CIOs need to stop overselling IT and be realistic about digital risks
- Summary:
- Hampshire County Council CIO Jos Creese believes real change will only happen when processes are overhauled
The CIO is at risk. IT leaders are currently trying to figure out how best to integrate new technologies – mobile, social, cloud, big data – into their monolithic back-end enterprise platforms, whilst still ensuring corporate governance and security measures don't go out the window. Savvy employees are demanding the latest digital tools, and if CIOs don't move fast to provide the them, they face being side-stepped.
But how do you sell this to the board? How do you ensure that the tools are used appropriately? How do you make sure that they are used at all? What about alienating less digitally able staff or customers? What if the technologies don't deliver against their business cases? What about security? This is a complex time for the IT leader in charge of digital transformation and many are at risk of getting it wrong.
Jos Creese, the CIO at Hampshire County Council in the UK, was speaking at the Connected Business conference in London this week, where he outlined how CIOs – or chief digital officers – should tackle this enormous challenge. He said companies need to stop buying 'stuff' and bolting it on in the hope that it works.
“This is about getting technology into the DNA of your organisation, this is not about bolting on IT. It's not about more IT, it's not about new technologies – cloud computing, unified communications, social media - and neither is it about more automation,” he said.
“It's about a fundamentally different way of thinking, about how you design and deliver your services, it's about how you operate internally, it's about throwing away lots of stuff and throwing away the ways of working that we have had for the last 50 years. It's particularly about being much more agile and much more customer focused.
“There is a role for the CIO to be more realistic about what technology can deliver. If you want to be ambitious, you need to understand what the appetite for risk is within your organisation, as well as the business readiness.”
Creese said that IT is no longer about the IT function within an enterprise dictating what employees and customers should have access to because that's what IT feels comfortable with. Instead, developing services should be collaborative, both in consultation with staff and in joint-development with the people that consume a business' products.
“The reason for doing this is because the business doesn't know best, it's the people that are consuming your products and services that know best. That's why many of these apps that are emerging within organisations have been so successful – they've not been designed by corporate IT, they've designed by users, for users.
“That does not mean that it's a free for all, what it does mean is that it is different way of delivering services.”
However, CIOs should not just hand out new digital tech and expect employees and consumers to get on with it. Creese believes that the new tools should be rolled out with disciplined controls and within frameworks, which are designed around the need of the end user and the function that it serves.
“Again, it's not the tools, it's how you use them.”
Don't oversell IT
The point of this digital transformation is about delivering value.
Creese said, and we have plenty of examples to back this up (particularly in the public sector), that IT does not have a good track record in delivering on what it promises and creating a delivering a positive return on investment. He believes that this is because the IT function and CIOs massively oversell what they want to roll out. Over ambition, as Creese puts it.
CIOs get excited about what they have seen is possible – both in the consumer world, what vendors have said, and in other organisations – and write the best case scenario into their business case.
“We have all done it, your teams will be doing it. We are excited about what we have seen and translating that into a business case into a corporate environment is actually pretty hard to do,” said Creese.
“One of the difficulties is that it is pretty hard to predict how these things will work in practice and where the real business value will lie. Traditional business cases don't work terribly well for IT – they tend to look at what's on the balance sheet, they tend to look at the direct and measurable costs of technology and they tend to underplay because it is very hard to cost the indirect cost that already exists in the business.”
Creese provided an example of customer services. Organisations know that there can be massive cost reductions in moving from a face-to-face customer service centre, to introducing a phone contact centre, or even an online self-service tool. However, the problem is that companies don't tend to ditch the old service delivery models, which in effect means that costs are duplicated.
“We need to be much cleverer about how we do the channel shift and unless you can switch off the more costly means of delivery, unless we can segment the customer base in a sensible way, then actually you can buy all the technology you want, you will not deliver the value that is in that business case,” said Creese.
This rationalisation also extends to enterprise legacy applications, the core IT platforms that have served the business for years. However, Creese doesn't believe that these hefty ERP platforms need to be ditched completely, or that they need to be a barrier to adoption.
“Legacy doesn't hold you back as much as you think. There is a need to rationalise all of our technologies, most organisations that I see have got too many suppliers, too many sorts of technology that have been specifically bought for particular applications. You really need to rationalise that because it becomes too expensive and too difficult to integrate,” said Creese.
“But many of the new tools that we need are incredibly cheap, they are consumer technology, they really are very cheap. I don't think the legacy is a huge issue – the big corporate IT was never designed for this world.”
He believes that these back-end platforms need to be stabilised and then effectively hidden from staff.
“My strategy for that is not to ditch all of that, but clearly move it into the back office and put over the top of it the agile layer, the consumer apps, the BYOD, the access to cloud services, that give the staff, employees, the customers the ability to do what they need to do in a way they need to do it, even though they are using a big powerful corporate SAP engine underneath
“Hide that from them. The small stuff over the top will be much more visible and that's where we need to invest.”
Don't lie to the board about the risks of digital
Despite being optimistic about the prospects of a digital revolution across an organisation, Creese isn't blind to the risks involved. He also believes that the risks shouldn't be hidden from the Board – the senior players in the organisation need to be actively involved and they need to be convinced about how it is going to transform the processes for the people working there.
Also, don't sell digital as an IT asset that can just be added without anyone noticing – it's not the truth.
“What is the board going to ask you? They'll want to know, how is this going to affect my organisation? If your answer is that it doesn't, you can just bolt it on, then I think you have missed the plot,” said Creese.
“The board needs to hear right now if you are going to maximise the value of technology, how you are going to have to reconfigure board structure, the governance of the organisation, the risk model, the way you manage the risk and reward around transformation programmes.
“They are going to want to know how big the benefits will be and they are not going to want to be oversold – they will start from the point of view that IT traditionally oversells. They are going to want to know about risks – IT comes with risks – what are they?”
And don't be afraid of admitting that it will be a bumpy ride...
“The board needs to understand that some of the things will go wrong, things go wrong today, they are just different things – trying to control all of these risks will not only undermine the value of the investment, but will actually increase your risks. You can't have a shopping list, you need to relate the stuff you see on the shelf to what your board actually needs to achieve. Don't just bolt it on.”
Don't be a CIO superhero
Finally, Creese said that the CIO cannot go at this digital transformation alone. It's not a one man job and it needs the buy-in of the entire management across the organisation, because they will be the ones that are having to manage the change in processes.
He believes that digital transformation can't be viewed as an IT project for IT to dictate. There needs to be genuine collaboration between service managers across the business – sales, marketing, finance, IT – they all need to be included.
“Service line managers need to do this, they need to understand it, but it's your job [the CIO] to help them to do that. To help them understand the risks and bridge the gap between the technology opportunity and the business creativity. We don't always do that terribly well.
“It's not a superhero job – it must disrupt and disturb current working practices and you can only do that if it is led from the top. Not just the CEO, not just the board, but the service managers, the middle managers, all of whom will be concerned about their bonus, their potential lack of skills that could expose them in this new world – you need to help them with that.
“You need to ask the questions that are too embarrassing to ask. You need to bridge the opportunity of technology and the creativity of people in your organisations – it's your job to make those connections. And if we don't make those connections, if you simply sell the technology, you will be overselling and falling short.”