Monthly Archives: December 2007

New Year’s Resolutions for Reaching Level 3


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Some suggestions for IT leaders who are determined to drive up the business value and impact of Information Technology during 2008:

  1. I resolve to be more effective in raising awareness of the potential for information technology to drive business growth.  I will bring ‘marketing thinking’ to my IT organization, and focus on improving our business communications.  I will leverage Web 2.0 technologies to this end, we will start several blogs authored by the IT leadership team, and be more deliberate in seeding experiments in IT-enabled business innovation.  These efforts will help me implement my 2nd resolution.
  2. I resolve to innovate IT funding so as to drive higher business value and more innovative behaviors throughout my enterprise.  Among the outcomes I will strive for through my new IT funding approaches are:
    • Shift at least 10% of my spending in 2008 from ‘steady state’ activities to ‘innovation-focused’ activities by aggressively retiring and decommissioning systems and technologies that are no longer essential to running the business.
    • Shift costs for business unit specific activities from the IT budget to business unit budgets – and shift the accountability for ROI on those costs to the respective business unit.  This will allow increased investment in IT infrastructure.
    • Add a new, voluntary ‘IT Innovation Fund’ – business are free to contribute to this fund out of their top-line income.  The IT organization will partner with business units on business innovation activity in proportion to that business unit’s voluntary contribution to the IT Innovation Fund.
  3. I resolve to experiment aggressively with Software as a Service (SaaS) during 2008 with a goal of shifting at least 15% of my IT spend to SaaS by the end of 2009.
  4. I resolve to establish the IT organization as the model of collaboration for our enterprise – we will lead our enterprise into becoming a ’Next Generation Enterprise’ by establishing a ‘Next Generation Enterprise’ IT capability during 2008.
  5. I resolve to establish a strong, compelling and valued ‘brand’ for IT at my enterprise during 2008 – a brand known for creating an exceptional customer experience for both our internal and external customers and partners.
  6. I resolve to significantly strengthen our IT talent during 2008 by looking beyond the traditional recruiting sources, and hiring people from entrepreneurial, high tech environments – I will care less about industry experience and more about attitude and potential.
  7. I resolve to shift more of my time and attention from inward-focused activities to looking outside – outside my IT organization to our business units; outside my business units to their clients and customers; outside our industry to other industries where innovation intensity is significantly higher than our own.
  8. I resolve to learn more about ‘design thinking’ and bring more design thinking competence to bear on everything we do as an IT organization.
  9. In conjunction with Resolution #1, I resolve to increase the transparency of everything we do in IT.  This will mean communicating from an ‘outside-in’ perspective – in business rather than technology terms.
  10. In conjunction with Resolution #4, I resolve to make the IT organization a more fun place to work – a place of innovation, experiments and excitement.  The heroes we will celebrate will be those that try innovative things, whether or not they are successful. 
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Reflections on 2007 – En Route to 2017 (Part 2)


I reflected in my last post on several significant milestones that mark 2007 on the journey to 2017 for IT organizations.  When students of IT organizational evolution look back on 2007 ten years from now, what might this year be remembered for?  I’ll continue this theme now.

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  •  Enterprise Systems unmasked as “no big deal” after all!

A veritable firestorm was ignited in the blogosphere when Robert Scoble dared to suggest that Enterprise Software (ES) is not sexy.  Firestorm aside, the fact is that ES has been among the top 3 initiatives consuming IT organizations (and their business partners) for much of the last 5 years.  Even if never “sexy,” ES did used to be big news – failures were common, successes were celebrated, and many CIO’s marched their companies on a relentless trek to the holy grail of ‘single global instance’ ERP – often to the virtual exclusion of all other IT progress.  It seems that during 2007, this march was no longer news.  For many organizations, while ES is still a ‘big deal,’ it is no longer in the top 3 initiatives.  One client of mine, proudly ‘late to the ES table’ rightly touts ‘last mover advantage’ – tons is known about how to successfully deploy globally common business processes, and they are shamelessly leveraging all this wisdom.

