Recently in CXO Agenda Category

An recent article at CIO.com entitled "How to Argue with the CEO - and Win" offers 13 tips, culled from current and former CIOs and communication consultants ...with the goal to get the CEO to see the CIO's perspective when arguments about IT spending ensue.

All 13 tips are relevant to BSM, but the one that sticks out to us is #3 -- CIO must Speak in Business Terms. We have heard this loud and clear from CIO's who fought for, and succeeded at getting a seat at the table with the CEO. To succeed at this level, the CIO must be respected for his knowledge and ability to contribute to the discussion about business strategy and operational excellence.

Our interview with Robert Urwiler, CIO at Vail Reports, brought this to the forefront very early on in our discussion. In the interview, Robert demonstrated a deep understanding of the business and discusses the collaborative role of IT regarding resort operations. Robert's story is a great example of the benefits of alignment, but not all CIO's can make that transition.

According to a number of sources, the argument between the CIO and CEO often are a result of poor business communication skills of the CIO. Another CIO,com article entitled "10 Communication Mistakes CIOs Still Make" highlight these communication challenges.

We have been discussing this communication gap at BSMReview for some time. We think there needs to be a new vocabulary that serves as the  bridge for this communication gap. Some people think the responsibility lies solely with the CIO ...that the CIO should develop the business skills required to learn the business.  I disagree in that I think the business also needs to learn something about IT, not at the level of the CIO, but certainly enough to know what IT services and trends directly affect business operations and competitive differentiation. Perhaps an IT 101 course for the CEO and line-of-business executives, and the equivalent course for the CIO on the dynamics of the business.

I have often thought that a set of business-oriented key performance indicators (KPIs) would be a step in the right direction -- linking IT investment and performance to business performance. Sounds a bit like Business Service Management.

At any rate, I wanted to bring this CIO article to your attention. It is well worth reading if you are interested in aligning your IT investment with your business strategy.

Finally, another must read that is related to this entry is the recent interview with Mark Settle, CIO of BMC Software.
Back in 2007, Gartner released the statistic that IT was responsible for 2% of global CO2 emissions. This puts IT on a par with the aviation industry. Yes, really! We all focus on the airlines, because they are big and obvious, we can even pay an off-set charge to "feel better", but we need to start and focus on things we can more directly impact on our own doorstep, the IT we use. The carbon footprint of PCs and monitors is expected to triple by 2020 - a growth rate of 5% per annum. The global data centre carbon footprint is expected to triple by 2020 - a growth of 7% per annum.

We've all heard about global warming and the impact we hungry consumers are having on the planet. It's something we need to address, especially as we begin to see the impact it's having on our weather patterns. Severe floods in South America, Australia, heavy snow in the UK and East coast of the USA. These conditions are impacting our lives and businesses and are projected to continue unless we all start to turn the tide and think of ways to reduce our carbon footprint. Many governments and businesses have Green policies and set targets as part of their corporate governance responsibilities ...perhaps your own organisation has such a policy. If so, do you know its content and how you can contribute towards it? We need to start adding Green IT thinking into all that we do, particularly in the business/IT (BSM) relationship, before it's too late.

What can we do about this? There are simple things to make a positive start, such as archive unused data, power off idle Desktops, printers etc. We need to bring this thinking into our Service Strategy and Design initiatives ready for the transitioning into live operations. We need to bring Green IT into the business-oriented service management discussion. 

Recently I came across a great article by Karen Ferris from a consulting company in Australia, Macanta Consulting, who looked into Service Management and in particular ITIL as a way of understanding, controlling and reducing a Businesses CO2 impact. I hope you'll find it of interest and useful in your Green IT efforts.
BSMReview is a Media Sponsor for the Pink Elephant conference and expo being held in Las Vegas this week. As a media sponsor, we promoted the event on BSMReview and are covering BSM newsworthy items at the event. BSMReview is well represented at the event and we are holding down a spot on the expo floor.

As you probably know, Pink Elephant is a professional services organization that provides consulting, education and tools to assess ITIL and IT service management competency. The Las Vegas conference is their 15th international event, has 1600+ attendees, and offers a solid program of educational sessions that features ITIL experts and customer presenters. The event is well run and sessions that I attended are content rich and well attended.

As a side note, I loved the opening video they produced and recommend watching it -- it is both entertaining and insightful.

We are launching the 2011 BSM Maturity Survey at the event. We are finding a high level of interest in both the BSM Maturity Model we developed last year and the survey instrument. Nearly everyone we have spoken to recognizes the alignment gap between IT and the business, but few know how to deal with the issue. They see the maturity model as a good way to start a dialog and the survey as a way to measure where they stand as compared to other companies their size and within their industry.

