Monday, October 28, 2013
He tracks the movers and shakers in the industry and selectively distributes the messages to some of the CIOs in his inner circle. Some send him news while he gets most of it from his ferrets and in almost all cases it is “Breaking news”. So his messages and conversations are always engaging and we look forward to these intermittent connects. So when I received a text message from him the other day that a CIO of a renowned enterprise has been summarily fired for breach of business ethics, I was aghast !
In a majority of organizations the CIO has direct responsibility and power over the budget spends. For large enterprises the value is quite substantial which brings in all kinds of vendors and service providers flocking to get a slice of the proverbial pie. The sense of power being obvious, many CIOs relish the hold on vendors and use it to the benefit of the company by bringing in lower prices, volume discounts or benefits as a first mover and adopter of technology. Month, quarter, and year-end target pressures are known and used both ways.
Governance in some companies requires the selection of technology and negotiations to be separate and allowed to operate independent of each other. IT organizations thus evaluate the hardware, solutions or services on their merit and specialist IT buyers take part in the financial transaction. These work well when the IT buyer is well connected to the market, goes to the same IT conferences as the IT organization and understands the rationale behind the decisions such that s/he will not force the CIO to go with the lowest cost.
Another set of companies vest the responsibility with central purchase organizations that over a period of time do learn the ropes but may be disconnected from the dynamism of the industry. Here the discussion is largely about getting the lowest price with limited benchmark information. In many cases they end up leaving margin on the table or creating a win-lose situation by squeezing even after the last drop has fallen. There are anecdotes of some individuals in purchase organizations wanting undue favors.
Temptation comes in many ways even to IT teams and CIOs who wield power over the selection and final TCO of the solution. A freebie here and there, goodies and occasion based presents are normally not frowned upon; the bolder ones offer and demand high value stuff for aspirational personal consumption. The brazen build in their commissions into the deal which may be taken in cash or kind. Earlier perception was that this malaise did not exist in professional organizations; the myth was broken many decades back.
I came across the first instance of such an incident before the turn of the millennium and felt sad for the CIO considering he was just a few years from retirement. Over the years intermittently news continued to come; a couple of them were repeat offenders. Quite surprisingly they quickly resurfaced in new assignments even when they exited abruptly. I wondered how they continue to blatantly engage in such behaviors and despite getting caught have no fear. How did they get sound sleep ?
Discussing with a few friends the answer was quite obvious; in all the cases the news never got out. The company never acknowledging the fraud or financial irregularities; they kept it under wraps. The person thus was free to go and join another company to repeat the same which many did. The impacted company tightened controls, made governance process a lot more rigorous or shifted the responsibility out of IT. The new company was clueless on the integrity of the hire as reference checks are rarely done with past employers.
For victim companies their faith in the IT organization stands shaken, the news spreads in hushed tones and the saga continues. Greed has no limits nor any preferences; the integrity of the person comes out of his/her foundation of core values. There will be temptations thrown at you by incorrigible vendors; if you don’t take the bait, they may approach others in the company. Be aware and be open, raise these internally if they impact you. After all you are responsible for your integrity; the I in CIO stands for integrity always.
Monday, October 21, 2013
Big fish gobbling up the smaller ones has been a natural way of life. Recent times have seen many startup and small-medium technology companies being acquired by their larger brethren as the biggies try to fill voids in their enterprise solution offering or expand their footprint in corporate IT. Innovative ideas and niche solutions have found it easier to expand their market aligning with the big companies while in many cases it was also about survival or the investors cashing out too.
Meeting up with few large enterprise and conglomerate CIOs the discussion veered towards how they are staying ahead of the pressures to continuously adapt to changing paradigms and ensure that the IT architecture stays agile and in sync with business. Everyone had gone down the path of implementing the monolithic ERP, CRM, SCM, … solutions more than a decade back. With (in)organic and global growth the footprint continued to expand moving from single instance to multiple and then back to consolidated deployment.
Depending on the evolution of solutions and enterprise need many CIOs took a call to implement the complete suite of functionality from one vendor; then there were few who decided that they will not compromise on business requirements and find the best fit for what their business needs. Integration as required was addressed using Enterprise Application Integration (EAI) tools which had evolved to allow coexistence of legacy and new systems. The resultant technology diversity did pose challenges for IT which was deemed acceptable.
Staying with one solution provider did have advantages of better integration over the other though not by a huge margin as most large vendors had acquired other companies to fill in gaps in their offerings. Some of the best of breed now became offerings from the same large vendor with support prices almost always going north busting budgets and taking away fiscal benefit which the smaller vendors had offered. CIOs had little choice but to fight tooth and nail to get marginal benefit eventually accepting the new terms.
M&A in the IT solutions industry keeps changing the landscape. While the acquirer in most cases buys to add missing functionality or to get ahead of competitors, there have also been a few to kill a smaller or dominant player in a specific segment. There have been many such acquisitions over the last decade where the solution became irrelevant and by the time it revived itself, the market had changed. This is very evident in customer management and supply chain solutions in which earlier leaders failed to regain their market leading positions.
