Monday, December 30, 2013

Working on Vacation

I switched on my laptop to check on my holiday resort reservation and a message popped on my screen, an accusing one at that: “What are you doing online on vacation ? Checking email or responding to some crisis that requires your intervention ? Or just that you cannot get work out of your veins ?”. I tried to justify to her that I was not checking mails, nor facing anxiety or withdrawal symptom disconnected from my mail. I was just checking on my bookings and that’s that. “Then why is your corporate IM on ?” she chided.

It’s that time of the year when everyone, well almost everyone (travel and hospitality industries excluded) is on vacation. Whichever part of the world you look at, across cultures, companies, industries, everyone is on vacation as evidenced by their “Out Of Office” messages. It’s like the entire world shuts down for a period of 2-3 weeks going out on trips, spending time together with family and/or friends, enjoying snow or the sun, and to that extent business for most comes to grinding slow motion if not fully shut.

Over the years OOO (Out of office) messages have increased during festive seasons and less frequent for rest of the year. Immediate conclusion would be that people are working harder through the year and then taking a good long well deserved vacation. It could also imply that irrespective of travel, vacation, weekend or time of the day, everyone gets their hands on their mobile devices and feel gratification giving attention to whatever came in or responding to mail, or just checking out or updating social status.

Our need to constantly check our smartphones has resulted in a situation that we compulsively want to stay connected all the time. It is now psychological and nothing to do with work or life or the balance that was a discussion in the past. To check my hypothesis I sent messages to about 600+ people in my list; CEOs, Head of business, friends, relatives, and loads of business acquaintances. I received about 200 odd out of office messages telling me that they were on vacation and not likely to respond to messages.

The subject line clearly indicated “Seasons’ Greeting” and thus was not urgent, important, a crisis or life threatening to merit immediate attention or response. Despite this, within 24 hours I received about 70 responses to my messages from those who had set OOO status ! Most messages carried a “Sent from a …..” footer. Was it an acknowledgement of the greeting or my hypothesis that we have become slaves to technology ? I now know which smartphones they use or service provider they have subscribed to.

There was a time when I would respond to every message that needed a response or I had a view on as soon as it landed in my inbox. Everyone loved it and commended my quick response; I was on 24 hour clock, not that it helped my life at home, I was thumb happy. Is it more to do with the way the stimulus response is changing rather than just work or life ? Are there any remedies available beyond old and simple willpower ? Is there a way out for the corporate bonded labourers armed with technology that keeps them in chains ?

Reality is that this is self-imposed nemesis of time, energy and expectations; if anything indeed merits response, do it, in most cases the urgent or critical will not land in your inbox, people will call you. Messages with scores in “To” or “cc”, rarely require critical review or immediate attention. A 24 hour cooling period is equally good in most cases and works well enough. Exceptions could be individually marked messages that may come to you from your Boss or a peer CXO for information or action.

Driving back from a vacation with the family comprising two teenaged kids, I noticed that both were constantly glued onto the small screen with rapid thumb movements and fleeting expressions as they deftly switched from screen to screen and application to application. There was little communication between us as I manoeuvred the traffic and they sent updates ad infinitum. I wonder how the new generation would behave during their vacations or work; would it be in anyway separable for them ?

Monday, December 23, 2013

Enterprise projects versus Government projects

“Did you know that the government is the largest adopter of cloud computing ?” asked a cloud service provider trying to provoke the group into a discussion on why enterprises are not embracing his solution. One amongst the group of CIOs retorted back, “Do they know what they are doing ? And with no budget pressures or ROI to demonstrate, how do you equate their reality with ours ?”. Before it became a slugfest between the vendor and the CIOs, the convener intervened; but that had me thinking about context really being different ?

Over the years I had the fortune to meet many people from many countries who headed government projects. Some of them were qualified bureaucrats, some with backgrounds similar to current CIOs or project managers, and a few with no formal IT backgrounds. Their responsibilities were comparable to the enterprise equivalents and the only differentiator in most cases was the scale of operation. The projects they worked on were in many ways similar and quite different at the same time.

G projects especially that revolve around governance are humungous by nature as they impact a very large population (number of users); the complexity varies depending on the process or function. You could draw parallel with large enterprise CRM projects or for that matter self-service application deployed by Banks or telecom service providers. On the other hand there are also conventional automation projects akin to what every CIO and enterprise does as a routine with a view to create operational efficiency.

Enterprise IT drivers and critical success factors comprise on-time, within budget, business functionality and/or benefit and nowadays usability across platforms; corporate project governance keeps everyone on their toes. I am sure that G projects too have somewhat similar drivers and accountability to internal stakeholders. Circumstantial evidence would however point to the fact that the percentage of G projects meeting the success criteria is far lower than corporate. To the taxpayer who funds these, there is limited visibility.

One project lead narrated an incident where the ministers kept changing through the project leading to significant change in scope and timelines. The said project finally went live with 100% time overrun; he did not divulge the budgetary impact. Many years later it is cited as one of the major success stories though it still remains challenged for the masses that use it. Change management is more complex with multiple stakeholders who are required to sign-off and by the time they do, a new set of stakeholders emerges.

Some may argue that an IT project is an IT project and requires the same level of discipline of execution irrespective of where it is done. It is public knowledge that almost all G projects undergo severe review and the bidding process favours the most economical; at least for the initial bid, change requests is another matter. The corporate world is unkind to this flexibility though price war is getting messy for everyone. With different contexts then is it then fair to compare an apple to a pineapple ?

Multi-year projects are passé now though most G projects are that way; maybe they now factor in their unique reality and thus allow for higher latitude than available to a CIO. Project governance, reporting and transparency is not common to all; not too long ago a high profile G CIO was shunted out as he was making many uncomfortable with his open to all reports. He took a leaf from acceptable good practices but the plans, ideas and governance were not acceptable to the well-entrenched way of working.

While we acknowledge the differences in context and realities, I believe that the comparisons are unfair to both. Corporate business entities will always be more aggressive in their approach to capture the first mover advantage or adapt technology for sustenance and survival. They seek market share, profitability, growth and much more. Most Government projects on the other hand do not have a timeline that is critical and therein lays the difference. I wonder if G projects were to be run like corporate projects what would happen !

Monday, December 16, 2013

Clouded judgment, slip in the rain

He was one proud adopter of cloud technologies and had moved almost all applications to the public cloud. It was a case study written about and discussed in forums and publications. He was hosted, flown across cities by the provider to talk about his experience and give advice on why everyone should consider the cloud. His stature had grown and he advocated the use of clouds for scalability, lower TCO, variability of cost, almost like the poster boy that the industry was looking for and had found one in him.

I met the CEO of that company last week and engaged him in some small talk on the business and how my cloudy CIO friend was doing ? The CIO had reverted all applications back to the on-premise data centre in a hurry. One fine day the cloud provider declared an outage and it just happened to be the day when the load was high; the revenue impact was substantial. The CEO had then warned the CIO to take care of such eventualities. Then of all things the hosted gate pass application stopped working.

