IT service providers are evolving, and at quite a rapid pace. To take a case in point, I was invited to a gathering of more than 100 IT service providers and channel partners to talk to them about “How to sell to a CIO”. This is not the first time that I have spoken on this subject; earlier, it was to sales teams of large Indian and global IT companies, but it was different this time. The group comprised of mid and large sized companies who vie for business from the small and medium enterprise (SME), as well as large enterprises. This segment has to balance between different types of businesses — right from owner driven organizations with no formal IT organization as such, all the way to CIOs of large companies. And a lot of such service providers classify the SME business in terms of people, revenue and process.
It was interesting to observe that the audience comprising largely of CEOs and heads of sales (or service), listened with rapt attention. It was eerie in a way — there was absolutely no cross-talk, buzzing of mobile phones, or anyone getting up during the hour long talk (I am used to, and also guilty of, such behavior during conferences). The audience could associate with most references to vendor behavior — their wins and losses, joys and frustrations, ups and downs. It was as if their lives were being subject to scrutiny, at a scale never done before.
On the flip side, the participants had many questions on why CIOs ignore them, and at the same time want the CEOs to visit even for a small transaction. According to many, the CIO egos were a big put off. There were also many questions around the lack of transparency in decision making, the inordinate negotiation timeframes, and then expectations of how the services, goods or solutions should be delivered in super crunch time.
As I made an attempt to answer some of these concerns, it was evident that the CIO’s evolution is still an ongoing process. Not every CIO has evolved to a level of maturity where almost every business transaction is a win-win situation (or every interaction is looked forward to). There are no universal answers that can be applied to every situation, since the CEOs agreed that there is a serious need to impart skills within their teams in order to more easily manage the situation.
Governance applied to IT procurement was another heatedly debated aspect. While vendors like to work with the CIO towards long-term relationships, being the lowest price vendor is not the best criteria for selection in such a scenario. According to the vendors, value additions offered as proof of concept, training and education, post implementation handholding, and technology advisory should be given due weight while taking a decision on awarding the business. The channel partners also expect clear decision making cycles, so that they do not end up in the hands of “purchase departments” who measure only on the basis of savings over the initial offer or budget.
The relationship between IT service providers, channel partners, and the CIO is at best, symbiotic. We need each other to be successful, in our quest for achieving our objectives. A partnership built on shaky ground will not withstand the travails of time and pressure from internal as well as external forces. Trust has to be built upfront and sustained, for each others’ success. To quote my favorite management thinker (at least in 2010), “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself” – Peter Drucker.
As the IT service providers and channel partners evolve to understand their customers, the industry in which they work, the opportunities open to their customers, and work towards creating success for the CIO, it will be a challenge for some CIOs to now engage with them at a new plane of maturity and understanding. It the CIOs fail to achieve this, they may alienate themselves into a situation that will make success difficult.
Are CIOs up to the challenge? It still remains to be seen.
Let me start with a quote from Peter Drucker — “There is nothing so useless as doing efficiently that which should not be done at all.”
Last month, I was invited to a a marquee publication house’s three day offsite CIO event to discuss the coming year’s IT agenda. Topics on the agenda looked good, the attendee list was glowing, and a long standing relationship with the Editor propelled me towards attending this event. So I packed my bags and decided to give it a shot.
Almost all such events invite a couple of CEOs and thought leaders to share their insights and provoke some thought within the audience. And the CEOs did not let down on that promise. They had the audience eating out of their hands, listening with rapt attention to every word, absorbing it, taking notes, discussing with their neighbors, and in the end asking a lot of relevant questions. The act was a tough one to follow, but the CIOs were charged.
As a result, they (the CIOs) did not mind a few vendor presentations. To their credit, the CIOs did attempt to follow these sessions, but it was a difficult proposition to keep the lids from drooping.
The following days had everyone unanimously wondering what hit them. The torture began with inane presentations ranging from the usual suspects — virtualization, green data centers, cloud computing, outsourcing, intelligent cabling systems, network rationalization, and so on. A few consultants tried to revive the audience by raising questions about CIO reporting and their efficacy. The audience was too numbed to be provoked, and let it go with a mild reprimand similar to “Don’t disturb my sleep”.
The icing on the cake was a presentation on “What is a Data Center”. Yes, men are from Mars, and in a predominantly male crowd, by association CIOs could be classified to belong to Mars. But telling a CIO about what a data center is like is rather akin to teaching Michael Schumacher how to ride a car! I wanted to insert an analogy on Golf, but decided against it.
