CIO

Business knowledge management helps boost offshore strategy

How important is business knowledge management to the success of your offshore strategy? Pretty important, one CIO who offshores to India told me recently.

Offshore workers are often at a disadvantage when providing services for U.S.-based companies. Sure – you can find a tech person in India who can code java without any detailed knowledge of your business. However, for other outsourced services, such as customer support or software development, the more knowledge your offshore workers have about your business, the better service they can deliver and the more productive they can be.

“How can they participate and anticipate, if they don’t know about our business?” said Cornelia Pool, CIO of San Jose, Calif.-based Covad Communications, a national provider of national provider of integrated voice and data communications. Pool, who outsources the company’s software development efforts to India, makes extra efforts to ensure her offshore workers are treated like company employees.

At the beginning of the outsourcing relationship, she involves team members from both the offshore group and U.S.-based team to review the project goals and determine the best ways to communicate on a regular basis – ways that are convenient for both groups. Regular communication regarding not only project deliverables, but also the company’s message and goals, are key to the success of working together.

Pool also looks for any opportunity for someone to go and visit her team in India or bring one of the offshore workers to the U.S. This allows the offshore workers to learn more about the company and feel more connected to the goals of the business.

Offshore workers who feel like they’re part of a team and understand the goals of the business are also more likely to stick around. That’s an important factor for companies offshoring to places like India, where employee attrition has been an issue over the past few years.

An investment in business knowledge management helps make offshore workers feel “part of the team.” However, this also brings up cultural issues at some companies. For instance, at Covad Communications, the U.S. team had gotten in the habit of saying, “Someone offshore worked on it; that’s why it went wrong.” Pool made specific efforts to make her U.S. team understand that their vendors are partners in the success of the company.

At your organization, how important is business knowledge management to your offshore efforts? Are you comfortable sharing the ins and outs of your business with offshore workers? Or are you more hesitant to offer your company’s intellectual property with offshore workers who might or might not be working for your team in six months or a year?

Don’t be like GM: How a BPM strategy can help you avoid bankruptcy

Midmarket CIOs who think of a business process management (BPM) strategy in its basic form as a tool for putting processes around purchase orders, claims or employee onboarding and offboarding should re-consider the role it plays in business sustainability during a recession, according to one analyst.

“You look at all the businesses that didn’t survive the recession – some of them were in a bad market segment, OK, but some of them just couldn’t scale down fast enough,” said Clay Richardson, an analyst at Forrester Research Inc. “Look at GM, for example. That’s really the GM issue — they couldn’t scale down fast enough.”

Although a BPM strategy and scalability might seem like minor factors among the financial obstacles GM is facing, the expansive company has been unable to respond quickly enough to decreases in demand — GM has lost about $88 billion since 2005 — and as a result, was forced to file for bankruptcy protection.

As more and more businesses suffer the same fate (Chrysler, Circuit City, Linens ’n Things) how helpful can a BPM strategy be for companies in a rocky economic climate?

“I think BPM is becoming important for sustainability,” Richardson said. “Looking at downscaling from a sustainability standpoint, we have to have control over our processes so we will be ready when things turn around.”

But not everyone understands sustainability and how a BPM strategy can have a positive affect on it. According to a recent report from the BPM Forum, “more than 53% of companies don’t have or don’t know if they have a corporate sustainability agenda in place. And lack of awareness of business benefits was identified as the top challenge to environmental sustainability.”

So what can midmarket companies do to achieve the business and sustainability benefits of a BPM strategy?

Transparency, process standardization and a company-wide understanding and appreciation for the processes keeping the organization moving steadily along are important. The more business processes you are aware of and attuned to, the easier it will be to recognize even a minor change in “business as usual.” This improved way of doing things can result in quicker reaction times, efficient restructuring and (hopefully) bankruptcy avoidance.

Open source cloud computing: The future midmarket sweet spot?

What happens when open source and cloud computing collide? Cost savings, flexibility and (at least one open source vendor hopes) midmarket CIOs checking it out.

Open source CRM provider SugarCRM has launched an on-demand version of its software that is included free with an on-premise license.

