The CIO/ITD In Crisis.
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“The best executives I have met have had a great understanding of how to use technology to gain competitive advantage and improve operations. They also worked with the CIO to help them to understand the business. They worked together to identify the technologies that could improve the company’s competitive advantage versus technologies that were needed to support the business. Once this was done, the executive leadership and CIO focused on implementing technologies that improve the company’s competitive advantage”.
“All the parts of the organization have to come together and build a common language to discuss their markets and their enterprise. They need to have a common appreciation of each other’s purpose. The CIO must step up and mentor the C-suite on the potentials, possibilities, threats and opportunities of information technology..”.
“If IT and the CIO come to the party talking like engineers, only offer convergent lines of thought(analytical, rational, quantitative, sequential, constraint driven, objective and detailed focus) and don’t offer a more holistic, shaded divergent thinking point of view (creative, intuitive, qualitative, subjective, possibility driven, holistic with conceptual abstractions), then they have missed the point”.
“The CEOs were actively aware, concerned, looking at alternatives such as chief digital officers, or creating “not-so-shadow” IT organizations under the CMO”.
This article posits that the need for change is now undeniable, and that CIOs are looking for practical steps for creating new habits in their teams. These new habits, developed now, will help prove the continuing need for a central Enterprise IT Department.
History & Trends.
The demise of the IT Department is not a new prediction, it was first suggested in 2004 by Nicolas Carr in his book ‘Does IT Matter?‘ and again in 2007 when Chris Anderson published his ‘Black Wire – White Wire’ article. This post talked about how corporate IT was being over-taken by consumer-IT. Later, in January 2008, Nicholas Carr famously pronounced “The IT department is dead” referring to the up-take of utility computing since his 2004 prediction.
Since then, others made further observations about emerging IT trends that appear to strengthen those predictions. Today, around six hard trends are well established. They sit within an umbrella trend we described as ‘Externalization’ back in 2007. Later, in ‘Flash Foresight‘ Daniel Burrus explains how he identified many of the established technology trends and why they are ‘Hard’ trends rather than passing fads. More recently, in his book ‘
Agile Architecture Revolution‘,
Jason Bloomberg talks about understanding the enterprise as a Complex System – a System-of-Systems. His book is architectural guide to help IT Departments respond to the Externalization trend and, at the same time, it highlights the need for a change in mindset within the IT community.
In parallel, John R. Rymer of Forrester Research coined the phrase ‘Business Technology’ (BT) to describe the ever-increasing reliance on information technology by businesses of all types to handle and optimize their business processes and the need for a more integrated & holistic approach to the use of business-embedded information technology. Here’s what Wikipedia says about BT:
“The increasing use of the term business technology in IT forums and publications is due to an emerging school of thought that the potential of information technology, its industries and experts, has now moved beyond the meaning of the term. Specifically information is seen by some as a descriptor not broad enough to cover the contribution that technology can make to the success of a business or organization“.
Focus on Externalization and BT.
Acceptance of the Externalization trend, and a deep appreciation of ‘Business Technology’ theme, provide the canvas, on which, we can sketch-out the ways in which the IT Department must change to survive. Probably most importantly, the CIO needs to find the time to think strategically: from ‘Whac-A-Mole-IT-Management’ to strategic, Business-Technology leadership. Thinking strategically means the CIO needs to develop a deep appreciation of the various ‘markets’ his/her team serve, as both a supplier, and a broker of services, to those markets. Such markets exists within and outside the enterprise and are made up of customers, suppliers, intermediaries and other stakeholders. All with differing values and requiring different sensitivities to protect and enhance trust relationships.
How to prepare for the inevitable change.
At my current company, we use the ‘BT’ label help position our five-year vision & strategy. It helps frame the discussion about the many areas of change required: cultural, technological, procedural, organizational & regulatory. BT is not, however, a new name-tag for the IT department – it represents the new thinking required across the whole business. It might seem ironic, given the predictions, that it was our CIO who initiated the discussion – I suspect, however, this will often be the case: the CIO is frequently the only C-level executive who has a holistic understanding of both the breadth and depth of the business.