  • Maybe there’s a cheaper, faster way to Enterprise Systems after all!

One reason ES fell off the ‘big deal’ list is that during 2007 a potential alternative to the big ES software packages (viz SAP and Oracle) began moving into the mainstream – Software as a Service (SaaS).  The first serious foray into this new territory (at least for large global enterprises) was with Customer Relationship Management (CRM) and Salesforce.com’s success.  Although only covering a limited slice of the ES landscape, Salesforce.com proved an important point – what had been previously unthinkable was now a valid alternative, raising questions about the multi-hundred million dollar, three year implementations common to ES installation and deployment.

  • Former on-line bookseller becomes seller of web services!

I don’t recall seeing this headline this year, but it could have happened.  Well, it did happen (the factoid, that is, not the headline!) – Amazon.com entered the web services business, leveraging its internal technology platform.  While this is by no means the first time a “non technology” company has launched a technology business, the fact that such a huge and successful on-line retailer is opening up its crown jewels speaks millions about the SOA and SaaS breakthroughs highlighted earlier in these Reflections on 2007.  It also marks 2007 as the “Year of the IT Platform.”  More on this later…

Reflections on 2007 – En Route to 2017


It seems like a good time of the year to reflect on significant milestones or events that somehow mark 2007 on the journey to 2017 for IT organizations.  Ten years from now, when students of IT organizational evolution look back on 2007, what might the year be remembered for?  I’ll split this into a couple of posts as we ramp down 2007.

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  • SOA crossed the threshold into reality

The challenge with this type of observation is that it is so dependent upon IT organizational maturity.  For some IT shops, this even happened several years ago.  For some, it still has not happened, but I believe is close.  Hence, I’m calling 2007 as “the year SOA became reality” for the majority of Global 2000-class IT organizations.  For most of these, that reality is still “experimental” – i.e., not yet the “way we do things here.”  But, as an experiment, it has become irreversible – I don’t see any experimenters saying, “We are going to drop our flirtation with SOA.”  On the other hand, I do see many saying, “We still have not figured out exactly how we are going to deploy SOA.”  Look to 2008 to see even the most immature figure this one out.

  • “Enterprise 2.0″ entered the IT organizational consciousness

Popularized by Andrew McAfee in a Spring 2006 Sloan Management Review and also referred to as “Next Generation Enterprise” the leaders of mainstream corporations and IT organizations are starting to pay attention to the use of emerging social networking technologies that have so penetrated youth culture.  I believe that we will, in retrospect, mark 2007 as the year this “fringe movement” became mainstream – at least in terms of recognizing the movement as real, with significant potential to shape business models and business performance.  Experiments are beginning, even in the most conservative and traditional businesses and IT shops.  Look to 2008 to see experimentation everywhere, and many of the experiments to move into full scale deployment.

  • IT Organizations started moving out of the personal computing support business

In 2007, we began to see IT organizations acknowledge that selecting, procuring, deploying and supporting end user personal computing (desktop PC’s, laptops, handhelds, etc.) just did not make sense, and moved themselves out of that business.  This shift was nicely illustrated by a friend who is a stock broker working for one of the big investment houses.  He often bemoans to me how poor he finds their IT organization in supporting him and enabling him to be productive.  For 2008 they’ve told their brokers, “When your computer is up for replacement, we will make a financial allowance, but find yourself a local provider who can equip you and support you.  We will offer advice on configurations, but you are now essentially on your own.”  I believe this approach to end user personal computing will become mainstream in 2008 – it’s already the way most organizations handle cell phones.  I talked in an earlier post about The Evolving IT Service Stack  - this move out of end user computing is consistent with the “Jacob’s Ladder” model I described there, and in fact is part of a larger trend, where infrastructure activities are moved out of in-house IT shops, and to external providers, be those the public infrastructure or outsourcers.  The big driver here is not that outsiders can do it cheaper, but they can typically do it better, and most importantly, allow your IT organizational focus to shift to “higher business value” activities and services.

Did You Accidently Outsource Your Enterprise Architecture?


