Today I had a couple of ah-ha moments. You know those moments when you put completely unrelated ideas together and suddenly realize that when combined they lead to a completely new conclusion. I’m sure you know what I am talking about, and I’m sure you have similar moments. Here’s what happened during my most recent revolutionary moment.
The changing role of the CIO
I was in London, meeting with a CIO I’ve grown to know and appreciate—let’s call him John. The objective of our meeting was to openly and frankly discuss the status of the relationship between our two companies. He started by telling me his job was fundamentally changing and, in supporting his CEO, he was getting dragged into a number of areas he had not even dreamed of. These areas actually have little to do with technologies; but instead with how technologies are used to address the challenges of the business.
He highlighted that he maybe gets five minutes at the end of his CEO’s meetings to discuss the datacenter consolidation project. Instead the bulk of the meeting reviews how some parts of the business are taken online, what that means for the employees, how change management is performed etc. I told him I’d written a piece on the changing role of the CIO about six months ago under the title CIO = CBO + CDO + CTO. John burst laughing and told me he had heard very similar messages from analysts and consultants—further proof that I’m not dreaming this up.
The sooner cloud disappears …
A couple of hours later, I’m working at the airport, in an airline lounge, waiting for a delayed plane, and I keep monitoring twitter. My eyes cuaght a tweet referring to a CIO.com article entitled “The sooner the cloud disappears, the better” quoting Jack Dorsey, co-founder of Twitter. The article uses actual examples to point to the fact that successful technologies end up out of sight, not because they fade away, but because they just become the way we work. TCP/IP is given as an example. And frankly, how often do we debate about TCP/IP? It’s just the way our networks work. I remember a few years ago when there were discussions about the fact that TCP/IP would never be allowed on the factory floor because it was not deterministic. Fast forward to today, now it is everywhere.
I agree with the article, cloud is doomed the same way. The sooner we get there, the better. This will move the debate back to what really counts— how the technology is actually used to address the needs of the business. And here is where John’s conversation comes back in the picture. Cloud will be the way IT is delivered.
This will have two key implications. First, the IT department will be less focused on infrastructure. IT will focus on the services delivered to the business. Second, the role of the CIO will expand beyond the traditional IT department, as John already experimented. Let me discuss these in a little more detail and highlight where things may go wrong.
The danger of BU-based IT
There is one danger though—each business department may argue it needs its own IT function. Some of that may already be happening; Scott Brinker claims “4 out of 5 analysts recommend a marketing technology office.” I can understand that traditional IT departments may be a little lost in a social media-oriented world. This world where structured and unstructured data needs to be analyzed to understand the sentiment expressed towards the enterprise.
An easy way out is to let marketing do its own stuff and instead focus on running the existing environment and just provision the required infrastructure. However that is the first step in making the IT department irrelevant—just making it capable of maintaining the legacy infrastructure. We operate in a world where infrastructure is quickly becoming a commodity. Employees are now asking themselves, “why would I source it from internal IT when I may get it cheaper from public sources.”
Because whether we like it or not, it is these new sources of information that are critical to identifying new opportunities and reacting quickly to the potential threats the business faces.
Operating in the danger zone
At the moment, marketing analyzes customer and market reactions to better understand client needs and spot new
opportunities for business. Tomorrow, the services arm may look at the same data to highlight possible warranty problems early. A little later, the supply chain team may be on the lookout for the first signs of potential disruptions in the supply chain (strike, political unrest, extreme weather conditions etc.)
If we let each department monitor the external world independently, they will tap into the same data sources using different tools—increasing the cost of running these environments, with no added value. This is why I feel they need a coordinated approach. In my mind, the CIO is in the best position to lead a converged analysis of needs and set-up a platform where all the departments can consume the required information.
As a site comment, we often complain of the lack of cloud literate resources, our next bottleneck will be the lack of people capable of developing the analysis strategies needed. So we better have a small central team rather than resources scattered across the departments.
IT – the guardian of information and services
What does this all mean for IT? What are the opportunities for forward looking CIOs? Business process execution, decision making, products and service delivery, supply chain management and client interactions all have a digital component these days. Now we need to organize how to best deliver the right functionality at the lowest cost and the highest agility. I think this is where the IT department in general and the CIO in particular ought to focus. If you look at John’s story that is what he is doing. Just realize that this will lead you way beyond technology and infrastructure.
Service provisioning (may sound like a procurement task), change management, organizational transformation andset-up of the appropriate governance are all part of the job.
In my mind IT should lead in four key areas:
- Lead the cross-enterprise governance related to information, tools and associated business processes. Ensure ownership and compliance as far as information is concerned.
- Ensure a consistent set of information addressing all aspects of the business is available for the enterprise. Source the required information and manage the lifecycle of the internally generated data. Ensure compliance with regulation, while providing appropriate access capabilities on a need to know basis. This is an expansion of the master data management role IT should already be playing.
- Establish an enterprise-wide IT architecture. Source and/or develop consistent tools to manage, analyze and expand the information. Please note, I started with source because I believe as many tools as possible should be sourced externally. Internal development should take place only where none can be found.
- Ensure cross-enterprise security while exposing the business teams to the information assets and tools available in other parts of the enterprise and its eco-system
The CIO, the ultimate enterprise technology advisor
The CIO will require an in-depth understanding of the business to fully play his role. This will allow him to advise the business teams on how information technology can help them achieve their objectives. IT allows new ways of working and triggers new business opportunities. Being first in spotting and exploiting opportunities gives enterprises great opportunities to grow—despite the current economic conditions. The CIO should play a key role in supporting the CEO in this space.
What are you waiting for? There are great opportunities ahead. Take advantage of them, or the IT department may become one of the dinosaurs of the enterprise, ultimately hidden in a cupboard. I’m sure you do not want that.
I want to know what you think. Will “Cloud” disappear? Will IT go the way of the dinosaurs? Do you have experiences or thoughts on the topic? Share them with me and others here in the comments section.