Archive for the ‘IT’ Category

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Just How Good Is Your Company At That IT Stuff?

Wednesday, August 31st, 2011
Image Credit What's Your Company's IT Grade?

What's Your Company's IT Grade?

You would think that since all of these computers, networks, and software things have been around for so long that most companies would be just about even in how they make use of them, right? A recent study reveals that this is not the case: some of us are using IT to move the company forward and some of us are slipping behind because of IT. Want to know more?

It’s All About The Data

One of the primary tasks that every company assigns to their IT department is the collection and processing of data. In a survey that was conducted by McKinsey & Co. and the MIT Center for Digital Business it was revealed that CIOs are generally doing a good job on the first part of this task and not so good on the second part.

What the study revealed was that of the 330 U.S. companies that they talked to, the ones who were able to collect the data, process it, and then make use of the results showed the highest profitability and productivity. Although you would think that every company would be doing this these days, the survey showed that many companies don’t view themselves as being driven by data.

Process, Process, Process

I can see you thinking to yourself, “well that data stuff can be tricky, the CIOs should at least have the basics down pat”. Once again, you’d be wrong.

The survey showed that the areas inside the company where there have been countless case studies showing the benefits of doing a good job of applying IT such as HR, procurement, etc. would surely be taken care of. Somewhat surprisingly this is not the case. The majority of the companies that participated in the survey reported that they had done an inconsistent job of applying IT technology in these areas.

One of the reasons that this is the case may relate back to the simple fact that most companies reported that they did not have a good IT governance methodologies in place. This means that they don’t do a good job of prioritizing what IT projects get funded and implemented. I think that we can all agree on this conclusion!

Finally, one area that should be a no-brainer for IT is the implementation of best-practices. However, once again companies reported that these have not been widely adapted by most firms.

If there is any good news to be had in these findings it’s that as CIO it should be very easy for you to be viewed as being successful. There is so much basic work that still needs to be done at most companies that just by focusing on these types of projects you can cause the company to become more successful.

What All Of This Means For You

As CIO it is your job to harness the power of IT in order to move the company forward. The MIT study shows that not all of us are being successful in doing this.

Where there seem to be gaps in how CIOs are using IT solutions to help the company do more are in the areas of making use of data and processes. Just collecting the data that a company generates is a good first step; however, CIOs need to create and apply the right tools that will allow the company to process the data and use the results. Implementing best practice processes will allow the company to streamline its operations and move ahead of the competition.

The great thing about IT is that the tools of IT, the computers, networks, and software are all available to everyone. What you need to do in order to succeed as a CIO is find ways to use these tools to make your company good at IT.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: What’s the best way for a CIO to convince your company to implement best practices?

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What We’ll Be Talking About Next Time

Isn’t a global recession just great? For CIOs it has been: it pretty much got rid of one of their biggest headaches – having their star talent leave. Now that things are improving, a new challenge is starting to show up for CIOs: how to turn their Generation X workers into the IT leaders that the company is going to need for tomorrow…

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Posted in IT | No Comments »

Here’s What’s Really Wrong With IT And How To Fix It

Monday, July 28th, 2008

Information Technology (IT) is broken and here's how to fix it

No holding back this time, I’m just going to let it all come out. I just got done reading my 1,000th article on how to improve an IT department and it was as worthless as most of the others that I’ve read. For way too long I’ve been listening to gurus, consultants, and other so-called smart people who have proposed band-aid after band-aid to stop the hemoraging that is going on in IT right now. As an industry we seem to be going through CIO-of-the-month scenarios, my friends and colleagues are burned out and fed up, and now we’re learning that the next generation of kids don’t want to have anything to do with IT.


What’s Wrong With IT?
In a nutshell, we’re too different. Yeah, yeah, I know that we treasure our late start times, all night work sessions, flip-flops at the office and multi-screen desktops that sit in front of our original Star Wars posters, but it’s killing us. Foosball tables in the hallways, SQL command hierarchy charts on the wall, and action figures lined up on top of cube partitions don’t do a good job of saying “we’re part of this company”. Instead, they say “we’re different”. That’s the problem.

