I recently spoke with Robert Kaplan, author of the Balanced Scorecard, about how he would revise his framework given the economic meltdown in the last few years.
The addition he would make is a risk scorecard that is equally important as the business strategy scorecard, and he would advise companies to stress test their IT strategies.
This made me wonder how CIOs should be stress testing their IT strategies, and if they have people in place paying attention to market shifts that could impact the ability of IT to support changing business needs.
There are a lot of what-if scenarios that financial institutions failed to consider. For example, many banks didn’t have a what-if scenario in place for declining housing prices, or a flat-out housing market bust, and the impact that would have on their asset holdings, Kaplan said. It’s not that they didn’t see the signs that the housing market was heading south — they just didn’t have a plan in place to account for that scenario.
And the banks had plenty of models and software in place, but they didn’t have people dedicated to identifying what-if scenarios as the markets began to shift and customer needs changed.
“I don’t think it was a lack so much in software, but a lack of imagination. Maybe [the banks] didn’t want to think that the good times had a possibility of ending,” Kaplan said.
CIOs have seen their share of good times coming to a close, between this recession and the dot-com bubble bursting. But I don’t really hear much about CIOs stress testing IT strategies. What you mostly hear about is stress testing as it applies to security or network and application performance.
What if your outsourcing provider goes out of business? What if the business decides to discontinue a product line or introduce a new supply channel? What if you have to cut your staff in half — what happens then to your project queue? These are but a few what-if scenarios that could derail IT strategies.
Kaplan also shared his thoughts on how IT can help the business measure the value of IT investments and how CIOs can make IT more valuable to the business. A key way to elevate IT strategies with the business is to embed IT in a business product or service, akin to the FedEx tracking model, he said.
I’m back from a couple of days off in Los Angeles – my first trip to southern California, and a well-timed one as I got to witness some of the pre-Oscar hoopla for myself. Now, it’s back to the office to catch up on e-mails, blogs, Tweets and the latest tech news.
Last week, during the commercial breaks for “Lost,” some friends and I compared pros and cons of our Web browsers, including Google Chrome, Mozilla’s Firefox and Microsoft’s Internet Explorer. (I’m a Google Chrome convert, in case you’re wondering, though I’ve been told I should give Opera a try.) So I read, with interest, this New York Times article on Web browser wars, ie, how Microsoft might be shooting itself in the foot by providing a “choice screen” in Windows-equipped computers in Europe that displays links to dozens of Web browsers, including its top competitors.
And did you catch the first iPad ad during the Oscars last night? If you missed it (as I did), you can watch the iPad ad here. It’s funny how little actual typing is demonstrated in the ad, as I think one of the most appealing aspects of the iPad is the larger keyboard, which will presumably allow for more accurate typing than the iPhone screen does. Then again, I’m probably thinking like an enterprise user, not a consumer who can’t wait to flip through photos and watch movies on the larger screen.
While you’re at it, here are the latest stories and guides from SearchCIO.com:
Enterprise desktop virtualization may increase costs – Enterprise desktop virtualization can solve difficult security, compliance and other problems, but at a price. How much are you willing to pay?
Innovation strategies: How Chevron drives ingenuity — Should CIOs have innovation strategies? We talked with Chevron’s innovation specialist on how the energy giant discovers ingenuity and develops a corporate creative process.
IT outsourcing contracts FAQ: Establishing SLAs, flexibility and more — IT outsourcing contracts are only as strong as the negotiations surrounding them. In this FAQ, learn how to establish SLAs, set contract lengths and maintain flexibility.
Running IT in 2010: Better response times on a budget — Running an IT department in 2010 requires new processes that boost responsiveness, and vendor management and outsourcing practices that cut costs and keep IT budgets in check. Find out more in our new guide.
IT innovation, that fraught phrase, has come roaring back after maintaining a polite silence during the fiscal misery of 2008 and 2009.