With new technology and disruptive paradigms driven by consumerization and services on demand being touted as nemesis of conventional IT organizations, solution providers are joining the bandwagon in an attempt to brick-wall their customers. We can offer you the option of cloud, stay with us; list prices are only for small customers, we will give you good ROI on either stack. CIO buying from startups soon discovers that the solution is now with a vendor who they may have rejected in their larger evaluation.
With integration becoming easier over the years across “commercial off the shelf” and cloud solutions, the new wave belongs to point solutions for specific tasks and functions. Almost all of them provide ready connectors to legacy ERP solutions thus eliminating the earlier pain of integration. Today CIOs can exercise a choice along with business to find the best fit for which there are alternatives as compared to the past. And the discussions between best of breed and integrated is no longer relevant.
Predictions about the demise of the larger solutions have been around for a while now; I do not believe that they are going away in a hurry, rather many have adapted to the new situation quite well. The momentum from new and micro solutions will keep everyone on their toes. Acquisitions will continue to change the landscape and the CIO will have to continuously adapt. Business will want agility and legacy will remain entrenched. The future will be uncertain, that is certain. All in a days’ job for the CIO !
Monday, October 14, 2013
I heard the buzz from a friend that this company was again looking for a CIO; my immediate response was “again, why”? It’s a large company with dominant market share in some segments and had implemented some good IT systems in the past. The then CIO had a hurried exit reasons for which were speculated by everyone. Then in the last 5 years they had as many CIOs. And they had hired a CIO less than a year back after a longish search who I thought had settled down into the role.
The company has had challenges with their IT systems which worked in a combination of the legacy and the new generation ERP type systems. Almost a decade back they hired a business CIO who helped them renew their systems and set the roadmap for them to gain benefit from IT. Under his leadership the various business units adapted the new technology solutions globally and set the path for the next wave. Suddenly the CIO exited leaving behind what appeared to be a dissatisfied business team.
They floated a need for a CIO with specific technology expertise to rescue their IT and hired such individuals who claimed to be experts in the said solutions. They came and did fix parts of what was deemed broken and when the situation did not improve for the company, they were replaced by others. Each time there was a solution sought based on what appeared to be internal diagnostic for the ailment and the cure was applied. Each time there was no significant change in the situation.
The last hire came with strong credentials having been on business and technology sides of the table and a clear and consistent record of deliverables. While he was no star, the companies he worked with had benefited from IT. He was a team player and a good deputy for some visible CIOs. Thus he was expected to be able to recoup the losses and forge ahead. He came onboard and reviewed the situation and did put in a governance process that satisfied the management of intended outcomes.
He held meetings with his team and the business leaders getting into the details of every initiative and action taken. The new governance expected every decision to be endorsed by him before any steps were taken. The team ran with it for a few months and then started getting restless when they had no freedom to do anything. The endless stream of meetings resulted in no outcomes or movement. Soon they started leaving, starting with the brightest and then the professionals who wanted action.
The exit of the teams’ star performer raised a few alarm bells with the management but they let the CIO determine how to run the function. Time passed away and management meetings started getting hot for the CIO who was expected to deliver. Soon other team members started departing out of frustration leaving behind a challenged operation even for business as usual. Vendors who had supported the new CIO for a while in anticipation of a change in mindset were equally disillusioned with status quo.
The CIO was worried and afraid to move ahead with his risk profile being quite low. He had thrived under the shadow of his earlier CIOs who took initiative while he and his team delivered the projects and executed them. Now with direct accountability he failed to get the team together and deliver what he could have. The confidence crisis was beginning to hurt him real bad and he was blind to this fact. That is when the company decided to find an alternative who would take them forward.
Inaction or the low risk profile created a situation from which the CIO found it difficult to extricate himself. He could have taken charge and changed the perceptions of the past short-term CIOs who had different problems in their stint. The IT team supported him, his individual demons and fears anchored him. For the CIO, the “I” does not stand for “inaction”; get started, you have everything to lose and everything to gain.
Monday, October 07, 2013
A newbie CIO was feeling very excited and thrilled to have made the grade and become a CIO, a dream he had cherished and worked towards for some time now. He had sought coaching from many senior CIOs and acted upon most of the advice received from various quarters. He was a good and consistent performer as IT manager having received accolades for emerging stars from various publications who track rising talent. I congratulated him on his new assignment along with others who celebrated his success.
Close to a year since the new assignment, he connected again wanting to meet; a request to which I agreed considering it had been some time since we had connected. I had not heard anything about his success or challenges from him or common industry friends. So we planned catch up over a meal in the near future. He mentioned the need to discuss a few issues which he was struggling with. That raised my curiosity and wondered how he had fared in his new assignment.
He had started well with understanding of business, industry, and company culture. He helped his team to a cohesive state dismantling silos and focusing on deliverables. Fixing IT came easily to him as he was responsible for the same portfolio earlier. He met functional leaders to understand their expectations from IT and how IT could contribute to their success. Based on this he created a plan which was accepted with a caveat that each project will require respective business owners to agree to and fund.
