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IT Organization Circa 2017 – 5 Year Countdown (Part 2)


countdownIn Part 1 of this post I pointed out why I’d named this blog “IT Organization Circa 2017″ and why I’d picked 2017. I then offered some musings about the nature and shape of the IT Organization Circa 2017.

I set this up by examining the major disruptive forces acting on the IT organization today:

The bottom line is that many IT organizations are at risk of being disintermediated – victims of the inextricable forces mentioned above.

“You cost too much and add too little value!”

is the familiar cry – but one that is more about the IT organization than it is about information technology.

The End of the IT Organization?

My view of the next five years is that in extreme cases, the IT organization as we know it will be gone – supplanted by a constantly shifting landscape of outsource providers, consultants, cloud solutions and “shadow quasi-IT groups” embedded in business units and taking care of local business needs. I can safely predict this because it’s already happened. In fact, when I started my IT career in 1970, working for International Computers Limited, (ICL) one of our major national accounts was British retailer Marks & Spencer. At that time, Marks & Spencer had no computers or IT department, even though they were highly computerized. Founder Michael Marks believed the firm should stick to what it knew – retailing – and hire experts to do the things it needed but did not know how to do. Consistent with that philosophy, ICL ran all Marks and Spencer’s computing. Nowadays, we call that “core competence.” As an aside, contrast that with another great British retailer and food manufacturer, J. Lyons & Co. who in the early 1950s had developed their own computer, the LEO, which eventually became part of my employer, ICL!

Already today, many companies around the globe have slashed the size of their IT organizations – some by 80-90%, taking advantage of global sourcing options and shifting the headache of running an IT shop to one or more outsourcing partners. There has, of course, been some backlash, and a small proportion of these outsourced IT shops bring their work back in house. In some cases, this is part of a long term strategy – pass your IT capabilities over to an outsourcer (or several) for a few years to have them “fix it” then bring those capabilities back in house. But even with the ebb and flow of the outsourcing movement, the trend is clear.  As companies become more networked and try to become more agile, they are less inclined to sustain large internal IT groups.

Similarly, the value proposition for cloud computing and the rapidly growing base of ‘software as a service’ is just too compelling, and the general satisfaction with internal IT capabilities too underwhelming. Why make huge capital investments in core systems, and carry the depreciation, maintenance and operational costs when I can ‘rent’ these and ‘pay by the drink’? Just as application packages have tended to supplant custom software development, software as a service is tending to supplant applications packages. As more computing moves to mobile, costly application packages become relatively inexpensive (or at least, value priced) “apps.” And the key issue with emerging computing models such as cloud and mobile is that they do not necessarily depend upon a permanent, in-house IT department.

The Ebb and Flow of Centralization and Decentralization

Organizational models tend to go through cycles of centralization and decentralization. There is always a tension inherent in finding the proper balance between the efficiency and scale of centralized, shared capability models and the responsiveness and customer-intimacy of decentralized models. This tension is never resolved – it is simply held in some sort of uncomfortable balance until the forces on one side outweigh the forces on the other side. This imbalance is often triggered by changing market conditions or by other disruptive forces such as new technologies.

The Mainframe Era – Centralization Rides High!

We’ve seen this through many cycles of technology shifts and their impact on IT organizational models. Back in the early days of the mainframe computer (early 1960s) virtually all IT professionals either worked for vendors/solution providers or worked in a centralized IT group.  (Back then it was typically called Data Processing.)

The Minicomputer Era – Departmental Computing Catches On!

With the advent of the minicomputer in the mid-1960′s, so-called “department computing” came of age, sometimes with the blessing of central IT groups, but often behind their backs.

Enter the Personal Computer – Departmental Computing Evolves into Decentralization of IT

As minicomputers gave way to personal computers and with IBM‘s launch of the IBM PC in the early 1980′s, the genie was further out of the bottle and the swing to what was euphemistically referred to as “distributed computing” was all but unstoppable. IT was becoming decentralized!

Inevitably, cracks in the distributed computing wall quickly appeared as users tackled issues such as mainframe connectivity and enterprise data management, and wrestled with the practical realities of back-up, security, integrity and privacy.

The Realities and Complexity of Enterprise Computing Surface – Centralization of IT Makes a Comeback – Sort Of!

By the early 1990′s the pendulum had begun to swing back to centralization. It seemed on the face of it that the old guard of the central IT group had returned in force.  But look under the covers, and what you see is not simply a return to the monolithic central IT group.  The new IT operating models had novel features such as:

  • Business-IT governance boards that moved ownership of prioritization and, in the best cases, value realization out to the business.
  • Business relationship managers bridging between the IT organization and business groups.
  • Business and Enterprise Architects focused on Business Operating Models and process management.
  • Sourcing and Vendor Management Groups.
  • Security and Privacy Groups reporting to senior business executives, embracing IT but not limited to it.

In other words, the centralized IT model of the early 1960′s had given way to a hybrid model that sought a more even-handed balance between local and global computing models. With the ascendance of cloud and mobile computing and the rise of global sourcing, I believe we are on our way to a new generation of computing model.

The Emerging IT Operating Model

I think it’s important to think of an IT Operating Model as an enterprise-wide construct – i.e., an IT organization is but one component. Many more IT functions are being distributed and dispersed – witness the so-called rise of Bring Your Own Device (BYOD). Here, functions that were performed by a central IT group are being performed by the business individual.  And this move towards ‘self-service’ and ‘business embedded’ functions will only expand with emerging technology. As such, we can think about IT Operating Model components as comprising centralized, decentralized and hybrid components. These might fall along the following lines:

Centralized Capabilities: Shared IT Services; Value Proposition = Standardization, Operational Excellence

  • Enterprise Architecture
  • Enterprise Shared Infrastructure
  • Enterprise Shared Solutions
  • Security and Privacy
  • Sourcing and Vendor Management

Decentralized Capabilities: Business-dedicated IT Services; Value Proposition = Customer Intimacy, Innovation)

  • Business Architecture
  • Local and Departmental Solutions
  • Business Analytics

Hybrid Capabilities: Networked IT Services, Communities of Practice; Value Proposition = Integration, Shared Learning

  • Business-IT governance/value realization boards
  • Innovation Centers
  • Organizational Development and Change Leadership Centers
  • Business Relationship and Sourcing Management
  • Data Visualization
  • Integration
  • Process Management

Why This Is Good News for the IT Profession

I will explore some of the implications of this shift for the IT profession in a future post, but by and large, given the many ways that I’ve seen IT professionals trapped in the past by their employers, I’d say the changes we are experiencing, while painful, will be beneficial at many levels.

