State Street Corp. announced this week that it is cutting 530 of its “non-client-facing” IT employees over the next 18 to 20 months, and shifting an additional 320 similar IT workers to outsourcing vendors IBM and Wipro Technologies. Application maintenance services are going to Wipro, while IBM will provide infrastructure support. The layoffs, which amount to 21% of State Street’s 4,000 IT employees worldwide, are part of a “multi-year business operations and IT transformation program,” to increase the efficiency of IT operations and focus more on innovation, bank officials stated — but I sort of knew that.
We recently spoke with State Street CIO Chris Perretta about his technology transformation at State Street, running a podcast just last week about the launch of a private cloud and his IT team’s laser focus on such innovations as Big Data processing. Perretta told me he has an organization now that “makes sense” to him, referring to the important role his chief architect and chief scientist play in finding IT trends that feed a “pipeline of innovation.”
Reaching Perretta this morning by phone, I asked him how many of the 850 lost or reassigned IT jobs were due to IT transformation. Before he uttered a word, the bank’s public relations specialist offered, “all of them, really.” Perretta was more reflective. Days like this remind IT people like him just how fast technology moves, and “our jobs have to reflect that,” he said. In addition, State Street has always pressured employees “to do those tasks which differentiate us with our customers.” The technology jobs being eliminated or moved off to vendors are “incredibly crucial to us,” he noted, but are more efficiently done by vendors invested in those technologies. State Street “gets to leverage” that vendor know-how and dedicate its IT people to things that are “out there on the technology edge.”
“So, for instance, our people designed our cloud; our people designed even the implementation of the hardware that we’re running. And it is our people who are designing our most innovative applications,” Perretta said. “Those are the jobs that we want to grow and keep within our employees. That’s the intellectual property we want to develop.”
The reassignment and loss of IT jobs are the consequences of a new operating model, Perretta said, and are driven by such new technologies as State Street’s private cloud and by IT’s move to Lean development principles. Automation eliminates some jobs. Outsourcing allows the bank to shift fixed costs to variable costs, a powerful advantage with technology changing so fast. “Sometimes that involves dislocation, and that’s unfortunate,” he said, but State Street has always watched the cost line. “And we want to make sure that what we do spend is spent in a way that makes a difference, so there you have it.” Whether these same forces will result in more IT layoffs, or how much money he saves by this shakeup, he declined to say.
Of course, State Street is not the only company shedding IT jobs. The federal government said today that it is closing 800, or 40%, of its data centers, a move that would save billions of dollars. The federal government’s outgoing CIO Vivek Kundra told The New York Times that the consolidation was “part of a broader strategy to embrace more efficient, Internet-era computing,” in particular, cloud computing. No word yet of layoffs.
Technology changes us. Perretta said he just bought an old typewriter and put it on his desk — the old manual kind, to remind him of that change in just his own lifetime. That’s the reality of the IT field, and because IT is integral to most business now, that’s the reality of many, many other fields as well — and the reason, in part, for a jobless recovery and why unemployment remains high, especially for the “non-client-facing.” Good luck to you.
There will be cases when mobile app development is necessary, but many of your enterprise business needs are going to be addressed by off-the-shelf or even free mobile apps.
At least that’s what mobile app expert Bill French believes, and he backs up his opinion with some solid examples.
“Why bother [developing your own mobile apps] when there are 74 options for a given business function?” asked French, founder of the iPad CTO news portal.
In the business intelligence (BI) space, for example, you don’t need a native application to display business data — and what enterprise isn’t trying to figure out how to deliver data to mobile devices?
“There are solutions like Geckoboard and the Klipfolio dashboard, in beta, that leverage open Web standards to deliver BI visualizations that are comparable to native apps. And if you absolutely must have the snappier performance or heightened security of a native app, RoamBI is an ideal solution that leverages integration services with many enterprise services and even Google Docs at very reasonable prices that small businesses can afford,” he said.
So, existing mobile business applications — or tools that allow a company to integrate the mobile form factor with off-the-shelf software — will cover many enterprise needs, but there will be just as many cases when they don’t.
Some industry needs are just too specific, and many off-the-shelf mobile apps are not developed with specific enterprise security, data privacy and compliance needs in mind.
Still, French makes a good argument for not breaking the bank on mobile app development, even in a complex area like BI.
