Posts Tagged ‘IT’

The role of today’s CIO is changing—why it’s imperative for the success of the organization

October 7, 2011

The CIO role is changing–it must continue to change so that IT organizations can become and remain successful. In her article for Bloomberg Business Week, Rachael King quotes Rebecca Jacoby, CIO at Cisco Systems (CSCO), on the changing role of today’s CIO:  “As technology plays a more central role in products and employees do more work on a broader range of devices, CIOs need experience running businesses and spurring innovation—not just keeping computers running.”

Read Rachel’s full post. Here’s my observation on why the role of the CIO should continue to change and why it makes sense.

The focus of the CIO role is now much more about the purpose of leadership.  Whether or not a CIO has come up through a technical track or not will not necessarily make that CIO become a successful business leader.  Technical experience alone does not give anyone the ability to lead an IT organization.

It has been my experience that many people within IT organizations may sometimes feel threatened by a non-technologically trained CIO taking the reins of a company that was once a technology dominated. Think about it. A successful non-technical CIO has no choice but to build an organization of great technicians that will help the organization to develop technical solutions for business issues.

The days of a CIO coming up through a technical track are quickly coming to an end.  IT organizations “stuck in the silo” and not working within the business community are doing a disservice to the organization and more than likely hampering the growth of the business. Nowadays a CIO must be very conversant in marketing, finance and accounting–really most of the core business leadership functions in my opinion.

It is myopic to think that a non-technical CIO cannot successfully run an IT organization just as it is myopic to think that a person that is technically competent cannot become a CEO, COO or CFO.

Be sure to read Rachel King’s Bloomberg post.

CIO Movement from Cost to Profit and Social Media?

September 23, 2010

The concept of moving IT from a cost center to a profit center is still fairly new for most companies with the notable exceptions of Google, Facebook, Neilsen and the major telcos. But the role of the CIO is transcending its traditional function of automating and enabling other aspects of the business to driving profit utilizing the data that it is the steward of.

The CIO needs to possess strategic business smarts and superb operational ability. The ability to be able to work with the operational units in devising ways to look at the data that they have an monetize it effectively. Most business become aggregators of data, the ability to monetize those assets is becoming a crucial keeping a profitable business. The companies that understand this are looking at their CIOs and saying, “You own the data now help figure out how we can make money off this — or make more money off it.”

Wireless carriers are starting to realize they can monetize all matter of data collected from mobile users — specifically data that highlights their movement habits. According to MIT Technology Review, researchers and marketers are finding plenty of new uses for call detail records, or CDRs — which allow them to study a mountain of user behavior data. That data can be used by researchers or city planners to study travel behavior — but it’s likely going to be a gold mine on the marketing behavioral front.

The digitization of business assets– in concert with the rise of social media and networking as the vehicles of choice for reaching customers — increasingly puts IT at the center of the business’ marketing effort. It is now becoming very difficult in some organizations to tell the difference between the Chief Marketing Officer and the Chief Information Officer.

OUTSOURCING 101

October 28, 2009

Outsourcing should never be considered if economic factors are the only thing that you are considering.

The ability to react to changes in the business with timely delivery of quality services and value plays a big role. Customer satisfaction, should be the IT group’s mantra and it should be instilled in everyone of the groups members.

To determine whether it makes sense to outsource, you must understand what makes for a successful outsourcing partnership.

1. Customer Satisfaction
If the customer isn’t satisfied with the goods or services you provide, you can be sure they’ll either be looking elsewhere or escalating their concerns. You must take a customer approach and insist that your outsource provider have the same commitment.

2. Align all sourcing actions to your business strategy:
A sourcing strategy must be defined in business terms.” You’ve got to get business executives on the same page.” Define ROI and critical success factor together and make sure that everyone is on the same page as to the reason for outsourcing.

3. Select the delivery model that best suits business and financial goals:
The only way to get sustainable business benefits and performance improvements is to leverage and adapt to the service provider’s operating environment. Making the right delivery model choice means you must understand the different types of delivery options (offshore, nearshore, utility and so on) and align your preferred options to the business goals.

