Starving People Will Find Food

In our Forrsights Business Decision-Makers Survey, Q4 2011, 79% of business executive respondents said that technology will be a key source of innovation for their company, while 71% said that it will be a competitive differentiator. So how well positioned is IT to help firms meet these expectations? Forty-six percent thought that their current IT organization was not well positioned to meet these needs, and 41% thought IT was overly bureaucratic.

I could go on with more data, but the message is clear — business is starving for technology to help it be more innovative, create market differentiation, and lower costs. In the midst of this, IT is mired in a technology mess created by years of underinvestment and business growth by acquisition. What’s going to happen?

The thing I want you to remember is something a client said to me not too long ago that stuck with me, “Starving people will find food.” So the question is: do we feed our starving business or tell them to stay on a diet? And if the latter, what will be the impact if they go scavenging the countryside? We think the answer involves flexibly and rapidly introducing new technology to take advantage of strategic opportunities, while still protecting data, mission-critical applications, and our most precious TCO reduction goals.

Over the last few months I’ve been piecing together Forrester’s agile technology introduction framework to help our clients do just this, and will be unveiling it at my talk on Agile Technology Innovation at the 2012 CIO/EA Forum in Las Vegas on May 3 and 4, and in Paris on June 19 and 20. In advance of that, I wanted to provide a sneak peek at its major components:

  • Watch. Industry and market trends, business capability gaps, and ideas are continuously monitored in a unified fashion and result in the development of a technology watch list that has enterprise visibility. The secret is not to do too much early — just watch, look for opportunity, and keep everyone in the know.
  • Fit. Once opportunities are spotted, such as a project need, or an infrastructure cost reduction play, the Fit activity involves evaluating how the technology plays within your current environment and developing a flexible plan.
  • Incubate. Not every watched technology will immediately be ready for sponsorship, even with a good plan. Incubate makes the funding and technical environment ready to conduct proofs of concept, or pilots to ensure that new technology capability, cost, and risk are acceptable for investment. Incubate and Fit can be done in parallel and/or iteratively.
  • Sponsor. Ultimately, new technology must be funded to introduce a production capability and return value. The goal of Fit and Incubate is to do enough to justify sponsorship, where somebody who controls resources agrees to the risk in return for the potential reward.
  • Measure and adjust. The framework does not end in sponsorship. The impacts of decisions to invest in new technology must be quantified and fed back into budgets, road maps, and the watch list. Assumptions about risk must be monitored and fed into implementation plans as well.

The framework is designed to be agile because the time from watch to sponsor can be really short if the case is strong and the risk is acceptable, or longer if the best approach is a future project on the road map. Fit ensures that your plan accounts for current state challenges, strategic road maps, and technology simplification goals, while providing flexible ways to enable new technology. Incubate ensures that there is a clear and fast path to the resources to prove ideas and understand the risk.

At the end of the day, it’s about moving from processes that slowly create only bulletproof solutions (because we are averse to risk) to ones where we move fast, are free to change direction, talk frankly with the business about risk and reward, and ultimately make the right decision.

Looking forward to your feedback here or at the forum.

Comments

Does IT need to "parent" their business colleauges?

You raise an interesting point. If you ask an IT professional, I think they will generally echo your sentiment. They see business people like kids in a candy story naively believing vendors that everything works as advertised and it is all wonderful and easy. We, who have to make it work know different. This tempts us to take a very parental attitude towards our business partners - something they probably don't appreciate. Our answer to the classic child's question of "why" is often answered, "because I said."
We need to get beyond that - the only way, in my POV, to really break through barriers to agility is to establish a trust relationship - when the vendors with slick, shinny tech toys some knocking, the business' reaction then becomes, "hey, let me check with IT and they'll give me the real scoop."
Unfortunately, we have done so many things to erode that trust over the years, that I fear many firms have a long way to go.

It's not what you said, but what you didn't say

I'm curious to hear about the 21% of business execs who feel that technology WON'T be a key source of innovation for their company. Curious what instead they're opting to innovate with, magic or faith perhaps? Or perhaps they feel they don't need to innovate. That tells a far more compelling story than the obvious 'technology can help you innovate'

Furthermore, I'm also curious to hear about the over 50% of respondents who felt their IT was not only capable of meeting their needs but also WAS NOT overly bureaucratic. I think their insight instead of those basically re-iterating the same story we hear every quarter and every year will help guide those who haven't adopted yet overcome those respective challenges. Otherwise this article basically says "Those who have Good IT will have Good IT and those who innovate will innovate regardless".

Just a few thoughts.

4% of the IT budgets are aligned with business strategy

Brian I do agree that more innovation is required to bring business and IT in alignment. However if the business is serious about IT becoming a source of innovation and value generation, they need to start operating within the flexible framework your post describes and invest in IT accordingly.

A recent study from Nucleus Research reveals that barely 4 % determine their IT budget in accordance with the company’s actual business strategy or an IT portfolio analysis. As a consequence, more than 90 % of the participants admit that they base their IT budget on industry benchmarks - as an arbitrary percentage of revenue - or simply tweak the previous year’s budget. The delivery of IT is a function of the budget; the budget should be a function of the required innovation.

You can read more about the study at http://bit.ly/rCUDbR

Interesting stat.

Wow,interesting stat. Thanks, and agree that 'IT' budgets don't reflect the expectation. Does the 4% include shadow IT budgets?

shadow IT budget

Hi Brian. Nucleus did survey 210 financial decision makers. The question of shadow IT budgets was not explicitly included in the questionnaire. As such the 4% is a number based on the insight that the financial decision makers have on the IT budgeting in their organizations. It would be interesting to know how big those shadow budget are in relation to the IT budget. Any industry figure you are aware off that gives some insight into that?