Top 3 Priorities for the CIO of the Future in 2014

By

Digital business leadership and increasing business productivity

Editor’s note: This article is the submission to our CIO of the Future – 2014 Project from Marco Orellana. We are delighted to get a global view from a Latin American perspective, given CODELCO-Chile’s role as the world’s largest copper producer.

From Technological Information Manager to Digital Business Leader

The CIO is becoming a business digital leader and his journey is based on the following points:

    • More Technology to the Core of the Business. Incorporating technology to the core of the business is more and more necessary, since nowadays the traditional relationship methods aren’t a clear competitive advantage, as opposed as technologies used in instances where they really add value.
    • More Education in Business Digital Innovation. Significant changes are required in the innovation of both business processes and products. These changes must enable non-traditional ways to approach business problems; today the technology is a distinctive factor that pushes organizations to develop new spaces in business relationships and interactions. The CIOs role is precisely to enable a digital technology-based innovation culture in order to make the company distinctive in an increasingly competitive world.
    • Moving From Chief Information Officer to Chief Digital Officer. The fundamental change we’re encountering is incorporating digital technologies throughout the business footprint. That’s why the new CIO must be immersed in the business he serves, where there should be not only traditional information technologies but also any kind of digital technology that helps corporations meet their strategic goals in a more effective and efficient manner.
  • Support the Business Strategy: Being the CEO’s Innovation Partner to Address Business Challenges. Today corporations’ challenges are ever-changing, subject to market ups and downs and with more and more government regulations. The CIO’s challenge is to enable the CEO’s strategies, becoming the company’s innovation branch and supporting the business strategies with ad-hoc solutions while meeting deadlines and budget constraints required by the business. A skilled CIO customizes solutions, aligning them correctly with the business strategies, at the right time and with competitive budgets.

Provide Real Support to Increase Business Productivity

    • Transform Technology into a Productivity Tool. Nowadays, digital technologies shouldn’t just automate the organization’s processes, they should be the tool that powers and guides its productivity everywhere, from strategy to operations. Businesses are under intense pressure to provide returns that are shrinking in markets that are increasingly demanding and competitive, making digital technologies exceptional productivity icons.
    • Enable Business Process Transformation: Deploy the Right Technology with Business Sense. The CIO’s job is not just providing the digital technologies required by the business. Today, there is a trend for CIOs to be immersed in business processes, redesigning them with a strong use of technologies that make the business more profitable, efficient, competitive and sustainable. Not only must technology follow the business, but also push it to find new spaces that were unthinkable in the past.
  • Use Business Intelligence to Analyze the Past and Create the Best Future. Digital technologies’ current role in information management is to let us know what has already happened. They allow us to understand very clearly what happened to us. But this is like driving while looking in the rear-view mirror. What is really needed today is to look ahead, towards the future from the present and that can be done with Business Intelligence, which gives us new ways to analyze the same information, finding key insights and modeling probable future scenarios which allows us to anticipate and make decisions today so we are still competitive tomorrow. Clearly the CIO’s role will be centered in this new generation of predictive information systems, which give the company access to new dimensions of the business.

Make the New Technology Wave Run The Business

    • From Social Media To Social BusinessBuild Social Culture with Customers, Partners and Staff. The same technologies used in social networks will be used in business networks. The CIO’s role in this context is that of a pioneer, championing the use and development of this kind of digital technology. Conversations and decision-making revolve around managing great quantities of unstructured information that must be massaged, transformed, interpreted and distributed. Here the CIO’s support is key to guide the adoption of best practices in managing these kind of technologies within the organizations and also in the relationships they have with their environment. The CIO will have to strike a balance between the information made available and the new intellectual or industrial property being generated.
    • Using Big Data and Business Intelligence to Create Business KnowledgeReal Time Predictions. These two components, Big Data and Business Intelligence, converge in the organization as two complementary trends that allow the generation of new knowledge within companies. This new knowledge allows the business to create new competitive advantages. Here the CIO is the main proponent of these new digital technologies.
    • Transform BYOD and Mobility into Business Opportunities. Another trend that the CIO must approach in 2014 is related to mobility and the users’ own devices. In both cases his role will be to provide safe, stable, reliable and robust mechanisms in order to transform both trends into business opportunities. Mobility enables new ways to carry out business tasks, basically anywhere and anytime. The key is that the access and associated security mechanisms are aligned with the business requirements and enable the digital worker to make use of all his skills, feeling comfortable with the technology that suits him best for his day-to-day job.
  • Create a New Cloud Perspective: The Business Personal Cloud. The business has become the sum of micro-businesses that interact among themselves in order to meet goals and execute the overall strategy. Each digital worker needs his own space in cyberspace to host his information, knowledge, tools and everything he needs to develop his role. That’s why, besides having a global strategy, the CIO must at the same time know each and every one of the usage profiles and must provide the virtual environments that enable this new digital way of conducting business.

