The Power-centric CIO

My marketing team is wresting part of my budget of customer facing applications and social media; at the same time funding for the new budgeting application is with my finance team. The IT budget is now almost 50% of what it was last year. How do I recover back control of my budget ? Wailed a CIO in a panel discussion, which was discussing amongst other things trends that are likely to be reality in the upcoming year.

The panel sympathized with the protagonist CIO and a few from the audience attempted to offer solutions. The debate threw up a interesting thoughts on how the budgetary control could be retained with IT. Ranging from bureaucratic rigmaroles to bullying and many other similarly trending behaviors, the suggestions were analyzed and discarded as untenable for either being against core values or not implementable without inflicting self-damage.

The IT budget has been a discussion point for some time now. It predicted the investments made by companies on technology enabled solutions. The industry created benchmarks around the investments linking it to the topline graded by industry. The maturity of IT usage was linked to this figure and anyone spending below the benchmark was seen as a laggard or highly efficient.

Then came research reports on innovation versus business as usual; ranging from 70% - 90% of the IT budget being consumed on keeping the lights on, while the remaining pittance being allotted to new projects or innovation. Anyone with BAU numbers under 60% was envied and deemed better aligned to the business. Models were created to turn the ratio upside down and reduce the operational budgets to strategic initiatives.

Economic cycles threatened available monies and CIOs were put under the scanner on every penny (or cent or whatever currency you like) they spent. Do more with less was the mantra and that is now the new normal. Every disruptive technology was seen as the next silver bullet to help the CIO in improving the dialogue on keeping the IT budget to a respectable ratio to the revenue. Cloud will save money, move everything to Operating Expense; virtualization will save the enterprise IT …

In one of the companies I worked the IT organization was empowered with the operating expense budget and incremental innovation on existing technology stacks. There was a discretionary budget for exploration of new trends and technology. New projects and initiative budgets were discussed with the business and IT advised the funding requirements which rested in the business P&L. This ensured that the accountability for the projects was an equal responsibility shared between IT and the function. The success rate was high and everyone loved IT. Since then I have followed this practice successfully in every company.

I believe that keeping the number in the CIO spreadsheet or the business spreadsheet does not take away the control from either. Mature enterprises and CXOs work together to solve real business problems and not bicker over where the budget lies. When was it about control or the power of the budget, large or small ? If the CIO is partnering with other CXOs and is focused on the corporate agenda, then it is about getting things done irrespective of where the number lies.

Does this insecurity befit the CIO ?

Unraveling BYOD/T

The one trend that everyone is talking about and which figures on every list (priorities, trends, technology, whatever) is Bring Your Own Device/Technology. It has had proponents and opponents from various quarters within and outside the enterprise. Opinions and views, recommendations and pitfalls, management tools and security concerns, the list is endless and continues to keep the CIO bewildered irrespective of whether s/he embraces BYOT or not.

From what I recollect, it all started with the iPhone and then extended to tablets, laptops, and what have you. Not that earlier personal devices did not connect to the corporate network; they did on the wire and then over the air, if you will remember devices with a technology called “activesync”. The early phones offered limited connectivity and as the network improved and so did the technology, browser based apps started appearing. The resident app followed soon enough.

I don’t remember all the devices that I used over the last decade and longer being provided by the company; which would imply that we did have a lenient policy even before the BYOT buzz appeared and started haunting every technology professional. The early PDA which eventually integrated the phone had limited use and was not widely prevalent due to unwieldy size and interface. Except for the early large form factor devices, it was not a statement to make.

Evolution of the device and the network created new possibilities and the scattered raindrops became a flood; apps for everything and power in the hands of the executive with no constraint on time. Business impatience became the hallmark of new technology deployment to swamp all available and unavailable time. The CIO built layers of infrastructure, applications and security to manage the demand. It did not matter who or how many used it; if it was possible, then it had to be available.

The democratization of information worried only the CIO until stories of compromise started spreading. Compromise not always by the external world, but bits of information scattered across slowly fading away with exits, ignorant employees losing devices or passing hands within the family. Enterprise liability driven by law and governance suddenly finds itself at loggerheads with BYOT.

Depending on the country of incorporation and most probably operation, the laws require stringent compliance. BYOT contravenes some with liability creation for not just the CIO but the CEO and even the global HQ. A cyber law expert thrust the fear of the law of the land to listening CIOs who cringed with every clause and interpretation of impact to the executives and the enterprise.

So what are the choices available ? Will the CEO not want the next new device on the block to be connected to the corporate infrastructure ? Does s/he not evaluate the ramifications to the enterprise ? Is ignorance a good excuse ? I believe that the CIO needs to raise the bar with heightened awareness starting with the Board and then cascading downwards. It takes only once incidence to create collective pain. CIOs can address the contingent liability with reasonable due diligence, control and documentation to dampen down the impact.

It is not going away, but what it means to you is up to you. BYOT = Bring Your Own Trouble, or BYOD = Bring Your Own Demise, or BYOD = Bring Your Own Destiny, or BYOT = Bring Your Own Tension, or BYOT = Bring Your Own Threat, or BYOD/T = ? You decide !

Finding alternatives

The bewilderment was visible to everyone who even glanced at the face; not that too many people were in the room, but everyone could clearly see the expression on the face of the Chairman. The trigger was the suggestion that the big ERP that has worked well for almost a decade should be discarded in favor of another one. The animated voice and high throughput beyond the normal diction made it difficult to comprehend the entire story. So I slowed down my friend the CIO of a fast growing enterprise and asked him to begin from where else, but the beginning.

Over the last year or so there was a rumbling of discontent about the lack of adequate support and the rising cost of licenses and annual support. The problem was brought to the forefront when after a version upgrade necessitated by end of support announcement, the system started behaving abnormally with earlier functioning features now working differently. Stability took a long time to achieve.

On the other side another function was struggling to support the continuously increasing license and support costs. The thought of additional functionality and modules was abandoned upon hearing the new licensing norms. This indeed creates a difficult scenario for the CIO and the CXO to contemplate the future. As the company grows, how to ensure that the efficiencies gained thus far are not lost ? How to control the ever increasing burden of Business As Usual ? The ratios of BAU to new initiatives were in favor but slowly sliding.

So the CIO called his team and started exploring alternatives. Can the already good discounts from the vendor be improved upon ? Is it possible to move away from per user license to something better ? What if we exclude a section of employees from the technology solution ? Would the enterprise technology architecture become complex if multiple solutions were deployed ? Would the cloud make any difference to the outflow ?

That is how the recommendation came up that the current technology stack be replaced with a competing product which offered (at least on paper) better TCO. And the CIO decided to raise the question with the management which led to the scenario above. The CIO had done his homework by talking to the respective functions and gaining their grudging nods. But the scale of change scared everyone.

We all know that change is not something anyone likes despite whatever pains may be currently plaguing the process, function or enterprise. It takes a lot of effort to even get the idea to gain traction. We discussed the merits and pitfalls of the proposal and agreed that there is no easy way out. The change will be transformational also providing an opportunity to kill a few “this is the way it is done here” kinds of processes. The TCO over the next 5 years with the projected growth did indeed demonstrate more than 30% reduction.

Reinvigorated the CIO agreed to push ahead armed with confidence that he was on the right track and that the change agenda will indeed benefit the enterprise in the long run. Would you do the same if faced with this challenge ?

The list price conundrum

With the economy tightening again and uncertainty across geographies, enterprise spending is once again under focus; this is giving rise to some interesting discussions. Driven by the CFO, CEO, and CIO who are exploring deferred investments or the usual doing more with less, the discussions translate into unrealistic (as griped by vendors) expectations from suppliers, vendors and partners to provide goods and services at higher discounts.

Result is rounds of moaning and groaning from either side citing their versions of reality and pushing the limit beyond the last transaction. The promise of future and making up the deficit in the long term does bend most; few who do not oblige sometimes are rewarded and more often it is an opportunity lost. The resultant business creates suspicion if earlier everyone was enjoying higher margins than they should.

In the IT world, I never heard of anyone paying list price on anything that they bought. In normal times discount levels used to range from the nominal 10% to in many cases as high as 70%. It was a rare one time transaction that enjoyed higher numbers. The list price was a marker to decide whose need was higher and who had more patience. Month end, quarter end and year ends provide opportunities offering higher levels of business and discounts. Again almost everyone recognizes this and plays the game.

In the last slowdown or recession depending on which part of the world or which industry you belonged to, a few companies breached 90%. There are anecdotes about free solutions being provided to a few marquee customers either as an entry price or to sustain business. Free is a paradigm shift though the way some vendors are hiking their annual maintenance charges, free does not seem too unreasonable considering that in 3-5 years you have paid as much as the initial acquisition cost.

