IDC vice president John Gantz hit the nail on the head speaking at the recent CIO Summit in Auckland, when he said “the next four years will be a once in a lifetime opportunity for success or failure”.
Which is to say, as IT professionals we have the keys to the success or failure of our departments in our hands right now. The environment is right, the opportunity is right (opportunity is taking advantage of circumstances, rather than letting the circumstances dictate the opportunities) and business organisations are crying out for some forward-thinking leadership to put them at the front of the queue when the recessionary bubble pops.
This may sound somewhat opportunistic at a time when we’re all facing budget cuts and fluctuating staff numbers. But rather than struggle through the recession desperately clinging to every dollar, I would rather become part of a process where the business overall starts to make some strategic decisions about positioning and discussing with them, whether an IT response is relevant or not.
In an interview with cioinsight.com, Microsoft CIO Tony Scott, talking about IT strategy in 2009, said CIOs are used to coping with recessionary-type budgets.
“Many CIOs are probably better positioned than most of their colleagues in business to understand how to manage in this environment. Most CIOs have been dealing with flat or declining budgets for at least seven or eight years, and have learned to get more productivity, and to expand the capability and functionality of what they have with the same or fewer dollars.”
When Gantz spoke about working with the business units at the CIO Summit, it took me back to when I started working at Employers and Manufacturers Association (Northern). IT needs were being met in silos and were driving the business units in isolation of any overall business strategy.
We worked really hard to align IT with the business’ needs and this resulted in the organisation reviewing its processes and innovation, along with IT, to deliver better services to its clients and customers. The flow-on effect is that it educated the business to look at its processes and markets, to understand what is needed and assess whether a change in IT is relevant.
The process became tangible with the implementation of a new CRM that produced business-to-customer efficiencies, significantly reduced operating costs, provided a competitive edge in the marketplace and synergies with its sister organisations.
But it was also a CRM that had benefits for other business units, and that would not have come about if we didn’t start to take a whole-of-business approach to the project - as opposed to the silo mentality.
And it is a significant investment the Employers and Manufacturers Association (Northern) senior management, managers and board members enthusiastically grasped.
However, just as accountants see the business from a financial perspective and marketing from a marketing and customer perspective - IT has to become part of a broader attempt to combine all these perspectives collectively to align the business strategically and operationally, in order to allow the business to drive the business not the individual departments.
Likewise, the IT strategy needs to align with the overall business plan and not work in isolation in order to innovate effectively and lead businesses beyond the now.
One of the things we are learning due to the recession is that businesses are not afraid to invest. The Standish Group’s Trends in IT Report 2007/2008 showed investment in IT as one of the top-three trends in IT.
If a new project showed a good ROI, 68 percent of respondents said they would find new money to support an IT project; 21 percent would divert funds from other projects to support it; and 2 percent would cancel other projects to make it happen.
Similarly, the MIS100 publication for 2009 showed more than a third of CIOs reported working on the same number of projects; with less than a third reporting working on less.
However, let’s look at the opportunity from more than a dollars and cents perspective. Because, what we are essentially talking about is the opportunity to mould the new paradigm for IT-business relations in the future. The old dichotomy for IT departments is no longer relevant.
If anything, the recession has shown that as segments of a larger cake, business units need to work collaboratively.
In an interview with cioinsight.com, PricewaterhouseCoopers National IT Strategy Leader, Bob Zukis, said working collaboratively prepares the ground for considering future strategies by non-IT executives:
“As non-technology executives have asked IT to share in the pain, I think that gap between the business and technology has really been bridged in terms of where the value is coming from across the IT environment.”
“What IT executives are focused on right now is innovation and its role in driving innovation across the enterprise. It is not going to be a question of ‘what have you done for me lately?’ It is going to be ‘what are you doing for me tomorrow; how are you going to help me find that next revenue dollar’?”
What IT departments have come to grips with over the past couple of years, is that throwing more hardware at the problem is not cost effective and thus the development of SaaS and virtualisation have become the new hot topics in IT.
I recently read that New Zealand Post is shifting to Google Apps for email and collaboration, replacing Microsoft’s Outlook and Exchange set up.
Cloud computing is a new outsourcing model for deployment of ICT solutions. The World Bank has leant more than US$7.73 billion, in more than a 100 countries, to government agencies and the like embracing software as a service. A background paper from the World Bank states, “the US government has embraced cloud computing, and government agencies in Canada, Japan, Australia, Sweden, Singapore, France and the United Kingdom, among others, have begun implementing IT solutions based around the cloud computing model”.
With cost control paramount the CIO’s role has become more strategically aligned within the business to being more than an IT fix-it, but one of adding strategic value by exploring how the innovations being promoted by IT vendors can generate savings, efficiencies and revenue.
For example, the new CRM I spoke of earlier is more than a value-added membership relationship system, but it is a richer customer experience through two-way interactivity that people have come to enjoy through web 2.0 capabilities.
As IT professionals we need to lead the move to innovate to change the business, but the business needs to champion the change. The recession has forced departments to form collaborative alliances across the whole of the organisation for the sake of the company, not the individual units.
The business may need to revisit their IT strategy as a consequence, and we may need to provide the road map to getting where the organisation pictures itself - but do it together and with a common set of values and goals.
The recession has demonstrated that no one is immune to its effects. What we must do as a kind of “new-world evangelist” is multitask; work through the now; position the business for the post recession lift; and crystal ball gaze three to five years beyond that.
The recession has caused us all to have a deep look at ourselves. The solution is not to live in the now, but provide forward thinking leadership.
Allow IT people to feel the pain of the business and have them relate to the relevance of IT to relieve those pains, and thus bring about mutual benefit.
Aubrey Christmas is the CIO of Employers and Manufacturers Association (Northern). He was a member of the panel discussion on the global economic crisis on business and how IT is contributing to meet this challenge at the CIO Summit 2009.
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