Is there a fundamental problem in today’s IT? I believe there is, and it’s this: IT decision-makers are too often focused on the wrong things.
In a recent study, Forrester examined the top priorities, topics, and terms from a variety of data sources for both business decision-makers and technology decision-makers. What we found was a very clear — and to my mind, troubling — distinction between these two groups.
Business decision-makers focus on topics like growing revenue, improving customer satisfaction, and hiring, developing, and retaining the best talent. By contrast, IT decision-makers focus on topics like improving project delivery performance, improving budget performance, and cutting IT costs.
The fact that IT decision-makers have so little focus on business outcomes is one of the main reasons IT is seen as disconnected from the rest of the business.
The only way for CEOs and CIOs to fix this is to begin to measure IT professionals more in terms of business-outcomes and less on project delivery and system uptime. In other words, we need to measure IT professionals using the same KPIs we use to measure leaders across the rest of the business. This means we must begin measuring IT’s impact on things like the change in customer satisfaction (that’s the company’s customer satisfaction and not IT’s internal “customers” as some groups like to refer to other employees in the company), or the increase in sales, or the ability to attract and retain top talent.
The rapid rise of social media, cloud computing, and mobility in India has started to affect how organizations do business in the country. This is driving a fundamental shift in the CIO role as it moves from classic “plan, build, run” cycle management to a business-oriented, leadership-focused position. To gauge systems integrators’ (SIs’) readiness to support the changing CIO role, Forrester interviewed CIOs at 30 Indian companies and has just published a report on the same. For the purposes of this report, “Indian SIs” includes SIs headquartered in India and multinational SIs doing business in the country. We conducted interviews with CIOs in the form of open discussions; our aim was to determine CIOs’ opinions about their SIs, including how effectively those SIs are shifting to a more value-added, business-oriented engagement model. These interviews yielded some grim findings, as CIOs believe that SIs:
Don’t understand the business requirements of the CIO role. Only 28% of CIOs think that SIs understand their changing business requirements, while 70% of CIOs think that SIs focus too much on technology delivery.
Focus too much on upselling or cross-selling their products and solutions. SI teams, including account managers and consultants, usually focus more on promoting products and services; they have very little knowledge of what CIO and client organizations are looking for and don’t care to learn.
Lack the tools and templates to define the business value of emerging technologies. Most of the CIOs indicated that they believe that SIs are not able to define the business value of emerging technologies.
Last week I gave a Forrester webinar on open data in government. The premise was that while big data is changing business, open data is changing the business of government. Open data provides not only greater transparency through access to information, it also improves government decision-making and operations, enables new forms of constituent engagement, facilitates new services delivery, opens new avenues for economic development, and gives rise to new government processes. The presentation explored the evolution of the open data movement, providing examples of the government transformation it has enabled and best practices for launching an open data initiative gleaned from the early adopters.
There were a couple of great questions that came in via chat as we were ending the webinar. And, I wanted to make sure I addressed them.
Who should or could be the business owner of Open Data Initiatives?
What are good practices with regard to this organizational question?
My upcoming report on open data provides a few relevant recommendations:
Build the right team to manage and promote the initiative. The CIO of Honolulu picked a millennial as a deputy with clear marching orders: Keep me informed and don’t break the law. The new deputy was the father of the Code for America program in the city, ran the hackathon, and an unconference to gather input from the developer community. Ghent also needed new blood and knew that it needed to have civil servants willing to engage with the community, open to young people and developers. Engagement is a two-way street. They also forged strong ties with local university students to extend their team.
Government reforms will not positively affect IT spending until 2014. Forrester estimates that India’s IT purchases will grow by 9.5% in local currency in 2013. The Indian government is taking steps to reform initiatives and stimulate the economy in the wake of faltering economic growth caused by inflation as well as corruption, political gridlock, and lack of business investment. However, Forrester expects corporate spending to remain cautious ahead of parliamentary elections scheduled for 2014.
Increasing customer expectations will drive software spending. 94% of the Indian organizations surveyed in our Forrsights Budgets and Priorities Survey, Q2 2012 cited the need to improve their product and services capabilities to meet increasing customer expectations as their top business priority. We therefore expect increased investments in CRM, customer communications management (email marketing software, SMS communication software, etc.), and business process management tool solutions.