I’ve referenced Enterprise Architecture several times in this blog, and see it (or lack thereof!) as a common “sticking point” (see, for Example, Enterprise Architecture and Level 2 Sticking Point) as it’s one of those things that does not naturally “grow” out of less mature practices (IT Architecture, for example) but takes a different twist (bottom up to top down, and inside-out to outside-in, for example).

I’ve found myself in conversations with a couple of clients this year who struggled particularly hard to grasp what I meant.  I then discovered that when they had shifted to SAP as their major Enterprise Software package, they had essentially said, “Whew!  Now we are going to SAP, we can just adopt their IT architecture and stop messing with all that stuff!”  Essentially, they had “outsourced” their IT Architecture, which had the unfortunate side-effect of masking them from the distinctions between Enterprise and IT Architecture, such they had therefore essentially outsourced their Enterprise Architecture. 

I am describing a couple of extreme cases I came across this year, but in reality, I think this phenomenon is not uncommon.  I’m all for outsourcing selectively, but it is essential to take care not to accidentally outsource important management disciplines along the way!  To push my frequent analogy of “crawl, walk, run” a little too far, it’s as if the crawling baby, about to make her first tentative walking steps, is intercepted by a parent with a push chair who says, “Baby, you don’t need to walk – let mummy push you wherever you need to go.  One day, you’d be able to run everywhere, and be pleased that you saved your feet!”

Let me take this opportunity to wish my readers Happy Holidays, and a Healthy, Prosperous 2008!

CIO vs. CTO – What’s The Difference?


One of the blogs I’ve been monitoring lately has the intriguing subtitle “Organizations Get the IT They Deserve” - a one-liner I’ve used from time to time (and something I truly believe!)  The latest post “Starting a High Tech Business: You Need a CTO” is, per its title, oriented towards high-tech start-ups.  However, it’s a good discussion of the CTO vs. CIO role – with the caveat that these terms are far from standardized, and I’ve seen many variations on this theme.

I point the post out here because:

  • It’s a good description of the CTO vs. CIO roles.
  • In many ways, all companies are going to become “high tech” in the next 10 years (the time-frame this blog focuses on).
  • For many of these companies, the switch from Enterprise 1.0 to Enterprise 2.0 (Next Generation Enterprise) will have many of the qualities of a start-up.

Enjoy!

CIO Turnover – The Price to Pay for No More Mr. Nice Guy?


We are seeing signs of increasing CIO turnover following several years of relative stability (at least since the mid-90′s when CIO was coming to mean “Career is Over!”)

I suspect it is in part a byproduct of increasing business-IT maturity, and the “take no prisoners” approach many CIO’s have taken to standardizing and consolidating IT infrastructure, and implementing global common Enterprise Systems.  Desperate to get out of Level 1 and through Level 2, the tack taken by many CIO’s has alienated them with their business colleagues.

While the end result is what was desperately needed, and perhaps even the “my way or the highway” approach was called for, I’ve seen a few CIO’s achieve this with high finesse, and in a way that won them business support.  I’ve also seen less politically savvy CIO’s take this path in a clumsy and politically naive way that alienated business partners, and failed to sell the business value and all the good things that will be achieved on top of the standardized infrastructure and application platform.

I’ve noted before that the CIO competencies needed to get from Level 1 to Level 2 (in our 3-Level Business-IT Maturity Model) are not the same as those needed to get to Level 3.  I’m now also seeing that the techniques CIO use to get from Level 1 to Level 2, unless applied with great care and finesse, may preclude them from taking their IT organizations from Level 2 to Level 3.

Business-IT Maturity: Theory Of The Case – Part 2


I want to pick up on this theme as we head into the holidays.  In Part 1 I talked about the drivers that are impacting business-IT maturity – Universal, Business and Internal IT.  Now I want to look at some of the overarching principles I’m seeing in business-IT maturation.  The idea is that these principles will help you accelerate your IT maturity – provide some guideposts for reaching organizational and structural decisions.