Companies are starting to broadcast their efforts to foster technology innovation among the ranks. (You can read about radical, reapplied and incremental innovation strategies at Chevron Corp. in today’s Q & A with the oil company’s innovation specialist, Jack Anderson.) Meantime, companies that appear to be lacking in ingenuity — cue Microsoft — are publicly flogged on no less than the op-ed page of The New York Times for “never developing a true system for innovation,” record earnings be damned.
So, has the corporate risk appetite for trying new IT stuff changed?
“I don’t think it is so much the risk appetite as it is the nature of IT innovation that has changed,” said Mark McDonald, who covers CIO strategy and the business of IT at Gartner Inc. McDonald said that in his conversations with CIOs this year, he is hearing about three conditions that have the potential to “completely reposition IT in three years” — in other words, make it new.
- 1. The first shift is that business is looking to IT more to raise productivity than to cut costs in the enterprise.
“Obviously, to raise productivity I can’t just do the same with less. I have to do different things with the same resources, which you could argue opens the door for innovation,” McDonald said. Rather than building a better mousetrap to do the same with less, CIOs should be looking for ways to “disrupt the mouse cycle so they don’t ever have to catch mice again,” he said.
- 2. The second shift — more subtle, according to McDonald — is that the housecleaning CIOs did during the recession left their IT departments with fewer projects to maintain. Companies got rid of those pet projects that kept IT a servant to the business unit that squawked the loudest, he said.
“So, if CIOs think a bit proactively, they can actually start allocating a bit more resources to innovation than they have in the past,” McDonald said. (CIOs at hard-strapped companies may not want to put in a budget request for innovation just yet, however. Call it increasing productivity, instead, he suggests.)
- 3. Finally, Gartner argues that “lightweight technologies” that don’t require a big up-front capital investment, such as cloud computing, Software as a Service and Web 2.0, will continue to make IT departments more responsive — which is different from being agile (a topic for another blog post).
And there is some data to suggest that the urgency for innovation is only going to grow, according to Gartner. In its periodic survey of some 1,000 CIOs worldwide, about 30% listed “creative new products and services” among their top five problems to address in 2010. Asked to project for 2013, just under half of all CIOs told Gartner that innovation will be the No. 1 issue they have to address.
Would paying for corporate mobile data in a cloud-like format change your mobile phone management strategy? It’s something to consider — AT&T CEO Randall Stephenson thinks the wireless industry is moving toward a usage-based pricing model for mobile data.
“For the industry, we’ll progressively move towards more of what I call variable pricing, so the heavy-[use] consumers will pay more than the lower-[use] consumers,” Stephenson said at an analyst conference this week.
A lot of analysts have seen this coming for a while. More mobile customers are sharing information via text messages, e-mails and even Skype on their smartphones rather than by making traditional phone calls, driving down their need to purchase pricier phone plans. (I speak from experience: A combination of these factors — especially Skype — has allowed me to remain with AT&T’s 450-minute calling plan, where I otherwise would have needed to trade up.) This could be viewed as a reflection of the cloud computing model that’s gotten so much buzz in the IT sphere, where you pay for what you use, rather than paying a flat rate.
These changes could drive up costs for big-time corporate users, who — like most mobile users — not only download and edit documents for their work, but also are inclined to surf the Web on their work phone during idle time. And why not? It doesn’t cost anything extra. But should IT start paying for mobile data based on usage, corporate mobile phone management policies might have to change.
Would a data-usage-based payment approach for mobile devices change your organization’s mobile phone management strategy or your mobile procurement decisions? What sort of mobile phone policies would you put into place for corporate users who also want to surf the Web?
Kevin Vogl has overseen hundreds of desktop virtualization deployments as vice president of virtualization for systems integrator Champion Solutions Group Corp., out of Boca Raton, Fla.
And he’s seen his share of desktop virtualization design-stage mistakes, a common one being the creation of too many desktop images.
