Has IT lost its shine?
- 31 May, 2005 22:00
This episode is symptomatic of an industry that at times threatens to choke on its own hype. <p/>
In the words of Richard Katz, vice president of EDUCAUSE, a non-profit association working to advance IT in higher education, information technology is "almost good enough to use".
Technology PRs behave as though technology promises "huge productivity gains", "massive increases in efficiency", and "ramped-up customer service", and yet the same PRs occasionally admit (off the record) they haven't seen, let alone used, their clients' products.
Industry analyst Gartner says today's CIOs must create business results without upfront investments. Is that because the board no longer trusts IT with shareholders' money? So didn't all those late-20th century projects really come in "ahead of time and under budget"?
Five years on from the hype zenith, it's time to subject enterprise technology to dispassionate scrutiny.
The New Zealand CIO community is hard-nosed, sardonic and wise to the vendors; the perfect people to ask whether IT has lost its shine.
We also cornered a consultant, a CEO and some vendors to get the oil on how CIOs should deal with journalists, analysts and project failures.
Why are technology vendors so enamoured with the word "solution"? I asked one, and that word recurred three times in his 86-word answer without a hint of self-irony. I took my questions elsewhere.
As CIO of Telecom New Zealand, Mark Ratcliffe is in the unusual position of overseeing information management in one of the country's largest organisations, but also of being an IT supplier to other big businesses. He views my disgruntlement from the supplier's perspective: "I think it's because we've educated people that it's better to solve a problem somebody's got, rather than just sell them something. Selling a solution looks like you've got a problem and I'm part of fixing it."
Aaron Kumove, now managing director of Horizon Consulting, dealt with IT vendors as CIO of New Zealand Post. "Vendors are by definition myopic," he says. "They typically only see their piece of the puzzle. By and large, an IT manager or CIO is at a significant disadvantage when a vendor comes knocking on their door because he has to be a generalist. The vendor has the luxury of only having to know about a very small number of things - the things they happen to be peddling - so, right away, they've got you on the back foot."
Nigel Murphy, former marketing director of Oracle NZ, has been in and out of the IT industry since 1983, when he joined IBM. Murphy is now group manager of public affairs at Auckland University of Technology (AUT). Reflecting on the pressures facing the vendor, he concedes that new technologies are often launched before they're enterprise-ready.
"The market imperatives mean when you've developed something new, you want to get it out there before the other guys do. More often than not, there are still a few little wrinkles in there." He is not the only person to recall the concept of the paperless office. "I used to joke that it was about as imminent as the paperless toilet," he says.
Denis Orme is chief executive of IBANZ, the Insurance Brokers Association of New Zealand, and former CEO of Bartercard. "In a lot of areas, they clearly aren't 'solutions'," he says. "It goes back to a decade or so ago, to the talk of 'the paperless office'. 'Enterprise-wide solutions' have typically not been enterprise-wide."
André Snoxall is general manager of HealthIntelligence and CIO of Capital and Coast District Health Board. He says CIOs must remember the vendors' motivation and be hard-nosed about it. "I've lost count of the number of times companies have said they're going to add value to my business, and if I go with them as a sole supplier, they'll add all sorts of value that nobody else can." Snoxall knows changing a vendor's nature is impossible; they're always going to tell you their product's the best. "As a businessman, you've got to treat things with the degree of scepticism they deserve."
"Information technology and the information revolution are relatively young," Marcel van den Assum, out-going Fonterra CIO, reminds us. "There's change in terms of how people operate and perceive things. Information technology, with the emphasis on technology, is just a tool. You can buy a hammer and build a house or smash a window."
In Delivering IT's Contribution: The 2005 CIO Agenda, Gartner says: "CIOs are transforming the IS organisation so it can contribute to business growth and efficiency." But analysts have been saying this for over a decade. Why do so many of the analyst firms seem to spout such platitudes?
"I was in IT when we were a priesthood. People never questioned what we said. They were the glory days," remembers Garth Biggs, former Gen-i CEO, who is now managing director of Biggs and Company and a member of the board of trustees of IT advisory body the HiGrowth Project. "I used to work with a guy who'd say, when he was underwhelmed by news, 'Blind pig finds acorn'.
What analysts should have, and certainly the credible ones do, is the ability to summarise the results of a number of conversations that their organisation is having with people who are opinion-makers and risk-takers."
Alan Hesketh, general manager of IT at Progressive Enterprises, believes some analyst research accurately reflects industry challenges: "That Gartner research is based on interviews with CIOs. I don't believe it hurts to re-emphasise what are the most important objectives of being a CIO. It may be repeating what's always been there, but what I've learned about establishing a vision or a direction is you've got to keep re-emphasising it, otherwise it drifts."
Kumove's view of the analyst community, he says, has become jaded. "I find the research coming out of some of these analyst organisations facile, and promulgating trends that aren't necessarily fully developed."
Irrational exuberance in Maungatawhiri
In December 1996, US Federal Reserve Board chairman Alan Greenspan referred to "irrational exuberance" in the US financial market. Since then, the global IT industry has fallen foul of a similar phenomenon. Take a look at the so-called case studies on the internet, the proliferation of PR fluff in the business and technology press, and the "technology will save the world" coverage on television. Customer stories have proliferated to the point where they've become TV commercials.
Picture your grandmother in her armchair in Maungatawhiri, wondering what a "supply chain solution" is and why anyone would be trying to sell her one.
To what extent is the media colluding with the world of PR and the vendors to tell good news stories about the technology at the expense of investigative journalism?
