We have witnessed rapid technology changes around us, along with an evolution of the software landscape. Today we run a host of application software packages ranging from office application packages on desktops/laptops to enterprise packages like ERP. Some of these are user oriented, while other enterprise packages are often mission critical, and should be dealt with carefully. CIOs frequently face the challenge of upgrading these packages from time to time. Now let us examine situations in which the CIO has to take a decision.
User packages like office applications on PCs are not much of an issue. For proprietary packages, we may either pay up AMC or take an upgrade charge (depending on the vendor policy), and then decide when to upgrade. In case of open source software, the call has to be taken by the customer in consultation with the service provider. Many a times, we face problems when some users are on the upgraded platform, while others are not. Files generated on upgraded software are sometimes are not readable on the older platforms.
For other specific application packages, the decision for an upgrade has to be taken based on the necessity. It also depends upon the position of the version in the product upgrade cycle.
The decision is often a bit involved when it comes to packages like ERP. Being a mission critical application and closely linked to the day to day work, any decision on upgrade has to be well thought of, as it has organization wide ramifications. I have found that CIOs often get stuck, and therefore defer decisions for too long. One of the main reasons is that ERP upgrade is a project in itself. It requires justifications and involvement of the organization.
There are two factors that influence our decision while deciding to go for an application upgrade. One is that the vendor announces the date from which a particular version will go out of support. That is a reasonable call, as the vendor cannot be expected to keep staff to support an older version. In such cases, organizations scamper to complete the upgrade since they don’t want to lose vendor support. Some organizations prefer to continue with the old version, and appoint a support person externally at a much lower cost. I consider both these moves— that is, either waiting till the last minute to upgrade or continuing on with de-supported version—rather dangerous and perhaps to be avoided. CIOs can choose an appropriate time to upgrade once he is told about the support schedule by the vendor.
The second situation requiring an upgrade is when the organization gets interested in doing so to enable use of features offered by the new version. I will cite two examples. In one of my earlier organizations, the decision for our upgrade to SAP version 4.7 and the middleware (Netweaver), was influenced by the company’s desire to implement CRM and SRM packages. These could have worked best in the newer version. Similarly, in the current organization, we are upgrading our Oracle EBS version R11 to R12, as we intend to implement a Production Planning system (with discrete and process manufacturing features as well as product costing), which is well served in the new version.
In either case, it requires a balanced view and the courage to upgrade at an appropriate time. Such upgrades require involvement of all the stakeholders to make it happen.
We have a lot of equipment in the data center—servers, storage boxes, SAN switches and network switches. Many of these are expensive, and bought with approvals that require a lot of justification. But like all equipment, these too age, and cry for a replacement.
The CIO is often in a dilemma, not knowing the right time to ask for a replacement. Unlike PCs, we cannot specify a time period for retirement of these equipment, since it will not be a wise decision. The need for replacement arises only if the equipment breaks down often, gets slow, shows funny results, or is incompatible with new software versions. So, what are the factors that a CIO should consider to determine if it is time to change or replace data center equipment?
- When the server slows down processing and users start complaining.
- If the server gives trouble and there are frequent interruptions. Or in cases when spare parts for the equipment are scarce and difficult to get. Yet another scenario is when the machine tends to get obsolete.
- When the OS version is old and cannot accommodate new versions of software packages. Or consider replacement if the OS becomes incompatible with applications on other servers.
- The manufacturer notifies end of support to the equipment.
There is another scene that I had come across a few times. For example, once we were in discussion for an enterprise storage server enhancement. The vendor suggested that instead of adding more disks, it would be prudent to buy a new storage server. I thought he was out of his mind, and chided him for the suggestion. He asked me to cool down and listen to him, and what he said made sense. His rough calculation went on these lines – the new equipment will be much faster, have larger capacity, fall into obsolescence much later, and come with a three year warranty. As against this, I would pay a higher amount for addition of the low capacity disks by retaining the old machine. I would run out of space much faster, be less prepared for the increasing demand for performance, and pay huge amount as AMC (which was a fixed percentage on the original purchase price).
It pained my heart to part with the reliable old box which had served me for over four years. Better sense prevailed, and I put a note to the management with ROI calculations and lo-behold, it received approval. I have now followed this principle in a few other cases. So the lesson is to make a sound business decision, and not carried away by emotional attachment to old assets.
