From the Swan and Dolphin resort hotels in manicured (hot as blazes) Lake Buena Vista, Fla., a quick dispatch before the day’s fun begins. I am here at Gartner Symposium/ITxpo 2008. I actually arrived a day early this year to get a bead on what’s in store for CIOs in 2009.
Gartner did something a little different this year, offering three sessions called Jump Start 2009 — one on strategy and planning, another on financial management and the third on managing people. The sessions came with a little activity workbook, with, yes, exercises and self-assessment quizzes to do in class, or in this case, in session, and pointers on how to get a grip on what your business is really all about and how IT can help. I’m going to include details from the two sessions I attended under “Homework You Need to Finish Before 2009” but wanted to give you the gist here on what is shaping up as a big theme at the conference. And I’ll give you the preview of where IT budgets will be next year according to Gartner’s Mark McDonald (channeling Hardball’s Chris Matthews! … more on that later, too.) from the 2009 CIO Agenda session that closed out the day.
Results, results, results
Basically, in what sounded like a bit of a fresh twist on the old business and IT alignment meme, the big message we’ll hear this week is that CIOs have to focus on IT’s impact on business results — assessing, measuring, promoting what IT does for the business. So Dave Aron, in his Jump Start session on strategic planning, made a distinction between doing things right (a given) and doing the right things for the business (what CIOs should be focusing on). IT organizations that fall into the bottom 25% of all IT organizations are distinguished by bad delivery, so it is never good to screw up on the fundamentals. But Gartner research shows that top performers are not distinguished by good delivery but by good strategy. CIOs need to figure out what makes customers choose their company or their organization over the competition and then focus on how IT can push that strategy.
In the Jump Start session on financial management, Barbara Gomolski said CIOs have got to come up with a new template for presenting the IT budget that reveals what IT does for the business. One insight: try presenting your IT budget in business terms, as the CIO of a Florida county did this year. It’s tricky, judging by the (unreadable) flow chart used in the Florida example. And there is apparently a big danger of duplication of IT spend. But the idea is to map IT spend to business programs. Another suggestion? Start by showing what percentage of IT spending goes to running the business, growing the business and transforming the business, and map the IT projects to business initiatives in each of those categories.
Let’s play Hardball
How should you think about next year’s budget, given the financial ruin of the past few weeks? Try a ham and cheese sandwich, says McDonald. Back in July, when he started to think about IT in 2009, it was shaping up as a roast beef dinner, “not the fanciest of meals, but satisfying.
“Unfortunately, the rest of 2008 came and everyone is living on a diet,” he said.
Instead, 2009 is looking more like a ham and cheese sandwich — appealing or lousy, depending on the quality of the meat and cheese, but with room for little flourishes like hot mustard and a pickle on the side. The good news? It isn’t bread and water.
Now, for the money part. According to MacDonald, based on the Gartner polling so far, IT budgets could be anywhere from UP 3.3% next year, compared with 3.18% growth in 2008, to DOWN 2.5%. Most likely? Flat to up 2.3%.
Here’s the big hunk of salt: Gartner’s budget polling started Sept. 15 and won’t close out until mid-December, McDonald said, so anything could happen to that forecast. Another way to look at it is that, again — so far, anyway: For every one CIO who is cutting the IT budget, 2.8 CIOs say their budgets will go up next year
A postscript on just how much presidential politics is on the brain: I’ve heard McDonald talk many times. He’s an animated speaker. Entertaining. He likes to do impressions — the deep-throated, self-important, clueless CIO who doesn’t listen to Gartner and pays dearly is a favorite. He likes to poke fun at his girth. Maybe I’ve been watching too much cable news, but at yesterday’s session he sounded exactly, I mean exactly, like Hardball’s Chris Matthews — the cadence, a lot of “et cetra, et cetras,” the talking through a grin … I’ll post an audio clip and let you be the judge. Off to Day 1.
