Are IT Benchmarks Useful?

by Marc Cecere

 

Recently, Forrester surveyed a number of CIOs to collect benchmark data on staffing ratios and spending. This is a new initiative within Forrester and one that is not yet complete. We did this for three reasons:

1. Benchmark questions (called inquiries at Forrester) on staffing have become relatively common. Examples are “Can you tell us the average share of IT Staff as a % of total staff by organization size” and “Would you have specific spending figures for IT infrastructure?”. 
2. This kind of data in conjunction with other data and analysis can identify problem areas. 
3. Staffing benchmark data along with spending and other data are objective measures of IT organizations. 

Though our initial sample size is small a preliminary view of the data shows that:

• The number of people in apps is somewhat higher than in infrastructure. 40% of IT people are in applications organizations, whereas 30% are within infrastructure.
• People providing strategic functions were a very low percentage of the IT organization. Planning, PMO (excluding project execution), vendor management, relationship management, were individually below 1% of the organization. Architecture was the largest of these functions and consisted of approximately 1% of the IT organization.
• The number of people working on enterprise projects varied by a lot, but in nearly all cases were a significant part of the IT organization at an average of 10% in medium sized shops (50 to 300 people in IT) and 5% in large shops (> 300 people within IT). 
• HR is almost non-existent within IT shops. Whether looking at HR as a part time or full time function, the mean was significantly less than 1%.

Though this is just an initial step, we see an obvious benefit for clients to compare their organizations against similar ones and identify outliers. This comparison will not be sufficient to make decisions about over- or under-staffing, but it can identify areas where further analysis is needed. Similarly, clients could use this data to support a business case for making changes in an organization. Looking at this from the analyst’s perspective, we see a rich source of objective data to complement other sources that we’ve been using for years. Interviews, inquiries and consulting provide analysts with highly granular information on what works and doesn’t for CIOs. However, this is subjective information based on opinions. Combining this subjective, but highly granular and nuanced information, with hard numbers, should give our research (and therefore our clients) a more complete picture of how IT shops are working. 

For this initiative, we are particularly interested in our client’s view. Would it be useful to you? How would you use it? What experience have you had in the past with benchmarking that would help to guide us?

The CIO And Social Media: Social Evangelist?

by Nigel Fenwick

Following on from my last post - "The CIO And Social Media: Social Police?" – you might have guessed I’m a big proponent of Social Computing to drive organizational transformation and increase profits.

The thing is, I wonder how many CIOs see themselves as social evangelists.  You’re a CIO: Are you on Twitter? Do you have a full profile on LinkedIn? How about Facebook? Do you understand how your marketing organization is leveraging social media? Does the CIO have a role as Social Advocate in the organization?

I believe one important role of the CIO is to help peers in the business to better understand just how transformational social media can be to helping increase growth and/or drive productivity to improve the bottom line.

I encourage CIOs to support trials; facilitate experimentation and provide the IT services support to the business units willing to tap into Social. Partner up with the CMO and get going - don't wait for the business case (heresy I hear you say) - but that would be like asking for the business case for email or for the phone; you could probably do it but why bother - this is table stakes in 2010. When was the last business case you saw for buying a PC?
 
The fact is, until you get in the game you really won't understand the potential.  The closest thing in recent times would be the evolution of corporate websites - in the early days some companies saw the power of the Internet and embraced it - some even changed business models using it (Amazon, eBay), while others couldn't see the business benefit and waited till having a website was no longer an option. (If you want to read about justifying social media from a marketing perspective Michael Green published research on this in Feb).
 
I'm not advocating you ignore basic principles such as aligning the goals of the project to positive business outcomes and measuring results  - that's essential for success - but the fact is any benefit numbers you and your business partners come up with in terms of a business case are more than likely a wild guess at best - you need to get some experience first.
 
While you are at it, you might want to find out what your organization is already doing - the chances are there at least a few covert social media projects underway already without IT's involvement.
 