 

Cloud Can Simplify and Empower Enterprise IT

By

Migrating our applications to the cloud creates the opportunity to do something meaningful for our customers

It looks like cloud computing is taking over. So if cloud is the future, then what might our future technology landscape look like?

The two largest centers of gravity in most IT departments are their back-end ERP and front-end CRM platforms. It’s clear that both of these platforms are migrating from the datacenter to the cloud. Organisations moving to using CRM and social-enabled front-end cloud platforms to engage with our customers. There’s a similar story with our HR and EPR backends that manage our firm’s transactions and help ensure compliance.

Each of these major cloud platforms swaps modules-that-we-customize for apps-that-we-download. The shift to apps allows business units to configure cloud platforms to their liking without much (if any) help from the IT department. Bought a CRM and need it configured to support a sales methodology? Just turn on Holden or Miller-Heiman, for a small additional fee. Want advanced analytics on that HR database? There’s an app for that.

Where we can’t find an app we can pick and choose from the growing number of cloud-delivered point solutions that solve all manner of problems. These solutions might be focused on our vertical, or they might represent general cross-industry capabilities. Need workforce management to support you consulting team? Or scheduling, supply chain planning and asset management to manage logistics? Or inventory management and planning for retail? There’s (probably) a cheap and cheery solution out there just waiting for you and your credit card.

Solutions are also morphing into services. Rather than buying a project and portfolio management solution we’ll buy Project Management Office (PMO) as a Service. We’ll get the tools we need, the methodology and training we need to get the most from the tools, and admin support to help us manage the tool and ensure compliance, all under a single fee structure.

Integration between these cloud-platforms will be treated as a feature to turn on (or as an “integration app” to buy) rather than as a major integration project. The application installation and customization work that used to be the bread and butter of many IT organizations will dry up.

There will, however, continue to be some custom build that we either do ourselves or with a partner. We’re not at the stage where there’s a solution to every problem we have. Nor would we want to push everything out to an external cloud provider, as there are some solutions that are central to the products and services our business provides.

The future IT landscape will be much simpler that those that we’ve struggled with over the last couple of decades. The complexity that used to consume so much of the CIO’s (or CTO’s) time is being hidden inside cloud platforms and app market places, a problem for the vendor to manage, not the CIO. However, as I’ve pointed out before, the CIO will still be accountable if these services are not working. When email stops working it will be the CIO, and not a cloud vendor’s service desk, that the CEO turns to.

But if the shift to the cloud means leaving behind many of the engineering-based skills and competencies that we worked so hard to develop, then why would we do it? Because, as Zach Hicks (Toyota’s CIO in North America) said:

“if I’m screwing around worrying about what version of mail I’m on, it’s wasted effort. It’s a lost opportunity … to do something more meaningful for our customers or our business,”

What do you think? Is moving everything to the cloud a bridge too far? Or do you relish the day when you can roll up your sleeves, get out of the back room, and get involved at the coal face of the business?

 

[VIDEO] The Intersection Between Enterprise Technology Trends and Leadership

By

How governance for transformation can drive value and support the humanity of organizations

I recently gave the opening keynote at the SAP Australia User Group Summit on Leadership in Enterprise Technology. After my keynote Inside SAP did a brief video interview of me. The video and a rough transcript are below.