Happy Monday! We had another busy week at SearchCIO.com. Here are our latest stories:
- Web 2.0, Web 3.0 mashup to yield more personalized online experience – At the EmTech conference at MIT, the mashup of Web 2.0 and Web 3.0 takes center stage, with implicit ramifications for enterprise CIOs.
- Health care CIOs grapple with e-health record adoption – Adoption of the electronic health record and related technology tools for physicians could revolutionize health care. But health care CIOs need to overcome cultural obstacles.
- BPM Platform as a Service turns IT shops into SaaS providers – A business process management (BPM) project a minute? Pegasystems offers a twist on BPM, turning corporate IT shops into SaaS providers with a BPM Platform as a Service.
- How the SEC’s proposed IFRS will affect your accounting systems – As the SEC looks to replace Generally Accepted Accounting Principles with the International Financial Reporting Standards, CIOs should evaluate the effects on financial data and application architecture now.
As if you didn’t already know, your buddy with the middle initial F is back. And I do mean buddy. A memo out this morning from consultancy Gartner Inc. reminds that in economic crises, CIOs need to “build a powerful alliance” with their CFOs to improve business value.
That would seem to be a wise step in light of the dark news today that stocks plunged more than 600 points, and that according to the latest Wall Street Journal (WSJ) survey, a majority of economists believe gross domestic product (GDP — the total value of goods and services produced) will shrink in the third and fourth quarters, as well as the first quarter 2009. If true, the WSJ piece says this would mark the first time U.S. GDP has shrunk for three consecutive quarters in more than 50 years.
Ugh. Back to you and the Gartner memo.
It seems that despite years of being told you need to “demonstrate the business value of IT,” doing so has proved a Sisyphean labor for CIOs “because of misaligned mind-sets between the CIO and CFO,” writes Dave Aron, a Gartner VP and research director. The path to reconciliation?
“The CIO and CFO have to devote time to aligning the economic architecture and the enterprise architecture of the business. In order for CFOs and CIOs to ally closely, they must come to a shared view of value. The most powerful tools for achieving this alignment are portfolio management and enterprise architecture.”
In 2008, 23% of CIOs report to the CFO, while 38% report to the CEO, but the trend is listing toward CIO to CFO.
Ugh again. CIOs with their IT shops in order and looking to have a bigger impact on business value have a harder time busting loose when they report to the CFO, Aron said.
“There are two clear pieces of evidence for this. First, only 45 percent of CFO-reporting CIOs have leadership roles outside of IT, compared with 63 percent of CEO-reporting CIOs. Second, CFO-reporting CIOs spend one day less per month with the board and senior executives than do CEO-reporting CIOs.”
Not to despair.
“The message here is not that CFO-reporting CIOs are doomed to failure,” Aron said. “Rather, it is that these CIOs need a focused plan to break out of the box, which should include influencing the CFO to be more IT-savvy and to understand the CIO’s full capabilities as a contributor.”
SearchCIO.com senior news writer Linda Tucci wrote an excellent, layered story yesterday on electronic health records. “Privacy issues, interoperability issues, liability and physician reimbursement for all that extra virtual attention are potential deal breakers as the medical practice goes electronic,” she writes. “But most important, people have to understand why e-health is good for them.”
Electronic health records are certainly a hot topic in the presidential campaign. Those of you who watched Tuesday’s town hall-style debate between Democratic candidate Barack Obama and Republican candidate John McCain heard Obama say that he would cut health care insurance premiums by as much as $2,500 a year by investing in prevention and improving electronic health records.
There are several news sources taking aim at Obama’s assumptions. The Washington Post explains that his campaign is relying on a 2005 study by nonprofit think tank Rand Corp., which estimated that the nationwide adoption of paperless health records would result in $77 billion in savings.