If you still have doubts on this I have two suggestions for you:
1. Read Groundswell to see real case studies on how companies are winning with social media – it’s a great book and a really easy to read, packed full of examples
2. If you don’t have time to read a book, take a look at Josh Bernoff's recent blog post on the winners of this year's Groundswell awards
 
In Josh's post you will see concrete examples of what companies are doing with social media and real, tangible business benefits such as how NASCAR reduced it's research costs by 80%; how Lion Brand Yarn showed people using it's social media site were 41% more likely to buy yarn at the website; how FICO dramatically decreased it's support costs and increased revenue; how UPS attracted 345,000 job applications at 75% lower cost than traditional newspaper advertising; how MetricStream created a portal with 500,000 users that generates 30% of the company's sales leads.

Am I being deliberately controversial? Maybe. I’d like to hear your opinion, especially from CIOs.

I’m writing a research report on the role of the CIO in Social Computing, so if you are a CIO and have examples of how you have helped your organization embrace social computing please post your comments on this blog & join the research group on LinkedIn. 

Follow me on Twitter @NigelFenwick

The CIO and Social Media: Social Police?

by Nigel Fenwick

What is the CIO's role in driving social media into organizations? Listening to many of our clients it seems that it is often that of "social police" - IT gets asked by legal to block any and all social media applications. While in some cases security concerns drive the decision, in others it's deemed a compliance issue.  There are also those who believe blocking social media improves productivity.
 
The trouble with this approach is that it assumes social media can and should be stopped with technology. The fact is many people are already using web-enabled social applications in the workplace on their own personal smartphones (see "SmartPhones and Telecommuting: Workforce Adoption 2009"  by Ted Schadler). 
 
Perhaps the problem is we are thinking of social media interaction in the same way we think of all other   digital communications. What if we were to think of social interactions on applications such as Twitter or Facebook in the same way we think of conversations; both are transient in nature.

I personally agree with the suggestion of at least one CIO I heard last week: we should be trying to police social applications through policy and training rather than using technology. Just because we have the ability to record every phone conversation doesn't mean we should. Shouldn't we take the same approach with social? By setting clear policy on the use of social media and training employees are we not likely to have an equally effective approach to blocking breaches? At the same time it would allow our organizations to benefit from social media.
 
There is also the risk that by blocking it we are giving a huge advantage to our competitors who figure out how to embrace it. Like many others, I believe social media is going to have as big an impact on society and business in the next decade as the Internet did in the 90's. Remember all the IT people in the 90's who said there was no role for the Internet in business? What about all those people in IT in the 80's who said there was no role for the PC in business? These waves of technology transformation have a way of becoming inevitable no matter what we do to try and block them.

The thing is, social media is too big to block. Sure, we can put in place technology to plug a leak in one place, but it's likely our creative colleagues will simply find another way to access social technology covertly.
 
Am I being deliberately controversial? Maybe. Here's the thing … If you agree, share your opinion on why and examples of what your organization is doing with social; and more importantly, the role of the CIO in driving social adoption. If you disagree, share your thoughts and opinions on why and what you think the answer is for your industry.

I’m currently researching this topic for an upcoming report on the role of the CIO in Social Computing, so if you are a CIO and have examples of how you have helped your organization embrace social computing please post your comments on this blog and join the research group on LinkedIn.

Don't miss my next post - "The CIO and Social Media: Social Evangelist"
 
Follow me on Twitter: @nigelfenwick

CIOs: Develop A Technology Watch List

by Sharyn Leaver

CIOs in all industries face a challenge (or opportunity depending if you’re a glass half full or empty kind of person): how to craft near- and long-term plans as technology rapidly evolves and becomes more integrated with business success. The requirement for new technology adoption is often led by the business, leaving CIOs to react to the strategy rather than take practical approach to push new technologies through to the business. To combat this, CIOs should gauge IT’s readiness for new technology adoption and ready itself for the next phase of technology innovation and growth. How? Create a technology watch list to determine which new technology tools could have the most impact on your business. Next, CIOs must work with their leadership team to develop IT infrastructure and knowledge and educate business peers on future technology needs.

