Archive for June, 2009

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Satyam Scandal: CIOs Need To Talk With Their CFOs

Monday, June 29th, 2009
Fraud At Satyam Means That How CIOs Do Outsourcing Needs To Be Rethought

Fraud At Satyam Means That How CIOs Do Outsourcing Needs To Be Rethought

Didn’t we solve that whole outsourcing thing years ago? Specifically aren’t the IT and the Finance departments on the same page when it comes to not only IF we should outsource some of the IT work, but also HOW it should be outsourced? If this is true, than what does the Satyam scandal mean for your IT / Finance relationship?

The Satyam Scandal

Just in case there is anyone out there who doesn’t know what happened at Satyam, perhaps a quick review is in order. Satyam Computer Services is based in India, has a work force of 53,000 and operations in 66 countries. They were very successful and served more than a third of the U.S. Fortune 500 companies.

Back in January the then CEO of Satyam, Ramalinga Raju, revealed that he and his CFO had been conducting a massive fraud – they significantly inflated its earnings and assets for years. Basically they were losing money hand over foot. In January they revealed that 50.4 billion rupees, or $1.04 billion, of the 53.6 billion rupees in cash and bank loans the company listed as assets for its second quarter, which ended in September, were nonexistent. Poof!

Impact Of The Fraud

What this means for firms that do outsourcing business with Satyam is that the firm might fold any day (perhaps you are one of these firms!). All of a sudden, outsourcing contracts that had appeared to be solid now seem to be not so solid. Most firms that outsource their work don’t necessarily have a good contingency plan for what to do if their outsourcing partner is suddenly unable to perform the work.

What Needs To Be Done

The Satyma scandal should serve as a wake-up call to CIOs everywhere. Oursourcing can never be done the same as it’s been done in the past. Here’s what needs to change:

  • Finance Needs To Play A Role: the IT department is responsible for making sure that the outsourcing company has the needed technical skills, but the Finance department needs to play a bigger role to make sure that the outsourcing firm can stay in business over time.
  • More Baskets For Your Eggs: it’s time to start to diversify your outsourcing activities in order to lower your risk profile. Detailed technical work needs to be moved around every so often so that not just one vendor knows how to do the work.
  • Update Your Contracts: create shorter contracts that are more flexible. Make sure that you are not tied to a given outsourcer for too long just in case things start to go wrong – you might want to move your work to another outsourcer quickly.

Final Thoughts

India has now had their version of Enron / Worldcom. Hopefully it will serve as a wakeup call for all CIOs who outsource their work that greater due diligence needs to be done even as the world continues to move faster. By working more closely with Finance, CIOs can apply IT to enable the rest of the company to grow quicker, move faster, and do more.

Questions For You

When you selected an outsourcer, did you do a detailed financial due diligence on them? Was your finance department involved? Has your finance department remained involved in evaluating the health of your outsourcer(s)? Do you have a contingency plan in place that you could us if your outsourcer went out of business? Leave me a comment and let me know what you are thinking.

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What We’ll Be Talking About Next Time

Data Security. There I said it. It sorta lays there like a big lump of coal and everyone in the company stands around looking at it wondering who’s responsibility it is to do something about it.

Nobody, including CIOs really wants to touch it for one very simple reason: it’s a losing proposition…

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Posted in outsource | No Comments »

Google’s Staffing Problems Have Much To Teach CIOs

Wednesday, June 24th, 2009

Google's Having A Common Staffing Problem - Will They Be Able To Fix It?

Google's Having A Common Staffing Problem - Will They Be Able To Fix It?

If you could be running the IT department for any company out there right now, which one would it be? A lot of us would say Google – everything that we’ve read and heard about the company makes it seem like a great place to work. However, it turns out that even Google is not immune to IT staff problems…

Google’s Staffing Problem

Google is in the middle of what is often called a “brain drain” – some of its best and brightest workers are leaving the firm to go join other companies. In the past few weeks they’ve lost Tim Armstrong who was their advertising sales boss and they’ve lost David Rosenblatt who was in charge of their display advertising. Oh, and they are losing their top engineers to Twitter and Facebook…

What’s Google Going To Do?

