Vendor lock-in

Kids ask the most interesting questions; they make you scratch your head and think. I had this experience recently when interacting with a gathering of B-school kids. The occasion was an event organized by the students with the industry exploring insights and networking. One such session was around the challenges and opportunities for the CIO. The CIOs presented were heartened that the role is one of the aspirational careers.

The question that stumped some of us went something like this. CIOs take decisions on IT strategy and architecture thereby setting the foundation of the technology that will enable the enterprise for a long time. So when selecting an ERP or similar system what are the criteria to select one over the other considering that once a specific technology is chosen, it will stay for a really long time. It’s like a lock-in because no one changes ERP systems normally. How do you then manage cost escalations and support ?

Now as I know the question is largely accurate portrayal of reality. Every enterprise when selecting an ERP has painstakingly reviewed most options before assigning the family jewels to the solution. Such magnitude of projects is always launched with fanfare with senior management speeches and project naming ceremonies. Committees are formed with best intent and sooner or later the project goes live. I am not getting into success or challenge that typical projects face; that’s another story.

Over the years with increasing licenses and customizations, the sustenance cost starts to hurt; CIOs find ways to reduce support costs or squeeze licenses deployed to keep operating expenses low. The thought of replacement is rarely tabled and considered impractical. How can such a change be ever executed ? Who will drive this ? Change will be disruptive to the business. The cost of replacement will be extremely high and not worth the effort.

I am sure that these reasons have some echoes for every CIO. Change is indeed a herculean task when it impacts almost everyone in the company; especially so when the change will have the biggest impact on the IT organization. Apart from the change that every employee will have to go through, the IT teams will have to get out of their comfort zones and drive the change from the front while keeping the lights on and business chugging along as usual.

So is ERP replacement the peak that no CIO wants to even attempt ? Or is it only for the few brave expedition leaders akin to climbing the Mount Everest ? Yes the biggest peak has been climbed a few times and so has ERP migrations done with sparse frequency. Why this reluctance in proposing the change or embracing the challenge to climb mountains ?

I believe that the vendor lock-in created around the difficulty of ERP change is to some extent promulgated by the CIO. It is time to abandon this myth and start exploring new horizons in the new world being created around us. We can be part of the creators rather than accept status quo irrespective of whether we were part of the original decision or not. Every decision taken is based on facts that that time and is largely a correct decision. Should we allow this to constrain the future ? After all if you keep climbing smaller mountains, no one rejoices with you as much as if you did climb the Mount Everest !

Walk the Talk

Almost all of my posts are based on personal experience or interactions with people from various walks of life. For a change looking for new topics to write about, I started scanning a few websites positioned at CIOs and aspiring CIOs. I also decided to look up a few celebrity bloggers and tech writers who have either been ex-CIOs or respected consultants and speakers in many CIO forums internationally.

I do receive and read more than 50 odd newsletters every day across various subjects; industry specific from retail (my chosen industry for the last 5 years), Human Resources (for people tips and ideas), ecommerce, social media, leadership, current affairs, regional news, politics, and many CIO focused sites. These are supplemented with some internet browsing, 5 newspapers and some IT magazines daily. The summaries and news briefs keep me updated with information which helps me understand trends and stay current with the world.

Coming back to my search of the sites, the idea was to look at what is the world taking about ? Can I pick up a few insights that could help me in creating the next week’s blog ? Are my posts still relevant to the CIO or I am living in a world detached from reality. What new innovation have I missed while running on the technology treadmill (see last week’s post) and getting to be a retailer and a coach to start-up CEOs and future CIOs ?

Headlines on new product introductions (tablets, phones, servers) and some of the hyped upcoming technologies took up 70% of the landing page across all the sites. A few links to notable blogs on the sites, vendor advertisements and videos made up another 20%. Desperately I started scanning for CIO leadership, business challenges, innovation, people management, and customer engagement, anything that was removed from technology.

