uGovernIT

A Practical Approach for IT Governance

Posts Tagged ‘CIO

The Digital Enterprise and Shadow IT: A Management Enigma!

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Background

We have all experienced some shades of shadow IT.   Gartner shared some facts at the recent CIO Summit in Orlando. In 2005, CIOs controlled 70% of IT, now they control only 58% and in 2017 they will control about 50%.  Is the growth of the Digital Enterprise a major contributor to this shift? This has led to a flurry of discussions and questions:

  1. What is the cause for this trend?  Why has the CIO lost control of IT Spending.  Is it Cloud computing, SaaS models or the push towards the Digital Enterprise?
  2. Do we encourage this trend or impose a rigid IT Governance framework that brings all control back to the CIO?
  3. If we want to encourage the trend, who should control the IT spend not controlled by the CIO?  Should we leave it to individual departments (aka shadow IT) or should we create a new position? Or should we revert to the CFO as the arbitrator?

The New Governance Model

There are no clear answers. Some argue that the reason for the shift in CIO spending is the emergence of inexpensive cloud based applications, and innovations such as autonomous robots, Internet of Things and 3-D Printing  that has led business units embrace technology easily.  Some argue that it was not the technology shift that caused the CIO to lose control, rather, it was the lack of response from the CIO that caused the business units to embrace technology on their own.

The second argument has more teeth in it.  The paradigm most CIO’s use is top-down.  Nothing wrong with it, except that the innovation is not just happening top down.   Innovation is also, in fact more often than not, happening bottom up.  Users are demanding more and oppose any structure that inhibits them.  Top down models focus on data and users focus on experience which are workflow-centric.  Therefore organizations will lose out if they do not encourage innovation.

Was the CIO a tortoise or did the technology move fast or both? In a broader sense the argument is irrelevant.  Irrespective of the cause of the shift, be it the slow CIO or rapid technology shift, the outcome is clear.  The Digital Enterprise is real – it is only a matter of time.

The Chief Digital Officer

When organizations did not understand technology, they responded by creating the position of the Chief Information Officer.  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)”.  Many CIOs disagree with this approach.  Ashwin Rangan, Chief Innovation Officer & CIO at ICANN, and former CIO at Edwards Life Sciences and Walmart, opined “To me, logic would argue that if the CIO is fully glued into the business of the organization, then the CIO ought to be the chief digital officer as well, because nobody understands the digital technology aspect as well as the CIO. The question that is being asked is who best understands the impact of the application, not the application itself. So, whenever there is a business-savvy CIO at the table who can understand and articulate the impact of digital technology as opposed to the application, I don’t believe there is a need for a separate chief digital officer.”

Relationship to the CIO

If we accept the role of the CDO, many believe that the CDO should report to the CEO and be independent of the CIO.  Not everybody agrees:  Janet Schijns, Chief Marketing Technologist, Verizon shared the view that if there is a Chief Digital Officer, then the CDO should report to the CIO.  Her rationale was that IT Governance was extremely critical and the core values of security, information integrity and quality of IT cannot be overlooked. There is considerable merit in this argument – imagine what would shadow CFOs do to the integrity of financial data.

Conclusion

Organizations need to be nimble, alert and innovate. That said, if it is the CIO who is responsible for technology, then the CIO should be responsible for all aspects: Keeping the Lights On, leveraging technology to increase revenues and decrease costs, and foster innovation. The CDO may just be a function like the CISO reporting to the CIO.    On the flip-side, the CIO should be some combination  of a business genius, technology wizard, a benevolent leader, a great communicator, and to be a bit cheeky, automate routine management functions using tools.

Written by Subbu Murthy

October 20, 2015 at 8:09 am

Posted in Helping CIOs, IT Governance

Tagged with ,

CIOs are judged by the Results they Deliver!

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Close up shot of a caliper, measuring the word "Results".

My very good friend, and advisor, Ashwin Rangan, pointed out that in the early stages the CIO focussed on what needed to be done. Later they recognized that processes were needed to deliver technology.  This naturally led to identifying the tools that helped them.  Today’s focus, Ashwin argues, is all about the results they can deliver.  We can use a three stage framework for understanding the paradigm shift:  Corrective, Preventive and Results Driven.

The Shift From Corrective to Preventive

Let us look at how we measure our delivery of services.  SLAs helped CIOs  identify process bottlenecks, and helped them make the necessary corrections to improve the timeliness of the delivered services.  Surveys helped CIOs improve the quality of the delivered services.  While this is great, it was a corrective set of measures – not preventive.    The old adage “An ounce of prevention is worth a pound of cure” had not lost its luster.  CIOs realized the need to empower their organization to take proactive measures to prevent/mitigate gaps in the delivery of products and services they are entrusted to manage.

