Monday, June 24, 2013
When the going gets tough, the tough don’t get going anymore because companies cut cost. In the last 4-5 years the economic, governance, and policy uncertainties across geographies, markets, industries and sentiment in general, have had an overall negative bias. We saw recessionary trends that never really went away; an after taste remains even today. Companies that have globalized continue to see challenges in some situations every day thus keeping the teams on their toes.
Cost cutting or management has become a way of life; we have all been through these cycles or what management types call S-curve of investments and cuts; the corporate strategy and agenda oscillates between cutting costs and creating efficiency when lead indicators of performance reveal that growth is stunted and profitability is taking a hit. The onus of efficiency many a times rests with the CIO who has a micro view of every process. Sooner or later the process reaches a break point within the constraints.
Green shoots that bring promise of the era of growth has most companies scrambling to invest again; with the herd mentality everyone then wants agility, process flexibility, and an ability to respond to the market faster than equally ill-prepared competitors. Why are you unable to deliver new functionality faster ? Market will not wait for us to build systems at leisure; IT is not aligned to business reality, they do not understand business priorities and how to deliver to them.
The CIO retaliates and cites budget cuts in the past when the going was slow; when IT and business teams had some spare time, we decided to fine tune efficient processes rather than building new capability that could have helped retain market leadership. All good things take time to build and deliver; now putting more men on the job does not solve the problem. If you (Business) continue to look for the perfect solution, we might not complete before the next recessionary cycle making all the effort pointless.
This tug-of-war is played across many enterprises with no learning applied from past cycles of cuts and investments. It is like a knee jerk reaction to external factors that throws strategy out of the window and the company to the mercy of fickle minds and men. The short-term prevailing over the long-term takes away the flexibility to respond to market shifts with no latitude to adapt. Thus benefits available with sustained investments thus continue to stay elusive.
Can organizations and CIOs create a balance between the efficiency and flexibility agenda ? Is such a position desirable and achievable ? Can IT help the cause ? I asked these questions to a few learned CIOs; everyone nodded unanimously to the fact that cost containment drives every few years has taken away a lot of energy. The yo-yo keeps them and their business folks running to stay in the same place. Discretionary budgets not being available now, the tussle for flexibility is an uphill journey.
Turning to a consultant amidst the group for wisdom of the ages, there was no solace in what she offered as advice. She propounded the obvious: stop investing and cutting cost in spurts. Don’t lose sight of your direction; focus on your customers, explore cloud, analytics…. With no real input coming from this quarter, we decided to brainstorm the issue. The nemesis was universal and thus participation eager; while we did not solve world hunger problems, an outline emerged that offered some promise.
The new engagement model with outcome based payments holds a lot of promise; as CIOs engage with the partner ecosystem to link outflow to projects delivering to business metrics, two things will change. Firstly business will have to define outcomes and their commitment upfront; this will impact discipline of execution and the ability to stay focused. The second change will be the acknowledgement of the role of IT in business excellence putting the CIO in the driver’s seat should s/he choose to take on the opportunity.
Are you ready ?
Monday, June 17, 2013
The last fortnight could be classified as the official cloud period of the year with multiple conferences vying for attention; it also saw business newspapers and magazines write about clouds. A couple of television channels aired hyperbolic programs with the usual set of vendors and spokespersons talking about why enterprises have to adopt the cloud for survival. One of these had an interesting open and candid discussion between two senior CIOs on clouds which kept the organizers on their toes and the audience regaled.
A brave move by the organizers, in an unstructured dialogue with no moderator, their bantering got off to a good start with sharing of experiences on how they had used various technology solutions to create purported private clouds as well as engaged with third party service providers to leverage varied cloud offerings. They unanimously admonished the vendors for creating hype more than they could deliver in reality. The hysteria parallels the dotcom era in its fervor with everything being tagged to the cloud.
The senior retired CIO used his sharp wit and tongue challenging the audience if they had different experiences. He demolished a few hypotheses and claims as myths with no evidence apart from anecdotal references. He sought to differentiate between public cloud solutions for consumers from ones available for enterprise users. The clouds are drifting with the wind created by a lot of hot air in the room, so let’s be practical and realistic in promises to customers on cloud solutions.
We all know that cloud for the consumer has been a big hit connecting mobile devices to ubiquitous cloud solutions offering multiple for purpose apps. Almost all the content is uploaded or downloaded to or from the cloud with seamless access across multitude of devices. Try for free, if you like it, buy it; micropayments allow easy download and upgrades, and if you don’t like it, you don’t feel the pinch. From tweens, teenagers to grandfathers and grandmothers everyone is hooked on in varying degrees.
The corporate journey started with sales applications gradually moving on to full-scale sales force automation solutions; employee self-service and customer facing portals (B2B or B2C) kind of rounded off the foray on the public cloud. Test & Development, archiving, and experimentation of new solutions were the other deployment cases. None of the core applications moved to the cloud; small and medium enterprises, and start-ups though did find the cloud offering quick solutions at affordable costs.
