Monday, June 30, 2014
With the advent of the Internet two decades back euphoria around internet based business models exploded upon all of us. Predictions like “if you are not on the web, you will be dead or if you don’t have an internet strategy, you don’t have a business strategy” shook up everyone and pushed them towards limits of paranoia. Untenable valuations on shaky business models led to the dot bust that wiped out millions from budgets and zillions in market capitalization. Now digital is rivaling the din of the past and it has everyone scrambling again.
Some CIOs saw it coming earlier than others; creating awareness within their enterprises, they attempted to raise the bar. Initial reactions of cynicism and indifference led many CIOs to return to their comfort zones while the world around them flirted with the digital wave. As success stories started trickling in, it gave jitters to the disbelievers and created a flurry of disconnected activity. Every CXO wanted a digital project; everyone added the word “digital” in the headline; many ignored the CIO to avoid embarrassing discussions.
SMAC came the response from consultants, vendors and the IT folks alike; to get started on your digital journey, you need the skills, talent and a link back to the physical world that IT provides. Many CIOs reveled in the limelight of having been ahead of the game while the rest joined the confused ranks adding to the chaos with technology play. As individual pieces of Social, Mobility, Analytics and Cloud made way into various initiatives, the picture started to become clear that digital is not an option anymore; it is going to be a way of life.
Board room and management discussions on digital attempted to create correlations with revenue growth, customer service, enablement of suppliers and business partners, automation for improved process efficiency. Now the connections to enterprise goals are shifting the discussion from the likes of Big Data Analytics or Mobility to creating new business models or tapping new profit pools and outpacing competition. Everyone wants to be anointed with title of the CDO to be hailed as the hero when success arrives.
Competition from new age companies in some sectors like hospitality, retail, virtual collaboration, and travel and entertainment has disrupted conventional age old business models leading to a scramble to catch up. Industrial giants slowed by corporate inertia are waking up to new threat and opportunities. Willing to use their scale, muscle power and enormous resources, they potentially have the ability to devour the small fish while they establish new business models and reinvent their business, systems and leverage the digital wave.
Silos of digital initiatives will at best test a hypothesis, for enterprise wide impact, cohesive and integrated approach with CEO alignment is essential. Reality is, IT and business strategies are no longer separate, and they have become inseparable. With everything going online and “Internet of Things” creating an avalanche of hitherto unexplored data, enterprises are pushing the boundaries of analytical possibilities. Corporate and information boundaries are disappearing demanding democratization of analytics and decision making.
The oft repeated question to CIOs raises its head again on their position in this evolutionary revolution ? IT teams need to focus on not just scale but also the new application ecosystem that requires IT teams to discard legacy and pursuit of monolithic systems and shift focus on agile built for purpose apps. This paradigm shift requires preparation for non-stop business in the interconnected world. Customers are challenging the business of incremental innovation and forcing companies to listen and co-create new products and services.
Digital is here and how ! For most CIOs BYOD/T was a beginning, BYOW (Wearable) will stretch the already delicate ecosystem. Finicky customers expecting instant gratification threaten fragile brand reputations with 140 characters and less. Consumption patterns are shifting thereby forcing CIOs to rework corporate peer relationships. I believe that CIOs can reclaim lost ground by challenging existing digital alignments and build the foundation that will help the enterprise win in raging battle for revenue, profitability and the customer.
Your enterprise digital stance may be a challenge at the moment; culturally maybe the company does not enable open ideas or visible risk; it is up to you to decide whether you want to be a bystander while the world moves ahead or you want your destiny to be linked to the new world of digital enablement ? Are you ready ?
Monday, June 23, 2014
That was a big debate as debates go though not as big and passionate as the Business IT alignment or for that matter on the changing role of the CIO or the shortest trigger which is the CIO reporting to the CFO. Conflicting and alternative views were aired by those present; by the time the group broke up there was no consensus and everyone agreed to disagree in defining or classifying a “best practice”. The innocuous subject of discussion was how should the IT team and/or the CIO select a package or solutions vendor !