Last week was one with unseasonal rain which surprised everyone with every falling drop. Across multiple discussions with different groups in formal and informal settings, adoption of cloud was omnipresent. How many of you have adopted the cloud for your workloads ? Which apps would you move to the cloud in the future ? Why is manufacturing so averse to adopting the cloud ? Even ERP is now available on the cloud ! Vendors in some discussions offered to conduct a “Cloud readiness assessment”.

On the table were many views on all kinds of cloud: highly virtualized data centres masquerading as private clouds, to Infrastructure, Platform and Applications as a service. All flavours of solutions and orchestration engines including a couple which promised to manage hybrid clouds. Voices raised incidents of hybrids not working effectively or seamlessly, leading to clouds not working with random and frequent outages, leaving the CIO smarting with no real recovery option except to wait it out.

In a discussion, taking examples from Sales Force Automation and some ecommerce applications doing well, CIOs from manufacturing were challenged to find business cases within their industries and organizations. None forthcoming, the vendors provoked the group to stop hugging servers and let go. Chastened the group retaliated and one CIO raised a question to a hardware vendor: “Have you move your ERP that runs your factory and supply chain to your Cloud ?” Sheepishly the answer came “no”.

Many vendors will sell the cloud with financial metrics that belie any rational thought; cost of variable fractional CPU saved and hundreds of MB of storage across 17 applications adds up to some cost, or the additional hour spent by the engineer over a weekend to ensure that the full backup was successful. Do we really pay that way such that we can apply microeconomics to calculate real savings ? I have yet to come across anyone who did and saved big bucks. Decision between capital investment and operating expense is a CFO call.

Coming back to the gate pass application, why is it such a critical application ? Entry and exit of every person, vehicle and goods from the factory premises depends on it. It was the most innocuous and the most critical application for continued operation of the factory. Amidst the lot of hue and cry, the CIO had no option but to come down to terra firma. He admitted that he should have been pragmatic in his approach and not moved everything to the cloud. DR to the cloud was not envisaged and there too laid his folly.

Everyone is experimenting and exploring the cloud in some shape, form or avatar. Many have moved non-critical workloads or external apps; not many references of other kinds of legacy or ERP type apps for largely centralized enterprises. Hybrids remain experimental for now while start-ups are enjoying the benefit of no upfront investments. Pure play technology companies find clouds viable, the rest of the old and large businesses continue to tread cautiously and take a step-by-step approach to the cloud.

You don’t slip in the rain that way !

Monday, December 09, 2013

Predictions from 2004, where are we today !

A decade back almost to the date of writing this passage I had presented to my then management team the rolling 3-year Business Technology plan and hazarded predictions for the future. The plan had components of what we would focus on and required endorsement of business projects which would in turn get budgetary approval. The predictions were another matter; while a decade back opinions about IT were subdued, they did challenge some of the thinking and conventional outlook at that time.

It is not typical to make predictions as a part of an IT strategy or annual plan, at least I have not seen or heard of any, but it has been a trend that I have followed which makes life quite interesting for everyone on the table. It also creates a discussion on which technologies we should explore and invest time in. Some have followed the technology hype curves published by leading research companies while some have been an antithesis to them, my view as I saw the applicability within the enterprise or at times a hunch.

So here’s the original unedited list of 7 published in December 2003.

Web-tone will replace dial-tone. Almost everything will connect to a web service. Well we never got a web-tone though everything now connects to the Internet. Almost all calls and chats and collaboration use the web in some form or the other. Conventional voice communication has been losing minutes for a long time now and is not differentiable from VOIP traffic.

Software distribution will reduce significantly with all applications moving towards the Browser. Some of this was aided by thin client technologies and then the move towards browser enabling most front ends. However that did not last too long with the mobile demanding attention. Starting with WAP and other protocols, with HTML5 now almost all content is moving to the browser

Centralized computing will drive down costs. Well to some extent the centralization did happen with most client server applications dying away. But the new disruption happened with the highly virtualized data centre moving into the Cloud. Everyone promised that costs will come down with higher utilization and buying only what you want. The debate on this one is still on.

Portable devices will outnumber desktop devices. I am kind of proud of this one ! Mobile devices are indeed outnumbering the desktop or for that matter desktop and laptops combined. My prediction did not envisage the tablet and the phablet, it was based on higher speed data connectivity of which I kind of had a sneak preview in my telecom stint.

The distinction between the computer and the network will be eliminated. Maybe I was following someone who claimed that network is the computer a lot more than I would say now; the computing device and the network are intertwined integrally and feed of each other pushing the barriers to levels that were un-imagined earlier.

Skilled senior level manpower will be extremely difficult to find. I wish I was wrong on this one, but it has been indeed extremely difficult to find good senior staff across domains and expertise. I wonder why with so many people joining the industry globally, the available talent should go up. So where do people fall off during the journey that makes it difficult to find them ?

The computer is the next generation Idiot Box. With the computer changing its conventionally accepted avatar and TVs getting smarter, we being enamoured by smartphones and changing them ever so often, I think the devices we use are making us dumber. The computer is slowly getting distant from the user moving away to the cloud or getting into our hands in a 5-6” form.

I can’t say I got all of them correct, neither was I way off. A few years back I wrote about predictions and why they don’t matter anymore. Every year brings a new flavour and then half way through we find ourselves in a wave that we had no clue about. These get named as disruptive innovation and get into the hype cycle which all of us love to follow. No predictions now, let’s get down to some work.

Monday, December 02, 2013

Annual Appraisals and Feedback

He came out of the room fully drained from the marathon discussion with his team member; the appraisal had lasted more than five hours. His team was watching from the sides of their eyes trying to guess who won. It was not the first time an appraisal had taken that long with the appraisee. The demeanour suggested that the CIO had not been able to prevail and had to concede some ground. The victor emerged later beaming that he had the ratings he wanted in his appraisal.

For many this time of the year – December – brings appraisal time when the annual game begins with everyone attempting to be on their best behaviours; keep smiling, look good, don’t upset the boss, don’t make mistakes, say all the nice things, tolerate quirkiness that makes all bosses a pain. This time of the year (some companies have different year ends and some countries like India have financial year end in March) brings butterflies even to the strongest stomach, irrespective of how well or badly they may have done.

Every company has an annual appraisal cycle, some do it more often with a mid-term check, and few have also adopted a quarterly discussion. Appraisals review performance against set objectives in most cases and others review consistent productivity and quality (e.g. production workers or financial back office or for that matter within IT the helpdesk and system/database administrators). Mistakes are frowned upon and may bring the score down. It matters since in almost all cases the increments are linked to appraisals.

On top of this exercise that forces managers to have a courageous conversation with their team, many companies use bell curve to force fit performance within a function, location or the entire company. The resultant pushbacks, disagreements, and angst have been accepted with a hypothesis that bell curves take away sub-optimal talent raising the performance bar. Statistically bell curves have had no impact on corporate performance, profitability or relative growth in the industry. Recent announcement by one of the tech bellwether companies discarding the bell curve had many celebrating.