Eager to satisfy the diverse needs of the user base, some enterprise IT departments end up designing hundreds or even thousands of virtual desktop images — voiding a major benefit of desktop virtualization, simplified desktop management. And it typically starts with one group of users and snowballs.
“I see enterprises that take a small group of users and instead of giving that group one or two images, they end up with six [images] because a few people in the group use an application that the rest of the group doesn’t,” Vogl said.
Instead, applications that are unique to a few users should be delivered separately through application virtualization, he said.
User boot storms also are often brought up as a storage-allocation or network-capacity nightmare that can be avoided during the design stage. Shared memory, available these days in most virtualization products, allows the first image of Windows 7, for example, to be loaded only once. Shared memory technology voids the need to load memory for that image the next time a user boots up Windows 7, Vogl said.
Read more about preparing your infrastructure for desktop virtualization in a tip written by Tom Nolle, president of consulting firm CIMI Corp. Or email your own tips to email@example.com.
I am reporting live from TechTarget’s brand new office in Newton, Mass., just up the highway from our longtime Needham offices. I have Internet access and my phone has a dial tone – so far, so good!
What’s everybody else thinking about? It sounds like Google and Microsoft are ready to go to war over ant-trust issues, while a new study confirms what I think most of us already know: More Americans are getting their news from the Internet rather than the newspaper or radio, and social media news sites like Facebook and Twitter are accelerating info-sharing opportunities.
As you catch up on these and other stories, be sure to check out the latest SearchCIO.com stories:
A dozen danger signs that your outsourcing contract is on the rocks — Outsourcing contract renegotiations were up sharply last year. Most of that activity focused on cost cuts, and that spells trouble. Experts offer advice, in the first of two articles.
What to watch for during negotiations with outsourcing vendors – And here’s part two! Outsourcing contract renegotiations were up sharply last year. Most of that activity focused on cost cuts, and that spells trouble.
Storage virtualization helps rein in storage sprawl — Storage virtualization can help CIOs manage the ever-increasing storage requirements that server and desktop virtualization cause.
IT governance framework helps public agencies boost service, cut costs — An IT governance framework can help public agencies improve service levels and cut costs amid tight budgets. Read more about IT governance models in Massachusetts and California (my background in community journalism was a big help with this one!).
My background is in community journalism, so public sector challenges — strained municipal budgets and efforts to improve education, health care and other city services — are all too familiar to me. But rarely do I get to put that knowledge to work nowadays, as I did this week in my story on implementing an IT governance framework in the public sector.
In researching my piece, I reached out to the CIO of the commonwealth of Massachusetts and to the chief deputy director in the state’s Office of the CIO in California. I spoke with each of them about how they’ve worked with their state governors to structure IT so that it can best serve not only the governor and his staff, but state residents too.
That’s one of the differences between public sector challenges versus private sector challenges for CIOs. In the private sector, CIOs are focused mainly on finding and implementing solutions that will move the business’s vision forward while cutting costs and boosting revenues. In the public sector, money matters, of course — particularly with California, as we’ve all heard about the state’s budget crisis — but the bottom line is far more intangible and difficult to measure with traditional ROI formulas.
A successful IT deployment might mean a better database of roads in need of repair, so the local Department of Public Works can fix a pothole before a kid on a bike tumbles into it. Or it might mean planning for the purchase of new desktops so that high school students without Internet access at home can work at the school library. On a much larger scale, the government push to electronic health records underscores the importance of technology in meeting citizens’ everyday needs.
Do I sound like the overzealous press person for a city mayor right now? Maybe a bit (I’m all too familiar with them as well). But one of the many things I’ve been impressed to learn through my reporting at SearchCIO.com is that IT — supported by a dynamite IT governance framework — can enable innovation and success at any level, from the multibillion-dollar corporation to the 5,000-person town.
Consultant Tom Young has been mulling over the good, the bad and all the ugliness of outsourcing contracts for 13 years, eight of them with the IT advisory firm TPI, where he is managing director of the CIO services and infrastructure group. Before that, he was a financial director at AT&T Labs.