Google’s plan to try to stem this exodus of talent is a typical Google solution – they’re going to try and solve it by crunching numbers. Unlike many IT firms, Google has both the data and the processing power to attempt this.

Google plans on using data that they’ve collected from surveys and peer reviews in order to discover which of its employees feel underused. This may sound a little far fetched, but Edward Lawler who works at the University of Southern California says that eventually all companies will be approaching HR issues this way.

What’s Gone Wrong At Google?

Using algorithms to find unsatisfied workers is clever and all that, but clearly there is something else going on here. Interviews with former Google employees reveal some interesting things about the day-to-day practical realities of working in this high-tech Shangri-La.

Former employees reveal that people are leaving because many employees don’t feel that their efforts will make the same amount of impact as the company matures from its startup days. Compounding the problem is the fact that Google does not appear to provide much in the way of formal career planning. Often these tasks would be addressed by a company’s Human Resources (HR) department, but it appears as though Google’s HR department is viewed by many as being quite impersonal.

So What Should Google Be Doing?

As amazing as it may seem, the answer to Google’s problems is actually very simple – hard to implement, but simple to describe. What they need to do is to put their customer first. By clearly communicating to the entire company that Google exists to serve their customers, a great deal of other staffing problems will fade away.

Final Thoughts

One of Google’s biggest problems is that they have not found a way to keep their employees engaged. This isn’t surprising because Google dominates its market and so it doesn’t have any big competitors to use as a rallying cry.

Making its customers first would allow Google to focus its staff on a single goal that would extend throughout the company All of a sudden every employee would have a way to measure the value of his/her work. Once again, this wouldn’t necessarily be easy to do, but it’s the right thing to do. If you can figure out how to do this with your IT department then you will have found another way to apply IT to enable the rest of the company to grow quicker, move faster, and do more.

Questions For You

Do you think that Google’s algorithm will be able to identify those employees who might leave? Do you think that it will make mistakes? Do you think that this type of algorithm would work at your company? Do you think a customer focus would solve Google’s staffing issues? Leave me a comment and let me know what you are thinking.

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What We’ll Be Talking About Next Time

Didn’t we solve that whole outsourcing thing years ago? Specifically aren’t the IT and the Finance departments on the same page when it comes to not only IF we should outsource some of the IT work, but also HOW it should be outsourced? If this is true, than what does the Satyam scandle mean for your IT / Finance relationship?

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Posted in staffing | No Comments »

First-Mover Advantage: Complex-Event Processing Is What CIOs Need

Monday, June 22nd, 2009
CIOs Need To Get To Know Complex-Event Processing

CIOs Need To Get To Know Complex-Event Processing

The job of  a CIO and the IT department is to equip the rest of the company to move faster and do more. One of the ways that a CIO can do this is by staying on top of new and emerging technologies (ex. unified communications).

If such technologies can be implemented in a useful way BEFORE the company’s competitors can do the same, then the CIO will have done his/her job. Complex-Event Processing looks like it may be another one of those technologies.

What Is “Complex-Event Processing”?

In business, knowledge is power and power is profit. Every business has multiple streams of information flowing into it at all times. Information on sales, inventory, returns, web site clicks, weather conditions, bank balances, etc.

For years firms have been processing these information streams individually and in near-real-time. These are the core business applications that produce the reports that get sent to senior management each night for them to review the next day. This is better than nothing, but it’s not quite enough.

Neal Leavitt writing in the IEEE’s Computer magazine points out that today’s traditional databases are not up to the task of analyzing continuous streams of business data in real-time searching for complex events (events that require more than one data stream to detect).

What is now arriving on the IT scene are general-purpose platforms that provide an IT department with enough processing horsepower to analyze real-time business information simultaneously across multiple business applications.

What’s It Good For?

Complex-event processing gives a firm the ability to spot interconnected business trends and patterns in real-time and then combine this information into complex events that can trigger alerts that can be sent to people in the company.

Complex events can include such things as determining when to trade stocks, detecting fraud as it is happening, spotting inventory issues before they become a problem, network status monitoring, etc.

Are There Any Risks?