So why do vendors continue to print a list price which has irrational numbers and then offer a discount ? Maybe to acquiesce human nature which revels on a deal ? Purchase managers and CIOs work on reducing prices every year. Volume typically adds to the discount but is not the only determinant. Benchmarking across the geographies I find that the level of discount rises from west to the east and then again slides with India and China being the trough. Despite this trend, I haven’t seen a gold rush to shift license contracts from other countries to take advantage.

The current uncertainty has once again brought budgets into focus. Slowdown in customer spending is already impacting retail consumption and thereby every industry. Going into budget sessions, the expectation is to once again lower expenses and investments. We still have inflationary trends is many countries and wages are going up for some, while cost of living continues to go up. But the question that haunts me is if there is indeed so much of buffer that every time the challenge is thrown, people find a way of adjusting to new baselines, then how did the same people allow higher expenses in easier times?

As goes the proverb, “Mother is the necessity of invention”, I believe that with every challenge new opportunities are explored and leveraged on operational efficiency. Technology evolution with new disruptions contributes to improvements; return ratios are however reducing and we are reaching a point where the stretch will reach a break point. We will achieve the pit bottoms sooner than later; the list price will then have to change. Whether it will go up or down is another debate.

Get on with IT

The other day I was in a gathering of CIOs being addressed by an eminent editor of an IT publication who was unraveling research conducted by his publication. The research surveyed a large number of CIOs who provided their priorities, challenges, opportunities for the year ahead and some numbers (budgets, compensation, and longevity in a role). Based on their frame of reference the audience agreed and disagreed with the data points. This was followed by a discussion on some of the inferences and the qualitative feedback. Then all hell broke loose.

The discussion like always touched upon some favorites like Business IT Alignment, measurement of effectiveness of leaders and the most debated one, TCO/ROI. Everyone had an opinion on everything and rarely did opinions converge. Some felt that BITA is a non-issue while others still struggle with it; it was opined that the CIO by virtue of taking on additional business responsibilities and participation in business discussions has already demonstrated leadership, and TCO/ROI matter to almost everyone except when under the guise of “strategic projects” the issue is sidelined.

The role of the CIO and its evolution from technology to business was justified with the fact that technology evolution and usage patterns within the enterprise have driven newer expectations and thereby the change encountered by the CIO. Alignment need, lack or existence was challenged and treated IT on par with Finance and HR or Marketing. Contextually depending on the incumbent CIO and the industry, these are real trends.

Who justifies ROI and who should be tasked with the calculations ? Is Post Implementation Review still in vogue ? No one had done any and neither did any enterprise go back to review the expectations with the reality. Those who did create business cases with ROI agreed that ROI is now passé. Interestingly a few promulgated that they use the cost of not doing a project and losing on growth, customers or position in the industry. The learning from the discussions could be summed up as follows:

1. BITA is largely dead; it is not about alignment anymore but about working together and solving real business problems. Gap if any is perceptions that vendors and consultants want to fuel.
2. In the same spirit ROI or any financial metrics is co-created by the CIO along with the function or business impacted. The justifications focus on incremental revenue or cost savings and are shared between the CIO and the business head
3. Projects are also being sanctioned with strategic intent focusing on not just the new capability and its impact, but also on the potential disadvantage faced when the capability is missing
4. The discussion around the table is no longer on the technology, but the impact and outcomes which have to be enumerated using the positive or adverse impact to customers and employees
5. There will be enterprises that get it and some who don’t. CIOs will jump ship where they remain challenged for too long.

I wonder what is the need to continue berating the role in which we are, the CIO ? Can we stop talking about it and get on with IT ? Are we creating self-fulfilling prophecies propounding the need for alignment, or the evolution of the CIO role, or at the basic level pondering on how to justify budgets ?

 

Surviving layoffs

We live in uncertain times with global economies tumbling randomly impacting everyone within as well as across borders. Citizens and corporates alike are living with FUD (Fear, Uncertainty and Doubt) as the world watches the unfolding of one crisis after another. With survival at stake, individuals as well as enterprises are taking steps to tide over the current quagmire. In our connected world, the impact is felt even in otherwise stable or developing economies.

Are there learning from past economic events that have left many economies struggling. Recession and slowdown driven new normal had everyone focusing on cost and then incremental growth. Successive events have taken away much of the impact once again driving enterprises and individuals up the wall. Once again there is talk of deep cost cutting which now chips at the bones with no flesh remaining.

Not too long ago interacting with such a CIO who was asked to find alternative opportunities, I learnt about the trials and tribulations of such a situation, especially when there is a gap between two jobs. The person was a great performer and excelled in creating new technology solutions. In recessionary times discretionary spending was cut, no new projects and thus the pink slip.

In good times every enterprise leader will cite the often repeated cliché “people are our best assets”. In difficult times after everything else has been tried, companies lay off assets that can no longer be deemed useful. Normalization has a way of sometimes impacting productive assets too with resultant attrition hitting operating efficiencies. Layoffs are reality and so is the adverse impact it creates.

The ecosystem of friends, peers and close family can help overcome the negative sentiment. Seek a coach or mentor who can keep the sanity levels normalized. Even if you are lucky it takes time to find what works for you and the new company wanting to hire your services. A non-CIO friend took almost 2 years to get his rightful position while his kids and family supported him emotionally. The CIO was lucky to find a fresh beginning within 6 months.

What could I have done to prevent this from happening ? The mind tries to justify and find causes related to personal behavior, performance or shortfall that created the situation. It refuses to recognize external forces instead attempting to rationalize self-existence. It takes a while for reality to sink in and start afresh. The self-denial phase can last from a few hours to years. This self-pity mode becomes the most unproductive time. It is important to leave behind the baggage and move on with a fresh start.

What does this mean ? Be prepared as Black Swans are becoming more prevalent than NNT (Nassim Nicholas Taleb) postulated. Do not feel disheartened when someone close gets impacted. Support the person any way that you can. When I faced this situation a long time back, my friends and the IT industry leaders provided adequate cushioning to sustain self-pride. I was fortunate to maintain continuity in my transition and thankfully overcame emotional distress quickly. That’s when I realized the importance of networking and reputation.

We live in uncertain times.

Becoming an Entrepreneur

Recent times have been interesting to say the least; according to industry news angel investors, venture capital and seed funding has been relatively easy to get by. Every business magazine and newspaper is talking about the young generation choosing the path less trodden. New business ideas appear out of nowhere and once executed makes one wonder, it was so obvious, why did I not think about it ? These are however the ones that succeed which I am sure are statistically very small compared to the ones that died prematurely.

The spirit of entrepreneurship seems to be in the air. Faced with mid-life crisis on unmet aspirations or growth, many are pursuing their dreams of being their own boss. So I decided to track down a few CIOs who ventured to find out what triggered their steps towards being an entrepreneur. Some ventured in related industries to where they were employed, while a few were totally unrelated to their past employers domain or for that matter IT. What came out was an interesting set of revelations.

A CIO with many years in the pharmaceutical industry decided to venture into healthcare, and so did another who was in the banking industry. For the former it was leveraging his business knowledge of the lacunae in the marketplace while the latter saw an unmet need to address based on his personal experience.

Both were driven by different stimulus, the common theme was however to get off the rat race. Both were good IT professionals and one would have assumed a journey from mid-sized company to larger enterprises was logical progression. So when a CIO approached me for advice on when to get started on an entrepreneurial journey, it was an interesting discussion.

We started with his current position, industry and economic impact, personal growth; all appeared positively stacked in his favor. Then we reviewed his quandary. His role had grown as a CIO, he was respected within his company, and everyone acknowledged his expertise. He knew it would be a difficult task to rise beyond IT even though he knew the business well. He dreamed of being a CEO and starting up on his own seemed to be an easy way to get there.

Risks were the economic uncertainty, funding required, and the financial safety that the family needed. Key requirements of an entrepreneur namely the vision, management skills, financial acumen, and marketing abilities were all present. The doubt was about timing, now or later. My advice to him was to take the plunge. There is never a good time like now, analysis will lead to paralysis.

Even in a job, every new venture has a risk element to it. Sometimes we embrace it and sometimes we dither. We call it change management. So why is change difficult ? Because we are the cause and the effect; we are responsible for the journey and the outcome. We compete with ourselves and have no other benchmark.

I guess it requires thinking in a different mindset to get off the ground. The chains of comfort will always hold back. The debate about when is the need for internal self-reflection and the answer is now. Do you want to be an entrepreneur ? As Charles Kettering the famous inventor said “I have never heard of anyone stumbling over anything while he was sitting down”.

Predictions for 2012

Like the sun goes down in the west every day, the earth goes round the sun, people make New Year resolutions and the IT industry makes predictions for the coming year. These lists offer hot technologies, CIO priorities, business priorities, technologies that will not last the year, ad infinitum. So what kind of list am I going to create?