CIOs often wait till the end when it becomes imperative to change, and that creates a panic situation. The explanation is usually on the lines of “Why should I disturb something, if it is running fine?” When I joined my current organization, I found systems that were over a decade old. Even the OS version was not disturbed—neither was it factored in the immediate plans. The organization had to make do with sub-optimal systems till it found alternative approaches. It is therefore important to continuously review the status, and carry out necessary replacements as appropriate.
Nowadays, all office employees are provided with a system—either a desktop or a laptop—to carry out their work. While such equipment is added whenever new employees join the organization, old systems are replaced with new ones (as and when they become due). On this front, certain organizations do have a very clear policy for replacement, but many don’t.
It is necessary to define clear rules for refresh and also convey them to the organization at large. Users are often tempted to ask for a replacement because their colleague might have got a new machine with better features. This request often comes in the form of false complaints which incline towards a plea for a replacement.
Rules of replacement vary across organizations. While some specify a fixed time period for retiring old assets, others specify a batch that would be replaced. The time period for retirement also varies between three to five years. In fact, many such rules may often not be based on scientific assessment.
I have heard of such debates in organizations during times of stress—for example, in times of recession or when the company’s business and finances are under pressure. At such times, business questions the rules for replacement, and often asks for extension of the period. This is again an ad-hoc measure, and not based on sound judgment.
There have been several studies made on this subject. I recall a Wipro case study which pointed out a few factors to be considered for the purpose. For instance, if the ideal period to retire a client machine is three years, then the following considerations are necessary:
- The PC usually comes with a three year warranty. Therefore, we will have to opt for an annual maintenance contract (AMC) after this period
- Beyond this period, we generally face work disruption due to failure of parts. For example, often laptop displays start giving problems, batteries die out, and CPU (or RAM) needs replacement.
- We spend on repairs, spends go up, but all these don’t enhance the resale value. The total cost of ownership goes up.
- Delay often causes problems in terms of compatibility, For example, it could be in the form of not being able to read files created in a higher version by other colleagues. Or it could be in terms of difficulty faced in installing the newer version of a software package.
- If we replace with a new machine, we get a three year warranty, and therefore save these costs.
We may often be tempted to defer replacements, thinking that we have saved in terms of spends for the year. However, when considered from a long term perspective, we may perhaps find that this was not the right decision.
Every other day we hear of a different product or service, a new software version, or an innovation. You hear on a constant basis about known companies being taken over and strange mergers. All these tend to leaves us confused, but that is only one part of the story.
IT is no longer the domain of techies, since there are umpteen users who read about, explore and operate new technologies. These users then put pressure on the IT manager asking why such new technologies or gadgets are not being used. The poor CIO is on the receiving end, and has to do his bit to prove his mettle.
Even otherwise, the lure of new technology, strong selling by vendors or just peer pressure, sucks in the CIOs into introducing new technologies without a full study. Many CIOs are very prudent and have been immensely successful on this front, but I am talking of those who catch the bait and struggle with the acquired technology.
It is important for a CIO to constantly scan the environment, regularly read up on new developments, as well as understand the new trends and the main principle behind the innovation. After grasping the subject, he should think about the applications that it can be applied to. Then he should apply his mind to figure out if there are situations in his business that such solutions can be applied to. In fact, the very interest in a particular technology emanates from the business need that stays on the top of the mind of the CIO.
I have noticed several mistakes that CIOs have made in the past. A quick look at some of these will tell us the kind of moves that we should avoid.
1. Often, CIOs trap the management into accepting ERP without a clear plan and business interests. In many such cases, the CIO might have thought that ERP experience will strengthen his resume. However, when he’s asked to manage the ERP project, our friend struggles to get users on board. Thus the ERP is reduced to a simple replacement of the earlier legacy system. Management questions the ERP’s usefulness, and the CIO has no answer.
2. Putting up a budget for a ‘disaster recovery plan’ without a proper risk assessment and recovery time objective (RTO) or recovery point objective (RPO) definition. Several such plans have come a cropper.
3. Installing a unified messaging system in the organization, but doing nothing more than instant messaging. Many a time this could be because of bandwidth or user adoption issues, but it lies largely unused.
4. Introducing mobility solutions to impress the management and end users, but struggle to start off applications like sales force automation, stock movement monitoring, and market info.
5. Getting IP phones for a few senior people without testing the voice quality and not realizing about the steady drop in telecom rates.
6. Installing enterprise storage, but not using its storage management features.
These are but a few examples that emphasize the fact that CIOs must put enough thoughts into any purchase. It’s essential that you conduct enough preparation before applying these technologies.
