What is the CIO’s mandate?

The following presentation is a condensed version modified for display on Slideshare. It is based on a workshop I run for organisations to help define a digital strategy, by understanding and aligning with current business priorities. I’m considering expanding it out into a book format to include templates and exercises from the workshop.  The content is based on a range of materials I’ve gathered over the years from studies into achieving business value from IT. This version has been recently updated to include statistics from IBM’s 2011 Global CIO Study.

One of the most hotly debated exercises is to take the business benefits diagram and apply it to an industry to identify the differences between market leaders, those struggling to survive and a sample in between. Or alternatively, plot how a company has changed its position over time.

 An easy example is Apple. At the start of the century, the company was not in the greatest shape. There was little focus on customers, products were expensive to buy partly because they were expensive to produce, and the quality had deteriorated from being an early market leader. In the following 12 years, they moved all three axis into dominant positions

  • The opening of the Apple retail stores, staffed by ‘geniuses’ changed the customer relationship for consumers. iTunes provides a treasure trove of data about purchasing decisions. One are that remains weak is the customer relationship in the enterprise space.
  • Operations were completely transformed under Tim Cook, enabling products to be manufactured far more efficiently and at lower costs.  Whilst the Macbook range is still more expensive than the average personal computer, the gap has reduced significantly when comparing like-for-like specifications. And Apple makes much higher profit margins compared competitors, making it harder for others to compete on price.
  • Product quality has returned to a strong position, with most other manufacturers seeking to imitate many of the design concepts introduced in Apple products over the past 6 years since the launch of the iPhone
  • …and the fourth axis – redefining the market. In barely 6 years, Apple’s revenues and profits from mobile devices surpassed their computer sales and turned them into the most valuable company in the world. Nobody expected the oil companies to be toppled just yet.

If you were a competitor to Apple, which axis do you focus on to improve performance?  The fourth is always still there – Apple has yet to dominate the enterprise market outside of a focus on education…

Should CEOs Tweet?

A couple of news articles were posted in the past week highlighting the growing recognition that social media has strategic value and noticing that most CEOS don’t get involved in social media.

BBC News published an interview with Google executive Sebastien Marotte describing recent research into social media for business. Findings included:

  • 81% of high-growth businesses are using social tools to assist that growth
  • 75% of senior executives said that social tools will change business strategy

TheStrategyWeb posted an article asking if social media is going corporate. They highlighted recent research that concluded:

  • 70% of Fortune 500 CEOs cannot be found on any form of social media
  • less than 10% of CEOs participating on Facebook, Twitter and co

Is that a problem?

Not necessarily…

Richard Branson is an example of a CEO who tweets a lot. And the tweeting is consistent with his reputation. He has always used media to promote what he does, whether for commercial, personal or charitable gain.  Steve Jobs didn’t tweet. And was anybody surprised?

Social media can offer benefits in two ways:

  • Communications to try and increase business*
  • Communications to try not to lose business*

* Business as in whatever rocks your boat – sales, contacts, reputation, knowledge, ego…

Social media is just another channel for the conversation. Albeit faster and more visible on a global scale. Beneficial? Absolutely! But it doesn’t mean everyone in the organisation needs to be directly involved.

Better to have the right personality tweeting regardless of their seniority in the organisation. That’s the charm of social media – it cuts through hierarchies. Bemoaning the lack of CEOs tweeting is a call for the old ways of working.

References

Related posts

Who wants to be in the middle?

 

In just about every scenario imaginable, success is usually found at the edges rather than the middle. Being in the middle is normal, comfortable, average, bland, OK, alright, doing fine…. feels safe but usually isn’t. Be big or small, not medium sized. Be loved or hated but never just OK. Be the hero or the villain, who wants to be the victim. Be thoughtful and considered or crazy and passionate, but have an opinion and don’t sit on the fence. Being at the edge creates a reaction, something happens. But there’s more to it. Being at one edge makes it easier to take on the other side, to compete. Being in the middle means sharing some traits from both sides but not enough to matter to, or be, either.

MIT Sloan Management Review has a detailed research article on Social Business: What are companies really doing?  Lots of case studies and examples about what works and what doesn’t. And yet again, the challenge for those in the middle. One of the key findings was that size matters:

To back their social business activities, both small companies (those with fewer than 1,000 employees) and large companies (those with more than 100,000 employees) tend to have stronger management support for social business initiatives than do midsize companies.

With social tools, small companies are demonstrating that they can appear larger than their actual size; large companies can appear less like corporate behemoths. Midsize companies see the advantages of social tools but, in general, do not see themselves exploiting these advantages for another few years.

It makes sense. Small companies usually have more flexibility to innovate and experiment, there is less bureaucracy. There is often also the urgency to do something, anything, to grow.  Large companies can be big enough to allow for experiments – so much bureaucracy, ideas can fly under the radar, what harm can they do? There are usually enough funds to take the odd risk and see where it goes. But for medium-sized companies, change comes much harder. Big enough to feel there is too much to risk losing. Not big enough to have a war chest to fund crazy ideas.

The competition is between the very small and the very large. And that competition eats away at the market for those in the middle. And all the while, those in the middle are waiting to see what happens. Feeling safe… and far from it.

Retiring old equipment

rusty old car

IDC has a report out showing the increase in IT costs for managing older hardware and software, covered by a recent Computerworld article. It’s sponsored by Microsoft so yes the numbers are unsurprising. But they are also quite believable.

