uGovernIT

A Practical Approach for IT Governance

Archive for the ‘Analytics’ Category

Ken Venner: CIO of the Month – May 2017

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Ken Venner is CIO at a space company that builds rockets. Like uGovernIT, our integrated IT management solution, Ken’s focus is to deliver Information Systems and Technology services that are “Like Air”, enabling engineers and scientists to propel mankind forward as a multi-planetary species. The challenge is to provide cost effective, high-performance and “always on” tools and business processes that enable the business to achieve this goal.

Ken’s accomplishments cannot be summarized in a blog post.  I need a book for it.  Just one example may give insights into his ability. He built a customer ERP package to meet the unique needs of a 21st century rocket company involved in space explorations.

Ken brings an in depth knowledge of information technology coupled with a good vision to the future.  With his deep knowledge of the business, he successfully builds a seamless bridge between business and IT.  And further add to this, his uncanny ability of managing people of various backgrounds:  analysts, programmers, managers and even support staff who are in security and facilities.  I was visiting him at the famous space exploration company, and both the security guard and receptionist were telling me how they enjoyed being a part of Ken’s team.

Despite his lofty achievements, Ken is very humble and always willing to help.

I requested him to send a short monograph on how to succeed as a CIO.  His advice centers around five key tenets. Please read the full text  and you will see why he is our CIO of the month. He is also a good friend and a key reason behind our success at UGovernIT.

Written by Subbu Murthy

May 2, 2017 at 12:21 am

IT Budgeting Made Simple!

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Cost and Value

 

In the past, presenting IT budgets was not unlike visiting the Dentist.  We all had to do it, but hated it.  We all tried to compare how well we did in reducing costs.  We used metrics such as cost of IT per employee or percentage of revenues and compared it with our peers.  For example, mid-sized companies spent around $13K per employee on IT and large companies spent about 20% less. These cost centered IT Budgets are a thing of the past.

With the shift towards business driven IT, the single most important metric is the value derived from IT.  We can define three stages of organizational maturity with respect to IT management:

  • Stage 1 – where Cost Centered IT far exceeds Value Centered IT
  • Stage 2 – where Cost Centered IT is about the same as Value Centered IT
  • Stage 3 – where Value Centered IT far exceeds Cost Centered IT

The question naturally that comes is how do we measure value.  In general there are three types of value:

  • Real – actual benefits/value received that can be measured;
  • Algorithmic – where benefits/value is calculated algorithmically; and;
  • Perceived – subjective assessment of benefits/valuation.

While you can spend enormous resources in identifying value, we argue it can be done relatively quickly if you use a combination of the three approaches. uGovernIT offers a multitude of models that can be tailored to meet each industry.    The best part is that the businesses can tailor the models to their specific enterprise without the need for extensive IT effort.

Value centered IT is the practical way to align IT to organizations. uGovernIT provides a 360 degree view of IT to align resources to IT activities that provide most value to the enterprise.  Value centered IT helps bridge the gap between business and IT, and uGovernIT provides an elegant solution to help you automate the process.

Written by Subbu Murthy

August 14, 2016 at 11:08 am

The Importance of Analytics – A Personal Story

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Diagrams projecting from tablet isolated on white

Many, particularly in the IT leadership field, fail to see the importance of IT analytics. They see the importance of Analytics for the business, but not for IT. This is particularly true for the Small to Mid-Sized firms. At first glance, IT Analytics may seem to be an overkill. However, the basic principles of management theory suggest that you cannot manage what you cannot measure.

I did a small personal experiment to verify the importance of measurement. I love to walk, so I wear a pedometer watch. I had a personal goal of at least 20,000 steps a day. Over two years, I kept track of the number of steps I walk on a weekly basis. A small footnote: I walk over 150,000 steps a week, more than double the recommended metric of walking 10,000 steps a day. Week after week the variance was within 10%. My job keeps me on the phone at least 2 hours a day, and I walk and talk.

One week, I stopped looking at the measurements. I was still measuring the steps I walked, but simply did not observe it on a daily basis. The average steps had dropped almost 50%! Elementary statistics tells us that there could have been other confounding factors such as a trip, weather, health etc. While all these factors were not prevalent that week, the fact that it dropped 50% gave an opportunity for me to appreciate the importance of measurement. The goal of at least 20,000 steps a day had driven me to walk, and without measurement, motivation of reaching that goal had waned.

Managing IT is a lot more challenging than one simple metric. IT leaders have to device those metrics that motivate the department to achieve. Please refer to an earlier blog post on IT Analytics. This blog post may serve as a starting point for developing meaningful IT Analytics.

Written by Subbu Murthy

August 14, 2016 at 11:05 am

Six Principles from Amazon can also guide CIOs

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Amazon CEO Jeff Bezos addresses a press

In the old article “6 Things Jeff Bezos Knew Back in 1997 That Made Amazon a Gorilla”,  Jeff identified key insights that can help entrepreneurs.  Sitting across the table with one of the five founders at Amazon at one of the round tables, I was astounded as to the audacity and approach they were taking.  I wrote a blog post on how those principles had guided me.  After nearly two decades, these six principles are still very true.

