The IT Beacon

CIO: Supply or Demand?

The usual business model is to create demand (aka customer relationship management) and then fulfil the associated order (supply chain management).

Both are needed. And it is increasingly common for elements of either or both to be outsourced to a third party. Outsourced elements tend to be of lower relative value to the organisation, but that bar is rising as I write.

So the question is whether your IT function is supply or demand focused?

The former model requires keeping the machines ticking over, with non-cyclic activities being triggered by system failures or user requests. Sustainable organisations that make no effort to stimulate demand in their customer base are exceedingly rare. And similarly IT functions that make no effort to influence the ‘buying’ habits of the users is destined to spiral into oblivion.

Forward thinkers in the market are encouraging CIOs to move their focus from supply to demand. Hand over the technology elements to those that (are at least supposed to) do supply well, ie the vendors. The demand-focused IT function is business-oriented, proactive and constantly looking for ways to use IT in innovative ways in respect of cost management, governance and business value.

The demand-focused IT function has a skeleton staff management team focused on supply, and thus supplier management. It also has an enterprise architecture team to ensure the integrity, reliability and suitability of the technology underpinning the business. However the majority of the IT function is customer-facing.

What were technologists are now business consultants with a strong grasp of how IT can improve the organisation. These consultants challenge user thinking. They are service oriented but not servile. Partnership is key.

In my view the worth of the CIO needs to be measured less by headcount and data centre footprint. The new focus needs to be more on customer satisfaction and the KPIs that the business as a whole is working to.

Don’t fight the vendors because they ultimately control the supply of technology. Accept that and work with them by repositioning the IT function as what is in essence the IT industry’s customer experience function.

e-Skills: Talent or Competency?

Working very closely with the IT recruitment sector over the years I have noticed that there is a strong tendency to focus on competencies when sourcing IT talent. This is in the main driven by the hiring manager of the acquiring organisation.

The beauty of competencies-led recruitment is that it can be distilled down into buzzwords, eg. Java, C sharp, Oracle, Unix. Admittedly these are not competencies as such but they strongly allude to the technical skills required. Now all parties in the supply chain can play buzzword bingo. In other words they can focus on matching terms that appear on both the job specification and the resume. Bingo!

That mindset compartmentalises IT talent acquisition alongside the procurement of say stationery. We need three staplers, twenty pens and two Solaris administrators. As a result IT talent is perceived as a commodity purchase, and so the rules that apply to acquiring receptionists, cleaning staff and security staff are applied.

As outsourcing and off-shoring gain momentum this will become increasingly a non-issue. However there is some way to go before the death of the end user IT function becomes a reality.

Again there is a somewhat patronising belief that IT is largely a manufacturing type function. Feed the IT function requirements and (at some point) out will pop the technical response. Well the reason that doesn’t happen in a predictable manner is because today IT is still partially an art.

A competent artist can create something that is acceptable. A talented artist surpasses expectations. Competent artists typically are easy to manage. Talent artists are the opposite. ( I wrote about this a few years ago in the Financial Times).

It’s the talented IT staff that will take your organisation from good to great. Or given the market conditions, from basket-case to sustainable.

We’ll take a look at what talent means sometime soon in this blog.

In any case, recruiting on competence is not enough. Consequently those involved in the talent supply chain need to raise their games accordingly. Perhaps the first step is to find some talented hiring managers?

Tech Sector Review - Intel’s Fine

Chipmaker Intel was handed a $1.45bn fine by the European Union regulators. The largest ever for monopoly abuse, eclipsing Microsoft’s running total of circa $1bn. This all stems from an ongoing war between Intel and AMD. Intel was accused of abusing its position of power to drive the buying behaviour of its customers.

This included conditional rebates to PC makers such as Dell, HP and Acer. It’s a difficult call in that chip prices are continuously dropping and so consumers do not seem to be adversely affected.

From time to time AMD produces superior products to Intel, but clearly not superior enough to cause buyers to wrestle free of their ‘golden handcuffs’.

The EU might consider the implications (and probably has) of Intel withdrawing from the European market. So whilst it might appear to be a knock out blow for European commerce, it looks more like a pre-rehearsed piece of wrestling theatre. Unless Intel is forced to pay cash upfront and actually change its practices immediately this will be nothing more than a European stealth tax on US companies.

Tech Sector Review – Microsoft's browsing

The IT industry end game is picking up momentum. Oracle’s recent swoop on Sun attests to this. Microsoft is itself no stranger to predatory action. It would appear, based on its recently and successfully placed US$3.75 billion bond issue, that it is just about to go shopping again. The software giant has had Sap and Yahoo in its line of sight for some time. The former would move Microsoft further up the enterprise apps hierarchy and get it closer to the boardroom. The latter would get Microsoft closer to the consumer. Both look expensive and so a purchase of either would seriously skew Microsoft’s strategic direction.

With the current, and in my opinion perverse, fashion for buying into the infrastructure, it might seem a more natural move for Microsoft to follow the trend and focus its attentions on the mighty Cisco. Entwining their futures would bring the end game to a swift conclusion. The associated market whiplash would likely push IBM and Oracle into each other’s arms.

Is this a thought too far?

Click here to see recent Tech Sector postings.

Autism and the IT Department

Definitions of autism include:

• An abnormal absorption with the self; marked by communication disorders and short attention span and an inability to treat others as people (Princeton).

• A diagnosis of abnormal self-absorption, observable in early childhood, characterised by lack of response to other humans and by limited ability or disinclination to communicate (Wiktionary).

This is a serious condition and one that tests the characters of those closely associated with autistic people.

These definitions also overlap with how the IT department in general and technologists in particular appear to users.

