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CIO upfront: Factors often overlooked by organisations in the adoption of new technologies

CIO upfront: Factors often overlooked by organisations in the adoption of new technologies

Shadow IT aside, what should business executives be doing to ensure that the often hidden business risks of their adoption of new technologies are sufficiently understood to prevent future problems?

Consider your IT department as a ‘business within a business’ – and one that can positively challenge any part of the business (including the executive team) to do better.

Rob Livingstone

Business leaders are now spoilt for choice when it comes to the selection and adoption of new technologies for their organisations – or so it seems.

The widespread prevalence of the shadow IT phenomenon is proof positive that the organisation’s own IT departments are no longer are the sole source of IT wisdom and service provisioning.

For established organisations in particular, business unit leaders (or even staff) under acute pressure to do their jobs or achieve their targets, may source IT services directly from the market. This will be done if it helps achieve their results or fix their specific problem.

Shadow IT aside, what should business executives be doing to ensure that the often hidden business risks of their adoption of new technologies are sufficiently understood to prevent future problems?

What factors should organisations consider when approaching the adoption of new technologies?

Each organisation faces a unique set of challenges, as no two organisations are identical. As a result, the individual influences and impacts of the adoption of new technologies would differ between organisations – even in the same industry.

Not only that, given the high rate of change, nothing remains static for a length of time. This makes the evaluation of the benefits and pitfalls of any technology ever more challenging. as the benefits and risks of today may change tomorrow.

The need for an adaptive approach to the adoption of new technologies is therefore a critical success factor for sustaining business value in the face of change.

However, in at least attempting to offer some indication as to what factors should be considered in your approach to the adoption of new technologies, let’s look at the following:

  • Institutionalise innovation organisation-wide
  • Recognise that your IT department (or vendor) cannot drive innovation unilaterally
  • Review managerial and staff incentive schemes
  • Transform your IT departments from a technology cost center to a business relevant services broker
  • IT Vendor Management V2.0
  • Protect your crown jewels
  • Monitor systemic risk
  • Manage the technology evangelists in your organisation
Rob Livingstone
Rob Livingstone

IT should be regarded as the trusted advisor – after all they should know your business better than you do – not consultants or vendors!

Let’s explore these in more detail.

1. Institutionalise a continuous improvement capability organisation-wide

Set the expectation that by developing and enabling new and superior ways of exploiting IT relies on a culture of continuous improvement. This will foster innovation and ensure that ‘all eyes’ are looking at how existing IT and the latest digital technologies can be best used. This would in turn enable business improvements to be achieved, and could go as far as helping to change the way the business operates or is structured.

Strategic: Can have significant impacts on the whole organisation, its stakeholders, customers, staff, etc…

Read more: When conventional business and IT leadership capabilities meet the new world

Business pProcesses: Change the way the business operates. Co-dependency is how the organisation as a whole is structured

IT operational level: Have expectation that enabling new and superior ways of exploiting IT, which would in turn enable sustainable business improvements to be achieved

2. Recognise that your IT department (or vendor) cannot deliver results unilaterally

IT relentlessly drives and delivers innovation at a global, societal, and individual level at phenomenally fast rates, yet, paradoxically, IT departments within organisations often struggle to drive serious business improvements – including fostering real innovation – from within their own organisations to the same extent

Read more: It's showtime for IT leadership

Assess how your organisation really uses IT systems. Make the shift to enterprise wide agility and adaptability – across the board.

3. Review managerial and staff incentive schemes

Framing short term financial incentives primarily around functional responsibilities will reinforce behaviours that will drive results that may not be in the best long term interests of the whole organisation. Avoiding new technology failures by including key business and non-IT stakeholders is key.

Localised/functionally focussed incentives can undermine attempts at cross-functional collaboration – and is is this multidisciplinary and cross functional collaboration that will minimise the risk of failure and maximise business value.

Incentives drive temporary compliance. What does that say for the longer term for enterprise-wide initiatives and processes?

The inappropriate focus on driving localised short term targets can hamper or even undermine enterprise-wide collaboration. Cross-functional collaboration is key in avoiding new technology failures across the organisation.