  1. When there is a window of opportunity – go for it.2. Think Long Term 5-7 years. 3. Focus on Long Term Market share – not short term profits.  4. OK to make mistakes but not be timid.  5. Obsess over customers.  6. Be the First.

Jeff’s guidance is not just for entrepreneurs.  IT leaders can apply these principles to transform the enterprises they work for.  The first principle of going after opportunities means that IT leadership should be proactive and seek out technology initiatives.  The second principle (long term thinking), the third principle (market share) and the sixth principle (“be the first”) all imply that IT leaders should constantly look for innovation that may not yield short term results but give the enterprise significant slice of the markets.

The fourth principle recognizes that innovation inherently carries risk.  The key is to make mistakes quickly and learn from them, but once it is deemed a failure, rapidly discard them or modify them to yield better outcomes.  It is interesting that very few IT leaders assess and abandon projects that yield no value.  The fifth principle of revolving around the customer implies transparency in building IT systems that are no closed within the enterprise.  Rather, IT systems should revolve around customers served by the enterprise.

I am proud to have built our firm around these six principles.  The new paradigm for IT management is not just ITSM but transforming the enterprise to meet the digital era! IT leaders can say goodbye to legacy tools,  uGovernIT – is the first tool to have ITSM plus Digital PMO!  uGovernIT is offered at a very attractive price and enables IT to become the change agents delivering not only IT enabled services but digital projects across the enterprise. Businesses and Customers can easily interact with IT using our automated agents, pre-built workflows and wizards. Check us out at www.ugovernit.com.

 

Written by Subbu Murthy

June 1, 2016 at 11:01 pm

SMDB – The New IT Paradigm

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IT Asset Management

Before the Cloud …

Cloud computing, Internet of Things (IoT), and Software as a Service (SaaS) have rendered many of our IT management paradigms obsolete.  In the past IT management centered around Data Center and multiple IT assets.  Management embraced CMDB as the fundamental component of their IT delivery.  No wonder tool vendors like Remedy and ServiceNow sprung up built on the CMDB metaphor.

A configuration management database (CMDB) is a database that contains all relevant information about the components of the information system used in an organization’s IT services and the relationships between those components. A CMDB provides an organized view of data and a means of examining that data from any desired perspective. Within this context, components of an information system are referred to as configuration items (CI). A CI can be any conceivable IT component, including software, hardware, documentation, and personnel, as well as any combination of them. The processes of configuration management seek to specify, control, and track configuration items and any changes made to them in a comprehensive and systematic fashion.

CMDB was one of the most critical aspects in ensuring safety and security of the enterprise. It was essential to provide a scalable, reliable, and secure Enterprise Architecture. While very useful, CMDB based management was expensive and needed enormous resources to maintain its relevance.

The New Wave …

The Digital Age has created the need to move to a nimble and innovation centric Enterprise forced IT leaders to look for a different model.  CMDB served its purpose, but automation took over.  Tools like Airwatch made asset discovery and management a very trivial exercise.  SaaS solutions rendered expensive application management obsolete, and beacons provided assets to communicate with one other without human intervention.  In other words, the CMDB has became a commodity.  IT has shifted its management focus to a service oriented architecture.  While ITIL and vendors quickly adapted their approach to take into account the need for a service delivery framework, the tool vendors simply patched their CMDB tools to appear like a services framework.  While large companies can afford to spend money liberally on tools, mid-market enterprises cannot afford this luxury.

Introducing SMDB …

As we have done in our tool (uGovernIT), there is a need for a Service Management Database (SMDB). Not just a catalog or traditional master data database, but a self-learning and adaptable service engine that can be easily embraced by mid-market enterprises. SMDB is comprehensive solution and includes the business demand for IT including user service requests, projects, and business need for innovation.  SMDB also includes the supply chain including people and assets to meet the demand.  To be effective, the SMDB should also include the processes and automation to make management simple. SMDB should provide knowledge management, workflows, collaboration, and analytics along with project management, project portfolios.  SMDB will not only help manage IT budget and IT spend, but also help to provide transparency into IT activities and facilitate effective demand management.  Agents and automation will make it easy for enterprises to adopt SMDB.

Adopting SMDB …

The CIO was the bridge by helping businesses communicate their technology needs and helping IT align the resources to match those needs.  Many of the CIOs focused their attention on execution.  This focus on execution meant that CIOs were slow to respond to the Digital Enterprise.  The organizations responded by creating a new role – the“Chief Digital Officer (CDO)”. While CIOs are still slow to adopt SMDB, CDOs, on the other hand have made SMDB their basis for managing the Digital Enterprise. If the CIO does not wake up to the new Digital Age, then the CIO era will sadly come to an end.  SMDB is an agile and nimble framework to help CIOs bridging the gap between the Analog enterprise and the Digital enterprise.  We are very pleased to play a part in this transformation.