Today’s CIO faces a dilemma. He knows technology, and he thinks he knows the business that his company is in. However, he’s confronted with articles and seminars that discuss the CIO role, which emphasize the fact that he should understand and participate in business. All these mean well, but these emphasize so much times on other aspects that the CIO’s knowledge of technology is pushed far into the background.
In fact, some of the articles also state that the CIO should not be a technology person but one from business. These even suggest that the CIO can always have technical personnel to help him achieve his objectives. So our CIO ends up tearing his hair as he tries to understand his place in the corporate world—unsure of his relevance.
Now let us debate this point a little. Let us assume that a bright manager who manages some business aspect is assigned to lead the team as a CIO. He definitely understands the business scenario and the company’s needs that are to be addressed. However, he may not be sure about which of these aspects could be addressed through technology. So he calls his technology manager and asks for ideas; so far, so good. Now the techie explains new technologies, but is not able to convince our CIO. Here, the question is about whether you run your business the way you conceive. Do you just put in technology for automation? That may not be the optimal usage of technology for business.
So it’s important to know not just business. It’s equally important to know and understand technology; how it could be applied to business. In my opinion, the CIO should also scan the technology environment—pick out technologies that could be relevant to his business.
Then he has to evaluate these technologies in detail. To do so, he should not only read articles and other hand-outs, but also meet and discuss various aspects with the technology vendors. Now, to be in a position to evaluate technologies, you have to learn them first. This involves constant research about organizations that have applied various technologies, attending events that speak about technology applications (and success stories) as well as speaking to consultants (or user organizations) to learn of the new developments. Well, all these involve time. Therefore, knowledge of technology cannot be pushed aside.
In this connection, let me recount my stint in a management consulting firm. My counterparts working on accounts and inventory applications used to finalize all processes and forms. These would then be handed over to IT in order to automate the process. For them, IT enablement meant putting in a few square boxes on the form to help enter the account numbers or inventory codes. Many a time, during discussion of these processes, I used to point out many processes that could have been made simpler—just by just applying our minds to think of processes from an automation context. Many of these specifications changed as a result. This is why I feel that knowledge of just one side of the picture is not enough to do justice.
So, it doesn’t really matter whether the CIO is a business person with a fair comprehension of technology or a technology person with a good idea of business. It is important to know technology before we think of applying it.
CIOs need not feel shy talking about technology even though it is fashionable to talk of business. If he professes to know technology, it may not necessarily put him into a slot where he may be looked down upon. The issues rise when he talks only in technical terms. If he closes his eyes and ears to other matters concerning business, then he is definitely asking for trouble. I for one, feel that those types of professionals are slowly becoming scarce.
Today’s CIO lives in a world which involves interactions with many stakeholders; he cannot operate alone. Since he services various internal and external customers, his reach and influence go much beyond his function. The management also has its own expectation of him, and he is expected to devise technology solutions to various business issues. Therefore, the CIO has a task set up for him. He has to talk to people, understand their issues, convey his solutions, and implement them. Therefore, good communication has to be his forte. This is a trait that has to be developed in order to be a successful CIO.
For the CIO to become a good communicator, he has to build on the following aspects:
Be objective: Any communication is with a purpose, whether it be for informing a person, raising a query, proposing a solution, or for discussion. It’s essential that you clearly state the subject matter so that the person you communicate with is clear about the desired outcome.
Clarity: It is important that the communication is clear and clearly states the issues without ambiguity. It is necessary to be frank and state even unpleasant matters (where needed).
Listening: This is a very important trait and perhaps one of the hallmarks of a good communicator. Listening involves absorbing what somebody says without filtering it with your opinions — first receive the input as it is delivered, and then prepare yourself for its analysis and interpretation. You cannot work out an appropriate solution unless if you listen to people and their requirements.
Language: Many CIOs suffer from a not-so-good command over the language. This mars their communication. Many a time, improper usage of words generates misunderstanding or leads to wrong decisions. Therefore, it’s imperative that he learns the use of language (in terms of grammar and usage), and conveys messages rightly even if it’s in simple words.
Self expression: It is important that the CIO expresses his views without fear (as long as he is objective). Self doubts and lack of confidence may often prevent him from clearly and objectively expressing himself.
Confidence: It is said “nobody can make you feel inferior, without your permission”. We are often inhibited by the feeling that we may sound silly–that somebody may find fault. So we choose to stay quiet or maintain a low profile. By doing so, we convey the feeling of being unsure, and the body language works to our detriment. If we hold our heads high and speak out with courage, people sit up and listen – it is amazing how even a little display of confidence changes the audience.