Every CIO already knows his/her current priorities, for the next year, and over the next 3 years (broadly) that fits in somewhere in the organization long-term strategy. These are dependent on many factors, some are (though not limited to) industry, size of the organization, geopolitical situation, global market dynamics, consumer sentiment, organization dynamics, profitability of the company … The broad collation of priorities through research conducted is generic enough to statistically fit over 80% of the CIOs globally and is available free or paid depending on whose list it is. So I will not pursue this line.

Different matrixes once again based on widespread research and opinions will tout waves, quadrants, hype curves, scatter charts, bubble charts and so on about disruptive technologies that would matter in the future. Stay with the bleeding edge or lose competitive advantage is the mantra. Some remain emerging technologies for decades like a solution searching for a problem to solve, while many remain niche or never get out of the lab to be adopted in mainstream business. I do not believe I understand enough about these esoteric technologies to offer predictions.

Having been a CIO or equivalent for more than decade and half across 7 different industries, I think I do understand the CIO travails and tribulations. To me every industry brought new opportunities for learning as well as new paradigms on how existing or new technology can be used. Every slowdown or black swan provided a platform to introspect on successes and lack of some. The next decade and half will bring disruptions unimaginable today. So here is my list for 2012 and beyond; can’t predict that all of these will be applicable to everyone, but statistically over the year you will find some connect.

1. CIOs globally will continue to be challenged on operating budgets. Capital investments will become relatively easier; operating expenses will need to be controlled very tightly.
2. BITA (Business IT Alignment) will fall off the priority list for many as it will no longer be an issue. Business will acknowledge IT contribution and will work with IT to plan business goals. There will be no separate IT goals.
3. Attrition will not be the problem, retention will be; with economic and political uncertainty, staff will hang on to their respective jobs. CIOs will have to take some hard decisions.
4. Clouds will be the first choice for deploying apps for the mobile workforce. The rest will continue to access applications behind the firewall. Hybrid clouds will remain experimental as CIOs figure out that it really does not save money. CIOs will no longer build data centers.
5. Lead by Consumerization, mobile devices will be out of IT control (for good) and the personal device will find a way to get inside; resisting CIOs will have to provide equivalent additional device, which eventually the Business will turn down. Managing multiple screens will become a pain for the Executive who will challenge IT to make it simpler. The phone as a corporate device will thus be replaced by the tablet over the next 2 years.
6. CIOs will or be forced to challenge the cost of sustaining big ERP (licenses, support, etc.) as it keeps growing; alternate support vendors will gain market share. Usage will shift out from the office to using marketplace supplied micro-apps thereby challenging the existence of big ERP in 5 years.
7. Social media fatigue will set in and even marketing teams will be asked to create ROI for expenses and investments on such initiatives. CIOs will need to manage expectations around social analytics while Consultants will thrive with maturity models and make loads of money.
8. The CIO will continue to be tasked with managing information security with the CISO reporting into him/her. A few cloud bursts (cloud security breaches) will make matters worse before things settle down over 2013 and beyond.
9. Big Data will remain high on hype with vendors pushing and CIOs scratching their heads if it really gives the benefits promised.
10. Custom development of solutions will wane with ocean of micro-apps promising to enable business processes as effectively. At the same time appliances will replace generic hardware.
11. Many CIOs and research analysts will not agree many with the above points.

I could have gone on and on but will stop now. I thought 11 is good for now; why 11 and not 10 ? According to Hindu scriptures it is an auspicious number and if you don’t believe in such things, then I would ask why 10 ? I know Moses had something to do with it !

 

Resetting Expectations

I met a CIO who was wondering what’s going wrong after having spent many successful years in his current position, working with the management team, implementing various award winning solutions, helping the IT team come out of the technology mindset to thinking business, and last but not the least making IT a business partner. He sought to unravel the mystery and find clues on what could be done to overcome the situation.

As the drinks continued to flow, I quizzed him on if he had made any behavioral changes ? Negative, he replied; everything was going smooth until recently and he had not made any changes to his modus operandi. So I dug deeper; where there any changes in the business scenario, industry, market position, anything that could have triggered the change ? He stayed silent for a while and then mentioned yes, the company had appointed a new CEO and thereby he had a new boss.

Every organization is dynamic and so is the team that makes the enterprise. Attrition is accepted as normal which brings fresh talent and leadership; in most cases new ideas and styles of management bring forward the strategic agenda of the company. When the new inductee is the CEO, there are always a lot of expectations by the stakeholders. The internal team(s) specifically the management team downwards has to make adjustments to new style, expectations and way forward. Few in discord decide to move on to greener pastures elsewhere.

However, there have been some exceptions where the company under new leadership has suddenly finds the management team not agreeing to the new direction. Most give the new agenda a try and work towards alignment. It is also possible that the CXOs may decide to move on citing working or cultural differences with the new leader. Rare instances also exist where the company floundered until the Board of Directors made corrections (we recently saw that for a large IT company).

As these thoughts ran through my mind, I realized that my friends’ company had seen good results in the last few quarters, which would imply that the new CEO was continuing the growth agenda. So I prodded the issue further; had his relationship with his peers changed since the new CEO took over reins ? Not really he quipped, they continued to work with him like before; his new boss seemed to have some strong relationships with some of his peers and transactional with others.

Opening up, he stated that he was being challenged on some of his decisions more rigorously than before; had to present a lot more justifications on any project, and was asked to review the IT strategy and its applicability going forward. The strategy was discussed and approved only a year back, so why the review again ? The CIO wanted to start polishing his resume again.

So I had to hit him hard with reality. If the new manager wanted additional details on initiatives, it would indicate that he wanted to update himself and validate assumptions. If he has to justify every project, why is he worried if due diligence has been done fairly and equitably with business participation. Every strategy including business strategy requires periodic review, so where was the problem ?

I believe that a dialogue is the means to build the relationship rather than see it as threatening credibility. No two people think alike; so to assume that past way of working will continue to yield dividends is foolhardy. It does not matter where you are in the corporate hierarchy, change is inevitable, and we have to learn to live in the rain.

(Why) Should CIOs be interested in LAN cabling or UPS batteries

I attended a CIO gathering which had an UPS battery manufacturer as one of the key sponsors. The presentation discussed the merits of one battery technology over the other; they offered a promise of higher reliability that matters to any CIO. So I started asking the half a dozen CIOs on my table if they knew which batteries their UPS in the data center or office premises used. Only one knew the answer.

A few days back a senior editor of a respected publication that also conducts small gatherings of CIOs asked me if I would be interested in attending a dinner sponsored by a structured cable vendor. He spoke in jest and wondered if he would be able to gather an audience numbering double digits. I kind of concurred with him as cabling was the last thing on my mind. I don’t remember when was the last time I reviewed cabling standards or attended a meeting with a cabling vendor.

I must have written many times on the new age CIO and the transformation over the last decade. I think that petabytes of information exists on this subject which any search engine will throw up. No event is complete without a discussion on what are or should be the CIO role or priorities. Everyone agrees that the IT leader is a business leader first and technology expert later. As a leader, s/he is expected to demonstrate behaviors no different from the CEO, CFO or any other CXO.

The CIO through his/her team gathers expertise on various technologies and related domains. These teams typically along with principal vendors, external service providers, and system integrators form an ecosystem that provides the basic and advanced solutions that enable and empower any enterprise. In every enterprise the deputies who form the IT Management and Operations team ensure that every day billing happens, manufacturing plants hum, goods leave the warehouse, call centers receive customers, sales people sell, finance teams collate figures, external partners get information due; in a nutshell, the world continues to move on despite random failures that occur at all levels.

In today’s world where most technology components (be it hardware, software, or connectivity) find it difficult to differentiate approaching commoditization, choices are influenced by existing long-term relationships between enterprises or people, or a significant price difference. Quality of Service is the only other determinant factor. New disruptive paradigms in the last few decades have kept every CIO on his/her toes to keep the enterprise competitive and current. But then there are some who haven’t.

So coming back to our battery vendor and the cable manufacturer, are these critical and high on the list of priorities of the CIO to demand his/her attention ? Should s/he undertake strategic meetings with the Management or Board on kind of cabling is being laid or the merits of one battery technology over the other ? What would happen if the battery bank failed and servers went down or storage disconnected due to a loose patch cord ?

I believe that the IT Infrastructure Head and his/her team under the CIO are tasked and are or should be empowered to deal with this. The ball however always stops with the CIO being answerable. But then every CXO depends on their teams to deliver and does not necessarily get down to micro-management. On an analogous note, is the CMO in trouble if lights on an outdoor hoarding go off ?

Judging CIOs and being judged by them

As a recipient of the award myself a few years back, I had the privilege of being invited as a jury member for the Global CIO awards organized by a global industry publication. It was a big responsibility to shoulder when almost all the nominated CIOs were friends who shared a drink or a joke in the past. I felt unsettled about it wondering about the impact it may create on the relationships shared. At the same time I was excited about it with the honor being conferred to be considered for this big task.