 

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countdown5 IT Organization Circa 2017 – 5-Year-Countdown – Part 1

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IT Organization Circa 2017 – 5 Year Countdown (Part 1)


countdown5When I launched this blog on September 21, 2007, my opening post declared:

I’ve named this blog “IT Organization Circa 2017″ in an attempt to position the domain of interest – what will the IT Organization inside businesses, governments and other organized entities look like in 10 years (2017) and how did they get there?”

I went on to explain that I’d picked 2017 as it was 10 years from my first post – a time-frame that seemed to allow a high degree of change, but that I would (statistically, and hopefully) be around to see.

So, with 5 years to go, here are some musings on IT Organization Circa 2017, with thanks to my co-founders at Business Relationship Management Institute, Aaron Barnes and Dr. Aleksandr Zhuk with whom I’ve been noodling on the subject.

To set this up, we need to consider the major disruptive forces acting on the IT organization today:

Let’s take each of these disruptive forces and delve into them.

IT Organizational Disappointment

There’s a general (though not universal) sense of disappointment with IT! We used to hear, “It costs too much and delivers too little value!” Nowadays, we are more likely to hear, “It takes too long!” When the competitive landscape can change almost overnight and when technology creates opportunities to reinvent products, services and business models just as quickly, it usually seems to be the IT organization that’s the bottleneck. Typically,

  1. It takes the IT organization time to examine a need or opportunity.
  2. It often feels to the business executive that the examination of a given need or opportunity is an exercise in bureaucracy – too many hoops and hurdles to go through with few of them, if any, adding value.
  3. If the request does make it through the hurdles before the need has gone away, there’s often a lengthy ‘waiting period’ while resources are freed up – the dreaded so-called ‘backlog’.
  4. Sometimes the original simple request somehow morphs into a major deal, as other business needs are piled on, and legacy issues rear their ugly heads.

To get beyond these clichéd perceptions, some IT organizations are now on their 3rd or 4th ‘transformation’ comprising activities such as retooling, re-skilling, reorganizing, leaning out processes, and adopting standards frameworks such as ITIL and COBIT. While these efforts may well be necessary, many are not cleanly executed, taking 2-3 years to bring benefits, and in the meantime creating more disruption for the business customer.

So, it hurts me to say it, and many of my readers may resent it, but the truth is that more often than not, IT organizations are seen as barriers to business progress with information and IT, rather than the enablers they would like to see.

Cloud Computing

Despite some well-publicized snafus, Cloud Computing is making significant inroads just about everywhere. Sometimes, the shift to the cloud is around very small services – document sharing, or storage of large files such as videos, and so on. Other times, the shift is broad based and significant – moving supply chain or customer relationship management processes to the cloud, for example. Either way, the cloud offers an easy way to try something without a significant capital investment or running through the corporate maze of product and vendor certifications and contracting. And, at least in theory, if not in practice, cloud solutions feel to non-IT people as something they understand and can procure and deploy without IT assistance. In fact, it’s often something they are already using at home with great success. This represents a huge ‘bypass’ to the traditional IT organization.

Many companies today are catching on to “big data” and the power of analytics applied to vast sources of data, such as sentiment analysis of social media or identification of consumer purchasing patterns based upon correlations that had not been previously recognized. Big data often requires massively parallel software running on tens, hundreds, or even thousands of servers – something that is beyond the limits of most corporate data centers, but achievable through Cloud Computing – creating yet another entry point that can bypass the IT organization.

Add the attractiveness of the Cloud Computing value proposition and perceived ease of doing business to the sense of IT organizational disappointment mentioned about, and you have an interesting recipe for a revolution!

Consumerization of IT

This, with its sister movement towards mobile everything is a powerful disruptive force! People are increasingly able to chose their own devices – smart phones, laptop computers, tablet computers, and so on. These devices come with a vast available library of ‘Apps’ to do just about anything you might need. And if you need something for your business that does not yet exist, there’s a universe of willing, inexpensive developers out there who’d be delighted to develop the App for you and your business!

This trend is not going away – to the contrary is is the beginning of a new sense of empowerment – everyone is their own IT department. It’s probably wrong to call this a “slippery slope” which implies a falling down at some point, but it certainly marks a shift in the relationship between business people and their technology – a shift in which the IT professional may have moved from a faceless body in the corporate IT department to a slick, service-oriented professional in the local phone store. (Reality note here – my daughter’s phone stopped working last week and she revealed to me her loathing of having to visit the phone store! She said, “The phone store has become the modern day equivalent of the automobile dealership!”)

Global Sourcing

While not a panacea, and while many companies experience a painful transition to various flavors of outsourcing, most companies have tried it at some level, and plan to do more of it! For all its challenges, a well-executed global sourcing arrangement (or set of arrangements) can help an IT organization flex with changing business demand – both in terms of capacity (the ability to handle more or fewer projects as demand dictates) and capability – the ability to take on work for which the inhouse resources may not have the necessary skills or experience.

Who Is Engaging these Alternate Sources?

Increasingly, these alternate sources (namely, Cloud Computing, Global Sourcing, Consumer IT, Apps) are being engaged directly by the business with minimal to no reference to the IT organization.

So, What’s Does the IT Organization Look Like Circa 2017

I’ll leave you all to ponder on these disruptive forces for a week or so, and then I’ll provide my take on the future of the IT organization. Meanwhile, comments appreciated and encouraged!