Some of the key themes are the idea of governance for transformation, how technology can support the ‘humanity’ of an organization, and of course leadership in enterprise technology.

Transcript: The intersection between enterprise technology trends and leadership

What will the future of enterprise technology look like?

We now have a truly connected world, where computing can literally happen anywhere. Where individuals have access to extraordinary technologies and dictate how they want to be able to use their technologies. It creates an entirely different landscape in which Enterprise Technology needs to take a leadership role. It is being subject to buffeting forces in where technology is coming from.

How can companies overcome barriers to innovation?

Organizations need to become more agile, adaptable, able to change what they are. This changes the nature of the organization itself. This is far more a cultural shift than it is technology or structure. I do believe that the idea of governance for transformation is fundamental.

We do need governance to be able to put structures around some of the risks as well to be able to understand the benefits emerging, but governance must be an enabler of transformation. So when we are looking at innovation efforts, be they explicit strategy innovation or product innovation, or they are simply creating organizations that can respond better to environment, I believe that governance from the Board of Directors down to the organization is a fundamental enabler of being able to drive effective innovation.

Which technology trends are particularly disruptive?

Vast computing powers are going into the hands of individuals. There’s processing power in terms of connectivity, and mobility is fundamentally changing the dynamic of enterprise technologies. Providers of technology and the consumers of technologies will often already have better technology in their own hands.

It applies differently across every industry, but the rise of the amount of data available and what can be done with that, the whole idea of big data which is now becoming ‘staggeringly enormous data’, changes the whole nature of what the organization it is, how it makes decisions.

What impact does technology have on organizational culture?

What is more important today than ever before, is not just technology as the enabler, but how technology relates to the humanity of the organization, to the culture of the organization.

I think social media is just one aspect of that. But on a deeper level technology is becoming enmeshed in the humanity in the organization, which was never the case before.

How will the role of the CIO change?

One of the aspects of the CIO is they are moving from managing infrastructure to hopefully managing the strategy of technology, being at the heart of strategy inside the organization. It is a shift in role to be truly in the C suite of the organization.

We’re seeing diverging paths. In some organizations technology is becoming marginalized. It is viewed as a commodity which needs to be done well and done cheaply. There are other organizations where it’s seen that technology is truly at the heart of strategy, at the heart of what the organization is becoming. The role of the CIO is to demonstrate the importance of technology being the heart of the organization. Those CIOs that are not doing that effectively are really abrogating their responsibility to that organization in creating a successful future.

Cloud has Moved from “Should We Do It?” to “How Do We Do It?”

By

IT investment has shifted from virtualization to private cloud as CIOs prepare to go public

recent survey of IT budgets shows that the focus for many IT departments has moved beyond virtualization and consolidation. They’re working to hard to realize the flexibility and agility that cloud promises to bring to their organizations.

The report found that:

  • The worldwide cloud computing market is predicted to grow strongly with a 36% compound annual growth rate (CAGR) through 2016.
  • Spend is flowing away from the virtualization and consolidation that has been the focus in many IT departments for the last few years.

Image sourceForbes.com

It’s not surprising that a shift to private cloud is at the top of the list. CIOs are, by nature, risk adverse as the role still carries operational responsibilities. The current boom in private clouds probably represents a try before you buy mentality. CIOs are using private clouds as a tool to understand the operational impact of moving to the cloud.

The fact that cloud provider assessments slot in at the second position, closely followed by Infrastructure as a Service (IaaS) and Software as a Service (SaaS), shows that the private cloud boom might be a short one. CIOs are already using what they have learnt from private clouds to evaluate cloud providers and then invest in their services.

The report also found that the biggest roadblocks are organizational or – that old bug bear – security challenges, and not the technology itself.

Image sourceForbes.com

Cloud radically changes the dynamics of our IT departments. The shift to cloud means that we’ll spend less time managing IT assets, and more time managing external service providers and knitting together end-to-end processes. This change takes time as teams and individuals must adapt to new roles and responsibilities, and new ways of working.

