Preaching to the CIO

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

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

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

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

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

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

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

IT Annual Report

Almost a decade back, I met the CIO of Intel, who talked about an Annual Report of the IT organization— similar to the Annual Report published by the company for its shareholders. This report made good reading, which at that time presented metrics around availability of systems, uptime of links, number of problem tickets, budget performance, and a few others. At the turn of the century, a lot of these were indeed deemed relevant, and accepted by everyone. The report’s interesting parts depicted ’Voice of Customer’, discussed projects undertaken with their status, impact to business, and customer quotes. It was a slick report, similar to what a company would create with help from Marketing and Advertising.


Fast forward to 2010, when I was listening to a presentation on “Why should IT create an Annual Report”. The examples quoted were from Computer Associates (CA) and Intel. The audience of about 40 IT leaders listened in rapt attention, made notes, consuming the speaker’s insights, who mesmerized the audience. The KPIs were largely different, reflecting evolution of the IT organization and IT leader. Post the presentation, a debate started off on how many in the room did anything similar in terms of KPIs, reports, transparency, or even the basic weekly or monthly presentation at the management meetings; and if they did, what did they report?

Almost everyone had some kind of report being tabled, though not an Annual Report akin to the one that was presented. These hard copies were typically printed and distributed to the stakeholders, with help from an Advertising agency or Marketing department. A large IT company’s CIO mentioned that he has started working on something similar (with external help). He hopes to emulate the success that we all listened to. The thought that crossed my mind was that are CIOs of IT companies a step ahead of the rest of us in the room who represented other non-computer related industries. It was a disconnect, considering that a fair number of IT companies did not provide a seat on the management table to their IT heads.

Thinking for a long while after that, I kept wondering about why I never took the step (despite having the benefit a decade back) and when it was rekindled from memory again. The thought also wandered around as to why the representative Annual IT reports were only from the IT industry. Where were the examples from the large and successful marquee CIOs as well as IT enterprises (of success stories that everyone talks about)? Don’t they need the Annual Report to publish their success story and present it to their shareholders (CXOs and Board)?

I believe that success does not need an anniversary to present, but is shared within the enterprise on occurrence, during frequent management meetings, and gets acknowledgement. The Annual Report is a vehicle to tell the rest of the world what we do well. But maybe, I am totally off the track.

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.

Are you happy being a CIO ?

It doesn’t matter which conference you go to, or who is the person at the discussion’s other end — Whenever the CIO’s evolution is examined, the other person always has a view on what should be a CIO’s next role. Multiple propositions get discussed, including that of the COO and CEO. Sometimes, the lateral inclusions are in supply chain, logistics or human resources, rarely in finance or marketing. But is the CIO an interim position that has to evolve into some other role? Why can’t CIOs be happy being good CIOs?

A few weeks back, a reporter called me. She said that I was one of the few people she knew who was happy being a CIO. She had not come across too many such people within her contact book despite having hundreds of listed CIOs. So this discussion continued on whether a CIO should necessarily move on to another role. If yes, which one?

I wondered a bit as she continued her excited chatter — what’s wrong in being a CIO, and that too a good one! Why is the world interested in my evolution to another CXO’s role (as if other CXOs would be extremely delighted to fill in my shoes)?

Apart from technology expertise, CIOs by virtue of providing technology enabled systems and processes across the enterprise have unparalleled visibility in terms of what happens across each function. They are expected to “know” the business, as well as understand the domain specific challenges and opportunities. Such a knowledge level is essential to provide new technology solutions, whether it’s marketing, sales, warehousing, finance or any other. Typically, this gets referred to as the wonderful world of “IT-business alignment”. Such opportunities give them an advantage over others from the CXO domain who may not have this opportunity (or the interest). Best of all, other CXOs do not get measured for knowing other functions and their ability to engage, let’s say the head of supply chain, in a discussion on the best put-away process.

This advantage and ability to influence business outcomes opens up possibilities. Maybe, just maybe, the CIO could take on additional responsibilities beyond “mundane” IT. In all possibility, he can bring about the best while improving the present. Analytical abilities come to the forefront at this point, whereupon the CIO typically challenges status quo, seeking a better tomorrow. So the question of whether a CIO is ready to take on the role of another CXO or a COO becomes irrelevant. If we push the envelope a bit further, he even has a remote chance of being a CEO. So pressure starts to build upon the CIO to get on with it.

So what’s wrong in being a good CIO? Why can’t the CIO remain in the current role and evolve it into a meaningful contributor to the organization (a difficult task to consistently execute)? At this point, the Board may benevolently grant a seat in the Boardroom’s hallowed chambers with other CXOs, executive and non-executive directors. The CIO then reaches the pinnacle of success within his role’s dimensions. Sustaining this peak position obviously requires as much effort as it took to get there. It’s at this juncture that the CIO can be deemed ready to challenge any CXO and succeed in the new role. Of course, this requires the ecosystem to at least be neutral (if not positive) towards the CIO. A negative or a non-conducive environment will be a challenge for any CXO, including the CIO. (See Are Boards ready for the CIO?)

