In August this year I am heading down to our nation’s capital to take part in the annual itSMF Australia event – LEADit. I have taken part in this event to a greater or lesser extent over the past few years across Australia – Sydney, Perth, the Gold Coast and now Canberra. As an analyst who broadly covers the Service Management space (as well as a previously ITIL qualified practitioner), this event is the mecca for those interested in service management in Australia.
Year after year at this event, I see a fair amount of change in the content and focus, but little change in the thinking, and little real movement in the implementation or improvement of the processes – a recent survey between itSMF-USA and Forrester displays the current maturity levels of processes in organisations:
Here we are – years (decades?) after the first ITIL books were written, and demand management is STILL immature. Even financial management has barely shifted in maturity over the past few years. Why is this the case?
UPDATED 26th June 2013 As you may be aware Microsoft has finally introduced its Office Suite for the iPhone (launched in the US on Friday 14th June, and now available in much of the rest of the world according to my sources). This is great news — it has been one of the real holes in the iOS application store and in high demand in many businesses we speak to (although will be MUCH more valuable when it's available as a native iPad app). Over the next week or so it is likely that many of your senior executives will read this news — as it has already made the consumer press. Soon they'll be knocking down your door asking how to get access to it.
However, the licensing model that Microsoft has chosen is one to encourage the uptake of the Office 365 Suite. ONLY those users with a MS Office 365 license will be able to activate the apps on their iPhone. This may mean a significant licensing impact for you. If, like many companies, you have not yet made the move to Office 365, your company’s employees will not be able to use the Office apps on their iPhone. There is a big risk here that you will see employees activate the license themselves and charge it back through the traditional expenses channel. And if senior management are doing it, it is hard for them to say no to the more junior ranks.
I reached out to Duncan Jones, one of our resident sourcing pros and Microsoft licensing experts to get his analysis of the situation. Here are his thoughts:
Last week, Forrester hosted a breakfast roundtable in Sydney for approximately 20 tech vendors seeking to capitalize on current IT spending trends in Australia and New Zealand. With expected IT spending growth of nearly 4% in 2013, the A/NZ market is still going strong. However, this good health hides major shifts, including the increased role that business decision-makers (BDMs) are taking in direct IT purchasing in areas like staff, products, and services. As a matter of fact, Forrester expects the percentage of IT budgets that IT directly owns or controls to decrease by 2% to 5% between 2012 and 2014 in most A/NZ organizations.
Forrester’s Asia Pacific team is working at a fast and furious pace preparing for our CIO Summits in Singapore, Sydney and New Delhi throughout September. As the content champion for the event, I have been working with about a dozen regional CIO speakers to prepare presentations on their journeys from IT to Business Technology, which is the focus of our summits.
Our distinguished line-up of CIO speakers provides an insightful cross-section of the countries, cultures and industries they span. As they all embark on their respective BT journeys, it has become clear that they must each chart their own course and sequence activities in a way that makes sense for their unique circumstances. Nevertheless, across these varied landscapes I have identified three key themes that are critical to the BT journeys regional CIOs will be forced to make:
Taking Care of the Basics: Although innovation and the power of BT are alluring, the BT journey starts with some basic plumbing. All of our CIO speakers have emphasized that their BT journeys wouldn’t have taken the first step without first ensuring they were doing the basic things well. They cannot convince the CEO that they deserve a seat at the table of business strategy without showing they know how to handle the basics first. In our Singapore Summit, Krishnan Narayanan, Managing Director and Head of IT at UBS will share his experience and provide recommendations for setting a solid foundation to enable the BT transition.
As regular readers of my blog will know, I’ve been talking about moving beyond alignment for a number of years now. The fact is, too many CIOs have been able to get by on the basis of managing the technology black box — and CEOs and CFOs have been complicit in allowing these same CIOs the freedom to do what they want within tightly controlled budgets, not wanting to sully their hands with “all that technology stuff.” But those days are rapidly coming to an end. The technology genie is out of the bottle; today’s business-unit leaders are more dependent on technology than ever before, and they are also much more tech-savvy. CIOs can no longer hide behind the technology black box — it’s time to change the IT game forever. It’s time for IT to drive business results and connect all technology investments to business outcomes.