A number of Forrester analysts from the Asia Pacific region attended the recent SAP analyst event in Singapore. Meetings with SAP global and regional executives and a large number of detailed breakout sessions over the 1½-day event all clearly indicate that SAP is continuing to try and reposition itself as a true generalized application platform player.
At the core of (almost all) initiatives is the HANA in-memory database technology. Whatever the problem, HANA will solve it (said with tongue planted very firmly in cheek). While the technology clearly has immediate performance benefits, particularly for existing SAP clients, net-new customers will likely need to compare the value of SAP’s offerings with others much more seriously.
Back in the day when “network” meant “telephone,” AT&T either directly or indirectly controlled virtually the whole thing. Bell Laboratories served as the R&D arm of the organization, developing the equipment that Western Electric would produce for AT&T. In addition to the very practical work in things like insulators for cables (which are a big deal when the cable is running under the Atlantic Ocean), there was a small group who conducted the basic work that led to discoveries such as the transistor, practical lasers, charge coupled devices (CCDs), and information theory. Bell Labs built the first communication satellites – Telstar.
While it could be argued that AT&T did not reap all of the benefits possible from its inventions, the way that Bell Labs operated presents some useful lessons for organizations looking to improve their innovative capabilities:
Over the past 20 years, I’ve been involved in many process initiatives, working closely with business and IT execs. And I’ve seen some efforts work while others go south. But it’s only this year that I so clearly understood why some organizations zoom ahead in process transformation while others stumble, go in circles, or abandon the chase. My own big “ah-ha” moment came at a big business process excellence event in 2012, when I looked across an audience of 500-600 process practitioners and realized there were very, very few CIOs, IT leaders, or even technologists in attendance. Then I remembered some past technology events when my references to process technologies, techniques, or methodologies drew blank stares. Why was that? It was because few process experts were in the room! That made me start wondering — what’s wrong with this picture?
More and more senior execs are embarking on business process transformation. These new changes are catalyzed by many things: new business models made imperative by a new market leader, new threats or opportunities because of rapid changes in technology, a much more customer-centric business strategy, aggressive global expansion plans, or something else. As a result, many organizations are working to become process-driven by 2020.
In early 2013, I plan to continue researching the business/IT partnership for process transformation by . . . interviewing Chief Process Officers. I’ve only met two honest-to-goodness officially titled Chief Process Officers, although I’ve heard rumors of more, and I've talked with many who have that responsibility. If you are a CPO or know someone who would like to talk on or off the record, please send a note to email@example.com. Many thanks!
You may be wondering, what is a Chief Process Officer? My working definition is:
A chief process officer (CPO) is the senior-most executive reporting to the board of directors, CEO, or COO with responsibility for an enterprise’s business process transformation and continuous improvement initiative. The CPO works with executive counterparts to develop strategic goals and objectives for process transformation in alignment with the business strategy; identify 5-6 cross-functional processes for transformation; and identify business outcomes (based on the customer’s outside-in perspective on processes). The CPO oversees process governance, methodologies, training, and change management and helps other process owners within business functions. The CPO may have more than one title and one set of responsibilities.
Some reasons why CPOs are as hard to find as unicorns may be:
Most companies have not yet embarked on strategic business process transformation.
Senior executives (including CEOs and COOs) are doing this job already without the CPO title.
Other titles compete, like Business Architect, Sr. VP of Business Optimization, and Sr. VP of Process Improvement.
The 2013 New Year has begun with the removal from the global tech market outlook of one risk, that of the US economy going over the fiscal cliff. On New Year's day, the US House of Representatives followed the lead of the US Senate and passed a bill that extends existing tax rates for households with $450,000 or less in income, extends unemployment insurance benefits for 2 million Americans, and renews tax credits for child care, college tuition, and renewable energy production, as well as delaying for two months the automatic spending cuts. While it also allowed Social Security payroll taxes to rise by 2 percentage points — thereby raising the tax burden on poor and middle class people — and did not increase the federal debt ceiling or address entitlement spending, the last-minute compromise does mean that the US tech market no longer has to worry, for now, about big increases in taxes and cuts in spending pushing the US economy into recession.