VMware’s Tony Scott has been chosen to become the next U.S. chief information officer, according to a White House announcement on Thursday. Scott will follow in the footsteps of previous U.S. CIOs Vivek Kundra and Steve VanRoekel and be tasked with spearheading the White House’s Smarter IT Delivery Agenda and looking over the nation’s federal IT budget. Scott is currently VMware’s CIO and was previously the CIO of Microsoft for a little over five years. The White House hasn’t had an official CIO since VanRoekel left the post to return to the US Agency for International Development where he advised the government on the Ebola outbreak.
Let’s get one thing out of the way right up front. The business of IT is very complex and getting increasingly more complex every day. It does not matter whether you are the buyer or the seller; the industry is evolving into a very different and complex beast.
Evolution of the CIO
How we, as CIOs, have lead IT organizations is very different today from how it was done just 5-10 years ago. In many ways, it is easier to forget what we learned about leading IT and starting over. Of course, the leadership aspects are perennial and will always endure and grow. I wrote a bit about the evolutionary changes for the CIO in more detail with the 5 Tectonic shifts facing today’s CIO. In essence, tomorrow’s CIO is a business leader that also has responsibility for IT.
Consider for a moment that the CIO and IT organization sits on a spectrum.
Where the CIO and IT sit along the spectrum impacts perspective, delivery of solutions, target, and responsibilities along with a host of other attributes for both the organization and providers alike.
The changing vendor landscape
Add it all together and today is probably the most confusing time for providers of IT products and services. Traditionally, providers have asked customers what they need and then delivered it. Today, many customers are not really sure what they need or the direction they should take. And the providers are not well equipped to lead the industry in their particular sector let alone tell a good story of how their solution fits into the bigger picture.
As an example, one provider would tell customers their cloud solution ‘transforms’ their business (the company IT is part of). This is completely wrong and over-extends beyond anything their solution is capable of. As such, it positions the company to over commit and under deliver. For the wise CIO, it leads to a serious credibility problem for the provider. It would be pretty unique for any vendor to truly ‘transform’ a company with a single technology let alone one that is far removed from the core business functions. A better, more accurate statement would be: We help enable transformation.
Be careful of Buzzword Bingo. Bingo!
In another recent IT conversation, the perception was that all Infrastructure as a Service (IaaS) solutions were ubiquitous and interchangeable. While we hope to get there some day, the reality is far from standardized. Solutions from providers like Amazon (AWS), Google (GCE), Microsoft (Azure) are different in their own rights. But also very different from solutions provided by IBM (SoftLayer), CenturyLink (SAVVIS), HP (Helion). Do they all provide IaaS services? Yes. Are they similar, interchangeable and address the same need? No. For the record: Cloud is not Cloud, is not Cloud.
The terms IaaS and Cloud bring market cache and attention. And they should! Cloud presents the single largest opportunity for IT organizations today. However, it is important to understand the actual opportunity considering your organization, strategy, capability, need and market options available. The options alone are quite a job to stay on top of.
Keeping track of the playing field
The list of providers above is a very small list of the myriad spread across the landscape. To expect an IT organization to keep track of the differences between providers and map their needs to the appropriate solutions takes a bit of work. Add that the landscape is more like the shifting sands of a desert and you get the picture.
The mapping of services, providers and a customer’s needs along with the fact that their very needs are in a state of flux create a very complex situation for CIO, IT organization and providers.
Is it time to give up? No!
Today’s CIO is looking to up-level the conversation. They are less interested in a technology discussion and one about business. Specifically, by ‘business’ conversation, today’s CIO is interested in talking about things of interest to the board of directors, CEO and rest of the executive team. Trying to discuss the latest technology bell or whistle with a CEO will go nowhere. They are interested in ways to tap new revenue streams, greater customer engagement and increasing market share.
For the CIO, focus on the strategic conversations. Focus on the business opportunities and look for opportunities that technology can help catapult the company forward. Remember that the IT organization no longer has to do everything themselves. Divest those functions that are not differentiating. As an example, consider my recent post: CIOs are getting out of the data center business. If you are not willing to (or capable of) competing at the level that Google runs their data center, it is time to take that last post very seriously. Getting rid of the data center is not the end state. It is only the start.
For those that follow my writing, this post may have a familiar ring to it. Unfortunately, there is a reason I’m writing about this yet again as the point still eludes many.