Of course – this is cutting edge technology, there are always risks with this stuff. The current limitations to this type of technology include:

  • Lack Of Standards: specifically for the event-pattern detection and rule-based languages for different vendor’s products.
  • Education: this is new technology and businesses don’t fully understand what the products can do nor all of the situations in which they can be applied.
  • Missing Benchmarks: No standardized benchmarks currently exist so it’s difficult to compare products.

Final Thoughts

Every great business break-through starts with a dream. What could your firm do if you could analyze all of your business data streams in real-time? If the benefit is compelling enough, then perhaps it’s time to start looking into how you could apply complex-event processing to as a way to apply IT to enable the rest of the company to grow quicker, move faster, and do more.

Additional Resources

If you’re interested, here are links to several vendors who have products in the complex-event processing. I have no relationship with any of them so there is no order to the list:

Questions For You

Does your firm have multiple streams of real time data flowing into it? What do you do with these streams today?  What kind of delay is there from when the data arrives to when staff can take action on it? What could you do with the ability to analyze this data in real-time? Leave me a comment and let me know what you are thinking.

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What We’ll Be Talking About Next Time

If you could be running the IT department for any company out there right now, which one would it be? A lot of us would say Google – everything that we’ve read and heard about the company makes it seem like a great place to work. However, it turns out that even Google is not immune to IT staff problems…

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Posted in technologies | 3 Comments »

Unified Communications Is An Opportunity For CIOs To Show Their Value

Wednesday, June 17th, 2009
The Arrival Of Unified Communication Solutions Is An Opportunity For CIOs To Shine

The Arrival Of Unified Communication Solutions Is An Opportunity For CIOs To Shine

The role of a  CIO in any organization is to find ways to enable the company to be more successful. This can include introducing new products quicker, reacting to changes in the marketplace faster, or even lowering the cost of doing business.

Underlying all of these different ways to assist the business there is one area that every CIO must master first: providing great internal communications. An opportunity to radically transform how a firm’s employees communicate has arrived and it’s time for CIOs to step up and lead the charge.

Just What Is Unified Communications?

“Unified Communications” (UC) is starting to take on all the characteristics of a high-tech buzzword and in the process folks are losing track of just what it really means. If you boil it down to its bare essence, unified communications is all about moving all of your voice, video, and data business communications to a single network. Instead of having a phone network, a LAN, and the Internet, you combine all three of these into a single unified (get it?) network that carries all business communication.

Is This Really The Right Time To Be Talking About This?

Hey, there’s a recession going on – right? Despite the current economic problems that the world is facing, CIOs still have a job to do and studying and implementing a unified communications solution is a key part of this. The world markets will recover and if the company is left behind while its competition zooms ahead because they didn’t stop innovating then there’s going to be an opening for a new CIO.

Nicholas Hoover over at InformationWeek has been asking around and he’s found out that:

  • 57% of companies have not gotten past the pilot stage
  • 86% say that they can make a good business case for it
  • 55% admit that their company is confused about the value of UC

What Global Crossing Did

Just in case you need some more motivation to look into what unified communication can do for your firm, how about if we take a look at what the communication company Global Crossing did.

Global Crossing has embraced unified communications in a big way. Their chief operations officer uses it to hold weekly global staff meetings with his 16 direct reports. They use the video conferencing capabilities that they now have. The savings of using a unified communications solution for this type of meeting can be calculated in terms of savings on conferencing services, long distance calls, and even travel costs.

Global Crossing has taken unified communications one step further. They’ve discovered that the real hidden value to this new service is what is called “presence awareness” – who’s currently there for you to communicate with? They’ve integrated this functionality into their day-to-day business applications so that people using them will know who they can contact if something goes wrong.

Final Thoughts

All too rarely does an opportunity like this come along that will allow CIOs to clearly demonstrate their value to the firm. As existing PBXs and data network components start to become obsolete, there has never been a better time to start to analyze WHEN will be the right time to upgrade to a unified communications solution. Your company needs you now…

Questions For You

Is there a driver that you can use to start to build a business case for upgrading to a unified communications system? What features does your firm need most urgently: voice features, instant messaging, location awareness, video conferencing, etc.? Who do you think will be your biggest booster in the firm? Who will be your greatest challenge? Why? Leave me a comment and let me know what you are thinking.