Let us know what you think about this blog post; email Christina Torode, News Director.
“We like to call it our innovation pipeline, but that sounds rather presumptuous,” CIO Christopher Perretta confesses, pausing for a split second. “But it is!” he crows.
Perretta is CIO at State Street Corp., the Boston-based financial services giant. I spoke with him recently about his construction and launch of a private cloud (our conversation is preserved as a podcast running this week on SearchCIO.com). After explaining the hows and whys of this two-year effort, he talked about another building challenge for CIOs: designing an IT organization that can leverage technologies like cloud computing and large-scale data analytics on an “industrial scale” to deliver business value.
To that end, Perretta has scoured his organization for people who “can think in an architectural way … in what I’ll call large-scale abstractions,” he says. While these people can get “down and dirty with the detail,” they also can connect IT architecture to “a real, live business result.” At the helm of this function is a chief architect, Perretta says, someone with 30 years’ experience who “knows the business inside out” and whose job is not to manage projects, but identify and pilot ideas that make sense for State Street. Out in front of this guy is a chief scientist whose job it is to look even further into the future for interesting technologies.
The presumptive result, Perretta explains, will be an IT organization that can spot technology trends three to five years out, assess the current state of the market, pilot the technologies that make sense for State Street and — with a lot of hard work, if his implementation of a private cloud is any evidence — figure out how to make these technologies operational in a very large organization. “We have a model now that makes sense to me. It is structured, but it is not bureaucratic, he says. “But there is a pipeline of ideas that focuses the organization,” he adds, “much more than if everybody is off thinking about things to do.” An innovation pipeline, in other words.
No matter the topic at hand, lately my conversations with CIOs turn to Big Data — or, to use my editor’s preferred term, large data sets. CIOs have Big Data on the brain — and for good reason. Business leaders are convinced that mining varied, complex and unstructured large data sets generated internally and from all corners of the world will give their companies a competitive edge.
As Yvonne Genovese remarked in my story this week on the impact of Big Data on CIO careers, business leaders are convinced that wisdom — or better yet, money — lurks in these vast amounts of distributed data, and they are counting on their CIOs to find it.
That is the good news, of course, for CIOs. In this era of commoditized IT, leveraging the value in Big Data gives CIOs a plum role, or as Genovese bluntly said, puts them “back in the boardroom.” They become the heroes of the enterprise again, she said. But what is becoming clearer with every conversation I have with CIOs, turning Big Data into information, and information into actionable knowledge, is a huge challenge.
Sure, there are technologies and applications that can help do that, as consultants and vendors are eager to inform you, from the Hadoop and MapReduce frameworks to SAP’s HANA (High-Performance Analytic Appliance) and Watson, IBM’s super-duper computer. Prospecting for nuggets in the goldmine of data out there, however, means getting through a minefield of organizational challenges. Those include finding the right IT people for the job, for example, and competing against other departments interested in Big Data that might not answer to IT, such as marketing and operations.
“The CIO’s role is very difficult,” Boris Evelson of Forrester Research told me. “CIOs know the reason for Big Data, they know the technology out there; but no one knows literally how to create an organizational structure and best practices around it.”
Evelson said he has talked to clients with multimillion-dollar budgets for Big Data, approved by the business to get started tomorrow! But “when they called IBM, Accenture, Deloitte and PwC, you name it, all [the vendors] were doing was pitching Hadoop,” he relayed.
As for what kind of organizational structure they should aim for, figuring out how business processes will change, and who owns this stuff, “CIOs have to figure it out on their own,” Evelson said. “We are on the cusp of an era where we will learn from our mistakes over the next few years.”
So, there you are, out there again — the enterprise’s guinea pigs (or is it monkeys?) in deep space — braving the unknown. Here’s hoping you return from your journey as conquering heroes. And please, if you are inclined to talk about how you are tackling the puzzle of leveraging Big Data, let me know. I’m even willing to negotiate terms of disclosure.
Business transformation and IT transformation no longer are separate items on the enterprise agenda. Now that agenda is all about IT business transformation, as three technology trends work their way into the business processes of many organizations: cloud computing, the consumerization of IT, and Big Data.
These trends are creating a ripple effect that appears to have no end and has consequences that will cause CIOs and IT departments to reinvent their roles.