Today’s new CEOs are looking to CIOs and IT to make a direct impact on business goals from investments in technology. While every business must make technology investments to sustain operations, IT must move beyond simply keeping the lights on and connect the dots between effective growth strategies and new technology investments. This requires a different set of technology and business skills: different people, process, and technology in the IT organization. In fact, the organization is so different we now call it the business technology organization, or BT. The distinction between IT and BT is subtle but important. BT represents the fusion of the IT organization into the rest of the business. In a BT organization, the lines between IT and business units are blurred. What is important is a focus on the roles needed for effective business technology strategy execution. What’s not important are reporting lines.
There is no doubt that Agile growth in the market is significant, and the growing daily number of inquiries I’ve been getting on Agile from end user organizations in 2012 gives me the impression that many are moving from tactical to strategic adoption. Why’s that? Many reasons, and you can read about them in our focused research on Agile transformation on the Forrester website. But I’d like to summarize the top five reasons from my recent research “Determine The Business And IT Impact Of Agile Development” :
Quality was the top — quite astonishing, but both the survey we ran across 205 Agile “professional adopters” and the interviews across some 21 organizations confirmed this. My read is that this is about functional quality.
Change was second to quality. We live in an era where innovation strives and organizations are continuously developing new apps and projects. But your business does not necessarily know what it needs or wants upfront. The business really appreciates the due-course changes that Agile development allows, as they enable the business to experiment and try out various options so it can become more confident about what is really right for the organization. Cutting edge cutting edge systems-of-engagement (Mobile, Web-facing, Social-media, etc) require lots of Change in due course.
Yes, that’s right — I’m suggesting CIOs should stop working on IT strategy. The days of developing a technology strategy that aligns to business strategy need to be behind us. Today’s CIOs must focus on business strategy.
Let’s face it: Does sound business strategy even exist today without technology? Most CEOs would likely agree that, unless you are running a lemonade stand, any successful business strategy must have solid technology at its core. The challenge for today’s CEOs is that, while planning business strategy in isolation from technology is sub-optimal, it remains the most common way business leaders develop strategy. And while there have been many great books about strategy, the specific challenges facing the CIO are largely absent.
I had an interesting conversation with a Forrester client in response to an inquiry about the definition of “time to value” for technology solutions. When I received the question, I thought, “That’s easy!” While there is no “GAAP” definition of time to value, I was ready to say that it would be one of two things:
1- The time from project start to the start of business benefit accrual. So, if a project took 12 months to implement, and then three months for the business to adapt to it, the time until business benefits began to accrue would be 15 months.
2- The time from project start to the date at which cumulative business benefits exceeded the cumulative costs. In other words, the time until the “payback” of the investment.
However, in trolling around to make sure that I hadn’t missed anything, I stumbled upon a potential third definition (and I wish I could point back to the source). One commentator on the Web suggested something a bit different – and something that has a great deal of merit as we rely more and more on technology to drive business gains. In his definition, time to value represented the time until the business targets for the solution were achieved. So, rather than looking at the start of benefits, or the date we’re no longer cash-negative, we are now looking at the time until the full desired benefits are achieved. So this becomes:
3- Time to value is the time from project initiation until the projection of total business benefits is achieved.
This change in perspective has a number of implications:
It's time to re-think the report card used by CIOs to report on BT performance – tomorrow’s BT CIOs must look beyond the traditional IT Balanced Scorecard (BSC).
I realize this is sacred ground for many people in IT (and some of my colleagues here at Forrester), so let me explain myself before I receive a barrage of complaints. The philosophy behind Business Technology (BT) recognizes technology as integral to every facet of every organization – as such, IT is very much an integral part of the business; we can no longer talk about “business” and “IT” as if referring to two distinct things. I’m suggesting that in the age of BT, we need a new scorecard that better reflects the impact of BT on the business.