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Digital Business and the Fate of the IT Organization


Social-MediaInformationWeek just published an excellent article titled “Goodbye IT, Hello Digital Business.” The article presents a compelling case for “Digital Business” as a lens into what the more information and IT-savvy companies are doing. It presents some good case studies from Digital Business leaders in the retail industry. It also presents some interesting statistics on emerging platforms for building customer ties, on the main opportunities for today’s CIOs and how IT teams are interacting directly with customers.

Are IT Organizations Asleep at the Digital Switch?

I found the statistics InformationWeek presented as both believable based on my consulting experience, and disturbing! The numbers reinforce the facts that:

  • The majority of IT organizational focus and energy continues to be consumed by legacy solutions, keeping the metaphorical “lights on and trains running on time.”
  • The IT organization typically does not play a major role in business innovation.
  • The IT organization is slow to enter the world of mobile computing.
  • Many IT staff don’t have the customer-facing skills and business knowledge to play in the emerging Digital Business space.

The statistics indicate a move in the right direction – no surprise there.  But the shift is slow – rewarding the early movers with the advantage of a differentiated experience for their customers and for their employees – especially for those IT staff that are involved in these frontier applications. The early movers, through business experimentation and studying success stories are building their digital capabilities.

Accelerating the Shift

Exploiting Digital Business is not just about innovation, agile channels, mobile computing and social media – it has profound implications for the IT organization and its context – the IT Operating Model. I’ve posted before about how IT Operating Models must change for what I called Enterprise 2.0 – aka, Digital Business.  (See here and here.)

Some companies are accelerating the shift through IT Transformation programs – reorganizing, rethinking IT processes and value streams, re-skilling the IT organization and, in some cases, radical outsourcing initiatives. Other are using ‘skunkworks’ approaches to learn and build credibility through early business experiments. Some have the most progressive and promising Digital Business initiatives happening in the shadows – outside the purview of their IT organizations. I find that to be a dreadful indictment of the IT leadership! If that is not a wake-up call for a new CIO, I don’t know what is!

Digital Business is Literally Business-IT Convergence

I’ve posted before on the concept of Business-IT Convergence. In many respects, Digital Business is all about the convergence of IT with the business – business products and services become digital, and IT capabilities – historically located in an IT organization – converge with business capabilities. Some IT professionals and leaders will see this as very threatening. Others will see it as the solution to many perennial problems associated with the ‘us’ versus ‘them’ of the business-IT relationship.

What do you think? How is Digital Business impacting your work life?

Image source courtesy of Devicix

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Motivation and Engagement – Why It’s Often Lacking in IT Organizations and How to Increase It!


motivation

A couple of years ago, I came across a remarkable presentation by author Daniel Pink, and featured it in my blog post, “So You Think You Understand How To Motivate People!” It’s always been a popular post (and a great example of animation as a way to present ideas.)  I recently got around to reading the book that inspired the presentation – Drive, by Daniel H. Pink.  I’ve also just read the wonderful, To Sell Is Human by the same author, so I’m clearly “in the pink” as they say, and very appreciative of his research, writing skills, and his ability to constantly challenge the conventional wisdom, with insight and clarity.

Why Are Motivation and Engagement Important to IT Organizations?

Clearly, this is a trick question – motivation and engagement are important to any organization (or endeavor) but I have worked with quite a few consulting clients over the last few years where engagement was low – it both felt low as I worked with various teams and observed behaviors, and it was measured as low in annual engagement surveys, such as those by Gallup and Towers Watson.  Often, the IT organization scored lower on engagement than any other part of the business – sorry, readers – please don’t blame the messenger!

Why is IT Organizational Engagement Low?

I’m not certain about the reasons, but I have some hypotheses based on my observations and conversations with many IT staff:

  • In tough times (yes, like we’ve had the last few years!) IT organizations take it on the chin!  They are asked to participate in cost cutting, and they do – often again and again!  I often hear comments such as, “I’m doing the work of three people – and I never feel as though I can catch up and do a good job!” These rounds of cost cutting take their toll on morale and negatively impact engagement.
  • Often the cuts impact things that are important to IT staff – education and training, for example, or office ‘socials’ where people get to network and know each other.  Even ‘perks’ that used to be taken for granted, such as free coffee and sodas, or subsidized cafeterias have been eliminated.
  • I’ve noted before that IT professionals tend to abhor ambiguity – after all, they have to reduce business problems to zeros and ones!  And yet, in times of organizational change and transition – which have become the new normal for many IT shops – ambiguity is high, leading to frustration and low engagement.
  • The nature of IT is that it is noticed most when things go wrong – less so when they go right!  I’ve observed before that the half-life of an IT snafu is 12 years, whereas the half-life of an IT success story is 12 minutes!  It’s tough to stay motivated when you are constantly defending yourself!
  • For IT to deliver great results requires that many moving parts and processes across a complex environment work together seamlessly and harmoniously.  It’s tough in such an environment to create the kind of motivation-inducing autonomy Dan Pink writes about.
  • Finally, outsourcing has created both fear of job stability, and, for some IT professionals at least, degraded the job to that of a commodity.  I don’t personally think of outsourcing as wrong or misguided, but sometimes it is handled and introduced to the IT organization in a crude and clumsy way – for example, as a threat, “You’d better knuckle down or your job will be outsourced!”

What Does Research Tell Us About Motivating Knowledge Workers?

Knowledge workers are most motivated by intrinsic rather than extrinsic factors.  This explains phenomena such as the open source movement, and, as Pink points out, the remarkable and almost unpredictable success of Wikipedia – created by volunteers over Microsoft Encarta – a product of a gigantic company with a large budget and a massive team of experts.  Pink goes on to define three elements of what he calls “Type I” motivation – fueled by intrinsic desires:

Autonomy

One of the three basic human needs, what motivation researchers Edward Deci and Richard Ryan describe this way:

Autonomous motivation involves behaving with a full sense of volition and choice.”

