Business driving IT driving Business

Everyone agrees that business priorities define the IT agenda for any enterprise; the starting point is the organization business strategy, in the creation of which the CIO participates and then gets down to formulating the IT strategy that is aligned to the business objectives. It is also well understood that there are no IT projects but only business projects enabled by IT. There is no disagreement to the fact that if there is business ownership and buy-in, initiatives have better success rates when compared to projects owned and led by IT. Companies working in this framework claim higher business IT alignment or BITA.

In the current context with disruptions and changing business paradigms driven by technology, social media, mobility, every day brings new challenges and opportunities for every CXO. All of these link back to IT in some way and the responsibility rests on the CIO to help unravel the quagmire. Referentially there are many instances of wins though they do not provide the same results when replicated by others. So where is the gap ?

A recent survey on the balanced scorecard of the enterprise cascaded to CXOs revealed that in mature organizations it was difficult to differentiate between the CMO, CFO and the CIO scorecard. They appeared to mirror each other with the collective agenda being customer acquisition and retention, growth, and profitability. There was appreciation of core competency but there were no silos. Everyone had to work together to create success.

Then is the hypothesis on alignment above still relevant ? Why some of the innovation does not work with copy and paste ? What makes some organizations successful and some challenged ? In the past some of the scenarios were termed cultural or political and brushed aside; sustained success is a function of how the management team works together to support each other. When any of the functions is perceived to be first amongst equals or of lesser pedigree, then the effort required for success multiplies.

CIOs leading from the front can drive new business opportunities and models. In the case of FMCG industry, the solutions transformed the way orders were logged into the system from the field; the Pharmaceutical industry gained prescriptions using planning, targeting and reporting by the Medical Representatives on the field; retail and airlines improved customer service with queue busting. These are just a few examples of innovation driven by IT. I do not in any way take away the credit from others without their collaboration this would not have worked.

I believe that the era of alignment is passé; many CIOs have already moved beyond focus on alignment to creating new business opportunities. It is not about how IT can solve a problem but about the next leadership step driven by IT and business adapting to the new paradigm. Business no longer drives IT alone; IT has broken free of the age old postulate and is now also leading business direction. BITA and ITBA are two sides of the same coin. It does not matter which side you look at, the value remains the same.

Don't turn my problem into your solution

It was an interesting meeting of a few CIOs with the debate revolving around IT Governance. From all types of models being discussed, the common subject of woes shifted to Business Intelligence. All the CIOs present had large investments in BI with varied degrees of success, some more than the others. Everyone acknowledged the presence of multiple tools and technologies with no single vendor’s ability to address the wide spectrum of needs. It was evident that their respective enterprises had reached a level of maturity in adoption of IT that would be the envy of many larger and smaller companies.

Later in the evening, the discussion continued over drinks and with rising spirits, the voices also became louder, the emotions hotter and the language looser. It so transpired that all of them had a few common service providers and solution vendors; stories exchanged stayed in the room but the lessons can be shared.

Most companies have common groups created with IT and Business participants to explore evaluate and decide on solutions. These heterogeneous groups are typically lead by the CIO or another senior IT leader who orchestrates the process. The process is similar across companies, with one or more of the following steps involving RFI, RFP, Demo/POC, Business case and budget approval, negotiation and commencement of project. A few vendors in their excitement sometimes try to take shortcuts which almost always results in unpleasantness for everyone.

But the more interesting phenomena occurs when solutions don’t really meet the functionality requirements by a reasonable margin, but the sales person in their desire to meet monthly, quarterly or whatever sales target pushes ahead with a desperation of a man clutching straws to save himself from drowning. Everything seems possible with a tweak, small code change, customization, bolt-on systems or to be released in the next version or patch.

The resulting tragedy of errors, omissions, round pegs in square holes and heartburn caused to the IT and business teams is imminently avoidable by following the process the way it should be, the urgency on the part of the sales person and his/her manager ensuring that targets do not override good business practices. It is not okay to withhold information or bend the process to fit the tools, neither it is acceptable for the CIO to allow leeway in the due diligence process. Even with rigor practised it is probable that some critical elements may remain uncovered. The Business IT teams will have to manage such exceptions (not a rule).

The luxury of time always eludes us in such activities; many a times deferred decisions put pressure on delivery of milestones thereby compromising quality or extended timelines and sliding targets to fix issues that could have been avoided with collaboration from both sides. Good practice is a result of everyone being on the same side of the table; a skilful CIO should and will recognize the body language when the problem is being twisted to fit the solution.