‘Marked self absorption’ – Many technologists struggle to talk to users in users terms. To the user it would appear that the technologist has made no allowances for the fact that the user is in fact not a virtualisation solutions architect. CIOs in the boardroom often focus on ‘projects’, downtime, data centres and the network. This is not the language of the top table.

‘Lack of response to other humans’ – Technologists often will take a reactive approach to engaging with the users. Much like a shy person at a social gathering. They won’t initiate the conversation. Consequently consultative opportunities are lost and systems are built as users requested despite the fact that the technologists can see the approach from a business and/or architectural perspective is flawed.

‘Limited ability or disinclination to communicate’ – Often help desks provide minimal information when responding to break-fix situations. This could have been a user education opportunity to help them avoid or self-manage the problem going forward. Also announcements at the eleventh hour that the new system will not go live as scheduled are quite common. Often I hear of major and very worthy IT department initiatives that are announced to the users via a one shot mail out. And that one mail shot is hidden deep within the daily flurry of emails relating to server maintenance, email management etc.

Of course there are technologists that do not exhibit these characteristics, but they may well be in an IT function that, as it were, suffers from departmental-autism. Hence the technologists concerned have to suppress their inter personal skills side to fit in.

This serious condition needs to be registered at board level. As poor communication is the prime cause of value-loss in respect of the corporate IT investment.

The condition needs to be acted upon by the HR function. As they say, the fish rots from the head downwards so the IT leadership needs to be the focus of attention. Recruitment agencies and headhunters are encouraged to take this onboard.

If this problem is not addressed the IT industry will continue to be tagged with this debilitating condition.

CIO – Collaboration and Information Officer

The market downturn appears to have set the IT industry back in its journey to being strategically relevant to users. Today the role of CIO seems limited to operational ‘run the business’ type support. In other words the CIO is the 21st century IT manager. 

Of course cost pressure is on and it would take ‘balls of steel’ for the CIO to challenge this redefinition of the role.

I propose that there may be a way to become strategically relevant without having to ask for a rework of the job specification. Businesses need better communication. We have email and it works well. We now have social networking platforms such as Twitter, Facebook and LinkedIn. In some cases these are already in corporate use. However their usage may be in spite of the IT function. I suggest that the CIO takes charge of such collaborative tools with a remit to extend their usage rather than be the ‘collaboration killjoy’ who focuses on making the case for not having such connectivity. This was the case with palmtops until the Blackberry Tsunami caused a rethink.

Also the use of wikis is to be encouraged. Again this is happening in respect of managing IT projects. It needs to extend to the user community to enable them to collaborate. Possibly the most important step is to have wikis that allow users and technologists to communicate.

I touched on this in my IT Value Stack book.

I also touched on it in an article I wrote for the Financial Times a couple of years ago. Click here.

The IT industry’s first attempt at knowledge management failed, because the focus was on control rather than collaboration. The technologies and platforms are sufficiently advanced now for CIOs to lever them (with little investment required) for the benefit of their organisations.

Collaboration provides a means for the IT function to be strategically relevant.

Better to be known as the collaboration guy than the laptop repair guy.

More on the Gartner IT Xpo Symposium Cannes

Just in case you missed it today my column highlighted some of the takeaways I tookaway from the Gartner event. Click here for the article.

You might also be interested in the latest FT podcast in which I lay out my view of what makes a good CIO. Click here and select November 18, 2008 Show for podcast.

IT Failures

Management Today recently published one of my articles on IT failures:

MT Expert: IT Failures

What can small companies learn from big IT failures?

In recent months you’ve probably read a lot about high-profile IT project failures (take the row over the new NHS IT system). But to be fair to the IT industry, most of these projects fail not for technology reasons, but for people reasons – such as a lack of IT voice in the boardroom. And if you wait until you’re a big company before you address this, you’re probably going to be too late...

>>Click here to read the rest of this article at Management Today.

How to stop the IT brain drain

I recently wrote a piece in Computing magazine about the need for organisations to value their IT staff to stop the IT brain drain. Gartner’s 2008 CIO survey highlighted this as the third most pressing issue for CIOs.

I touched on the issue of the exodus of experienced talent as a result of people reaching retirement age in significant volumes for the first time in the industry. This is a serious problem. Some IT veterans will suggest that it serves the industry right because they perceive the industry as ageist, which broadly speaking it is.

The Y2K challenge involved paying inordinate sums to IT staff that were previously considered as ‘over the hill’. In the same way as freak weather is becoming less unusual, the frequency of Y2K-like imminent disasters will increase in frequency. Again creating a gold rush opportunity for those that are retired either by choice or because their skills were no longer deemed fashionable.

Smart CIOs in my opinion will avoid such costly perturbations in their talent costs and make every effort to reskill and redeploy their experienced staff as one never knows when they will be needed to get the IT department out of a (deep technical) hole.

Here is a link to the piece.

*Photo by spierzchala on Flickr. Some rights reserved.

Boardroom debate: IT ch-ch-ch-ch-changes to golden years

In my recent FT piece I drew a parallel with influential musician David Bowie. His career has spanned 5 decades, which is about the same duration as the modern IT industry. Unlike Bowie the IT industry has changed very little over that time. Same old problems:

• Lack of IT representation at board level
• User-technologist distrust.

But some new trends are emerging:

• IT is becoming simpler
• Vendors are working with users to bypass the IT function.

So the IT department has a choice, either become irrelevant or change. My suggestion is that the CIO:

• Accepts that IT is becoming commoditised and pushes this down the food chain to the utility vendors
• Accepts that web services is a reality and manages these silo solutions as part of a cohesive enterprise architecture.
• Takes every opportunity to move his role to that of Chief Change Officer rather than just Chief Information Officer.

Read the full article.

I am curious to know what your views are on this. Do you feel the IT industry as we know it has peaked in terms of the value it can offer the business?