Many of the presenters at the event are real customers who are sharing their experiences -- lesson learned and best practices. Many view the CIOs role as the indicator for BSM maturity. Many see their CIO focused exclusively on IT operations (keeping the lights on), others see the CIO as transforming IT (to run IT like a business) and a fewer number see the CIO as strategic to the business. There was a healthy discussion about how IT leadership transitions though these phases, what leadership characteristics are key and if multiple roles are necessary to do it all. It is worth reading the 2011 State of the CIO survey by CIO.com to see how CIOs see their priorities changing this year.

We didn't spend a lot of time with vendors and won't be blogging about any new BSM related announcements. However, we spoke to a number of vendors who have agreed to promote the BSM Maturity Survey to their customers and prospects to support the benchmark study.

Finally, we made some great connections with customers at the event and have a half dozen or so lined up for interviews, so be on the lookout for that.

The Pink Elephant event is 100% relevant to BSM, offers insightful content and is run professionally. We will be back there next year and hope to see you there.

Chris Bruzzo, the CTO of Starbucks, and Narinder Singh, the founder of Appirio, demonstrate Starbucks Pledge 5 application, built on the force.com platform.

They did it in 21 days.  That’s the real value of the cloud.

Watch:



BSM Definition

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A friend of mine just pointed me at this Wikipedia definition of BSM. Whilst I like some of the entry, I must admit that I'm not keen on the first couple of paragraphs, which seems to imply that BSM is a bunch of management tools you buy from one or more vendors.

As one of the people, who can actually claim to have been involved in the very early formulation of BSM (at BMC), can I please explain what we were trying to achieve and what I think BSM really is? It has grown and developed since then, but I think a few key points are getting lost in the plethora of tools.  

  • BSM is not a bunch of tools. You cannot buy it.
BSM is actually a mindset. Everything you do has to be from a business point of view. This is absolutely key. Once you get this, everything else flows on from here. Tools are pointless if you don't have the mindset and processes to exploit them.

For instance if I walk into a motor manufacturer IT department and ask an employee what he/she does, the correct answer is I sell cars - not I monitor Oracle.

Once you have this, then you look at things like ITIL and CoBIT to help you achieve your goals.

  • You don't need all of ITIL - choose the bits you need
My big hang-up with ITIL is that it demands you learn its grammar and syntax and vocabulary. Sorry, I know why I need a CAB, but I couldn't care less what the initials actually stand for. Use ITIL as a means to achieve the first bullet, not as a gospel that has to be followed blindly. 

  • BSM is two-way
Everyone loves to talk about the business impact of a failed router or whatever, but  that is only a small part of the story and an example of IT impact on the business. 

What most people forget or ignore is the other way - the impact of business on IT.  One of the definitions cited in the Wikipedia entry says that BSM is a 

"strategy and an approach for linking key IT components to the goals of the business. It enables you to understand and predict how technology impacts the business and how business impacts the IT infrastructure." 

I would actually say services rather than components, but I see too many people getting bogged down in the first half and forgetting the second. Actually you have to get the second half right before you can do the first. There is no way you can design an IT infrastructure if the business hasn't told you what their goals / budgets etc. are. I can design you a sub-second 24x7 system, but do you need it and can you afford it? It may be right for some business services , but not all etc. 

  • IT and business need to be co-joined.
If IT does not have a place on the board with equal or greater importance than other departments like manufacturing, sales etc. then get another job. BSM has no chance in a place like this, as IT will always play second fiddle. 

However, this also means that IT people have to learn to not  talk IT when they meet anyone from outside their department, and that business people have to say what they need rather than what they want.

  • Don't run stuff in-house that should be outsourced
BSM is not about protecting IT - it's about running IT in the most efficient and effective manner possible for the business. For example, if you know nothing about networks, get someone else to run them for you.

  • Make your contracts business based, not component
Any contracts you have with service providers, or you have with someone outside your organisation should be based on the delivery of that service, not on the availability of server no. 843, which is meaningless.

This raises some very interesting questions on who measure the service and reports on it and with what regularity? Are they measuring it from your point of view or theirs? I don't care if the service provider uses carrier pigeons if the service meets my requirements. I have no interest in how they do it, I just need to know that it will work and how they will respond when it breaks? 

  • Don't run something just because someone else does or you read it somewhere
Every business is different. Your company goals are different. Your strategy is different. (If not, then merge and save some money). Ergo, your IT will be different.

There are many more examples I could quote, but I hope you agree that everything flows from the first bullet. If not, or you think I'm totally wrong, please let me know.