To help decide what should be on your technology watch list, Forrester has identified 15 technology trends that CIOs should look out for in the next 3 years. Assessed by their impact, newness, and complexity, Forrester has group these 15 technology trends into 5 distinct themes:

• Theme 1: Social computing in and around the enterprise. As businesses look to become more effective across different departments, functions and processes, social computing in and around the enterprise will become more widespread. Forrester has identified three social computing trends that CIOs should look out for: 1) the growth of people centric collaboration platforms; 2) the integration of customer community platforms with business apps; and 3) the common use of telepresence services.
• Theme 2: Process-centric data and intelligence. For the business to detect and respond to market opportunities IT must empower frontline staff with applications that can process information on customer behavior and market conditions in real-time. CIOs should keep track of three technology trends that allow the business to become responsive: 1) the demand for real-time business intelligence (BI); 2) the maturity of master data management (MDM); and 3) the requirement for real-time data quality services.
• Theme 3: Restructured IT service platforms. Business leaders planning for growth expect the processes they use to be scalable and flexible, while remaining cost effective. For CIOs to support and influence business strategy by providing cost effective and scalable IT services, they must assess IT’s readiness to support three IT service platform trends: 1) the ubiquitous deployment of software-as-a-service (SaaS) for packaged applications; 2) the standardized infrastructure for cloud based platforms and platform-as-a-service (PaaS); and 3) the universal adoption of client virtualization solutions for improving desktop and application availability.
• Theme 4: Agile and fit-to-purpose applications. A number of new technologies will improve the way in the business can leverage applications. Forrester has identified four significant technology trends on agile, fit-to-purpose applications for CIOs to track: 1) the mainstream use of business rules processing to allow business mangers to maintain rules and quickly explore ways of optimizing business processes; 2) the extension of current business process management (BPM) implementations to support Web 2.0; 3) the expansion of policy-based service orientated architecture (SOA); and 4) the increased importance of data-content based security.
• Theme 5: Mobile as the new desktop. Powered by network and infrastructure enhancements, business leaders will look to expand the use of mobile technologies as a business platform for services and specialist applications for sales and operations. Two technology trends for CIOs to keep in mind when planning their near- and long-term technology strategy are: 1) the impact of mobile enabled applications and business processes; and 2) the development of mobile networks and devices.

I encourage you to read the full report titled “The Top 15 Technology Trends EA Should Watch”, written by Forrester’s research team serving Enterprise Architecture professionals.

Does The Federal CIO Set The Transparency Bar Higher For Everyone Else?

by Sharyn Leaver

It has been an interesting year – who would have thought that the federal government would have done such a thing – provided a Federal IT Dashboard of allocation of federal IT dollars to investments for all of us out there in citizen-land to read? Federal CIO, Vivek Kundra, announced it and the keyword of the effort that made the headlines is "radical transparency."  It’s very clever in its design and visuals – "mashup ready." It would be especially appealing if the shell of the software would be made available to anyone who wants it – since some real (taxpayer) money went into this project.

It’s a pretty cool dashboard from which we can learn that services for citizens are out spent by projects for management of government resources and that most VA projects are behind schedule.  And it is truly impressive that it is possible for the citizenry to comment, grab info to Tweet, and generally know which project dollar is where. So, should CIOs from the private sector or from non-US government organizations look at this as a transparency role model? 

Certainly Forrester has always advocated for portfolio transparency – but in an important and different way than the federal government IT dashboard – linkage to business value. Not to be picky, but with the attractive visual on distribution of government IT spending, the benefit of each of these investments is not presented – payback? Savings to taxpayers?  Ways in which previous failures will not be repeated (comparison in prior costs doing the same type of project)?

CIOs, of course, should provide a dashboard about projects and investments, and of course they should make it available to anyone in the enterprise who wishes to view it. This, however, is one of those "be careful what you wish for" initiatives. Be prepared when opening the black box of IT spending so that anyone can peer in – what’s the value, benefit, return, usefulness of a project – for the enterprise, for the requestor, for the employee? Until these can be answered, dashboards like this could invite more questions – and ultimately, skepticism.

What’s your experience? How transparent should you be? Or, more importantly, when should you be transparent and when should you maintain a bit of mystery?