It can include autonomy over task, over time, over team and over technique.  I’ve posted before about the concepts of standardizing process, deliverables or skills, and how IT organizations tend to get these confused, or try to standardize everything though processes.  Autonomy has been all but stamped out in many IT shops!

Mastery

Which reminds me of Robert Pirsig‘s Zen and the Art of Motorcycle Maintenance, which I’ve posted at length about as one of the most influential books I’ve ever read.  Given sufficient engagement in an activity, rather than being forced into that activity by compliance, individuals will generally seek personal fulfillment by striving to achieve mastery.  Even though they may never get there, they find enormous personal satisfaction in the journey towards mastery – spending significant chunks of time in what some call “flow.”  My colleague at the new Business Relationship Management Institute, Dr. Aleksandr Zhuk, pointed me to this quote from Matthew E. May‘s The Shibumi Strategy: A Powerful Way to Create Meaningful Change.  Shibumi is a Japanese word that better captures the concept of flow:

Moments of utter clarity. We feel wide awake and connected and balanced: everything makes sense, we know exactly who we are, what we want, and why we’re here. In that moment, be it one blink or a thousand, our effectiveness is maximal. And yet our actions seem minimal, effortless even, and the experience is consummately satisfying.”

How many IT jobs are designed to encourage Shibumi?  Many of my clients create an environment where constant context shifting takes place, as people are shuffled from design to maintenance to break-fix and so on.  Not much Shibumi takes place under such circumstances!

Purpose

Purpose provides the energy for living.  Think about the things you do outside work – and why you do them.  Coaching kids soccer.  Skiing.  Learning a musical instrument.  Volunteering for a charitable organization.  All these things have a purpose – and it’s not wealth creation.  Of course, there’s an element of wealth creation in our work, but for most of us, the need to make a living wage was satisfied early in our career.  So what is the real purpose in our work?  I remember some years back in a coaching session with a group of IT leaders from separate organizations discussing the fundamental mission of our work places.  Most of the group members were confounded by the discussion – they did not know what I was trying to uncover.  Except for one of them, who watched the others struggle with a slight grin on his face.  Eventually, this IT leader from a global pharmaceutical company said, “We save lives by inventing drugs that cure deadly diseases!  That’s why we do what we do.”

Why are you and your IT staff coming to work every day?  Is the purpose really motivating mastery?  And do you have the autonomy to engage in your work?  What could you do to improve motivation and engagement?  As a starting point, you might read some of Dan Pink’s “Drive.”

Graphic courtesy of Success Blog

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Driving Business-IT Convergence – The Evolving Role of the Business Relationship Manager (Part 2 of 2)


cloudIn Part 1 of this 2-part series I defined the BRM role – with the caveat that it is by no means standardized.  In fact, as far as IT Service Management standards such as ITIL® and ISO/IEC 20000 are formalizing the existence of the Business Relationship Manager (BRM) role and corresponding process as a new best practice, they are selling the role short in terms of its potential strategic impact to business.  I went on to describe the typical BRM in terms of their purposes, goals, responsibilities and accountabilities.  To the title of this post, I introduced the shift from business-IT Alignment to Convergence and why this is so important as every aspect of business strategy and operations is increasingly dependent upon information and IT.   Today, the BRM operates at the leading edge of the convergence movement – a movement being accelerated by the ‘consumerization of IT‘, digitization of everything, and by the “Internet of Things.”

In part 2 of this 2-part series, I’d like to discuss needed BRM competencies, how the BRM role changes over time with increasing maturity (of both the BRM and her business partner) and how the way that the BRM engages with the business partner shifts the nature of the relationship from one of order taker to that of strategic partner.

Typical Competencies Required of the BRM

Drives Value Realization

This might be the most important competency for a BRM.  It includes knowing how to surface, clarify and promote the best value-delivering opportunities for IT investments and assets, and how to ensure that these actually deliver on their promised value – delivered in ways that are felt and seen.  This requires skills in Program Management (with implied Project Management skills), Portfolio Management, influence, persuasion, communication, finance and organizational change.

Understands Business Environment

Driving value realization also requires a great understanding of the business, its ecosystem and its competitive landscape.  Successful BRMs have a keen sense of the top strategic business and IT issues – both short and long term, and how these issues relate to initiatives in their industry.  In short, they understand the “business of the business.”  They are viewed by business leaders as a proactive partner in finding the right solutions to business needs and not as a mere “order takers” for IT services.

Aligns IT with the Business

First, let me say that some readers will fume at the subheading.  “IT and the Business are one and the same!” they shout.  While this may reflect a laudable perspective (and one that will gradually materialize as IT-business convergence takes place) it is rarely, if ever, the case today.  Unless your business is information technology, then “business” is where profits are generated, and IT organizations work in support of that.

With that digression out of the way, alignment can be a tricky concept, and in some respects sounds inconsistent with my argument for business-IT convergence.  But alignment represents the necessary table stakes – business leaders and IT leaders need to be ‘on the same page’ in terms of mission, vision, values and goals for both IT and the business – and how these relate to each other.  Mismatches in any of these can spell disaster to the ability to build and sustain value-producing business-IT relationships, let alone converge business and IT capabilities.

Successful BRMs work closely with business leaders to predict demand for IT services and to manage that demand.  They take the lead in highlighting competing objectives.  They are effective at managing the flow of demand through negotiations and seek to iron out demand/supply disconnects between IT and business leaders.  Most important, they constantly seek ways to foster convergence – empowering business leaders – teaching them to fish, as it were, rather than always fish for them!

Manages Relationships

Any role with the word “relationship” in the title has to imply a high level of competence at creating, sustaining and developing strong relationships among stakeholders – especially between business units and the IT groups that support them.  Relationship skills do not come naturally, and are not easily developed in some people.  Effective BRMs are able to build and maintain relationships with senior IT and business leaders.  They are seen as a value-added participant in strategic business-level discussions (i.e., worthy of a “seat at the table”).  Successful BRMs are not shy in speaking up when the demand for IT services outpaces supply ability or capacity.

