Tom Hughes, currently with CSC but formerly the CIO of the US Social Security Administration, spoke to us about Lean and the CIO. The imperative here is driven by surveys that show that (to paraphrase) business thinks that IT is important, but that they’re doing a crappy job. He believes that CIOs need to break out of the technology pack and focus on business outcomes (e.g., market share) rather than outputs (e.g., number of workstations): exactly the same message as Connie Moore gave us in the opening keynote. CIOs needs to be valid members of the executive team, reporting to the board rather than the COO, HR, general counsel or any of a number of other non-effective reporting structures.
He believes that the CIO of the future must:
- Be a strategic thinker, not an IT techie
- Be at the table of chief executives
- Partner in agency or business transformation
- Have broad experience
The CIOs focus needs to be on four things: strategy, budget, architecture and security. Delivery and maintenance, on the other hand, are operational issues, and should be handled below the CIO level, even directly in the business units by promoting cross-functional ownership. The CIO needs to be forward-thinking and set strategy for new technologies such as cloud computing and unified communications, but doesn’t need to be responsible for delivering all of it: for things that the business can handle on their own, such as business process analysis, let the business take the lead, even if it means acquiring and deploying some form of technology on their own.
He concluded with the statements that the CIO needs to work with the CEO and develop a collaborative operational model, be at the table with other senior executives, and get other executives to take accountability for how technology impacts their business area. The CIO needs to be seen by the CEO as a partner in business transformation, not the guy fixing his Blackberry.
Questions from the audience included how to transition the current technology-focused IT teams to have more of a business focus: Hughes’s response is that some of them will never change, and won’t make the cut; others can benefit by being seconded to the business for a while.
On a side note, I like the format of the keynotes: Mike Gilpin pops up on stage at the end of each one, he and the speaker move to a couple of comfy chairs at center stage, and he asks some questions to continue the conversation. Questions from the audience are collected on cards and vetted by Forrester analysts, who then distill them into a few key questions to ask.
There’s still a bit of confusion over the Twitter hashtag: the website says #BTF09, then Gilpin announced in the opening address that it is #FBTF09, but then @forrester DM’ed me that it is actually #BTF09 and that Gilpin will correct this, although that hasn’t happened yet.
Just btw… this statement got my attention: “Questions from the audience included how to transition the current technology-focused IT teams to have more of a business focus: Hughes’s response is that some of them will never change, and won’t make the cut; others can benefit by being seconded to the business for a while.” – if you offshore your IT department, or completely outsource it, you can’t possibly have an IT team that is focused on the business. They’ll be focused on managing huge outsourcing vendors that are holding the keys to the kingdom.
Moreover, by offshoring/outsourcing, you’ve let your most valuable assets – your knowledge workers – leave the building – an investment of decades in organizational learning and knowledge of your business. Aflac’s former CIO had a great interview on this subject in CIO magazine a few years back. IT departments at many organizations used to be more business focused – until they got boxed up and shipped outside the company. I think we’re just now starting to see that companies that kept their expertise in-house are better positioned to compete in the long-run. IT was looked at as just a commoditized cost to the business (a problem both of IT’s and Business’ making) and not as a strategic asset.
There are parts of IT that are completely commoditized services, and can be outsourced without strategic impact: maintaining physical servers, for example, or email. For the parts of the technology that have a direct impact on the business’ competitive differentiation, and hence are likely to be highly customized for that business environment, I agree that you really need to have IT that understands the business, and therefore more likely to be in-house.
The question is which part is a commodity, and which part isn’t. Those that have pushed the envelope have often been burned, sometimes reaped short term rewards (e.g. Dell), and in the longterm often pay the price (e.g. Dell).
Even outsourcing commodities, talk to your customers and you’ll hear them seriously complaining about turnaround for “real resolution” of performance issues, bugs, IT setup, server allocation, etc. And this is generally a comparison against their own internal staff that was shown the exits months or years earlier. They rarely say “wow, everything is so much faster/easier/better now…”… but that is how it was supposed to be in theory.
I know there are exceptions to this, and the smaller your company, the more likely you need to rely on outside help for IT – for example outsourcing email to Google or some other hosting provider – outsourcing hosting to someone, etc. And these days it may be a critical part of your business plan to not have the capital outlays for hardware stack, etc – to go “in the cloud”. But I still see lots of challenges in outsourcing stuff you *already* have people on staff to do (empirical data, not statistically significant, i’ll warrant)
Outsourced solutions get a lot of bad press when they have outages, but that ignores the fact that internal IT solutions also have outages, they’re just not publicized to everyone in the world. During Gmail’s recent outage (which wasn’t really an outage, just a failure of the web interface; if you use a POP or IMAP client like I do, you would not have noticed that they were down), no one pointed out that companies often have their own server failures that might cause email or other system outages — it’s as if corporate IT is pretending that internal outages just don’t occur, which is nonsense.
when you say “outsourced” you seem to only include “cloud” services – but there are LOTS of outsourced services that are performed by people, rather than clouds… And that is where I think a lot of the pain is – nonstandard software maintenance that is outsourced, IT support outsourced, etc. These are not services that Google provides, nor Amazon, nor Salesforce. And that type of outsourcing has really hurt a lot of companies, I think. (And, in the longer run, probably helped the cloud-based vendors by showing the value of going with more standard infrastructure, while simultaneously stripping companies of the necessary internal competencies to build big scalable architectures/solutions). Often things are mistaken for commodities that just aren’t… (email actually is a commodity, I think 🙂
re: pretending outages didn’t happen. outsourced solutions pull this trick too – you notice your hosted site is down and file a ticket, and the vendor sends you a “resolved” ticket that your site was never, in fact, down. you recheck, and lo and behold the site is back up. Was it ever down? hard to prove unless you have the budget for external monitoring and third-party monitoring to prove your case. Not accusing Google of doing this, mind you, but it seems to be common practice in the hosting world. Some of it is human nature to CYA.
I was thinking of cloud services in some cases, which is where I believe that commoditized outsourced software applications should be, but I agree that there are other types of outsourcing that aren’t (just) cloud software. In many cases, they are going to need to make themselves more standardized and cloud-like, if not actually cloud-based, in order to compete in that space.
Corporate IT outages are common, and in many cases just the day-to-day life for users. I’ve worked with large enterprise clients where they gave me an internal email account, and there were several notices *per week* about planned outages, usually around MS-Exchange. I’ll take Google Apps’ once-per-year outage over that.
sandy – i agree w.r.t. gmail vs. exchange – that wasn’t the comparison i was making, however, because it is about the easiest thing to outsource of all the IT tech there is.