Recently, an international event management company approached me to conduct a workshop on Business-IT Alignment. It made me wonder whether CIOs are really interested in one more presentation on this subject unless these CIOs lived off another planet (or have just been born), and needed to be seasoned with a dose of the much discussed subject. I think, maybe apart from the subject of CIO reporting into the CFO/CEO as well as what next for the CIO (role of the CIO), the most oft discussed topic in the IT industry is definitely IT’s alignment to business.
No event or seminar is ever complete without a reference to the wonderful BITA. Most presentations assume that BITA is indeed an issue for CIOs, and the CIO requires help. In fact, many vendors and consultants project their products or solutions as the key ingredients towards achieving BITA. Now I can’t claim to be an expert on this hallowed subject, but have had my share of contributing to the discussion based on some experience and observation. Based on these, I have a hypothesis on what enables BITA, and where it is a challenge.
Let me first list out the standard assumptions (or ‘Conditions Apply’). A CIO understands the business, and is able to conduct a dialogue where he is understood across the organizational layers. He has good verbal as well as written communication skills, and is able to use these in internal and external meetings. He has the confidence required to debate a business or IT issue without getting so frustrated that others do not understand him. He has a reasonable track record of creating value from projects undertaken which meet (or exceed) expectations most of the time. He has a good network of vendors and partners who provide the CIO with technology advisory based on the domain. Finally, he is a good leader of people, as well as able to motivate and lead large cross-functional teams.
As I wrote the above paragraph, I wondered—if a CIO has all the skills listed above, can he still be challenged with BITA? Many might say yes, that is, if he did not report to the CEO. So let’s assume that a CIO does not report to the CFO. Will all these factors contribute to BITA? My analysis indicates a high probability of success, but I will still give it an even chance, i.e. 5/10 for the combination to lead to BITA. Have we not considered all factors? One might argue that if the CEO is technology friendly, the probability would go up to 6/10. So what can nudge the figure higher to 8/10 or 9/10 ?
My ‘Oh I See’ moment happened in a chance conversation with a CFO. When is an enterprise willing to invest in new initiatives? When are budgets relatively easier to get? When do justifications not get into the realm of fiction? The simple answer is that when a company is profitable. Not just simple profitable, but with good cash flow and available money. If the company is meeting analyst or shareholder expectations, is growing faster than the industry, and has higher margins than competitors, it’s not possible to deny BITA. So every opportunity gets the budget, as well as every employee is charged and amenable to change, as they all understand the dimensions contributing to success.
Unprofitable or marginally profitable companies always struggle to cut costs, reduce (or defer) new projects, and challenge every investment, looking for the lowest cost option. All these challenge the CIO, and keep the focus on business as usual rather than innovation. There will be exceptions to this too, but then they will be the 1/10 or 2/10 driven by the force of the leader or CIO, as compared to the higher propensity of success for a profitable company.
CIOs in business roles or add-on responsibilities are likely to have higher appreciation of the hypothesis. The new normal post 2009’s slowdown may have contributed to a shift in a few cases—in profitable as well as profit-challenged companies—based on the role played by the CIO during difficult times. If the CIO was a key player, the alignment pendulum would have shifted right, if he was not, then it may have shifted left.
Monday, May 31, 2010
Monday, May 24, 2010
The power of CRM to alienate a customer
Last week, I was subjected to five calls in a day from an insurance company wanting to sell me a new improved high return insurance cover. The first time round, I listened to the caller, and politely advised her that I already subscribed to the said policy. I interrupted half way through the second time and told the lady I already had the policy. The third caller was not fortunate enough, and as soon as he announced the company name, I told him I had no interest in their products. The fourth could not get beyond the first line, and had to answer questions on how the CRM worked. And the last cut the phone when I advised him that I had taken a policy a few weeks back, and now wanted to cancel it. These were different sales agents armed with a database trying to “sell” insurance.
How many times do we wish that CRM solutions work the way they are sold to companies by the vendors? Why can’t the stupid CRM tell sales and marketing teams that the customer has already been contacted five times in the last week, and that the last interaction resulted in the customer calling the caller unsavory names for repeatedly calling him? This is despite the customer saying that he is not interested in one more credit card, insurance policy, new personal loans, or whatever the company offers. The problem compounds itself when the harried customer is already a receiver of the service.