  • The magic milestone is after the three-year mark, when “costs begin to accelerate” because of additional IT and help desk time, and increased user downtime due to more security woes and time spent rebooting
  • IT labor costs jump 25% during year four of a PC’s lifespan, and another 29% in year five,, while user productivity costs climb 23% in year four and jump 40% during year five. Total year five costs are a whopping 73% higher than support costs of a two-year-old client
  • Organizations reported that they spent 82% less time managing patches on Windows 7 systems than they did on Windows XP, 90% less time mitigating malware, and 84% less help desk time
  • Windows 7 users wasted 94% less time rebooting their computers and lost 90% less time due to malware attacks.

It’s part of Microsoft’s campaign to get computers running Windows XP replaced.  And so they should be. You rarely see a company car over the age of 3 years old, let alone in service for over a decade.  This is another area that in time will benefit from the transition to cloud computing and apps that work across multiple devices. One of the issues for replacing old desktops in large companies has been a dependency on bespoke applications that prove hard to migrate. That’s one trend to be glad to see the back of.

An associate who runs an IT support company for small businesses has recently introduced a new service plan for his clients.  The support costs now increase for all equipment over 5 years old.  For many customers, it has spurred them into action. IT systems can become like a pair of comfy old slippers – we hang on to them for far too long after they outlive their usefulness. The comparison to managing cars and their servicing/MOT costs has encouraged many to now look at a more regular cycle to keep technology current and useful to business activities instead of just sticking with what they are used to regardless of the wear and tear. Not all good news for Microsoft, some are now looking at a possible switch to Apple and others…

Video interview about Olympic IT

BCS interview image

The British Computer Society/Chartered Institute for IT has posted an interview with the Metropolitan Police’s Director of IT, Stephen Whatson, who’s been tasked with the IT infrastructure for the Olympics this year.  Includes some interesting comments about the preparation and decisions made. Video embedded below (Flash player required).

 

Source: BCS – Video interview: Olympic IT, Apr 2012

The need to mix business and design

A great article on Fast Company highlights the need for both business and design skills when faced with tough business challenges: What Both MBAs And MFAs Get Wrong About Solving Business Problems, by Melissa Quinn.

Article outline: Numbers and bullet points aren’t the only things driving executive decision making. And pretty pictures won’t get you there either. Both designers and MBAs have a lot to learn.

Toronto University’s Rotman School of Management has run a design challenge geared at exposing MBA students to the value of design methods in business problem solving. For the past 2 years, the MBAs (Masters of Business Administration) have been trounced by the MFAs (Masters of Fine Arts). How?

With only 15 minutes to convince a skeptical panel of experienced professionals about a new idea that doesn’t exist in the world today, [MFAs] fared significantly better than their MBA counterparts. Why? Because they shared real user insights to engage us emotionally, used narrative and stories to compel us, drew sketches and visualizations to inspire us, and simplified the complex to focus us. It’s proof positive that numbers and bullet points, while important, aren’t necessarily what drive executive decision making

The key message – don’t assume you can teach MBAs to do this stuff well by chucking in a couple of modules as part of their course. Don’t dismiss the years of study that designers undertake to develop these skills.

That said, it wasn’t an entirely happy ending for the MFAs either.

While design students fared much better than their MBA counterparts that Saturday afternoon, I should point out that only the winning team from the Institute of Design at IIT actually charged a fee for the service they developed (a fact that was not overlooked by my final-round co-judge Ray Chun, the senior vice president of retail banking at TD). Some competitors were able to offer a vague notion that their ideas would generally create economic value, but crisp articulations of a profit model and underlying assumptions were hard to come by.

A great article, worth a read. Particularly if you tend to rely on bullet points more than visuals in PowerPoint to explain something you want people to remember. (Side note: but does depend on the type and purpose of presentation. If teaching a technical topic, screenshots and bullet points are usually quite helpful after the event.)

p.s. The image at the top? A book shelf in my home office, containing some of the books that continue to help develop presentations. Story boarding for films has been the latest new topic of study. 🙂 (Half of those books are in Kindle-only format… times change.)

As a good mentor Nicholas Bate likes to say – ‘Always be learning’.

Evolving web business models

There is an outstanding presentation on Slideshare explaining why all web-based businesses need to be evolving their business models to leverage APIs more than their own web sites. Found via Twitter but I can’t find who originally shared as Tweetville is amok with a ‘0 followers’ discussion at the moment. And this presentation is too good to get lost in the stream.

To summarise the presentation:

  • Darwin identified that finches lived in a very remote location meaning the variations had to compete with each other to survive. The finches you see today are the winners
  • At the start of the 20th Century, retail business was primarily local within villages, towns and cities, selling direct to people. With the evolution of suburbia, we saw the shift from the corner shop to the shopping mall with each mall containing mostly the same retail brands – business went from direct to indirect. The big brands at the end of the 20th Century were the winners
  • At the start of the 21st Century, web-based business was ‘local’ to the web site, selling direct to visitors. With the evolution of social networks and mobile devices, we are seeing a shift from visiting the corner-shop equivalent web site to the mall equivalent – lots of businesses hosted on the same web platform, be it micro-applications on your mobile phone or applications in widgets on a social networking site. To be one of those applications means using APIs (application programming interfaces). How important is it?:

80% of web-based traffic will be coming from beyond the browser…

If you are doing business online, you need developers who understand APIs