The curious case of Acme Inc
Take a recent example for Acme Inc (company name changed). Acme is a mid-sized organization without a CIO. I spoke with the CEO and another member of the executive team that were trying to solve tactical technology and information problems on their own. In this case, Acme is experiencing solid growth of 50% CAGR. They believed they were being strategic in their technology decisions. The truth was far from it. It was painfully apparent they were way out of their wheelhouse, but didn’t realize it. In a way, they were naive that the decisions they were making were locking them into a path where, near-term, the company would not remain competitive. But they didn’t know that. They were looking to solve a technology problem to support their immediate growth trajectory without thoughtfulness of the opportunity. They were also relying too heavily on their technology providers whom they believed had the company in their best interests. Unfortunately, this is not a fictitious story of what could happen to a fictitious company. It is a real situation that occurred with a real company. And sadly it is one of many.
Trust is incredibly important in business today. There is no question. But as one mentor once taught me many years ago: Trust, but verify. In the immortal words of Deming “In God we trust, all others bring data.”
What is a CIO?
What is a CIO and do I need one? This is a question that many chief executives ask as their business evolves. I addressed a similar question about the CDO in ‘Rise of the CDO…do you need one?’ last year.
For small to mid-size enterprises, the conversation is not taking place soon enough. Many are still contemplating how to task the IT manager or director with more responsibility. Or worse yet, the responsibilities are being shared across the executive team. In one example outlined below, the results can be catastrophic.
So, when do you get your first CIO? And if you have a CIO, do you still need one? Isn’t the CIO’s role simply about managing the computers? In a word, no.
Do I need a CIO?
The short answer to this is yes. From small to large enterprises, the need for a CIO is greater today than ever before. Many will see a CIO and their organization as a cost center that eats into the bottom line. If so, that is a very short-sided view. Today’s CIO is very strategic in nature.
More than ever, business relies heavily on technology. But more than the technology itself, it is how it is applied and leveraged that makes the difference. The how relies heavily on context around business value and applicability. It requires someone, the CIO, to make the connection between business value across multiple disciplines and the technology itself.
Can other executives provide this capability? No. They can provide a different caliber of tactical implementation, but not the cross-functional strategic perspective that a CIO brings to the table. And it is this cross-functional strategic perspective that brings significant value to differentiate companies.
Information is the currency of business. It is what drives business decisions that will affect the success and failures across a myriad of dimensions. The CIO is the best position to understand, drive and expose value from information. The value of the information
What does CIO stand for?
This seems like a perennial subject. What does the ‘I’ in CIO stand for? Information? Innovation? Inspiration? Integration? The bottom line is that the I stands for the same thing is has always stood for; Information. Today’s business is driven by information. Technology is simply an enabler to leverage information. Integration, innovation, etc are all functional means to drive the value of information to a company.
If information is gold, what is technology? Technology is similar to the mining and refining equipment to extract and process the gold. Without it, the gold may be discovered, but in small quantities using ineffective means. A major factor in today’s business is speed. Access to information quickly is paramount.
The evolving role of the CIO
The CIO’s role (past and present) is far more complicated that many appreciate. A CIO is really a business leader that happens to have responsibility for IT. In addition, a CIO is really a CEO with a technology focus. A CIO is strategically focused and able to traverse the entire organization at the C-level. That last attribute requires a level of experience very different from the traditional CIO.
In the case of Acme, a CIO would be a great asset moving forward.
The past several years have presented an interesting time for CIOs, their staff and the companies they work within. In many ways, the changes are significant shifts how companies have operated.
IT has a history of tectonic shifts
Tectonic shifts are not new. In just the past 25 years, we have seen many major shifts in the way we operate. Many of the changes were about technology. But others directly impacted how we think of and consume technology. Here are just a few:
- Distributed Computing: Moving from centralized mainframe computers that took up entire rooms to small computers that could fit on a desk. The smaller size presented greater processing capabilities at a fraction of the cost. This trend has continued right down to the very smartphone we carry today.
- Internet: There was a time when companies actually believed the Internet was a non-essential connection. A gimmick of sorts. Today, a company would have a hard time surviving without connecting to the Internet.
- Virtualization: Virtualization presented the opportunity to do two core things: 1) create abstraction between the application and hardware and 2) more fully utilize resources. This provided greater flexibility and utilization.
- Cloud Computing: The advent of cloud presented the opportunity to take virtualization to a whole new level through the abstraction of resources and ownership. Now, a company can operate while abstracting from the physical resources. In essence, cloud presents a significant leverage point for organizations.
Each of these shifts passed through a period of disbelief, challenge and eventually acceptance. Arguably, one could suggest that cloud still sits on the precipice of acceptance. However, each has also become a core foundation to today’s computing environment.
Today, there are a number of new tectonic shifts in flight. Each shift follows a similar path of disbelief, challenge and will eventually gain acceptance.
The five tectonic shifts facing today’s CIO
- The IT customer is the company’s customer: Technically, this has always been the case. It may have come through a secondary source: The internal user. Many IT organizations still believe their customer is the internal user. Today’s IT organization needs to think about how IT supports the company’s customer. That’s not to say that the internal user is not important. But supporting the internal user is in concert with supporting the external customer. It also positions IT to align with other departments within the company.