On one site I did find some hidden behind a menu option; it was a CIO case study on how she overcame a difficult business situation with her expertise in business. On another site a menu button offered expert advice but clicking a few links got me some technology experiments and vendor sponsored white papers.  When every publication rues and makes a case for a business savvy CIO, why is the content not reflecting this ? Why are these sites still about technology and are they really targeting the CIO ?

Take any IT publication (physical or electronic), irrespective of the target audience (CIO, IT Managers, channel partners, broad-based audience), the editorial or one of the cover stories is always about what the CIO should be doing to stay relevant to the business. The underlying theme is always about business before IT. But after the preaching is done, back to business as usual, do you know about the new 64 core server or the next crossover device with zillion pixel screen ?

They proclaim, CIOs should evolve, cite surveys from other CXOs, CIOs, vendors … and then publish technology trends, new servers, tablets, smartphone comparisons, stuff that matters to a technology professional and detached from a CIO who would depend on his/her team to advise him on  the relevant tools required to achieve the defined business objective. Why can they not walk their talk if their defined target audience is indeed the CIO or the senior IT leader ?

I believe that evolution is slower and selective than technology innovation.

The Technology Treadmill

In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing." – Theodore Roosevelt

There have been predictions on hot technologies and trends to watch for across the board; from vendors, IT consulting companies, media companies (not just IT), academic circles, groups of various kinds and individuals, CIOs or otherwise. The lists short and long, good and bad have caught the imagination of many CIOs as well as others within the company who are asking how will it impact us within the company, and our customers.

It is certain that a few will create enough hype and threaten disruption. Be it personal devices or back end technologies or even consumer facing applications, every new tool or technology promises to change the way business is conducted or we engage with customers. Some are improvements over existing tools with the novelty factor fading away quickly with the response of the existing leaders; the rest fail to follow up on the initial promises.

We occasionally find some actually providing benefit to the enterprise, some measurable, the rest is largely a race against competition to deploy and look savvy. Our employees and customers expect the adoption of almost every new announcement the following day. Thoughts about security or reworking or plain simple ROI are for the CIO to figure out. Vendors and consultants definitely benefit from this running behind the technology.

From the time of the mainframes to the promise of the Internet, social media, and consumerized devices of today with apps and everything in between, technology has created opportunities and challenges for the IT organization. The pace of change is increased with ubiquitous technology; the accelerator is now on auto with everyone running to stay in place. Can we afford to stay where we are and be observers or slow adopters with a hope to survive the mad rush to nowhere ? Is there likely respite from the ever increasing pace of changing expectations ?

The technology treadmill will continue to move irrespective of whether we hop on board or not. It is extremely unlikely that we will be allowed to stay on the sidelines and admire the speed at which the treadmill and its players are going. CIOs will have to stay connected to the pulse and inspect every change from multiple angles. Some team members will have to keep jumping on and off the treadmill to ensure that the ramifications are understood and communicated effectively to set realistic expectations.

In most cases, the call on which ones to stay with or discard will remain with the IT organization. Success or lack of it will however be decided by our internal and external customers and stakeholders. Can the CIO get off the technology treadmill and stay relevant ? I believe that pragmatically the CIO and now even the other CXOs have no choice. They did not enroll into this madness but have been made party to simply by being there; exclusion is not even an option any more.

I am going back to the treadmill with a quote that I leave behind after listening to some retired CIOs. “Strangely enough this is the past that someone in the future is longing to go back to” – Ashleigh Brilliant.

The price of inaction

The setting does not matter, but whenever I meet someone unrelated to IT (with IT folks the discussion is anyway about IT), the conversation always ends up talking about how they use technology. Maybe something to do with me, so when I met with a CFO of a large company, we predictably ended up discussing the health of their IT systems.

The company had grown organically to become a leader in its industry and now had global aspirations. Family run, it had over the years it had invested in IT to keep pace with the change in technology. The owners indulged the new generation allowing them to embrace cutting edge while retaining the legacy for the comfort of the stalwarts who built the company. The diversity that thus coexisted was amazing to just admire the profoundness and marvel at how it all worked together.