Without exception, every sponsor had a slide deck (with a minimum of 30 slides) to be displayed to the captives. They ranged right from very basic elementary stuff and all the way to one which wanted CIOs to learn how to move virtual partitions across servers. To be subject to such a score of presentations over two days beats the torture that even the famed Nazi inflicted on their poor captives.
Despite being advised against it by the organizers and post event feedback by the audience, it beats me as to why vendors insist on subjecting CIOs to repetitive presentations with nothing new to talk about, and preach their version of religion. To top it all, these activities are dished out by sales and marketing folks, who are not even subject matter experts (these people could potentially be challenged by the listeners).
The last straw (in a few cases) is the substitute junior staff member reading out slides with no eye contact with the audience. Such a person is typically in a hurry to get off the stage in order to avoid any cross-questioning from the few members who suffer from insomnia. I would rather withdraw the slot than be the subject of “How to reduce your exposure to this vendor”.
Has the IT vendor become a slave to these habits? Has their thinking has become clouded (a side effect of cloud computing?)? Is the scene so bad that IT vendors are unable to explore alternatives to engage their prime customers — the CIOs? Whatever happened to good old case studies, panel discussions, and interactive sessions in the form of a Q&A? Are vendors unable to stand tall without the crutches of slide decks which no one wants to see? Why do vendors continue to alienate themselves from their customers?
I guess it’s time to get back to basics. To quote Peter Drucker once again, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” Will a publishing house donate some Peter Drucker books to all the Marketing Heads of IT companies?
On an average, I receive more than 100 email newsletters every week from various publications and sites that focus on CIO agenda and leadership. These newsletters are expected to help me keep abreast with what’s happening around the world in the domain that I made my career with, which is Information Technology — now almost always referred to as IT. My mailbox has been full of such messages for as long as I can remember, maybe a decade or so now.
A decade back, the IT leader — now referred to as the CIO — focused a lot on applications, infrastructure, new technology innovations, and business process improvements. In a few cases, the CIO also participated in discussions that were indeed strategic in nature. Contributions to ideas and products were happening even then, as they are the norm today. Ten years back, emails were not as many as they are today, pure-play content sites were few, and not too many sent daily updates. The focus was typically on the nuts and bolts that make up IT infrastructure, the wrapping around it, the database, middleware, presentation layers, and packaged applications which were replacing legacy custom coded programs.
The CIO’s role started transforming in the early part of this millennium. This was driven with the expectation that if a CIO has to retain his right at the table, he has to become more business savvy and leave technology to partners and outsourced teams, as these skills became commodity. IT teams reorganized themselves around business functions and avidly pursued learning of, and about the business and processes. The focus was on how IT teams could contribute towards achievement of common corporate goals and objectives. Vendors and consultants changed their pitch to the CIOs talking about business issues, measuring the efficacy of the CIO’s business knowledge, and how they applied this towards solving real business problems.
Thus CIOs started to attend executive development programs, speak about business technology, scavenge management books, and debate with management thinkers. It was suddenly about how to challenge CEOs and other CXOs on how they can contribute to the business. A few expanded their roles into other parts of the business.
All along, CIOs continued to stay in touch with their roots through various newsletters, magazines and online publications. These media channels continued to feed them with latest happenings in technology, vendor landscape and case studies of how someone leveraged technology investments (in a few cases). IT-business alignment was one of the much debated subjects.
But guess what? Media continued to push technology content down the throats of CIOs who were not really interested in that stuff anymore. Yes, awareness of trends, innovation, new gizmos, and collaboration technologies was important, but not to the level of detail that is being published. That is stuff for IT managers, the doers, and the technical teams (outsourced in many cases).
And that confused the CIOs on whether they should retain the level of in depth technology expertise which is being thrown their way. Most weaned themselves off such content, to make the move towards domain, industry and softer issues that a CXO has to manage every day. Content for such learning is rarely available from even marquee publishers — offline or online.
Such disconnect between expectations drives home the point that the evolution of information givers to the CIO is still incomplete. Media has lagged behind the role that they themselves have created for the CIO by egging them away from the technology stuff towards what matters. We are thankful for that, and hope that CIOs will no longer be subject to tips on how to configure a listener for a DB or resolve malformed IP packets or even look at performance management tools for networks!
By attempting to address a range of audience which spans mid-level managers to executive directors and senior vice presidents, the upper segment is being alienated. And if the CIO is indeed the focus, then a major transformational change is required.