Subscribers can switch back and forth between the local server and the cloud version, called Open Cloud. They can make one version a hot backup for disaster recovery, or use one version for testing and the other in production if they like. “There’s no one asking you if you want on-demand or on-site; you get both,” said Martin Schneider, director of product marketing at SugarCRM Inc.

Jay Lyman, an open source analyst at The 451 Group, said the number of startups emerging pairing open source with cloud computing is a clear indication of a growing trend. “Open source is a good fit for cloud computing because of the interoperability and the portability,” he said. “We’re going to see rapid experimentation, testing and vendors using this as an opportunity to learn customer pain points and match the right apps in with the clouds.”

In many cases, small and midsized businesses will investigate cloud computing the same way they checked out open source – by experimenting with and investigating minimal fees. “[CIOs] can’t revamp their entire systems in the down economy, but they can look into trying new things while still leveraging their existing applications with open source cloud offerings,” Lyman said.

March Madness 2009: What network slowdown?

March Madness has officially started. Offices are buzzing with pick-to-win pools, friendly competition amongst peers and co-workers — and the network slowdown caused by streaming live videos of the game. Is your network up to snuff and prepared to handle the rush of the game as March Madness progresses?

The NCAA will be streaming live video of every game, from the round to the last – including a new high-quality option (requiring a Microsoft Silverlight download). CBS will also be providing the live games online, something it has been providing for free for the past four years. Just to provide some scope for how many people will be streaming this game online this year: In 2008, the online audience for the NCAA men’s tournament grew 165% over 2007 with 4.8 million viewers (way up from the 2006 number of 1.3 million people).

Streaming video, as opposed to another productivity buster like online shopping, affects the entire network. According to one calculation on the effect streaming video can have on the network, in a company of 10,000 employees, if 75 of them (on a 100-megabit network) were streaming video at the same time (on decent-quality video streams with other Internet apps going on), the network could be slowed down to a stop.

One company I talked to experienced a 2x increase in bandwidth utilization on Thursday; its normal average of 15MB increased to 30MB. This IT director told me there wasn’t a noticeable slowdown because the company is able to burst to 45MB, but if usage increased further, he was going to lower the priority of CBS SportsLine on the firewall to make the user experience poor and give more important applications better performance.

So that’s one approach to handling NCAA enthusiasts. What else can you do before or during non-work events likely to cause a network slowdown?

Strategically plan for the event with public viewing areas. Set up televisions within the office so employees can keep up with the live footage during breaks. The workplace can only go so far in accommodating employee interests during the day, but for some public interest events like the inauguration or national disaster updates, providing the televisions can help separate work from other things.

Limit the access with policies. Block video during the workday, providing only a limited window of opportunity for streaming or downloading (8-10 a.m. or 1-2 p.m., etc.). This may be away to provide a positive work experience while safeguarding the company from loss of productivity and network overload.

Block it. For many the hassles and risks are just not worth it, and blocking video on the network is a quick fix. The flip side of this? Some employees may try to access the video through less reputable sites, posing a security/virus risk.

The good news is, if you’re thinking about how to handle network slowdowns before it becomes a problem, you’re already strategically planning. Monitoring, preparing and understanding the risks are important when it comes to staying on top of your IT game.

IT job opportunities persist, even as recession deepens

As the national job market continues to founder, with total jobless claims reaching a record high of 5.5 million, IT professionals can take solace in a recent report from Forrester Research Inc. analyst Andrew Bartels. The report shows that there are IT job opportunities out there, with some skills more in demand than others. (CIO wasn’t on any of the lists.)

The Forrester report predicts that total jobs in IT will drop by only 1.2% this year. Indeed, compared with past recessions, the impact on IT “will be relatively mild” this time around. That’s largely due to the bloodletting IT has been going through since the 2001 tech recession. Most IT departments are already quite lean, Forrester notes.

After three consecutive years when IT jobs grew more than 2.5%, 2009 will be a down year. This is especially true for IT occupations at IT vendors, where jobs are expected to fall almost 3% in 2009. On the other hand, IT jobs in IT departments will decrease by only 0.7%. Still, both these numbers are substantially less than the 4+% job shrinkage after the dot-com bubble burst in 2001.