4. Transform IT from a technology cost centre to a business relevant services broker

Consider your IT department as a ‘business within a business’ – and one that can positively challenge any part of the business (including the executive team) to do better. Can your IT department deliver SaaS: Strategy as a Service? This is where IT can proactively deliver business relevant, achievable technology strategies to meet defined or expected changes with adaptability and agility. Clearly define the accountability locus for enterprise IT across the organisation and consider:

What’s in-scope for the management of IT services – including BAU and innovation?

What is /is not negotiable in the IT portfolio of services?

IT should be regarded as the trusted advisor – after all they should know your business better than you do – not consultants or vendors!

IT should constantly and proactively identify the opportunities and risks of new and emerging technologies for their organisation. IT leadership should be able to operate confidently and with business relevance at most senior levels of management.

5. Upgrade your technology vendor management practices

The conventional RFP-bid-response approach to engaging IT vendors may not be effective in the adoption of new technologies. Complex, monolithic contracts inhibit agility and partnering across a range of providers, and can inhibit the interactions between (potentially competing) providers. Consider striking strategic sourcing contracts on a ‘pain-share’ and ‘gain-share’ basis – after all if they are ‘business partners’ make sure that this intent is reflected in the contract.

My earlier article on strategic vendor management explored the following factors shaping vendor relationship landscape:

  1. IT may no longer be the primary decision makers.
  2. Your exit is more important than the entry.
  3. Disruption in your vendor’s market
  4. Too big to talk?
  5. ‘Agile’ is the new black
  6. Risk appetite is not constant
  7. Managing vendor jurisdictions
  8. Your vendor’s shareholders are not yours.
  9. What’s the purpose of your contract?
  10. Fragmentation of the vendor’s supply chain.

6. Protect your key information assets

Intellectual property is often your organisation’s primary asset. By this I include your minutes of important meetings, board minutes – not just your trademarks and patents.

Ensure your IT and organisational security controls are effective and appropriate. For cloud and outsource service providers, do not assume compliance to specific legislation such as privacy, data protection, or respect for jurisdictional boundaries. Cybercriminal activity is a multi billion dollar industry – and it’s a constant arms race between the good guys and the bad guys – and it appears that the bad guys are winning.

Organisations often reluctant to report that they have been successfully hacked or compromised for reasons of brand damage, adverse impact on share price, etc. Mitigates against industry-wide collaboration to fight cybercrime and lowers the perceived level of risk.

7. Monitor Systemic Risk

What processes do you have to identify and mitigate the systemic risks to your organisation? The combination of a number of events may adversely impact the whole organisation. This is a systemic view of the enterprise of which technology is only one element. So, taking a systemic view of the risk within the organization you result in a better perspective of what the actual risk is rather than what you think the risk might be.

The systemic risks are more significant as they impact the entire organisation. The conventional approach to managing the ‘risk register’ – which underpins Security certification such as ISO27001 – fails to detect systemic risk effectively.

8. Manage the technology evangelists in your organisation

The technology evangelist is typically categorised by the persistent advocacy and promotion for the use of a particular product or technology with a view to its broad adoption. Distinguishing the true technology evangelist from an enthusiastic and persuasive acolyte of a particular vendor’s offering. This may be a challenge to make the distinction for Executives with moderate ‘digital literacy‘.

The single minded technology evangelist’s enthusiasm for their specific solution may gain a groundswell of support without the appropriate due diligence and rigour being applied to the solution.

This fuels the emergence of shadow IT, which, if not managed appropriately could set the seeds of future systemic risk for the organisation through inappropriate use of technology.

This article is an edited transcript of part of the presentation delivered by Rob Livingstone as part of the UTSpeaks public lecture series. A video of the presentation is available here.

Rob Livingstone (rob@rob-livingstone.com) is a mentor, consultant, and industry advisor. He is the author of Direction through Disruption and Navigating through the Cloud. He is a fellow of the University of Technology, Sydney’s Faculty of Engineering and IT, where he lectures to higher-degree students on leadership, strategy and innovation.


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Tags shadow ITcustomer focusDXchange managementdigital transformationbig datacxdisruptiondigitalRob Livingstone

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