The CIO who had aspirations to grow into a HR role was discussing how to manage the employee in question who always managed to stay one up on him. Listening to the story, I found myself at the edge of the seat with multiple questions and answers. I could visualise the situations and his helplessness which arose due to his inherent nature and behaviour. He was a good person and had done well over his 25 odd years of work life. He always drove decisions by consensus and avoided conflict or confrontation.

Managing recalcitrant behaviour does require a firm demeanour; his ability to remain on top of the situation failed him many times when he was required to be assertive, take a stand or give bad news. People took advantage of this and he a backseat most of the time. The appraisal discussion was no different with the employee using all instances to his advantage where he had raised the issue with the CIO and not received feedback. The CIO was reluctant and did not know how to give candid feedback.

Annual appraisals are not the only opportunity to give feedback to a person in the team. It should be continuous tactically and periodically planned discussion to review progress, consider challenges, explore opportunities for improvement, and overall development. Restricting this to once in a year takes away the context and relevance or focuses only on the recent past. Performance review and appraisal is an art and a science which is easily mastered, giving factual especially negative feedback is an act of courage for many.

Many years later I happened to meet the “difficult” employee; I found him knowledgeable with an inherent need to talk and discuss throwing challenges to the other side as if to test the other persons’ expertise. I enjoyed the conversation as he gradually backed off and focused on the discussion at hand. I could see why he would be a difficult person to manage if not held with a firm reign. He received the suggestions and worked upon them. Today he has matured and manages a team having himself survived multiple managers in the same company.

Monday, November 25, 2013

If CIOs became Tech company CEOs

Before the turn of the millennium there was a trend with many conglomerate and large corporates wanting to hive off their IT departments to become independent companies. Some of the companies scaled up well and grew to become fairly sizable and tech services or product providers in their own right. Few retained their niche and did well for a while; in most cases the Head of IT or CIO equivalent became the CEO of the start-up. Then the CIO moved on and the reins were taken over by typical IT sales persons from the outside.

The past decade saw the economy on a roller-coaster ride triggered by black swan events; technology hype drove irrational behavior; acquisitions saw the small and mid-size companies being gobbled up. Quite a few leaders of the past too struggled to survive and sought white knights; in M&A most of them lost their identity, some went off into oblivion. The CIO typically the customer was challenged to keep balancing contracts and budget escalations triggered by the larger company wanting to improve bottom line.

With competition heating up and start-up companies innovating to gain market share, the companies of yore created Customer Advisory Boards (CAB) to seek input from CIOs towards the product road-map. They used these forums to stay connected to their customers which did not necessarily always impact their ability to squeeze every cent they legally could from the same customers; product engineering and development was far detached from commercial and sales divisions.

Through challenging times, quite a few tech companies saw CEOs being fired, sales structures redrawn, and alignments change from products to industry to logical groups to key account management, and many more. Consulting companies reformulated strategies to sustain market share and retain customers; beyond tactical results this did not deliver to promise. All through the process, customer frustration continued its organic growth faster than the growth realized by the tech company.

So companies hired domain experts across industries and sometimes also across roles within a function; for example a Warehouse Management Solution company hired warehousing experts who would be the users of the solution. Similarly across Retail, Pharmaceuticals, Banking, Finance and Insurance, or for that matter depending on the industry focus, it was deemed important to have subject matter experts to connect with the CIO and other CXOs to facilitate the sales and adoption cycles.

I often wondered as to why CIOs rarely joined technology companies ? There have been rare instances where a CIO transitioned and started selling products or services. These individuals were CIOs representing their past industries or a specific solution set; I remember one instance where the only thing such a CIO wanted to talk about is how her company had implemented a specific technology and she had lead the team towards creating the success story. She was not very successful in her pitch but told her story wherever she went.

Why is it that companies never think of taking on a powerful or marque CIO as their CEO ? Wouldn't it be better to have someone who uses their solution or service and knows how to take advantage of the technology also drive the company ? Aren't CIOs adept at selling technology internally to their users, management and the Board ? They also have their eyes and ears to the ground and connect to strong social groups within the industry where some influence opinions and drive adoption.

Discussing this trend with a few friends I realized that most CIOs love their position of power over the vendors; they do not see themselves in the same position where they normally end up putting their tech partners. The game has gone on too long now with boundaries being defined and roles cast. Their cynicism coupled with reputation of some vendors does not make this an attractive value proposition for CIOs who would rather join consulting companies or take up academic roles; join a tech vendor ? No way !

I personally believe that IT companies would immensely benefit from such a move; who knows the pains, opportunities and challenges of CIOs better than CIOs themselves. Sales cycles nowadays follow a predictable pattern of technology analysis and negotiation linked to period end. I think that while the broad design may not change, there would definitely be higher traction based on mutual empathy. Maybe this is the trend for the future; taking CIOs as independent directors on the Board could be a starting point.

Monday, November 18, 2013

For the CIO, IT is (not) enough ?

CIOs shed your technology garbs and start donning business clothing; variations of this message have been bombarding the CIO for some time now. It was a clarion call for some who started working upon it, some nodded their heads and said we have already been on this path, the balance found that they were unable to make the transition either due to their own limitations or their company not willing to accept the new avatar that the CIO wanted to transform self into. A decade later the crescendo has only increased.

What next after you have been a successful CIO ? Move laterally into a business role, take on additional responsibilities, don’t you aspire to be a CEO ? Is IT not a business role asked a few ? The CIOs up/cross-skilled themselves into understanding business as well or better than the business; this was the new peak to climb. So once again some raised the bar and took on new roles, added new functions, managed P&L for parts of the business, and few took plunge into entrepreneurship; a smattering made it to the corner office too.

SMACS or variations of this theme create the next scare; the Chief Digital Officer threatens to take away a chunk of the CIOs span of control. Social is willy-nilly intertwined into the enterprise fabric now and there are more mobile internet users in many markets. Big Data and Analytics threaten to disrupt existing business paradigms while Cloud has thrust BYOD and consumerization into another orbit. With all this comes the scare of individual privacy, leave aside the corporate security policy which has been struggling to keep pace.

CIOs should know legalese as well as number crunching in equal measure. After all they sign many contracts with service providers and vendors; they also manage and run the IT budget which is significant. Charge backs to business are being discussed actively which raises many challenges on the financial models. CIOs also need HR skills to hire and retain good talent within their teams. So the CIO is now a CLO, CFO and CHRO all rolled into one just to run the IT organization effectively. Not that other CXOs have it easy, but for the CIO these are more discussed than others.

While the CIO battles all of this, somewhere the CMO is expected to sidestep the CIO while sourcing services and solutions on the Cloud; the hypothesis, the CIO is too busy doing something else (what?) and is ignoring the CMO ! So the question that keeps raising its head is whether IT as a domain is not good enough for the CIO to succeed ? Is cross-functional knowledge essential to maintain the position or nice to have skills ? And if the CIO is indeed expected to be a Jack of all trades and Master of some, how does s/he keep hitting a moving target ?