Every customer facing enterprise seeks to implement a CRM solution to service the customer effectively, as well as to understand the customer requirements and behavior for tailoring the product or service based on customer preferences. All such initiatives start with big expectations; the processes are sometimes complex and time consuming. In a few cases, these initiatives are not aligned to reality at the front office, thereby rendering usage ineffective.
When data entry ends up being outsourced, the quality of customer information suffers. So when it’s not possible to find the customer quickly, adding one more record is an easy solution. Buy databases, simply upload, and in no time, rest assured that you will figure a dozen times. Attempts to scrub and de-duplicate may bring some efficiency, but as the number of records increase exponentially, the effort starts losing its efficacy.
Successfully operational CRM solutions have little relevance to the technology deployed, but are built on the foundation of strong processes, buy-in from every function which will interact with the customer, technology sizing that can address peaks in capacity, and a simple design that is effectively implemented and executed across the enterprise. The IT organization diligently reviews data quality with the marketing and sales organizations to ensure uniqueness of the customer records. Data quality is never an accident; it requires significant planning and discipline of execution. Despite the best efforts of men and women, we still end up with some challenges when integrating with external data. These are as yet being addressed through innovative strategies, but are not fool-proof. Maybe the unique identification number (UID) initiative will help solve this issue, but that is a long way off for now.
Coming back to my “friendly” insurance company, I called my insurance advisor with the promise of canceling all policies, should I get one more call from his company or their sales agents. He profusely apologized and promised to fix the issue. I am hopeful until the next bought database gets uploaded or a new agency is appointed or the pressure to acquire customers based on month end, quarter end, or yearend pressure begins, and the calling starts again. Sometimes I pity them the barrage they face every day for no fault of theirs, but then companies don’t appear to care beyond a point, as the universe of customers is still probably 1-2% of the addressable market. So who cares!
How many times do we wish that CRM solutions work the way they are sold to companies by the vendors? Why can’t the stupid CRM tell sales and marketing teams that the customer has already been contacted five times in the last week, and that the last interaction resulted in the customer calling the caller unsavory names for repeatedly calling him? This is despite the customer saying that he is not interested in one more credit card, insurance policy, new personal loans, or whatever the company offers. The problem compounds itself when the harried customer is already a receiver of the service.
Every customer facing enterprise seeks to implement a CRM solution to service the customer effectively, as well as to understand the customer requirements and behavior for tailoring the product or service based on customer preferences. All such initiatives start with big expectations; the processes are sometimes complex and time consuming. In a few cases, these initiatives are not aligned to reality at the front office, thereby rendering usage ineffective.
When data entry ends up being outsourced, the quality of customer information suffers. So when it’s not possible to find the customer quickly, adding one more record is an easy solution. Buy databases, simply upload, and in no time, rest assured that you will figure a dozen times. Attempts to scrub and de-duplicate may bring some efficiency, but as the number of records increase exponentially, the effort starts losing its efficacy.
Successfully operational CRM solutions have little relevance to the technology deployed, but are built on the foundation of strong processes, buy-in from every function which will interact with the customer, technology sizing that can address peaks in capacity, and a simple design that is effectively implemented and executed across the enterprise. The IT organization diligently reviews data quality with the marketing and sales organizations to ensure uniqueness of the customer records. Data quality is never an accident; it requires significant planning and discipline of execution. Despite the best efforts of men and women, we still end up with some challenges when integrating with external data. These are as yet being addressed through innovative strategies, but are not fool-proof. Maybe the unique identification number (UID) initiative will help solve this issue, but that is a long way off for now.
Coming back to my “friendly” insurance company, I called my insurance advisor with the promise of canceling all policies, should I get one more call from his company or their sales agents. He profusely apologized and promised to fix the issue. I am hopeful until the next bought database gets uploaded or a new agency is appointed or the pressure to acquire customers based on month end, quarter end, or yearend pressure begins, and the calling starts again. Sometimes I pity them the barrage they face every day for no fault of theirs, but then companies don’t appear to care beyond a point, as the universe of customers is still probably 1-2% of the addressable market. So who cares!