All As-A-Service models worked on the assumption that enterprises are desperate to move their capital investments to operating expense; in reality all of them were not excited. The variability of expenses that clouds promised was rarely delivered with rigid contracts and time to (re)provision. ROI remained elusive in the public and hybrid cloud models, the private cloud (which was created as a term to appease the CIOs who did not embrace the real cloud) did provide some benefit with agility and higher utilization.
Re-purposing a consumer offering to the enterprise (read the micro-app nemesis) has many challenges which I guess will eventually get resolved; the reverse may to the consumer as I know is not been ideated; the boundaries are blurring between the two. While the transactional need fulfilled by enterprise applications will rarely move to the cloud or onto the mobile, information consumption and field data gathering will become key processes working off the same personal mobiles on the public cloud.
With the boundaries between consumer and corporate devices no longer tenable and enterprises adopting BYOD, the next disruption will be the convergence and unification of the consumer and enterprise device, and applications. Until that happens, the debate will continue on where the cloud has a promise for the CIO and where it impacts the person the CIO is. Stock tickers, games, utilities and what have you gratify the individual and are perceived as a distraction and risk by the enterprise.
Coming back to the chat, a vendor in the audience challenged the duo that the vendor had customers who have successfully deployed the cloud but meekly backed off when challenged to verbalize the business case and benefit. The hot air was indeed clouding a normal discussion; so the CIOs agreed to wind up the discussion with the conclusion: clouds are here to stay, they are/will be a part of the IT setup, don’t go gaga over it, be pragmatic, practical and deploy only if it fulfills a business need. Sound advice if there was one !
Tuesday, June 11, 2013
Innovation has always been a mystery to me; I mean what triggers innovation, how do people come up with ideas that result in innovation, why do some companies innovate more than others, what enables companies to create an innovation culture. Most of the books on innovation do a wonderful job of justifying why some are more successful than others. Theories and postulations fail to tell us how to innovate in our frame of reference; their motherhood statements are rarely actionable.
Corporate innovation agenda manifests itself in many ways starting with Committees, working groups, posters and banners, award and reward schemes, various interesting sounding Japanese terms used to christen the initiative, what have you. When these do not deliver in the anticipated stupendous way, consultants are hired to review and propose a model presumably aligned to the enterprise reality. Many interviews and thousands of slides later no one is wiser on the way forward.
In the last few weeks I was bombarded by the need for innovation to be on the CIO agenda. These came from CIO surveys, research papers and opinions of a few vendor marketing pitches. The reference was to enable and support corporate innovation programs and at the same time also create an IT innovation agenda. The tall order revolved around deploying solutions that capture ideas, enable collaboration, allow progress visibility, all of which will turn the enterprise into an innovation factory.
The other part of the discussion looked at IT innovation which in turn should enable business strategy and/or growth. According to them, a combination of the usual suspect and hyped technologies should do the trick for every company irrespective of size or industry; if you are not doing Big Data, then you are missing out; if you do not use mobility solutions (or BYOD), then you are a laggard; you don’t have clouds ? you must be joking, everyone does clouds, private, public or hybrid. The message does not look at business cases, but expects traction.
So where does the CIO stand in the corporate innovation agenda ? Is s/he leading or participating in the program, or is the CIO a bystander ? Where does IT if at all fit into the innovation drive ? I started tracking the reality for the CIO and how they are dealing with this predicament to validate my reality. While I had no expectations, the answers in their candour surprised me. Very few had a different reality and I am not sure if they were trying to cover up. The overwhelming majority were quite clear.
In a large part, the innovation initiatives were created to counter some competitive force or pressure that hurt the business. Beyond the initial wave of ideas that delivered quick-win results, the programs did not live up to their initial expectations. All the buzz and hoopla died down after a few months or quarters, few lived to celebrate an anniversary. Where technology platforms were part of the design, the CIO enabled it and stepped out of the way. A few IT lead innovative business ideas brought them to the limelight which was good while it lasted.
Innovation and breakthroughs are rarely achieved using structured agendas; they flow out of creativity of individuals and teams working together. These can impact processes, products or services in big and small ways. Committees evaluating ideas are more likely to kill them than enable, so is the case with laborious processes to determine which ideas should be funded and which discarded. We all know this but play the game along when it is seeded in our companies.
Is the CIO really uniquely positioned to help further the innovation cause ? The challenge is the enterprise wide acceptability of this position where every CXO wants to be associated with such a prestigious initiative irrespective of whether it delivers to promise. After all, no one wants to be not seen as not supporting innovation. Should the CIO fight to get his/her name stuck on ? If you can’t beat them, join them appears to be the best approach for now. Do you have a different view or reality ?