As more IT services lend themselves to outsourcing, CIOs and IT groups might find themselves in the role of service brokers. Some experts predict that the majority of business services will be outsourced, pushed by the fact that many services are being bought directly by business units from cloud providers. The result is that IT staff also will move over to work for a given business unit or be retrained — or, yes, be let go.
This might sound to some as though IT departments are being marginalized; but the transfer of commodity business services to the cloud actually opens up an opportunity for IT staff to work more strategically with the business, a goal that has been on the CIO agenda for years.
In any case, IT groups must adapt to the paradigm shift the cloud represents. IT folks I’ve spoken to at recent events, like the Enterprise 2.0 show in Boston, said that IT as a Service, as one attendee called it, is inevitable. Internal IT departments will have to package up their services, price them competitively and make them easy to consume — like cloud services. Although this is happening in some IT organizations already, the problem is that business units aren’t aware these services are available — an important reminder that the IT department must advertise its wares, like any other provider.
Consumerization of IT
It might be a buzzword, but the term consumerization of IT sums up the fact that enterprise employees are forcing their organizations to consider new ways to collaborate. The line between personal use and business use is being blurred by social networking and mobile devices. It will be up to the CIO to foster the use of both platforms — developing useful mobile business apps that go beyond marketing purposes, as well as enterprise collaboration platforms that cater to the social impulse in human nature. Consumerization of IT, however, ultimately will not work in the enterprise unless it is governed in a way that restrains business risks and creates new business opportunities.
Yet another buzzword, Big Data is all about harnessing the power of large data sets. The CIO who can figure out how to help the business locate and manage the “right” data sets will be in high demand. As SearchCIO.com Senior News Writer Linda Tucci explains, the CIO job could hinge on taking charge of large data sets: “Whether your company is in a fight for its life or fighting to stay on top, its ability to manage and mine large data sets will be critical to its success,” she writes.
“A lot of business leaders felt that if they just had a little more access to information, they might have averted a problem with the supply chain or sales, or realized sooner that the just-in-time orders they were busy filling were about to dry up,” Gartner Research analyst Yvonne Genovese told Tucci.
SearchCIO.com has been covering these trends and tying them together to outline how they are shaping the future of corporate IT. Next week, we will further explore the trends and factors shaping the new face of IT, as well as the ways the roles within IT are changing.
Let us know what you think about this post; email Christina Torode, News Director.
While you’re debating whether to develop native mobile business apps, use HTML5 for mobile or take a hybrid approach using PhoneGap, one enterprise IT exec highly recommends asking for an experimental budget to test use cases first.
Large-scale deployments of mobile business apps will move beyond the realm of marketing within the next few years, predicted Jim Worth, director of global services at pharmaceuticals manufacturer Merck & Co. Inc., during a panel discussion titled “Mobile: Delivering New Context and Capabilities to Applications and Collaboration” at the recent Enterprise 2.0 event in Boston.
Sure, Merck is building mobile applications to help educate doctors and patients about various health care issues — a huge marketing opportunity, Worth said — but an experimental budget is allowing his team to also investigate how data can be collected and pushed out to mobile devices. One mobile app is being considered that would collect vital signs and report them to a central location. Another potential app is one that would send an alert to patients’ mobile devices when it’s time to take their medication.
Yet another mobile application is one that would alert a specific member of a clinical trial team if something is holding up the trial process, Worth said
Other companies are in the development stage with mobile business apps. For example, a large airline has tapped IBM to build a native application for frequent flyers. That app would look for a frequent flyer’s mobile device to come online, and then send travel updates or even alert a customer service rep to call the customer.
Geolocation also presents business opportunities, not just in the context of sending coupons to mobile devices but, for example, to locate members of a project team and sync them up with each other or with business partners in the area.
Panel moderator and mobility expert Maribel Lopez, principal analyst and vice president at Constellation Research Inc. and founder of Lopez Research LLC, called this “connecting with context.” She described a scenario in which a mobile device could pinpoint her location, search her LinkedIn account to see whether any of her connections are in the vicinity, and based on her preferences, recommend a restaurant where they could meet.
“I’ve allowed all these services to dig into my information because I want the value [these services] create,” Lopez said.
Given the social nature of many workforces these days, it is possible that people could look at geolocation services as an advance, not an intrusion.
