22 November 2012

Beware the Sirens of IT transformation

I have been writing a series of posts about implementing an operating model for IT which is based upon services. If you followed the last post you will have already started to engage your key stakeholders and they will already be thinking about their IT needs and their role in making the IT ecosystem work. Now you will be looking for advice on how to map out the value chains for the new IT model.

The next post will go into more detail on how to use value chains and provide some examples but first I thought I should share a few warnings. We are about to enter what is probably the most dangerous part of the journey where unwary CIOs could be lured off course and face disaster. Take a look and let me know what you think.

24 October 2012

Questions are the first step towards service oriented IT

This post is one of a series about developing a service-oriented operating model for IT. Previous posts have covered:
This post is about the first step in the IT transformation process - engaging with the rest of the organisation. This means IT leadership engaging with other leaders across the enterprise and not just the rest of the IT department. Whether or not your vision is to move to a service-oriented operating model this is the first step in the process.

9 September 2012

Strategy or routine operations - Binary Thinking Hex No. 8

Why has IT management become so cursed with Binary Thinking?

No. 8: The CIO needs to focus on strategy and ignore routine operations

Binary Thinking: CIOs should not waste their time on the trivial matter of keeping the IT machine running. These days the issues in running IT are well understood and should be left to subordinates. If necessary a CIO can appoint a CTO to look after technology. Instead the CIO should be a business strategist and spend most of their time sitting with the CEO and the board and:
  • talk about social media and new consumer devices,
  • agree the budget for replacing all existing IT equipment with public cloud services and
  • consider what questions could be answered through Big Data once the management hierarchy has been made obsolete by collaboration and gamification.

Portfolio Insight: Conceptually, execution without strategy is inefficient in the long term and strategy without execution is irrelevant. In theory these disciplines can be carried out in isolation but the strongest results come from linking both together. In practice, if there is an IT related crisis or IT services are out of control then operational matters will dominate the CIO's time. The CIO's executive peers will ensure that this is the case. Through developing a great team and delivering high quality services a CIO creates the time and earns the right to engage in higher level activities.

Binary Thinking Hex No. 7

Related Blog Post: Future of the CIO

Related Blog Post: Peter Kretzman on CTO vs CIO

Related Blog Post: Brenda Michelson on avoiding the PowerPoint-to-Execution Gap: Strategists as Operators

5 September 2012

Agile or waterfall - Binary Thinking Hex No. 7

Why has IT management become so cursed with Binary Thinking?

No. 7: Changes and projects can be delivered in an agile or waterfall way

Binary Thinking: Traditionally people commissioning a change have carefully specified their requirements and then left a project team alone for months, or maybe years, to develop and deliver a capability to fulfil the requirements. This disciplined, structured approach has been largely discredited in the IT domain as the cause of many high-profile project failures. Alternatively changes can be made in an agile way which means delivering basic capabilities in days or weeks and working closely with commissioners to add further capabilities iteratively over time. These days everything should be done using an agile approach.

Portfolio Insight: When undertaking DIY at home is it wise to use the right tools and be skilled in their use. The same thing applies to change and projects in businesses. Agile is not a panacea and if the right conditions are not in place it may not work well. Anyone who has struggled with stakeholders who insist that every last one of their requirements are critical will recognise this. So will anyone who has experienced a major phase of rework half-way through a series of iterations. There are plenty of skilled practitioners who break their waterfall projects into manageable stages and keep buyers and users closely engaged. In many cases experts will mix and match, employing waterfall techniques in some iterations to build a robust platform for later work or using rapid, iterative development to help unblock issues during requirements or design phases.

Special Bi-Modal Hex: At least two high profile analyst firms have proposed bi-modal or two-speed IT. I fear that this removes the "Thinking" from "Binary Thinking" and probably shouldn't be treated as progress.

Two-Speed IT update: It seems one of the high profile analyst firms has back tracked on their proposal. Let's hope the other one sees the light soon.

Binary Thinking Hex No. 6

Binary Thinking Hex No. 8

Related Blog Posts
Agile often isn't
5 Things that will make your Agile dev project fail
The world’s biggest agile software project disaster
Oh not again by @swardley
Why agile software architecture will never be agile
Bimodal IT - the new old hotness

23 August 2012

IT is either a cost centre or provides business value - Binary Thinking Hex No. 6

Why has IT management become so cursed with Binary Thinking?

No. 6: IT is either a cost centre or provides business value

Binary Thinking: If the IT department is accounted for as a cost centre then stakeholders in the enterprise will be unable to appreciate what the IT team and its services can do for the enterprise and will not be able to exploit the opportunities IT provides for adding value to the business. Only by changing the accounting treatment of the IT department can its full value be realised.