For IT Vendors, CIOs are a very sought after audience. As a result, they always solicit face contact with the CIO to pitch their wares, hoping to get a foothold in the company. These vary from license sellers (paper licenses or shrink-wrapped), hardware vendors, consumables, networking, security, applications, custom development, maintenance, testing services, manpower augmentation, staffing services, consulting, strategic alignment, and so on.
If I were to create a comprehensive list (which I will do some day), it would probably run into multiple pages! CIOs endeavor to keep these individuals and companies at bay, as they seem to be interested only in selling, and nothing else. Also, consider the fact that CIOs would only be listening to vendor pitches and groveling through the week, if vendors have their way.
Vendor pitches range from “the cheapest”, “cutting edge”, “better than the other”, and in a few rare cases, “solve business problems”. The majority fail to engage in a dialogue or listen, as if they have the entire routine by rote — the moment they are in front of the CIO, the Play button is activated! Unfortunately, only a handful of vendors understand the realities of your company or industry. The typical vendor repeats stories that may be out of context (based on experiences with companies or geographies, where the challenges are dissimilar to those faced by you).
With IT budgets either about to lapse (in a few cases) and new budget preparations (for most of us), vendors endeavor to wrangle their way into our minds. These heightened pitches tire the CIO, and in many cases fail to gain traction of any kind. The story repeats itself many times over, with the results remaining the same.
Albert Einstein said it very well, “We can’t solve problems by using the same kind of thinking we used when we created them”. Vendors should stop selling, and start listening to their prime customers — the CIOs — on what they are working on, and then help them succeed. According to the Peter Drucker quote, “A customer never buys what we sell”. This is more so in the case of IT.
Every time a vendor approaches a CIO, his understanding of the CIO’s need should supersede the need to sell. Just the fact that you have a solution, does not imply that I have the problem!
Wishing all a very happy new year, and a great decade ahead!
I am sure that most of you had a wonderful time enjoying your favorite activities with your friends, relatives, and even strangers. The number of messages (SMS, tweets, emails, Web posts, etc) multiplied over the weekend. And in almost all cases (I am sure there were a few exceptions), they were delivered to the intended recipients. All this was enabled by the IT infrastructure which worked seamlessly, despite the additional load generated by hundreds of messages, which implied a multiple factor loading over average transaction loads on the servers and networks.
No one really planned for this surge, unlike the planning that typically goes into catering for month end or quarter end processing. It just worked!
Does it mean that most IT organizations deploy infrastructure that is way over the required average load?
Most analyst reports indicate that average usage of the IT infrastructure ranges from 5-30%. This is where the virtualization story promises to deliver higher utilization levels. So how would one explain the success for highly virtualized shops, where utilization is higher than the numbers stated by analysts and vendors? Did we receive messages sent on the last day of the year after a few days?
At least in my case, I know for sure that the messages that I sent out (about 10 times the emails I send in a day) within a span of 20 minutes — all of them were received by the intended recipients within a few minutes.
The bogey of capacity planning, utilization levels, right sizing of servers, etc. for our messaging and collaboration platforms would appear to be highly overstated. Most IT shops play it safe, and buffer in more than 200% capacity in such infrastructure. However, the same hypothesis does not hold good for business transaction systems, which do tend to feel the pressure over month or quarter end sales cycles. Users end up at the receiving end during these peaks, and the reactions to such planned upgrades are slower than expected.
Maybe, cloud-based models for compute power on demand are an answer to such issues. But their deployment still remains experimental (at best), for mission critical transactional applications like ERP, financial accounting and supply chain management. As the interoperability of applications and base infrastructure improves, with consistent bandwidth becoming available on demand at affordable rates, the sizing problem will slowly die a natural death.
CIOs should review their capacity planning assumptions in the New Year as they engage with vendors and users, learn from the past, and take some calculated risks. I am sure that sooner or later, these questions would be posed; the answers may not be very easy.
There is a general agreement that 70-80% of the IT budget (this figure varies depending on the reported overall IT operational spends) gets committed on the first day of the year. Whatever remains is typically spent on new initiatives and projects. While the reality may vary from company to company, the same question has been posed time and again in such a scenario.
So do CIOs need to prepare elaborate IT budgets?
In this context, one of the CIOs I was talking to mentioned that he has stopped preparing IT budgets altogether! Instead, he transfers all spends to the business, as they decide the business requirements — whether it’s operational or project driven. He asks them to justify why any project needs to be undertaken, and what should be the ROI. An interesting perspective, I must say.