CIOs Gather In Chicago To Discuss IT Strategic Planning

by Laura Koetzle

Last week, Forrester’s CIO Group held its North American Fall Member Meeting in Chicago. In addition to enjoying some Chicago-style deep dish pizza and dinner at the Art Institute of Chicago, approximately 70 members gathered from across the globe to discuss top-of-mind issues. Sessions included presentations from Forrester analysts, case studies presented by members, and a workshop on IT strategic planning.

The IT strategic planning workshop was facilitated by CIO Group Advisor Natan Abraham and Research Director Sharyn Leaver, but the members did most of the talking. During the workshop, each participant was asked to identify 5 challenges he/she faces in the IT strategic planning process. A small sampling would include:

• Conflicting objectives between business leaders
• Having the time to step back from the day to day to think long term
• Determining the true value of a project
• Management changes and organizational alignment
• Changing priorities from the business leaders
• Addressing all business units fairly
• Transformational vs. incremental project scope
• Demand exceeding supply
• What criteria to use for prioritization…ROI, cost, risk, etc.
• Lack of clear business strategy
• Unrealistic benefit statements

 

Strategies on how to counteract the challenges were then discussed. For example, one member suggested that dealing with a business strategy that changes frequently could be an opportunity to engage with the business. A suggestion was made to look at factors such as value, criticality, and complexity brought on by the business strategy change.

 

When it came to involving the right people, it was suggested that an executive committee made up of mostly senior leaders, including the CIO, should be formed to provide oversight, prioritization, and direction for enterprise-wide IT projects and services. The highest level personnel who have an interest in the projects should be involved. Also, those that are paying get to vote on the prioritization.

 

Managing the balancing act between competing priorities was a topic of heated discussion. There was unanimous agreement that IT should be the facilitator of prioritization, not the judge. Different ways to compare competing projects included risk mitigation, alignment to overall corporate strategy, value certainty (the likelihood of a desired outcome), and looking at urgency vs. business avoidance.

 

Finally, the area of looking at hard-to-justify projects, such as infrastructure, was explored. It was suggested that one follow the insurance model…the need to quantify, assess, and evaluate risk looking to see where risk and cost converge; and what risk is the business is willing to accept. Phasing in infrastructure projects was seen as valuable. Also, these types of projects should be tied in with the overall strategic vision (e.g. if an organization wants to be global, a unified communication infrastructure would be valuable in reaching that goal). The bundling of these types of projects to solve multiple business needs at the same time was suggested.

 

As the workshop came to a close, the comment of one of the members seemed to sum up the discussion very well…a variety of interesting and helpful tips & tricks were shared, but he was particularly pleased to know he wasn’t alone…that others were facing similar difficulties with creating and managing an IT strategic plan. If you have strategies that have been successful in the IT strategic planning process, please join in the conversation.

Have CIOs Scared Vendors Into Silence?

by Sharyn Leaver

We had a pretty good idea recently (or so we thought) to look at the relationship between CIOs and their strategic vendor partners. The idea was to take a different perspective — ask the vendors for best practices and for not-so-great practices — hoping for examples that could be used to guide CIOs.  So we made a list of likely strategic vendors for CIOs — the likes of HP, IBM, Microsoft, Oracle, and SAP — and pushed a request out to multiple vendor analyst relations contacts.

It turned out, however, that this was akin to inviting them to visit the dentist and have their teeth drilled. Phrases like “we don’t understand the request,” “we don’t feel this is an appropriate fit for us,” and “actually, we just can’t find anyone to talk about this” threaded through the back and forth push-pull. After several months, we succeeded in getting one interview. The best practice uncovered: call up the vendor outside of regular check-ins, and be involved in the contract negotiation. Worst practice: delegate to staff or procurement. Not exactly the insightful examples we were hoping for.

Hmm. Generally speaking, vendors (including senior execs) love to talk to Forrester, seeing it as an opportunity to be quoted, tap a wealth of experience in a topic, provide their practices as best practices, and be cited in the interview list for research. So what’s behind the apparent reluctance to discuss this particular topic in any depth? Several theories (your feedback welcome):

1. Vendor executive management seldom talks with CIOs. Our one interviewee recommended a strong personal relationship between vendor execs and the CIOs, anecdotally correlating the strength of the relationship with more strategic use of the vendor — even helping to problem solve in tough times. But many IT execs delegate the relationship to team members. In those cases, the reality may be that the CIO only surfaces in later rounds of contract renewals — to remind the sales rep (not top management) who is the customer and who is the vendor. The nature of the relationship is further complicated by the type of IT organization a CIO manages. See Forrester's report "How CIOs Evaluate Vendors." 