Monday, May 17, 2010
How to become a CIO - Part 2
Every time I meet a set of people aspiring to become a CIO, they are interested in the 101 of how to become a CIO. So a long time back, I gave my viewpoint (this link takes you to the old post) on how can one become a CIO. That was driven out of a discussion with aspirants who wanted a checklist. In recent times, the discussion has come back with renewed vigor, which includes various themes including succession planning, on which I commented last month. However, the moot point is about how one can indeed become a CIO in the new normal—when everyone is now discussing about whether the CIO role as it exists today will disappear in the next five years.
Almost all the CIOs I know understand business (process, results, metrics, and influencers) as well as other CXOs. They are no longer enamored by technology, but are always asking the business benefit and ROI questions to vendors as well as partners. Most of them are able to hold a conversation on broad business subjects with management, and challenge the CEOs on why they should be engaging the Board. Their soft skills are well honed, and the CIOs are taking on additional responsibilities within their enterprises. A few CIOs (based on their interests) are seeking lateral movement or even nudging the CEO chair.
Now, that’s indeed a reflection of how the CIO’s role has evolved, and continues to break new barriers. So what should aspirant CIOs be working on? Should they adopt a role model from amongst CIOs, or look up checklists that many paper and web publications offer? If only transformation to a CXO role was as easy as ticking off an objective question list!
There are no training programs for someone to become a CIO, nor any specific qualifications that are inherent to a CIO. Like any CXO, the CIO is an integral part of the decision makers who influence the business’ direction. However, technology enablement of the business (process, results and metrics) is one of the key contributions expected from the CIO. To successfully execute this, I reiterate that the CIO’s focus is on par with others; evidently, the key ingredient for an aspiring CIO is the understanding that the business of IT is business, and not technology. This is the key tenet on which the CIO role is evolving, and success will largely depend on the (aspirant) CIO’s ability to further the business with, or without help from technology. The remaining traits can be developed with training, coaching and/or mentoring. Look around, and you will observe that the successful CIOs are indeed business leaders—not technologists.
So no 101s on how to become a CIO, or a checklist that you can use; did I not meet your expectations? I would rather do that, than give anyone a false sense of hope!
Almost all the CIOs I know understand business (process, results, metrics, and influencers) as well as other CXOs. They are no longer enamored by technology, but are always asking the business benefit and ROI questions to vendors as well as partners. Most of them are able to hold a conversation on broad business subjects with management, and challenge the CEOs on why they should be engaging the Board. Their soft skills are well honed, and the CIOs are taking on additional responsibilities within their enterprises. A few CIOs (based on their interests) are seeking lateral movement or even nudging the CEO chair.
Now, that’s indeed a reflection of how the CIO’s role has evolved, and continues to break new barriers. So what should aspirant CIOs be working on? Should they adopt a role model from amongst CIOs, or look up checklists that many paper and web publications offer? If only transformation to a CXO role was as easy as ticking off an objective question list!
There are no training programs for someone to become a CIO, nor any specific qualifications that are inherent to a CIO. Like any CXO, the CIO is an integral part of the decision makers who influence the business’ direction. However, technology enablement of the business (process, results and metrics) is one of the key contributions expected from the CIO. To successfully execute this, I reiterate that the CIO’s focus is on par with others; evidently, the key ingredient for an aspiring CIO is the understanding that the business of IT is business, and not technology. This is the key tenet on which the CIO role is evolving, and success will largely depend on the (aspirant) CIO’s ability to further the business with, or without help from technology. The remaining traits can be developed with training, coaching and/or mentoring. Look around, and you will observe that the successful CIOs are indeed business leaders—not technologists.
So no 101s on how to become a CIO, or a checklist that you can use; did I not meet your expectations? I would rather do that, than give anyone a false sense of hope!
Monday, May 10, 2010
Food for thought or snack gone bad: Data centers drive business agility
In the recent past, I attended a few seminars conducted by large IT solution providers with a tantalizing subject line, “How to achieve business agility” (or something on similar lines). The invite’s text appeared to offer a ready-to-eat snack with all the good tidings of fruits, fresh vegetables, salads, and everything that’s healthy. Since it sounded like the formula for fitness in a week so, CIOs obviously turned up in large numbers—only to realize the old adage that if it’s too good to be true, it probably is.
Almost all the organizers wanted to focus on how to improve data center efficiency, utilization, management and agility in provisioning new servers. According to all of them (without exception), the delay in provisioning a new server can lead to compromises in business agility, thereby adversely impacting the outcomes. Each vendor’s formula for success revolved around their solution for virtualization and (or) management tools, which allow quicker provisioning of virtual machines—allowing the IT organization to bring up a new application within hours, as compared to the days when physical servers were in vogue.