- Consumers drive business behaviors: This could be seen as a ‘who-drives-who’ statement. The reality is that consumer behaviors are driving business behaviors. One can look to several examples to support this:
- Cloud: Gmail, Yahoo, Netflix, Dropbox.
- Mobile: Smartphones, tablets and wearables.
- Speed: Real-time satisfaction of results, information and access.
To understand where we are going, just look toward the next generation of millennials, digital natives and ultimately, children. Understand how the next generation is adopting technology and adapt accordingly.
- Real-time replaces batch process: Many core IT processes follow a batch processing methodology. However, today’s business is moving toward real-time access to information and analytics. Speed is the keyword here and plays into the consumer/ customer drive for real-time satisfaction.
- Transformational CIOs replace Traditional CIOs: This is probably one of the most sensitive shifts to discuss. Transformation CIOs are business leaders first that happen to have responsibility for technology. They understand how the company makes and spends money at an intimate level. Traditional CIOs are more technology-focused.
- IT becomes a business organization that happens to have responsibility for technology: IT (and the CIO as its leader) needs to become a business organization from top-to-bottom. Each function must consider the business value of their actions and the best course to take.
Reaching for the stars
There is no question that these shifts (like those in the past) will rock IT to the core. We can expect each to follow the same sequence of disbelief, challenge and acceptance. In fact, a small number of CIOs are already well down this path. The reality is that technology, or how it is used, is changing right around us.
Now is absolutely the best time to be in IT. It is also the scariest for IT folks and the stakes are only increasing. The hope is that IT (as a profession) and the CIO see the future and aim for the stars. The future is brighter than ever.
Last week, Amazon (NASDAQ: AMZN) held their annual re:Invent conference in Las Vegas. Gigaom’s Barb Darrow summarized her Top-5 lessons learned from the conference here. Specifically for CIO’s, there were a number of things coming from the conference that every CIO should take note of. One of those is to prepare for innovation. It is not a matter of if; it is a matter of when.
Innovation is not a destination, but rather a journey. The path is not always rosy and presents a number of challenges along the way. The upside is an outcome that positions the CIO, the IT organization and ultimately the company in a unique position among their competitors.
There are a number of core items that prepare the CIO for advancing down the innovation path:
- Keep it simple: The world of Information Technology (IT) is getting complex, far more complex, and not simpler. Yet, the importance to become agile and responsive to changing business demands is ever-present. The IT organization must find ways to streamline their processes across-the-board. We all know the KISS principle.
- Create innovative culture: Innovation is not innate for most. Current culture may actually inhibit innovation within the organization. Understand that culture must change. A good friend and CIO, Jag Randhawa wrote the book “The Bright Idea Box: A Proven System to Drive Employee Engagement and Innovation.” Jag outlines a process that he found to be successful and applicable to many different types of organizations.
- Avoid constraints: It is easy to find ways to avoid problems. Preparing for innovation can cause disruption. However, questioning the status quo may be exactly what the organization needs. Look for ways to address constraints whether from technology or from conventional thinking.
- Find leverage: IT is not able to do everything. In the past, it was necessary for IT to do everything (relatively) since there really was no other alternative. Fast-forward to today and there are many more options available. Identify what is strategic and should be a focus for IT. Find leverage for the other points to avoid distraction and paralysis.
- Seek difference: Being different is often a scary proposition. Many see differentiation as a sign of risk. The thinking that there is safety in numbers. But the thinking must change. Differentiation is something not just to be cherished, but sought out! Look for opportunities to change and provide differentiation.
The combination of these mantras set the stage for a different perspective and line of thinking. Are these the end-all, be-all list of steps? No. But they present a good short-list to start with. Start small and do not expect the changes to happen overnight. It will take time and reinforcement.
Many of the discussions taking place last week at AWS re:Invent spoke of innovation and new ways of thinking. They spoke of a future state for IT. Consequently, traditional thinking had a hard time gaining a platform for discussion.
Connecting the dots
Yet, much of the challenge traditional enterprises have is around connecting the dots between current state and future state. For the CIO, setting the stage, cadence and direction is much of the challenge. It is a lot of work, but still needs to be done.
The first step is in setting a vision that aligns with the business strategy. Understand the core business of how the company makes and spends money. Seek out ways to provide innovative solutions. Start out small, learn from the experience and grow. Look for ways to streamline how IT operates and continually improve IT’s position to become more innovative.
Innovation is about the journey, not the destination. Innovation is an opportunity for differentiation that must be accepted and celebrated. Innovation presents a significant opportunity for companies from all industries. And IT plays a key role in driving today’s innovative processes.