Ask any consultant or for that matter any Tom, Dick and Harry about the future of the CIO; they will for sure have a view on why the CIO is going to die sooner than later. Everything as a service, outsourcing and savvier employees will challenge the role of the CIO as it exists today. CIOs have presumably resisted mobility, BYOD, and every new technology that actually made their lives easier. Are CIOs really so dumb and resistant to change ? And if they indeed are, why is it that when asked, no one can give names of a few specimens ?

A long time back someone had asked me the question: now that you have been a CIO across multiple companies and industries successfully creating transformation, what next ? At that time my answer was “What’s wrong with being a good and successful CIO ?” People don’t want to accept the fact that being a CIO can also be a fulfilling and satisfying career; you don’t get there so easily anyway and stay in that position. There will always be few who will continue their quest towards new shores, and there are ones who just enjoy the journey.

Monday, November 11, 2013

We have been hacked !

Not too long ago I had this interesting encounter with a CIO in a highly agitated state talking to someone on the phone while pacing the corridor of a hotel. He looked up to acknowledge my presence and continued the tirade, his face changing shades of red I never thought possible. I waited for him to complete his conversation (more of a monologue) and then asked him the reason for his state of mind. He stated that the information security of his company had been compromised and he was still discovering the extent of damage.

Information security has always been one of those investments that are like an insurance policy every organization takes to protect them. The number of threats has been going up since the internet became intertwined into the enterprise fabric; with the complexity increasing and external attacks rising in sophistication, solutions have evolved attempting to stay abreast of the game. Security budgets have been rising steadily and so have been instances of successful breaches to companies big and small.

In the older days of IT deployments, basic anti-virus was deemed adequate; today they encompass almost every device and mode of communication used by enterprises, partners, vendors, and the corporate road warrior. Even manufacturing process controls and industrial equipment were targets of some attacks which left many companies and governments struggling. Every day we hear of new data compromises, phone taps, social media sharing agreements leaving individuals and their shares exposed to the world.

Using surveys and incidents everyone talks about a majority of the threats being internal attributable to recalcitrant employees or contractors; many have also been victims of social engineering that coerced sensitive information from gullible staff. Thus building moats around the castle largely served as preventive measures for the external snooper. Despite this the industry feasting on the FUD (Fear, Uncertainty, Doubt) factor, has continued to corner the hapless CISO and CIO to make significant investments though not without reason as highlighted by many attacks and data leaks.

Based on identified security measures and advice from vendors and partners and in conjunction with his business leaders, my CIO friend had put in all the available technology at his disposal; audits and other exercises had declared his enterprise to be secure. He had also followed all the good practices and undertaken the path towards popular security certification. Despite all this his fortress had been breached and he was now at the receiving end to justify why all the heavy artillery could not secure the company.

The extent of damage was not too high with a few noncritical servers being breached, but they raised an alarm internally. The CIO in damage control mode had to address the issues it raised. A systemic exercise and root cause investigation revealed that these servers were adequately protected with all the controls that the security team had put in place. The breach was discovered to a compromised password which had been gained using social means. The hapless user who knew no different had shared his credentials.

All the policies, processes and technology were no match for the human frailness which exposed the company. My friend controlled the damage as much as he could and was wondering how to prevent recurrence of such an attack in the future. His training courses and promotional material to all the employees talked about refraining from such behavior; the hackers obviously wielded higher convincing powers. As frustration poured out on sympathetic shoulders, I could only offer him words.

When information security gets compromised, what should companies do ? Whether it happens due to ignorance inside or brute force from the outside, any breach can impact company credibility, image, and customers. The resultant impact is dependent on the industry, size and position in the market. I believe that CIOs and CISOs should build in steps on internal and external communication which should be executed without fail. Damage control is as important as the technology solution; after all, the weakest link in the chain is human.

Monday, November 04, 2013

Chief Introvert Officer

One of the common perceptions about CIOs is that they are introverts, they like to keep their mouth shut and rarely speak up in meetings or conferences or for that matter anywhere at all. Socially they are people unfriendly and communicate only with their kith and kin and that too in tongues that are not listed in the languages of the world. The geeky and nerdy persona of the IT populace has been slow to dissolve largely fueled by consumerization of what was earlier the stronghold of the chosen tech few.

Technology and various things attached with IT are no longer mystic and find print space in the digital world and mainstream business and social publications. Across age groups and social strata the adoption of smart devices (phones, tablets and everything in between) led to discussion on apps moving away from enterprise to marketplace/store, now cost a Dollar or more shedding many zeros to insignificance. Complexity associated with writing apps was dispelled by teenagers putting big enterprise software to shame.

Written to death the “alignment” with different parts of the company, CIO and IT shed the comforting façade to embrace the language of business. They rose to the occasion and reversed the belief that they could not take on lateral roles or get a seat on the table. In fact many today know technology as much as their business brethren even when they still lead the technology function. They also know where to source the skill or answer to the next challenging and disruptive hype as and when it raises its head.

CIOs share stage with other CXOs and leaders with equal ease discussing and debating macro-economic trends, customer centricity, or strategic directions. They are not waiting in the wings to be called to action; they are seizing the initiative to find revenue improvement, cost and process efficiencies or for that matter how to retain market share. M&A is no longer complete without their involvement, nor is divestment; CIOs have taken on HR, Supply Chain, and Finance along with their existing portfolio with ease.

Why is it that this perception has not changed despite the fact that new age CIOs are different from their ancestors by a huge margin ? What contributes to continued opinion of the CIO’s personality ? Are CIOs really introverts who love technology to no end ? Is evolution restricted to a few CIOs who have transitioned or has it gained critical mass with the majority now walking on the right side ? Or is it that the title has now been conferred on the undeserved IT Manager by virtue of his/her being the senior most IT professional in the company ?

I surveyed my network of CIOs and asked a few friends to do the same to qualify the numbers from all they knew to carry a title of CIO or equivalent. They were asked to rate and create two buckets; CIOs and IT Heads yet to portray characteristics now associated with CIOs. While the result may have been subjective, it helped in classification that started making some sense. We discussed and debated and unanimously agreed on some; the list had a 30:70 split with the smaller segment being CIOs.

The reasons were varied and we believed that we did a fair assessment; anyone with less than 10 year experience or company revenue below a mark was not tagged; the balance was the total set. We then looked at the 30% and observed that 80% of the set were quite vocal and articulate; they were well placed and rarely found themselves tongue-tied. They had truly overcome the perception and their reputations preceded them; whenever they were invited to any gathering like magnets they attracted others to themselves.

I have rarely found the confident and articulate to be introverts or the other way round; semantically that is the definition of extrovert and that ability and confidence comes from success. Articulation is another matter with some reveling in smaller groups and some at ease in all settings. The question really is “Is being introverted a bad thing ?” I don’t think so; it is a behavioral trait which sometimes chooses you. I believe that for a leader what matters is the right attitude and the ability to get results ! 