I find this unpalatable, as it presupposes that everyone in the IT organization is only focusing on the infrastructure, with no communication with the team members who create or buy applications. Or that we have a scenario where the applications team does not tell the infrastructure team until the last minute that they require some compute and storage resources to deploy their test, development, or production environments. The assumption is that the two factions are not on the same page on projects or timelines, which results in delay.
Agreed that virtual machines can be provisioned quicker than physical machines—CIOs will also agree with this, but that’s only part of the story. If not enabled with policy, it can also lead to innumerable virtual machines (with limited or no use), thereby blocking resources and creating inefficiency. Virtualization continues to remain at the periphery of deployment, with core and large package providers as yet to certify their applications on virtual servers.
Typically, IT organizations are more organized in nature, with visibility of planned deployments and requirements of licenses or hardware. Dependencies are well known, and irrespective of the physical or virtual environment that the enterprise may prefer, this is rarely a cause of delay (or lack of agility).
In my observation, project delays are more to do with scope creep, signoffs or even indifference from business. It’s a subject that deserves a longer discussion on another day.
So has the data center become the cause of business angst? Well, I’ve never heard of such a scenario in the recent (nor the distant) past!
Coming back to the event under discussion, presenters sheepishly agreed to counterviews from the attending CIOs, and attempted to justify their stance by stating that their global research data had indeed given them such insights. Talk about assumptions!
My view is that vendors should refrain from such titillating titles to attract the audience. At the end of the day, vendors end up with the realization that most participants badly want to leave. The CIOs stay back only out of sheer decency and respect. As a result, vendors run the risk of alienating their key customers by continuing this play of words.
Coming back to the ready-to-eat snack, it was stale, oily and very unhealthy—causing heartburn and acidity. Most of the CIOs required gallons of liquor to drown the symptoms of disbelief and utter boredom.
Almost all the organizers wanted to focus on how to improve data center efficiency, utilization, management and agility in provisioning new servers. According to all of them (without exception), the delay in provisioning a new server can lead to compromises in business agility, thereby adversely impacting the outcomes. Each vendor’s formula for success revolved around their solution for virtualization and (or) management tools, which allow quicker provisioning of virtual machines—allowing the IT organization to bring up a new application within hours, as compared to the days when physical servers were in vogue.
I find this unpalatable, as it presupposes that everyone in the IT organization is only focusing on the infrastructure, with no communication with the team members who create or buy applications. Or that we have a scenario where the applications team does not tell the infrastructure team until the last minute that they require some compute and storage resources to deploy their test, development, or production environments. The assumption is that the two factions are not on the same page on projects or timelines, which results in delay.
Agreed that virtual machines can be provisioned quicker than physical machines—CIOs will also agree with this, but that’s only part of the story. If not enabled with policy, it can also lead to innumerable virtual machines (with limited or no use), thereby blocking resources and creating inefficiency. Virtualization continues to remain at the periphery of deployment, with core and large package providers as yet to certify their applications on virtual servers.
Typically, IT organizations are more organized in nature, with visibility of planned deployments and requirements of licenses or hardware. Dependencies are well known, and irrespective of the physical or virtual environment that the enterprise may prefer, this is rarely a cause of delay (or lack of agility).
In my observation, project delays are more to do with scope creep, signoffs or even indifference from business. It’s a subject that deserves a longer discussion on another day.
So has the data center become the cause of business angst? Well, I’ve never heard of such a scenario in the recent (nor the distant) past!
Coming back to the event under discussion, presenters sheepishly agreed to counterviews from the attending CIOs, and attempted to justify their stance by stating that their global research data had indeed given them such insights. Talk about assumptions!
My view is that vendors should refrain from such titillating titles to attract the audience. At the end of the day, vendors end up with the realization that most participants badly want to leave. The CIOs stay back only out of sheer decency and respect. As a result, vendors run the risk of alienating their key customers by continuing this play of words.
Coming back to the ready-to-eat snack, it was stale, oily and very unhealthy—causing heartburn and acidity. Most of the CIOs required gallons of liquor to drown the symptoms of disbelief and utter boredom.
