Leaping Onto The Change Bandwagon

In most organizations where I have recently consulted, business executives are dissatisfied with IT. This dissatisfaction is usually because IT isn’t delivering what the business wants or needs, or it is perceived that IT costs are not in line with the value being delivered.

Last year’s BES posts expressed high expectations by executive leadership for IT to deliver on both critical business imperatives and cost improvements. Sadly, it would appear that this has not happened.

Whether real or perceived, this is an important problem to address because IT is now seen as contributing to the failure of achieving important business objectives and wasting significant budget dollars on low-value activities.

The size of the problem varies, and therefore the executive leadership appetite to address it does as well. But if it is a big problem, with critical business objectives missed and/or IT costs way out of proportion to the services provided, then why isn’t the problem being fixed?

The answer almost always can be classified as one of these three statements:

•    We are planning to fix the problem.
•    We are in the process of fixing the problem.
•    We have tried to fix the problem and it hasn’t worked.

When pressed for more detail about how the fix will be approached, or what actions are being taken, the response is usually an IT-centric one that focuses on process and organizational change.

Frankly, and from experience, I believe that an IT-centric approach to solving the problem is fundamentally flawed and will invariably lead to the result in the third statement.

Which brings us to the point of today’s post – the introduction of a new series.

Entitled “Business-Centric Change” this series will describe an approach to solving the problem (captioned in the first paragraph) of “IT isn’t delivering what the business wants or needs, or it is perceived that IT costs are not in line with the value being delivered” that is business-centric and IT-led.

Like BES, the BCC posts will appear weekly (or so, depending on my schedule). The first – entitled “The Problem” will be on the site next week. I hope that you enjoy the series and remember that your feedback and comments are always appreciated.

My First Attempt at Political Technology Commentary

President Obama will soon be appointing a Chief Technology Officer for the country. This has been known and discussed as one of the major features of the Obama ’08 Technology Plan (still available for review at the campaign web site).

This is an interesting “new” position. Our Federal Government already has a top-of-the-house Chief Information Officer role (the Administrator of the Office of Electronic Government and Information Technology at the Office of Management and Budget) that seems to have accountability for most, if not all, of the responsibilities articulated in the CTO role. Per the plan, CTO will specifically:

•    Ensure that our government and all its agencies have the right infrastructure, policies and services for the 21st century
•    Ensure the safety of our networks and will lead an interagency effort, working with chief technology and chief information officers of each of the federal agencies, to ensure that they use best-in-class technologies and share best practices
•    Focus on transparency, by ensuring that each arm of the federal government makes its records open and accessible as the E-Government Act requires
•    Focus on using new technologies to solicit and receive information back from citizens to improve the functioning of democratic government
•    Ensure technological interoperability of key government functions

Both CIO and Deputy CIO roles also exist at other levels in the vast Federal Executive Agency structure and many of these people are members of the Federal CIO Council.

Also, the nation will be getting a new head of the National Cyber Security Center in the Department of Homeland Security (a.k.a. “Cyber-Security Czar”) as part of the new administration as well. That position should not be confused with that of the CIO of the Department of Homeland Security.

If you’re beginning to become confused as to the structure of IT in the Federal Government, you are exactly where I am on that subject (although that really isn’t the point of this post).

Outside of the articulation of the new CTO role and its responsibilities, the rest of the plan is a statement of how technology (not just information technology) will be used to accomplish some important transformational goals. All of them to some extent rely on a critical enabler – the existence of a digital high-speed communications infrastructure – that is listed as a specific goal in the plan as well.

So the new administration appears to be tasking the new CTO with critical interagency work, the creation of a digital infrastructure and is planning to “Employ Technology and Innovation to Solve Our Nation’s Most Pressing Problems” (another technology-enabled set of goals) in the plan.

Sounds like a challenging job! Unfortunately, given my own experience with the way IT is structured in the Federal Government, I don’t believe that it is positioned for success as it is currently envisioned.

As noted earlier, CIO leadership is at multiple levels in the Federal Agency structure. A federated-style CIO Council exists, along with designated leaders for important activities, like Information Security. The initiatives that the new CTO is responsible for cut across Agencies/Departments and no authority (or budget) currently exists to accomplish them. Add to this the overlap with the Federal CIO (OMB) job and/or its limited success with inter-agency technology governance, and I just don’t see how the new role can be successful without substantial reengineering of IT decision-making authority.

In the private sector, this would take the form of a negotiation between the various IT groups about governance (architecture), funding (budget authority) and investment for IT for each IT service domain. A simplified decision-making authority matrix to be drafted might look something like this.

Translated to the task at hand, the IT groups participating would be from the Agencies (representing LOB IT), Departments (representing business-domain specific IT, like Treasury), the CIO Council (representing central IT to-date), the OMB CIO (ditto) and the CTO (ditto).

Their mission would be to agree on who gets to makes the decision on architectural direction, investment, and spending for each domain. The groups would need to normalize a bit, perhaps with a future state diagram showing one combined central IT organization under the CTO (?) consisting of the various architectural domains (Enterprise Architecture), an interagency Program Management Office, perhaps some sort of Managed Services Organization and Security function. The key would be to have strong support and sponsorship for this as the single central (?) Federal IT Organization.

Therein lies the major problem as I see it. As loathe as I usually am to come up with organizational solutions to technology problems, I believe that this case may be an exception. The new CTO role, if it is to be successful, should be a direct report to the President – a Cabinet-level position. Otherwise, it will lack direct political linkage to its sponsor and be at risk of becoming another great idea that languishes (like in the private sector) because the legacy structure will not allow it to move forward.