Written by Subbu Murthy

February 4, 2016 at 10:54 pm

A Simple Scorecard for building a Healthy Project Culture in a Technology Centric Environment

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CultureIn a very useful HBR study that attempted to build a scorecard for assessing company culture,  Lindsay McGregor and Neel Doshi, argue that “Creating a business case for culture isn’t impossible. While it is difficult to measure whether someone is being creative, proactive, or resilient in the moment, it’s actually not difficult to calculate total motivation.”  They identify six factors: three encouraging (Play, Purpose, Potential) and three discouraging (Emotional, Economic and Inertia or Friction).  They go on to provide a simple score card for assessing the net cultural score (they call it ToMo) based on surveying the employees.  The specific factors they use or their scoring technique is not as relevant as the approach an organization should take.

Let us start by acknowledging that while there are literally thousands of articles and models for understanding and building organizational culture.  However, the harsh reality is that very few in the leadership team have the time to devote to building a corporate culture.  The approach presented here is simple and can be implemented with relatively less effort.  To credit the authors cited above, their technique bears some resemblance to the one I am presenting.  The methodology shared here is built into our IT Governance tool (uGovernIT).

To start, baseline the current state.  Identify measurements and set a weight for each measurement.  Note that measurements can be positive or negative.  For example, excess emphasis on technology cost may hamper the innovative culture of the organization.  For technology centric-companies,  typical positive measurements may be organizations ability to tolerate mistakes, organizations ability to promote from within, flexibility in work styles, etc.   Example of negative factors include emphasis on cost and not on value, emphasis on meeting schedules and and not on quality, emphasis on onerous processes, etc. Once these factors are identified and the measuring instruments chosen, the implementation typically involves a survey mechanism.

Many use the survey ranking from 1 to 5 or 1 to 7, but this may be a mistake.  As eloquently quoted by Mr. Ken Venner, CIO at SpaceX, the best technique is to use a 1 to 4 ranking forcing the responder to select an opinion.  The baseline score is readily computed using the weights associated.  Once the base line is established, then a specific set of expected targets are established.

The diagram above shows six measurements (three to enhance the positive focus and three to diminish the negative focus).  To achieve the expected state, let us assume that the organization works out a strategy, perhaps in conjunction with experts.  Once the strategies are implemented, and survey is again conducted to measure the actual state.  This process can continue as a normal aspect of organizational change.  Scorecards will help keep us honest.  Instead of giving lip service to a serious topic, the scorecard gives organizations the current state and helps them plan for a better state.  The very fact that a scorecard is created has the Heisenberg effect.  It shows that culture is important to the organization.

The simple technique illustrated above highlights that even small organizations can undertake the effort to improve culture.  A strong organization culture is a strong brand.  All of us in technology know the value of a strong brand.

Written by Subbu Murthy

December 2, 2015 at 6:46 am

A Lesson in Life from the CEO of Boston Celtics and the CEO of Boston RedSox

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Celtics and RedSoxAs a Lakers fan and a Dodger fan, I may have committed two cardinal sins that may not be condoned by southern californians. On a business trip to Boston, I was privileged to attend the Evanta CIO Executive Summit.  The key note was moderated by David Rudzinsky, SVP, Information Services & CIO at Hologic, Inc.  The two key note speakers were Wyc Grousbeck, Governor and CEO of Boston Celtics, and Larry Lucchino, CEO of Boston RedSox.

With CEOsUnlike “I did so and so, or you should do so and so” keynotes which is typical of CIO Events, this was different.  There was a just a panel discussion.  Neither Wyc nor Larry,  even remotely hinted about their stellar achievements.  They shared how technology had changed sports. Larry was articulating how analytics was helping the organization draw the balance between intuitive decision making and fact based decision making – scary to think how a former basketball player and baseball player is in tune with the technology trends. Wyc was talking about the role and influence technology had played in the Celtics organization. If you visit the Evanta site, you can read all about it.  I will only share two of the many insights they shared.  Wyc shared that streaming basketball games on mobile phones in China alone yielded NBA 280 million dollars in revenues last season. Larry shared that decades back, internet rights were given away by baseball owners to MLB leading to inequities between large markets such as Boston, LA or NY and smaller markets like Kansas City.

The punch line!

It was refreshing to hear these two and meet them afterwards.  But Wyc left us with a very impressive message.  When asked what advice they had for CIOs, Wyc said “All of you have achieved a lot in life.   You may want to start thinking about what your next banner will be.  In my case, I have a blind son, and while it was great to hold the Celtics banner in 2008, it will be nicer if I hold a banner for a social cause.

Written by Subbu Murthy

December 2, 2015 at 6:29 am