It was no different when CIOs delivered major IT initiatives.  They identified cost and schedule variance, and took corrective measures when they were off-track.  While corrective measures improve how CIOs delivered technology to the enterprise, preventive measures help them deliver more for less.  As an example, look at traditional project management tools.  Initially, they focussed on using cost and schedule variance as determinants of project success. The key thing they missed was “scope management”.  Scope creep accounted for delays and cost overruns about 70% of the time.  Agile methodologies mitigated this risk to a large extent by delivering projects on a specific schedule by controlling the scope of the delivered product.

The Shift From Preventive to Results Driven

CIOs used ITIL, and ITIL based tools, to help them be proactive.   ITIL, no doubt a great framework, caters to the older school of process adherence.  Most of the tools that support the CIO are focused on process adherence.  But the real challenge was not delivering the project or service efficiently, but did the CIO deliver the results the enterprise needed?

What is badly needed is an outcome focussed tool that helps the CIO define and deliver results to the enterprise.  CIOs need to walk the talk – they talk about the role of technology in transforming the enterprise, yet they fail to use the tools internally.  In an earlier blogpost I identified that “We are so involved with day to day challenges, we seldom get the time to use some of the same tools we are delivering to our customers. The solution is quite simple – we should think and act like CEOs of an IT company. Using Key Performance Metrics (KPMs) to help manage your IT as an enterprise, IT Analytics provides you the ability to prioritize your demand and allocate resources that best serves the interest of the enterprise.”  

However, shifting to Results Driven management is much more difficult.  It requires that IT is aligned to the Enterprise, and more important, the Enterprise has not just accepted the CIO to sit at the table, but to listen and act on the CIO’s advice as well.

Written by Subbu Murthy

October 11, 2015 at 1:51 pm

The Six Stages of a CIO

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CIO Icon

Background

Over the past several months, I have been researching how best to sell ourintegrated IT Governance solution to a CIO. Being a CIO myself, I realize it is not an easy task.  One of the studies I started was analyzing the different CIO archetypes.  We have seen many theories on the different CIO archetypes.  CIO Executive Council indicates that the CIO role is made up of 3 CIO archetypes, specifically; 1) Operational/Functional (Business relationship: Service provider; 2) Transformational (Business relationship: Partner); and 3) Business Strategist (Business relationship: Peer).  Earlier this year, I felt we needed a more contemporary taxonomy for classifying CIOs. The taxonomy I proposed was on the background where the CIOs come from.

Imagine a three dimensional grid with one axis being business background, the other being technology background, and the third being the leadership skills. Since it is difficult to show a three dimensional grid in a blog, I developed two 2×2 grids. The two grids are separated by leadership skills – those who have it and those who do not. This framework helped me define our market.  Our target was CIOs who exhibit leadership skills to run IT like a business. They feel that their role is no different than that of a CEO of a IT company.

CIOs Based on Age

One of my colleagues asked me why I had not considered the “age factor”.   My first reaction was that age will be an absolutely weak differentiator.  Besides, you cannot discriminate based on age.  So why even look at this analysis.  Strangely enough, if you look at HR consultants they discuss why it is important to understand the various age groups and develop an organization culture that meets the needs of the different segments.  From purely a sociological perspective, I started wondering if these age based segments have any relevance in developing the CIO Archetypes.    I used the common accepted terms for identifying different age groups.  The one from Bank of America was simple and elegant.  They used six age groups: Late Millennials, Millennials, Generation X, Late Boomers, Baby Boomers and the Senior Set.  I looked around my network to see if I knew CIOs in the various age groups.  I have a network of several hundred CIOs, and over the years, I have developed a friendship with them. I found them in all age groups but one – I knew of none under 25.  For the rest of the groups, I asked what was the dominant characteristic of the CIO.  I tried the two frameworks identified in the previous section.  All age groups had overlaps and there was no clear differentiator.  When existing frameworks failed to deliver any meaningful results, a new idea emerged.  I focussed on what would be the focus if I were in the respective age groups.

If I were to be a Late Millennial (under 25), I may be focused on learning the role.  If I were a Millennial and had the CIO title, it is likely I would be in a small to mid sized firm with an eye for growth.  If I were a Gen X, then I likely would be trying to move ahead by leaping firms and gaining expertise in different verticals.  If I were a Late Boomer, I may be peaking in my job, gaining business acumen and maturing as a CIO.  If I were a Baby Boomer, I would probably be feeling that I have learnt all that is there to learn (personally speaking, learning never stops)and my focus may have shifted to stabilizing my job.  If I have climbed the hill and entered the Senior Set, I may be shifting to sharing and coaching. The good news is that there is a role for the CIO to play independent of the vintage!

