Recently in CXO Agenda Category

For those of you who live on another planet, e.g. Venus, or in another country, which has no interest in what goes on here in the UK, e.g. most of you, we are going to have a General Election soon. This means we get to choose who is going to make a complete hash of running the place for the next five years, whilst they line their pockets with our hard-earned cash. (If you think that's cynical, you should have seen my initial version!)

I recently had the pleasure of interviewing Robert Urwiler, the SVP and CIO at Vail Resorts Inc.  Yes, this is the Vail ski resport in Colorado. They also own and manage 5 other mountains, resort hotels and more. It is rougly a $1 billion business. As a side note, I would highly recommend visiting a few of their websites for the experience alone -- I wouldn't be surprised if they win a few design awards. In particular, drop by the Keystone Resort site and check out the immersive video of Prospector run.

I wanted to share a project that was driven by IT initially which resulted in a BSM initiative that has become a significant differentiator for their highly competitive business. The approach landed Vail Reports on the list of CIO's 22nd annual CIO Awards and resulted with Robert on the cover of CIO Magazine.

Tactically Vail Inc. needed to replace an old fleet of bar code scanners that are used to validate guests at lift gates on the mountain. RFID was the natural replacement technology for bar codes and had been used successfully in Europe. It would have been easy to just use what others had already done. But the leadership at Vail wanted to differentiate the guest experience and learn more about guest patterns on the mountain.

The CIO made the case for investing in UHF RFID, which was higher risk and more costly, but met the requirements of the business. What looked like a tactical move to replace older technology resulted in a strategic decision for the business. This is a great example of how BSM principles lead to strategic business advantage. 

Utilizing UHF RFID and Wi-Fi infrastructure, Vail has been able to deliver a unique guest experience at the lift gate and can track guest patterns across the mountain which was not possible before. Knowing where the guests are skiing allows them to execute highly targeted marketing programs to promote offers on and off the mountain. 

For the details on the story see the article in the RFID Journal. 

Register for our monthly newsletter, and download "Creating Strategic Differentiation with Information Technology" - a diagnostic for IT executives - by John Hagel III.

Here's what John says to frame the discussion:

IT alone cannot create strategic differentiation - it is only an enabler. IT creates options that must be effectively exploited through focused business initiatives.

Nick Carr is right: competitors can copy virtually any individual business initiative leveraging information technology. This has three implications:

1. Companies must aggressively measure return on IT investment - companies often over-estimate the differentiation available from IT investment and under-estimate the investment
required

2. Building institutional capability for continued initiatives is the only real source of sustainable advantage

3. Since individual initiatives provide only fleeting advantage at best, it is helpful to define a longer-term strategic direction that can provide a context for waves of initiatives that reinforce each other and accelerate movement towards longer-term areas of opportunity

The document is made up of diagnostic questions in four key sections, to help you think through how to create strategic differentiation with IT:

I. Do you know where you are going?

II. Are you achieving as much impact as possible?

III. How do you define success?

IV. What is required to move even faster?

Don't just sit there - sign up for our newsletter, and download your copy now. >>

Is your company’s IT department passionate about their work?

If not, then perhaps you’re not letting them solve problems…  Passionate IT solves problems - not just for IT, but for the business.

More from John Hagel on pursuing passion »

I have started a mini-series in The Agile Executive on the subject of innovation. Part I discusses new forms of experimentation. Part II is about US national policy. Part III, to be posted early next week, will address Open Innovation.

I have preliminary thoughts about Part IV and Part V of the mini-series. I would, however, like to keep the mini-series open to contributions from readers and experts of BSM Review. The number of WW IT professionals is about 15M. Innovation, particulary in Business Service Management, is, I am sure, on the mind of many of them. I plan to tap into the wisdom of this "crowd."

Please post a reply, compose a guest post, or just send an email to isrgat@gmail.com.

Some years ago I wrote a book about making our lives easier, and I am glad to see that a lot of the ideas in there are now appearing as apps on the iPhone. Then when I worked for BMC I wrote a popular blog, which urged people to adopt a Service Mentality, and things seemed to be getting better round the world (not entirely due to me - my timing was just good!). Unfortunately we then entered a nasty recession and things have gone severely downhill as companies strive to save money and hence cut down on service.

I live in the UK, a country which appears to be run by a group of greedy incompetent people, and that means that we probably will probably de drowned by melting polar ice caps before we come out of recession. So I was not at all surprised to see an article in one of our Daily newspapers (Daily Mail) asking:

Infuriating call centres, feeble excuses - who gets YOUR wooden spoon for rotten service? 

The categories where they have asked for nominations are:

1. Overall worst customer service
2. Most irritating call centre
3. Longest time to solve a simple problem
4. Biggest incorrect bill
5. Most pathetic excuse for failing to solve a problem

Anyone care to share a nomination or two?

IMHO there is little point in spending lots of money on IT systems if you treat your customers like dirt, which is why I have always said that BSM is not a set of products or systems - it's a mindset.

 

I don't generally tell people that a report from a vendor is a "must read," but in this case it is. 

I'm referring to IBM's The New Voice of the CIO report, a global study of 2,598 Chief Information Officers (CIOs) released back in September of this year. 