I’m sure that many of you have experiences where a position or program of work was less than successful because of its positioning within the organization. Given this is my first foray into this subject area; I’d love to hear your thoughts one way or another on my thinking here.

Also, because I’m quite confident in the ability of our Federal Government to “find” information on the Internet, I very respectfully offer the following:

Dear Mr. President,

Congratulations on the new job! Hope the move is going well and that you and your family are getting settled in the new place.

The information that you’ve seen on my site regarding the new CTO role is intended only as a suggestion. I’m sure that there are many things that you are working on to ensure the success of this new role.

That having been said, if you happen to wish to discuss this further, or perhaps need a special consultant on the matter, please give me a call on my mobile (224-234-8682) or email me at www.itstraighttalk.com and I’ll be happy to assist at my special new inaugural rate.

Thank you for your time.

Best Regards,

Eric Davis

(From FAQ) I’ve heard a lot of talk about the Value Proposition of IT. What is it?

Value, at least economically speaking, is simply what you receive for what you are spending. In determining the value of IT services, depending on the business and the particular service, that value may have other dimensions than cost. The value proposition of IT depends on the services offered by IT, the measures of value articulated for these services by the business, how well IT is delivering against those measures and the weighting of that performance across services.

For example, I would suggest that for commodity services, where industry standard measures of service quality exist and may be benchmarked against, that the main dimension of value is cost at the standard service level. For delivery of business solutions or capabilities, the main dimension of value may be speed to implement (versus the most economical method), thus enabling a business advantage in time to market. For other services, quality may be the most important dimension of value to the business.

The business plays a key role in ensuring that the appropriate value proposition is defined and realized. IT can help frame the discussion, but it is the business that has to articulate the appropriate weightings for the dimensions of value. From that information, and agreed-upon measures, an objective scorecard may be built and maintained to determine how well IT is delivering against that value proposition.

(From FAQ) Isn’t IT transformation to a managed services model a big deal – and what about the people in IT?

Before going further, let’s make an important distinction between transforming to the managed services model and outsourcing or multi-sourcing. One is not the other.

Implementing a managed services model gives you the tools to run IT like a business. That includes the ability to source services in different ways (insource, outsource, multi-source), but does not require it. The changes for IT people during the implementation of a managed services model are primarily in roles and responsibilities that correspond to new or modified service delivery processes. People’s jobs are changing. When implementing a multi-sourcing strategy, jobs are at stake.

The transformation to a managed services model is a big deal. It involves fundamental changes to processes, organization and technology. Extensive support is required from the Finance and HR functions. Customers of IT will interact differently with IT in procuring services. It’s a lot of change. In my experience, IT people can learn and operate successfully in the new paradigm fairly quickly – a matter of a few months – so long as the management team invests heavily in time to communicate the vision and value of the new managed services model (not just speeches, true interactive sessions) and provide training.

Implementing a multi-sourcing strategy is much more difficult to manage from a staff impact perspective. Presuming that you have already done the diligence and have a compelling case to pursue significant outsourcing of services, my advice is for full disclosure as soon as you have any sort of timeline for the process. If you are in an IT leadership role, you will soon find that your communications and staff interaction on this topic consume the lion’s share of your time. It’s time well spent, since you’ll want to minimize attrition – particularly of your best people, who know that they have options and can easily make a move.

Unfortunately, the answers that IT people most want to know (what happens to me, specifically) aren’t generally available until the end of the process. That is deeply unsatisfying to someone who is directly impacted. What I’ve found to be of value is to communicate throughout the process about what the various steps of the process are and will be known when.

The bottom line is that people will have choices to make and a time frame in which to make them. If someone is in the outsourced services scope, then the choices are generally pretty straightforward:

• A non-IT role at the current company
• An IT role that is not in-scope at the current company
• An IT role with the company that the services are sourced to
• Severance Package
• Retirement

The timing of when each of these will be known and available varies; so impacted staff will probably have multiple decisions to make. HR will be your best friend in helping to manage the information and processes for the various options.

Successful transformation programs invest heavily in an Organizational Change Management program of work that runs in parallel to the transformation workstream. These efforts are mostly communications-based and are vital in keeping the IT group informed and engaged during the transformation.

One of the most important points in these communications is that the transformation to a managed services model does not mean that IT jobs are being outsourced. In fact, unless both the goals of the business and IT transformation are best met by outsourcing as soon as possible, I would strongly suggest against the two efforts (IT transformation to a managed services model and IT outsourcing) being done as one – and then even so, I would caution that it will be a very bumpy ride for both the business and IT.

Again, the transformation to a managed services model positions IT to be able to source its services internally, externally or in any combination along the sourcing continuum. I believe that this multi-sourced model is the only way for IT to be competitive from cost, service quality and capability dimensions in today’s continuously changing global technology marketplace. However, it is highly advisable that the managed services structure first be in place and operational before implementing a multi-sourcing strategy.

Be prepared that no matter how well you communicate and execute this process, you will be the least popular person in IT for some time. Read Colin Powell’s Leadership Presentation – particularly the last page on “Command is Lonely.” It may help you though a difficult time.

2009 Greetings and Housekeeping Notes

Hello Everyone,

I hope that you all had a great holiday season and are now well-positioned for a prosperous 2009!

Before getting to the new posts for this year, I wanted to give you all a heads-up on two changes to the site. This week, I’ll be moving the posts on the FAQ page to the main blog page and deleting the FAQ page (it wasn’t being hit often and hadn’t been updated since the site launch). Also, I’ll be implementing a a new Theme to freshen things up bit (nothing radical, just something a bit brighter). After those items are taken care of, we’ll get to the new posts for 2009.

Thanks for your continued interest, and keep those comments, questions and suggestions for new topics coming!