The good news is that a number of IT occupations will add jobs in 2009, according to the Forrester analysis of Labor Department figures. Some of the IT job opportunities are as follows:

• Systems analysts, the largest U.S. IT occupation, will grow from 580,000 jobs in 2008 to 600,000 in 2009.
• Network systems and data communications analyst jobs will increase from 230,000 in 2008 to 240,000 this year.
• Network and computer systems administrators, an occupation that has seen steady growth over the past decade (even during the tech bust) will increase “slightly” in 2009, due to continued growth in networks and systems that have to be managed.

Conversely, job opportunities in four areas will decline: software engineers for applications and for systems, computer research scientists, database administrators and help desks.

It’s the network, stupid

The job picture tells you a lot about what IT departments will look like in the future, according to Bartels.

The areas of growth and the areas of contraction reflect the changing face of IT. Network analysts are in high demand because of the rise in mobile technology and workers who are either based at home or on the road. Companies need IT experts who understand the security and communications requirements of a workforce that is becoming more and more extramural.

The part of IT that is contracting — computer programming, computer operations and research — tells you how much outside vendors (commercial software companies as well as outsourcing providers) have co-opted these responsibilities.

We are curious to know if your experience matches the job data described above. Is the recession hurting the IT job picture in your company? Have you been laid off?

Obama chooses a federal CIO: The next generation of CIOs?

President Obama selected Vivek Kundra as his first federal CIO. Kundra, formerly chief technology officer for the District of Columbia, has been recognized among the top 25 CTOs in the country and as the 2008 IT Executive of the Year.

Is he an example of the next generation of CIOs?

Kundra, who refers to citizens as “co-creators,” has received a lot of attention in his 19 months of service with D.C. mayor Adrian M. Fenty – adopting the latest computing trends and introducing popular social media tools into his bureaucratic processes.

Keeping up with the ever-changing beat of technology, engaging citizens, lowering the cost of government operations and spearheading innovative projects are some of the many things that make Kundra stand out.

Young and change-oriented, Kundra uses YouTube to post the bidding process for city contracts and Twitter in the office, and he wants to let drivers pay parking tickets on Facebook. Imagine that: Accept a new friend request and pay your fine, all in one login.

For midcareer CIOs who don’t use social media and may not be making innovation and big change a priority, especially in this economy, Kundra and others like him may feel like a threat. CIOs get replaced because they become too comfortable in the way things are and are unable to see new opportunities for change and transformation, or are unable to make it happen.

Granted, Kundra’s big ideas and plans may be so forward thinking as to be naive, given his resources and the potential four-year shelf life of his position as federal CIO. But there is something to be said about a big-dreamer with fresh ideas who is able look beyond the tried and true. Kundra launched a contest in October called Apps for Democracy and got developers to submit 47 Web applications to provide residents with city data. According to The Washington Post, Kundra said he spent $50,000 for the contest, including prize money, but he estimates saving $2.6 million by not hiring contract developers.

Willing to take risks and able to visualize new ideas and situations, Kundra was able to engage citizens, save money and come up with a series of applications for the people in his last job. As he demonstrates similar gusto as the federal CIO, do you applaud his youthful energy and ideas as a welcome reprieve from everyday government, or foresee him having to learn hard lessons about change, resources and the politics of IT, as many of you have in the trenches of corporate America?

Navigating your SaaS contract: Buyer beware?

Even as CIOs face smaller IT budgets in a range of areas this year, one segment that still has traction is Software as a Service (SaaS). The subscription-based software delivery model provides an alternative to bulky, on-premise applications and is thriving in shops where CIOs need to deliver functionality quickly without a lot of up-front investment.

But buyer beware: The gold on the road to SaaS is often buried in the contract you negotiate, and some CIOs are left wishing they had done something differently soon after the ink has dried.

In a recent SearchCIO-Midmarket.com article, CIOs shared tips and advice for avoiding potential pitfalls in SaaS contracts, from contract duration to licensing fees and more. One CIO faced a requirement to buy a minimum number of licenses, which had to be maintained for the life of the contract. Adam Sokolic, vice president of product management at National Retirement Partners Inc. in San Juan Capistrano, Calif., lost 15 people in a layoff and was stuck paying for the licenses even though he didn’t need them anymore.