The report (registration required) highlights the somewhat schizophrenic roles that CIOs the world over are under pressure to take on, depending, of course, on the nature of the burning issue at hand.  The report identifies six distinct roles that CIOs must learn in order to keep up with the requirements of the job:



The bright side of the report:

The voice of the CIO is being heard in new ways--as CIOs are increasingly recognized as full-fledged members of the senior executive team. Successful CIOs are much more actively engaged in setting strategy, enabling flexibility and change, and solving business problems, not just IT problems.

Today's CIOs spend an impressive 55 percent of their time on activities that spur innovation. These activities include generating buy-in for innovative plans, implementing new technologies and managing non-technology business issues. The remaining 45 percent is spent on essential, more traditional CIO tasks related to managing the ongoing technology environment. This includes reducing IT costs, mitigating enterprise risks and leveraging automation to lower costs elsewhere in the business.

Continuing my thoughts on Bad IT = Bad Communication, I would like to give you an analogy.

Imagine you are a doctor and you have 3 patients and you have to decide (rapidly) which one to "work on" first - like the beginning of MASH when the helicopters come in.

The first patient has a blinding headache, the second one has stomach pains and indigestion, and the third one has a knife stuck in his arm. I am sure your immediate reaction is that you would treat the man with the knife first?

OK, now some more background. The first patient is the CFO, who pays your salary. The second is the VP of Sales, who won't get off the 'phone and is driving everyone mad,  and the third one is the boss of HR, who is currently selecting people for redundancy. Who goes first now?

Some more. The CFO says he must get the latest sales figures to the CEO immediately, the Sales VP is trying to launch a new sales campaign and has a TV interview lined up, and the boss of HR has just fainted. Changed your mind yet?

Now, you happen to know (because you are on the board) that the sales figures were printed last night and they probably haven't changed significantly today as we haven't got near the end of quarter yet, the HR man is not bleeding as your nurse is applying pressure and tending him, but your TV campaign was signed off last week and if you miss this slot the company has just wasted half a million dollars. Which one comes first now?

And people expect IT to make the right decisions without the facts?
 

I've just been reading about the interview with HP CEO Mark Hurd at the Gartner Symposium. He said that when he hears top executives tell him that their IT is bad, his first reaction is that the real problem is probably a bad CEO. He was actually answering a broad question about the interplay between IT and business processes, and whether HP should be aiming its messages at CEOs focused on business outcomes or IT leaders focused (according to the question) on technology. An interesting question, and as the audience was predominantly CIOs, I can understand the inclination to push the blame elsewhere, but I feel the Bad IT = Bad CEO answer is way too simplistic.

Where I feel the answer actually lies is Bad IT = Bad Communication. By that I mean that  IT will never be good if the fundamental communication has not happened at a senior level to define what the company actually wants from IT, and how much they are prepared to pay for it.

Many years ago I read a book called The Myth of Excellence: Why Great Companies Never Try To Be The Best At Everything.  Apart from some very sensible stuff about what consumers really want - Consumers are fed up with all the fuss about "world-class performance" and "excellence", what they are aggressively demanding is recognition, respect, trust, fairness, and honesty - they also recommend that companies be excellent at one thing, e.g. service, differentiating on a second, e.g. availability, and be average on the rest, e.g. price, quality etc.

Now, for me that makes perfect sense for companies and for IT. If you wander into McDonalds you do not expect gourmet food, but you do expect it to be quick and cheap. If you go to buy a Rolls-Royce, you expect to be treated like royalty and you know it is going to cost you an arm and a leg. The problem I find in many companies is that the CEO asks for "Roll-Royce" IT, but is only prepared to pay "McDonalds" prices.

So, for me the starting point is actuallly agreeing just what this company's strategy is, which systems are vital to its survival, prioiritising the others, and making all of those work at the correct service levels. For this to work, the CIO must be reporting directly to the CEO, and must be able to hold conversations with finance, sales, marketing etc. to understand what their business requirements truly are, and communicate these to his/her people in IT. Everyone he/she talks to in the business will say they require 24x7 systems with instantaneous response. Not true. Ask why, and ask some brutal questions like:

• If this system is down, is anyone's life or safety threatened?
• If this sytem is down, how much money are we losing?
• If  this system is down, is there an alternative, and how long can we run with it?
• Do you truly need your people/customers to be online at 3am?
• How much is this sytem worth to you?
• Why is your system more important than anybody else's?
  

I was visiting an IT Manager in Germany some years back, who was being asked to provide 3 or 4 hours extra online service every day (the batch housekeeping cycle had grown so much over the years that it was taking too long). I asked him much those 3-4 hours were worth and he told me he didn't know, so I told him not  to bother as the business would perceive no benefit in his providing the solution, and hence would not sign off for the software he needed to buy. He left the room to ask his boss what the solution was worth and came back 15 minutes later. The bad news, his boss didn't know either; the good news, they were going to run a task force next week to find out. We returned at the end of that week to be told that the 3-4 hours were worth €20M a year. I grinned at him and said, "Great, the software only costs €19M!", which fortunatley he realised was a joke. It was actually way less than €1M and was signed off very rapidly as the business now could see the cost and the benefit.

That is what I mean by communication.