I’m not sure how this all started, but I blame air-conditioning. The early mainframe computers could only operate from within well air-conditioned rooms and so naturally the technicians who maintained and programmed them were placed in the same room or near by. This allowed them to be hidden from the rest of the company. Out of sight, out of mind. The action figures showed up, the dress code got thrown away, and the MIS team stopped trying to fit in.

Who Cares?
You do. Your career is going to be very short and you are going to be quite bitter when your IT job goes away. The company views you and your department as a cost not an asset and they are even now looking for ways to reduce the expense that is known as you.

The CIO cares because he/she just doesn’t seem to understand why none of the other executives really want to play with them. The reason is simple, the IT department is weird and so by extension the CIO must be weird and who really want’s to play with a weirdo?

What To Do?
In the immortal words of the hair removal lady in the movie The 40 Year-Old Virgin, “…this is going to hurt.” What needs to be done is that IT needs to look, act, and talk like the other parts of the company. I’m going to go one step further and say that the role model that they need to follow is the finance department. “Ouch!” you say. Yep, put the long sleeve shirts back on, jettison the foosball table, take down the star wars posters, and let’s all get back to moving the company forward.

The thinking behind this is simple: who do we like to work with? We like to work with people who are like us. That means that if the IT department really wants to align itself with the rest of the business, then it needs to start to look like, sound like, and act like the other departments. The finance department is generally well respected and has the ear of the senior management team so they are a great role model for the IT department. In fact, the IT department should try to be viewed as finance’s “brother department” — if you’re talking to one, you should be talking to both.

What would this do for a CIO? First it would instantly boost his / her respectability. All of a sudden everyone would realize that the CIO and the IT department were really part of the company and that they were working to make a profit also. This would allow the CIO to start to take on different information management tasks that showed real value to the company. Finally! Alignment would be possible.

Don’t get me wrong here, I like foosball as much as the next IT staffer. However, I believe that the “IT markings” need to be taken down so that we can blend in with the rest of the company. There should be some special place buried deep within the IT department that can be turned into a shrine for IT. This is the place where the IT employees can go to indulge in IT talk and, perhaps, play some foosball. However, once they leave this special palace, they should re-enter a workplace that looks like they are a part of the rest of the company.

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Posted in align, alignment, CIO, finance, IT, jargon, weird | 26 Comments »

Breakthrough IT Strategy: Take A New "Path" To Success

Monday, July 21st, 2008

Shinsei Bank Used Paths To Implement Successful Enterprise IT Projects

Businesses today spent roughly 5% of their gross revenue on IT and end up with very little to show for it. A couple of very bright guys over at the Harvard Business School (David Upton and Bradley Staats) have come up with a new approach to Enterprise IT Projects. They started their research from Eric Raymond‘s (programmer / open source champion) point-of-view: most IT projects are built using the Cathedral Approach:

  • they cost a lot,
  • they take a really long time to create,
  • and they only start to deliver any value after they are all done.

The Harvard guys believe that they have come up with a different approach that slashes costs while at the same time boosting the existing business and even making it easier to launch new ones. Sound interesting? Read on!

The new IT strategy is called the “path” approach. It assumes that there is no way that you can define all of a system’s specifications at the start of a project and so instead you just focus on laying out a path for the system to be further developed over time.

As a proof that this approach works, they studied the Shinsei Bank which is a a Japanese bank. In 1998 Shinsei was in a bad spot: it had had gone bust and (due to bad loans — sound familiar?) sold to the U.S. private equity firm Ripplewood Holdings. The very smart guys at Ripplewood got Masamoto Yashiro (former chairman of Citigroup Japan) to be the CEO of this struggling bank. Yashiro decided that Sinsei needed to compete based on a strong IT department. Here’s how they used a path-based approach to do it:

  1. Instead of implementing a new “big bang” set of business software, they took a different approach. They build a modular infrastructure that would allow them to put pieces in as needed.