Where are you on the cloud-adoption journey? Have you experimented with private cloud? Or have you leapt into a public cloud? And what challenges did you need to overcome on the journey?

 

Three Rules to Survive in an Age of Tight Budgets

By

We’ve done the obvious things to save money so now we need to find smarter ways to deliver solutions

Money is tight and many industries are feeling the squeeze. Budgets are being trimmed – if not outright slashed – and we need to do more with less.

We’ve done the obvious things. We’ve eliminated waste by disposing of unused licenses and assets. We’re moving fixed costs to variable costs so that services will flex with the business.

All of these tactics are backwards-looking though. They’re one-time savings resulting from trimming the fat and tightening our belts.

The challenge is not just making our existing IT solutions a little more efficient. We need to find ways to create the new solutions that the business needs without breaking the bank. We need to find a low-cost approach to enterprise IT.

IT is no longer an engineering profession

The success of many business used to rest on the on the quality of its tools. If the tools – a business’s IT systems and processes – broke then the business would fail. We spent our time engineering capital intensive, complex IT solutions that would withstand whatever the we threw at them.

Today, though, reliable solutions can be purchased as-a-service.

The success of many businesses now rests on their ability to respond to changing market conditions. Our challenge is to furnish the business with a set of tools that it can use to quickly adapt to the ever changing market.

The old capital intensive, complex, IT solutions are the legacy that is dragging many IT departments down. Legacy thinking is our albatross.

What are the new guiding principles?

But if enterprise IT is no longer an engineering challenge, then what sort of challenge is it? What are the guiding principles we should use as we craft solutions to the problems that our business has?

We don’t need to look any further than the low cost consumer industries for our inspiration.

  1. Keep the core solution simple
  2. Provide sensible options
  3. Only pay for what you use

Rule 1: Keep the core solution simple

Reduce the complexity – and thereby the cost – of the technology you use. All those fancy options take effort to implement, and this effort must be paid for. If you can keep your core requirements simple then you can use a cheaper solution, and you can (largely) avoid the expense of customization.

Most solutions on the market today are more than capable enough for many organizations. We don’t need to spend our time trying to find the “best of breed”, knowing that the best might only just be good enough.

Apple stripped back the smartphone, simplifying how we interact with it, and created a more satisfying experience in the process. Zara develop a constant stream of fashionable but simply constructed clothes and revolutionized the fashion industry.

Basecamp, from 37signals, did something similar for project management. They realized that most projects don’t need the complexity typical project management tools brought with them.

This trend toward simplification has grown beyond small teamware tools to include tools to support managing small organization. The trend is moving upstream to larger and – traditionally – more complex solutions. First project management. Next email and desktop automation. Today CRM & ERP from SaaS vendors such as Salesforce and Workday.

It might be wise to consider which solutions deliver the outcomes that your organization needs, and then change how your organization works to match the tool. Rather than trying to (re)configure the tool to support unique processes.

Rule 2: Provide sensible options

Provide a small but logical set of options so that teams can tailor solutions to their needs by selecting the options that they find the most suitable.

Avoid the “one size fits all” problem where all stakeholders are forced to use the one, monolithic, expensive solution that tries to cater for every eventuality. This results in you needing to either overcharge the smaller users – often discouraging them from using the solution in the first place – or let them ride on the coattails of the larger users.

Building one large, complex solution was right approach when creating an enterprise application was akin to launching a rocket to the moon. You only get one chance and you need to make it all the way to your destination so you better pack everything you’ll need for the journey. Saber – one of the first, if not the first, airline reservations systems – is a case in point, with the final solution including everything from back-end mainframes and applications through networks to the terminals the staff would use to access the solution.

Unbundle your products and services – just as the low-cost airlines have – and provide a small but logical set of options that the business can use to construct their own end-to-end solutions. They might have bought the flight, but do they need the meal?

These days there’s an app for that. If we need something small to add onto our CRM or ERP then we can often buy an app or module from the marketplace provided by our platform.

You’ll need to work with your customers to understand what options they need.These options will also change over time as the business and the market around it evolves.