Time to get back to the question “Are you happy being a CIO?” If you are, great! Build upon your success, challenge the organization, and keep on asking the question, “What do I need to do to get to the Boardroom?” If you aren’t, you are probably a CIO by accident or unable to find the magic formula for success (the magic formula is for another day). If you face a personal crisis on your role as a CIO, you should find yourself a mentor or coach who can help. Otherwise, go and find the right job for yourself !

Do we need an IT Budget ?

There is a general agreement that 70-80% of the IT budget (this figure varies depending on the reported overall IT operational spends) gets committed on the first day of the year. Whatever remains is typically spent on new initiatives and projects. While the reality may vary from company to company, the same question has been posed time and again in such a scenario.
So do CIOs need to prepare elaborate IT budgets?

In this context, one of the CIOs I was talking to mentioned that he has stopped preparing IT budgets altogether! Instead, he transfers all spends to the business, as they decide the business requirements — whether it’s operational or project driven. He asks them to justify why any project needs to be undertaken, and what should be the ROI. An interesting perspective, I must say.

Such maturity can be reached only in two situations. First is if the organization has evolved to a level where CXOs are in sync with reality and work in tandem towards achieving their objectives. The other situation entails that CXOs are totally disconnected, and have no faith in the CIO’s ability to manage his budgets.My survey of Indian enterprises (by talking to CIOs) reveals that operational IT expenses are typically lower than consultant projections — by about 10-15%. This is a reflection of our lower wage bills, and the ability of Indian CIOs to stretch their IT budgets a bit longer than their peers in other geographical regions.Does the learning from global CIOs stretching their budgets apply to Indian CIOs? To some extent, yes! But the big differentiator that most global enterprises depend upon to shrink costs has limited relevance in India — outsourcing to offshore vendors.

If the CIO splits his budget into two parts — operational IT (business as usual) and business IT (new or incremental projects creating value) — the management of IT budgets becomes easier. CIOs still have to run an efficient shop. Also, accountability still rests with the IT organization, when it comes to managing the overall infrastructure, applications and relationships that create an ecosystem to support business operations. Improvements driven by new technology trends and innovation are essential, and this is what IT organizations have to excel in — even if it is outsourced. The placeholder for such spend is not relevant, whether it is integrated with the business budget or a separate IT budget, as the cost is finally allocated across business units.

Business IT or strategic IT is a larger discussion. The CIO’s maturity and relationship with CXOs is the key to success. Working in step with his/her peer group, a CIO can influence the outcome, which is whether the budget is approved or not. My belief is that an individual CIO who aspires for lateral growth should understand how to manage within a budget. At the same time, he must understand the impact he creates on business operations, customers and stakeholders. For this alone, the IT budget’s ownership has to rest with the CIO.

Business buy-in ? Why do we need that ?

In a panel discussion involving a few vendors and CIOs, someone asked a question to the panel. “My business users do not seem to be interested in the project, even though I know for a fact that the implementation will create big benefit. How do I get business buy-in ?”. This kind of question comes up every so often (words change, context is similar) as if evolution will be denied to a few.

It is amazing to see that IT heads in their enthusiasm to push ahead ignore the signs of discomfort or lack of interest, rarely pause to reflect upon the message coming across quite clearly that “No !”, we are not interested in this wonderful project. In some cases, it could be due to the inability of the CIO to articulate the project clearly enough for everyone to understand and be on the same page. Thus the business case is not compelling enough or the benefit statement is not a true reflection of the real case.

It could also be that there are other priorities that consume the business users and thus they would rather have the CIO focus on them as compared to the latest trend or new fad which the IT vendor may be interested in selling. In a few rare cases, the digital divide between the CIO and the CXO may be the raison-d’être for the disinterest in moving ahead.

The basic principle in all cases is listening first, and then talk. Communication is not about your ability to use your linguistic skills such that the other needs a dictionary to decipher, but to ensure that you understand the frame of reference of the listener. Effective communication always happens when the involved stakeholders share a common interest and are willing to listen to each other.

Finally, if you are still facing the same question, then stop pursuing it. After all you do not want a scenario where the system is developed to specifications that were sketchy and no one uses it. Why are you interested in the project when your customer is not ? Sometimes the answer can be no too.

CIO reporting: a non-issue

In the last one month, there have been a few surveys conducted by a few research companies as well as IT publishing houses attempting to find the CIO priorities for the future, what drives their agenda and does their reporting relationship has any bearing on the outcome. The research primarily focused on US CIOs. I came across these reports and findings courtesy of some IT newsletters and the editorial board of the publication on their visit to the mecca of IT outsourcing (India).