Manages Organizational Change

Another tough set of skills and behaviors to master!  This requires deep understanding of the organizational levers for making change (people, process, and technology) and how IT and business strategies translate into practical plans of action for change.

The successful facilitator of change engages in discussion with IT and business leaders on the intended and unintended consequences of change, and is willing to confront senior executive sponsors if they are not “walking the talk” and proactively leading the change themselves.  They understand the total cost – both technical and human – of end-to-end implementation.  They can surface the hidden costs and potential obstacles that could derail the change.

They have the ability to identify key stakeholders at the outset of a project, to assign decision-making roles, and ultimately hold leaders accountable for results.  They think and act in terms of outcomes, not deliverables.

Manages Projects and Programs

Successful BRMs typically have several years of project and, ideally, program management experience under their belts.  They have demonstrated competency in project management fundamentals and in the complexities of program management. They demonstrate the ability to get things done through others, even though they may lack ultimate authority.

Effective Communication

Successful BRMs are recognized for their ability to listen, speak, write and communicate clearly and effectively. They demonstrate the ability to negotiate win-win, or at least buy-in, in situations where there are opposing viewpoints.  They are effective at influencing those that they hold no real power over.  They have the ability to recognize and surface disconnects between IT and business leaders and are able to resolve problems through difficult confrontations.

Financial Savvy

Successful BRMs have good knowledge of finance and accounting – they know their ROIs from their NPVs and know how to build a business case that is compelling.  They understand Portfolio Management and have at least basic knowledge of Options theory.  They understand the financial drivers of the business and the drivers of the industry within which the company operates.

The BRM Maturity Journey

BRM Maturity - The Merlyn Group

The graphic above shows how the quality of the Business Partner experience grows and the BRMs maturity increases.

Ad Hoc Relationship

At the lowest maturity level, the BRM role has typically not been formalized.  As such it is being handled in an ad hoc way – the ‘squeaky wheel’ Business Partner gets the most attention.  Or, in some cases, the least demanding Business Partner, regardless of their potential to use IT for high value purposes get the most attention.

Order Taker Relationship

I see this most frequently. Typically, IT supply has been badly broken and the business-IT relationship is hostile, so the BRM role is introduced to “patch things up!”  The BRM, in her ignorance, believes the best way to improve the relationship is to say “yes” to any and all business demands.  This is nearly always a losing proposition.  IT can’t meet the demand, and if they did, there’s little to no business value to be gained.

Advisor

This is a more constructive and productive relationship, where the Business Partner sees the BRM as an advisor.  By this time, there has usually been some formalization of the BRM role and its rules of engagement.  There’s also been some level of training for the BRM – or at least some thought put into the selection of people for the role.

Strategic Partner

The ‘Holy Grail’ of BRM implementations.  This should be the clear ambition – one that is understood and shared by the BRM and her Business Partner – with the recognition that you aren’t a Strategic Partner because you say you are, or because you want to be.  You reach that elevated position because you’ve earned it – and because your Business Partner sees you that way.

IT Matures as the BRM Role Matures

At the risk of pointing out the obvious, the BRM role does not act in isolation.  It is inextricably linked to IT supply.  If IT supply is broken, the BRM role will be limited, and might not even make it to Order Taker.  This, from my experience, is a common situation.  Things are bad, so the BRM role is introduced.  Unless supply improves, the BRM is doomed to failure – and may actually make things worse.  Promises are made and expectations set that cannot be kept.  On top of lousy supply, the BRM is seen by the business partner as ‘overhead’ – yet more evidence that the IT team is clueless, always adding cost without demonstrating value!

To reach the Holy Grail of Strategic Partner, IT supply has to be excellent – both with steady state services (networks, email, help desk, etc.) and with solution delivery (projects and programs).  The “strategic” BRM needs IT supply to work flawlessly.  IT supply needs the BRM to suppress low value demand while stimulating demand that delivers real business value.  That way, everyone is happy and a virtuous cycle is sustained.

Image courtesy of TradeArabia

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Driving Business-IT Convergence – The Evolving Role of the Business Relationship Manager (Part 1 of 2)


WhitePaperCoverI’m seeing a surge of interest in the emerging role of the Business Relationship Manager (BRM) as a key position that sits between a shared services organization (most frequently IT) and its business partner.  This is an internal role that should not be confused with the similarly titled externally-facing role common in banks and financial services organizations. I have referenced the BRM role many times over the last 6 years, and covered the topic at some length in January (see ITIL and the Business Relationship Manager: Avoiding the Performance Trap and Design Thinking and Emerging IT Roles.)  Recently, I’ve been getting an inbox full of questions about the role, so I decided to satisfy that interest with a new 2-part post looking at how the role is evolving.

Defining the BRM Role

The BRM role is by no means ‘standardized’, even as the IT Service Management movement tries to place it in its standards as a rather tactical position, mostly focused on steady-state IT services.  High quality steady-state services are certainly an important aspect for any IT organization – table stakes, if you will, for getting a “seat at the business table”.  (Please excuse the double table metaphor!)  But once the business partner experiences the BRM as negotiator for and arbiter of services, service levels and the like, they are unlikely to invite that BRM to the next strategy offsite to help figure out how the business strategy should address increasing business digitization, for example!

We see common variations in BRM:

  • Seniority – and the level of business executive with whom the BRM partners.
  • Scope – and the number of business unit executives and managers the BRM works with.
  • Purpose – especially in the balance of the BRM focus between supply and demand.
  • Title (e.g., Business Partner Director, Account Manager, Client Relationship Manager, IT Business Partner, Business IT Partner, etc.)
  • ‘Supply side’ focus (i.e, many BRMs represent the IT organization, some represent HR, Finance, and so on.  A small number represent multiple “shared services”.)
  • ‘Demand side’ focus (e.g., Line of Business, geographic region, major business process, corporate functions, etc.)
  • Size of the BRMs team – from sole practitioner to leader of a team of 8 or 9.