As an advocate of using "agile" principles to improve the alignment of business and IT, I'd encourage evaluation of the March, 2011 Agile Enterprise Forum 2011 ...which addresses how the CIO can effectively speed the development of business-oriented software. The need to restructure the process of developing new applications and modifying existing applications seems mandatory if IT is going to enable their users to stay ahead of the competitive curve.  Israel Gat's session on "Agile Governance: Tying Delivery to Value" is a business service management (BSM) approach to ensuing tangible value is delivered to IT's business customers by IT development ...cutting through traditional blockages.    

At the following blog post by Chris Curran in CIO Dashboard, he quotes Louie Ehrlich, CIO, Chevron Corp,

http://www.ciodashboard.com/leadership/closing-expectation-gap-business-stakeholders/#disqus_thread

It is a first person example of the CIO challenges of moving up the BSM maturity model, and the need to get your IT fundamentals in place prior to shaping IT deliverables in a business context ...which is needed prior to moving to the strategic business discussion of making technology a better enabler of effective business goals.

Mr. Ehrlich references the different types of business executives he has dealt with, and offers three requirements to becoming a "business strategist CIO."  I would offer that those requirements need to be done sequentially for best effectiveness.  Great insight on BSM from someone who has been there and done that.

Reading through the articles on BSMReview.com, I started to wonder: "what is the problem?". Is IT really thàt disconnected from the business? Looking around in my living room and at the office, I can harldy imagine how life would be without any Information Technology to support me. And all of this is provided to me by companies in the form of products and/or services. Would I buy and/or use them if I didn't know what value they bring to me? No, of course not. Given that IT has penetrated already so much into my life, these "IT companies" must be connected to (or better say integrated within) "my business".

Interestingly some time ago I delivered an ITIL v3 based Service Portfolio Management workshop within a large Financial Institution. In preparing for this workshop we agreed to first focus on the question: "what is a service?". So I started by presenting the ITIL v3 definition of a service: "A means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks.". So far, so good. Then we looked at how to define a service and -more specifically- on how to define the business value of a service. Now when I asked the question "what is the busines value of your e-mail service?" the answer I got is "The e-mail service provides message traffic and storage of e-mail and e-calendaring". Does this describe a business value? Don't think so.

Looking at this sample, one might see it as a proof point that IT is really disconnected from the business and use it to justify a Business Service Management approach. Personally I wouldn't go that far. The only thing that it shows to me in this particular case is that IT is not able to articulate the business value of a service, but that doesn't mean the service doesn't have value or is not being used. On the contrary, the e-mail service sample above is one of the most used and appreciated service in the Financial Institute with an implicit value. Nevertheless and ultimately as one of the results of the workshop we came up with the following definition:

E-mail services provide value to the business when cooperative business communications are conducted without the constraints of location, device or time-zone. Value is created when IT operates for the business a store-and-forward messaging system, so that business employees can compose, send, store and receive e-mails with peers both inside as well as outside the business and in a manner that

  • Is accessible 24 x 7 x 365 across the globe
  • Allows only one outage of max. 5 min per 3 months
  • Enables messages up to 45Mb and mailboxes up to 100Mb
  • Supports protection of business confidential information
  • Ensures data availability and archiving within business policies

Similarly and on a bigger scale, I recently met with another customer (read: a service catalog manager within IT) who asked me to review his service catalog and provide feedback. Of course I accepted this and then found myself reading through a 193 pages thick service catalog printed on paper. When the guy returned after a few days and asked me for my opinion, I said: "Imagine that you are entering a restaurant and ask for a menu card. And when the waiter returns he delivers to you the cookbook of the chef. How would you feel?". He immediately got the point that the service catalog contained way too much information for their business customers. In addition I showed him that there was also information missing in the service catalog. And you probably have guessed this one already: it contained no descriptions of business value whatsoever.

Again also in this situation the reality was that all services in the catalog already existed and were actively being used by the business customers. So why then create a service catalog? Good question. In this particular case the main driver for producing a service catalog was IT's desire to explain what they deliver, however the business didn't ask for a service catalog and also was not involved in the creation. And like Bill Keyworth rightfully stated in The Why & What of Business Service Management: "BSM success is entirely dependent upon the willingness and skill of both IT and business to have an effective two way conversation ...one party without the other is doomed to failure.".

Reading through my samples above and several articles on BSMReview.com, I see a number of very specific issues and symptoms, but am still not sure what the main problem or need is for which we are trying to find a solution under the name of Business Service Management. When we define BSM as "the discipline that aligns the deliverables of IT to the enterprise's business goals" then I wonder what's the value in doing this? And isn't this already happening implicitly ? Is it really possible to define the package of whatever it takes to deliver the expected service to the business community ...in a way that they can understand and appreciate that delivery? To me this sounds a little bit similar like designing the perfect organizational structure, while we all know that this does not exist (otherwise everybody would have it by now...).

