed the CIO or the senior IT leader?
I believe that evolution is slower and selective than technology innovation.
“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”
– Theodore Roosevelt
There have been predictions on hot technologies and trends to watch out for across the board; from vendors, IT consulting companies, media companies (not just IT), academic circles, individuals, groups of various kinds, CIOs or otherwise. The lists, short and long, good and bad, have caught the imagination of many CIOs as well as others within the company who are asking how will it impact us within the company, and our customers.
Any good tools?
It is certain that a few will create enough hype and threaten disruption. Be it personal devices or back-end technologies or even consumer-facing applications, every new tool or technology promises to change the way business is conducted or how we engage with customers. Some are improvements over existing tools, wherein the novelty factor fades away quickly with the response of the existing leaders; the rest fail to follow up on the initial promises.
We occasionally find some (tools) actually providing benefit to the enterprise; some are measurable, while the rest is largely a race against competition to deploy, and ‘look’ savvy. Our employees and customers expect the adoption of almost every new announcement the following day. Thoughts about security or reworking or plain simple ROI are for the CIO to figure out. Vendors and consultants definitely benefit from this running behind the technology.
From the time of the mainframes to the promise of the Internet, social media, and consumerized devices of today, with apps and everything in between, technology has created opportunities and challenges for the IT organization. The pace of change is increased with ubiquitous technology; the accelerator is now on auto with everyone running to stay in place. Can we afford to stay where we are, and be observers or slow adopters with a hope to survive the mad rush to nowhere? Is there a likely respite from the ever increasing pace of changing expectations?
Can you ignore the change?
The technology treadmill will continue to move irrespective of whether we hop on board or not. It is extremely unlikely that we will be allowed to stay on the sidelines and admire the speed at which the treadmill and its players are going. CIOs will have to stay connected to the pulse and inspect every change from multiple angles. Some team members will have to keep jumping on and off the treadmill to ensure that the ramifications are understood and communicated effectively to set realistic expectations.
In most cases, the call on which ones to stay with or discard will remain with the IT organization. Success or lack of it will however be decided by our internal and external customers and stakeholders. Can the CIO get off the technology treadmill and stay relevant? I believe that pragmatically the CIO and now even the other CXOs have no choice. They did not enroll into this madness; but have been made party to it simply by being there; exclusion is not even an option anymore.
I am going back to the treadmill with a quote that I leave behind after listening to some retired CIOs:
“Strangely enough this is the past that someone in the future is longing to go back to.”
– Ashleigh Brilliant.
The setting does not matter, but whenever I meet someone unrelated to IT (with IT folks the discussion is anyway about IT); the conversation always ends up with talking about how they use technology. Maybe something to do with me, so when I met with a CFO of a large company, we predictably ended up discussing the health of their IT systems.
A family-run business
The company had grown organically to become a leader in its industry and now had global aspirations. Family run, it had over the years invested in IT to keep pace with the change in technology. The owners indulged the new generation, allowing them to embrace cutting edge technology, while retaining the legacy systems for the comfort of the stalwarts who built the company. The diversity that thus coexisted was amazing, to just admire the profoundness and marvel at how it all worked together.
Hundreds, not thousands, of almost disjointed small systems supported mission critical tasks across functions and were held together by the experienced hands that orchestrated the business. The management had discussed and debated renewal for a decade to replace the increasing inventory of applications with a contemporary ERP. The decision was always deferred with the fact that it has worked for us so far, so it should work in the future too. We have survived downturns, competition, and grown.
They did not have an IT Head and had never thought of getting a CIO. What about cost of sustaining diverse and antiquated technology? The response was, my IT vendors take care of that. Were employees happy with the situation? It works, so happiness is not the consideration. Was productivity optimal? Grudgingly he accepted that it could be improved upon.
In the second decade of the twenty first century, a successful large enterprise working with neither a formal IT strategy nor a CIO! As I dug deeper, it was evident that the unfettered IT had its advantages. There was agility in creation of solutions where required; business teams worked with multiple partners and even individuals, to get processes or content enabled. Across various offices and functions this was the norm.
Integration and reporting was on another planet. Rarely did anyone agree to figures; and sharing of best practices or synergies in process was unheard of. The local optima did not favor global optima. The CFO was at the receiving end of most of the chaos, but did not see ROI in large scale change. He lamented the fact that competitors were beginning to catch up and technology may have a role in that. The promoters wanted to step back and handover reigns to the next generation and professionals.
Can total or strategic outsourcing solve the problem? We discussed and debated the merits and challenges of this approach, the change management across the diverse enterprise and employees across locations. Giving away the problem will not necessarily solve it. Someone internally will have to own the change, coax it step by step and create lasting change. S/he will have to take everyone along the journey. My humble suggestion to him was to get a CIO.