This was not the first time I have been on any jury; there have been many instances where along with industry veterans, global luminaries and celebrities, and academia I contributed to the selection of award winners. In most cases the nominees were upcoming leaders; in a few cases where the subject was the CIO or a CEO, other jury members by virtue of their seniority carried the process well without pressuring the junior members. Many of these awards recognized companies and not individuals thus making it easy. This was the first time that I had this wonderful opportunity and I was nervous.

The process was fairly well laid out with well-structured data and defined evaluation criteria. Each jury member selected from different backgrounds and was provided the same information to analyze and independently create the list of winners. The common list with validations would be then declared as the final winners. So far so good !

Listening dispassionately to each pitch without clouding influence from past interactions is difficult. Spread over a fortnight the discussions left me richer with new insights that I could imbibe, a benefit rarely possible with otherwise guarded conversations on challenges and tactics used to overcome them. My respect multiplied for most of the contestants with the learning gained; my achievements suddenly looked insignificant in comparison. On the designated evening as they collected the awards, the new bond shared with the winners created warmth to be cherished for a long time.

Recently, I too was subjected to peer judgment in another open list being compiled by an industry association which sought to recognize “Most Respected CIOs” in India. Self-nominations were not allowed and neither was CIOs reporting into the individual in case of group responsibilities; it was a selection by peer CIOs who were asked to nominate others. With open ended questions and selection based purely on votes, the contest was wide open to anyone.

I believe that peer recognition especially from high performers is difficult to achieve when the starting benchmark is own performance for the person judging. People observe behaviors and form opinions that are difficult to change. The foremost element that matters is Trust which in turn over a period of time builds Respect. It does not happen overnight but can be lost in a moment. It was gratifying to be voted to the list and staying there as the voting progressed.

Investments in sharing, learning, coaching, and mentoring pay rich long-term dividends; it is important to give as much as it is to receive.

Metrics that matter

I bumped into an angel investor in a social gathering organized by a company funded by him. Discussing a range of subjects, he was interested in understanding how customers of his funded company used technology and traction with the Management across different sectors. Acknowledging the fact that all his invested companies used IT as a competitive differentiator, he queried the metrics used by CIOs in India. In the discussion group were CIOs from Banking, Insurance, Manufacturing and Retail.

Starting with IT budgets, the range observed was 1.5% upwards all the way to over 10% for a Bank. I am referring to percentage of revenue, one of the metrics everyone uses and is portrayed as a reflection of the seriousness of IT investments globally. Angelically he disagreed with this norm as Capital and Operating budgets should not be clubbed into one IT budget. Echoing the thought a few CIOs stated that they separated the capital investments moving them to the business units since new initiatives have to be what business needs and wants.

Investors have a way of getting their viewpoints; he asked if separating the capital investment and operating expenses helped. The answer to that was a vehement yes. The CIO actively controls how the existing IT setup is managed and thereby can optimize capacity and support. Investments are always linked to new business initiatives and outcomes. A great system or the best technology does not create a recipe for success if business fails to utilize it effectively. When the investment impacts P&L of the business, the ownership and contribution equals the effort put in by the business and IT.

The discussion veered to CIO dashboards and what were CIOs monitoring daily, weekly or monthly. The responses varied from health of systems to active budget tracking and key projects that IT was involved in. Only two mentioned that there dashboard was no different from the other CXO dashboards but included a few IT metrics too. Considering that the CIO is in most cases an equal partner in the business, why should the dashboard be different ?

Active projects with large investments require monitoring and communication to provide visibility across the enterprise. Success is measured not just by on budget or timeline, but effective use and business value that may have been spelt prior to the project. Like the CMO would monitor marketing campaign effectiveness or the CFO tracks treasury, the CIO has his/her business IT projects.

Lastly the IT Strategy and long-term plan tracking is the most critical one. As the owner, the CIO must track and report periodically progress made, issues and challenges, new opportunities and finally business impact delivered. It is a living plan and not something to be created, approved and locked up. What gets measured normally gets done.

The investor benevolently nodded to the maturity of the CIOs and their success in managing perceptions and that they get it.

Engaging the Board (of Directors)

If you want to get a seat on the Board of Directors, then you have to think like them; understand what drives them and how they take decisions. BoD is not interested in the micro details of various initiatives or specifics of the technology solution. The discussion is about how IT furthers the strategic direction and helps the company achieve its long-term goals and objectives. Does it improve revenue or bottom line such that it creates shareholder value ?

So went the discussion to which I had the privilege of being invited that was debating the need, process, and models to engage the Board of Directors by the CIO. The panellists comprised a consultant, a CEO, and a couple of CIOs. The audience of CIOs were keen to learn from the experience of the panel, tips, insights, any pearls of wisdom that would help them forge ahead. So what does the CIO need to do to get the attention or when s/he needs to present a new initiative, how to make a case compelling enough to attain approval quickly ? Do BoD really get into the detail ?

Over the last decade or so I have observed that they do balance the strategic and the operational. Depending on the context, they have a tendency to drill down all the way to the transaction or root cause; the next discussion could be about the next 5 year growth or an acquisition. The latitude of debate varies; the composition of most Boards is normally diverse with complementary skills to cater to such swings. So is there a checklist that helps in getting an audience to begin with and then a permanent invite ? Is there a timeline that can be cast ?

Few insights that did come across were that in new age high technology companies the CIO is indeed included by design. Younger CEOs are more likely to invite the CIO to the table considering their familiarity and usage of technology. Conventional and old age industries with a legacy or history are less likely (there are exceptions though). Despite constraints that may be cultural, evolutionary, or due to lineage, there are steps the CIO can take which are listed with some input of my own.

• If you report to the CEO and s/he is not tech challenged, then take his/her help to get exposure with the Board
• Engage with other CXOs who are already working with the BoD
• Cultivate relationships with one or more Board members who are sympathetic to IT
• Create an IT Annual Report that is also circulated to the Board
• And the obvious one, talk about business and not technology even if you are the CIO of an IT company

 Despite this it is likely that your Board may be bored or uninterested in what IT is doing or how you the CIO plans to transform the business. You are walking the talk, you could keep pushing hoping that the message will get through or you convince your CEO make the pitch. But if none of this is happening, start looking where the grass is greener or be satisfied with what you have, you can always make lemonade out of it.

 

Squeezing the last drop

One of my CIO friends narrated an interesting anecdote about his meeting with a CEO of a mid-sized IT services company. They were talking about the extension of a contract that had run through 3 successful years. The CEO was relatively new to the company and not party to the original contract. He was berating the fact that they were losing money on the current deal and needed to turn around the business and the fact that the global HQ was fast losing patience.

The contract was signed in times when growth was good and business expectations were stratospheric across industries. The then CEO was exploring local expansion as well as captive services for global operations that would have given Indian entity a firm standing. The downturn took everything away including the CEO. Business growth did not revert despite the economy stabilizing. The pressure to turn around the business thus became paramount for this IT Company.

As the negotiations stretched over a few days, the CEO began demonstrating discomfort. In an open book costing he was justified in his pricing but unable to acknowledge that the company had built up higher running cost which could do with pruning. As the customer, my CIO friend was unwilling to pay a substantial increase to accommodate. The choice to the vendor was to cut costs in a hurry and acquire new customers, and to the CIO it was about continuity or moving to another vendor.

Companies set up specialist functions to negotiate deals, sometimes within Finance and at times as an independent charge or within the function equipped with experts who justify their existence with great sounding deals. Some of these may be win-win, but many end up with bickering over legal contract terms or lose-lose unless you are an 800 pound gorilla who nobody can ignore. So how does one define the limit for negotiation ? How do we know that the deal is great for both of us and not a win-lose or lose-win ?

Conventional way is to negotiate hard, drive a bargain that is best value for the customer. It does not matter if the supplier makes money or not; they can always recoup their margin in the next deal or with other customers. This belief has survived and done well for many. Suppliers recognize it and so do customers who play the game. The industry has adjusted prices accordingly so that nothing sells for full price anymore. Everything has percentage off going all the way to 90%. Can we get it free ?

There is a need to change some of these paradigms to bring the dance of the discount to a stop or at least reduce it to realistic levels may be linked to volume of business. CIOs too need to set fair expectations internally and externally to create win-win scenarios and work upon long-term relationship building. Rarely any deal now is tactical. It is also important to remember that people churn across companies. The spurned, scorned or bitter salesperson may turn up a few years later in another company which is critical to your business operations.

People buy from people, so don’t squeeze the lemon too hard, you may end up with a bitter taste.

P.S. my CIO friend concluded the contract with the vendor who did reduce his overhead costs.

Learning never ends, neither does work

Over the weekend while I sat reading some emails and my commitment towards writing Oh I See, a 4-year old walked by and curiously observed my activities, uninterested she moved on. An hour later, once again she found me transfixed at the same spot. This time she queried the nature of my busyness. I replied that I was working. “What are you working on ? Do you have homework ? If you did not do your homework, your teacher will punish you ?”