My CFO is my best friend

The recent past has seen many discussions, debates, as well as advice from anyone and everyone who has an opinion and finally some pieces of alignment between the CIO and the CFO. All of them make interesting reading, depending on whether you are the CIO or the CFO. Last week, my CFO and I were approached by a media house to do a story on our relationship and the CFO called to ask  "Is this a story"?

Almost every CIO (and I will not debate the merits or lack of) passionately believes that he should be reporting to the CEO or the Board. This is a demonstration of IT’s strategic intent, as the CEO has direct overview of the direction taken by IT and the influence it has on the business. Reporting to the CFO is fraught with pitfalls, as the primary discussion is around cost. While I largely agree with this hypothesis, a lot of equations changed during the downturn, as the CFO grew in his span of influence.

IT was at the receiving end to some extent, with squeezed budgets, investments becoming difficult and overall sentiment prevailing around cost containment. Organizations with good governance processes as well as CIOs who were aligned to the enterprise realities adapted quickly, and worked with the CEO and CFO to create models that worked for everyone. Innovation slowed in some cases, but did not come to a halt. On the other hand, some CIOs had difficulty in adjusting to the new reality as the CFO dominated the decision making process.

Gigabytes of information were created around this new paradigm; CIOs hating it and CFOs wondering about what’s wrong with IT. The strain in an otherwise cordial coexistence or tolerance became a sore point for the CIO who could only vent his frustration at the inability to break the deadlock — unwilling to recognize that change begins from self. In the last 18-24 months, I had many interesting discussions with CIOs who struggled to get on with the IT agenda. Not that this was universal; many adapted to the new reality. In the new normal, the baseline has shifted and the new paradigm is a way of life. The CFO is an integral part of the decision making process, and signs off at least large value investments or costs.

Coming back to the interview between my CFO, myself and this senior correspondent, the discussion was around the relationship, alignment, issues and challenges. The bantering between us left the reporter surprised, until it was clarified that I am the CIO and my CFO is indeed the person who manages the money (amongst other things). The stereotype CFO too has changed as the CIO has evolved; thus to expect a Bean Counter in every CFO is like expecting every CIO to go fix the CEO’s laptop or the boardroom projector.

CIOs who have cultivated a relationship with other CXOs (including the CFO) would wonder if this hype is created by consultants wanting to sell models of alignment or governance. My quip would be that you should invest in relationships with all CXOs. If you do not help them win, why should they help you?

Oh My God not a CIO, but a CDO (Chief Disinformation Officer) !

The other day, I found myself aghast by the onstage passions of learned men—those who had absolutely no kind words for the CIO. I tried to get up from my seat in the audience with a wish to raise my voice against what was going on (CIO bashing), but something invisible pulled me back. The 400+ audience comprised largely business folks (with probably a handful of CIOs), and that was their reality. I felt sad, as I internally seethed with no avenue to vent my feelings. I wanted to tell the poor audience that the CIO does not stand for Chief Invisible Officer—or clarify that they are not CDOs (Chief Disinformation Officers). So I began to analyze their reality, hoping to catch some of them later during the event. But, let me start from the beginning.

The event was a leadership summit attended by a cross section of global CEOs, Board Members, CXOs from various functions, and a few invited CIOs who were categorized as business leaders—not just a technology CIO. The setting was a panel discussion between few thought leaders, a senior Asian government bureaucrat, and a couple of CEOs; the topic, the economy, growth challenges and opportunities. Everyone was enjoying the insights and the rich knowledge being shared, as the subject veered towards business analytics, IT and the CIO.

It was evident that for most speakers that the CIO was an inept technical being—rarely visible except when something stops working like the Boardroom projector or WIFI. Beings for whom the phrase Business IT alignment (BITA) is foreign, while IT feeds the hapless business with inaccurate information. They evidently experienced the CIO’s challenged ability to come up to a level of basic understanding of business drivers. The CIO contributing to business discussions was alien to them. Thundered a bureaucrat, “I have only seen Chief Disinformation Officers, not Chief Information Officers …” Others almost broke off into a spontaneous applause.

Though a CEO did appear a bit uncomfortable, he did not consider it prudent to disagree. The thought leader commented on the CIO’s ability to stay invisible most of the time, and thus christened him “Chief Invisible Officer”.

As I walked out of the auditorium thinking about this discussion’s various aspects, I reflected on my experiences within my multiple CIO roles, interactions with peer CIOs, vendor speak, and discussions with CXOs across enterprises big and small. My reality appeared a lot different from what I had heard from the Magi, who have seen more of the world than I have, but from a different frame of reference.