Ouch.

Such issues don’t seem to be crimping the popularity of some SaaS solutions, though. Research firm IDC has increased its SaaS growth projection for 2009 from 36% growth to 40.5% growth over 2008.

Service-now.com recently announced record growth of almost $20 million in recurring revenue by the end of 2008, bringing fiscal year revenue growth to 389% of 2007. Salesforce.com saw a 34% jump in quarterly revenue by the end of January, reaching a record quarterly revenue of $290 million. Subscription and support revenues were $266 million, an increase of 35% over last year, and professional services and other revenues were $23.5 million, an increase of 15% over 2007. In fact, as these results show, CRM and IT Service Management software seem to be among the more popular application categories for SaaS.

So while lobbying for desirable SaaS contract terms may require a practiced and skilled negotiator, the market growth shows that SaaS continues to gather steam in today’s corporate IT. And that can benefit everyone.

Qualities of a good leader: Avoid layoffs at all cost?

An article on our sister site, SearchCIO.com, this week highlighted the qualities of a good leader during a recession, culling advice from leadership experts and CIOs. The list includes qualities such as utilizing the ability to inspire those around you, having communication (and listening) skills, proving you can perform and drive results, being able to prioritize, and then — BAM! Avoiding layoffs at all costs. Something that seems almost impossible, as daily news headlines remind us.

In the article, Jason Jennings, an author, speaker and consultant who has studied more than 100,000 companies, said the most productive companies are completely opposed to layoffs. Why? As soon as layoffs begin, employees start to worry about themselves and their futures as opposed to their work.

But with expectations that unemployment will top 9% in 2009 and budgets that are painfully tight, aren’t layoffs necessary?

Oftentimes, they are. When demand for new cars virtually stops, carmakers need to pare back production, and that means job cuts. But when it comes to IT, there are some ways to prove value and cut costs without resorting to the proverbial ax. For example, some companies are relying on their project management offices to steer them through the recession – time-tracking and tying resources to specific projects. Doing so prevents redundant work on projects, speeds project completion (freeing up the time and the budget for more projects) and justifies positions. One IT executive in our recent article specifically attributed job preservation to his PMO.

And most recently, technology giant HP announced pay cuts for the entire workforce as a way of avoiding layoffs after a disappointing first quarter. Rather than scaling back the 100,000-person workforce by 20,000, CEO Mark Hurd preferred the pay cuts to trim the budget.

Jennings notes that besides the morale issues that layoffs cause, job cuts can be a short-term fix. When business picks up again, the recruitment and training for renewed growth will be a setback. No argument there. But if your management is calling for a headcount reduction and you have already made all the efficiency moves you can – what then? Have you found other creative approaches to avoid pink slips?

What the tweet? Using Twitter as a business tool

It took a lot of coaxing to get me to start using Twitter. It wasn’t that I didn’t want to join. It wasn’t because I didn’t understand it. I just didn’t get it. I didn’t see what the big deal was. To be frank, I didn’t think I could keep up with the twit-chat. I barely update my Facebook page. I still take notes in (gasp!) a notebook. My inboxes are overflowing with work and personal messages.

And I’m not alone. As more and more companies are showing an interest in using Twitter, from the CIO to the marketing department, the benefits of the social networking tool are being questioned and investigated. Is the time investment worth it, or is this another trend?

Recently on (ahem) Twitter, I came across a Tweet from someone in my following about companies using Twitter as a business tool. Thus, a business connection was born – Norman Birnbach (@NormanBirnbach), president of Birnbach Communications, a small agency that works with clients in both traditional and online media. Birnbach gave me some Twitter business insight into why everyone should be investigating it.

1. Twitter, shmitter – why bother?

According to Birnbach, you need to protect your brand. If you aren’t there, someone else will be. “It’s important to build up a following and credibility. In the tough economy, companies need to have an established spot to provide honest information and respond to Twitter reactions,” Birnbach said. Situations like employee layoffs will spur people to react via Twitter — without a spot on there, you lose your voice to respond. Keep a pulse on what your employees are thinking and join the dialogue when appropriate.