What is the incentive for any CXO to invest his/her spare time towards anything related to work ? Do organizations really expect 24 X 7 attention ? The portable computer was just the beginning, the tablet is not the end; increased connectivity driven by technology advances in telecom coupled with mobile enabled work processes as well as applications leave few areas unexplored. But these are optional to some extent and do not impact everyone in the same way. Reality is that work expands to fill all the time like traffic expands to take up available bandwidth in a network. Are you doing what matters ?

So is there a way out ? Different strategies work for different people. Some take the discretionary route to carefully deciding what occupies their precious time. It could be reading newsletters, industry research, business magazines or management books, or just the general newspapers; fiction and other categories like travel also find their place. It is the discipline that keeps them going. The time thus spent is invested in gaining perspectives or insights that could help in various walks of life. The remaining choose to stay away from such mundane activities.

While I make a general observation from my limited span of friends, colleagues and acquaintances I have interacted with, the fact is that reading as a habit or investment is waning. Most IT professionals slog to acquire various degrees and certifications, but stop short of expanding horizons. This is despite the fact that it is a lot easier to find information in all forms, print or digital. Reasons and excuses revolve around paucity of time, to work pressures to just plain inertia.

I have been asked the question “How do you find time to read so much, write a blog, respond to so many IT reporters ?”. I don’t know, but I do find it. Without sounding condescending I would say that to begin with it is the prioritization of critical versus important. Focus on what matters towards where you want to be. Second is the determination to learn. It does not matter what you start with as long as you do. Slowly curiosity rises and it becomes a habit that generates long term benefits.

I find that every interaction provides a new perspective, a new question, a new way of thinking; the opportunity is too tempting to leave. This is especially true when I interact with students in B-Schools. They challenge you with the sole motive being to learn from your experience. So I spend nights, weekends, traveling time, and spare hours at work, whatever sliver of time I can find. Like the proverbial drops, they do fill the ocean. After all, any time is better than no time.

I believe that learning is not a destination to reach. Learning ends when we complete the journey of life.

The Elastic CIO

Last week I happened to be in a panel discussion with some CIOs who were expected to debate on “Improving Enterprise Efficiency”. The sponsor management personnel on the table listened attentively and sometimes also asked intelligent questions to the CIOs. The expert moderator balanced the discussions well jumping from one to another keeping everyone engaged. Unfortunately the enticing headline inevitably focused on server virtualization, private cloud, and VDI as the key theme.

How do you create a link between responsive IT systems to Enterprise efficiency and Business IT Alignment ? The question had everyone stumped and the answer emerged as the lack of responsive systems would imply time wasted by the employees; thus response times are important to efficiency. Intuitive and elementary, so what is the debate ?

Taking another element of research over the last decade on significant portion (estimates vary from 50 to 90%) of IT operating expense is expended on maintaining the lights on or business as usual. So reducing this piece of the pie will presumably shift the budget towards innovation and not as savings. This shift of expense to investment if prudent and allocated to virtualized servers will improve the efficiency of the enterprise. And we will all live happily ever after !

If through some magical process or non-empirical derivation two unrelated pieces of research can be correlated, then as suggested by the Chaos theory, anything can influence the outcome of what the IT organization creates, manages or improves upon. It could be sun spots, or a butterfly in eastern Asia; or global warming might provide insights.

Above is just a sample; simplistic evaluation models defined to justify generic technology investment have almost become the norm. Even when the specific context may not apply, the push to sell is discomforting and creates an auto pushback. Confused, the CIOs have been struggling to divert the discussion to their technology team which is better equipped to discuss alternatives and how they align to enterprise architecture.

The elasticity of hypothesis amuses and at the same time frustrates. Nowadays the headline proposed at any event or by a consultant or vendor speaker has rarely any connect with the subject. The stretch of imagination belies conventional and sometimes unconventional wisdom. However, despite repeated occurrences, the bait still works in getting CIOs excited to come and participate.

The elasticity expected from the CIO goes against the business aligned IT leader with a dialogue that is expected to straddle server provisioning or data centre cooling to improving customer service with process redesign using video analytics, or complex transport management. The diversity of expertise with deep levels of understanding creates a superman like persona who is discussing code optimization with the programmers and engaging the board on shareholder value.

The latter is still rationale and achievable with some hard work, some help and coaching, but the former in which unconnected factoids create an opportunity for specific technology breaks the rubber band.

The follow up nemesis

The meeting finished with agreement on clear responsibilities, timelines and the next scheduled meeting date four weeks away. The minutes circulated to the team the next day captured this very well. Like all projects, this one was thus far on track though the next three months were critical. The requirement gathering had gone well and the first cut was delivered on time; everyone seemed geared to take on the challenge and another successful project delivered.

Over the next few weeks, some updates were received on the portal, a couple of emails and then none. I began to wonder getting anxious if everything was okay with the project. So a reminder was sent to the group asking for updates; received one response, silence from others. With just one week remaining for the next meeting, and progress report depicting inconsistent updates, acidity levels started rising on the real progress.

So I started calling folks and walking across to their workstations to figure out what gives ? Some titbits:

“Yes, I have completed the tasks, but was too busy to provide an update”

“You should have the status by end of the day”

“Why are you getting on my back ? By the time we get to the meeting, we will be on track”

“Sorry, something urgent came up, so am a bit behind schedule”

All this made me wonder, here we are in the midst of an important project that has Board visibility, will provide a significant benefit, everyone vied to be on the project due to the positive impact, but they do not find time to provide an update. What causes such behaviour ? Why do some people find it difficult to provide open and clear communication on agreed milestones or request for information ? Why is follow up necessary ?

With multiple priorities and fires that need to be doused, short-term dementia is pervasive. Rarely the lack of response is out of disrespect, disregard or plain indifference. Follow-up is essential to bring the issue at hand to attention, to reinforce the signal of ownership and shared responsibility. It also helps in bringing back focus on what matters.

Having said this, there could be instances of no response where connect is not adequately strong or in some cases of missing shared accountability. Another factor that contributes to silence is fear of conflict; this occurs when the issue and people are inseparable. Culturally many are unable to provide bad news and thus prefer not to respond. In all these cases, the leader has to intervene and create the way forward.

IT organizations suffer the most when following up with diverse groups – internal and external – when working on cross functional projects or when solving problems that require different technologies to work together. It is important for IT leaders to inculcate missionary discipline within the team to ensure that initiatives in which IT participates, there is clear communication to all stakeholders.

Someone summed it up well “If I did not have to follow-up, I would save half my day”.

I am a new CIO

Recent past has seen many young IT professionals make the grade and move up the hierarchy to take on the responsibility of IT Head, some also getting the coveted title of the CIO. For those who made the cut within the same company, it was new found responsibility with new peers willing to guide through the maze. The rest in new positions in new companies charting unknown waters, every swell appeared to trigger emotions of “Titanic” proportions.

One such new CIO gingerly approached for help, tips, advice, anything to help navigate shark and pirate infested courses. Going down memory lane (it was a long lane) trying to collate the thoughts across each early success and challenge, the gushing emotions had to be controlled to provide coherent thought. So we agreed to meet again and mine the memories for actionable insights that can be specifically applied and get some general good practices (almost like doing Business Intelligence, can we call this Mental Intelligence).

Is there a checklist or step-by-step approach that can be used by a new IT leader to gain success ? The answer is yes and no. Yes because there is indeed a framework that helps get started irrespective of variations across different industries or size of company; no because it is not cast in stone and needs to be adapted to the context determined by corporate culture, politics, and industry and company growth. But something is better than nothing. So here is a set of guiding principles; the list is not exhaustive due to space constraints. 

1. Listen. Understand the business, the technology, the rationale behind the decisions taken, the people involved. Take notes and validate them to ensure you have the facts captured accurately.
2. Observe. People dynamics is important to success. See how your peers and other heads interact and behave with each other. It gives you perspectives on key influencers and roadblocks
3. Ask questions. Everyone loves giving away knowledge to the “ignorant”; clarify your doubts and seek to unearth the assumptions if you are in a new industry. Gather finer nuances that make your company different.
4. Bond. Not just with your team, but also across other peers and across management layers. Be approachable and yet confident of your capability that has got you here so far.
5. Communicate. When you speak (a people language), do it in a way that you connect with others and they are able to understand you. Whether it is good or bad news, focus on the issue, not personalities.
6. Manage Expectations. As the newbie expectations will be high or none with most somewhere in between. Set realistic expectations, sometimes stretch, but never overpromise. 
7. Always meet people. Don’t wait for a problem, issue or project to meet that is transactional and does not build relations. Have a coffee with as many people as often as possible, including vendors.

 Finally if you get stuck seek help from other CIOs or even your boss. Good performers need coaches too.

 

Language curriculum for CIOs or ...