Are CIOs living in illusions of grandeur in their castles far removed from reality or the experiences, especially of the government speaker as an exception? With some relief, I recollected many Indian enterprise CEOs talking positively about the contributions made by their CIOs and IT organizations. Of certain CIOs who have also took additional charge of business, as well as a few CIOs who have also led cross-functional enterprise projects that made a difference in difficult times.

I guess reality is multi-faceted and not bipolar. Everyone reflects their reality and experience; the world is full of diversity that cannot be captured into a stereotype. Many CIOs I know would react similarly upon hearing about the above discussion, while a few CEOs (hopefully none) may actually be able to associate with the panel’s experiences. As enterprises invest significantly in IT enabling the enterprise, they also recognize the importance of a CIO leader who can walk lockstep with other CXOs while working towards achieving excellence using technology driven efficiencies and innovation.

I believe that a consistent movement is required towards spreading the good work done by many CIOs in conjunction with their CEOs. The learning from these can be applied towards improving the kith and kin. It is also important to talk about and discuss the challenges faced so that everyone does not have to rediscover them as a part of evolution—not just in CIO events, but also in industry and other CXO events. After all, the wheel needs to be discovered only once, and then it’s about replicating success.

Business IT Alignment (BITA) is also a 4 letter word

Recently, an international event management company approached me to conduct a workshop on Business-IT Alignment. It made me wonder whether CIOs are really interested in one more presentation on this subject unless these CIOs lived off another planet (or have just been born), and needed to be seasoned with a dose of the much discussed subject. I think, maybe apart from the subject of CIO reporting into the CFO/CEO as well as what next for the CIO (role of the CIO), the most oft discussed topic in the IT industry is definitely IT’s alignment to business.

No event or seminar is ever complete without a reference to the wonderful BITA. Most presentations assume that BITA is indeed an issue for CIOs, and the CIO requires help. In fact, many vendors and consultants project their products or solutions as the key ingredients towards achieving BITA. Now I can’t claim to be an expert on this hallowed subject, but have had my share of contributing to the discussion based on some experience and observation. Based on these, I have a hypothesis on what enables BITA, and where it is a challenge.

Let me first list out the standard assumptions (or ‘Conditions Apply’). A CIO understands the business, and is able to conduct a dialogue where he is understood across the organizational layers. He has good verbal as well as written communication skills, and is able to use these in internal and external meetings. He has the confidence required to debate a business or IT issue without getting so frustrated that others do not understand him. He has a reasonable track record of creating value from projects undertaken which meet (or exceed) expectations most of the time. He has a good network of vendors and partners who provide the CIO with technology advisory based on the domain. Finally, he is a good leader of people, as well as able to motivate and lead large cross-functional teams.

As I wrote the above paragraph, I wondered—if a CIO has all the skills listed above, can he still be challenged with BITA? Many might say yes, that is, if he did not report to the CEO. So let’s assume that a CIO does not report to the CFO. Will all these factors contribute to BITA? My analysis indicates a high probability of success, but I will still give it an even chance, i.e. 5/10 for the combination to lead to BITA. Have we not considered all factors? One might argue that if the CEO is technology friendly, the probability would go up to 6/10. So what can nudge the figure higher to 8/10 or 9/10 ?

My ‘Oh I See’ moment happened in a chance conversation with a CFO. When is an enterprise willing to invest in new initiatives? When are budgets relatively easier to get? When do justifications not get into the realm of fiction? The simple answer is that when a company is profitable. Not just simple profitable, but with good cash flow and available money. If the company is meeting analyst or shareholder expectations, is growing faster than the industry, and has higher margins than competitors, it’s not possible to deny BITA. So every opportunity gets the budget, as well as every employee is charged and amenable to change, as they all understand the dimensions contributing to success.

Unprofitable or marginally profitable companies always struggle to cut costs, reduce (or defer) new projects, and challenge every investment, looking for the lowest cost option. All these challenge the CIO, and keep the focus on business as usual rather than innovation. There will be exceptions to this too, but then they will be the 1/10 or 2/10 driven by the force of the leader or CIO, as compared to the higher propensity of success for a profitable company.

CIOs in business roles or add-on responsibilities are likely to have higher appreciation of the hypothesis. The new normal post 2009’s slowdown may have contributed to a shift in a few cases—in profitable as well as profit-challenged companies—based on the role played by the CIO during difficult times. If the CIO was a key player, the alignment pendulum would have shifted right, if he was not, then it may have shifted left.