Monday, May 03, 2010
Web 2.0 (Social Media) and the CIO
There are two camps out there, which hype the perils and advantages of social media for an enterprise—both are gaining ground and visibility. The CXO suite is confused, and this leads to pendulum like actions (moving from one end to the other) on how they react to these prophesies and theories. In many cases, it also results in total inaction, as they understand, and are comfortable with status quo. This leaves the employees in disarray—they act in an uncontrolled manner, thereby adding to the uncertainty.
Confusing? Well, that’s the moot point, so let me elaborate.
There are enough consultants, research papers, anecdotal references and general hype—that every business (irrespective of industry, geographical presence, market share and multi-channel presence) should leverage social media by connecting to consumers. This connection is deemed so important that businesses are creating presence across almost every social networking site—trying to gather the consumer around this space. A few have been able to get there with some degree of success, while others are struggling to find the meaning of being there. As organizations understand this social media revolution bit by bit, the general feeling is that it might translate to real money in the bank.
The same enterprises are paranoid, when it comes to opening access to social networking sites for their employees. One extreme is to mandate the CIO to block access to social networking sites (as the management believes that it results in precious time being frittered away). On the other hand, the balancers are defining policy for staff on the dos and don’ts of how to engage on social networking sites. These policies are expected to act as deterrents towards moderating use. However, IT organizations tend to bypass these policies for their own kin, thereby rendering the effectiveness suspect. I have not come across any organization having an open access policy with no restrictions on content, or the way it is used.
The two stances detailed above are divergent from each other. In the first case, the organization seeks to leverage social networking towards creating a business benefit, while on the other hand it restricts its own staff from participating. Every staff member is also a consumer of merchandise and services; companies would like to leverage the insights that can be created by understanding behavior. So if a similar stance is adopted by every business unit, the end result will be akin to companies creating retail stores, but preventing their employees from shopping.
Is the CXO’s disconnect due to the inability to understand the impact or control the behavior of the consumers? Or is it a generation gap between the digital natives (the new workforce) and digital immigrants (the policy makers)?
Under the guise of corporate security, the restrictions constrain natural desire to reach out in the digital world. CIOs should recognize these trends within the enterprise based on demographic undercurrents, and leverage the internal consumer’s voice before reaching out to external consumers using the digital media. These same employees will help you find ways to tap this latent source if aligned to the initiative. Else they are likely to be disruptive, since they want the freedom—because they can!
Confusing? Well, that’s the moot point, so let me elaborate.
There are enough consultants, research papers, anecdotal references and general hype—that every business (irrespective of industry, geographical presence, market share and multi-channel presence) should leverage social media by connecting to consumers. This connection is deemed so important that businesses are creating presence across almost every social networking site—trying to gather the consumer around this space. A few have been able to get there with some degree of success, while others are struggling to find the meaning of being there. As organizations understand this social media revolution bit by bit, the general feeling is that it might translate to real money in the bank.
The same enterprises are paranoid, when it comes to opening access to social networking sites for their employees. One extreme is to mandate the CIO to block access to social networking sites (as the management believes that it results in precious time being frittered away). On the other hand, the balancers are defining policy for staff on the dos and don’ts of how to engage on social networking sites. These policies are expected to act as deterrents towards moderating use. However, IT organizations tend to bypass these policies for their own kin, thereby rendering the effectiveness suspect. I have not come across any organization having an open access policy with no restrictions on content, or the way it is used.
The two stances detailed above are divergent from each other. In the first case, the organization seeks to leverage social networking towards creating a business benefit, while on the other hand it restricts its own staff from participating. Every staff member is also a consumer of merchandise and services; companies would like to leverage the insights that can be created by understanding behavior. So if a similar stance is adopted by every business unit, the end result will be akin to companies creating retail stores, but preventing their employees from shopping.
Is the CXO’s disconnect due to the inability to understand the impact or control the behavior of the consumers? Or is it a generation gap between the digital natives (the new workforce) and digital immigrants (the policy makers)?
Under the guise of corporate security, the restrictions constrain natural desire to reach out in the digital world. CIOs should recognize these trends within the enterprise based on demographic undercurrents, and leverage the internal consumer’s voice before reaching out to external consumers using the digital media. These same employees will help you find ways to tap this latent source if aligned to the initiative. Else they are likely to be disruptive, since they want the freedom—because they can!
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