Monday, October 28, 2013

Chief Integrity Officer

He tracks the movers and shakers in the industry and selectively distributes the messages to some of the CIOs in his inner circle. Some send him news while he gets most of it from his ferrets and in almost all cases it is “Breaking news”. So his messages and conversations are always engaging and we look forward to these intermittent connects. So when I received a text message from him the other day that a CIO of a renowned enterprise has been summarily fired for breach of business ethics, I was aghast !

In a majority of organizations the CIO has direct responsibility and power over the budget spends. For large enterprises the value is quite substantial which brings in all kinds of vendors and service providers flocking to get a slice of the proverbial pie. The sense of power being obvious, many CIOs relish the hold on vendors and use it to the benefit of the company by bringing in lower prices, volume discounts or benefits as a first mover and adopter of technology. Month, quarter, and year-end target pressures are known and used both ways.

Governance in some companies requires the selection of technology and negotiations to be separate and allowed to operate independent of each other. IT organizations thus evaluate the hardware, solutions or services on their merit and specialist IT buyers take part in the financial transaction. These work well when the IT buyer is well connected to the market, goes to the same IT conferences as the IT organization and understands the rationale behind the decisions such that s/he will not force the CIO to go with the lowest cost.

Another set of companies vest the responsibility with central purchase organizations that over a period of time do learn the ropes but may be disconnected from the dynamism of the industry. Here the discussion is largely about getting the lowest price with limited benchmark information. In many cases they end up leaving margin on the table or creating a win-lose situation by squeezing even after the last drop has fallen. There are anecdotes of some individuals in purchase organizations wanting undue favors.

Temptation comes in many ways even to IT teams and CIOs who wield power over the selection and final TCO of the solution. A freebie here and there, goodies and occasion based presents are normally not frowned upon; the bolder ones offer and demand high value stuff for aspirational personal consumption. The brazen build in their commissions into the deal which may be taken in cash or kind. Earlier perception was that this malaise did not exist in professional organizations; the myth was broken many decades back.

I came across the first instance of such an incident before the turn of the millennium and felt sad for the CIO considering he was just a few years from retirement. Over the years intermittently news continued to come; a couple of them were repeat offenders. Quite surprisingly they quickly resurfaced in new assignments even when they exited abruptly. I wondered how they continue to blatantly engage in such behaviors and despite getting caught have no fear. How did they get sound sleep ?

Discussing with a few friends the answer was quite obvious; in all the cases the news never got out. The company never acknowledging the fraud or financial irregularities; they kept it under wraps. The person thus was free to go and join another company to repeat the same which many did. The impacted company tightened controls, made governance process a lot more rigorous or shifted the responsibility out of IT. The new company was clueless on the integrity of the hire as reference checks are rarely done with past employers.

For victim companies their faith in the IT organization stands shaken, the news spreads in hushed tones and the saga continues. Greed has no limits nor any preferences; the integrity of the person comes out of his/her foundation of core values. There will be temptations thrown at you by incorrigible vendors; if you don’t take the bait, they may approach others in the company. Be aware and be open, raise these internally if they impact you. After all you are responsible for your integrity; the I in CIO stands for integrity always.

Monday, October 21, 2013

Integrated Best of Breed

Big fish gobbling up the smaller ones has been a natural way of life. Recent times have seen many startup and small-medium technology companies being acquired by their larger brethren as the biggies try to fill voids in their enterprise solution offering or expand their footprint in corporate IT. Innovative ideas and niche solutions have found it easier to expand their market aligning with the big companies while in many cases it was also about survival or the investors cashing out too.

Meeting up with few large enterprise and conglomerate CIOs the discussion veered towards how they are staying ahead of the pressures to continuously adapt to changing paradigms and ensure that the IT architecture stays agile and in sync with business. Everyone had gone down the path of implementing the monolithic ERP, CRM, SCM, … solutions more than a decade back. With (in)organic and global growth the footprint continued to expand moving from single instance to multiple and then back to consolidated deployment.

Depending on the evolution of solutions and enterprise need many CIOs took a call to implement the complete suite of functionality from one vendor; then there were few who decided that they will not compromise on business requirements and find the best fit for what their business needs. Integration as required was addressed using Enterprise Application Integration (EAI) tools which had evolved to allow coexistence of legacy and new systems. The resultant technology diversity did pose challenges for IT which was deemed acceptable.

Staying with one solution provider did have advantages of better integration over the other though not by a huge margin as most large vendors had acquired other companies to fill in gaps in their offerings. Some of the best of breed now became offerings from the same large vendor with support prices almost always going north busting budgets and taking away fiscal benefit which the smaller vendors had offered. CIOs had little choice but to fight tooth and nail to get marginal benefit eventually accepting the new terms.

M&A in the IT solutions industry keeps changing the landscape. While the acquirer in most cases buys to add missing functionality or to get ahead of competitors, there have also been a few to kill a smaller or dominant player in a specific segment. There have been many such acquisitions over the last decade where the solution became irrelevant and by the time it revived itself, the market had changed. This is very evident in customer management and supply chain solutions in which earlier leaders failed to regain their market leading positions.

With new technology and disruptive paradigms driven by consumerization and services on demand being touted as nemesis of conventional IT organizations, solution providers are joining the bandwagon in an attempt to brick-wall their customers. We can offer you the option of cloud, stay with us; list prices are only for small customers, we will give you good ROI on either stack. CIO buying from startups soon discovers that the solution is now with a vendor who they may have rejected in their larger evaluation.

With integration becoming easier over the years across “commercial off the shelf” and cloud solutions, the new wave belongs to point solutions for specific tasks and functions. Almost all of them provide ready connectors to legacy ERP solutions thus eliminating the earlier pain of integration. Today CIOs can exercise a choice along with business to find the best fit for which there are alternatives as compared to the past. And the discussions between best of breed and integrated is no longer relevant.

Predictions about the demise of the larger solutions have been around for a while now; I do not believe that they are going away in a hurry, rather many have adapted to the new situation quite well. The momentum from new and micro solutions will keep everyone on their toes. Acquisitions will continue to change the landscape and the CIO will have to continuously adapt. Business will want agility and legacy will remain entrenched. The future will be uncertain, that is certain. All in a days’ job for the CIO !