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What We’ll Be Talking About Next Time

The job of  a CIO and the IT department is to equip the rest of the company to move faster and do more. One of the ways that a CIO can do this is by staying on top of new and emerging technologie. One such technology is called Complex-Event Processing…

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Posted in communication | 1 Comment »

5 Things That CIOs Need To Stop Doing

Monday, June 15th, 2009

CIOs Need To Stop Doing Things That Hold The Company Back

CIOs Need To Stop Doing Things That Hold The Company Back

I firmly believe that the reason that any firm has a CIO is so that they have someone who can drive the company’s IT department to provide services and support that will enable the rest of the business to grow faster. It really is that simple – if you can leverage your IT department to support what the business is trying to do, then you’ll be more successful. Of course, this only works if the CIO is doing his / her job…

First You Need Respect

Bob Evans (no, not the breakfast sausage Bob Evans) over at InformationWeek has been thinking about why, of all of a company’s senior leadership, CIOs seem to be the ones who get the least amount of respect.

His conclusions are that the world at large believes that CIOs lack the business skills that are needed in order to have a seat at a company’s strategy steering table. It doesn’t help that all too often CIOs tend to talk using technology terms that seem to go right over the heads of the rest of the business.

If CIOs are to take the reins of the IT department and turn it into the engine that allows the rest of the company to move faster, then there are 5 things that they need to STOP doing.

#1: Stop Avoiding Customers

In order to provide the firm with the tools and services that it needs to meet the needs of its current and potential customers, CIOs need to be spending time meeting with customers. It’s all too easy to become focused on internal issues, cost cutting, and staffing challenges. Get out and talk to customers in order to find out what you REALLY need to be doing to support the company.

#2: Stop Avoiding Change

It is all too easy for an incoming CIO to adopt the “if it’s not broke, don’t fix it” mentality. However, even as you read this the world is being changed by the arrival of Twitter, the long rumored Apple tablet PC, etc. Changes of this magnitude mean that everything must be constantly reconsidered by the CIO in order to find ways to allow the company to move faster and perform better.

#3: Stop Doing Projects Based On “Gut Feel”

Microsoft is getting ready to come out with a new operating system. Should the firm upgrade all of its PCs? Good question. The answer lies in another question: how would upgrading those PCs help the company achieve its business goals? Could the money be spent on something else that would do a better job of achieving those goals? It’s the ability to justify projects based on solid business reasons and not “gut feel” that has been missing from the way that CIOs have been doing business.

#4: Stop Spending So Much On Support

We’re not just talking about money here, we’re also talking about time. Everyone seems to be hung up on the 80/20 rule when it comes to support / new business. Over at HP they’ve found a way to do it, so why can’t everyone else?

#5: Stop Supporting Stereotypes Of CIOs

Evans points out that both at the online version of CIO magazine as well as over at Fortune magazine, disparaging things have been said about the role that CIOs play in firms. CIOs need to stand up and push back – as long as reporters and press are allowed to push them around, they will. CIOs need to start to publicize the fact that their departments are powerful enablers that the firm desperately needs in order to stay ahead of the pack.

Final Thoughts

No senior leadership position is easy to perform these days. However, CIOs have the double burden of having to stay in front of a rapidly changing technological wave as well as being intimately connected to what’s going on in the firm’s business. This can be done; however, in order to be successful, CIOs need to stop doing things that produce more harm than good.

Questions For You

How often does your CIO meet with customers: once a week, once a month, or once in a blue moon? Does your CIO talk about change or does he/she actually cause it to happen? Does your CIO have the ability to turn off the technology talk and turn on the business talk? Leave me a comment and let me know what you are thinking.

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         The Accidental Successful CIO Blog is updated.

Coming Up Next Time

The role of a  CIO in any organization is to find ways to enable the company to be more successful. Underlying all of these different ways to assist the business there is one area that every CIO must master first: providing great internal communications. An opportunity to radically transform how a firm’s employees communicate has arrived and it’s time for CIOs to step up and lead the charge…

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Posted in CIO | 1 Comment »

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