The Chairman of the Indian entity of a leading global IT vendor addressing a gathering of CIOs stressed on the (now so obvious) fact that CIOs should speak in business language. Everyone in the audience agreed and appreciated this repetition like the fact that “sun rises in the east”. The senior statesman then went on to present a dozen slides on why virtualization and consolidation should be on the CIO agenda.

A group of CIOs visited an international event hoping to learn from interactions with their global peers and gain different perspectives. While the IT vendor companies represented in the event were somewhat similar considering the global nature of the IT industry, the speakers were different providing a local flavour of the country. Majority of the sessions stressed on the same fact “sun rises from the east”, I mean CIOs need to speak the language of the business. They however presented in complex detail the technology solutions that they wanted the CIOs to buy.

Excuse me ? Did we (the CIOs) miss something? No, we did not doze off during the presentation and neither did we see you skip some slides in your presentation which may have connected to the obvious fact. We were attentive and so was everyone until the tech stuff started. There were many messenger, text, and email messages flying in the room to check that we were all in hearing the same thing. Excusez-moi or should I say Entschuldigen Sie, maybe if you like I can try another language. But where is the connection ? How many of the CIOs in the room were part of your sample size ?

Over the years, IT was nudged, pushed and coerced to discard techno-speak in favour of what everyone else speaks in the enterprise; the quick compliance and transition surprised many and helped bridge the perception about individual and team capability. Projects were no longer about the next big technology or the latest versions of the fancy devices, they embodied holistic discussions around internal process and external customers. On the other hand for some reason the industry refuses to acknowledge the change continuing to cite examples of a shrinking minority of change averse IT leaders.

So how can this perception be changed ? How do CIOs ensure that what they say is what the IT vendors and consultants hear ? I believe that it is time to start challenging the well-wishing speakers to cite examples when they talk about the language course CIOs need and not hide behind the global research reports of named companies to justify their spiel. Can they speak more from personal experience ? For them to be heard, maybe they need to talk business, unless this is a ploy to hide their inability to speak the new language of the CIO.

For the CIO, the sun indeed rises in the east, but maybe just maybe it needs to rise from the west for the vendors and consultants to notice that the CIO has passed the language course with flying colours; maybe it is the vendors and consultants who need the course after all !

The Power to say No

Over the years for the business dependence on IT has grown to reach a state that it is unimaginable to think of any business running without IT. I am sure that we can start creating a list of exceptions which may be different by geography or economic classification, but predominantly every business operation uses IT to sustain, grow, diversify, improve, analyse, and a lot more.

Over the years the IT Head also transformed through the journey working lock step with the demands of the organization providing the necessary solutions, sometimes wildly successful and challenged, delayed or unsuccessful. Through the era the IT leader kept moving outward from the glasshouse to the factory, warehouse, corporate office, and field and wherever the internal customer was present, and then beyond to where the external customer lived.

Over the years as the transition occurred to the CIO, the discussion changed from the nuts and bolts, three letter acronyms, servers, routers, hardware, software, networking, to business process, order to cash, procure to pay, customer analytics, increasing revenue, strengthening the bottom line, creating competitive differentiation, managing supply chains, collaboration with the suppliers and customers, new business opportunities, until the difference with other CXOs started blurring.

Over the years one characteristic that has not changed is the acceptance of demands = reasonable or otherwise, requirements - rational or not, time pressure to deliver - urgent or not, budget cuts - downturn or not, accepting everything business desired, spoke about, or demanded. The IT function was expected to stay subservient to cajoling, coercion, ransom, threats, with the proverbial sword hanging inches from the neck; if you cannot do it, we will find ways outside to get it done a la shadow IT.

IT was not expected to challenge, they were expected to deliver; whether it is a report that no one sees, a quick fix that stays in UAT for weeks beyond the deadline, systems that saw usage drop faster than the stock market in the downturn, one liners or vague or assumptive requirement definitions, or in recent times consumer devices to be connected to corporate networks. A challenge or denied service was sacrilegious and a pile of turndowns could lead to “lack of alignment” to what business wants.

With increasing comfort with business, conviction, and communication, CIOs have looked the other in the eye and engage in a non-confrontational debate which has germinated into acceptance of the CIO viewpoint and its intent only to the best interest of the enterprise. It’s a newly discovered facet that boosts confidence and fuels itself; the spark is now traveling virulently. CIOs have created the freedom to say “No” to the unreasonable and ill-defined.

When any discussion is based on data, facts, and sound logic, the outcome normally takes predictable route. The acceptance of the CIO into the “Inner Circle” is happening; the retention requires practice of democratic principles. CIOs should exercise this power judiciously and use it to create a better solution or paradigm that encompasses hitherto unused tenets. It takes some wisdom to differentiate between the need and the want and not play favourites; it is always a bad time for dictators who can be overthrown quickly.

Go and exercise this choice, you will be surprised !

Can the CIO help improve Customer Service ?

The headline for the discussion said “Business transformation”, the participants were CIOs across different consumer facing service industries, the audience a mix of 80 odd CIOs wanting to take away some pearls of wisdom from the collective experience of over 100 years on stage; after all not too often you get to hear success stories on how business has been transformed by CIOs with a mix of people, process and technology.

It started off well demonstrating the rich experience of the moderator who put across some sharp questions to the CIOs. Into the discussion, a couple of service incidents specific to their company had the CIOs on the defensive in an attempt to rationalize what appeared to be process lapses. Few from the audience joined the charge and soon it appeared to be a “Consumer redressal forum” with the hapless CIOs on the dais unable to defend and afraid to rebut the moderator. A brave soul from the audience chastised the moderator for diverting from the core subject and the personal affront to the CIOs. Sensing trouble, the organizers closed the discussion citing time constraints.

Later in the day a debate set off between a few panellists and a bunch of CIOs on whether CIOs can influence service outcomes in the call centre, field service, or responses received by the customers. Service exceptions are reality despite the best intentions and efforts of the enterprise. With attrition being sky high in service functions, training time has been shrinking with on the job training becoming a norm for some.

Even when process and technology has been engineered for effectiveness, the people challenge remains. So what options exist for an enterprise and what can the CIO do to create a consistent framework that the enterprise can depend to provide consistent, scalable process driven service outcomes across geographies ? Is there a best practice that can help to reduce the customer pain ?

Products entice a first time buy, but services create repeat customers. Irrespective of how the service is delivered, via call centre, on premise break-fix or at service centre, it is important to set expectations and manage customer interaction with empathy. Sears coined the “Customer is always right” paradigm; in the current hyper competitive world and unreasonable expectations, the customer has the ability to take her business away to competition.

Enterprises need to stay connected to the customer via all channels seeking and listening to feedback that is out in the social media. It is a space to watch not just what they are saying about your company, but also competitors. I believe that every CXO including the CIO should stay aware of the pulse of the services and continuously improve on the experience with a feedback loop. After all your customers can be your best sales persons and success (or an irate customer) is only 140 characters away.

Surviving Audits

Once upon a time (actually not too long ago) a company and its audit firm lost their marbles indulging in innovative accounting and logic belying practices. The event resulted in the first shutting down and the other being dismantled. Hapless citizens and investors who put their faith in these lost their financial safety nets and were left poorer. The aftershocks felt by the rest of the companies created an industry around consulting services. SOX became a bad word for all CXOs and everyone dreaded facing audits. Compliance gained prominence and everything else was subservient to it.

IT being the foundation of processes and information enabling the enterprise came under the scanner; it was not enough to demonstrate that data integrity and consistency is maintained, it was also important to provide evidence that others in the organization did not violate process that could result in potential loss of control. Thus as the custodian of the physical information assets and the administrator of the logical processes, the IT organization had to fend off auditors of all types at unnerving frequencies.

Consultants thrived on FUD (Fear, Uncertainty, and Doubt) factor as non-compliance had severe ramifications for the CIO, CFO, COO and the CEO. Perceptions of risk heightened the tension with any risk classified as high needed immediate attention. Tolerance levels of Boards tended to zero and Risk Committees hounded the functional heads to comply by the written word, who turned to the CIO to address the sane and inane collectively.

Whether it is Internal, Statutory or Third Party Audit, the basic intent is to review process execution consistently against good practice and compliance to stated policy. Additional frameworks on quality, process maturity, security and others provide the enterprise incremental value over competitors. Policy once stated requires alignment with the real world to ensure relevance; thus periodic review is critical. When regulatory restrictions impose process change like SOX or PCI-DSS, HIPAA, the enterprise has limited choice but to comply. Some industries are more regulated than others; some companies pride themselves on their GRC frameworks, the rest follow the path of least resistance.

So what are the strategies the CIO can adopt to ensure that s/he does not get beaten up at every audit ? CIOs should partner with their Internal Audit functions to work with each functional head and process owner to review and validate not just the process, but also the management of exceptions. If Internal Audit is unable to provide the necessary attention, seek external help; but do not ignore it. S/he should create clear accountability and transparency of every task across the cross-functional teams involved in the execution. It is important to note that people are the weakest link of any process discipline. Internal process champions or BPM experts are invaluable in the quest towards excellence.