Monday, October 14, 2013

CIO is a verb, not a noun

I heard the buzz from a friend that this company was again looking for a CIO; my immediate response was “again, why”? It’s a large company with dominant market share in some segments and had implemented some good IT systems in the past. The then CIO had a hurried exit reasons for which were speculated by everyone. Then in the last 5 years they had as many CIOs. And they had hired a CIO less than a year back after a longish search who I thought had settled down into the role.
The company has had challenges with their IT systems which worked in a combination of the legacy and the new generation ERP type systems. Almost a decade back they hired a business CIO who helped them renew their systems and set the roadmap for them to gain benefit from IT. Under his leadership the various business units adapted the new technology solutions globally and set the path for the next wave. Suddenly the CIO exited leaving behind what appeared to be a dissatisfied business team.
They floated a need for a CIO with specific technology expertise to rescue their IT and hired such individuals who claimed to be experts in the said solutions. They came and did fix parts of what was deemed broken and when the situation did not improve for the company, they were replaced by others. Each time there was a solution sought based on what appeared to be internal diagnostic for the ailment and the cure was applied. Each time there was no significant change in the situation.
The last hire came with strong credentials having been on business and technology sides of the table and a clear and consistent record of deliverables. While he was no star, the companies he worked with had benefited from IT. He was a team player and a good deputy for some visible CIOs. Thus he was expected to be able to recoup the losses and forge ahead. He came onboard and reviewed the situation and did put in a governance process that satisfied the management of intended outcomes.
He held meetings with his team and the business leaders getting into the details of every initiative and action taken. The new governance expected every decision to be endorsed by him before any steps were taken. The team ran with it for a few months and then started getting restless when they had no freedom to do anything. The endless stream of meetings resulted in no outcomes or movement. Soon they started leaving, starting with the brightest and then the professionals who wanted action.
The exit of the teams’ star performer raised a few alarm bells with the management but they let the CIO determine how to run the function. Time passed away and management meetings started getting hot for the CIO who was expected to deliver. Soon other team members started departing out of frustration leaving behind a challenged operation even for business as usual. Vendors who had supported the new CIO for a while in anticipation of a change in mindset were equally disillusioned with status quo.
The CIO was worried and afraid to move ahead with his risk profile being quite low. He had thrived under the shadow of his earlier CIOs who took initiative while he and his team delivered the projects and executed them. Now with direct accountability he failed to get the team together and deliver what he could have. The confidence crisis was beginning to hurt him real bad and he was blind to this fact. That is when the company decided to find an alternative who would take them forward.
Inaction or the low risk profile created a situation from which the CIO found it difficult to extricate himself. He could have taken charge and changed the perceptions of the past short-term CIOs who had different problems in their stint. The IT team supported him, his individual demons and fears anchored him. For the CIO, the “I” does not stand for “inaction”; get started, you have everything to lose and everything to gain. 

Monday, October 07, 2013

The Newbie CIO

A newbie CIO was feeling very excited and thrilled to have made the grade and become a CIO, a dream he had cherished and worked towards for some time now. He had sought coaching from many senior CIOs and acted upon most of the advice received from various quarters. He was a good and consistent performer as IT manager having received accolades for emerging stars from various publications who track rising talent. I congratulated him on his new assignment along with others who celebrated his success.

Close to a year since the new assignment, he connected again wanting to meet; a request to which I agreed considering it had been some time since we had connected. I had not heard anything about his success or challenges from him or common industry friends. So we planned catch up over a meal in the near future. He mentioned the need to discuss a few issues which he was struggling with. That raised my curiosity and wondered how he had fared in his new assignment.

He had started well with understanding of business, industry, and company culture. He helped his team to a cohesive state dismantling silos and focusing on deliverables. Fixing IT came easily to him as he was responsible for the same portfolio earlier. He met functional leaders to understand their expectations from IT and how IT could contribute to their success. Based on this he created a plan which was accepted with a caveat that each project will require respective business owners to agree to and fund.

Undeterred, he started working on what he believed should be the first priority, customer service. The marketing head listened to the proposition and declined the project stating no need for disruption in an already growing market. My friend attempted to reason it out without success and in the face of push backs, approached the CEO for help only to be told to find a way to align the marketing team if the project were to succeed. After pushing for many weeks he realized that their low risk appetite would not get him what he wanted.

He targeted supply chain optimization which would reduce inventory levels and improve profitability. This time he created a financial model based on his understanding of the situation and presented to the functional head who dispassionately looked at the presentation and said he will revert back. Weeks became months with no revert despite gentle nudges and follow-up. So he confronted the issue and was asked to back off in no uncertain terms. He was disheartened and sought answers from his peers.

The organization was run by the close group of confidantes of the owner for many years. They had a monopolistic market and continued to grow at a fast track pace which was the envy of others in the same industry and outside. There was no growth or efficiency pressure with healthy margins and cash situation. As an unlisted company there was no market pressure to go beyond what they had achieved. The founder owner chairman benevolently asked the CIO to take it easy and not rush into things.

After his initial success, he was expecting a carte-blanche and what he got was a conditional approval where he had to sweat for each and every project and still remain challenged. He was struggling to break the shackles and do what he believed he was capable of. He had given up trying and was feeling a sense of purposelessness. He could have walked away to find a new opportunity but was worried lest the new one also leave him with no recourse. And the fact that as a first time CIO he had hardly spent any time and needed to show some results.

I did not have the context of the function heads, but I did know a bit about the CIO and his personality. Interrogation revealed that he was pushing his solution without listening or connecting; his enthusiasm blinded him from observing that he never connected with the business teams as he was so immersed in technology and solution design. Full of himself, in his eyes he had made the transition, in reality he was still some steps away. I left him with a mirror and hoped that he would start listening.

My offer for help stayed suspended in the air, I left feeling sad for him.

Tuesday, October 01, 2013

CIOs beware, CIOs rejoice

The hall was brimming with people, hardly a seat empty and many standing with their back to the wall. Safe capacity of the premises was pegged at 5000; if there were more, no one paid heed. The session was to be broadcast live and streaming media on screens across the venue. It was not a show on how to get rich quick, nor the speakers had a magic formula on how to lose weight, the speakers were global IT industry icons and leaders who draw crowds when they get on stage with their charisma and speeches.

The audience comprised of CEOs, CFOs, CIOs, in fact CXOs across countries, industries, global and local companies, big and small; many were accompanied by rising stars from their teams. It was a big event spread over 4 days that makes it one of the largest. Partners, system integrators and consulting companies invest their time and money annually to network with customers, solicit new ones and also hear about new offerings that typically get announced in such events. As a bonus, you get to see what competition is up to.

We got off to a great start with a few announcements and partnerships between past adversaries which was a significant milestone that helped the industry and customers. The star speaker did not show up, but most stayed put. The session however took a direction that had many in the audience surprised. The collective energy level suddenly dropped and to bring up the intellectual level in the room, many started playing with their smartphones. A few dozed off which was quite expected, but there were many who listened attentively and took notes.

The speakers had started explaining the step by step process on how to provision a virtual server on the cloud with various options; how to migrate from one platform to another, how to upgrade a few technology components, and how to benefit from the new offerings. The people awake and taking notes were not all IT folks, a large number were users with no technical background or past experience in technology. Were they trying to help their IT folks back home or had a sudden urge to learn cloud server management ?

I met some of them post the session and many more during the evening drinks seeking to unravel the mystery behind their new found love for an IT back office activity which is mostly outsourced. What motivated them to take active interest in something that many CIOs shy away from. I cannot say that the answer surprised me, what did was the extended outcome. The context determines how you view an event and its impact. What would happen when users start provisioning IT infrastructure and services themselves ?