“The people side of [outsourcing] is a tough, tough business,” Young said. This was at the tail end of a long interview for a piece I was doing on the danger signs of outsourcing contracts. Young was a wealth of useful information on that subject, and now we were talking shop about cutting jobs.
Young has seen his share of hatchet jobs. “I’ve been through this many times,” he said. At one company, where he was dispatched to cut IT costs, the employees called him and his partner “the Bobs,” after the two consultants in the 1999 cult film “Office Space” who were brought in to fire employees. (He had the modesty not to compare himself with the George Clooney character in “Up in the Air.”)
But Young said he “sleeps at night” because he’s convinced that the corporate IT guy is better off working for the very outsourcing provider that displaced him. His argument is that the IT professional working in a corporate IT organization is judged by his ability, of course, but limited by the opportunities to move up the value chain. In Young’s view, those opportunities typically pale beside the potential for career advancement at the big provider firms.
And unlike a corporate environment where you might be locked into a salary, “the more valuable you are to the provider, the more you make,” Young said. And he knows, because he’s kept in touch with people who have made the transition. “Nobody likes to be told, you’re not working here anymore,” he said, “but most people, except the slackers, will be better off.”
This sounds plausible, but didn’t I read not that long ago about IBM shipping U.S. jobs off to India?
When the audience at VMworld 2008 was asked if anyone had virtualized hundreds of desktops, I saw only one person raise his hand.
This year, anecdotally, VMware said at its partner show that the majority of its customers are evaluating, testing or rolling out its virtual desktop infrastructure (VDI) product.
Last month, Citrix Systems said that 1,000 new customers bought its desktop virtualization technology in Q4 2009, with several customers buying more than 10,000 seats.
In addition, a very large food manufacturer plans to virtualize 10,000 desktops this year, according to a system integrator I spoke with who had interviewed a job applicant working on the project.
There aren’t many CIOs putting themselves out there as desktop virtualization pioneers on a large scale, however. There are risks involved, after all: The technology is not mature, the ROI is questionable, new strategies have to be developed to account for the capacity needs of a virtual infrastructure, and software companies are still trying to figure out how to support their applications in a virtual environment.
Yet companies are moving forward with desktop virtualization. Independent Bank Corp., out of Iona, Mich., for example, has 1,000 virtual desktops as part of its disaster recovery strategy.
Disaster recovery was not named as a top driver for desktop virtualization in an informal survey conducted by Forrester Research analyst Mark Bowker. What did top the list? Reduced capital expenses associated with traditional desktops, simplified application upgrades and deployments, and reduced operational expenses tied to supporting client devices.
Let us know what is moving desktop virtualization forward — or holding it back — at your company. Email firstname.lastname@example.org.
The New York Times caught my eye today with this piece on whether the Windows 7 phone will be better than the iPhone for the enterprise. The BlackBerry is still the undisputed leader and the iPhone isn’t doing too shabby, but as the article points out:
We really have not seen any bona fide use of mobile collaboration tools as of yet across any device. People are using smartphones to check messages and use applications. The applications they do use are services like Twitter.
Also in the Times, a primer on traveling smart – with your technology. Most of this you’ve probably heard before, but it never hurts to review.
Come back here and share your thoughts on these stories, as well as the most recent content from SearchCIO.com:
Desktop, server virtualization help CIO fix disaster recovery plans — A combination of desktop and server virtualization is helping one bank CIO sync up disaster recovery between the backup data center and production site.
Proving the value of a business continuity plan (before disaster hits) — It’s the bane of business continuity experts: proving the value of business continuity management — before the incident occurs. Are KRIs and KPIs the answer?
CIO and IT salaries: Do you know what you should be paid in 2010? — CIO and IT salaries and IT job security and optimism all took a hit in this economic recession. Review our latest IT salaries stories and find out if you’re being paid enough in 2010.