For business as usual application support, break-fix maintenance services, system or database administration, network management, data center and then the servers, storage or network devices, vendors are largely selected and managed by the IT team. In many cases the CIO is happy to let go and have his/her team manage these relationships, service levels and depending on the governance model, the negotiations. These all comprise operational IT which is essential to run the business and is only noticed when something breaks.
Enterprise projects or new initiatives represent a different set of dynamics; the heads of function(s) impacted their CXOs and their operating staff which will feel the change, most of them have a view on the right or the best or the cheapest solution. Industry benchmarks based on global industry and local market view and competitor information provide a starting point. Then there are favorites based on past experience or use in previous company that skews the selection process depending on the seniority of the person pushing it.
Most initiatives start with an internal discussion with internal stakeholders on solving a business problem or tapping an opportunity which culminate into documented requirements and outcomes. This is when business likes to handover the reigns to IT to find the most appropriate solution, negotiate, implement and deliver the outcomes. Technology CIOs love this though this hands-off approach “I know the business and you know the technology” has had its share of challenges with iterative development and delayed timelines.
The more formal process expects a Project Initiation Document or some kind of document prepared by Business and IT, which is then circulated and signed off to formally start the search. RFIs and RFPs follow resulting in colossal volumes of paper which no one reads; subjective and objective scoring of responses create a vendor shortlist who are invited to present to the group that sees diminishing participation over time. Final set of vendors are grilled and the winner is announced; such a process requires high level of maturity to sustain itself.
Research companies and third party assistance for independent assessment based on formally defined parameters was touted as the way to drive a decision transparently. This was accepted as the best and irrefutable methodology in the past though not too many had used it due to the cost of conducting such an exercise and the discovery of secret alliances such companies had created with vendors. Then a junior CIO murmured about a research company changing the parameters to put forward a vendor based on his boss’ choice and directive.
The view of many in the group was that users don’t know enough about the landscape and choices available; they should stick to defining the problem or articulating the opportunity; partake in the requirement gathering and participate in the testing, training and deployment. The counterview expected business collaboration through the project with equal ownership from concept to execution. Both camps spoke of their experiences – successes and challenges – which were in ample quantity to pick from.
As I see it there is no right or wrong way to select a vendor; in many cases the choices are not really choices with dominant vendor position for the process, function or industry. IT maturity, governance and credibility play a strong role in whether a unilateral or collaborative approach is best. Internal strife if any is best managed within; in either case, it is critical to not lose focus of the expected outcomes and project a unified view to potential vendors and partners. For CIOs to stay relevant as business partners they need to be adaptable.
Monday, June 16, 2014
Over the years economic cycles have turned all conventional wisdom upside down; the new normal that became reality before the turn of the decade squeezed all the unnecessary costs out of every line item in IT budgets. Do more with less being the mantra, CIOs scrutinized operations and optimized them ruthlessly. Half a decade later and half way through the year, one of the resurgent themes with many CIOs is conservation of funds; revenue growth has been under pressure for some time, bringing costs back into focus.
In an informal gathering of CIOs this was the predominant theme with everyone attempting to figure out where do they get additional savings from ! Hardware refresh had eliminated maintenance costs for a few years, but now maintenance and support contracts are up for discussion for all the critical and non-critical hardware. Users now expect desk side support for all types of incidents and problems; with rising manpower costs, hardware service vendors and maintenance providers are demanding inflation linked increases.
Last time around there was a flurry of activity around license management; are people really using their allotted licenses ? Thus software license costs were pruned down to the bare minimum required; number of users has gone up now and there is a need to buy additional licenses. Vendors pushed usage audits and attempted to enforce compliance to license agreements putting the CIO in a precarious situation; no one wanted to be non-compliant. Open source again became a discussion with limited success for some.
Back then again contracts for running legacy and custom applications, and maintaining business as usual were trimmed; wherever possible the activity moved to internal resources. Onsite activities were offshored to the service provider’s premises; back office functions relegated to low cost locations in the suburbs. Contracts were examined afresh and brought down to a bare minimum. A few also took the tough step of letting some of their team mates go and reallocated portfolios stretching the remaining team. FUD ruled for a while.
