In summary, it's probably the closest thing to a road map for implementing Enterprise 2.0 in companies (although to their credit, they don't call it that).
It's chock full of data (some of which will surprise you) and case studies. It also makes concrete recommendations how to evaluate what's the best strategy for a company (should we do a blog, an open forum or a video on You Tube). And best of all, the language the use (for the most part) is clear (focussed on business value not technology) and practical (always refreshing).
]]> What they don't talk about (and I don't get) is why so many people contribute at all. In all this Web 2.0 / Enterprise 2.0 talk, all I see is the users giving up their time, their ideas etc to make companies they don't work at better. What do the users get back in return? Yes, I get the positive karma point of view, but I just don't see the payback for the users. Five minutes of fame on the internet, yes. Positive kudos from their peers, yes. A pat of the back and a meeting with some senior marketing executive, yes. Better rates on the companies products, no.But maybe I'm getting too old and cynical. Definitely worth a read, especially all those trying to figure out this 'Enterprise 2.0' thing.
]]>More here.
]]>Mckinsey has highlighted eight interesting business/technology trends to watch. (You may need to register). The abstracts are really short and give only a passing introduction to the subjects, although they do have some neat examples that I had not seen before. To their credit, however, they do provide pointers for further reading. The article got me thinking on how an IT organization could profit from them.
]]>Nothing new in these two. Usual story about Linux and user generated content. The ‘consumers as innovators’ cites the case of a T-shirt manufacturer leveraging user talent / creativity to create new designs. How would an IT org use this? User generated strategies? It is hard to see a distributed set of users designing a Loan Origination System, for example.
This is interesting to me. More often than not, business and IT are at each other’s throats. Business claims that IT is not delivering enough value. IT says business people don’t know what they want and they keep changing their minds. Most of the time, the issue is simply a case of IT holding business hostage. Let me explain. In most organizations, the IT department is usually is the sole provider of IT services. Business does not have a second “service provider” to turn to. As classic economic theory predicts, with no competition, IT’s service quality declines. Businesses should be allowed/encouraged to engage several service providers.
I wouldn’t be surprised if Google or Microsoft start doing this in a big way. Amazon has led this field by letting companies tap into its big investments in IT. EMC has announced their own move into the “cloud”.
Some of the features in Xobni (such as search) can be found in either Google Desktop or in Microsoft search (which is now integrated with Outlook 2007), but I really like the insights that it provides. What especially caught my eye was the graph that shows when your contacts send emails, the ‘email deficit’ between you and your contact and the ability to quickly find attachments. Can’t wait to try this out. Thanks to Don Dodge for pointing this out.
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From what I can tell, it describes the evolution of IT from in house operations to a utility. Companies that have been leading us up the SaaS path (SalesForce, Google et al) are likely to benefit, while the incumbents need to think hard and come up with a compelling strategy to stay relavent.
]]> An excerpt -"The entire computing industry is going to be turned on its ear. There are a whole lot of big tech companies - Microsoft, IBM, Oracle, Hewlett-Packard, Dell, and many others - that have made fortunes selling the same pieces of hardware and the same software programs to thousands of different customers. As computing turns into a utility and systems begin to be shared, a lot of those sales are going to dry up. Instead of buying new computers, companies will just subscribe to various software services served up online for a low monthly fee. Most of today’s computer giants see this transformation coming, and they’re scrambling to remodel themselves to compete in the new world. Some will adapt successfully. But some are going to fail. And new utility companies - companies like Google and Salesforce.com and even Amazon—are already moving in to take their place."
The million dollar question is, of course, how fast will this be adopted by enterprises. Early adopters (like Arizona State University's CIO's adoption of gmail as a standard) are proving that the utility model does work. Microsoft, predicitably, seems to to be pooh-poohing the trend, while Google, again predictiably, is gung-ho about it.
How long do you think it will take for enterprises to adopt this utility model? Will it be a full scale utility model or somewhere in between (e.g. see Microsoft's Software + Services play)?
So who tests the application? Well, the poor users of course. And this is what has caused a firestorm. There have been cases of employees not getting paid, or in some cases overpaid. The CTO's justification for not fully testing? He's apparently managed to save over half the original $70m estimated price tag and reduced the time taken to bring the application to its users. Very impressive. But is this a strategy that other CIOs should follow?
]]> I think not. While releasing a photo sharing program or email software such as Gmail in Beta can be justfied, doing this for software that going to matierally impact people lives can not.What's really shocking is that one would skimp on testing. Of all the items that one can offshore, testing and documentation of software are probably the items that are the least risky to offshore. Why for say $2m, the CIO could have got a team of say 65-70 testers testing the crap out of the system for say 6 months. Surely a wise investment given the $30m price tag.
What do you think? When is not testing software justified?
]]>" IBM Lender Business Process Services, or LBPS, received clearance to provide mortgage origination services for federally insured Federal Housing Administration (FHA) loans.
When it announced the unit’s launch in March, IBM said the unit would fill a void in the lending space, particularly for small and midsize lenders.
