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.
The question to Warren Ritchie, CIO at the Volkswagen Group of America, was pretty standard: What was the biggest surprise he faced when he came into the IT world? Ritchie was speaking at the recent Forrester IT Forum in Las Vegas. He hemmed and hawed and let out a little sigh. “Not a surprise,” he said. “I had an inkling of it. I didn’t realize the magnitude of the issue.”
Ritchie, who was named Volkswagen’s CIO in 2008, was referring to the proliferation of rogue IT in business, and the general lack of understanding about its inherent risks. Volkswagen’s top executives understood what it took to run their business operations, of course, but he discovered they knew much less about IT operations than he had supposed. He was taken aback by “the general lack of appreciation of the complexity of running an IT environment and … what it takes to manage it.”
Ritchie has a doctorate in business strategy, as well as a longstanding interest in the relationship between organizational structures and business success. In fact, most of his 24-year career at Volkswagen has been spent on the business side. So, he certainly wasn’t up on stage to whine about rogue IT and his business peers’ lack of insight into enterprise IT. Rather, he was describing the coordinated changes IT and the business side were making to help the company compete more effectively in the era of the connected car. It’s no secret that Volkswagen has been slower to capitalize on the digital car than some of its competitors, notably Ford; and Ritchie — with the right IT team — has an opportunity to seize the moment and take the lead in this area.
It was therefore surprising to hear this business-savvy CIO talk about the need “to educate the business” on what it takes to run enterprise IT. Especially because all the talk at this conference — and at most other IT conferences for that matter — is about how CIOs must keep up with the business or be left in the dust by tech-savvy employees (aka rogue IT cowboys) who can self-provision the technology they need to do their jobs, thank you very much, pardner.
The biggest challenge in IT innovation is doing the change management part correctly, Ritchie said. His business partners needed to understand, for example, that they can indeed get a great “above-the-water-line strategy” for connecting with the connected cars of their customers by going around IT, but that the solution will “not leverage our internal managed services, and it is not going to leverage our internal app functionality.”
Ritchie let his business partners know that rogue IT solutions might get them off to a fast start, but “we’ll be slow, as a corporation, to take advantage of it.” Instead, he argues for IT and the business working together on the plumbing.
Maybe IT is the victim of its own success. CIOs and their departments provide all manner of IT solutions to business challenges, but over time these systems become a routine part of business operations — so much so that they begin to be disconnected from their original enterprise IT roots.
This view or opinion was evident in Forrester’s latest survey of some 2,000 business leaders on how businesses interact with technology. While 87% of the leaders told Forrester they believe the future of their organizations hinges on technology innovation, more than one-third (35%) said they don’t consider IT to be a source of technology innovation. Almost two-thirds (65%) said they have budgets to buy technology within their group, without involving IT. Of the so-called Generation Y employees (those 18 to 30 years old) surveyed by Forrester, 64% said they download unauthorized applications or websites at least once a week to get their jobs done; and at least 40% do the same every day.
We live in a golden age of rogue IT. Ordinary schmoes like me can download apps to do our work. Business departments rent software over the Internet to carry out critical business functions. Amateur developers build business applications in the cloud.
But without the scalable, secure and integrated features that only IT departments can manage, these quick fixes will fall as fast as they rise — or worse, sink the enterprise.
You’ve heard about it for years: IT and business alignment, or the acknowledgement that CIOs have to bridge the gap between IT and business goals. These days, I’m hearing that IT and business alignment is not enough. What enterprises really want from the CIO is IT-enabled business transformation.
“IT is pervasive in business today,” said executive recruiter Shawn Banerji, managing director at Russell Reynolds Associates, who is “flat out” trying to fill enterprise CIO positions across all industries.
One reason for the rush on CIOs is that enterprises increasingly are taking an approach to running the business that relies on data and analytics, and they view technology as a means to gathering the internal and external intelligence to better understand their customers and marketplace, Banerji said.
IT and business alignment isn’t coming up in recruiting conversations because IT, simply put, is so ingrained in the business. “It’s not about IT transformation, and it’s not about business-technology alignment,” Banerji said. “If you don’t view [IT] through the lens of where the business is going and those desired [business] outcomes — whether it be regulatory compliance, risk management, driving revenue profitability, entering new markets, introducing new products — you’re focusing on the wrong things.”
A recent Gartner survey also reflects a shift in CIO responsibilities to enterprise business goals. Among the 2,014 CIOs it polled, increasing enterprise growth was the No. 1 priority, followed by attracting and retaining new customers, and reducing enterprise costs. In 2010, the CIOs surveyed ranked improving business processes as their top priority, followed by reducing enterprise costs.
IT-enabled business transformation will shape the desired CIO skill sets, but it also is being driven by two new workforce realities: young employees with new work habits and new collaboration needs, and mobile and social media technologies becoming primary work tools. These two realities are part and parcel of a megatrend often referred to as the consumerization of IT.
We’d like to hear what you believe the role of the CIO is these days, and whether the conversation at your company is shifting from IT and business alignment to IT-enabled business transformation.
Let us know what you think about this blog post; email Christina Torode, News Director
Petabyte data warehouse? Check! Scalable to thousands of users? Check! Every business intelligence (BI) feature imaginable? Check! Agile BI?
“One thing we do not yet know how to do well is agility,” Boris Evelson told me at the recent Forrester IT Forum in Las Vegas.
