How Well Do You Understand Your Business And IT Strategy?

Whether you are a CEO, CIO, IT employee, or working outside of IT, you have some level of understanding of your organization’s strategy. At least that’s what I believe. But how much do you understand? To find out we’re conducting research across the enterprise to see how well employees understand business strategy and whether they have any idea about the IT strategy or even the IT architecture strategy.

As a reader of this blog, I know you are an innovative thinker and business-savvy — I’m hoping you will please take five minutes now or later today to help out our research by taking part in this survey, no matter where you work or what your role is. Even if you cannot take the survey, you can still help by sharing a link to this post (http://bit.ly/cioblog29) with friends, colleagues, and associates who you think may be interested in the results.

 The survey examines a number of aspects of business and IT strategy, such as:

  • How well defined and understood is the business & IT strategy?
  • How well understood are the measures of strategy success?
  • What time horizons are most common for strategic planning?
  • Frequency of planning updates
  • The perception of IT (from inside IT and from outside IT)
  • The maturity of enterprise architecture planning
  • Social technology strategy

I'll be writing future blog posts here based upon the data we gather as well as sending participants a summary of the results. 

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Why CEOs Should Stop Limiting IT Budgets

CEOs should stop limiting IT budgetsAs CEOs put IT budgets under pressure year after year, CIOs and their teams focus on balancing money spent on running the business (RTB) versus money spent on growing the business (GTB). By decreasing the percentage of their budget spent on maintenance and ongoing operations (RTB), they aim to have a greater share of their budget to spend on projects that grow the business. In the best IT organizations, the ratio can sometimes approach 50:50 — however, a more typical ratio is 70% RTB and 30% GTB.

Unfortunately, such practices suggest an incremental budget cycle — one that looks at the prior year’s spend to determine the next year’s budget. While this may be appropriate for the RTB portion of the IT budget, it is far from ideal for the GTB portion. Incremental budgeting for GTB results in enormous tradeoffs being made as part of the IT governance process, with steering committees making decisions on which projects can be funded based upon the IT and business strategy. Anyone from outside of IT who has worked through IT governance committees understands just how challenging that process can be. And the ultimate result of such tradeoffs is that sometimes valuable projects go unfunded or shadow-IT projects spring up to avoid the process altogether.

How CEOs Can Get More Value From IT

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A Tale Of Three Software Vendors: Microsoft Up, IBM Lagging, SAP In Between In Q2 2010

To paraphrase Charles Dickens, Q2 2010 seemed like the best of times or the worst of times for the big software vendors.  For Microsoft, it was the best of times; for IBM, it was (comparatively) the worst of times; and for SAP it was in between.  IBM on June 19, 2010, reported total revenue growth of just 2% in the fiscal quarter ending June 30, 2010, with its software unit also reporting 2% growth (6%, excluding the revenues of its divested product lifecycle management group from Q2 2009).  Those growth rates were down from 5% growth for IBM overall in Q1 2010, and 11% for the software group.  In comparison, Microsoft on June 22, 2010, reported 22% growth in its revenues, with Windows revenues up 44%, Server and Tools revenues up 14%, and Microsoft Business Division (Office and Dynamics) up 15%.  And SAP on June 27, 2010, posted 12% growth in its revenues in euros, 5% growth on a constant currency basis, and 5% growth when its revenues were converted into dollars.

What do these divergent results for revenue growth say about the state of the enterprise software market? 

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Jive Looks To Play With The Big Fish

This week, Jive Software, a leading player in social technology, announced it has closed $30 million in Series C financing, with Kleiner Perkins Caufield & Byers (KPCB) joining Sequoia Capital as the company’s venture investors.

So what does this mean for CIOs and IT, the custodians of enterprise technology architecture?

It is clear Jive wants to play with the big boys in the enterprise software space. To date, many Jive deployments have not involved IT. This ability to deploy its technology without IT’s involvement has no doubt helped Jive to this point. Of course, having market-leading functionality hasn't hurt. (Jive has featured highly in recent Forrester Wave reports).

At the recent Enterprise 2.0 conference in Boston, I sat down with Jive’s new CEO, Tony Zingale, to explore the company strategy. From our discussion, it was apparent that Jive intends to compete for a big slice of the enterprise collaboration marketplace. Fundamentally, this is the right direction for Jive, but I foresee some big challenges for the company along the way.

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Green IT Adoption Is Driven by Business, Not Environmental, Considerations

I've been leading Forrester's efforts in sustainable computing and green IT for the past three years, with a particular focus on the role of IT professionals and assets in furthering corporate sustainability initiatives. We work with many clients — both supplier and buyer organizations — to improve the adoption, governance, and communications of their green IT and overall sustainability programs and policies.

One of the centerpieces of Forrester's ongoing research in this area is our survey of IT practitioners at enterprises and SMBs worldwide. We have done the survey twice each year since 2007, and it provides a fascinating window into the motivations, depth, and breadth of corporate commitments to greener IT processes and into IT's role in broader corporate sustainability efforts. I want to share two results from our latest survey (conducted in April 2010) and briefly discuss the implications of those findings. 

 

At first look, the data in Figure 1 (click image for a larger version) is not-so-good news for those of us evangelizing and implementing green IT. Simply put, sustainability and energy efficiency rank low (No. 10 out of 11) on IT's priority list. But let's look a little closer at some of the other priorities our survey respondents identified.

"Improve the efficiency of IT" ranks No. 1. That should be directly related to green characteristics of assets and processes, particularly in terms of energy usage. And look at No. 5 on the list, "Define strategy for risk and compliance." This also directly relates to green IT initiatives for e-waste disposal, carbon reporting, and the like.