The Charlotte-based unit will allow mortgage lenders to replace the fixed costs that are associated with typical loan fulfillment operations with a variable-cost framework. This in turn will free up lenders to provide better service and support to consumers, IBM says.
LBPS will offer a variety of lending services, including loan application, underwriting, processing, vendor management, document preparations, and loan closing."
While this may not seem like a significant announcement, I think there's more here than meets the eye. This is really IBM introducing LaaS (Lending as a Service) to the market.
]]> Lenders typically spend on the order of hundreds of millions of dollars building and maintaining custom loan origination systems. Such projects are a CIO's worst nightmare - budget overruns and long delays seem to be common. IBM's offering of a no money down, pay as go model seems to be a god send. But this may not fit all lenders equally well.I don't see large lenders (Countrywide, Wells Fargo, Bank of America etc) using this. Large lenders typically have a great deal of blood, sweat and money invested in their origination and fulfillment systems. It's not an easy investment to walk away from, especially since each lender will claim that their processes are different and hence they need a custom system. Moreover, it's highly unlikely that they'll risk exposing their decisioning/pricing rules - really their secret sauce - to a competing lender.
However, I think IBM is bang on in offering this to smaller lenders. First, they don't have to spend a fortune standing up yet another origination system. Second, the variable per-loan cost arrangement will allow companies to better weather markets turns.
As with any SaaS offering, it will be interesting to see if they'll be able to customize the experience, processes and rules for each client without incurring exponentially rising costs. While its fairly obvious how they're planning to use their recent acquisitions of FileNet (BPM) and Palisades (Origination/Fullfilment) in this offering, it's less clear how's they're planning to offer a custom user experience for each of their clients. Adding a dash of Bowstreet's Factory (User Experience Customization) to this recipe may make this a potent offering.
~"Keeping operations up an running is just table stakes" - Doug Schwinn, CIO, Hasbro
~ Interest level in Vista seems low; interest level in virtualization, open source and Web 2.0 seems high.
~ All the CIOs on the panel predicted an increase in their IT spend.
More here.
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I recently had a discussion with a CIO of a global company, who understandably wants to remain anonymous. He suggested that, in spite of rhetoric to the contrary, IT still acts like a back-office support organization, reacting to cost pressures daily rather than developing a robust IT strategy that aligns with corporate strategy and sticking to it. As are many CIOs, he is pressured by other business executives to deliver more while the CEO demands doing so with less, and focus is moved to showing immediate results rather than what might be better, and even lower cost, over a longer period of time.
Educating line management on technology’s possibilities and limitations is hard, and so is setting priorities for projects, developing resources and skills, and integrating systems with corporate strategy. It’s even tougher to keep business and IT aligned as business strategies and technology evolve.
Is it even possible to achieve and maintain alignment? By building the right relationships and processes, and providing the necessary training, experience in many companies has proven that it can be done. Several components in those successful organizations include:
· Relationship managers embedded in the IT organization;
· Annual or more frequent updates to formal IT strategy to reflect (and even influence) changing corporate strategy ;
· Implementation of appropriate processes for governance, demand management and other IT disciplines;
· Regular and frequent reviews of IT costs and performance metrics with business.
In the world of do more with less, focusing on relationships and processes that enhance mutual understanding between business and IT is key.
Take an average company. Chances are that the users of technology - customer service advisors, production managers, marketing personnel etc. - hate IT. Yes, hate. And not just the abstract concept of hating IT (e.g. hating Microsoft for Outlook), but hating IT people. Why is this so? Is it because IT personnel are in general social misfits and like dealing with machines instead of humans? Is it because IT people can't explain concepts simply? Is it because IT people regard business folk as dumb and incapable of understanding technology? While I think there may be an element of truth in each of these gross generalizations, I think the core of the problem has to do with control and trust. Users of technology resent the control that the IT people have over their professional lives and resent IT's lack of trust. And with good reason.
]]> Take security for example. I got a nasty call today from a information security officer at a client. He informed me that my having instant messenger, iTunes (a music player) and Freemind (a mind mapping tool) on my corporate laptop was a threat to corporate security.Now before the security zealots severely chide me for failing to follow appropriate policies, let me explain. I fully understand and agree with the need for security policies and the need to protect against the threat of corporate espionage. But there's a balance between given freedom to explore and a fascist crackdown on independent thought. Why with instant messenger I may be able to get a quick answer before a meeting; why with iTunes I may even be productive at work as I create a presentation; why with FreeMind I may be able to organize my thoughts and plan better. Clearly threatening to the very edifice of the corporation.
It's exactly this kind of big brother behavior that kills initiative and make corporate citizens into drones. And makes people start to hate IT. This has to stop. Let's face it - IT shops are seldom the founts of innovative ideas. Was instant messenger created by a strategic IT committee looking into improving employee communications? Were wikis created by the IT department looking for a way to empower business folks into sharing knowledge? Was blogging software created by a team of IT professionals dedicated to facilitate equality in expression?