The survey clearly demonstrates the skew in the responses from CIOs based on whether they report to the top honcho (CEO/Chairman/Board) or to another CXO (even within this there were some variations, though not significant). It was amply evident that CIOs reporting to the CEO have priorities better aligned to business outcomes whereas the others were struggling with operational IT issues and continued to remain technology focused.

The meeting of about a dozen odd Indian CIOs with the publishing house editorial team was a big surprise for them. Some way through the presentation/discussion, it was evident that the Indian CIO has climbed the maturity curve quicker driven by the fact that the CIO reporting into anyone apart from the CEO is almost unheard of (yes, there are exceptions). Turning the US CIOs priorities almost upside down, it was an eye opener for the guests that a show of hands on who the audience reported to, it was a unanimous CEO/Board.

What is the underlying message to the Global CEOs ? If you believe that you do not have the time, energy, or disposition towards spending time with the CIO or managing his/her portfolio, then IT will deliver exactly what you deserve. Innovation will rarely be seen and the IT organizations will continue to suffer, thereby not providing the competitive advantage or even sustained advantage that IT can deliver. Yes, there are exceptions even in the US, but that's what they are even in todays hyper competitive age with slowdown written all over.

The key message to CEOs and CIOs is to stop looking at IT as just a technology play, when your business cannot even imagine working without it. Your business deserves a lot more, so do your employees, shareholders and customers.

Concluding on a lighter note, an executive search company recently attempted to interview a few marquee CIOs for a role in a large conglomerate. All of them declined since the position reports to the CFO !

That alignment thing

Last week in a gathering of CIOs and IT heads (more on the difference later), the editor of a large magazine talked about the issues that we are grappling with. And like it or not, amongst the top 3 was "Aligning Business & IT" ! While a few in the audience nodded their heads in agreement, this raised a hue and cry with many present. One CIO pointedly asked the question, which industry and segment is facing the issue today in this part of the world (India to be precise).

Most CIOs have evolved in their roles and maturity model (can we categorize them by a scale akin to SEI CMM ?) such that this is no longer an issue. The CIO is today actively involved in taking decisions shoulder to shoulder with other business leaders. The discussion has shifted from which technology to deploy to how does it impact my topline, bottomline and the customer. Despite this transformation, the old flogging horse continues to be flogged even though it's long dead. Or maybe it is not !

My interactions with peers internationally specifically in the western world provides interesting glimpses on where time has stopped for many and they have yet to figure out the evolution curve. Even survey results on strategic IT appear to demonstrate that fewer CIOs are now reporting to their CEOs, which indicates that they have not delivered to their promise. Thus it was heartening to see the strong response back home with CIOs refuting the existence of the digital divide.

I am not offering any magic formulae for curing the nemesis of the CIO, as the cure in almost all cases lies within. The CIO needs to start thinking beyond the terms IT is a given. The CEO and the organization may provide the platform; in most cases, the CIO has to build this brick by brick and earn the coveted position on the management table.

Do you see this problem within your enterprise ? Write in with your magic formula !

CEO Expectations

Recently one of the large IT vendors with a blue logo published a report on what CEOs expect from the CIO and how they percieve the role of the CIO. This report spawned many a critique and proponents of what the survey of the CEOs said.

Key finding specific to this part of the world was that the CIO needs to evolve an understanding and appreciation of the business and how IT can work lock-step with the business to deliver value. According to the report, the CIO still has a long way to go in realizing this goal.

Contrary to the report however a panel discussion sponsored by the same vendor with some CEOs revealed that their respective CIOs are doing a wonderful job of taking on roles which do add value to the business. That makes me wonder the specifics of the report.

My assessment is that the challenge as revealed by the report is more visible in the larger multinational organizations driven by the organization culture and historical evidence arising out of the HQ which translates into restrictions on what the local CIO can do. The local organizations by virtue of no such legacy provide a better platform for innovation and growth to the CIO.

Thus, as we see the adaptation of technology within the local enterprise though it started late has delivered better value and alignment to the business.

What has been your experience based on the companies you work for ?

ITIL and aligning Business to IT

Earlier this week I attended a seminar titled "ITIL and Aligning Business to IT". I wondered what the connection was and how can ITIL facilitate the nemesis of all CIOs "IT-Business alignment" considering that ITIL has been around for over 20 years and rarely this connection has been made.

Information Technology Infrastructure Library developed in the UK for controlling the chaos in IT services and creating a consistency in what IT does remained a good case study for long until it became obvious to many that there were indeed a few good practices that could be adopted by other IT Organizations to improve their internal ratings with their customers. Consultants created practices, Software organizations started talking about ITIL compliant tools and suddenly a market for ITIL certified professionals began to appear.