I realize that my statements are provocative, however I believe that a good understanding of and interactive discussion around the fundamental problem we are trying to solve should be the starting point for (m)any article(s) on BSM(Review.com). So let's first address the question: "Business Service Management: what's the problem?".

Looking forward to your comments.
bsm ibm


Richard L. Ptak, Bill Keyworth and Audrey Rasmussen believe that IBM's strategic focus on Integrated Service Management (ISM) and the application of IBM solutions under the Smarter Planet theme marks a milestone achievement in linking business and IT resources and assets for business success. Not the least because Integrated Service Management, in our opinion, leads directly to the broader message of how IT can effectively leverage and link together all enterprise assets and resources to achieve the goals of the business. ISM closely aligns with the Business Service Management (BSM) concepts that are being unnecessarily limited to discussions of just leveraging IT infrastructure. 

Learn how IBM illustrates and documents enterprise-wide benefits to be realized from BSM.  Read the article »

cloud 
migration

IT leaders must learn the necessity, value and process behind the development of a "Business Impact Statement" and the importance of crafting this statement in terms and metrics that are meaningful to the business community. Bob Multhaup & Ken Turbitt highlight its critical role in initiating business-oriented service management.

Read the article »

agileWhy would a business executive be interested in Agile software development? 

Why is Agile a topic of interest to the Business-oriented Service Management community? The answer involves strengthening the connection between the developer (...who provides software capabilities for business use) and the business entity (...who uses software technology for critical business functions.)  These two groups are frequently bridged (...successfully or unsuccessfully) by IT operations, adding complexity and increased business frustration to the BSM process of aligning business with IT (...both operations and development or DevOps.)

Read Bill Keyworth's book review >>
Well, here it is: "Why Doesn't the Business Drive BSM? A Value-Driven Business Service Management Maturity Model" >>

BSMReview's Bill Keyworth and Rick Berzle evaluate the management of IT services from the perspective of the business, a.k.a. "business service management."

The negative impact of IT organizations being culturally and functionally disconnected from their business community is escalating, explain the authors.  As evidenced by the push to bypass traditional IT options through Cloud and SaaS initiatives, IT must enhance how technology is provisioned for the business.

The BSM Maturity Model described in this ground-breaking paper covers 5 levels:

bsm levekls

You can download it here for free (registration required) and let us know what you think >>
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!)

The UK used to be a superpower. When I went to school, most of the world was coloured pink on my school atlas, which made geography pretty easy. However, things have changed dramatically, although a lot of people here don't seem to have realised that. No, they still think we should be poking our noses into places we don't belong and throwing our (light) weight around. To quote the youth of today - get real.

So it is also with computer systems. You may dearly love the one you built 30 years ago and think it is the greatest thing since sliced bread. You may think the new technology from WhizBang Inc. is fantastic. In some cases, you will be totally right; in others sadly wrong. Being able to stand back and look at things objectively, and with an open mind is very difficult, but I believe it is vital if we are going to squeeze the optimum results out of the limited resources we have available. Always ask yourself "Why?", and "What is it worth?"

I just hope our next government thinks the same way.

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. 

hagel cio
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.

Service!?

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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.

 
voiceofcio.gifI 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:


IBMCIO.gif

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.

So IT is increasingly viewed as strategy enabler, but not everyone is on that bandwagon.  The low-growth companies are, as might be expected, focused on bean counting and fire-fighting.

Visionary IT, on the other hand, is focused on strategic initiatives:

cioinitiatives.gif

What's interesting here is that for high-growth companies, IT leadership is critical to both decision-making and innovation which are key to value-creation.  They're focused on the future of the business.

When I read this, I immediately thought of VG's three box strategic framework for how companies compete:

According to VG, "many organizations restrict their strategic thinking to Box 1. This tendency has been particularly acute in the past two to three years, as most leaders have emphasized reducing costs and improving margins in their current businesses."

That seems to square nicely with the IBM findings.

So it seems like the role of the CIO is largely determined by the culture and mindset of the executives running the company.  It's pointless trying to be strategic or innovative in a company that focuses on Box 1.

Where does business service management fit into all of this? IMHO, the CIO who sits at the decision-making table (in boxes 2 and 3) is practicing BSM.  The ones who are stuck in Box 1, not so much.

Once again, I suggest you find some time to read the report >>

Triage

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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?
 

Bad IT = Bad CEO?

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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.  

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