Uncertainty is certain, that is the maxim of today and the reality for all of us individually, as well as, for enterprises. A repeat of the economic downturn of a few years back or worse, that is the question everyone is pondering over. When the sentiment is down, the first casualty is the innovative propositions as they are perceived to be risky. People withdraw into their anxieties and work to keep status quo. Any remotely disruptive thought is beaten black and blue, unless inaction threatens existence.
So what does it do to the IT budget and the CIO who is being challenged to do more with less, and find resources to create efficiency? How can operating expenses be lowered when a large chunk is allocated to paying for license fees and annual charges for the large systems? Cloud may shift some capital expenses but does not take away the payout for license and support. Can the business critical solutions be shifted to open source?
Even if the shift to open source was possible for some processes, the core ERP systems are the ones that will be resisted by the users. Be it HR or finance, the users do not want to shift away from already stable (take that with loads of salt, considering the patches that continue to make the system unstable) and comfortable systems. The big vendors know that such a shift is almost impossible and continue to hammer the proverbial nails into corporates with increases year on year. So what is the way out for the CIO?
In a CIO forum, I met one of the thought leaders who has and would make it to every list globally. He ran a discourse on the change that IT brings about in an enterprise. He talked about some of the IT-led change projects being executed by many global enterprises that pertained to reducing expenses across the board. Mandated or democratically agreed to, these were being resisted by layers across the enterprise. He preached top-down and bottom-up collaboration to “sell” the ideas along with existentialist discussions. If we did not do this, then the sky would fall upon us.
It was nothing new, as CIOs use this strategy quite well to garner buy-in for most projects. It is another matter that measurement of the impact is rarely done a few years later. By this time, the business context has changed, or we have moved to another crisis, or the people who made the case no longer exist in the company. “Push ahead and ye shall be rewarded,” he expounded. Maybe I have become a cynic, after trying this so many times, to believe that it would still work in the current business environment.
I believe that irrespective of support levels across the enterprise, the CIO should continue to engage with the stakeholders to have them share the pain before embarking on the journey to create colossal change or transformation of the IT landscape. Finding business allies will be difficult, but the journey in solitude is a sure way to achieve martyrdom. After all, we all live under the same sun but have different horizons. So lead the way, but make sure that there are others along with you, not following you.
The words that stayed with me a long time were, “the cultural response was resistive, sometimes proactively resistive.” Hasn’t the world always been the same for the CIO?
“My marketing team is wresting part of my budget of customer facing applications and social media; at the same time, the funding for the new budgeting application is with my finance team. The IT budget is now almost 50% of what it was last year. How do I regain control over my budget?” wailed a CIO in a panel discussion on, amongst other things, trends that are likely to be a reality in the upcoming year.
The panel sympathized with the protagonist CIO and a few from the audience attempted to offer solutions. The debate threw up some interesting thoughts on how the budgetary control could be retained with IT. Ranging from bureaucratic rigmaroles to bullying and many other similar trending behaviors, the suggestions were analyzed and discarded as untenable for either being against core values or not implementable without inflicting self-damage.
The IT budget has been a discussion point for some time now. It predicted the investments made by companies on technology enabled solutions. The industry created benchmarks around the investments linking it to the top line, graded by industry. The maturity of IT usage was linked to this figure and anyone spending below the benchmark was seen as a laggard or highly efficient.
Then came research reports on innovation versus business as usual; ranging from 70% – 90% of the IT budget being consumed on keeping the lights on, while the remaining pittance being allotted to new projects or innovation. Anyone with BAU numbers under 60% was envied and deemed better aligned to the business. Models were created to turn the ratio upside down and reduce the operational budgets to strategic initiatives.
Economic cycles threatened available monies and CIOs were put under the scanner on every penny (or cent or whatever currency you like) they spent. Do more with less was the mantra, and that is now the new normal. Every disruptive technology was seen as the next silver bullet to help the CIO in improving the dialogue on keeping the IT budget to a respectable ratio to the revenue. Cloud will save money, move everything to Operating Expense; virtualization will save the enterprise IT …
In one of the companies I worked, the IT organization was empowered with the operating expense budget, and incremental innovation on existing technology stacks. There was a discretionary budget for exploration of new trends and technology. New projects and initiative budgets were discussed with the business, and IT advised the funding requirements which rested in the business P&L. This ensured that the accountability for the projects was an equal responsibility shared between IT and the function. The success rate was high and everyone loved IT. Since then I have followed this practice successfully in every company.
I believe that keeping the number in the CIO spreadsheet or the business spreadsheet does not take away the control from either. Mature enterprises and CXOs work together to solve real business problems and not bicker over where the budget lies. When was it about control or the power of the budget, large or small? If the CIO is partnering with other CXOs and is focused on the corporate agenda, then it is about getting things done irrespective of where the number lies.
Does this insecurity befit the CIO?