Typical response, how can we allow them to do that ? It’s our job ! They do not know technology, they don’t understand the interdependencies and lack the skills; they should stick to what they know best and come to us when they need something. The IT Relationship Managers will understand the holistic big picture and then get the stuff done. There have been so many instances when they bought some solutions and came running to us when something broke or the project had challenges which were out of their league.

Alternate view, it is good that they are getting into self-service. With interfaces getting idiot proof and general awareness improving, there is no reason for them not to do it. Most of these tasks are easily done by anyone. It takes away a chore from us and gives us time to focus on what matters. Some of the IT team can now move to other value added activities. We are always there in case something was to fail or require deeper expertise or require escalation with the service provider or integration with other solutions.

Which view do you endorse ? The first believes that technology should remain within the IT domain and IT will service requests or provision based on project requirements. The alternate view encourages giving up and offers independence to everyone. The federated model with adequate controls does not necessarily free up many IT resources but creates a perception of self-reliance. Applicability of the model is dependent on enterprise IT maturity and partnership between business, IT and vendors.

Monday, September 23, 2013

Trusting Cloud Lords

Everything is moving to the cloud if not today it definitely will in the near future, so say almost all the learned consultants and everyone who has an opinion on IT. Every large IT vendor has invested in creating their own cloud offering and acquired many start-ups who loved the dotcom like phenomenal valuations with their offerings. Private Equity, Venture funds and Angel investors have bet big on this new found paradigm that once again threatens to change the world (the last time was with dotcoms a long time back).

Different models have emerged with software, platform, infrastructure, storage, what have you, being available as a service with enterprises being pushed towards perceived agility and budget shifts from capital investments to operating expenses; pay as you go, variable cost, scalability, numerous benefits being touted with all kinds of engagements and service models. They have indeed been beneficial in many cases, disruptive in some cases with licensed software model being challenged.

Retaliatory steps from big packaged software vendors did not deter the cloud providers which continued to get funding and mushroomed all over. Unable to beat them at the game, all of them have now joined the bandwagon with their own offerings in an attempt to retain the customer. Their agility has remained a challenge competing with the nimbler start-ups. They do have the big budgets and deep pockets to squeeze out their smaller competitors and if that does not work, acquire them.

When I recently came across news that one of the prominent niche cloud players was going bust, it had my undivided attention. The provider had many partners big and small selling their solution and many major enterprises using it. The service offering was good, the price attractive and their growth meteoric. They had good funding available through the rounds. And then suddenly they announced that they had run out of cash will be winding up in two weeks’ time asking customers to find alternatives.

Not too long ago another cloud platform provider had shut shop with 30 day notice to their customers. Their largest customer had pulled the plug; that implied more than 50% of their revenue disappeared. They were smaller and not highly visible, and thus their demise did not create many flutters. The business impact to many of their customers was severe as they were left scurrying to protect their business and revenue; in a few cases survival. There have been other insignificant ones who did not really take off, becoming an epitaph in history books.

Can and should enterprises and business bet on offerings from cloud providers ? Is there a way to safeguard the adverse impact if the company went kaput or even got acquired ? Should companies put their operations or for that matter IT and information assets at risk with cloud lords ? Legal contracts and SLAs rarely offer a solution despite the lawyers debating every clause and punctuation. The impact whenever it happens even with an outage or a security compromise is real and threatens reputation beyond the revenue or profitability.

I do not believe that anyone can ignore the clouds and continue to work with the conventional models of yesterday while preparing for tomorrow. Reality is that clouds will continue to be disruptive, their value propositions worth evaluating and experimenting with; the pragmatism required is to ensure that the advantage it creates to either business or IT is taken into consideration along with the risks and potential impact should there be a need to migrate across public clouds or transition back to private cloud.

It is evident that there is no ubiquitous solution that can be applied to all cases. The CIO with end accountability along with business stakeholders should highlight the benefits along with the risks of the step towards clouds. The mitigation plan should be tested like all Business Continuity Plans (BCP) and Disaster Recovery (DR) are executed periodically. This is a necessary inclusion now for every cloud service that an enterprise subscribes to. Costs related to such a plan should be factored into the initial budgets when calculating the benefit of the cloud solution.

Go for it, you have nothing to lose and everything to lose depending on how you approach it; if you don’t, the business will always find a way to get it leaving you to manage the mess when things go wrong.

Monday, September 16, 2013

Process or Relationships ?

Within a span of a week, twice I was asked the same question in different forums by different people. I don’t know if that was pure coincidence or what is due to the fact that both belonged to different parts of the world and thus had different perspectives. In both cases they were curious to get an alternative view of how CIOs succeed in culturally diverse environments with dissimilar work ethics and realities. What if anything separates the modus operandi and style of the CIOs in the East and the West ?

I am not sure if this is a fair comparison or should we be listing the divergence in the approaches; both adapt well to their realities and both have had share of success and challenges. Neither can be said to be better than the other as they address similar opportunities a bit differently. One way of working cannot be transplanted as-is into the other world and expect success; even if the second is a part of the same organization in another geography. Thus global best practices remain good to read, not always workable on the ground.

What separates the CIOs between the West (read US, Canada, and EU) and East (mostly Asia, though the comparison set is largely India). You will hear this from almost every vendor doing business in East, and so will you get a similar message from the CIOs of Indian enterprises or CIOs of the Indian entities of global companies with business interests in India. Despite the recognition I have not come across a formal analysis of such differences in the way of working across markets and geographies.

Everyone agrees that India is a value conscious market; products and services vend at lower margins and discounting is normal. The outsourcing boom in India driven by wage arbitration did not leave too much behind for the Indian companies who had to pay higher wages to get quality skills. Due to this the services play for the Indian market was taken up by mid-sized companies who out-priced their bigger brothers who were happy to take the higher margin business from the West until recession dried up their pipeline.

Software vendors realized that to gain market entry and sustain business, the discount levels had to be different from their home markets. For hardware manufacturers the margins stood squeezed to low single digits, enough to cover marketing and administrative costs, not to make too much money. System integrators and consultants fared a bit better though not by too much; only the subject matter experts and high technology professionals could bill at global rates, in many cases reduced to advisory roles.

CIOs in the West are process driven, like standardization, drive scale though tools and technologies and create predictable outcomes with great contracts and Service Level Agreements between the parties. This is fairly well accepted as a way of doing business and everyone internally and externally aligns to the order and discipline. There is limited flexibility and exceptions are indeed rare. Thus everyone knows where they stand and what the terms of engagement and governance are likely to be.

The East shuns order that takes away individuality; everyone believes they are uniquely different. Standard solutions are frowned upon as they take away the flexibility that casts everyone into the same mold. While contracts are drawn up and SLA signed, they are rarely followed if at all irrespective of the size of deal or financial implications. If there is a change in reality, the first thing customer wants is a change in terms of engagement. If there is an adverse event, SLA is damned, immediate service is expected.

