Your IT Governance Coach

IT's Revenue Growth Future and Need for Responsiveness

Alan Calder has a short post in his blog about a positive trend affecting IT organizations. He has the following quote from the Economist:

“…globalisation and increasing competition in markets worldwide is driving senior managers to demand a closer alignment of IT to business goals. The research indicates that 69% of senior IT and business executives expect the primary role of IT, traditionally cost efficiency, to be elevated to that of enabling revenue growth within three years.”

Alan goes on to say, however, that this is creating a fissure between CEOs and CIOs as "IT Managers are dragging their feet." I have also seen surveys from IDC that say the same thing. CEOs are growing increasingly excited and dependent on IT as a top line growth and innovation driver, but are also growing frustrated with IT's lack of responsiveness. In fact, in an IDC 2006 survey asking CEOs for their top priorities, "improving IT responsiveness" jumped from #7 to #4 this year. So, the good news is that the value of IT is getting more recognition. The bad news is that IT is not keeping up with the speed of action that the business demands.

I believe that improvements in IT governance will make a world of difference in improving IT's responsiveness. With a dynamic and direct link between business and IT goals, and with IT's ability to quickly and effectively make well informed decisions that balance benefits and risks IT will demonstrate it's ability to add top line value and its ability to do so on a timely basis.

Technorati Tags: IT Governance

Scanning the Environment for Strategic Assumptions

CobiT Control Objective P01 – Define a Strategic IT Plan is in my opinion the most important of all CobiT objectives. I probably write more about IT Strategy than about any other topic. What’s the purpose of IT governance if there’s no strategy to advance? Yet, in my experience only 10% of the IT organizations have a strategic plan worth its weight in salt. I often like to study about how strategy plays out in non technical areas and learn lessons to apply to the IT group.

Last weekend I was reading an article in the New York Times about the Toys R Us company of toy stores. Not long ago they were king in the toy category among all retailers. They were #1 with 20% of the market share. Recently they have been passed by Walmart, who now commands 30% of the market share and Target who now has over 15% of the market share. What happened? There were some failures in managing their strategy and in leadership. Noticed that I said that their failure was in managing strategy and not that they had the wrong strategy. All strategies are a gamble. Based on reading external trends, making strategic assumptions, and understanding an organization’s purpose and competencies, a plan is crafted that will generate the greatest business value. If executed well…. and if the assumptions prove right… the gamble will work. In my opinion, it’s more important to be constantly sensing changes in the external assumptions, than to work so hard to get it perfect from day one.

Toys R Us strategy consisted in been a category killer like Office Depot or Lowe’s. No one had as many toys under one roof. Walmart had a fraction of the toys, but they had ridiculously low prices. At the end, price won. Toys R Us also had three focus areas: toys, baby supplies, and children clothes. They decided to have three different stores. Taking baby supplies out, which had people who visited the stores many times a year buying pacifiers and bibs, left them with a clientele that visits every nine months. It is harder to sell with such few visits. From a leadership perspective the new CEO found a company that avoided accountability and that blamed others for everything going wrong.

What does this have to do with P01 and IT Strategy? Do you know what strategic assumptions drove your plans? Are you scanning the external environment for changes that would alter your assumptions? Have you thought about the impact that advances in service oriented architecture, Web 2.0, and social networks have on your future vision? Is your company outsourcing business processes that were thought to never leave the company? A more important question is, how well is your strategic process for regularly scanning the environment with an open and innovative mind? Toys R Us never thought they would fall from the position of dominance. How comfortable is your group?

Technorati Tags: IT Leadership, IT Strategy

ITIL Mind Map

I use Mind Maps all the time. My kids make fun of me because if they ever share some complex information they are dealing with at a restaurant I always take a napkin and draw a mind map to help them organize their thoughts. Well, Gary Slinger has developed a nice ITIL mind Map. Please go to his blog and take a look...

Technorati Tags: ITIL

The 30 Most Important IT Trends for 2007

On Friday CIO Insight published their top trends for 2007. I think 30 is too high of a number to be able to be provocative, but it still gives us food for thought...

What do you think?

Strategy
1. Process improvement will be job No. 1
2. IT works on closing the sale
3. Companies make their Web sites more engaging
4. Customer service gets a tune-up
5. Companies put their mounds of data to work
6. Information governance gains momentum
7. CIOs strive to be strategic

Management
8. The division between IT and business will diminish
9. CIO compensation keeps climbing
10. IT organizations will keep growing
11. CIOs struggle to find business-savvy technologists
12. Outsourcing changes IT management
13. Outsourcing growth slows
14. Offshoring shifts from India
15. Companies invest in IT leadership
16. Demonstrating ROI will remain a struggle

Security and Risk
17. No abatement of IT security threats
18. Security concerns turn users away from Windows
19. Security morphs into risk management
20. Compliance achieves what government intended
21. Compliance spurs financial process improvement

Technology
22. The move to a new architecture marches on
23. Enterprise applications start losing their luster
24. Data quality demands attention
25. IT reluctantly embraces Web 2.0
26. IT innovation loses traction
27. Business process management services and software will frustrate users
28. For business intelligence, the best is yet to come
29. IT organizations start going green
30. Dissatisfaction with vendors is on the rise