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Three American Leaders In Green IT And Building Technology

Watching the World Cup over the past few weeks gave me a new appreciation for soccer/football/futbol. Imagine passing, catching, shooting a ball with NO HANDS.

The goal that Ghana scored in overtime (sorry, "extra" time) to knock out the USA was, sadly, prettier than anything that Tom Brady or Jerry Rice could do with an American football.

So my national pride took a hit as the US was eliminated — fortunately it got a boost in an unexpected way on a trip to a client's event later that week. I spent the day at Panduit Corp.'s new company headquarters outside of Chicago, speaking to their executives and customers on my favorite topic: the role that IT leaders and IT organizations can play as enablers and catalysts of corporate sustainability initiatives.

In the course of Panduit's headquarters-opening event, I got a chance to visit with three companies with a lot in common: privately-held, headquartered a long way from Silicon Valley or Route 128, and family- or founder-led. Not the usual characteristics of innovative, high-tech firms. And yet all three are at the front edge of technologies being used to make buildings and data centers more efficient and less environmentally impactful:

Lutron of Coopersburg, Pa., founded in 1961 by the inventor of the rotary dimmer switch. A supplier of leading-edge lighting systems for green buildings. The lighting in the building's conference rooms and public areas was calm, cool, and extremely energy-efficient.
 

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What Do Business Strategy And Formula One Racing Have In Common?

Many companies are at the height of the IT strategic-planning season. For some, this is an annual ritual tied to the budgeting process. For others, this is part of a long-range planning process, with an annual review to check on progress. Still other CIOs are approaching the development of an IT strategy as an integral part of an ever-evolving business strategy, with regular adjustments as the business units flex and respond to market changes. Whatever your perspective, it’s apparent that in the past executives outside of IT have given scant attention to the machinations of the IT strategy — but this is surely changing.

The operational performance of any business unit is now so heavily dependent upon the effective and efficient deployment of appropriate technology that planning a business strategy without also planning technology strategy is like planning to win Formula One without any telemetry. You can’t even get to the starting grid.

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Despite Fears About Economies In Europe And US, Forrester Still Forecasts A Strong 2010 IT Market, With 7.8% Growth Globally

Expectations about economic growth prospects and the resulting implications for tech markets have been gyrating wildly in 2010. First, there were fears that the Greek debt crisis would spread to Portugal, Spain, Italy, maybe even the UK, leading to a breakup of the euro zone and a renewed recession in Europe. Then, as worries about Europe started to ebb after Greece and other countries successfully held debt tenders, the slow pace of job growth and weak retail sales in the US sparked concerns that the US was facing a double-dip recession.

What should a tech market watcher make of this uncertainty? As I read the economic and tech market indicators, I see more news that is in line with our expectations than not; where there have been surprises, they have been more often positive than negative. Economic recoveries seldom move in a straight line, so I did not expect to see an unbroken string of good news. Moreover, because of the imbalances that caused this downturn (too much consumer spending in the US, housing bubbles in the US and several other countries, too much debt), I expected the US economic recovery in particular to be relatively weak, with real growth rates of 2% to 3%. True, European economic growth — in large part due to the effects of the Greek debt crisis — has been weaker than expected, and the euro dropped much more against the US dollar then I had assumed. On the other hand, economic growth in Asia Pacific and Latin America has been stronger than I expected, and many of the currencies in these regions have risen in value against the dollar. Lastly, the indicators of the tech market itself — both US and other government data on business investment in technology (where available), as well as the vendor data from earnings releases for calendar Q1 2010 — has generally been stronger than our forecasts.

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How Are You Using iPad For Business?

We are getting many requests for help on iPad strategies for the enterprise. It's clear why. iPads are a tremendously empowering technology that any employee can buy. My colleague Andy Jaquith has a report coming real soon now on the security aspects of iPhones and iPads, and I'm launching research on case studies of iPad in the enterprise.

I am currently hearing about three business scenarios for iPad and tablets, but I'd love hear of your experiences, plans, concerns, or frustrations. Ping me at tschadler(at)forrester(dot)com. Here are the three scenarios:

  1. Sales people out in the field. This is the "Hollywood pitch deck" scenario. The iPad, particularly with a cover that can prop it up a bit, is a great way to scroll through slides to show a customer or demonstrate a Web site. In one situation, I heard that there's a competition brewing for who can manipulate the Web site upside down (so the client across the table sees it right side up) without making any mistakes. Now there's a new skill for sales: upside down Web browsing.
  2. Executives on an overnight trip. No, iPad doesn't replace a laptop (at least not yet; more on this below). But it's great for email, calendar, reviewing documents, and presenting PDF or Keynote decks.
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Social technologies: Standalone Applications Or Features?

During CScape at Cisco Live, one of the more interesting conversations I had started with a simple question: Is social software (and collaboration software in general) a set of standalone applications or features of other business applications? This sprang from a discussion on the future of the collaboration technology business and really speaks to a couple of important developments in the market:

 

1) Collaboration platform vendors incorporating social features into their offerings. Anyone who's followed my research and my blog posts knows this story: Cisco, IBM, Microsoft and Novell (amongst others) have released collaboration tools that include robust Web 2.0 technologies such as social networks, tag clouds and blogs. This has led to a maturing of the messaging of pure-play vendors - going from "we have the best social software" to "this is how we solve a specific business problem."

2) Business applications that power business processes are becoming social. Another recurring theme in my research is corporate interest in (and fear of not having) enterprise 2.0 technology has led business application vendors to jump into the market. As these vendors do so, they are seeking out tools to help them make their applications social. The inclusion of business application vendors, though, has put more pressure on the pure-play vendors to find a niche that will allow them to compete with vendors that have sure footholds in businesses.

 

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