Portfolio Insight: It is often convenient for a business to group some of its IT related costs in internal accounts and either write them off regularly or transfer them directly (or indirectly) to revenue earning operating units. This need have no impact on how IT services are organised or exploited. It is possible to conceive of an IT department which issues invoices to external customers and collects revenue but since this administrative change would have tax and accounting implications and would provide no tangible benefits to the organisation it is largely irrelevant and unlikely to ever be implemented.

Binary Thinking Hex No. 5

Binary Thinking Hex No. 7

Related blog post: Are you making a meal of your IT finances?

19 August 2012

Public or private cloud - Binary Thinking Hex No. 5

Why has IT management become so cursed with Binary Thinking?

No. 5: IT is either internal or provided from the public cloud

Binary Thinking: An organisation's internal IT department is never involved if an organisation uses public cloud services and this makes sense as public cloud is completely self-service, self-managing and requires no commercial commitment. CIOs should make plans to move to all IT services to the public cloud and then resign. Oh, except when there are some security issues in which case no IT services should be moved to the public cloud and everything should be kept in-house.

Portfolio Insight: The various flavours of cloud and the various providers, both internal and external, create a rich palette of options for enterprises to use. Although cloud services are built upon commodity components they are not easily substitutable commodities themselves and all have unique characteristics, strengths and weaknesses. The optimum combination of services is likely to be a carefully selected blend of the different options. CIOs should not plan any wholesale migrations to the public cloud or anything else but should instead be ready to exploit the public cloud along side other options to satisfy specific business needs.

Binary Thinking Hex No. 4

Binary Thinking Hex No. 6

9 August 2012

Obsolete or indespensable CIO? - Binary Thinking Hex No. 4

Why has IT management become so cursed with Binary Thinking?

No. 4: The CIO will soon be obsolete or indispensable

Binary Thinking: Computing and communication technologies are becoming commodities which means that specialist IT skills and all of the management structures around them will no longer be needed. General managers can satisfy their IT needs from the consumer market place in the same way they can get their home PCs and mobile phones. Unfortunately, in the not too distant future, the performance of any organisation will depend on how they use information, other sources of competitive advantage will cease to be important and only CIOs and other IT leaders will be qualified to lead enterprises.

Portfolio Insight: The behaviour of large systems (of people, investments or other components, not just IT) exhibit patterns which can bear little relation to the behaviour of their constituent elements. Just because IT components can be easily substituted commodities it does not mean that the large, integrated IT architectures which enterprises need are also commodities. Financial services, where commodity equities or consumer loans have been assembled into more complex products, have given us all a painful analogy to use. Enterprises will continue to need a leadership team who can focus on different aspects of their system (for example, money, people, technology or IT services) and work together to achieve the best results possible.

Binary Thinking Hex No. 3

Binary Thinking Hex No. 5

Related post: The future of the CIO

6 August 2012

IT is internal or outsourced - Binary Thinking Hex No. 3

Why has IT management become so cursed with Binary Thinking?

No. 3: IT is internal or outsourced

Binary Thinking: Organisations can get their IT services from an internal IT department or they can dispense with their IT department and their CIO and get all of their IT services under contract from an IT outsourcer.

Portfolio Insight: Both extreme options are illusions. Even organisations which have "fully" insourced IT employ contractors and purchase software and equipment, together with supporting services, from external parties. Organisations which have "fully" outsourced their IT still have internal staff involved in requesting, governing, specifying, procuring and supervising the outsourced services. The optimum model will be a carefully tuned combination of internally and externally provided products and activities.

Binary Thinking Hex No. 2

Binary Thinking Hex No. 4

1 August 2012

Control of IT can be centralised or distributed - Binary Thinking Hex No. 2

Why has IT management become so cursed with Binary Thinking?

No. 2: Control of IT can be centralised or distributed

Binary Thinking: CIOs need to make a fundamental decision for their organisation. Either they will control all IT staff, assets and projects across the enterprise centrally or they will delegate everything out to local managers on a geographic and/or business-line basis. Unless a CIO chooses the centralised option they should probably resign.

Portfolio Insight: Different classes of IT service experience different economies (or dis-economies) of scale. Total centralisation or total distribution are just extreme ends of a whole spectrum of options. The optimum option for any enterprise is likely to be somewhere in the middle of the scale and not either end.