Preparation: If we prepare well before a communication, it shows in terms of the confidence with which we face the audience. It’s hard work, but it pays. Imagine making a presentation without knowing much about the audience, or not being well prepared to answer questions. These dent your image as well as your ability to convince the audience.
Well, I may have missed out a few more aspects of good communication. It’s best to treat this as an illustrative list and consider practicing them as you deem appropriate.
Every CIO functions in various capacities at an organization. Due to this multi-faceted job profile, he requires various traits that put him in charge of the situation. As a good manager, he can function very well by being dedicated and efficient. Just this capability will not take him far, since he continues to be considered a good techie who can help people with usual problems. In my opinion, the CIO has enough potential to rise up to high levels and be a person who matters.
For the CIO to really become a leader and play a significant role in the organization, he has to take a leap—put his neck on the block and play for higher stakes. Therefore, playing a leadership role requires that he imbibes the following qualities.
Have the vision: The CIO needs a clear sense of direction—his vision should extend to matters farther than his departmental issues. He should look at the environment that the organization operates in, the company’s strengths, and faced challenges etc. Thereby, he has to formulate plans that will help the company to become a winner.
Communicate right: A CIO’s vision and plans may need articulation for these to be understood. This could be through presentations, strategy notes, discussions or any other form of communication. Such communication needs to be focused and also expressed in an easily understood form. As often said, the management is not interested in technology, but in the business solution that it brings forth.
Be proactive: It’s essential that you step forward and look for solutions to various issues in the organization. This is more advisable than waiting for someone to approach you for a solution. The CIO has to reach out to various stake holders and offer help to their problems.
Become the ideal team leader: You have to manage the team which delivers. So explain the purpose of various tasks to them and give the required guidance. Encourage and motivate them to deliver more than what they think they can.
Achieve execution excellence: Plans have very little relevance if they are not executed well. The CIO has to ensure delivery in order to stay credible and bring in excellence into the work that gets done. Only then can a CIO enjoy the management’s confidence and get their continuous support.
Cultivate relationships: One of your contributions as a CIO could be the ability to create and maintain good relationship with all stakeholders. Not only would you get their ideas and support, but also create an environment which is conducive for your team to operate. Thus you can let your team concentrate on work while taking care of the surrounding environment.
The above are some qualities, which in my opinion, help a CIO play the role of the leader and get to be a person of significance in the organization. There could be other traits that a leader could posses and there may be many other views. Therefore, the views expressed in this article may be seen as a set of suggestions.
Can the CIO make contributions to HR? Certainly yes, will be my answer to this query.
Now, if we go by the traditional view, the CIO is a technology wizard who peers at the computer screen and makes various machines work. He is considered a back-end guy, someone who has very little to do directly with the people. But haven’t things changed over the last few years?
Today, IT touches us our everyday lives, and we are very largely dependent on it. Unless the CIO has an idea of the accruable benefits and how IT influences the way we do our work, he would certainly not be of any help. Therefore, the CIO has now come out of his hiding and to do everything that is needed—alongside the people around him.
Let me cite a few examples from my experience. During my stint with a chemical company (way back in 1992), I fought against the prevailing opinion and persuaded the management to sanction the budget required to roll out state-of-the art IT infrastructure throughout the company. With sheer enthusiasm, I went about putting in Windows 3.1, introducing e-mail throughout the company, connecting all offices through the 9.6 kbps STD link, and organizing large scale training to staff on the new platforms. In doing so, I made visits to all locations to ensure functioning of the programme. Within a short period of three months, people were playing around and connecting with people from other offices whom they might have not spoken with for years.
Unwittingly, I had played the role of binding people and getting them interested in work. With a modern IT infrastructure in place, the factory (which was in a remote location) started to attract Graduate Engineering Trainees (GETs). People gave me the informal title of ‘the real HR head’, and this was a pleasant surprise.
Yet another example I can use comes from my tenure with an automobile company. I worked hard to get the systems right in this organization – not one of the pleasantest of things. I met with resistance, but somehow managed to put in improved systems across various areas, which covered work flow, ERP systems and process automation through bar codes. To make systems more effective, I worked with users to bring about process improvements. The results were amazing; apart from financial benefits, there was a transformation in the work load on people and reduction in stress levels. Cessation of overtime and late sitting came as a boon to people. Realizing the popularity of the IT department with the masses, the HR department started to use us for rolling out some of their initiatives in the organization—with the HR head frankly admitting that IT had more credibility.