Still, geolocation creates privacy and security issues for both employees and corporations. As a result, enterprises are developing policies during the experimental stage for the use of mobile business apps.
“There’s a whole bunch of policy questions; and before you can write those policies, you need some experiences,” Worth said. “So, do some experimentation and quickly follow that up with a policy.”
Let us know what you think about this post; email Christina Torode, News Director.
One of the great things about social media platforms is that they break down barriers, allowing easy, sometimes effortless communication among people. Given that we are social animals, social media and networking serve our innate drive to communicate — even in the highly cubical-ized, walled-off environments that many of us spend most of our workdays in. But is this spontaneous communication what business needs?
I had an epiphany recently. I went to a panel discussion on social media platforms and business that was gosh-awful. The expert panelists were asked to muse spontaneously on the risks and benefits of using social media in business, based on questions from the moderator — without knowing those questions in advance. One question after another led to muddled, vapid or unintelligible answers. I realized that what makes a well-thought-out answer so good is that it is well thought-out. Many of us can’t generate a really thoughtful answer on the fly. So, exactly how is using social media for business gonna help?
Jones was brought into NASA in 2007 to develop the agency’s Enterprise 2.0 social media strategy and platform called ExplorNet.
“I’m Kevin Jones, and I’ve failed,” he said to the audience before giving his take on the top social media project missteps. Many involved political landmines and the fear of sharing knowledge.
Take, for example, his No. 1 reason for social media failures: Creating a culture of mistrust. A director was wary of letting his employees use NASA’s internal social media platform to ask and answer questions and share ideas. The director’s concerns: His employees would post something stupid, spell something wrong or take a shot at another group.
“If we don’t have a good trust culture, trying to do anything social is very difficult,” Jones said. One audience member said that a big blockade to creating a culture of trust is fear of retribution. Instead, people need to feel that they can make mistakes and not be punished.
In fact, this theory was at the heart of Jones’ presentation: Failure leads to learning for everyone, which leads to innovation, which leads to progress. “Flip that around. The less trust you have, you’re not going to have failures; then [there's] no learning, then no innovation, then no progression. We need to fail, and we need to be OK with it,” he said.
Here is a brief synopsis of Jones’ five other reasons a social media project could fail:
Relying too much on stats. Jones gathered data to back up his proposal for ExplorNet, but it wasn’t until his manager actually used the system that he got the point and became aware of how useful the tool could be: “I crammed in facts and figures, and it didn’t work. It wasn’t until he had his own experience and he had a good story to tell that he could really buy into it.” The takeaway: Make a business case and create interest in social media by relying heavily on sharing stories and experiences across the company.
Underestimating the political landscape. The CIO asked Jones to let him know if anything held up the social media project. When something did, he told the CIO, who in turn asked the managers he had put in charge about what was going on. The managers didn’t know what the CIO was talking about, and Jones got an earful. They told Jones not to talk to the CIO, or meet with him or email him without first going over what he was going to say to the CIO with them first.
“I said, ‘OK, do I go to the CIO and tell him they said this, or not? What do I do?’ I was so confused. I underestimated the political landscape, and I still do. Politics can seriously alter the outcome of what we [as social media project managers] are trying to do,” Jones said.
Treating the project as yours. Jones admits he fell into this trap in 2007 while working for another company. He quickly learned that it was “almost a potential disaster.” By making it his project, he realized, there would be less buy-in from others. He turned it around by seeking out feedback at every step from many people across the organization.
Treating the project as an IT project. NASA put the IT group in charge of the social media project, and in the end it became all about the tool and not about the people. “IT is definitely part of it, but you don’t want it to become an IT project. It needs to be a human project,” Jones said.
Audience members suggested these steps to keep a project from being identified with IT: Making sure business users were early adopters, involving users in the decision-making process, making sure the money for the project comes from outside of IT.
“If you ever want to get into a good debate, ask what department Enterprise 2.0 should live in,” Jones said. “IT was in control, and we were stuck on a timeline, which was not necessarily bad; but if they control it, you lose the perspective of the people.”
Going cheap. When the social media platform was rolled out, it crashed. IT added more memory and it crashed again. When he was asked by management what happened, Jones explained: “Nothing. You guys went cheap, using the minimum specs for everything, and had no idea how popular [the platform] was going to be . . . If you go cheap, you’re going to get cheap, whether with personnel, whether with your software or hardware. You don’t have to spend billions, but if you go cheap, you will get cheap as well.”