But the same study estimates that the shift wouldn’t be completed until 2019, after Obama (should he be elected) would be out of office. Furthermore, the Congressional Budget Office (CBO) has put out its own paper, “Evidence on the costs and benefits of health information technology,” which argues that a 90% adoption rate over the next decade is unlikely, as moving to a fully computerized system of medical records would be prohibitively expensive for small and medium-sized medical practices. In his blog, CBO Director Peter Orszag wrote that the RAND study “suffers from significant flaws.”
So Obama’s claim is a reach, at best. As we head into these final weeks leading up to the election, just stick to the facts, please.
Do any of you have experience implementing electronic health records and, if so, what is your view of the timeline and obstacles to a reliable, secure and widespread system?
Yesterday on SearchCIO.com, we ran a story I wrote about the burgeoning mashup of Web 2.0 technologies into something that’s being called Web 3.0. It’s based on the assumption that the next generation of the Web will require less searching on the part of users as advancing Web 2.0 innovations such as blogs, wikis and social networking forums push desired information straight to them. Check out this definition of Web 3.0 that was overheard in the tech blogosphere.
A friend sent me this article from The New York Times yesterday on a Google e-commerce effort that would allow YouTube users to buy digital goods from Apple’s iTunes store or Amazon.com, which I think is a move toward this Web 3.0 concept.
Remember how exciting it was to search a movie time on the Internet, rather than via the newspaper or a dial-up phone number? Within the next decade, it’s likely you’ll be able do the same search and receive not only movie times but also the locations closest to you, what your friends are seeing, what others in your social network thought of the film and where everybody is going to have dinner afterwards.
One of the speakers at MIT’s EmTech conference referred to Web 3.0 as “frothy,” and compared the “rush of innovation” to that which characterized what I guess we’d now call Web 1.0. It still amazes me what we’re able to find on the Web … it really has changed both my everyday life and the way in which I complete my work.
I’ll give you an example. As I was typing this post, my cell phone rang, and the out-of-area caller ID was a number I didn’t recognize. Before the phone had even stopped ringing, I had already searched the phone number in Google and come across this website that tracks suspicious phone numbers. Within seconds, I could see that several other Boston-area individuals had received calls from this number in the past hour, so I’d like to think I wisely ignored it.
Are you as excited about Web 3.0 as I am? Are these concepts that you are looking to implement into your company’s Web strategy?
Happy Monday! For those who missed it, here’s what we produced on SearchCIO.com last week:
- Microsoft: Spatial computing the future — Microsoft’s Craig Mundie says the next era of computing will ride on multi-core processing and spatial computing, but it will be defined — as previous computing eras — by killer apps.
- Information lifecycle needs data realignment fast — Unstructured data and classification woes prevent companies from lining up business processes efficiently.
- Mergers and acquisitions can catapult CIOs to new career heights — CIOs in the middle of a corporate merger and acquisition should use the opportunity to build expertise in finance and other areas across the enterprise.
If you’re looking for another reason to pay attention to whether the $700 billion bailout bill gets passed by the House today, you might want to look at this call for action from the Information Technology Association of America (ITAA).
The bailout bill aimed at steadying the financial markets would also reinstate the Research and Development Tax Credit, which was allowed to lapse last December. According to the ITAA, the lapsed credit has already cost more than $14 billion in lost revenue and 10,000 jobs.
The ITAA has estimated R&D credit would have created and sustained a total of 141,753 jobs in 2008, not far from the number of jobs cut last month, according to the federal jobs report out today. The majority of the new R&D jobs projected for 2008 would have been required by law to be based in the United States.
Here’s ITAA’s president and CEO Phil Bond making the case:
“Congress’ inaction has left our most innovative companies in limbo, is undermining tens of thousands of R&D-related jobs, and placing billions of dollars at risk. How many more jobs must be threatened before Washington will act?” Bond said.
Three Boston-area men have been arraigned in connection with allegedly setting up kickbacks from a vendor in exchange for securing computer software and service contracts for Partners Healthcare.