1. Principle of Business-IT Convergence

I first heard this articulated by colleague and Professor James Cash, Harvard Business School.  This is best understood in the context of maturity itself.  At low business-IT maturity, there is a virtual (sometimes real!) wall between the IT organization and the business it serves.  As maturity increases, the wall becomes more porous – we find roles that are quite blended (business relationship managers), and we find increasing IT knowledge in the business, and increasing business knowledge among it professionals.  By 2017 (this blogs title, after all!) I expect convergence to have become almost total – while there will be a small highly specialized IT organization (largely concerned with Enterprise Architecture and Partner Management) the rest of what IT organizations do today will have become dispersed and distributed throughout the business.

2. Principle of Open Source Domination

I expect Open Source will be THE WAY that software is developed.  There will still be a need for some development of objects and services that cannot be obtained from Open Sources, but this will be minimal.  This will clearly have far reaching implications (in fact, it is these implications that will lead to the relentless ascendancy of Open Source everywhere).

3. Principle of Public IT Infrastructure Domination

As unlikely as this will seem to many today, I believe that by 2017, the reality of “The Web is the Computer” will be long established.  As a result, few companies will have their own data centers, preferring to use that great “on-demand” data center in the sky.

Well, I suspect that one or more of these 3 principles will inflame a few pre-Christmas rants, so I’ll leave it for now. 

“Weed Pulling” and IT Maturity


I was working with a client earlier in the week on their IT process model.  In common with many IT shops, their processes were heavy on finding, starting, and managing new stuff.  However, they were woefully light on stopping, killing or retiring old stuff!

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Many (many!) years ago, I shared an office with a guy who was very structured, probably even “anal retentive” as they say.  Anyway, he had a ritual in that if he needed to create a new file (I’m talking filing cabinets, manila folders and hanging green Pendaflex files!) he would always go through the file draw to see what old file(s) could be thrown out.  One of our only points of frequent tension was that he could not get me to do likewise (I hate throwing stuff away).  However, I did see the merit of his obsession, and I see one form of it today as mandatory IT practice – if you are creating something new, you better figure out how you are going to retire stuff that will (or could) become redundant.

This really is a function of IT Process Management, IT Life-cycle Management and IT Portfolio Management.

IT processes need explicit steps that address the “what can be retired, how can it be retired, how will it be retired” issues.  As a leading practice example, I’ve seen clients where the business case for a new IT investment is not considered complete until the costs and savings of retirement opportunities associated with the new investment have been considered, and there is another business case triggered for the retirement project (or program).

All IT investments need to be considered in terms of a defined life cycle – with life cycle costs and benefits estimated, tracked and managed from start to finish.  This must become institutionalized behavior – for projects, assets, and services.  It really is shameful that IT shops have got themselves into a situation where almost all IT resources are consumed maintaining the stuff that’s already been built – and that this maintenance trap has come as a huge surprise to business and IT leadership – just kind of snuck up on us while we were busy creating!

Finally, the proportion of total IT spend consumed by “keeping the lights on” must be aggressively managed – that means knowing what this proportion is today, defining what it should be in 1 year, 2 years, 3 years, and so on, creating/executing programs and projects to achieve the target portfolio mix, and tracking performance against reaching that target mix. 

Professor Peter Weill at the Center for Information Systems Research refers to this as “weed pulling.”  It’s a great metaphor – and a critical IT discipline.

Does Your IT Organization Embrace the Future?


I talked in my last post (Business-IT Maturity: Theory of the Case – Part 1) about IT leadership either being “victims” of the trends and drivers around them, or leveraging them for advantage.  I want to expand on that thought today.

I’m afraid if history is any indicator, the natural behavior of IT leaders is to be very conservative in their approach to emerging technologies.  They also tend to be blind to (or at least, chose to ignore) the trends and drivers going on around them.