Let us know what you think about this post; email mailto:email@example.com Christina Torode, News Director.
Sooner or later every one of us (and much of what we know) is expendable in a technology environment that changes so rapidly. The latest endangered-species alert to come across my desk: the procurement office. The IT procurement strategy and best practices that many companies have perfected over the past decade are at an inflection point — a big one, according to Tom Young, a partner at global sourcing advisory firm TPI.
“Just as CIOs can get marginalized if they can’t meet users’ needs, procurement will be marginalized. Users will revolt and go around,” Young said.
Over the past five to 10 years, the market for IT services and products was what Young calls buyer-led: “Buyers knew what they wanted and went to market with their procurement teams. The order: Get me this at the best possible price, terms and conditions.”
Today, people don’t know what they want, Young asserts. “People know they want a solution, but there is so much stuff out there, they’re not sure what they should be asking for,” he said. “What we are encouraging clients to do is not to ask for it in the old way — ask for it in a new way.”
So, how would your IT procurement strategy change? Instead of telling the market what technology you’re looking for and at what price, Young suggests you explain what you want to accomplish from a business perspective “and let them come to you and solve your problem.” Rather than a buyer-led exchange, adopt a “seller-led” approach.
The old IT procurement strategy rested on apples-to-apples comparisons, but in a technology landscape with so many options, there might not be — or shouldn’t be — an apples-to-apples solution for your business problem. Young trots out a personal life analogy: planning a vacation on the West Coast. Rather than asking for the best price on a flight to California, in a seller-led market, you state the objective and see what comes back. It could be that the options include a West Coast vacation by way of Las Vegas or the Panama Canal — or you might realize that the vacation that will really rock your boat is camping in the Rockies. “You can’t normalize in the old way. You consider the solutions and make a decision,” he said.
The challenge for the IT procurement office — and all buy-side brokers, including his own firm, Young said — is their feeling they are being taken to the cleaners. “You have to reevaluate what is a good deal,” he said, arguing that this type of commerce requires a more sophisticated buyer: “You make a business decision, not take a reductionist procurement view of how to buy stuff.”
One more caution: Young claims that in seller-led commerce, buying decisions tend to get kicked upstairs, “making procurement less relevant by definition.” Rather than fighting the market trend, he suggests that IT brokers take the bull by the horns. Educate the business on this new IT procurement approach, and when you go to market, “be open and unconstrained in your requirements.”
When I covered Microsoft, I appreciated the grass-roots SharePoint efforts across businesses small and large. Unsatisfied with the capabilities of a given collaboration tool, knowledge workers said, “No, thanks,” and opted to use a tool that simplified and suited their needs.
Now that I speak mostly with IT executives for SearchCIO.com, I see why such grass-roots efforts are the bane of their existence. As the collaboration tool count rose, their ability to harness and share ideas across the company sank.
But it is the knowledge workers who again are taking the lead — at least, they have at Intuit. The company behind QuickBooks and TurboTax was using SharePoint and “countless” other idea collection tools when employees began coming to Roy Rosin, vice president of product management and innovation, to say, “this [collection of tools] is where ideas go to die and not evolve.”
So, a group of employees started their own grass-roots effort, and built a collaboration tool called Brainstorm — which now is sold as an Intuit product. Brainstorm does what the collection of now-retired idea-creation tools at Intuit could not: It connects ideas to people who can help shape and improve them, or to decision makers who can act on them. In one place.
Getting back to the SharePoint grass-roots effort: I received an email a while back from a project manager who had been put in charge of centralizing hundreds of SharePoint instances, and wanted to know if we had written anything about how to consolidate SharePoint deployments. I directed him to a story by our TechTarget sister site SearchWinIT.com about enterprise SharePoint deployments, but have not heard from him since. That makes me wonder whether he got caught up in some SharePoint centralization rebellion.
So, on the one hand, grass-roots IT can be a good thing: It can lead to innovation when employees take it on themselves to create new and useful tools for the company — and perhaps a new product for customers. On the other hand, rogue IT can take down an enterprise, as SearchCIO.com Senior News Writer Linda Tucci talked about in her recent blog post. At the very least, a standard collaboration tool can help you avoid idea dead zones.