Such maturity can be reached only in two situations. First is if the organization has evolved to a level where CXOs are in sync with reality and work in tandem towards achieving their objectives. The other situation entails that CXOs are totally disconnected, and have no faith in the CIO’s ability to manage his budgets.
My survey of Indian enterprises (by talking to CIOs) reveals that operational IT expenses are typically lower than consultant projections — by about 10-15%. This is a reflection of our lower wage bills, and the ability of Indian CIOs to stretch their IT budgets a bit longer than their peers in other geographical regions.
Does the learning from global CIOs stretching their budgets apply to Indian CIOs? To some extent, yes! But the big differentiator that most global enterprises depend upon to shrink costs has limited relevance in India — outsourcing to offshore vendors.
If the CIO splits his budget into two parts — operational IT (business as usual) and business IT (new or incremental projects creating value) — the management of IT budgets becomes easier. CIOs still have to run an efficient shop. Also, accountability still rests with the IT organization, when it comes to managing the overall infrastructure, applications and relationships that create an ecosystem to support business operations. Improvements driven by new technology trends and innovation are essential, and this is what IT organizations have to excel in — even if it is outsourced. The placeholder for such spend is not relevant, whether it is integrated with the business budget or a separate IT budget, as the cost is finally allocated across business units.
Business IT or strategic IT is a larger discussion. The CIO’s maturity and relationship with CXOs is the key to success. Working in step with his peer group, a CIO can influence the outcome, which is whether the budget is approved or not. My belief is that an individual CIO who aspires for lateral growth should understand how to manage within a budget. At the same time, he must understand the impact he creates on business operations, customers and stakeholders. For this alone, the IT budget’s ownership has to rest with the CIO.
Earlier this month, I had the opportunity to meet with, and listen to a bunch of IT consultants from global consulting and IT companies. All of them presented their view of the CIO challenges and opportunities, and without exception sounded like they had dug into the same library or archive to create slides which said the same thing — though the words were different, to their credit. This presentation made to a gathering of more than 50 CIOs stunned the audience. And this was not because the CIOs were bowled over by the analysts’ insights, but because the presentation was disconnected from reality.
Consultants have a wonderful habit of looking down upon their audience in a condescending way while preaching their version of truth, which says, “I know better than you, and I have a prescription for the ills that pain you”.
So the consultants under discussion were attempting to advise CIOs of their current challenges, reality and cures for the situation. While the number of points was consistently at 10 (wonder why everything has to be “top 10”!), the order of appearance of the topics was not in sync. The most interesting part was that no one, I repeat no one, in the audience agreed with the consultants.
So the questioning began:
- Did you actually survey or speak to CIOs and CEOs to create this list?
- What was the sample size?
- How many of them were located in India (since the presentation is being made to Indian CIOs)?
- Considering the sample of more than 50 CIOs in this room, did anyone here participate?
As the cross-questioning got uncomfortable, the consultants were tying themselves into knots and literally sweating (despite adequate air-conditioning). One of them had the audacity to state that, “I am the consultant and speaker for this session; you have to listen to me!”
That was the last straw for most, and the duel almost resulted in an unsavory situation. It was rescued by the organizers — just in time.
It is evident that the CIO has a better connection with reality and business. The challenges and opportunities for Indian CIOs do not revolve around Business Speak or Alignment, but Value Add, Enabling Business and Growth. Global consulting companies are slow in realizing this trend, as the world at large still revolves around the US for them (maybe because most of them are headquartered in US).
The post event networking saw a face-saving quote from one of the consultants. “I was asked to provoke the audience, and I succeeded in doing that”.
A close friend narrated this incident about a CEO who asked the IT organization for three laptops. The first one for use in the office, second during travel, and the third to be used at his residence! It was one of those unchallengeable CEO mandates. My friend thought of this incident as a compliance issue or misuse of power vested with the position. To me, it was interesting that the CEO even thought of such an arrangement without realizing the improbability of how it will aid his work.
Every organization endeavors to define and execute policy with minimal exceptions. These are discussed, debated and agreed upon by the management — signed off too, in a few cases. Everything works well until the first exception request. Such requests typically come from a high performer or a CXO who states constraints within the defined boundaries. Thus begins the dilemma which is normally taken as an acceptable deviation to aid the CXO/high performer, as no one wants to leave any room for doubt when it comes to performance.
