It has been many months since my last post to this blog – the result of continued recuperation from last year’s surgery, involving a good amount of vacation travel, and a reduced work schedule. Now however, with that all hopefully behind me, as I sit in my office looking out at the sunrise over beautiful Saanich Inlet, and the snow covered Vancouver Island mountains beyond, it seems as good a time as any to reflect on the fact that 2013 marks my 50th year working in, with and around technology. To think about what has changed, what is still changing, what hasn’t changed, and what has to change if we are to really unlock the potential value of our use of IT.
What has changed?
To cover all the changes that have occurred in 50 yrs would need a book, not a post, so suffice it to say that when I started working in 1963 for C-E-I-R (UK) Ltd., I was working with an IBM 1401, which had a (not really published as such) processing speed close to 10 million times slower than today’s microprocessors, 8k of storage (later upgraded, with an additional unit, to 16k), no solid state/hard drive, displays or communication capability, and no operating system (that was me!). Weighing in at around 4 tons, it needed a fully air conditioned room, with a raised floor, approximately twice the size of my living room.
Today, in my home office, I have a (now pretty old) MacBook Air with 256GB of storage, an iPad with 32 GB and an iPhone with 64 GB (I’m still not sure why I did that), and a number of printers all wirelessly connected within my house and to the world beyond through the internet. I have access to an ever growing body of knowledge that can answer almost any question I have, and, generally free through Skype, to anyone in the world I want to talk to (and see). I can manage my banking, pay bills, check my medical lab test results, organize my travel, shop, read books, listen to music, watch videos, play games, organize, edit and enhance my photographs and videos, and a myriad of other tasks. And, I can do the same from almost anywhere – including from a lanai in Hawaii, a stateroom (we used to call them cabins) on a cruise ship or, unfortunately, now a airplane. And, of course, this doesn’t include all the other computing power in the house, our security system, appliances, watches, cameras, cars, etc. but you get the picture. And I’m just one guy!
At the enterprise level, we have experienced extraordinary advances in computing power, storage and communications capabilities, and how we interface and interact with all this. Technology is now no longer a “black box” – it is embedded in almost all business processes, and in everything that we do. As described in a recent blog by Mark McDonald of Gartner, the technology model is changing from computing – the technology in and of itself, to consumption – how individuals and organizations use technology in ways that can create value for them and, in the case of organizations, their stakeholders.
What’s still changing?
On the technology front – everything, and at an increasingly rapid pace. We are in the middle of what I first described in a January 2012 post as a “perfect storm” of technological change, including:
- Increasing adoption of the Cloud, Software (and just about anything else) as a Service which is fundamentally changing the delivery model for technology – and business services and, as a result, leading to seemingly endless debate about the role of the IT function and the CIO as I discussed in a January, 2011 post;
- The explosion of “Big Data”, and along with it analytics and data visualization – here, as described by Bryan Eisenberg in a recent post, it’s not the “big” that’s so important, although it is impressive and presents it’s own challenges, but rather the shift beyond analyzing samples of data to all the data, historical data to real-time data, and structured data to unstructured data. All of which with a cost structure for using these data tools has now made it more widely available and accessible to a greater number of organizations, regardless of size. Other implications/challenges here include the need to look beyond analytical tools themselves to the creation an environment where people are able to use their organization’s date and their knowledge to improve operational and strategic performance, as described by Joe Peppard and Donald Marchand in a recent HBR article, as well as the increasing personalization of data, and the question of “whose data is it?” as discussed by my son, Jer, in a 2011 TED talk.
- Mobility, consumerization and BYOD which are fundamentally changing how, where and when we interact with technology and access information – as described by Mark McDonald of Gartner in his previously mentioned post on the technology model changing from computing to consumption;
- The emerging ” internet of things” (TIOT) where everything talks to everything and which, as described by Andrew Rose of Forrester in a recent WIRED UK article, brings with it unprecedented challenges in security, data privacy, safety, governance and trust.; and
- Robotics and algorithmic computing which have considerable potential to change the nature of work as described by Sharon Gaudin in a recent Computerworld article.
This is certainly not an exhaustive list – it doesn’t, for example, include 3D printing or wearable technology, both of which will also have significant impact, and it will certainly continue to change and be added to, but it does capture the main areas where change is occurring, and the essence and magnitude of that change.
What hasn’t changed?