  2. They build new systems that mimicked the old existing systems that the bank was already using. This allowed them to switch folks over to the new system and then make gradual improvements without requiring extensive retraining.
  3. They helped to ensure that the IT department was integrated with Sinsei’s business strategy by having the CIO report directly to the CEO. Note that this is different from many U.S. firms where the CIO reports to the CFO and is effectively “hidden” from the CEO.
  4. The Sinsei business unit heads spend a lot of time learning to “talk IT”. This helps to break down internal communication barriers.
  5. Sinsei IT application development projects start by focusing on the foreseeable business objectives — not the existing business environment. In other words, they think about how they want things to work, not about how they can automate how things currently work. The IT strategy is then built to meet this forecasted future.
  6. This is key: the Sinsei business folks tell IT what they need. IT creates prototypes and has the business side use them. This causes feedback and new possible solutions are identified.

Finally, the Harvard boys identified three characteristics of a path based IT solution that will allow it to succeed:

  • Use a minimal set of standards: pick a few and stay with them. This will reduce costs and simplify the entire project.

  • Create Simple Reusable Solutions: This can be as simple as taking each IT problem, breaking it down as far as it can possibly go, and then implementing solutions to those individual problems. When the low-level problems are connected together you’ll have a flexible solution that can be easily adjusted if any component changes.
  • Create Solutions With Modularity, Not Just Modules: Getting back to the original definition of modules, this simply means that you can tinker inside of one module without impacting any of the other modules that make up a complete solution. A good example of this is to create a solution that can be rolled out in phases. This limits your risk, allows users to get used to the new business software, and allows time for changes to be made.

The Harvard boys conclude their study with one final note of caution: if you want to build on what you’ve accomplished with an IT project, then you need to ensure that you have the committed involvement of your end-users. Otherwise you can expect to fail. In the end, the Shinsei bank is doing quite well due in part to its strong IT department. The realization that most large IT projects end up failing due to internal resistance instead of any technology issues, the path based approach to IT projects has allowed Shinsei to completely re-invent itself.

Tags: enterprise systems, IT, Shinsei Bank, modular software, CIO

Posted in CIO, enterprise systems, IT, modular software, Shinsei Bank | 3 Comments »

From Plumber To Partner: How IT Can Become Part Of A Company’s Success

Wednesday, July 2nd, 2008

How To Make IT Less Like A Plumber and More Like A Partner

Current industry wisdom estimates that companies end up spending 5% – 10% of their gross revenue on all things related to Information Technology. Ouch! That means for every $1M in revenue, the IT cost could reach up to $100,000. You do the math!

In a recent article in Baseline magazine, Cary Westmark who is the VP of Technology for golf course management firm Troon Golf talked about what he’s done to make IT a key part of his company’s success. I liked one of his points about simply changing the vocabulary used withing the IT organization. How many times this week have you heard the phrases “cost savings”, “expense avoidance”, “improving the bottom line” used in your department? If you haven’t, then perhaps it’s time to start using them.

Cary realizes that IT spending is sorta like trying to run up the down escalator: it will get you further ahead for awhile; however, your advantage will dissipate as your competitors adopt the same technology that you are using. However, the steady and continuous application of IT to real business problems can result in reductions in operating costs and can improve efficiencies. Cary goes on to revel his top 6 suggestions for making IT a vital part of the way a company does business:

  1. TCO – Live It, Love It, Learn It: the rest of the company is always talking about Total Cost of Ownership (TCO) and IT should be doing the same. Within IT we realize that the cost of a server is not just its purchase price. Rather it’s the purchase price + operating system maintenance + electricity + cooling + 3rd party software costs + etc. Some studies say that the cost of just powering a server are 3x the initial purchase price over the life of the server. An IT device’s life expectancy is roughly 3 years — after that everything starts getting much more expensive (Windows 95 support anyone?). Having an IT plan to refresh your IT assets is key to managing these costs.

