uGovernIT

A Practical Approach for IT Governance

Posts Tagged ‘CIOs

The C-Suite needs to wake up to the Digital Age!

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Background

At the Avasant CIO Digital Connect in Washington DC earlier this month, Kevin Parikh, CEO of Avasant,remarked “Today’s digital technology options are creating opportunities for government and corporations to be more nimble and better serve their constituents”.  He then posed a question to us (Jay Ferro, CIO, American Cancer Society;  Vivek Kalra, Senior Vice President, Tech Mahindra; and Subbu Murthy,  CEO, UGovernIT) sitting on the panel:  “How does digital innovation impact how we design and deliver technology to the Enterprise?”

The Old Paradigm 

Over the past decade, many IT Advisers, including yours truly have been canvassing the idea that IT needs to be aligned to the enterprise, IT should be an enabler, IT should be scalable, flexible, so on and so forth.  In an earlier blog post,  I identified that for the CIOs to run IT as a business, they need to develop an IT Governance mechanism that covers four key aspects:

The first and the most critical aspect is safety and security of the enterprise. This implies providing a scalable, reliable, and secure Enterprise Architecture.  It should be pointed out that the Enterprise Architecture is not just technology components, but using a framework like Zachman, it encompasses people, process and technology.  While cost efficiency, getting value out of IT and innovation are essential components of aligning IT to business, these do not matter if the enterprise is at risk. Target, Home Depot and now Anthem Blue Cross serve as grim reminders as to how critical managing risk is to the enterprise.  So the first pillar in managing IT as a business is Security and Mitigating Risk.

The notion of shared services helps IT manage and deliver shared services efficiently. This helps IT leadership use the same service framework within the department and extend its use to other functions in the business.  The second pillar in managing IT as a business is Shared Services.

Since there is usually more work than resources available, one challenge is how to identify and prioritize the IT workload?  The most effective way is to proactively work with users to enhance the value of IT delivered.  Traditional project management tools do not address this interaction between users and IT.  The key to success is to bridge the IT-User-Executive gap by providing a practical, efficient, and most important, a non-onerous process of managing IT workload.  The third pillar in managing IT as a business is Effective Demand Management.

The CIO has earned the seat at the table, but will not be able to keep it if the CIO is not helping the Enterprise meet its Strategic, Operational and Budgetary Objectives.  This requires the CIO to be the change agent driving efficiency and innovation to the Enterprise.  This also requires the CIO to align IT plans to the business plans and pay close attention to IT spend versus value delivered.  The fourth pillar in managing IT as a business is Aligning IT Spend to Business Needs.

The Digital Age and the Paradigm Shift!

As I reflected on the impact of the Digital Age, I recognize that the paradigm 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.  If top down design worked, why did the Taxi companies not anticipate Uber? By no means I am suggesting that we abandon IT Governance. Nor am I suggesting we abandon traditional IT alignment models.  I am suggesting that we need to incorporate the users in the innovation cycle.  We have to abandon top-down only models and add the bottom up model that keeps the user experience as a key component of developing the IT architecture.  Top down models focus on data and users focus on experience which are workflow-centric.

Janet Schijns, Chief Marketing Technologist, Verizon shared a great example.  When she manages her flights via the web, there is great help in making reservations but very little that is beneficial to the experience of the specific passenger on the specific flight.  For example:  Did your luggage make the connecting flight?  If there are delays, how are you rescheduled?

A Sandwich Model!

Borrowing from an old design paradigm,  we have to switch from the top down design model to the sandwich model.  By no means the sandwich model implies that we abandon the fundamentals we have all learnt as CIOs. But it does mean that we have to actively incorporate user-centric workflows built on easy to use platforms as part of our IT architecture, manage risk (not design rigid systems that eliminate risk), allow users to innovate, embrace change rapidly and harness the rapid changes in technology.

Implications of the Sandwich Model

Not that I have the crystal ball, but I feel that the CIO’s role will be very different from the present.  While CIOs will continue to be the change agent, and the bridge between Business and IT, the role will shift to becoming the “hermit” who will facilitate innovation.  From a technology perspective, there will be a radical shift to mobile computing.  This will force a fundamental shift from large monolithic Enterprise Systems such as SAP to modular, workflow centric mobile applications.  I hope so, I have spent millions building technology on this principle.