2. Vendors are afraid of alienating CIOs in a down economy. This is certainly plausible — even generalized critiques can be misinterpreted in such a bad year. As IT budget growth crawled to its nominal 1.3% growth rate in 2009 vendors have taken it on the chin. With every CIO considering or done with consolidation into shared services, license and maintenance revenue for everything from services to backup software is a candidate for shrinkage.

3. IT is irrelevant — vendor management is the face of the relationship.  Forrester has seen the vendor management function in IT procurement play a bigger role over the past several years. It is possible that vendor execs and CIO paths will be crossing less and less, making any advice meaningless.

Regardless of the cause, the take-away here seems to be that CIOs are in the driver’s seat — big time! We still believe that engaging regularly with your strategic vendors creates a win-win scenario. But don’t expect your vendors to be proactive or identify executives for you to interact with on a regular basis. Instead, decide what works for you, and dictate that to your key partners. Over the coming months, we’ll be tapping CIOs like you to uncover best practices that work. If you have some, chime in and join the conversation.

CIOs: Take Control Of Your BPM Destiny

By Alexander Peters, Ph.D.

Despite the economic situation, investments in BPM tools remain a key priority in many firms. Attracted by their performance-improvement potential, business stakeholders often adopt such tools from inside their functions and fail to recognize the overall impact at the enterprise level. The consequence? Many tool-based initiatives are counterproductive, making already intricate processes even more complex and difficult to support. As costs swell and projects become unmanageable, the responsibility of BPM falls onto the IT’s lap. As recent Forrester Leadership Board (FLB) research on “Driving Value With Process Improvement” illustrates, CIOs must step up to the mark and proactively embrace the responsibility for BPM-tools early in the life-cycle. To succeed, they must leverage their position in the enterprise as they:

• Have a unique cross functional view of business processes. CIOs straddle all business units, developing portfolio of services tailored to each business function, and understanding each business users needs and expectations from technology. They are able to view processes which span all business functions, allowing them to disseminate best practices and knowledge, as well as being able to continuously refine processes. CIOs are business executives ideally placed to support the business in its process improvement initiatives.
• Are uniquely positioned to manage BPM tools as shared enterprise resources. As BPM continues to grow, IT’s role is expanding to empower the business with tools required for business process improvement — whether it is for enhanced operational efficiency or increased business innovation. The BPM tools can range from cloud based process wikis, to widely established integration servers, through to mature business rules management functionality. IT staff with specialized BPM skills will work closely with business stakeholders to define and prioritize the features they require from BPM tools and coordinate their implementation for optimal results at the enterprise level.

Business executives will naturally guard processes that have a direct impact on departmental performance. CIOs should not fight for ownership of these processes, but instead provide business executives with process analysis, design, and modeling guidelines and tools. IT executives should look to establish a BPM centre of excellence to disseminate best practices and knowledge throughout the enterprise. By doing this, IT executives can boost their visibility in the organization, increasing its value and accelerating IT’s transformation to a service-oriented delivery model.

I encourage you to read the report titled “Forrester TechRadar™ For BP&A Pros: Business Process Management Suites, Q3 2009”, written by Forrester’s research team serving business process and applications professionals.

IT To BT Transition: Threats And Opportunities For CIOs

by George Lawrie

  Forrester has published extensive research about the transition from IT to BT, but two recent announcements demonstrate the threats and opportunities for CIOs:

• Darryl Stein, director of IT and logistics at UK retailer Marks and Spencer, with his process standardization and innovation adopted widely in the business, made it to number 5 in silicon.com’s CIO50.
• But IT director Mike Cope was not so fortunate leaving the company when, in June 2009, Virgin Atlantic integrated its IT and finance departments.

