Monday, August 29, 2016

How can you expect returns if you are unwilling to invest ?

Business is hurting from the lack of the right tools and enablers, we need a good dose of IT to create efficiency. We acknowledge the need to transform and that is why we are talking; the team also agrees with the direction and the way forward. The benchmark results are well received and we would like to be in the top quartile of the industry. We should create the framework for evaluation of options to our specific requirements before we finalize on the best option and let’s work to an aggressive time line.

The CEO intuitively knew, to take performance to the next level, technology has to play an important role. Coming in of global competitors had started slowing growth and put pressure on profitability. Operating margins and other business metrics were lagging behind; survival was not at stake but to stay relevant to major customers, the business begged for technology. The absence of mature IT leadership posed additional challenges in execution of the strategy defined through a technology consulting engagement.

Early investments in technology solutions had not delivered to promise; early decisions were taken by the business based on promises made by vendors on business benefit. Business participation in the project waned quickly as technology formalized processes and exposed lacunae in operations. People on the ground resisted the change creating roadblocks – real and imaginary – towards deployment. The cycle repeated itself a couple of times leaving everyone frustrated and wondering if technology will ever deliver.

That was before global players invaded the market changing the way business was done, improving customer satisfaction and driving profitable growth became an urgency. Even with higher overheads and manpower cost, they delivered; in came Consultants offered a mirror to the business and helped them with a well-crafted plan and strategy; technology strategy followed. A new CEO added to the excitement with experience at competitors. Culmination of events necessitated that the company reach a decision rather quickly.

In a perceivably low margin business where the average margin was half of the best, it was evident that operational efficiency can gain significantly with the right IT interventions. Industry specific solutions and generic options competed on functionality and price with a wide variation in between. An all hands meeting agreed to the strategy and initial steps enthusiastically committing resources and time. With negligible investments thus far, in parallel the Management decided to approach the Board for budgetary approvals.

The Board members had diversified business interests with business operations of varied size; they were also parsimonious in their approach to investments especially technology which was seen as necessary but not essential. Thus while their companies had grown in size and reputation, they had not been able to realize the true potential while newer competitors had moved ahead. The minnow in the family thus started from a disadvantage when the CEO put his case across for investments in technology.

Discussions went back and forth on various technology options, merits of one over the other, cost of acquisition and support, TCO (Total Cost of Ownership) and business benefit; the figures appeared obscenely high even though they were competitive and in line with benchmark investments. For the Board reality was that other larger entities in their bouquet too had rarely invested similar amounts barring the initial stages for industry standard ERP solutions. They finally approved a significantly reduced number which turned the project into a non-starter.

The business case was clear in identifying the benefits – financial, customer satisfaction, growth, profitability – the ROI was less than a year; but past experience made the Board wary of committing to the investment. Ensuing “What if” had no answers beyond a point; there are no certainties, only probabilities of success. The sanctioned budget did not cover basic costs even if executed in phases to demonstrate potential success. Risk mitigation strategies can be created for most action plans, the keyword being “action”.

Except in cases of some of the new technologies and innovative digital models, most of the solutions – vertical or horizontal – have successfully established credibility to deliver business value with discipline of execution and leadership oversight and endorsement. Phases can reduce risk if logically broken down with continuity in the journey. Processes if left out of design consideration will fail to provide the end result. Analysis paralysis can miss opportunities that become clear only in the future, status quo breeds mediocrity.

Years have passed since the above happened; they are still at the same milestone the debate continues, they are yet to decide and the industry continues to grow rapidly !

Monday, August 22, 2016

Cloud based offerings encouraged Shadow IT, problems brought them back to Core IT

The launch of the new disruptive solution was well attended by CIOs and Business alike; some of the early adopter customers spoke highly of the solution, especially the business who claimed freedom from IT after integration was done with existing ERP solutions during implementation. Euphoric pronouncements elevated the solution to the next best thing since the spreadsheet came into their lives. The going was great until some of the audience started digging deeper into the success seeking clarifications.

Yes the solution was easy to deploy, it is Cloud based; we pay as we go based on number of users (aren’t most licenses like that ?) and there is also an app which I can download and use when I am traveling. There was some help taken from IT for integrating with the ERP and then with the CRM and yes they had to work on cleaning the data feed. No it is not complete freedom from IT as the system administration and user rights management is still done by the IT team; but I can build my own reports and workflows !

Opening up the conversation in contrast another customer mentioned that many of the users don’t actually use the mobile app which was seen as a prerequisite for selecting the solution and paying a premium. The self-service model had started with a bang, but was floundering with users now wanting IT to generate the information and insights for them to consume. The novelty factor had gone down with other work taking precedence over extracting information on demand or accessing it while on the move.

Who wants self-service was a discussion that suddenly filled the room much to the embarrassment of the organizers who attempted to deflect the discussion and bring it back to the merits of their solution and why the prospects present should seriously explore their brand of snake oil. A senior CIO refuted the claims that competition did not offer the same agility, flexibility or feature set which was grudgingly accepted with a counterclaim that some existing customers had been transitioned from competition.

Conventional IT a score of years back did pose challenges to agile deployment of solutions and at times delayed success with challenged projects. A decade back the same IT organizations began to push the business to actively participate in creating mobile engagement models, pushing the realms of self-service across functions. Initial candidates were travel and expense, followed by Employee and Manager Self-service driven by Human Resource solutions, though some even today continue parallel paper processes.

Closer to the beginning of the current decade, service providers proclaimed victory over IT by wooing the business with solutions that could be bought with a swipe of the credit card. You can get anything you want without asking your IT folks who normally say NO to everything; the promise led to a smattering of success and large number of headaches for IT who were being called out for tasks like opening up ports on the router, data dumps (instead of integration with on premise systems) and rescue when something did not work !

The last bastion was management reports, dashboards, and analytics moving to the Cloud with a promise of self service; what they got instead was garbage in-garbage out ! Some power users did manage to hold on for some time, they succumbed when on-demand analytics and complexity of data across sources needed them to go back to IT for real-time integration. The shift to collaborative design of solutions between IT and Business brought back the success which alluded companies in solo forays.

Today most solutions are pushing the limits on self-service with mobile first strategies (browsers are pass̩ now). Leave & Attendance, Travel & Expense, Approvals of all kinds are all mobile; the rest require a login from a larger screen Рtab or laptop or desktop. Thumbing around is the new way of working with no time limitations; what started with email pings on mobile is a flood of notifications vying for attention. Everything is urgent and requires hyper speed and attention stretching the already extended work day.

IT has embraced the self-service culture even though it puts higher demands on resources; data security requires locking down devices and monitoring, and diversity of devices increases complexity of deployment and maintenance. CIOs are also innovating with new technology disruptions pushing the envelope to automate everything in sight. On the flip side, busy executives are happily delegating some of the critical and important work downwards compromising the quality of decision making and possible outcomes.

I wonder when the breakpoint will be reached !