Terry Hartmann, director of secure identification and biometrics at Unisys Asia Pacific, is quick to defend the IT press.
"Everybody gets excited over something new and what the possibilities can be. You don't need a great conspiracy to make that happen. Unless the media is pushing and promoting ideas, you're in a vacuum. It's then up to you as a responsible manager to evaluate that product to see how it might fit your situation."
CIOs know that even positive media coverage has implications for their workload: "This is the problem that you hear often - the CEO saw something in an airline magazine and therefore we've got to put it in by next Friday," Snoxall says resentfully.
Failure? What failure?
Sun Microsystems marketing man Andy Lark has said, "There are more big marketing campaigns that yield no result than there are IT failures." This doesn't mean we should simply blame the marketers and PR firms for IT projects that have not met expectations, but should CIOs shoulder the blame?
Hartmann, for one, believes vendors are only partly at fault. "You can't put things in the hands of a vendor without proper governance in place. You need structures." Murphy agrees with Lark, but says there are all kinds of business deals that don't deliver. "Some of these projects are pigeonholed as IT initiatives when, in fact, IT is just a technology to enable a business initiative, like CRM. And if it doesn't work because the sales guys can't be arsed using it, they blame IT."
For Snoxall, too, it comes down to labelling. When projects are tagged 'IT', there's likely to be an ownership problem. "There should be no such thing as an IT project, it should absolutely be a business project that has a large IT component, and that's fundamental. If people don't get that right, we'll continue to have large projects that fail because they didn't have the right business ownership."
"If a project is classified as an IT project, you've got it wrong to start with," van den Assum agrees. "Your chances of having a white elephant are greater if it's run as an IT project."
As Ratcliffe points out, failed projects tend to be the ones in which the biggest risks are being taken. "It's really easy to get predictable results if you don't do anything particularly radical. I can guarantee no project failure but I wouldn't be able to guarantee much output."
Death by PR
Increasingly, media requests to speak to CIOs have to be channelled through the communications manager and it's rare to find a senior executive who will speak on the record about a project failure - or, indeed, anything that might be perceived as negative.
CIOs, consultants and vendors recognise the paradox; for while they acknowledge the need for an organisation's marketing messages to be coordinated, they all decry the accompanying decline in transparency.
Kumove doesn't care for overprotective PRs. "If you've got someone in a GM-level role - like a CIO or an IT director - you should probably trust them to be smart enough to know how to talk to the press." He likens it to a game of 'chicken': "The underlying notion of that game is, hope like hell we can keep it under wraps and if we play it right we come out far ahead, but if we aren't able to contain it we could end up looking stupider than if we'd fronted up in the first place."
Ratcliffe says, at a time when current performance and future expectations in public listed companies are under intense scrutiny, it would be naïve to expect executives to divulge anything market-sensitive. "The more you disclose, the more questions you tend to be asked. I assume that anything I say to any form of media will be on the internet within a few hours."
Snoxall doesn't believe it should be the CIO who fronts-up in the case of project failures. "If a large project fails with a large IT component and it's public, the person to speak to is not the IT director, it's the business owner of the project." And if you're unable to establish who the project's business owner is, he says, you know why the project failed.
Orme would send inquisitors even higher up the food chain. "Have the journalist do the dialogue with the CEO on business strategy and how effective some of these technology 'solutions' have or have not been."
"Ultimately, these projects are business projects," van den Assum agrees, "So why doesn't the business leader talk about the project? I'm a believer that the CIO role will eventually disappear." This might, he says, foreshadow a future in which there'll be greater transparency, "But it'll be the business talking about the transformational challenges, rather than the CIO."
Che Guevarra's kindred spirits
It's heartening the CIOs in two of the most high-pressure jobs in the country, at Telecom and Fonterra, far from having become jaded over time, are as excited about their roles as ever. But both stress it's business that motivates them, not technology.
"I classify myself as a revolutionary," says van den Assum. "I've got the Che Guevarra t-shirt. From the information revolution perspective, I'm just as excited about the revolution as I've always been."
"The telecommunications and IT industries are still enormously exciting industries to be in," Ratcliffe says. "Having a leadership role in them still pushes most of my buttons."
And it was when we quizzed our interviewees about technologies likely to reinvigorate the industry that they became most animated. There was a degree of concurrence, too, about which technology will yield the most benefits and help keep the shine on IT. "If you look at service industry businesses and artificial intelligence and robotics coming together, there are potentially some incredibly profound implications," says Kumove.
"The true technologies that will really drive business initiatives over the next few years are voice and video over IP and RFID (radio frequency identification). I think they'll be the next big area of hype," Snoxall says.
"RFID becomes a no-brainer when the cost of the chips comes down to the right level," Biggs agrees. "To the extent that it can replicate barcodes plus add other functionality, it's potentially very powerful."
"One of the challenges with RFID," says van den Assum, "is that tagging technology generates screeds and screeds of data. And my concern is that the industry hasn't yet cracked the fact that we're drinking out of a firehose - whether you're on the net surfing and searching and scanning or whether you're at the office trying to swallow 100 email a day."
"I've got a screen on my desk that allows me, at the press of a button, to dial up and have a desktop-to-desktop video conference with my colleagues and team around New Zealand and Australia," says Ratcliffe. "That's truly revolutionising the way I work. My experience says new waves of technology always end up taking a little longer to arrive than you thought they were going to do, and then being more profound when they do."
Wherever these technologies may be in the hype cycle, CIOs are as excited about them as they were about new trends five years ago and as mindful of the challenges facing them. Maybe that's how they succeed in polishing off any tarnish.