Hundreds, no thousands of almost disjointed small systems supported mission critical tasks across functions held together by the experienced hands that orchestrated the business. The management had discussed and debated renewal for a decade to replace the increasing inventory of applications with a contemporary ERP. The decision was always deferred with the fact that it has worked for us so far, so it should work in the future too. We have survived downturns, competition, and grown.

They did not have an IT Head and had never thought of getting a CIO. What about cost of sustaining diverse and antiquated technology ? The response was, my IT vendors take care of that. Were employees happy with the situation ? It works, so happiness is not the consideration. Was productivity optimal ? Grudgingly he accepted that it could be improved upon.

In the second decade of the twenty first century a successful large enterprise working with no formal IT strategy nor a CIO; as I dug deeper it was evident that the unfettered IT had its advantages that there was agility in creation of solutions where required; business teams worked with multiple partners and sometimes even individuals to get processes or content enabled. Across various offices and functions this was the norm.

Integration and reporting was on another planet. Rarely anyone agreed to figures; sharing of best practices or synergies in process, unheard of. The local optima did not favor global optima. The CFO was at the receiving end of most of the chaos, but did not see ROI in large scale change. He lamented the fact that competitors were beginning to catch up and technology may have a role in that. The promoters wanted to step back and handover reigns to the next generation and professionals.

Can total or strategic outsourcing solve the problem ? We discussed and debated the merits and challenges of this approach, the change management across the diverse enterprise and employees across locations. Giving away the problem will not necessarily solve it. Someone internally will have to own the change, coax it step by step and create lasting change. S/he will have to take everyone along the journey. 

My humble suggestion to him was to get a CIO.

Proactively Resistive

Uncertainty is certain, that is the maxim of today and reality for all of us individually as well as for enterprises. A repeat of the economic downturn of a few years back or worse, that is the question everyone is pondering over. When the sentiment is down, the first casualty is perceived risky innovative propositions. People withdraw into their anxieties and work to keep status quo. Any remotely disruptive thought is beaten black and blue unless inaction threatens existence.

So what does it do to the IT budget and the CIO who is being challenged to do more with less and find resources to create efficiency ? How can operating expense be lowered when a large chunk of the allocation is to paying license fees and annual charges for the large systems ? Cloud may shift some capital expense but does not take away the payout for license and support. Can the business critical solutions be shifted to open source ?

Even if the shift to open source was possible for some processes, the core ERP systems are the ones that will be resisted by the users; be it HR or Finance, they do not want to shift away from already stable (take that with loads of salt considering the patches that continue to make the system unstable) and comfortable systems. The big vendors know that such a shift is almost impossible and continue to hammer the proverbial nails into corporates with increases year on year. So what is the way out for the CIO ?

In a CIO forum I met one of the thought leaders who has and would make it to every list globally. He ran a discourse on change that IT brings about in an enterprise. He talked about some of the change projects being executed by many global enterprises pertained to reducing expenses across the board led by IT. Mandated or democratically agreed to, these were being resisted by layers across the enterprise. He preached top-down and bottom-up collaboration to “sell” the ideas along with existentialist discussions. If we did not do this, then the sky would fall upon us.

It was nothing new as CIOs use this strategy quite well to garner buy-in for most projects. It is another matter that measurement of the impact is rarely done a few years later as the business context has changed, or we have moved to another crisis, or the people who made the case no longer exist in the company. Push ahead and ye shall be rewarded he expounded. Maybe I have become a cynic after trying this so many times to believe that it would still work in the current business environment.

I believe that irrespective of support levels across the enterprise, the CIO should continue to engage with the stakeholders to have them share the pain before embarking on the journey to create colossal change or transformation of the IT landscape. Finding business allies will be difficult, but the journey in solitude is a sure way to achieve martyrdom. After all we all live under the same sun but have different horizons. So lead the way, but make sure that there are others along with you, not following you.

The words that stayed with me a long time were “the cultural response was resistive, sometimes proactively resistive”. Hasn’t the world always been the same for the CIO ?