The IT organization struggles to maintain normalcy, since the precedent is taken as the new norm. After a while, only two choices remain — change the rulebook or try to save face by diligently documenting each exception. The third alternative is really not an option, since it means that you have to take a tough stance and deny the request. Is there a way out of such a predicament, especially when you consider that powers vested with the CIO are not absolute and can be overridden by the “business requirement”?
Coming back to the story of the “three laptop” CEO, I asked my friend about how the CEO proposed to use this distributed computing to his advantage? Did he not realize that he was misusing his executive powers which may be challenged by the Board of Directors or may set an avoidable example for other CXOs to emulate? I was advised that the CEO was creating value, and by virtue of this, the Board may allow such small indiscretions and look the other way.
In such cases, I believe the relationship and openness existing between the CIO and CEO will play an important role (where healthy discussion and debate exists), as does a possibility of influencing the decision. CIOs should work diligently to build and sustain this relationship to remain relevant and successful within an enterprise.
What about you? Would you acquiesce to such a request?
Budgeting starts around this time of the year for most CIOs, along with the exercise of defining operations cost and investments for the coming year. This process typically lasts from four weeks for the agile to four months (in some cases). Almost every year, there is an expectation to do more with less, until you reach a scenario where “there is no more left to do more with”. During this time of the year, the CFO is at his peak of influence, since all the other functions which want funds try the level best to justify their investments and plans.
Recently, I was asked to present to a group of CIOs on “How to make your CFO your best friend”. Such a subject can be a hair-raising experience for most seasoned players, as it requires a strong financial background and understanding of the business to put across acceptable metrics and KPIs for the management team. This is where a skilled CIO can get budgets approved without the proverbial scissor’s side effects — it’s possible to avoid typical across the board budget slashes (of, say 20%), especially on the operational side of things.
Long time back, I decided to separate the operational budget and the investment (read capital expense) budget. My intention was to let the business decide the projects that they wanted to invest in. This ensured that business created the P&L for their projects.
Obviously, IT had to help the business with the figures and merits of each solution. In most cases, business would choose the best possible solution and succeed in justifying them to the CFO and CEO. This shift signifies that we will help implement and execute the project from an IT perspective, but you (business) own it. Many cases required the creation of innovative KPIs rather than the conventional ROI or IRR models to help the business justify its investments.
While setting the operational budget is relatively easy, the expectation to reduce budgets year on year remains an interesting discussion. In one of the cases, I took a menu card approach to operating expenses. If you want good speed of response from your network, you have to pay higher, like a toll paid to travel faster. Hardware refresh can be analogous to replacing cars every five years, a common corporate practice. Why? Mainly since the cost of maintenance goes up, and availability of spare parts is also an issue.
It’s possible to have the CFO as an ally, if the CIO understands the compulsions and metrics that the CFO has to manage. After all, CIOs are also responsible for managing the cash flow and acting as conscience keepers for the company.
At a recent social event, I got introduced to a new-age professional — one who hobnobs with CEOs and Boards, all the while talking about environment changes and the resultant impact on future climatic conditions. Post the introductions and a bit of discussion about carbon credits, she innocuously asked me the question, “What does a CIO do?”
I was taken aback, aghast, and speechless for a few moments. Seeing my face, she quickly added, “Sorry, I have not come across CIOs in the past.”
And they talk about CIOs driving their companies’ Green agenda!
So I tried to give her some answers based on commonly accepted definitions and job descriptions loved by CIOs and executive search companies. She listened attentively as I started my discourse on the strategic nature of a CIO’s position and how the role has evolved over a period of time to now being recognized as an integral part of the C-suite. However, it was obvious after a few minutes that she was just being polite. She had no interest in the wonderful stuff that CIOs do — at least, not in what CIOs believe is wonderful.
The fundamental question nagged me for a few days after this fateful meeting. So I started asking a few peers that question —without exception, everyone wondered if I needed to visit a Psychiatrist. The more I thought about it, the more it haunted me. My Eureka moment arrived, by chance, while reading “The Whole New Mind” by Daniel Pink.
CIOs are left-brained people pushed towards right-brained activities and they face a constant struggle. The CIO’s role involves a transformation from being the glass-house’s keeper. He has to mold himself to becoming worthy of the oak desk corner office and a seat on the management table. For most CIOs, this has been made possible by successfully traversing the path from being a technology person to a well-rounded professional. He has to be the person who is equally at ease with techie stuff, as well as balance sheets and customer engagements. The CIO is unique in his ability to contribute to all segments of the enterprise.
Now, that’s an unusual way to describe a CIO. But to me, it’s a very satisfying definition of a continuously evolving role.