The Typical BRM

While typical, as with averages, can be misleading, the most common model for the BRM includes:

  • The BRM sits at the intersection of IT and its business partner – representing the business partner(s) to IT and IT to the business partner(s).
  • The BRM stimulates, surfaces and shapes business demand for IT projects, services, capabilities and investments in order to maximize their business value.  This means taking a proactive role in educating the business partner, suppressing demand for low value activities while stimulating demand for high value activities.
  • Ideally, the BRM is a member of both business and IT leadership teams, contributing to both business and strategy and planning, identifying how information and IT can support and advance business objectives, and helping translate demand into supply.
  • The BRM partners with appropriate supply resources to ensure supply-demand alignment.
  • The BRM helps create project and program charters.
  • The BRM oversees initiatives and helps manage business process change to ensure that the value predicted by a business case is actually realized.
  • The BRM monitors business partner satisfaction and facilitates continuous improvement in the business partner experience with IT (or HR, etc.)
  • To accomplish all the above, the BRM typically manages a small team comprising “junior BRMs”, business analysts and other specialized resources required to ensure an effective business-IT relationship.

If that sounds like a lot of responsibility, it is!  In fact, at their best, IT BRMs are thought of as “mini-CIOs” and are often on a succession path to the CIO position.

BRM Responsibilities

Common responsibilities include:

  • Active member of both the business partner and IT leadership teams.
  • Joint accountability (with the business partner) for business case development and value realization.
  • Accountable for development and execution of the business partner IT investment portfolio.
  • Partnering with the IT Solution Delivery Organizations to manage expectations and ensure efficient and effective delivery of all IT services.
  • Accountable for business partner awareness of systems security requirements and responsibilities.
  • Orchestrating key roles on behalf of their business partner (e.g., Project Manager, Enterprise Architect, Business Analyst).
  • The BRM acts as a broker for needed resources and capabilities (e.g., Vendor Management, Service Management, Organization Development).

From Alignment to Convergence

I’ve posted on this important concept before – with all due credit to Professor James Cash, Harvard Business School, with whom I helped design and deliver a relationship manager development program some years back.  He first helped me to the insight that alignment was no longer sufficient – CIOs needed to recognize that business and IT were converging as every aspect of business strategy and operations was increasingly dependent upon information and IT.  Today, it is largely the BRM who operates at the leading edge of the convergence movement – a movement being accelerated by the ‘consumerization of IT’.

Teaser for Part 2

I’ll pick up in Part 2 of this 2-part series with examples of needed BRM competencies, a discussion of how the BRM role changes over time with increasing maturity (of both the BRM and her business partner) and how the way that the BRM engages with the business partner shifts the relationship from one of order taker to that of strategic partner.

Graphic courtesy of Acre Resources Limited

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Resolving the CIO Paradox


Last week I posted a review of the excellent book, “The CIO Paradox: Battling the Contradictions of IT Leadership” by Martha Heller.  Martha examines the CIO role, stakeholders, staff and future, and provides a rich trove of practices shared by leading CIO’s.

Reading the book and writing the review got me thinking about the current state of IT leadership, and where this is going in the next few years.  After all, this blog, started back in 2007, is titled “IT Organization Circa 2017″ and was originally intended to explore just that topic!

The CIO Role is Essentially “Unnatural”!

I first became aware of this fact back in 1980, when reading Alvin Toffler‘s remarkably prophetic book, The Third Wave.  (I had the privilege of having dinner with Mr. Toffler early in the 1980′s and talking with him at depth about the coming implications for IT leadership, further reinforcing my beliefs around this).  In the book, Toffler argues that Second Wave economies (Industrial Revolution, late 17th century through the mid-20th century) were largely driven by an unnatural breach between “consuming” and “producing.”  He pointed out that in the first wave economies (Agrarian Revolution) most of us produced for ourselves what we needed to consume.  The Industrial Revolution tore production and consumption apart – we worked in offices and factories to earn the money to buy the goods and services that came out of the offices and factories.  Toffler further argued that in the third wave, technologies would “heal” the breach, creating what he called “prosumers.”

The very notion of the IT professional, grouped into IT organizations, managed by CIOs in order to help consumers of IT is inherently very “second wave.”  In fact, over the last 60 years or so, we have seen more and more examples of IT “Prosumerism.”  The first spreadsheets (Visicalc, et al) allowed someone with virtually no IT training to create financial models that a few years earlier could only be produced by teams of expert programmers.  Desktop publishing allowed anyone to get into the publishing business.  YouTube, et al allows anyone to create and publish their own videos, and today high quality movies are produced by amateurs on relatively low cost consumer equipment.

The forces behind this IT prosumer revolution are not going away – rather they are leading to an exponential growth of the IT prosumer – a trend which some people refer to as the “consumerization of IT.”

CIO as Enabler or Barrier?

So, what’s a poor, embattled CIO to do?  On the one hand, the CIO has an obligation to protect a company’s assets against the continuous and growing threats from hackers, viruses, criminals and bad technologies.  On the other hand, the CIO and her IT organization must constantly, even aggressively be preparing for and pushing people towards IT “prosumption.”

As an IT leader, how much of your time and actions are devoted to protecting those who use IT from it’s perils, versus creating the infrastructure and an educated business community that can safely exploit information and IT for competitive advantage?

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Book Review – The CIO Paradox: Battling the Contradictions of IT Leadership


I’m often asked to review new books – I usually decline.  There’s a couple of reasons why I stay away from book reviews:

  1. It’s just not what my blog is about – there are many sites that do a great job reviewing books, and I love the “wisdom of the crowd” effect you get from customer reviews on sites such as Amazon.com, so I don’t feel the need to add my own voice to the book review universe.
  2. I’ve been asked to review some books that were real clunkers!  I felt an obligation to say something (after all, the author has had a hand in getting me a review copy!) but I wanted to keep my authenticity, so I tend to end up “damning with feint praise” as they say!  (e.g., Fred’s book is nothing if not short!”)