Undeterred, he started working on what he believed should be the first priority, customer service. The marketing head listened to the proposition and declined the project stating no need for disruption in an already growing market. My friend attempted to reason it out without success and in the face of push backs, approached the CEO for help only to be told to find a way to align the marketing team if the project were to succeed. After pushing for many weeks he realized that their low risk appetite would not get him what he wanted.
He targeted supply chain optimization which would reduce inventory levels and improve profitability. This time he created a financial model based on his understanding of the situation and presented to the functional head who dispassionately looked at the presentation and said he will revert back. Weeks became months with no revert despite gentle nudges and follow-up. So he confronted the issue and was asked to back off in no uncertain terms. He was disheartened and sought answers from his peers.
The organization was run by the close group of confidantes of the owner for many years. They had a monopolistic market and continued to grow at a fast track pace which was the envy of others in the same industry and outside. There was no growth or efficiency pressure with healthy margins and cash situation. As an unlisted company there was no market pressure to go beyond what they had achieved. The founder owner chairman benevolently asked the CIO to take it easy and not rush into things.
After his initial success, he was expecting a carte-blanche and what he got was a conditional approval where he had to sweat for each and every project and still remain challenged. He was struggling to break the shackles and do what he believed he was capable of. He had given up trying and was feeling a sense of purposelessness. He could have walked away to find a new opportunity but was worried lest the new one also leave him with no recourse. And the fact that as a first time CIO he had hardly spent any time and needed to show some results.
I did not have the context of the function heads, but I did know a bit about the CIO and his personality. Interrogation revealed that he was pushing his solution without listening or connecting; his enthusiasm blinded him from observing that he never connected with the business teams as he was so immersed in technology and solution design. Full of himself, in his eyes he had made the transition, in reality he was still some steps away. I left him with a mirror and hoped that he would start listening.
My offer for help stayed suspended in the air, I left feeling sad for him.
Tuesday, October 01, 2013
The hall was brimming with people, hardly a seat empty and many standing with their back to the wall. Safe capacity of the premises was pegged at 5000; if there were more, no one paid heed. The session was to be broadcast live and streaming media on screens across the venue. It was not a show on how to get rich quick, nor the speakers had a magic formula on how to lose weight, the speakers were global IT industry icons and leaders who draw crowds when they get on stage with their charisma and speeches.
The audience comprised of CEOs, CFOs, CIOs, in fact CXOs across countries, industries, global and local companies, big and small; many were accompanied by rising stars from their teams. It was a big event spread over 4 days that makes it one of the largest. Partners, system integrators and consulting companies invest their time and money annually to network with customers, solicit new ones and also hear about new offerings that typically get announced in such events. As a bonus, you get to see what competition is up to.
We got off to a great start with a few announcements and partnerships between past adversaries which was a significant milestone that helped the industry and customers. The star speaker did not show up, but most stayed put. The session however took a direction that had many in the audience surprised. The collective energy level suddenly dropped and to bring up the intellectual level in the room, many started playing with their smartphones. A few dozed off which was quite expected, but there were many who listened attentively and took notes.
The speakers had started explaining the step by step process on how to provision a virtual server on the cloud with various options; how to migrate from one platform to another, how to upgrade a few technology components, and how to benefit from the new offerings. The people awake and taking notes were not all IT folks, a large number were users with no technical background or past experience in technology. Were they trying to help their IT folks back home or had a sudden urge to learn cloud server management ?
I met some of them post the session and many more during the evening drinks seeking to unravel the mystery behind their new found love for an IT back office activity which is mostly outsourced. What motivated them to take active interest in something that many CIOs shy away from. I cannot say that the answer surprised me, what did was the extended outcome. The context determines how you view an event and its impact. What would happen when users start provisioning IT infrastructure and services themselves ?
Typical response, how can we allow them to do that ? It’s our job ! They do not know technology, they don’t understand the interdependencies and lack the skills; they should stick to what they know best and come to us when they need something. The IT Relationship Managers will understand the holistic big picture and then get the stuff done. There have been so many instances when they bought some solutions and came running to us when something broke or the project had challenges which were out of their league.
Alternate view, it is good that they are getting into self-service. With interfaces getting idiot proof and general awareness improving, there is no reason for them not to do it. Most of these tasks are easily done by anyone. It takes away a chore from us and gives us time to focus on what matters. Some of the IT team can now move to other value added activities. We are always there in case something was to fail or require deeper expertise or require escalation with the service provider or integration with other solutions.
Which view do you endorse ? The first believes that technology should remain within the IT domain and IT will service requests or provision based on project requirements. The alternate view encourages giving up and offers independence to everyone. The federated model with adequate controls does not necessarily free up many IT resources but creates a perception of self-reliance. Applicability of the model is dependent on enterprise IT maturity and partnership between business, IT and vendors.