  2. Standards Rule!: How did Southwest airlines get to be such a successful airline? One of their main secrets is that they fly only one type of airplane — Boeing 737s. This simplifies pilot training, maintenance, ticket sales, etc. The more standardized you can keep your IT environment, the easier it becomes to manage. Standardizing also allows you to (1) reduce costs and (2) buy hardware/software in bulk and get bigger discounts. Once again, industry wisdom is that by standardizing you’ll need only 1/5 the support staff that you would need to be paying for otherwise.
  3. Pull It Over Buddy – Software License Management: This is an issue that nobody likes to talk about because we all suspect that we are probably using software that we don’t have a license for. The flip side of this is that we are probably paying for licenses that we aren’t using. Getting this issue under control and presenting it to the rest of the company as a cost savings program helps IT to better align with the rest of the company.
  4. To Outsource Or Not: Welcome to the 21st Century where everyone needs to be considering how much of their IT operations they should outsource. Cary uses the following metrics to make project by project outsourcing decisions. If a job will last at least 12 months and will require more than 700 hours of effort, he hires an employee to do it. If the role is part of a strategic project (e.g. custom development) he once again uses employees to do it. Everything else is up for outsourcing consideration.
  5. Custom vs. COTS: Developing a customized application to support a part of your business is very much like having a baby — it signs you up for a lifetime of responsibility. Implementing large enterprise applications can be difficult and they are constantly undergoing changes. Here’s a different way of looking at things: use commercial off the shelf (COTS) products and instead of changing them to fit your business, change you business to fit the products. Every time that you can do this, the savings in development and support will make the effort well worth the pain of change.
  6. Data Center or Closet?: Where should you put your precious servers? The instinctive IT answer is to co-locate them in a data center. However, if you only have a few servers, then perhaps creating an on site computer room will allow you to save roughly 50% what co-location would cost. Please remember: if you use a computer room, you will need to have a very good off site data backup plan.

There you have it. Six simple tips on how IT can adapt and become more of an integral part of how your company operates. Consider these just the starting point on your road to alignment success!

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Posted in business advantage, IT, revenue, success, TCO | No Comments »

Soft Work In Hard Times

Thursday, June 5th, 2008

Soft Skills Are Important For IT Workers
It would appear as though the U.S. economy is starting to pull out of it’s recent downturn; however, for those of us in the IT industry, this should serve as yet another wake-up call for both ourselves and our teams: technical skills alone are not going to cut it anymore.

Generally when I say that, heads start to nod. However, nobody seems to know that answer to the very next question: so what to do about it? For IT departments to transform themselves from where they are today to where they need to be tomorrow, there are a whole new set of skills that everyone needs to learn and the quicker, the better. You’ve heard this phrase before and you’re going to hear it one more time: soft skills.

More head nodding should be occurring right now. The big question is what soft skills do IT departments need to get good at? There are lots of these skills, but I believe that for IT they can be placed into five groups:

  1. Negotiation Skills: proving once again that its not what you know, but what you know how to get done that is most valuable to the company. As IT departments start to rely on outside vendors more and more, the ability to properly negotiate agreements becomes a must have skill.

  2. Communication Skills: being the best technical worker is of almost no value to the company if you can’t communicate what you are working on and the challenges that you are facing. Putting together a 100+ page PowerPoint deck does not mean that you can communicate. Using a three page PowerPoint deck to clearly communicate your point does.
  3. Your Business Knowledge: knowing what your business does, how it does it, and why it does it has become critical knowledge for all IT workers. Ultimately the goal is to align what IT does with where the company wants to go and knowing what the business side of the house is trying to do is key to being able to do this.
  4. Team Motivation Skills: knowing how to get a group of people to work together towards a shared goal has always been important and now it is a required skill. Everybody is understaffed and overworked. Having the ability to cut through all of the clutter and get folks to accomplish an objective makes you worth your weight in gold to the company.
  5. IT Product Management Skills: even if everyone is not a product manager, having the basic product management skills of scheduling, planning, and coordinating are critical to making sure that the project that you are working on is a success. Once the IT department is aligned with the rest of the business, missing delivery dates can have significant impacts on the company’s bottom line.

These are my picks for the top five must-have IT department soft skills, what do you think?

Posted in communication, IT, motivation, negotiation, product managment, soft skills | 2 Comments »

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