Binary Thinking Hex No. 1

Binary Thinking Hex No. 3

Related post: How to organise IT on a global scale

Related post: Chris Curran on Balancing lopsided IT governance

19 July 2012

Binary Thinking - a hex on IT management

Why has IT management become so cursed with Binary Thinking?

No. 1: There is IT and there is business

Binary Thinking: Everything that exists within an organisation (strategies, policies, processes, people, teams, assets, budgets, requirements, projects etc) can have a label of "IT" or "Business". Nothing can carry both labels. Organisations need to work hard to make sure all of the "IT" things and "business" things are aligned but merging any of these things would be a mistake. Usually "business" people prevent "IT" people from participating in "business" activities. If "business" people work with "IT" suppliers it is bound to cause problems.

Portfolio Insight: Everything in the organisation is about the business, a subset of these things have specialist IT elements. For example, a specially trained engineer may help maintain some computer equipment but this is a small component of an internal service which keeps the organisation running. It is helpful to break down large teams, systems or change programmes into smaller components to make them more manageable but very often there are much more useful groupings to use than IT and non-IT.

Special Marketing Hex: A new variant of this curse is the confusion surrounding IT spending by the CMO. Most of the posts about this subject suffer from Binary Thinking by insisting that a CIO cannot possibly have any influence over spending which is labelled as "marketing". Thankfully some, like Chris Murphy of Information Week, are willing to challenge. His blog can be found here (with thanks to @ij_cox for sharing it).

Binary Thinking Hex No. 2

Related blog post: Will CMOs Outspend CIOs? Wrong Question

16 July 2012

Organising the service-oriented IT function

This is first of a series of follow ups to my blog post about a service-oriented operating model for IT. These posts are based upon some of my insights and experience of putting this model into practice and I hope they will either help you develop your own thinking or provoke you to share your own ideas.

In these follow up posts I am going to cover:
  1. engaging the rest of the organisation
  2. mapping out the IT value chain
  3. developing the IT bill of materials
  4. designing the IT organisation structure
  5. aligning funding and resources
  6. implementing the change.
Most of the comments and reactions to the original blog post concern organisation so I am going to start there although, logically, it is the fourth step.

8 July 2012

Step away from that corporate app store

The app store concept has become an accepted feature of consumer electronics remarkably quickly. When Don Tapscott and Anthony Williams were writing about producer/consumers in Wikinomics in 2006 major corporations like Apple and Sony were trying to block their customers efforts to open up their devices and add new functions. It was another two years before Apple added their app store into their ecosystem and yet now it is hard to remember not having access to thousands of applications on your smart phone.

The app store user experience quickly caught the imagination of other sectors. When I wrote about the UK public sector IT strategy in 2011 (link to article on PA Consulting site) Apple's success had already made a big impact and, perhaps, the concept is now poised to disrupt corporate IT in the same way. Or maybe not!

2 July 2012

How to organise IT on a global scale

There is quite a lot written about IT consolidation and centralisation.
  • Best practice in business operations includes concepts such as having a "single source of the truth" to help understand and serve customers or make key business decisions. These sorts of concepts imply some centrally managed shared IT.
  • Enterprise architects strive to understand, model and design business structures and supporting IT spanning whole enterprises. IT concepts and technologies such as Service Oriented Architecture and Cloud Computing are justified on the principles of maximising scale and re-use.
  • Procurement specialists seek to rationalise suppliers and consolidate purchases for all categories of spend including IT products and services. Suppliers offer price and other inducements for sole supplier status.
  • For a long time ERP suppliers have promoted their ability to provide a single, integrated solution to the needs of large businesses.

For relatively small organisations a single, enterprise-wide perspective on IT is quite realistic. For large organisations, particularly those which operate on a truly global scale, the reality is a lot more complex.

26 June 2012

IT needs to get serious about Asset Management

I am going to start this blog post with a quiz. Which of the following scenarios is the odd one out?
  1. A business services organisation did not recover all of the fees it was due because of poor quality customer data
  2. A telecommunications firm received a large licence charge from a major enterprise software vendor because they had unwittingly exceeded a key licence metric
  3. A transport business continued to provide maintenance services unnecessarily for buildings that it had sold off
  4. A government department delayed an expensive but critical applications upgrade in order to reverse engineer a business case for the project
  5. A utility company had no software support in place for an application because the two people who had the necessary experience took redundancy in a re-organisation.
So which one did you pick?