More often than not, it's the business folk who are pushing the envelope by bringing technologies in house to make their lives easier. We have to encourage this. Not to foster anarchy or a deliberate flouting of rules - but to allow knowledge workers to dream, think and create. Monitor the activities of employees, don't control. Trust your fellow business employee, don't patronize.
]]>The next series of blogs will develop Points of Views regarding - How can organizations achieve differentiation based competitive advantage via IT?
The same survey determined that aligned CIOs were twice as likely to have created a new revenue stream and 150% more likely to have created a competitive advantage for the business than unaligned CIOs.
Some would call this “business savvy”, not “business alignment”. Despite the lofty intentions of seeking alignment, perhaps a more pragmatic focus is to make IT relevant to the business.
Beyond lowering costs and opening new business opportunities, finding new ways to increase the business bottom-line profitability is a more tangible objective.
Today’s CIOs need to better understand the company’s products and services, its customers, and the issues facing its stakeholders – marketing, sales, manufacturing, distribution, business partners and customers.
Ask the question, what can IT do to make their jobs easier and improve the bottom line? Answering the question will most certainly lead to business alignment.
]]>Alignment, and hence survival, is a matter of focus on two basic themes -- enable the business to achieve value and communication about what you're doing. Oh, and don't forget the basics.
]]> Enabling business to achieve value is really an outcome of execution. By getting close to the customer, in big and small ways, IT can help with the value proposition. Annual IT strategy sessions, quarterly budget and project reviews, monthly financial and operational reviews, all performed with a committee of high-level business owners, are examples of the big things. Smaller things, but just as important, include named resources and co-location -- people that the every-day business person can converse with regarding business issues.Another key component of achieving value is an unabated focus on business process. Using or evaluating technology because it's the latest thing might be fun and look cool, but if it doesn't improve the business then you've just spent money doing something for IT alone. If, on the other hand, you completely understand what the business is trying to do and can provide solutions that streamline or enhance business processes, you enable the business to achieve value through innovation. The difference may be subtle, but the focus on what rather than how is the real value creator.
The other basic theme in enhancing IT and Business alignment is communication. It's not self-serving to tell people how well (or not) IT is adding value, and, in fact, may be a survival tactic as well as an alignment tactic. Make sure the metrics you're using in the communication really point out value as well -- does a CEO really care as much about system up-time as he would about sales increases brought about by customers who are driven to a new web-based sales channel? Tell your story, tell it often, but do it in a way that business leaders can understand.
Oh, and don't forget the basics. You have to keep the phones working, you have to keep the PC's up, you have to get the checks out, you have to keep the systems operating. Poor or sloppy execution can undo all the alignment that has been achieved. Consistency in performance and financial excellence is one of the fastest ways to instill confidence in business, and is the cornerstone of alignment improvement.
]]>]]> The role of the CIO has evolved through three broad eras of computing.
The Automation Era launched technology into the business world and somebody had to manage it. The “DP / IS Manager” was an operational manager focused on on-time delivery, reliability and effectively responding to the business’ need for information. IS leaders began to develop deep functional knowledge of certain business operation from a support and execution perspective that would serve them well in the future.
The Integration Era leveraged technology to implement enterprise resource planning systems and re-engineer business process, giving CIOs a long sought seat at the table. CIOs engaged in persistent efforts to educate business management about the opportunities presented by IT. Over time, business recognized that IT could be a competitive differentiator (e.g. American Airlines Sabre system)
Most recently, the Ubiquitous Computing Era arrived, and with it new technologies emerging from every direction, creating an environment where the CIO is personally responsible for determining whether the organization positions IT as liability or strategic asset. CIOs are increasingly challenged to align technology opportunities with business strategies better, faster and cheaper than their competitors.
The CIO today has become a central figure in the management of business transformation. In upcoming posts we’ll discuss in more detail the dimensions along which the CIO has evolved.
If you're already familiar with collaborative software development (e.g. Linux), collaborative editing (e.g. Wikipedia), tagging (e.g. del.icio.us, flickr) and the general Web 2.0 buzz, a lot of this book will be feel like old material. What's was new (and interesting) to me was the application of the principles of openness and collaboration by established companies (e.g. P&G). In fact, the first chapter describes how a struggling mining company (you can't get more old economy than that) turned the tide by using the intellectual power of people outside the company. Don's premise is simple: use the power of your customers, partners, suppliers to co-design, create, market etc. In short, he urges companies to follow an open kimono policy.
What this book doesn't do however is provide a compelling playbook for companies looking to follow an open kimono policy. Take an example of a mortgage company. How would customers add value in processing a loan? Can one see customers co-creating financial products? The answers are not so clear. What's lacking is a methodology for judging what activities truly add value and what activities don't in an expanded value chain. Companies simply cannot open up their secrets to their competitors willy nilly without a strategy for how the value chain would work. Although I don't buy all of Don's hype, I do agree that companies need to start thinking about how they would operate in the Web 2.0 era. Innovative companies are emerging (witness the rise of social lending companies such as Zopa and Prosper in the lending space for example) that potentially threathen existing business models.