I am sure that many of our friends would have similar experiences to narrate. In my opinion, today’s CIO has come of age. While doing so, he brings about changes that bring in positive changes to the environment. These above examples just emphasize the fact that a CIO is more human than some may think, and can really be of more value to the organization.
Many organizations have already gone through the usual grind of generating several periodic and ad-hoc reports. Managers take action on some of them, whereas many such reports get printed as a matter of routine—with very little use made of them.
On the other hand, routine reports have a limited use. These are used by managers for operational review and control, but do not carry much value for the senior management. Again, the so called MIS is a set of predefined formats generated for management review of operations and financial parameters. Information reports such as sales versus target, expenses versus budgets, and sales by category/geography/customer type are some such examples.
Over the last couple of years, we have been hearing a lot about analytics and business intelligence as well as data mining. In fact, various predictions by research firms indicate increasing spends on these applications. With heightened competition in the markets, top management (across the world) is looking for focused information on markets, competitors and expenses. They constantly yearn for analysis that will help them arrest decline of their market share, spot opportunities, correct inefficiencies, and optimize expenses. When so much is happening at the Board level, can the CIO be far away?
Using information, the CIO can play a significant role when it comes to enhancing the organization’s ability to analyze its performance using a proper diagnosis of problems and available opportunities. For instance, work on sales force automation was initiated in one of the organizations (that I earlier worked with), and the pilot proved successful. Encouraged by its success, the organization’s sales division decided to roll out this application at all centers. However, I had my apprehensions since we had not worked out adequate justification for all the requisite spends. Funds would be incurred on hundreds of handsets, connectivity, backend infrastructure, and on the services. So I sat with the sales team to develop analytics for performance of salesmen, outlet productivity, area wise/ outlet class wise sales patterns, and other multi dimensional correlations. As a result of this process, the application’s purpose got clearer. We had greater buy-in from field staff, managers and the management.
In another case, analysis of the inspection data revealed that many items were not rejected even once during the past one year—leading to a suggestion that that inspection entry in such cases could be skipped. This saved several manhours. In-depth analysis of the warranty returns brought forth issues that were hidden from view.
Opportunities are many for the enterprising. So in my opinion, a CIO can take the lead and be more relevant to business.
The CIO is a champion when it comes to procuring and deploying new technology elements in an organization. However, IT as a function does much more than making the tasks run faster; much of the advantage comes from generating information for decision-making, as well as in helping the organization become more efficient through better processes.
Now, it is at this point that the CIO becomes a bit shy at times. He wonders about how can he think of (and suggest) better processes in, say Production, Sales, Maintenance or Finance. Users in these areas are domain experts, and know the processes inside out. It will be odd to go and discuss improvements with them. He feels that a CIO is not equipped to deal with this task, and he would be better off dealing with the task he knows well. Some may find that this argument makes sense. However, isn’t the CIO missing a chance of playing a greater role in the organization?
In my opinion, a CIO has the rare distinction of being part of designing processes that cover various functions. Over a period of time, he develops knowledge of the business processes and inter-linkages between various systems. When discussing the process specifications, he comes across differing views of people. This opportunity gives him an insight of not just the possible solutions, but also about the underlying cultural issues. When he weaves these systems together to generate MIS for the top management, he has a chance to view the entire organization from a management perspective.
I have seen many a CIO playing significant roles in what is called ‘business process improvement’. I have also been a part of such exercises, especially so with ERP implementation projects. All that I had to do was to get engaged in a discussion with the users, raise innocent queries, or suggest changes (when appropriate). Things worked even better when I could put words into their mouth as they spoke about these changes. I applauded them and gave them full credit.
While it sounds simple, I had to work hard and make several attempts to be successful. I had to go around and study these processes in-depth before I could enter into such discussions. But what I learnt was that not being in operations was an advantage; I could look at the processes from an entirely different perspective. For instance, when I was with an automobile company, I could initiate discussions on inventory control measures which resulted in considerable inventory savings. It was possible to seed thoughts of declaring buffer stocks and transparency, thereby optimizing shop floor stocks. I could push towards synchronization in planning processes across sales, purchase and production functions which lead to arresting several redundancies. These opportunities came in purely through interactions with some of the senior managers and being persistent with reforms, despite being under fire for disturbing the prevailing serene environment.