2. It’s not (always) about marketing.

Aside from creating a brand and name for yourself, Twitter can be used as a customer service tool. “@ComcastCares does a really good job listening to their customers and providing assistance and feedback,” Birnbach said.

Reaching out to your customers (whether it be external or internal IT customers) and providing another outlet for your services builds loyalty (refer to No. 1). “No one really cares about your product or service,” Birnbach adds. “All people care about is how you help them, and you can’t oversell being helpful.”

3. Keep an eye on what everyone is doing.

The constant posts on Twitter provide company transparency – you can share what you’re doing, and you get to see what your colleagues and competitors are up to. The ability to see in real time what peers are learning and doing, projects they are diving into and new trends as they develop turns Twitter into an online networking and learning tool. This type of knowledge share has been very beneficial, according to Birnbach. It provides a new way for companies to communicate internally and externally and learn from peers and colleagues.

4. Ready to join?

If you’re ready to start using Twitter, there are a few things you need to know:

Build a following. Look for people who are Tweeting on the topics that interest you and follow them. Search topic keywords or companies you want to know more about and start following. “Twitter is different from Facebook in this respect – you can just start following whoever you want without knowing them,” Birnbach said.

Banish Twitter-block. Birnbach said some people don’t join Twitter because they don’t want their tweets to sound foolish, boring or inappropriate – people are concerned about oversharing and privacy issues. “Don’t tell people that you’re having a sandwich for lunch. If you’re always going back and forth with obscure references, you’re not going to engage people. Figure out who you are trying to reach and what you are trying to achieve and post a mix of insight and conversation,” Birnbach suggested. Provide useful comments and remember – ABL (always be linking). Sharing news, timely information and important updates make you a credible source and an asset to your following.

Don’t overdo it. To ensure you and your employees are focusing on other priorities (like work), set a time limit for using Twitter and stick to it. “It’s important to at least look at Twitter. If you decide to go ahead with it, use it to extend what you’re already doing – as a complementary component,” Birnbach said.

I’ve been on Twitter for more than two weeks and … I love it. Used right – as a business tool to communicate with your CIO universe, your staff and/or your users – you will, too.

Vendor gifts: Holiday cheer or ethical dilemma?

Twas the night before deadline and all through the office,
we worked with our heads down, appeasing our bosses.
But what to my weary eyes should appear?
The USPS delivery, bringing vendor-purchased cheer!
Brown, unmarked boxes of who knows what,
Cookies? Chocolates? Kitsch that is haute?

‘Tis the season! The lights, the cheer and, for some, the vendor gifts.

In the name of the holidays, vendors will often promote goodwill (future sales?) by giving gifts to employees they have worked with. Although thoughtful, some gifts can raise ethical and moral issues. For example, an extravagant gift could make the recipient feel a sense of obligation. You certainly don’t want gifts hampering employee objectivity when making purchasing decisions or recommending products or services to clients and users. You have an obligation to consider your company’s – not your own — best interests (as well as those of consumers or people looking to you for advice).

Most companies have strict human resource policies about what is considered a gift, what dollar amount needs to be reported to the company, what needs to be sent back (What, no spa weekend?!), etc. For some industries (such as health care) the giving and receiving of gifts can raise certain implications concerning the appropriateness of medical treatments given to patients and at what point the gift starts looking like a bribe.

So, how do you differentiate between a possible bribe and a simple thank you? Use common sense, read up on your company’s policy and if you find yourself in a gray area, it’s always best to check with your HR department.

With that said, you may not even really want what your vendor is sending you. Here are some examples of vendor gifts my colleagues have received and kept over the years (whether they wanted to or not):

• A large, corned beef-style chunk of buffalo.
• Electric ice cubes (sounded dangerous to me, although she swears by ‘em).
• A bottle of chocolate wine (yes, it was alcoholic).
• Mr. Potato Head.
• A box of mixed nuts doubling as a business card holder.
• A red velvet blanket teamed with Godiva hot chocolate (?).
• A bottle of whiskey. Period.
• A gift card for either a facial or a body wax at a local spa (No further comment necessary).
• Steaks. Packed in ice.

Feel free to send along any strange, interesting, bizarre and random vendor gifts you’ve received (or sent).

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