Written by Subbu Murthy

October 11, 2015 at 1:45 pm

Using the Technology Capability Framework as a Guide

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A useful context for understanding the overall IT governance requirement for medium to large IT organizations can be found in the following Technology Capability Framework.

The framework helps enterprises better understand the objectives of IT governance and the associated IT leadership orientation and capabilities for 3 major maturity levels of governance in an orderly progression. Once this framework is understood, IT Leadership can conscientiously plan and take actions that build an IT governance capability that provides ever-increasing value to the business.

The Service Management maturity level is focused on efficiency in handling a variety of user requests including help with user technical problems, requests for new capabilities and services such as setting up a new employee with the required hardware and application services or in managing IT incidents and delivering solutions to restore services. Service Management can also help with application deployments as well as tracking and managing the configuration of deployed resources and assets. Emphasis is on quickly resolving requests with solutions that work the first time and controlling the impact to achieve a known condition. Reporting against SLAs for problem response is provided along with a variety of user defined dash boards reporting on active requests by priority, tickets created by category. Also trend reporting, response time/trends and days to resolve by priority are a few of the views that are useful. User satisfaction input at the completion of a problem resolution is helpful along with periodic user satisfaction surveys for both the direct users and their management. A good service management process framework is based on ITIL best practices and reduced process variation is a key objective.

IT leadership orientation for this level of IT governance is focused on developing processes in conjunction with business users for such processes as on boarding new employees, acquiring hardware and software for employees and standing up infrastructure for new locations. IT leadership must develop relationships and interact with the business unit management to understand its needs. In addition IT leadership focuses on standards, processes and training for technical IT resources to ensure an efficient service management operation that meets the enterprise needs.

The Project Management maturity level is focused on justifying, planning and executing major project and IT technology initiatives that involve significant costs and resources and inherent risks. Capabilities for this level include easy to use standardized project plan construction, understanding and visualizing resource and infrastructure constraints to achieve on time results. In addition the governance application must help users understand and visualize resources and estimated costs at completion and measure the changing direction of risks. It is also important to highlight problems and constraints for timely resolution so it is clear to the user what action is required to address the issue.

End users and management users of the project management governance application must be able to see and understand projects with related dependencies. The application should help users understand and visualize total portfolio resources and costs and understand and visualize categories and enterprise impact as well as aid in project/initiative prioritization and rejection or postponement. The governance application should allow for a classification of the project and enable a clear linkage back to the core business requirement(s).

IT leadership orientation for this level of IT governance is focused on working with business management and building relationships. IT leadership interacts with the business unit management to understand their needs and define approval and review processes, ensuring the appropriate business unit participation in the project/initiative and fostering PM skills training and best practice disciplines through well understood PMO structures. IT Leadership works with business management to determine user discretionary spending limits and other thresholds and incorporates these into the application work flow and user authorities. Connectivity to mobile devices is also required for users of the project management governance application.

The Resource Management maturity level is focused on enabling the longer term business blueprint and enabling major impacts that can transform the organization. Deep and powerful analytics are central to achieving this goal. At this level, IT management works with the prioritized project portfolio to determine budget needs for the current operating budget and capital needs over the planning horizon. The resource management governance application helps the IT leadership understand and visualize the flow down of business requirements into IT requirements. Project lists and dashboards help both IT leadership and business management understand and visualize the total enterprise portfolio associated cost and resource requirements. Summarized views of resource requirements help ensure adequate management of the resource demands by resource type and help avoid project/initiative slowdowns due to resource shortages. Dashboards are based on business intelligence and use data analytics to help assess how well IT is performing. This includes assessing ROI of IT investments, managing a portfolio of projects, conducting IT assessments, and maintaining an IT Balanced Scorecard as a benchmark of the value created by technology investments.

In this maturity level of governance, IT Leadership has a “Seat at the Executive Table” and participates in business planning and strategy. The capability of dashboards and the analytical capability to understand data and causal relationships promote new and powerful understanding of the business dynamics. IT Leadership takes the lead in this type of information discovery and presentation for the benefit of the executive team. IT Leadership becomes a trusted member of the executive team to provide fact based analysis that can be trusted for critical decision-making.

 

Written by Jeff Crowell

June 8, 2012 at 9:39 am