So where do we look for new savings opportunities ? How much more can we do with less lamented the group ? The group had no bright ideas, nor any best practices to share. One of the CIOs present gathered sympathy for a 25% cut imposed on her capital investments as well as operating expenses and still expected to run projects as well as keep the lights on with no adverse business impact. Someone suggested that she conduct an open dialogue with her boss and ask him for ideas on how to implement the cut.
Systematically the group explored some of the options that vendors pitch in as cost savings measures. Is the Cloud with pay-per-use models a viable option ? Variability has been one of the promises from the cloud; but then the proponents of this model cautioned against if cost savings was the primary objective. If you moved existing loads to the Cloud, what would you do with the existing hardware ? It would anyway make sense only if there was a need to increase compute capacity or hardware refresh was imminent.
Can and should total or strategic outsourcing be explored ? That is when most vendors promise 20+ percent savings and projections are locked down for a number of years ! Transfer the accountability and let the vendor figure out how. A couple of CIOs who had been there done that cautioned against it. They have had a harrowing time making some of the numbers in the spreadsheets stick in real life. Legal teams poured over contracts to find a way to make it stick; the CIOs ended up in getting the stick instead.
Most organizations which are driven by ratios and numbers resort to cost cutting rather than cost management in their attempt to keep the street happy. They want to look better than their competitors and keep the stock price high sometimes even at the price of damaging the DNA of the company. Consultants get hired to find hidden costs while they get paid visible money with diminishing returns. I believe that enterprises driven by customers don’t resort to cycles of cost containment and thrive in adversity.
A lone voice in the room asked, “Can we look at increasing revenue instead ?”
Monday, June 09, 2014
Should I take up the new offer I have ? It’s offering over 50% rise and a larger responsibility. The industry is the same and the company which is a recent entrant is growing in leaps and bounds. I have been in my current company and role for over 4 years now and it has a great work-life balance. So moving to the new assignment would entail moving to a new city, unknown people, unknown culture, starting afresh building credibility and gaining acceptance from the team as well as peers which would take a year or so.
The CIO was past his mid-life crisis and leaning towards his sunset years with about a decade of active working life remaining based on generally accepted and regulatory definition of retirement age. He was doing well in his current company having spent a decent amount of time managing process, systems and expectations. He had been successful though not overtly so, but consistent in his ability to deliver to promise and keep progressing. He was been headhunted for the first time and was excited by the prospects of the new role.
He was also heavily into work-life balance and an example for some of us on keeping the balance tilted towards life more often than work. While his demeanor suggested a laid back person, he was effective in managing tasks, projects, budgets, suppliers and customers with ease. Financially stable and well off, he was not driven by monetary incentives nor materialistically inclined. Thus I was a little taken aback with his meanderings considering that he was of a sure mind and rarely hesitated or consulted anyone in such matters.
Challenging him to listen to his heart rather than the mind if they were in conflict, I asked him what caused the dilemma ? Was he unsure of the new organizations ability to succeed in the chosen industry or was it the comfort zone that caused the see-saw decision ? It’s not like that he had spent a lifetime in the current company; why was he feeling discomfort by the thought of change ? Continuous prodding finally brought out some interesting tenets for his inability to take a decision and it was not an easy one to solve.
Growth in current company would come over time; it was a profitable and stable entity where he had the freedom to operate. He knew the system and how it works; he had a good team and they delivered consistently. His family was well settled in the current city; wife working, kid entering last year before college, other kid getting to his first job in another city. He had just bought a house with a mortgage and done it up with a lot of care. Workplace being a stone’s throw, he enjoyed life to the fullest even after putting in the required work hours.
The new entity had expanded fast and planned high growth in an industry which had a lot of promise but not too many made money. There was a lot to do for the next couple of years and he would hopefully grow with the company. The new company had a frugal mindset and culture vis-à-vis his current one. Work-life balance would become a memory with pressures in the company, a new entrant in an industry requiring deep pockets. Success would come but require far more effort; comfort versus challenge !