According to the Massachusetts Attorney General’s Office, investigators discovered that between July 2003 and October 2007, Brian Colpak, owner of enterprise technology reseller Future Technologies, allegedly paid two men thousands of dollars for their help in obtaining contracts to provide IT systems and service for Partners and its entities, which include the Dana Farber Cancer Institute.
Before vendors can do business with Partners, they must complete a vendor application, and the winning bid is selected and must be approved by the department’s supervisor. The guidelines stipulate that the vendor cannot provide any members of Partners with rewards, gratuities or gifts.
Co-defendant John Dimille was a group leader in the production division of the information systems department at Partners, and had a great deal of control as to who was awarded the contract for the acquisition, installation and maintenance of these particular systems. As master engineer in Dimille’s division, co-defendent John Cleary played a major role in reviewing the contracts for these systems.
Authorities allege that Dimille and Cleary often would not solicit competing bids for contracts, or failed to engage other interested parties, before awarding Colpak the winning bid.
Colpak pleaded innocent in Suffolk Superior Court to four counts of commercial bribery and one count of conspiracy to commit commercial bribery. Dimille pleaded innocent to commercial bribery and conspiracy to commit commercial bribery. Cleary was charged with two counts of commercial bribery.
According to Future Technologies’ website, the company helped move Dana Farber to a large-scale data center based on two large Sun servers. The company claimed the cancer center saved $1 million a year.
Also, interesting to note: try Googling “John Dimille” and then click on the Future Technologies “Testimonials” page (for me, it’s the fifth result). Compare the cached version with the current version of the page — notice anybody missing?
Thanks to Universal Hub for the heads up.
My colleague Linda Tucci’s story this past week on how women in IT should brand themselves (and, by the way, most of the advice applies to our male readers, too) really struck a chord with me. As I embarked into the working world several years ago, a friend bought me a copy of Nice Girls Don’t Get the Corner Office, and I took many of its tips to heart – among them, that I probably shouldn’t decorate my cube like my living room, let people waste my time because I feel bad interrupting or apologize for having a strong opinion. I’ve had varying success sticking to these tenets over time, especially when some of them conflict with my natural tendencies.
But I’m a journalist, not a CIO, and I recognize that female CIOs trying to make headway in a business that has traditionally been dominated by male managers is probably a much tougher proposition than I’ve faced.
Atefeh Riazi, CIO at New York-based ad agency Ogilvy & Mather Worldwide Inc., touched on these points in her presentation at last week’s EmTech 2008 conference at MIT. She noted that she now says, “I believe,” rather than “I feel” after a boss admonished her for it. She doesn’t communicate when she’s upset because she is “perceived the wrong way.” And she’s learned not to apologize for being bold, wearing red lipstick or requesting more money or staff.
Already, we’ve received feedback from readers who saw some of their own experiences in Riazi’s talk. I’d love to get a dialogue going on that. If you’re a female IT manager, have you faced the sort of challenges in the workplace that Riazi discusses and, if so, what are your strategies for overcoming them?
Don’t miss the following stories we posted this past week on SearchCIO.com. Feel free to chime in on any of them below!
- Health care CIO tackles complex security, privacy mandates — Carole Cotter, CIO of Lifespan, a health system affiliated with Brown Medical School in Providence, R.I., talks to SearchCIO.com’s Linda Tucci about the complexity of delivering IT in a health care environment.
- IT infrastructure tracking software puts CIO in business — IT asset tracking software quickly inventories what’s on your network and promises “actionable” databases that will help cut costs and improve security.
- The politics of BPM: Sit IT, business at the table — It’s ultimate fighting, with IT vs. business over business process management. But as growing usage shows, there’s victory for all once projects streamline workflows and cut costs.
- CIOs must learn to brand themselves despite stereotypes — The opening keynote at MIT’s EmTech08 conference this week takes on the stereotypes that can derail an IT manager’s career.