The Digirati are coming

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 ?

How to select a vendor

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.