Would you sacrifice work-life balance and family over career ? How do you prioritize and determine where you should focus ? At which life stage should life takes precedence over career or career over life ? When do you reach a point that you get off the treadmill ? Many have given up careers to pursue their hearts desire or become entrepreneurs on reaching financial goals; some remain hesitant with fear of the unknown. It is easy to stay in the comfort zone until life gives you a push to get out and start afresh.
I believe there is no right or wrong, no good or bad decision. The inflection point varied by individual; open a restaurant, write a book, teach at B-schools or colleges, the calling has varied for some of my friends. My recommendation to my friend was to take a few days off and introspect for the future and find what keeps him going every day. If you can dream it, you can also make it possible. I for one have been conscious of comfort zones as they give me discomfort. What would be your advice or what would you do ?
Monday, June 02, 2014
The flood of resumes was overwhelming; I was surprised by the numbers wondering if there was a crisis out there with people wanting to leave. Maybe it was the company and its reputation that created a pull of sorts that the applications found exciting. Or it could be that the economic situation has resulted in uncertainty in their current positions and thus they sought a comparably stable environment. Anyway the problem of plenty was a good problem to solve which gave us the option to choose from the best and the brightest.
Sifting through the lot it was difficult to shortlist probable candidates; everyone appeared to have been there done that, a menu card of technologies that they professed to know and work experience that would make you want to hire them right away bypassing the process. Discounting spelling errors in favor of experience, the final list of interviewees was drawn up. The list was not as short as expected, but then we did not want to miss out on deserving candidates just because they had turned off spell-check or had bad grammatical mistakes.
Not having conducted so many interviews at a go, they had to be spread over 3 days with almost 20 candidates. In tow a HR colleague and the functional lead who wanted to evaluate technical skills, armed with a formal assessment sheet to capture impressions, we started the process; questions were divided to suit our respective functions. HR would break the proverbial ice, settle down the person, my teammate tossed difficult technical questions and I looked at attitude and confidence. The days passed by in a whirl and we had a winner !
We have been taught to keep our demeanor friendly and suppress emotions while conducting job interviews; it was difficult to hold on to sanity and control laughter in few occasions. The journey to the end was excruciatingly painful and frustrating; the candidate with the perfect resume turned out to be a disaster. She had put in all the right keywords, technologies and projects; she had been in projects with the technologies in a role that barely gave her basic understanding. Scratching below the surface revealed no substance.
Another one believed that he scored 10/10 on every skill mentioned in his resume and that he had reached the pinnacle of learning. He was stumped on most of the questions which led to his quick exit. One candidate kept repeating that the information about the projects he had worked on was classified and that he was under NDA and thus could not talk. One person narrated the long story of her life for about 30 minutes immune to any attempts at interruption. We thanked her for the enlightening moments and heaved a sigh !
The quality of most discussions made us wonder about current state of knowledge and expertise; or is it that the unwanted and incapable having realized their shaky existence decided to seek newer pastures. Are these the types who find themselves on the left side of the traditional HR performance bell curve ? My HR colleague mentioned something about finding the right talent through references and not an open process. Junior and mid-level hiring filtering done by executive search companies and headhunters is typically based on keywords.
The selected candidate did not have all the skills required for the position; he was short on qualifications though the experience was relevant. Knowledge on technology was above average with understanding of his own limitations. He demonstrated how he stayed abreast of current trends and could articulate how he worked in teams. His enthusiasm and candid responses had all of us liking him; his can do attitude clinched it in his favor. We exchanged notes and everyone was in agreement; so we made him an offer.
We were pleased with our find and wanted him to join us expeditiously. He accepted our offer and promised to revert on when he could be part of our company. Weeks passed and HR kept following up on his joining date. One day I receive an email: “I thank you for your offer and opportunity to work for your company; I have carefully considered it and after much deliberation and discussion, I have decided to stay back with my current employer. I wish you all the best and hope our paths will cross again in the future”.
Life is tough !