As it becomes ever clearer that the subject of innovation of business models is actually all about a disruption of the technology model as it is currently defined, the role of the CIO becomes an increasingly hot topic. (My colleague Christine Hodgson wrote a neat summary of the challenges recently in CIO Online). Ever since Web 2.0 started to make its presence felt, and application users have become ‘browsers’, this topic has been around in periodic articles. I have referred to it in a number of posts my self, but i am not sure we have really grasped what we are asking of the role in most of the posts and articles. I suspect that’s because month by month the definitions and capabilities are changing and this affects the emerging picture. I am going to have a go this month at building on my recent post about the six roles who are stakeholders and users of technology, to do a more detailed job.
Let’s start with remembering the CIO role was established to centralise, and control, the use of Information Technology within the enterprise to reduce operating costs and increase internal operation efficiency. Paramount importance was attached to the need to stop the distribution of data and develop ‘one version’ of the truth for all enterprise data using client-server based monolithic applications with systems integration through tight coupled, state-full integration. Oh, and of course this is all paid for by investment business cases as part of the operating overheads of the enterprise.
Not one word of this description fits with the new challenges around the use of technology within the business, in fact worse, every value is in fact the exact opposite. Business managers and users want to use the web and cloud based services to support decentralised, local operational excellence of business technology to optimise sales and marketing responses to external events and conditions. The key is agility and flexibility to do what is needed using ‘services’ orchestrated from loose coupled, stateless elements. And this is part of the go-to-market operating costs which pay for the services they use on a consumption model.
Mmm – no wonder there is conflict! The well practiced approaches and management methods, to say nothing of the expertise and project skills, are all based on firmly managing ‘big’; big projects, big investments, big licenses, etc, whilst the new model is all about enabling ‘small’; small teams, small time periods, small direct costs, etc. To put it in the words that were used by one Capgemini CxO level executive, ‘the IT department can deliver the £3 million upside to a reorganisation of the spare parts systems, but they can’t handle 30 quick wins that deliver may be £50,000 to £100,000 upside each. However success in the (new) markets requires us to be able to succeed in the 30 quick moves’.
All of this before we even get to the question of the explosion of the user device types connected by mobility, the instrumentation of many objects and a wholly different attitude to working practice of the new younger workers. Paul Hermelin the CEO of Capgemini, summarised these issues both in respect to the new environment that is emerging and the way that it is a fact of life in Capgemini itself with our relatively young and highly technology aware workforce at the recent CeBit 2011 event and was, of course, captured on a YouTube video!!
I referred at the beginning to a previous post around six roles that each have a definable and different use for technology. Three of them, including that of the CIO, are all related to the role that IT plays, and continues to play in the enterprise today. The other three are based on using new technologies in ways entirely alien to existing IT: 1) The CEO wishing to develop new business models built around services to compliment their traditional products; 2) leading to the managers of new business models arising from this such as smart metering in Utilities; and lastly 3) the forward thinking managers and business users optimising their operations to local conditions and events. This represents ‘the who’ element of the two key criteria to actively drive to support and enable.
The other is ‘the what’ element that defines new skills and capabilities that must be developed and the simplest definition of this in outline that I have seen was developed by Ray Wang whose blogs are always interesting. In this case the full work has not been published, but in discussing it with Ray I felt it provided a simpler alignment model than the one that we were using at Capgemini. We shared pretty much the same content in detail, but Ray had better ‘what’ groupings, whilst the other way round Ray liked my ‘who’ groupings in the six role models approach. The four headings are:
Infrastructure; the challenge of using new technology and techniques to continue to reduce the cost of operating the current IT base and lay down the basis for enabling the new requirements. My comment on this is that whilst the adoption of virtualisation as an example is moving ahead it is still almost always related to IT and nowhere near enough attention is being paid to how this work will support the new decentralised services and clouds model.
Integration; the need to adopt a focus on processes and services, to extend the current data centric integration architecture into a flexible architectural business model. This will require moving beyond the existing enterprise architecture approaches which are based on tight coupled, state full systems to adopt orchestration methods for loose coupled stateless services.
Intelligence; the huge task of managing and using data of all types and adding the capability to deal with unstructured data as well as the existing enterprise structured data. Who captures what and from where, how they display and use, enabling safe real time decision making are all aspects of this the most challenging of the four groupings.
Innovation; The short and long term re-organisation of how the business and its business activities are changed by using technology to compete in the market in new ways, starting with addressing the three previous headings in terms of delivering the changes identified by using new technology in new ways to match new requirements.
My belief is that a simple matrix of the six roles and the four groupings provides a starting point for many CIOs to examine in an organised way how to address the delivery of technology to the business, both the existing generation of IT and the emerging generation of clouds and services. Hopefully that’s a concrete approach for attacking the issue of what the CIO role will have to address that also acknowledges that the focus points and importance of each of the boxes will be different at this time when the disruptive shift is still emerging and immature.