Having implemented ITIL practices across two different companies in the last 3 years, I was wondering how the SDIM (Service Delivery Incident Management) and other formalized practices like Change management, Configuration management etc will help create a better business alignment if the underlying technology or solution is not compliant to business requirements or if your customers don't like the way you look.

As the seminar unfolded, we had the vendors' view of how their tools bring you closer to the holy grail and then a consultant from the big consulting organizations presented his perspective. It was but fortunate for me that the subsequent panel discussion between CIOs, the vendor and the consultant had one dropout and thus creating an opening for me to be called upon to fill in the gap. It's becoming a bit irritating to be pulled off the audience onto the stage regularly with no preparation.

So I asked the question to the panel braving brickbats from the audience for asking such a stupid thing.

ITIL provides consistency in service delivery that comprises typically 70-80% of the activity carried out by most IT organizations. It ensures that the experience does not have elements of surprise irrespective of rank and order in the enterprise. ITIL defines everything explicitly and expects commitment to deliver which some IT shops do extremely well and a few even with internal Service Level Agreements (SLA).

The underlying assumptions being that the systems, hardware, networks etc are well crafted and architected, services and service levels promised are in line with expectations and effective usage of these systems by the users, ITIL will create harmonious co-existence between IT and business. There you are !

Now you know how ITIL will help you align IT with business ? No ? Then if you find the answer let me also know.

The T in IT

Many a gurus and vocalists have been expanding on the I in IT. Information goes beyond what is managed by conventional systems and is not limited to what can be processed, transformed and presented by Computers. So the debate on whether the role of IT departments should expand beyond the management of technology enabled information or the I should be dropped from the name.

But does it make sense to treat the words individually by separating them and creating context around what has become ubiquitously IT ?

I met with the CEO of a large respected company in a private party and he made a statement that "You folks do not give adequate focus to technology". Now that was a shocker to many present from the IT fraternity as almost everyone seems to be preaching the opposite of what this gentleman was saying. Be it consultants, experts, users, vendors, the standard message has been "Don't focus on technology, focus on the business". So I probed further to explore how to interpret the message I had just heard. I will not get into the lengthy discussion that ensued, but give you the synopsis of what transpired.

The reality today is that the CIO and the team typically focuses on the business and attempts to deliver the requirements and stated needs using technology. The perceived gap exists from the not so evolved communication capabilities of the earlier generation (and many of today too) IT folks to express themselves using non-technical terms. The gentleman in question is technically aligned and has been a proponent of IT deployment for many years. His view arises from the fact that 95% of the IT business solutions validated by his experience too are based on conventional usage and gains based on "industry best practices" or acceptable deployment.

The other 5% puts technology in the forefront and looks at unconventional use of technology which sometimes works, and many a times bombs. This creates a risk averse attitude towards technology which dissuades innovation and thereby IT ends up playing a supportive role. Explicit communication on the possibilities and the business benefit with shared risk that can provide rich gains does encourage enterprises to dabble in new stuff.

For you to make a difference to the business as well as to the technologists in your team, you have to create the excitement of how it will separate your company vis-a-vis your competitors as well as the benefit internally. If new IT gets driven by the technical staff, the solution may work but will rarely get implemented successfully or will fall off the way in a very short while. Some introspection will provide you with insights on which projects worked like a dream and which created nightmares.

Business as usual is easily outsourced. Go out and sow the seeds of innovation.

The Digital Divide

I had a very interesting experience a few weeks back in a CIO conference organized by one of the leading IT publishing house which had a congregation of about 100 CIOs and 15 CXO (business and head of enterprise). The theme of the conference revolved around the challenges faced by the CXO and the CXO (IT) in leading through technology driven innovation. The experience was interesting as my Sales & Marketing Head was invited as a subject matter expert and held 2 sessions that were well attended.

Since this was a first for him to be called to speak in an IT conference, he was spellbound by many a facets of a typical CIO who debated, discussed, challenged and learned through aggressive interaction within the group as well as the invited CXOs. The breadth of technology solutions on display by the sponsoring IT companies gave him a perspective of cutting edge possibilities and application to business.

All our interactions in the Management Team meetings and recommendations that were endlessly debated and a few that never got off the ground created a great flashback. To him it was a revelation of sorts to see industry peers seek advice on challenges and possibilities within their organizations.

What is the point I am trying to put across ? Well, for our CXOs to get a real perspective of the talent that they possess and for them to respect you as a CIO and your views, it is important for them to be exposed to your peers and the industry at large. IT conferences offer one such opportunity that you should effectively use to your advantage. You don't want them to realize your true potential after you have decided to seek greener pastures either out of frustration or because its kind of end of the road where you currently are.

Have you attempted to get your CXOs to participate in any IT event ? Give it an earnest attempt and once you succeed, success will follow internally too. Go ahead, what are you waiting for !!