Back in May this year, I posted about the work we were doing to establish a BT Vision. This has since been developing gradually and is gaining acceptance across the IT senior leadership team, but more importantly, with C-Level executives.
Recently, I was invited to share, with a large multinational conglomerate, some of the more tangible changes we’re implementing Our vision & journey towards ‘BT’, and our response to the the ‘Externalization‘ trend set the context for the discussion. Here’s the list of ‘contrasting behaviors‘ I shared:
15 ways to change the IT Department’s habits
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Old Habits
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New Habits
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1.The department of ‘No’
2.Products focus
3.Internal SLAs
4.IT Strategy
5.Cyber security tooling
6.CAPEX-first mentality
7.Solution-focused technology architecture
8.Product standardized IT portfolio management
9.Governance of large IT projects
10.IT Cost Centre management
11.Internal procedures & methods
12.‘Family’ of IT vendors
13.Gadget-focused innovation
14.Periodic, internally-focused, measurement
15.Technology focus
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1.The department of qualified ‘Yes’
2.Services focus
3.Services internal/external ecosystem –SLA-chains
4.Integrated BT strategy
5.Cyber security culture
6.Balanced, outcome-focused, investment
7.Adaptive, value-focused, Enterprise Architecture
8.Principle-led architecture & standards-based integration
9.Company-wide, joined-up, BT-governance
10.BT services broker, innovation-lead and advisory
11.Internal & external engagement
12.Consumer-driven, ecosystem of suppliers
13.Customer-story-based innovation
14.Constant, external & internal, feedback-loops
15.Focus on information value & risk
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We’ve made good progress on many of the 15 points, but I’d say the most compelling for the business are: 1) The department of qualified ‘Yes’, 4) Integrated BT strategy, 5) Cyber security culture, and 13) Customer-story-based-innovation. I’m pleased to see these seem resonate with the observations made in the HBR article mentioned above.
Will the IT department will be dead by 2020?
Will the need for a central IT department go away by 2020? No, not in our case at least, but it does need to rapidly adapt and evolve and we believe those that don’t will become side-lined. We are seeing, however, other businesses taking a different view: there does seem to a dangerous, frustration-with-the-ITD, pattern emerging where IT departments are being split-up into LOB sub-teams, without considering the need for, holistic, enterprise-wide thinking.
Maybe the IT Department label won’t exist by 2020, but many organizations will require a team that focus on the value of the digitally enabled world that balances agility, resilience, security and cost across the whole enterprise. For these companies, dispersed and unbridled IT (use of consumer-led technologies and commoditized services) would lead to unprecedented levels business risk: operational, financial, commercial, reputational and regulatory. [post addendum: FUD alert! See my response to Nick Gall’s comment].
My hunch is that, once the hype has died down, the Externalization trend will actually strengthen the need for strategic, less operationally-focused, ‘Office of the CIO’ within organizations. I’m sure, however, such an entity will be unlike today’s ‘Operationally-focused’ IT shop, by 2020.
Addendum
Since posting, I was asked where VPEC-T fits in the context of the move towards BT. VPEC-T is a tool for the sense-making of complex systems-of-systems. It deals with the complexities of plurality (e.g.multiple value systems and multiple types of event). Moreover, it is used for sharing stories about such systems which helps: reach common understanding, ensure completeness and make trust explicit. These considerations will be increasingly important in the diverse and emergent world of BT. It’s most applicable to ‘New Habits’ 5,7 & 12-15.
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Back in 2008, I wrote a paper on Business Analysis. Recently, I’ve been revisiting this subject in my day-job and this made me realise how little things had changed and inspired me to write this post, which is, basically, the original article re-written, with additional thoughts (in italics).