Evelson, a principal analyst at the Cambridge, Mass.-based Forrester Research, has been covering BI for some 30 years. Over that time, scalable, powerful, stable BI has become a reality at companies with enough money and know-how. “I don’t want to say it is a commodity, but we know how to do that,” he said.
On the other hand, agile business intelligence — the ability to react faster to the ever-increasing speed of business change — remains “challenge No. 1,” Evelson said. It’s the subject of every conversation he has with clients these days, he told me, and it was the centerpiece of his talks at the conference.
Guidelines for an agile organizational structure
One of the reasons agile business intelligence remains elusive for most CIOs, Evelson said, is that BI software is different from almost any other enterprise application. With ERP or CRM, for example, once the requirements are defined and the software either procured or developed in-house, IT can expect a shelf life for that software of 12 to 36 months, with minor modifications. “With BI, if you do that, when you roll out the first iteration, it is already too late. The world changes way too fast,” he said.
Given that CIOs can’t do much about the pace of change, how do they get to agile business intelligence? In Evelson’s view, it’s a combination of using an agile software development methodology — which relies on prototyping rather than specifications — and on an agile organizational structure. Not that either is easy to do, especially the organizational-structure part. CIOs and their BI experts understand that silos are bad for BI, he said. But so is centralization, because “shared services are anything but agile.” What’s needed is a middle ground. Not middle as in wishy-washy, but as in a nuanced set of guidelines for handling BI. That requires a hard-nosed discussion about which apps need to be in a central area (mission-critical ones, for example) and which nice-to-have, ad hoc apps should stay where they are.
In-memory analytics, mobility
There are also plenty of technologies that can make a BI environment more agile. Forrester has a list of about 20, Evelson said, from cloud and mobility for BI infrastructure and delivery to inverted indexes and in-memory analytics, an approach he believes is suitable for as much as 90% of BI efforts.
“Think of in-memory as Excel on steroids. It has all the flexibility of Excel but also the power of traditional BI tools, like virtualization,” Evelson said. QlikTech International’s QlikView and Microsoft’s PowerPivot take an in-memory approach to BI.
Of course, the flexibility these tools provide also represents a “huge danger,” Evelson hastens to add. IT cannot control what users do in Excel, and the same is true for in-memory tools: One person’s analysis of customer profitability is not going to be the same as another’s. “You have to be smart. If it is a mission-critical app where nothing less than 100% accuracy is good enough, then in-memory analytics is not the right choice.”
Not surprisingly, at companies where there is more business ownership of BI, in-memory analytics are being adopted “left and right,” Evelson said. At IT-centric companies, not so much, he said.
The quick fix
Technologies help facilitate agile business intelligence, but for CIOs, finding the organizational structures and methodology is the tough nut to crack, in Evelson’s view. In the meantime? Users will gravitate toward instant gratification.
“Traditional BI is why spreadsheets are still the most ubiquitous, best BI tool out there. You have a question, and as long as you have spreadsheets, you can get your answers,” Evelson said.
Is agile business intelligence as hard as Evelson makes it sound? If you have blazed a path to agility and are willing to talk about it, I’d love to hear from you.
You couldn’t go far at the MIT Sloan CIO Symposium held recently in Cambridge, Mass., without hearing about the workforce of the future and how the CIO will help develop what some people are calling Workforce 2.0.
The old corporate regime, dating back to the days when generals were brought in to run companies post-World War II, is no longer working, but such top-down, command-and-control corporate cultures are still common.
What is needed from the C-suite down is a culture of transparency that encourages input from everyone in the company. That entails a lot of technology platforms, from social media and mobility, to real-time analytics and reports that “mere mortals” can actually decipher, according to Brian Halligan, co-founder and CEO of HubSpot Inc.
“The CIO will work with the CEO to fundamentally transform how we communicate, transform the culture, and … work to pull the workforce into the postmodern world,” Halligan said during a panel at the MIT event. “Everything needs to be rewritten, and the CIO will be the one to pull the CEO over that line and help develop the employee workforce of the future, by putting in place critical hardware and software skills that employees need now and five years from now.”
This disruption of the “Old World Order” is taking many shapes. At New York Life Retirement Plan Services, CIO Neal Ramasamy and CEO David Castellani plan to “destroy the desktop” and replace it with smartphones and dumb terminals.
In a conversation about the changing role of IT, Castellani said he envisions a more flexible, self-service computing environment for the workforce of the future — no surprise, considering his background as a co-founder of Mi8, a Software-as-a-Service email and messaging platform provider.
As far as proprietary applications? “Throw them out the windows,” Castellani said in a panel at the MIT event. “They don’t add business value; all they do is create more headaches. Focus on disruptive and aggressive ways to get rid of things like this.”
At Raytheon Co., Chief Information Security Officer Michael Daly and his team are building a private cloud so Raytheon employees and the company’s partners can collaborate in a dynamic environment. The end result will be a new approach to collaboration between and among Raytheon employees and partners to develop products for various government defense branches.
The message from some attendees and panelists at the MIT event was not only that corporate culture had to change to foster the workforce of the future, but also that IT systems and methodologies are the backbone of that culture and workforce. CIOs need to develop transparent, fluid communication environments, with teams that can be spun up and disbanded as needed; and they must be willing to let go of entrenched systems.