I remember when the PC first emerged, IT leaders everywhere went into denial regarding the implications of PC’s on their companies.  I had several experiences where a CIO would tell me, “PC’s have no place in our company, and we’ve successfully been able to keep them out!”  I would then take them by the hand along office corridors close to their own to point out the TRS 80′s, Apple 2′s and early IBM PC’s that were sitting on people’s desks – mostly, business desks rather than IT professionals desks!

Ditto with the Internet.  I was fortunate to be working in a research center in the early Internet days, so I was exposed sooner than many of my client’s in the business IT community.  But as the Internet became more widely known, it was not the IT leaders (by and large) who were the proponents – quite the contrary.  The Internet revolution happened largely outside the IT shops in Global 5000 companies.

Today, the Web 2.o technologies are mostly appearing outside the business workplace – surfacing first in homes and among teenagers.  And again, I’m seeing a majority of IT leaders being reactive rather than proactive.

Of course, there are many exceptions, where IT leadership is embracing the new – or at least trying to really understand it, its opportunities, and its limitations.  There are also good reasons to protect the IT infrastructure from unstable or dangerous technologies. 

I think a couple of telling metrics (perhaps even leading indicators) are:

  1. What percentage of thier time are your IT leaders spending thinking about and/or working in the Web 2.0 space?
  2. What percentage of IT spend is set aside to understand and experiment with this space?
  3. What proportion of these experiments have heavy business involvement?

Business-IT Maturity: Theory Of The Case – Part 1


I’d like to begin examining and making explicit a theory of the case for “Next Generation IT Capability.”  By theory of the caseI mean to identify the major drivers behind increasing business-IT maturity, and lay out some basic principles of business-IT evolution – how today’s IT shops are evolving to capitalize on emerging technologies (e.g., Web 2.0, SOA, SaaS) and enable new and more valuable business models.

Let’s start by considering the drivers that cause Business-IT Maturity to increase.  I think there are 3 distinct types of driver at play here – Universal , Business, and Internal IT.

Universal Drivers (inevitable, mostly independent of industry or geography) include:

  • Organizational learning over time
  • Technological evolution
  • Social change (e.g., innovations in consumer use of technology)
  • Global change (e.g., growing “green” awareness and actions)

Business Drivers of Business-IT Maturity include:

  • Changes in the marketplace
  • Competitive threats and opportunities
  • Strategic pressures (e.g., shifts in business strategic intent)
  • Business leadership vision and ambition
  • Changes in talent situation (e.g., talent shortage, shift in workplace demographics)

Internal IT Drivers include:

  • IT leadership vision and ambition
  • Gap between business demand and IT supply capability
  • Competitive threats to internal IT (e.g., outsourcing seen as a threat)
  • IT strategic change (typically in response to business strategic change)

Clearly, the way these drivers (especially, the Business and Internal IT drivers) play out for any given company in any industry will shape both business demand and IT supply maturity.  Also, as stated in earlier posts, demand and supply maturity are ultimately mutually dependent – high supply maturity will increase the business appetite for IT.  High demand maturity will drive IT to increase its supply maturity.  While supply/demand gaps are common (perhaps inevitable?) the dynamic tension between them never allows them to get too far out of whack.  At a certain point, the gap is relieved by a replacement to the CIO, or through wholesale outsourcing of IT capability.

What’s interesting to note, I believe that IT leadership can view themselves either as “victims” of these forces, or as “amplifiers.”  For example, among the Universal drivers, IT leaders can accelerate organizational learning by using IT as an enabler (the Web 2.0 stuff should be a great asset here!)  They can accelerate technological learning by establishing some form of “IT technology research lab” or by partnering with (dare I say, collaborating?) their strategic suppliers.  On the other hand, they can be victims of these forces, dooming their organizations (business and IT) to “groundhog days” as they relive over and over again chaotic, reactive experiences common to Level 1 business-IT maturity, or through determination to be “slow followers” of new technologies (“We don’t need no Windows XP – 98 works jsut fine for us!)

So, just understanding the drivers (if you don’t like those I’ve highlighted, create your own) and thinking about how well you leverage them on the one hand, or are victim to them on the other might be revealing for understanding how fast an IT maturity trajectory you are on.