Rule 3: Only pay for what you use

The last and possibly the most important point as it ties the other two together. You might have provided simple base solutions with a reasonable set of options, but if the price is not connected to the choices the business makes then it’s all for naught.

Encourage consumption-based models using sensible business drivers – per seat, per … – so you only pay for what you use. This is the key to the low-cost model.

Three rules to bind them

The persistently tight margins we seem to be experiencing mean that it’s time to move beyond belt tightening.

Luckily we don’t need to look far for inspiration. The low cost consumer industries can point us to three key principles that we can use to help the business optimize.

  1. Keep the core solution simple
  2. Provide sensible options
  3. Only pay for what you use/li>

If the base solution is simple then you get a  low starting price. Providing a sensible set of options allows the business to adapt the solution to meet their changing requirements. A consumption-based model can help you ensure that you’re never paying for anything that you’re not using.

What do you think? Is the current belt tightening a passing fad? Or do we need to find new and smarter ways to procure the technology that allows the business to do more with less?

 

Top 5 Reasons to Invest in Predictive Analytics

By

Predictive analytics can give your business an edge in a competitive marketplace

Predictive analytics is the new buzzword in CIO circles right now and for good reason. It offers significant advantages that can give your business an edge in a competitive marketplace. Predictive analytics can be used in any industry, from life sciences to consumer goods services.

To derive accurate results from predictive analytics, you need:

  • A comprehensive set of data. Having data from a wide variety of sources will improve the accuracy of the results.
  • Good problem definition. Predictive analytics can do a lot, but you need to define your goals first before it works.

There are many analytics services that can create algorithms to derive relevant results from your database. From that point, you can make decisions that will improve the overall profitability of a company.

It is easy to see why businesses have invested heavily in predictive analytics. Here are the top five reasons why you should too:

  1. Marketing optimization. Traditionally, analytics have been used to measure the success of a marketing campaign. Customer segmentation, pricing analysis, and marketing mix modelling have all been derived from studying data. Predictive analytics takes this to a whole new level. It works by using algorithms that can take data sets from different sources, identifying trends, and then creating a forecast you can use to identify where your marketing spend can have the greatest impact.
  2. Demand planning. Overcapacity and wastage are the results of poor planning. These can drain the profitability of a company. Predictive analytics can be used to optimize your resources so your company can meet customer demand without sacrificing quality. You can increase profits using the same resources as before through improved planning.
  3. Financial analysis. Financial markets have seen extensive usage of predictive analytics. From determining the credit risk of an individual to identifying investment opportunities in the stock market, predictive analytics can be used to evaluate current trends and create forecasts about the future behaviors of individuals, companies, or markets.
  4. Talent sourcing. One of the newer developments in predictive analytics is finding the best people for particular jobs. The US Special Forces has started using data models to assess new candidates. It can identify acceptable trade-offs such as trainability vs. experience. Given the amount of resources companies invest to find the right people, there will certainly be exciting developments in this field. Stay tuned.
  5. Location analysis. Social media companies such as Facebook and Foursquare have created algorithms that assess the location data of their users. This can reveal opportunities for businesses. By identifying where people are in real time (their routes, where they stay, etc.), it is possible to know which areas are up-and-coming and predict future developments in that area.

Predictive analytics holds massive promise. Business owners and executives can gain significant insights about their customers, trends, and the future. They can make better decisions that will help their business achieve optimal profitability.

What other important reasons or opportunities do you believe will drive the rise of predictive analytics?

 

The Elephant in the Room About Cloud

By

How do you control SaaS and Cloud solutions when you don’t own them?

The first law of being a CIO might well be “You don’t get to talk about strategy if your IT is broken”. Moving your enterprise applications to the cloud doesn’t change this.

Once an application has been transitioned to the cloud you will no longer be responsible for the day-to-day management of a solution. You are, however, still accountable when these solutions fail. If CRM is broken then the CEO will be calling you, their CIO, and not someone at the Software as a Service (SaaS) CRM provider.

Moving applications from your own data centre to the cloud can provide tangible benefits. But you need to be prepared.