People do business with people and that is reality. Standards can change because the relationship manager changed jobs; who you know overrules contracts or SLA. A call to the right person will get you right resources or help resolve a problem. Relationships score over process every time. Value is paramount and cost is always expected to go south. It is a delicate balance which everyone learns to sustain their business interests. So SLA is measured, penalties rarely enforced; contracts are fought over until signing, rarely referred to afterwards.

I believe that for a global business to sustain, these differences are acknowledged and adapted to. There is no other recourse. For the leader, the CIO, s/he continues to wonder about the debate over the different realities. I am sure there are nuances to each country, market and culture; a global entity takes all in their stride. Employees who work across borders get used to this. For management consultants and their elk, they want to create untenable uniform models as global best practice. All the best to them !

Monday, September 09, 2013

Nonlinear impact of IT

In recent times we have been talking about business projects and not IT projects that are evaluated on business criteria and require business owners to sign-off the impact it has. The funding for such projects is done by respective business owners and part of their P&L and budget. This has also led to higher ownership and thereby improved success. The enablement and partnering by stakeholders has changed the way IT has traditionally acted in the role of creator of solutions now focusing more on business outcomes.

Many CIOs that I talk to now are creating significant impact with business partnership extending to the customers of their internal customers. The outward focus has created many new opportunities for making a difference to the company. The resulting rise in credibility puts the business savvy CIO in a position of advantage which they are willingly capitalizing. On the flip size it is creating pressure for the IT teams to manage expectations and the pipeline of new projects; an interesting problem to solve.

Not too long ago I was at a conference where the speaker raised the question on how does IT impact the business – process, efficiency and effectiveness. He spoke about looking beyond the obvious KPIs and metrics used by business and IT teams, challenging CIOs to go higher to view the impact technology is creating. A supply chain or customer engagement initiative has larger impact than the immediate efficiency or new capability it creates. The new capability can be a game changer for enterprises competing in a low margin hyper-competitive world.

A company implemented a supply chain project to bring visibility and transparency downstream and upstream. Connecting vendors and suppliers linked to a demand forecast or sell-through resulted in improving the order fulfillment resulting in increased revenue as well as bringing down the holding cost of raw material and inventory. This led to improved customer satisfaction which in turn got them incremental business. Thus the impact was not just visibility; it also created new opportunities with existing customers.

The initial project when it was drawn up had modest expectations of visibility impacting supply and consistency of execution. The result it delivered was however beyond the defined outcomes. The limits were based on known direct impact not factoring in the derived benefits which it actually delivered. It took some time for the stakeholders to connect back these to the small project taken up by IT for the supply chain team. The acknowledgement of the nonlinear impact took a while and raised the team morale.

This case study had every CIO thinking about the nonlinear impact their initiatives had created which they had failed to capture in the post implementation reviews, management debriefs or meetings. Almost everyone had a set of projects that had delivered the ripple effect of positivity which they shared with each other. The speaker urged them to change their thinking beyond the immediately visible to a holistic view of how every project can potentially provide a higher ground for discussion. He also cautioned that It may not be obvious to begin with.

We are all conditioned to believe that large high value multi-functional long duration projects are the ones that create new capability for our companies. I am not discounting this belief; smaller projects too can have a cascading effect that creates a competitive differentiator at least in the short-term. They are rarely captured as baseline benchmarks in the initial stages. The post implementation review (PIR) rigor which is quite weak culturally (except when things go wrong) needs to change to bring forth the benefits.

CIOs move their teams from project to project with a sense of urgency to fulfill the pipeline of new initiatives and keep the business happy. It is imperative for the CIO to enforce PIR for all projects not limited to the traditional post go-live capture of learning, but also review the same again in three months, six months and a year after the solution has been institutionalized. PIR is not about what went wrong and what worked or for that matter whether the stated business benefit was delivered. It can be about the nonlinear impact.

Go ahead and make a beginning and you will be surprised !

Monday, September 02, 2013

Awry Outsourcing Anguish

Recently I met a friend whose company had signed a strategic outsourcing deal a few years back with much fanfare and was talked about as one of the first in his industry. His company made news in restricted industry circles and the vendor gained good leverage out of the deal. The long-term deal was expected to create efficiency which were acknowledged by the Management and the Board. The teams were excited with the prospects of the new engagement and the benefits outlined.

From initial discussion to closure of the deal, it had taken a lot of groundwork between both the teams who toiled for over a year. Setting the baseline was the most rigorous task which required everyone to agree to the “as-is” scenario; number of assets, age and residual life, upgrade and replacement norms, scale-up of the business operations, revenue growth targets, additions to workforce, industry outlook; everything was required to be put in writing to ensure that the contract survives the signatories.

I asked him on how it was going; after going down the journey for close to three years, had they started seeing the benefit of their decision ? How was the service delivery and how had the users taken the change ? What would be his advice to others who may want to go down the same path ?  After all not many had signed long-term deals in recent times. He looked at me hard as if trying to understand why I was asking him all that. Seeing no ulterior motive in my query, he responded:

We have decided to terminate the deal; it is not working out. Our problems started during service transition. The team misinterpreted almost every clause and intent; we had to involve the pre-sales team and escalate across layers to get to the shared understanding that went into the contracting. The people on the ground had skills deficit and were unable to come up to the same level of service pre outsourcing. In every review meeting they promised improvements and then nothing changed.

The commercials were based on certain assumptions of growth and efficiency. They were expected to make upfront investments on tools and technologies which took longer than committed to materialize. Business had also started slowing down and the cost was beginning to hurt. The vendor was unwilling to accept this and review terms of engagement even though one of the primary benchmarks, cost as percentage of revenue, was broken and going north instead of the promised south.

After much discussion, escalation and negotiation, small tweaks were done to the model which survived a stormy year. When business growth eluded us as per original plan and required deferral of certain initiatives and hardware refresh, the dialogue was not very encouraging. All the spreadsheets that made lot of sense prior to commencement now appeared to be work of fiction. The contract did not allow significant change downward while it captured the upside. Short of suing each other the only recourse was termination.

In recent times there have been many outsourcing contracts that have run into rough weather; what seemed like a great idea in the late 90s and turn of the century have lost charm. Back then everyone was racing to outsource; now it seems that everyone is in a race to find a way out. Most contracts that are coming up for renewal are finding favor with neither incumbent vendor nor new partners. Have the outsourcing benefits suddenly disappeared ? What has changed that suddenly makes enterprises shy away ?

It is evident that for many who outsourced with large long-term deals with big service providers have not gained the promised benefits. Where did it fall short ? Sales organizations did a great job of painting a rosy picture while the delivery and execution team ran out of color red. The gap between intent and execution and the inability to adapt to variability of business has resulted in both sides feeling shortchanged.  The advent of newer services and scenarios like RIMS and BYOD has anyway changed the game.

One of the models that I have found survive over others is a deal where service parameters and expectations are reset every year. It requires IT, business and the vendor to work on the same side of the table. I have observed many successful deals that survived multiple challenges; they had clearly defined ownership. When you outsource, you still are accountable and responsible; it is not abdication of responsibility. New models of outcome based engagements are appearing on the horizon, their efficacy is yet to be experienced.