Compliance is non-negotiable; our shareholders and regulators expect every part of the enterprise to conform to the laid down policies and principles. Good corporate governance expects no exceptions; despite all the controls we still come across black swans that disrupt the equilibrium and raise the difficulty level. Unfortunately the enterprise CXOs and the CIO have no choice but to run faster to stay in the same place.

Cost of IT versus Value of IT

The CFO has traditionally controlled the purse strings ensuring fiscal prudence to keep the enterprise healthy with adequate financial safety net. As a part of the management team the discussion and debate ensured that investments stayed aligned to overall company direction. With adequate risk controls, only in rarest of rare cases the CFO could overrule other CXOs. Recent times have been full of analysis and news that the CIO is no longer in control of the IT budget, now the CFO purportedly controls IT investment decisions.

The CIO being the youngest CXO not always by age but the role has evolved only in the last decade or so and having typically grown from a technology background was perceived to lack business acumen and unable to take all aspects into account. The majority migrated and matured with ease working lockstep with other CXOs to the benefit of the enterprise. Post slowdown “new normal” changed organizational risk appetite and with finances being scarce the CFO rose to prominence. Now with growth back on track, why is it that the CIO continues to stay shadowed considering s/he demonstrated higher changeability and adaptation to the environment.

IT budgets have stayed stable over the years with mature enterprises focusing on bringing down IT operating expense leaving the capital investments open for discussion. Corporate and IT governance provided the necessary checks and balances on where to invest. So what gives rise to the new paradigm ? Does it indicate breakdown of the balance or has the CIO relinquished his/her responsibility now satisfied to stay in the back office ? Has the foundation and partnership set by IT crumbled with cost remaining the residual reality with the value being discarded on the wayside ?

IT does incur cost; everyone is aware and acknowledges that a significant portion (40-90% depending on the enterprise, IT maturity, CIO, Board of Directors, etc.) of the budget is allocated to “Business as Usual”. Where the IT organization and its leader is unable to clearly communicate the benefits or have a dialogue with other CXOs as an equal, irrespective of the good work done, IT gets labelled as a cost thereby nullifying the efforts.

IT also delivers value to the enterprise, customers, employees and the shareholders. Sustained differentiation and competitive advantage in the near term are typically IT enabled innovation. Multiple industry IT and CIO awards, and case studies validate success clearly illustrating value. New disruptions created by mobile consumers, social online engagement, analytics, and many more would find it difficult to survive without a good IT platform and sustained focus. Is the balance shifting ?

I believe that recent times have accentuated the value of IT and have created a wider role for the CIO that goes beyond technology lead interventions. Outsourcing the operational activities has also given the IT team an opportunity to focus on what matters. The task of managing the budgets and reporting has become even more important thus creating a stronger bond between the CIO and CFO. With increasing financial acumen, the CIO and CFO are on the same side of the table with the CIO deferring the financial decisions to the CFO. This is rebalancing the equation and not a shift.

Is divergence the new convergence ?

“I use 7 screens to manage my work and life” proclaimed a Silicon Valley high ranking geek working for a big technology company. It amazed everyone on the table who had challenges with two phones, one personal and other company issued, and a laptop. 7 devices, portable and fixed comprised the stable of computing assets used across various operating systems, capabilities, synchronization with multiple systems, providing segmented information to cater to specific needs of this executive. Asked a CIO in the audience, “How do you remember which device to pick up for what purpose ?” Quipped the multi-device juggler, “Oh it’s easy …” and rattled off the work distribution.

When Smartphones made their mark with the ability to push email and SMS, it ensured that the corporate worker had no option to 24X7 work. The small screen however posed limitations on what one could achieve on the phone. As screens became larger the phone got bigger and bulkier redefining the shape and size of what was once a small pocket appendage. The good thing is that the phone never aspired to replace the clunky laptop.

The advent of the tablet a few years back had researchers proclaiming the imminent demise of the laptop; déjà vu when the laptop made its appearance. Executives love the soft keyboard on the tablet, plus the ability to scrawl and convert to text but slowly realized speed limits imposed by this input method. Keyboards found their way back connecting to tablets and then everyone wanted spreadsheets and word processors compatible with their other devices. Reading on the smartphone has evolved to allow all types of documents barring few exceptions; the tablet had to compete with the phone and the laptop.

Manufacturers are experimenting with different screen sizes, 5”, 7”, 9”, 10” with justifications on why their version makes sense to the users, while the phones now have crept to 4”. Each has found traction with a set of users, segmenting the market by activity or deemed convenience. While initially WIFI was acceptable communication channel, now 3G/4G is a necessity.

One more connected device, one more data plan to manage, the growing monthly expense is not a discussion, the ability to traverse across the screens is insatiable, which are evolving faster than (Charles) Darwin or (Gordon) Moore thought possible. The want rate is keeping pace with this and suddenly the hapless executive has multiple screens not wanting to discard the earlier one as quickly as s/he is acquiring newer ones.

Will the phone and the tablet converge in the future ? Many believe convergence is the way forward between the capabilities offered by the phone and the tablet with the new device offering the best of both worlds. Does it mean we will be able to make phone and video calls, surf the net, work on documents and applications, talk to the device, type on it as fast as we do on the humble laptop, and use it for entertainment; all this with clear demarcation and ability to segment usage as well as official and personal data.

Me thinks that it will take longer than we believe it will; maybe there are individuals who will happily put a 7” or bigger device to their ear or use it with a Bluetooth speaker, the majority will manage the convergence or divergence with multiple and live with its associated challenges.

Achieving business agility between ERP and Cloud

An intense debate between two CEOs ensued while I was listening with concentration to them; there was no debate on the need for every business to leverage technology to stay ahead of industry growth curve. Both had experienced success, but there was indeed a bone of contention. One of the leaders vehemently recounted the inability of ERP solutions and vendors to address the market dynamics. He cited many instances where the ERP vendor as well as his IT organization took longer time than business could afford; small solace that his competitors also used the same solutions and thus had similar issues.

The other CEO countered with an equal number of scenarios when the specific ERP had indeed been ahead of others. Now every ERP solution provides a complex array of parameters and settings that can be manipulated to provide functionality for most business processes. This complexity also becomes a bottleneck when any change is required. It is rarely as agile as other smaller solutions that can quickly be customized. CIOs have had difficult discussions on this aspect with Business and Vendor alike. The monolithic nature of the solutions indeed poses a challenge. Not that there are too many options, so the technology ecosystem has created multiple layers to manage the agility requirements.

Grudging acknowledgements later, both glared at me as if to validate their arguments and then turned back to each other. Before they could continue, I pitched in with thoughts on the new opportunity that has everyone confused and wondering with benefit statements ranging from better ROI to TCO, time to market, productivity, and the panacea to all ills that face every enterprise that uses technology.

This brought a smile to the face of the second CEO who began to lecture on the future being cloudy and why current IT models will no longer survive. He elucidated the benefits of the new disruptive paradigm the Cloud is and why enterprises should be embracing this. Now the other looked imploringly at me to help him and I could not refuse the request. After all I had broached the subject so I had to provide a perspective.

Differing flavours of clouds offer different value propositions; the viewpoint put across by the CEO related to Application and Software as a Service. Both offer an easy way to deploy and get started on any new business area or process. The most widely accepted scenarios are sales force automation and collaboration; for SME the benefit is limited upfront investments and no worries about managing complex technology. Beyond these mainstream business process remain firmly grounded in corporate data centres.

Irrespective of their physical location, the big ERP remains the same animal, big monolithic and complex. Separating processes like sales force or collaboration (read email, chat, etc.) does not in any way create an opportunity for agile business process alignment for the rest of the enterprise. In fact with the cloud, the base expectation is that business processes are standard and can thus be uniform across multiple companies. Clouds provide faster start points, but the change ability remains similarly constrained. A question from the audience inquired about ROI models for evaluating Clouds; that is another story for another day.

The two CEOs representing a large business house and a leading global ERP vendor acknowledged the reality and it was time to move on. The CEOs and CIOs listening to the interaction went away with both sides of the coin clear (?) to create their own agenda and discussion in their enterprises.

Preaching to the CIO

The other day I attended a congregation of CIOs with a dozen odd vendors sponsoring the event. It was a gathering of 100 odd CIOs who took time off on a Saturday to amongst other things patiently listen to the spiel. With representation across industries and a mix of senior and evolving leaders, the learning and networking potential was expected to be high. The investment of time from these leaders carving out a portion from their personal time was expected to yield reasonable value.