Technorati Tags: IT Strategy, IT Trends

IT Infrastructure Management Association's 2006 Conference

I have been too busy in the last week or two to really talk about this, but I wanted to discuss this year's ITIM conference in Vegas. I had the pleasure to attend this year's IT Infrastructure Management conference and I also had the honor to be part of their faculty. I gave a presentation on IT governance entitled, "Simplifying IT Governance to Maximize Infrastructure's Business Value." The presentation covered the business value for IT governance and a governance implementation framework I have developed based on decision making, strategy, people management, and the use processes like CobiT. The presentation went well and we were able to have good interaction. I wish that we had more time to go deeper into the governance issues affecting the companies represented there. We did do a survey on the most important governance decisions they were facing, so I'll write a post about that at a later time. I truly enjoyed the interaction with the attendees and that the framework seemed to resonate with them. I also had the honor of facilitating a breakfast chat session entitled "Is your outsourcing relationship dysfunctional?"

I believe this is the third ITIM conference and expo and it was outstanding. Anyone reading this should plan on attending next year's conference scheduled for November 2007. What did I like about the conference? Three things. First, the members of the ITIM Association and HDI that organized the conference did a terrific job. They were organized, everything happened according to schedule, they ensured all presentations were good to go, and all the way to the last hour, they greeted our constant requests for help with a smile and with results.

The second thing I liked was the quality of topics and speakers. There was enough variety in the tracks, IT governance, security, IT service management, business/IT alignment, and lifecycle management to really make things interesting. Few of us can focus on one of these topics exclusively, so it's great to take part of the "buffet of topics." The presenters were well prepared and exhibited an attitude of service ("How can I help?" versus "Am I not wonderful?"). Finally, and most importantly, was the quality of interactions among the participants. Because of the planned opportunities to network, as well as the openness of the participants I found it very easy to meet people. We had some great and interesting discussions on topics such as barriers to implement ITIL, but also just plain fun. I have already been enjoying the continued interactions with my new friends.

This was also the launch of a new association for infrastructure management professionals. The association already has a lot to offer in terms of content, thought leadership, and resources, but I truly believe this is only the beginning to a great association. It has a good vision, great experience since it is associated with the Help Desk Institute, and a talented group of advisors. If you haven't done it yet, please join.

I'll see everyone next year!

Technorati Tags: IT Governance, IT Infrastructure Management

Four Archetypes of IT Organizations

Christopher Koch has a very good post in his blog, Koch's IT Strategy, entitled "How to get fired for doing a good job" In this post he interviews Harvard Business School professor and IT guru F. Warren McFarlan about the state of IT. One major conclusion of the interview is that the expectation that business leaders have for the reliability and availability of their systems continues to increase. Organizations that before were OK with some downtime, are continuing to move up the axis of expecting much better reliability and control. Those who were OK before with 99.99% uptime now need and expect 99.999%. There's a lot of pressure on CIOs to deliver reliable IT systems. However, as businesses continue to realize the game changing nature of technology, many are also expecting more strategic IT initiatives that could help companies gain a competitive advantage. Christopher's bottom line is that CIOs will get fired for not attaining the expected reliability, but if that's all they do, they will either not get compensated well or they will also get fired.

Mcfarlan shares a quadrant describing four archetypes of an IT organization based on where they fall on two dimensions: the degree of expected reliability and the degree of strategic change driven by the CIO. For me the most important aspect of the interview is that as IT professionals we must know what the business expectations of our organization are. After scanning the environment we should then understand how this may affect our value proposition. For me, it's OK if the organization needs a strategic IT, an IT Factory, a turn around or a support. The most important thing is the alignment between business and IT strategies, as well as an understanding of where we are today and where we are going. It would be detrimental for a CIO to continue to spend energy on strategic IT initiatives because that is his or her strength, when the business needs a reliable and trustworthy IT. The opposite is also true.

Please go and read the interview...

Technorati Tags: IT Leadership, IT Strategy

YITGC Working With Multicultural Teams

Because of the flat world and off-shore outsourcing we find ourselves increasingly working in multicultural teams. This adds a lot of business value, but only if we manage our differences.

In this podcast we discuss the benefits of working in multicultural teams, we reference the November 2006 Harvard Business Review article “Managing Multicultural Teams” in which its authors explain typical issues associated with multicultural teams, and then we explain what can be done to not only minimize the potential issues, but to thoroughly enjoy the advantages of diversity. We reference resources that can help, such as the use of companies like Global-Dynamics to help us manage cultural differences.

We can’t maximize our teamwork potential if we allow our differences to impact our relationships and trust. We either manage our cultural diversity, or allow it to manage us…

Please listen to this podcast now or subscribe to it and automatically get future releases for free by clicking the iTunes or RSS orange buttons on the left column. YITGC0607.MP3

YITGC Sponsorship and Governance

In this pocast we'll explore change management, sponsorship, and the relationship between sponsorship and governance. Would implementing one take care of the need for the other?

In addressing a listener's question, we will cover what change management is, the role that sponsorship plays in change management, and the interdependent relationship that sponsorship and governance have. As part of the podcast we will cover the role of a sponsor and the three most common mistakes change management sponsors make.

Please listen to this podcast now or sign up to automatically get episodes delivered to you for free as they are released, by clicking on the iTunes or the orange RSS buttons on the left column. Download YITGC0606.mp3