You need to do your due diligence so that you’re fully aware of the benefits and limitations. You need to integrate the solutions into enterprise wide support and business continuity processes. And you need to manage cloud providers like any other vendor: monitoring their performance and weeding the under-performers from your vendor portfolio.

It’s important that you know what you’re buying

All cloud solutions come with some sort of service level commitments. It’s important to understand what these commitments mean.

SaaS solutions will provide some commitment on availability and data durability (i.e. how much data might be lost during a failure). Often the level of these commitment will depend on the package that you purchase. Getting by on a cheap-and-cheery freemium package might seem like a smart move at the time. That is until the service fails, taking all your data with it, and you realize that the freemium service levels provide poor availability and put you at the back of the queue for data recovery.

Service levels provided by Infrastructure as a Service (IaaS) platform vendors – such as Amazon Web Services (AWS) – are more nuanced. They will provide service levels for each of the distinct platform services they offer: virtual machines, data storage, and so on. It’s up to you to weave these services together in a way that provides the end-to-end service level you require.

You’ll notice that whenever there is a highly publicized AWS outage that the Amazon.com store is rarely affected. The failure of third-party applications hosted by AWS is not Amazon’s fault. These applications either deemed the failure an acceptable risk or didn’t design for Amazon’s cloud computing model.

IaaS provides you with a toolbox. It’s up to you to use the toolbox effectively.

You can’t avoid integration

No application is an island, and it must be integrated into your IT estate if you want to realize it’s full potential. This might be as simple as plugging it into your identity management solution so that employees can use their usual username and password. It might be more complicated, integrating it into end-to-end business processes.

Cloud solutions also need to be integrated into your business continuity plans and processes. What will you do if the solution should be unavailable for some reason? How will you manage to keep the business running without it? How long can you keep the business running without it? What will you do if the cloud solution becomes permanently unavailable?

In many cases including a cloud solution in business continuity is as simple as periodically extracting a spreadsheet containing all the data the application contains.

Your support desk also needs to be aware of the cloud solution, and ready to support users who have problems. Users will call the same number regardless of who the solution is provided by (just as the CEO will always call you, the CIO, when a solution fails).

Finally, you need to plug the cloud solution into your operational monitoring. You want to be the first of the management team to know that the solution is down. That call from the CEO should be along the lines of “We already know about it, and this is what we’re doing to solve the problem…”

Prepare for life as a small fish in a big pond

Many of the benefits of the cloud – scaleability, low cost, etc. – come from the huge scale that cloud and SaaS providers can achieve. The downside of this huge scale is that you’ll most likely find that you’re a small fish in a very big pond.

Operating your own data centre allows you to be your own lord and master, controlling every aspect of the data centre’s operation. With the cloud solution, however, you’re just one voice among many. Your requirements will often become just one of the thousand conflicting demands that the cloud provider is attempting to balance.

You need to consider cloud and SaaS solutions as tools that your business simply uses as is, rather than solutions that you try and adapt to your unique needs. Typically it’s the commodity business activities that you want to throw out to the cloud or SaaS. There’s no benefit from foisting you peculiar approach to order management onto the SaaS solution. You might have pages of requirements, but a smarter approach is to find a solution that you consider capable and cost effective and them simply adopt whatever standard business processes it provides.

This is somewhere the CIO can help the business

Moving applications to the cloud can deliver tangible business benefits. There are, however, pitfalls that need to be avoided.

As IT spend migrates out of the IT department and into the lines of business more and more CxOs will find themselves in the unenviable position of being the proud user an IT solution that isn’t currently working. The first person they’ll turn to will be the CIO.

This is something that an astute CIO can help with.

  • Work with the other departments to ensure that the right options are purchased, covering both functional and non-functional requirements.
  • Deal with the integration challenges so that the cloud solution does not become an isolated island.
  • Weave the cloud solution into enterprise-wise business continuity and support processes.
  • Ensure that you have monitoring in place so that you get the bad news first

Cloud solution work, but you need to be smart about how you use them if you don’t want to be caught out.

Have you moved applications from the data centre to the cloud? What problems did you encounter? And how did you overcome them?