Written by Subbu Murthy

October 11, 2015 at 1:55 pm

Five Rules of Thumb to help us Manage IT

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Lance Mooneys CartoonAs CIOs we are used to leveraging our experience and creating a cheat sheet (aka rules of thumb) to manage IT.  When IT was focused on costs, a few of the common measures were:

  • IT Benchmarks:    Our goal was always to be lower than others in our industry, particularly so if we reported to a CFO;  and if we were higher, we justified it by showing other indicators such as higher quality, customer satisfaction etc.
  • Adherence to Project Budget: We targeted actual versus planned consumption of financial and personnel resources to be within x% (we felt good if we were within 10%).
  •  Gaps in Process Automation: We kept the number of identified gaps to be minimal in the core business areas.  We were very good in creating new projects to cover these gaps.
  • Number of Planned New Services: Our goal was that the percentage of new services correlate with the allocated budget. We really did not care how many new services we created as long as they correlated with the IT budgets.
  • Duration of Service Interruptions: We maintained the average duration of service interruptions to be just a few and the impact mitigated in less than an hour.
  • Customer Satisfaction: We used a Likert scale to get responses and if we got within 25% of the top, we felt we had done a good enough job, and if we were within 10% of the top, we were bragging about it in CIO events.

All of these are important, but they do not help us keep the seat at the table.  As we shift our focus from managing cost to creating value for the Enterprise, what are the new “rules of thumb”?

  1. Spend at least 20% on Innovation: If you are spending less than  20% of your IT budget on projects that bring innovation and increased value to the enterprise, you are not likely to get traction at the leadership table.  This generally means that you should be spending less than 50% of the IT budget in maintaining your core IT systems to meet your business needs. Not that this includes applications (licensing, support, changes, etc.) and the infrastructure (data center, network, voice/multimedia and user devices).  If you are spending more, you are likely not leveraging the current technology (Cloud, Mobile Computing, SaaS, etc).  This also implies that managing IT should cost less than 10% of your IT expenditures.  This includes all management costs including the cost of the office of the CIO, PMO, tools you use for service desk, project management, reporting, etc. This implies you have a hands-on management team and are leveraging modern IT management tools – not legacy and onerous IT Governance practices.
  2. Spend at least 20% on shared services:  Build efficiency by sharing services.  Many services are found in more than one part of the organization or group. CIOs recognize this as an opportunity and have funded the development and implementation of shared services.   The services are delivered based on defined measures (KPIs, cost, quality etc.).  Examples of shared services are salesforce automation, employee on-boarding, business project request, adjudication and execution, financial reporting, content management, compliance and other core business activities that are typically not part of an ERP.
  3. Discretionary Projects Should Have an ROI:   Today, the businesses expect you to treat IT as an investment.  What is the return you are providing to the enterprise?  If you carefully observe the proposed metric, there is no specific ROI value I have proposed.  These depend on the type of project.  As a CIO, you should be very proud if you are thinking about ROI. The very fact that you are providing an ROI puts you in a different category of CIOs.
  4. Work Backlog Should be Less than 6 to 9 Months: The business units always wants more IT than you have resources available.    Good CIOs recognize that if you have a very huge backlog, you will be constantly prioritizing and triaging business project requests.  This leads to political friction.  You can minimize it by reducing the backlog.
  5. Most Projects Should be Less Than 6 Months in Duration:  This is probably the most difficult to achieve.  There may be a few that are necessarily longer term, but your goal should be that longer projects should be an exception – not the rule!  Businesses are fickle – they change their needs constantly.  Shorter projects help avoid costly mistakes.  Breaking up complex projects into smaller ones (each one having their own value proposition) is the best way to mitigate IT risk.  In fact in our tool, we have crafted a special 6 Month Project Methodology that combines agile and traditional waterfall models into a nimble yet managed project request and delivery process.

Written by Subbu Murthy

October 11, 2015 at 1:49 pm

A Forum For CIOs and Future CIOs

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I was asked to chair a Business Forum for a cultural group from India.  It was a wonderful opportunity to reopen my network.  The Navika Business Forum will be held in Pasadena at the Convention Center on July 2nd, 2010. The Business Forum is under the aegis of Navika, a non-profit cultural organization.  It will provide an opportunity to showcase some of the project opportunities in Karnataka. Karnataka is a state in Southern India and is best known for its picturesque gardens and tourist spots,and the hub for aerospace, software industry and now biotechnology. Words cannot do justice to the great history, culture or the wonderful people who have made this state India’s crown jewel. 

It is an ideal platform to reach groups of people for furthering business contacts and business interests.  It has multiple tracks including the CIO Forum, Electronic Medical Records (EMR) Forum, Infrastructure Forum, and the Youth Entrepreneur Forum.  Leaders from the state of Karnataka and global entrepreneurs will be attending this event providing great networking opportunities for C-level executives and future C-Level Executives.  Budding CIOs will learn from experienced CIOs on what it takes to be at the executive table.

Written by Subbu Murthy

May 3, 2010 at 10:27 pm