Notwithstanding the above, when the request to review The CIO Paradox by Martha Heller came in, it was accompanied by sufficient clues as to its content (including a table of contents and a sample chapter) to convince me I’d enjoy reading the book, and have no problem creating an honest review.  It also helped that I was familiar with Martha’s writing for CIO magazine, including her first article on the CIO Paradox back in 2009 – a piece that resonated strongly with me from my work with CIO’s.  I suspected this book would be of value to my readers.

The CIO Paradox

Martha sets up the book with a question she started asking CIOs in 1999:

When you walked into your most recent CIO job, what did you find?”

She almost always got the same response:

I inherited a mess. IT had no credibility with the business. Projects were overdue and over budget. We had no project management discipline, no governance, no career paths, and the team had outdated skills.”

Thirteen years later, Martha points out, she is still asking the question, and getting the same response. CIOs continue to inherit a mess.  She goes on to ask:

How can this be? How can CIOs strive tirelessly to improve their IT organizations only to leave “a mess” in their wake? … is there something so inherently problematic about the CIO role that even talented, intelligent, and experienced leaders have trouble making it work?”

Great question!  From her work with the CIO Best Practice Exchange and the CIO Executive Council and as an executive recruiter, where she talks to hundreds of CIOs and helps them build their teams, she concluded that there are a set of paradoxes – conflicting forces that are deeply embedded in governance, staffing, executive expectations, and even corporate culture.  She groups these into four major categories which become 4 major sections of the book:

Your Role

  • You were hired to be strategic, but spend most of your time on operational issues.
  • You are the steward of risk mitigation and cost containment, yet you are expected to innovate.
  • You are seen as a service provider, yet you are expected to be a business driver.
  • IT can make or break a company, but CIOs rarely sit on corporate boards.

Your Stakeholders

  • You run one of the most pervasive, critical functions, yet you must prove your value constantly.
  • Your many successes are invisible; your few mistakes are highly visible.
  • You are intimately involved in every facet of the business, but you are considered separate and removed from it.
  • You are accountable for project success, but the business has project ownership.

Your Organization

  • Your staff is most comfortable with technology, but must be good with people.
  • Your staff is doing more with less, but must make time for learning finance and the business.
  • You develop successors, yet the CEO almost always goes outside to find the next CIO.
  • You are forced to seek cost-efficient overseas sourcing, yet you are expected to ensure the profession’s development at home.

Your Industry

  • Technology takes a long time to implement, yet your tool set changes constantly.
  • Technology is a long-term investment, but the company thinks in quarters.
  • Your tools cost a fortune, yet they have the highest defect rate of any product.
  • You sign vendors’ checks, yet they often go around you and sell to your business peers.

Leading and Interesting Practices

For each paradox, Martha shares leading and interesting practices from CIOs.  She names names, and writes clearly and insightfully about approaches that have worked – some simple, some more involved.  This makes for an easy and interesting read.  It also provides a comprehensive compendium of improvement ideas to consider.

A Suggestion for a “Meta-Practice” Based on The CIO Paradox

As I was reading the book, thinking back over my many years of management consulting and helping my clients think through and address some of these paradoxes, I found myself running through a thought experiment.  In the experiment, I had some of the IT leadership teams I’d worked with read the book.  Then they’d come together for a one-day retreat, where they’d discussion questions such as:

  • Which CIO Paradox have we made the most progress on solving?  What were the keys to our success?
  • Which CIO Paradox seems like it is the toughest for us to solve, and why?
  • Which practices suggested in the book should we be implementing, and how?

A variation on this theme would be to share the book with senior business executives, and run the retreat with them – perhaps as a prelude to a business-IT strategy/roadmapping process?  That could open up some invaluable dialog!

Two “Killer Practices”

Finally, as I was reading the book’s closing chapter – a “Breaking the Paradox” checklist, I was sorting out in my own mind which practice could have the highest transformational impact for an IT organization that was already doing well in terms of business-IT maturity.  I tried to distill this down to a single practice, but in the end, I whittled the list down to two:

  1. Reach beyond IT. CIOs are picking up new titles left and right. We see “CIO and VP of customer care,” and “CIO and VP of strategic planning” all the time. Whether they take on an additional title or not, it is time that CIOs apply their leadership far beyond the IT organization.
  2. Move closer to the revenue. When technology data is directly related to a company’s products or services, the CIOs of those companies have a shot at driving revenue.

To view the table of contents, advance praise and a sample chapter click here.

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What’s Really Meant By Business-IT Engagement and How Do You Achieve It?


This is another post triggered by a reader’s question emailed to me.  Here’s his question (some details have been omitted to preserve anonymity).

I was searching for information around Business-IT engagement but have yet to really come across anything with substance.  I’m looking to better connect with the business unit managers to formulate an IT strategy. The unit managers have a track record of operating in their own silos, often making IT decisions without talking to IT which has ultimately cost the company money.  I was thinking about putting a plan together to engage. Structured via, face-to-face, email, social media, newsletter and even survey. Ultimately, from start to finish, I build the picture and connect and portray the message that IT is an enabler and there is benefit in engaging.  I wondered if you knew of anything which may help me?”

This is an interesting question and a common challenge.

What Do We Mean by Business-IT Engagement?

A little research into the term “Business-IT engagement” found a reference to “Employee Engagement“, which Wikipedia defines as:

An ‘engaged employee’ is one who is fully involved in, and enthusiastic about their work, and thus will act in a way that furthers their organization’s interests. According to Scarlett Surveys, ‘Employee Engagement is a measurable degree of an employee’s positive or negative emotional attachment to their job, colleagues and organization that profoundly influences their willingness to learn and perform at work’. Thus engagement is distinctively different from employee satisfaction, motivation and organisational culture.”