18 June 2012

Setting the right amount for the IT budget

I regularly see questions in the press and in social networks along the lines of: “What is the right amount to spend on IT?” Often the debate descends into variations of: “It depends.” For years I used to smile quietly to myself as I watched these debates. Why? Because I had the secret formula! Simply count the number of knowledge workers in the organisation (better still the number of full-time equivalents) and multiply by a unit price (until recently £4K - £5K) and you would be pretty much there. Oh, I know there is a lot to challenge with my formula but it was much quicker, easier and no less accurate than all the debate or a benchmark from one of the big analyst firms. Unfortunately, in recent years, my secret formula has stopped working so I turned to some of my trusted advisers to find out what had happened and help me fix it.

13 June 2012

Make the IT function service-oriented

Recently I read an article on the on-line version of Forbes by Mark Settle, CIO of BMC Software (thanks to @marthaheller for highlighting the article). Mark was proposing an IT operating model which he calls "Broker/Integrate/Orchestrate" as a replacement for a more traditional approach he refers to as "Plan/Build/Run". The article is well written but I think Mark creates an artificial gulf between these two ways of looking at IT and neglects another useful alternative: an operating model based upon a portfolio of services.

17 May 2012

Turn your Application Portfolio into a Software Product Portfolio

A recent post by Gartner caught my eye this week. A key topic at one of Gartner's events will be their views on how applications are managed and the shift they expect from a mainly project-based structure to a more product-based structure. I think this is a great idea and I have already written and presented a conference paper about how the approach to software maintenance should shift from projects to product life-cycles. I would really like to provide a link to the paper but it was the UK Military Computing Conference in 1991 and you will have to find a paper copy of the proceedings somewhere!

In the 20 years since I wrote my paper the advances in IT have been astonishing. If you had met me in 1991 and described the technology I would use to write this blog I wouldn't have believed you. If you had also told me that a product approach to applications would still make conference headlines 20 years later I would have known for sure that you were crazy. But, 20 years on, a product life-cycle approach to applications is still the exception rather than the norm. What have we been doing all this time?

7 May 2012

What? Not another blog about the future of the CIO!

I am often amused by the heated debates about the future, or not, of the CIO. The fun comes from the combination of intense emotions, arguments heroically generalised from limited data and the dismissal of evidence which does not fit preconceived ideas. Before I attempt to set out my views on the role of the CIO let me try to eliminate some of the noise and confusion.

Is the CIO really that unique?

Start dismantling your IT project portfolio

There are many different definitions of Project Portfolio Management but at their core they share the concept of a business process for optimising a collection of projects and programmes. Projects are deliberately started, stopped, accelerated, delayed, split or merged to best achieve an organisation's goals.

Project Portfolio Management would appear to be a sensible management discipline so why would a CIO want to avoid it? The fundamental problem is that there are no IT projects and so the IT Project Portfolio should be empty. Nearly all projects labelled as IT explicitly include non-IT elements such as organisation or process changes and cannot achieve their objectives or realise benefits without these. Unfortunately, the remaining projects cannot be completed without risk or impact to the users or consumers of IT services and so also need to manage non-IT elements. Perhaps someone reading this blog will find an exception (in more than 20 years in this field I have not found any) but there will never be enough to justify an IT-only process.

1 May 2012

SoCloMo? So what?

Every few months the IT press is swept by talk of the “next big thing” and how it will totally transform the IT market, change how IT users work, shake organisations, batter IT departments and threaten CIOs. In reaction many commentators will post a wave of comments explaining that the “next big thing” is not new at all and has been a core part of IT for years. There are always a few that point out that IBM Mainframes were doing the same thing decades ago. The current wave of press hype seems to be focused on the combination of Social Networking, Cloud computing and Mobile devices and trends built upon these components such as “Consumerisation of IT” and “Bring Your Own Device”. In this case I think there is some substance to the arguments made by both camps but both seem to be neglecting what could be a slower acting and more profound shift - a shift in the application of technology rather than the technology itself.

No wonder portfolio management leaves everyone confused

If you were an artist, investment manager or a government minister you would describe a “portfolio” in very different ways. Even within the domain of the CIO the word has several distinct uses. Here is my attempt to summarise what constitutes the different portfolios that are relevant for a CIO. In subsequent blogs I’ll expand on what I have learnt about each of these from my research and my own experiences.
  1. IT project portfolios - These days most people I talk to about IT associate “portfolio”, first of all, with a collection of projects and programmes. There are good odds that any IT portfolio manager you meet will be a projects and programmes specialist. In the vast majority of cases IT projects should not be purely focused on IT (and so IT project portfolio management could be considered to be a flawed idea) but I am realistic that many organisations need to perform IT project portfolio management as a step on the journey to enterprise-wide project portfolio management.

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