Now every sponsor vendor always seeks to disseminate information on their offerings and pitch their wares to every target segment. Traditionally this has taken the form of slide presentations that no one wants to hear; at times even the presenter is struggling to do justice to the content as s/he is not the creator of the slides which have in many cases lost relevance. Futile attempts to change this model of engagement have left the participants numb as they grace such time with their physical presence but rarely with the mind.

Before embarking on the merits of doing business with their company, setting the context with the audience has always been seen as a good idea; and this is what they started off with. The first one off the ground started with data from respected research companies.

What is the business reality today ? Not necessarily in order of priority, they are: expectations of growth, exploring new markets or products, driving operational efficiency, cost containment, IT lead innovation, and customer centricity. How do these impact the CIO ? The CIO is expected to be a business leader shedding off the technologist skin; s/he should transform and work with other CXOs, overturn the iceberg of IT expense by reducing the operational expenses and allocating higher amounts to new initiatives. Slides titled “Changing Role of the CIO” advised the need to wake up and get going. However, the best part was how their old offerings now enable this shift.

Storage solutions, Security service providers, system integrators offering RIMS, data centre solutions, virtualization solutions, and even network solution providers found a way to connect the dots and make the CIOs appear like cretins and kids in school who needed to be reminded of how their performance will be measured. Best part was the repetition of content with the context lifted from the same reports.

We all know that CIOs are a patient lot and do not ruffle feathers easily. But when speaker after speaker repeated the cliché, the unrest in the room began to take the shape of a mutiny. Half way through the program, sparsely occupied seats greeted the incoming speakers; those present had no interest and thus engaged each other on the table in discussions detached from the proceedings in voices loud enough to send a clear message across. Over coffee the vendors were chastised for their immature behaviour with a clear message:

We know our reality better than you ever would; we transitioned to being business leaders a long time back; however you are still trying to sell to IT Managers believing that the past is frozen. We did impact the expense line and it was not about IT expenses only which is why you believe that we are not connected to the reality. Our CEOs and other CXOs do not look at us the same way they did a decade back; they partner with us, seek our advice and work together towards the common business objectives. We are not enamoured by hardware, software, new technology, we seek to solve real life business problems, sometimes with help from technology. So, stop debating the changing role, it happened while you were busy trying to figure out why there is no traction any longer with the CIO. It is you who need to change to align to the new age CIO.

Do you have one big message ?

Earlier this month, I was in a conference of retailers discussing how IT can contribute to growth within their business and to the industry at large. The event had its usual bevy of IT vendors who had availed of speaking slots as well as many deciding to exhibit their products/solutions to target potential customers with their offerings. Attendance being large with representation across retailers, it was a great opportunity for the sponsors to engage.

Now this was one conference that was crafted together by a panel of CIOs and vendor representatives in conjunction with an industry body. The panel engaged with the sponsors through the planning process defining expectations and providing the suggested format of their participation in the event. Vendors presenting the traditional way using slides were expected to send their presentation to the Committee of CIOs to validate the context aligned to the theme and to ensure that it made sense to the participants. Thus, the agenda, content headlines and topics (de-jargonized by the CIOs with some catchy titles) were fairly relevant to the audience comprising of a mix of business and IT representatives across the layers of management.

Every marketing executive when provided with the opportunity to deliver an address to a captive audience attempts to put in everything that the company does whether it makes sense to the target audience. The result is that anyone listening is more confused than s/he was prior to sitting through the presentation. Charts and multiple boxes with bullet points are the norm. Animations and pictures add to the already crowded slides.

With a few exceptions, the changes to the pitch comprised of slashing the number of slides to fewer than 20 and making them readable even to people sitting in the back of the room. The clear message to everyone was what is the one big message you want to leave with the audience in your allotted 30 minutes ? Can you engage and provoke thought rather than outline the menu of options your company has to offer ? Given the task of reviewing 3 presentations each and ensuring that the changes are in line with expectations, the CIOs were a harried lot by the time they got into the conference. Few still escaped censorship by either citing unavailability of global speaker slides or by simply not responding.

The end result ? Few chose the case study route to deliver the benefits of their product or services; the compliant presentations created a wow for almost everyone, visible from the crowd outside their stalls. Vendors who did their own thing found the audience twiddling with their smartphones, chatting to their neighbours, dozing off, or simply walking out midway. If I was the speaker, it would be totally demoralizing for me.

In the day end debrief with one such vendor, he insisted that there is no other way to inform the audience of what his company has to offer. If the customer is not aware of the entire spectrum of offerings, how and why will s/he think about his company ? According to him, when he puts across 10 points, a few will be remembered. He refused to believe that his speech was delivered but not received.

Sigh ! some people don’t learn.

Do Clouds really save money ?

The beginning of the monsoon season in Mumbai inspired me to push the boundaries again in quest of the silver lining in the Cloud. Recent events around outages and security across multiple global Cloud pioneers poses doubts on the movement of even non-mission critical applications outside of the corporate data centres. We are not just talking about Infrastructure or Platform as a service, but everything that is the manifestation of the Public Cloud.

Over the last couple of years every offering saw two shifts, first it had to have a Cloud flavour and second around social networking (that is another story); some termed this new euphoria as bubble 2.0 tinted by valuations achieved in recent IPOs. So everyone justified how this time it is different and why it is sustainable. Many large and small enterprise found efficiencies (at least short term), in moving field functions like sales and service, and collaboration on the move, to the Cloud.

 

Leaving aside the debate between public, hybrid and private clouds, the real issue is about the promise of the Cloud irrespective of the vendor, type of cloud offering, or engagement model. The big benefit that every type of Cloud offered was savings, real quantifiable savings or better Total Cost of Ownership. CFOs would agree that TCO is always a good measure for any financial model if all other dimensions remain unchanged.

 

Cloud service providers financial models are contingent on multiple customers adopting their base solutions which give them the efficiency of scale and repeatability. As the number increased, beyond a threshold they start making money. Non-concurrency improves yields, but prices remain the same for customers. So the financial models attempted to capture some efficiency based gains making them look attractive to the prospects.

 

Most discussions got off to a good start with worksheets providing easy decisions. The newness of the paradigm left some questions unanswered, but during the slowdown, these were brushed aside. Some of these were 

1. What happens if the SLA is not met ?
2. Is my data as secure as it is in my current state ?
3. Can I move off to another Cloud if I don’t like something ? How easy is the transition going to be ?
4. As I upgrade internal systems, how do I ensure integration with the external systems does not break ?
5. What recourse do I have if the Cloud Service Provider goes bust ? ...

I will stop here, the list is a bit longer, but you get the point.

 

Business impact due to recent outages and security breaches for some of the smaller customers was significant. Some of them just had to wait and watch with no option. A few had spread the risk across and thus the impact was limited. The big enterprise shrugged and moved on. How does one balance the adverse business impact against the cost savings ? To me this is a bad compromise as everything is subservient to business interest.

 

Do CIOs really take real vacations ?

Last month I was confronted by a peculiar but innocent question from a young professional, “Do CIOs take real vacations ? I mean real long vacations with friends and family free from all the worries of workplace and fighting fires that keep them at work beyond the normal hours ?”. I began to wonder about the question and the more I thought about it, the more it troubled me. I mean, vacations without my email, phone, laptop, no connectivity; that was eons ago.
Today every executive irrespective of hierarchy is consumed by the need to stay connected to the workplace. Downloaded information and alerts keep the buzz going 24X7. Approvals via phone, business intelligence on the fly are the norm; one cannot ever claim that I was not informed or I did not have access to information. To add to the clutter, friends and partners want to stay connected using various social networks.

So what is the vacation about ? Working on the road with interruptions on the phone, balancing the laptop in between site seeing trips, late night responses to emails with long attachments, talking to a vendor while soaking into the natural beauty staring in the face ? For most of us who travel across time zones, the first reflex is to reach out to the phone to see what came through while we caught up with the forty winks.

What does it take to sell the Ferrari and become a monk who has no links to what we call “work”, while immersing into “life”. Is that a possibility in the hyper-connected fast paced activity conundrum ? We CIOs created this paradigm for our enterprises to which every corporate employee is a slave.

Imagine if we did not answer the phone (makes us appear rude), stopped responding to emails and had an active “Out of Office” message, let team fight the fires that make up a regular day at work; would it make a stress free day ? 9 out of 10 times people would say yes, but 9 out of 10 times they will suffer higher stress levels’ wondering about what is indeed happening.

So is there a way out ? I would hazard to say yes and it requires excruciating will power to execute; go at it one hour at a time. That is like taking baby steps and setting a realistic target because stating that I will not look at that device called the phone, laptop, or tablet; for a week is unlikely to happen. Feeling awkward, I called many CIO friends who took vacations recently and asked them if they did what I have outlined above. No prizes for the result of the survey.

I think Bob Dylan had seen the future when he wrote in the year I was born “The answer my friend, is blowing in the wind, …”.

Guess what, next vacation I am going to try it. (it’s always the next, isn’t it ?)