I don’t think it’s an unreasonable stretch to derive from this a definition of business-IT engagement:

Business-IT Engagement exists when business unit leaders are fully involved in, and enthusiastic about their IT capabilities, and thus will act in a way that furthers the business value of those capabilities.  Business-IT Engagement is a measurable degree of a business executive’s positive or negative emotional attachment to their IT capabilities, IT colleagues and IT organization that profoundly influences their willingness to participate in the use of IT for business value.”

IT Engagement Model

I also found an IT Engagement Model from our friends at the Center for Information Systems Research:

The IT engagement model is defined as the system of governance mechanisms that brings together key stakeholders to ensure that projects achieve both local and company-wide objectives. The model consists of three general components:

  • Company-wide IT Governance – decision rights and accountability of company level and business unit level stakeholders to define company-wide objectives and encourage desirable behavior in the use of IT
  • Project management – a formalized project management process, with clear deliverables and regular well-defined checkpoints, that encourages disciplined, predicatable behaviour for project teams.
  • Linking mechanisms – processes and decision-making bodies that connect project-level activities to the overall IT governance.

The Linking Mechanisms are further explained in the following graphic:

I find this to be a pretty comprehensive and easily understood way to define some of the major aspects of Business-IT engagement.

Key Business-IT Engagement Factors

The other key factors I pointed my reader to include:

  • The experience your unit managers have with IT – do they trust IT? Has IT served them reliably? Is there transparency into how IT charges?  Is the business value of IT recognized and celebrated?
  • How engaged are business and IT leadership with each other? Does the CIO sit on the Management Committee? Is there an effective business-IT governance board and related processes and structures?
  • The skills of those in the business-IT interface role (Business Relationship Managers, or BRM’s) – how well do they understand the business? Do they have good relationship skills? Are they co-located with the business unit leaders and sit in on business management meetings? Do they perform a business management role, or are they simply seen as technical people taking care of IT?  Are they primarily responsible for Demand Management?

To the balance of his question, I asked:

  • Are you really trying to formulate an IT strategy? Or is it going to be a business-IT strategy. (If I’m a business unit leader, why should I care about or want to be involved in an IT strategy – it sounds rather internal to IT to me, so I’d probably want to stay out of it – I’m busy enough as it is!)
  • Do you really understand the business problems and how IT can contribute to solving them? If you do, what’s the best way to “market” those ideas, and to whom should you be marketing them?
  • What are the cultural norms in the business – do ideas drift down from the top, or do they percolate up from the edges – the ‘front lines’?

Outside-in Versus Inside-out Thinking and Acting

Finally, I was troubled by an aspect of the language my reader used in his question:

I build the picture and connect and portray the message that IT is an enabler and there is benefit in engaging”

This is what I call Inside-out thinking – “We (IT) are good and can help you so you should engage with us!”  I think my reader might be on a better path to engagement if he can identify the specific business issues and needs and communicate how IT might contribute to addressing those issues and needs.

Don’t Engage – Empower!

Just as I was finalizing this post, Zemanta did its usual thing of suggesting links and related articles.  (I really like Zemanta – it’s been one of my little blogging secrets for a while!)  Among its suggestions for articles was Don’t Engage Employees, Empower Them!  I think that is an important dimension to Business-IT engagement – especially in this age of IT consumerization.   Too many IT leaders see there role as ‘protecting the business from the perils of IT.’  Empowering them – for example, Bring Your Own Device (BYOD) can be a powerful way of bringing the business into the business-IT dialog and engaging them in strategic and tactical dialog and decision making.

Graphic courtesy of The Social Workplace

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To Whom Should Business Relationship Managers Report?


I recently received this question from a reader:

We are evaluating a strategy to centralize IT and implement Business Relationship Management (BRM) roles as part of the centralization. Where do you typically see the BRM’s reporting into in a centralized IT organization? Should they report directly in to the CIO, or can they be effective a level or two below the CIO?”

Rule #1 – Reporting Lines Are Weak Determinants of Success for the BRM Role

I have found reporting relationships to be a very weak determinant of success for the Business Relationship Manager (BRM) role. Far more important are the competencies (especially business knowledge and relationship skills) of the BRM and the maturity of the business executives they partner with.

Rule #2 – Heft Matters!

Notwithstanding Rule #1, the “heft” of the BRM role – the weight and implied authority it carries does matter.  There’s a couple of reasons for this:

  1. BRM’s are often on a CIO succession path (either explicitly or implicitly) – i.e., have the skills and wherewithal to be a CIO down the road, and the BRM role may be seen as a developmental step.  This has implications for who you chose to fill BRM roles, and for their career paths.
  2. The story a CIO tells the business executives when establishing the BRM role is along the lines of, “I am giving you one of my senior staff members to help surface, shape and manage IT demand so that you get the highest possible value from IT investments and assets. In return for this ‘gift’ I expect you to treat this BRM as a member of your management team.”

As a result, the most common reporting relationship for successful BRM’s is directly to the CIO.  In some cases, the BRM has a dotted line relationship to the senior business executive for the unit they represent.  In other cases, the BRM role is solid line to the senior business executive and dotted line to the CIO.

Rule #3 – Context Matters!

There are many other contextual factors to consider here, including:

  • What is the scope of the BRM role – is it primarily demand management (shaping, surfacing and managing business demand for IT)?  Or does the role include supply management, service management or other responsibilities?
  • Do the BRM’s act as Project or Program Managers for major initiatives?
  • Do the BRM’s sit on any governance bodies, such as Portfolio Management or Service Management?
  • How do BRM’s engage with the supply side?  How do they engage with Enterprise Architects?
  • How mature is IT supply?
  • Howe mature is business demand?

BRM’s Can Be ‘Game Changers’!

The BRM role is a tough one to get right, but from my experience, well worth the effort!  An effective BRM can:

  1. Elevate business maturity
  2. Ensure that IT resources are being focused on the highest potential value activities and initiatives
  3. Ensure that those initiatives capture the highest possible value

 

Graphic courtesy of Linda Galindo

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