4. Measuring Metrics
Too many organizations undertake outsourcing arrangements and attempt to focus their attention on two or three critical success factors. Intangible metrics such as Customer Satisfaction, employee retention, and application quality need to be included in any metrics management initiative. As well as the obvious metrics such as ROI, budget and impact on the enterprise.

5. Financial savings
Outsourcing in many cases provides a financially compelling alternative to providing the services in-house. However, if reducing cost year over year is a key measure, it’s essential that you craft the partnership so that the provider has the incentive to help you meet your goals.

Like every other company, the Outsourcers goals are to grow revenues with existing clients and increase profitability. There needs to be a measured balance as to how both companies are going to achieve their goals. If this is not accomplished then end user customer is the one who suffers.

6. Weigh the value of customized versus standardized services:
Customization can deliver specialization and differentiation whereas standardization can deliver agility and speed. Which one is right for you? You must evaluate the risk/benefit of each solution and determine the strategic importance of the expected outcome to determine the right fit for your firm.

7. Delivery and quality
Delivery and quality aren’t always used in the same sentence, but they should be. Be very specific and deliberate when documenting your expectations on delivery and quality. It’s not enough to say that all requests for service will be responded to within 15 minutes from time of call and closed within six hours. It is more important to articulate that if a problem occurs it will not occur repeatedly over the length of the contract.

8. Scalability
Your outsource partner needs to be positioned to meet your growth requirements, so don’t just look at their current capability—look at their ability to scale. Just as you need time to ramp up skills and staff, your outsource provider needs time to react to your needs.

9. Define the relationship model and incentives for mutual benefit:
A true partnership means accepting risk and sharing rewards on both sides and is appropriate only in strategic business-critical outsourcing relationships. Mapping outcome to payment and incentive structure, determining the mutual investments and benefits and defining “success” will help outline the relationship

10. Negotiate and renegotiate a win-win deal:
No deal stays the same. It is best to negotiate up front that certain modifications can be made to the agreement at the end of each year as the corporate environment changes. Two to three years into any deal, business drivers can and will change for both parties. It’s best to realign expectations and benefits on an annual basis.

Which option is best for my organization: Offshore, Outsource, or Insource?

September 30, 2009

With the economy coming off of its lowest point since the great depression and CIOs being under extreme pressure to reduce cost and increase their return on investment for every project they undertake, many are asking the question of whether executing IT activities under a third party model makes sense for their organization. The answer to this question is quite complex especially when considering the third party’s experience in outsourcing, offshoring or insourcing. Allow me to first define the options that are available to most organizations.

1. Offshoring refers to sending both knowledge-based IT work (i.e. most often application development and maintenance) to third-party firms in other nations. The intent is to take advantage of lower wages and operating costs in such nations as China, India, Hungary, and the Philippines as examples. The choice of a nation for offshore work may be influenced by factors such as the language and education of the local workforce, transportation systems or natural resources. For example, China and India are graduating high numbers of skilled technicians, engineers and scientists from their universities. In addition, some nations are noted for large numbers of workers skilled in the English language, such as the Philippines and India.

2. Outsourcingcan be defined as the hiring of an outside company to perform a task that would otherwise be performed internally by a company (this can be done on an offshoring, local, or combined basis)–generally with the goal of lowering costs and/or streamlining workflow. Outsourcing contracts are often several years in length. Companies that hire outsourced services providers often do so because they prefer to focus on their core strengths while sending more routine tasks outside for others to perform. Typical outsourced services include the operation of human resources departments, telephone call centers, distribution centers, research needs, computer departments or services and design.

3. Insourcing refers to situations where an outsourced services provider moves into and sets up shop in or near a client company’s facility. It is common for major companies to sign agreements with IBM Global Services, HP, Perot Systems and other outsourcing firms whereby these firms take over and operate a client’s internal IT department. Coming up next (post): Discussion of the pro and cons of each option.