As IT becomes the sole means of standardizing and executing functions as diverse as logistics and customer service, CIOs should keep in mind that:

• CIO influence depends on line of business perceptions. While CIOs should assiduously propagate tools and processes that contribute to standardization and cost reduction they must beware of strait jacketing peers driving for agility and innovation and must develop governance frameworks that deliver distinctive differentiation in increasingly cost competitive markets.
• CIOs should capitalise on their skills in orchestrating change. In a delicate economy firms must redistribute resources for the coming recovery while keeping the existing business on an even keel. CIOs should advertise to their peers and capitalise on their deep skills and experience in best practices in large scale change management.
• CIOs should acquire and demonstrate expertise in core disciplines. Until recently IT professionals have worked mostly in a staff role supporting line of business managers. While a few enlightened (and wealthy) firms were able to rotate their IT people into line roles, the fabled hybrid manager, equally at home in technology or the line of business has been as common as the unicorn.

Forrester is currently exploring CIO’s level of confidence or anxiety about near term threats and opportunities. Got ideas or input? Take our confidential survey on “Urgent Threats And Opportunities For CIOs” to examine the major factors that can have an impact on the role of the CIO and how CIOs can best mitigate risks and capitalize on opportunities offered by IT to BT transition.

Q&A: Business Technology Maturity Assessment

by Bobby Cameron

On Tuesday of this week I hosted a webinar - "Assessing And Developing Your IT's Leadership Practices Today And Into The Business Technology Era." As promised, below are the answers to questions about business technology (BT) maturity assessment that we weren’t able to cover. If these still leave issues unaddressed, please ask follow-up questions — either by leaving a comment or setting up an inquiry.

Question: The output of the maturity assessment would be transformation plans. A hot spot we are finding is making sure all transformation plans move in the same direction. Any best practices to ensure everyone pulls in the same direction?

Answer: That’s the $64,000 question, isn’t it? With or without BT in the mix. A well run enterprise — including well run IT — has a system of practices which integrate strategy, annual planning, investments, and ongoing operations into a mix that moves the firm forward:

• Setting clear direction (strategy) and applying metrics to test progress against that direction is fundamental — you’ve got to know where you’re going. This starts at the executive level and cascades into the various business organizations, including IT (which, of course, has to coordinate with the rest of the firm).

• Annual investment planning is best done when explicitly driven by the strategy. Portfolio management is the process which best handles this, recording all opportunities and providing the basis for assuring that the mix of planned investments targets the strategy in a balanced manner.

• Ongoing operations should regularly (weekly / monthly / quarterly) test whether they are actually achieving the intended directions set forth in the strategy. Again, this requires metrics.

BT adds complexity in that multiple service providers engage with the enterprise to deliver on the strategy, but it’s still incumbent on the business organizations (including IT) to assure that the capabilities provided by these external providers are in tune with the strategic intentions of the corporation. Read here that SLAs and metrics for external providers have to be able to demonstrate success against the business strategy

 
Question: Does the maturity assessment instrument (spreadsheet) come with detailed instructions about how to complete the assessment (weightings, etc.)?

Answer: The quick answer is yes. We provide the detailed questions for the specific issues — and automatically apply the weightings that we think appropriate. We also detail how you can update the weightings if your interests / needs / realities differ from the ones we’ve pre-packaged.

 
Question: How do you see Business Intelligence (BI) fitting into the BT landscape?  What would "mature" placement and rollout of BT look like on the BT continuum? How would this impact the completion of the assessment (weightings, etc.)?

Answer: I suspect that it’s an axiom that the closer an IT activity is to the business user, the greater BT’s impact on that activity. That would mean that BI is front-and-center. In fact, you’re probably aware of Forrester’s extensive work around the Information Workplace (IW) — the delivery of content (structured and unstructured) in the context of the individual user. And one of the key focuses of IW is the ability to give the user greater control over how the information comes into the users’ environment (refresh rates, format, applied analysis, etc.).

As for applying the BT maturity assessment, as I mentioned on the call, this implementation is focused on IT-management issues. This means that BI is not singled out as a focus — but all of the IT planning and investment processes are included, including working with the business users.