Back in 1998, together with what was then DMR Consulting. later Fujitsu Consulting, I wrote The Information Paradox, which described the conflict between the widely held belief that investment in IT is a good thing, and the reality that this, all to often, it’s value cannot be demonstrated. The book’s main premise was that benefits do not come from technology itself, but from IT-enabled change, and that benefits do not just happen, nor do they happen according to plan – they need to be actively managed “from concept to cash”. It put forward the view that this was not a technology problem, but one that business leaders needed to own and step up to – that realizing the potential value of IT to organizations should be an imperative for all business managers. It proposed an approach, the Benefits Realization Approach, to enable them to address the challenge of value. In the second version of the book, published in 2003, an Afterword built on the Benefits Realization Approach to address the essence of overall organizational governance focused on enterprise value. (A good summary of the book can be found on Basil Wood’s bazpractice blog). Yet today, 15 years since The Information Paradox was first published, the track record of so called “IT projects” remains dismal, and realizing the value promised by IT remains elusive. Why is this? The answer lies in what has not materially or broadly changed over the last 5o years, including:
- A continued, often blind focus on the technology itself, rather than the change – increasingly significant and complex change – that technology both shapes and enables (more on managing change in this post);
- The unwillingness of business leaders to get engaged in, and take ownership of this change – preferring to abdicate their accountability to the IT function (as discussed in this post);
- Failure to inclusively involve the stakeholders affected by the change, without whose understanding and “buy in” failure is pretty much a foregone conclusion;
- A lack of rigour at the front-end of an investment decision, including, what is almost universally a totally ineffective business case process (as described in this post);
- Not actively managing for value; and
- Not managing the journey beyond the initial investment decision.
Overall, despite all that has been written and spoken about this challenge, and the growing number of frameworks, methodologies, techniques and tools that are available, we still have what is predominately a “culture of delivery” – “build it and they will come” – rather than a “culture of value”, one that focuses on creating and sustaining value from an organisation’s investments and assets. For more on this , see my recent APM UK paper on the topic.
What needs to change?
In work I have been doing with Joe Peppard, we have identified 8 things that business leaders, starting with the CEO, need to do. These are:
- Don’t see IT as something separate from your core business – technology today is embedded in, and an integral part of most, if not all parts of your business processes.
- Don’t focus on the technology alone – focus on the value that can be created and sustained through the business change that technology both shapes and enables.
- Do recognize that you are ultimately accountable for the overall value created by all business change investments – and ensuring that accountability for the realisation of business benefits anticipated from each investment is appropriately delegated to, and accepted by, other executives and managers.
- Do demand rigorous analysis of every proposed business change investment, whether or not IT is involved. Ensure that you and your team know and can clearly define expected outcomes – (value), that there is a clear understanding of how that value is going to be achieved, that all relevant stakeholders have bought in to the required changes, and that they are capable of making or absorbing them and delivering on the expected outcomes.
- Do recognize that the business case is the most powerful tool that you have at your disposal to manage business change investments – insist on complete and comprehensive business cases, including desired outcomes, benefits, costs and risks, and clear explanation of how each benefit will be achieved with unambiguously assigned accountabilities, supported by relevant metrics.
- Do recognize that benefits don’t just happen and rarely happen according to plan –outcomes and plans will change – don’t think business case approval is the end of the story. Mandate that the business case be used as the key operational tool to “manage the journey”, updated to reflect relevant changes, and regularly reviewed.
- Do know if and when it’s time to stop throwing good money after bad, or when there are better uses for the money and “pull the plug.”
- If your CIO doesn’t “get” the above points, and hasn’t already been talking to you about them, get one who does and will!
So, what is it going to take to make these changes happen? For myself, I am going to continue to try to make a difference – but more directly, and more directed. Since the initial publication of The Information Paradox, I have travelled the world presenting to, talking and working with many hundreds of organizations and tens of thousands of individuals. Some of the organizations have heeded these ideas, embraced a value culture, and continue to thrive, many have taken some of the ideas across the organization, or all of the ideas in parts of the organization with some success, and others have tried but slipped back. There are many individuals who tell me that my ideas have changed their lives – sometimes resulting in success, in other cases simply greater frustration in that they understand what has to be done but can’t make it so. At the end of many presentations or discussions, I almost invariably get the same two comments. The first – “You’ve given us a lot to think about”, to which I always reply “Great, but what are you going to DO about it?” The second comment, which in some ways answers my question – “My boss should have been here”. Getting the “boss” to come to listen to anything that has an IT label has been, and continues to be a challenge as I discussed in my last post. Where I and they have been successful, it is only when we have got the attention, understanding and commitment of of the Executive Team. It has become quite clear that without this commitment, the best we can do is tweak around the edges – and that is just not good enough.
So, it’s time to be more direct – getting this “right” is not an option for business leaders – it’s their job and they cannot be allowed to shirk it. The CEO, supported by the Board and Executive Management Team is accountable for ensuring that effective governance is in place around IT decision-making, with specific focus on value, as well as for the selection, oversight and optimisation of value from the portfolios of business change investments and assets. This should be a condition of employment, and grounds for immediate dismissal if they with fail to do so.
It’s also time to be more directed – to get the message directly to business leaders – a shareholder or taxpayer revolt would be a good idea, but, turning 70 next year, I can’t wait for that. I will however be working to get in front of more boards, or organizations of directors, targeting articles to more business-oriented publications, presentations to more business-oriented events, and targeting presentations, seminars and workshops to business executives.
We can, and must all play our part in this. In my case, in addition to getting more active on this blog, I am currently working on articles in business journals, as well as executive briefings and workshops – I will be co-instructing one of these, Value Management Master Class: Enterprise Governance of IT for Executives and Senior Managers, with Peter Harrison from IBM at the University of Victoria in Wellington, NZ on April 11th & 12th. If you’re interested and live in the area, or would like to visit Wellington – a beautiful city, you might want to consider this opportunity, or – even better – encourage your bosses to do so.