CIO Archives - Page 5 Of 9

Digital Enterprise Iceberg | Sherpas in Blue Shirts

July 9, 2014

We all understand the power of digital — it enables us to change the way we interact with our customers, employees, vendors and governments. Getting interactions right with those stakeholder groups gives us powerful strategic advantages. However, the digital world is like an iceberg, and we tend to see only the tip. Below the water is a mass of ice that can sink digital outcomes just as it sunk the Titanic.

Companies that can change their stakeholder conversations in a meaningful way can change the game, changing the competitive landscape almost overnight, reaping enormous wealth. Wal-Mart and Interstate Battery achieved this outcome when they changed their supply chains. And Amazon, Google and H&R Block completely changed the game in their markets.

So what’s the problem?

The business stakeholders see the tip of the iceberg. But the CIOs recognize that 90 percent of the expenses are below the surface and initially can’t be seen.

What we’re finding at Everest Group is that when companies switch to the digital world — such as creating a mobile app as a new way of communicating with Millennials about insurance offerings — there are huge pull-through implications on the rest of the organization.

For example, the company’s vendor systems may not be set up to interface to the new mobile app. Sure, the digital product enables the company to be able to spot new customers as they emerge. But the company needs to change its organizational systems to move into this instantaneous world so that the company can react quickly enough to take advantage of these opportunities or operate in a way that is digitally friendly in this new world.

We’ve all been through the experiences of the impact of the portion of iceberg under the water … such as the half promise when we’ve visited a website or used a mobile app to find we can only go part of the way. We get frustrated when the promise isn’t fulfilled.

As the figure above illustrates, many companies find a huge body of work that is not obvious when they start down the digital path. Although it looks like the cost and time required for launching a mobile app is small, the cost of getting to a great customer experience is high because it often requires huge amounts of infrastructure, application changes and organizational change to live in the new world.

In addition to the cost and time, there are other business risks in the iceberg portion below the water. And aligning the organization so it can operate at digital time requires significant effort and change management tactics. We tend to operate from committees. But in the digital world, that takes too long; it must be instantaneous.

Finally, providers need to venture into this new digital world while they still maintain the old world, thus increasing their investments in services capabilities. There are significant costs involved in dealing with the risks in the part of the iceberg hidden under the water.

Why Hasn’t Cloud Had a Bigger Disruption on the Services Industry? | Sherpas in Blue Shirts

June 10, 2014

If you read the technology news in the press and social media sites, it’s apparent that we’re in the midst of a big sea of change in which the as-a-Service and public cloud models are transforming the services industry. HP and IBM’s travails and Oracle’s slowdown are laid at the feet of the SaaS providers. But when you pile all the current cloud activity together, it amounts to a hill of beans, not a mountain. Why aren’t we seeing evidence that disruption from these models is happening on a significant scale?

The buzz

In the famous words of an American hamburger TV commercial several years ago: “Where’s the beef?” Everyone is talking about big agendas to rework workload portfolios and making big efforts to to do that. Yes, Accenture has invested well over $1 billion around cloud and several Indian providers have invested $100+ million a year in mobility and cloud work. And the HCL-CSC alliance is predicated on the fact that there will be a huge cloud sandwich for which they want to position themselves.

If you give providers half a moment, they’ll wax with great eloquence and excitement about the prospects for the cloud model as a high-growth area in services. But if cloud disruption is coming to the services industry, it must be walking; it sure isn’t running.

Where are the billion-dollar practices that do cloud? Why don’t we see service providers launching entire new practices or start-ups reworking applications so they work in the cloud? Who is doing all the work?

The reality

The answer to the above questions is that disruption to service providers is happening occasionally but not en mass.

It reminds me of a conversation I overheard around the impending revolution about self-driving cars. Supposedly a Google executive was saying that it’s not likely that new self-driving car will come on the market and people will buy them when they arrive. Instead, he believes the more likely scenario is that we’ll find ourselves using cars that park themselves and then over time become incrementally more capable and eventually driving themselves. But we won’t have gone through that aha moment where we went out to buy a self-driving car.

I think the same thing is happening with cloud disruption. There just doesn’t seem to be a lot of evidence that companies are driving huge transformations to the cloud right now. Maybe it’s a timing issue in which CIOs and large enterprises will become comfortable enough with the technology that they’ll move en mass to rework their ecosystems to embrace this model. But maybe they won’t embrace it like this and, instead, the industry will wake up one day and find that we’ve incrementally adopted SaaS, public cloud and private cloud.

Perhaps the tide bringing cloud disruption is coming in slowly rather than in as a tsunami. What do you think?

Digital Transformation: The Non-sense of Customer Centricity! | Sherpas in Blue Shirts

April 23, 2014

Have you ever spoken to a “digital transformation” enthusiast? The first thing you will notice is the person cannot exactly define digital in any meaningful way. The second thing is that the discussion will invariably include citation of popular consumer mobile apps, portals, and other things such as Facebook, Google Glass, the Internet of Things, PayPal, Pinterest, TripAdvisor, and Uber.

The third, and perhaps the most intriguing, is their obsession with customer engagement. The focus is so extreme that it pretty much excludes anything that is perceived not to be glaringly customer-related. This fixation, which means a sole focus on the front-end sales and marketing engine, fails to take into account that a digital strategy must pervade the entire value chain – customer engagement, business processes, technology operations, and organizational policies – and that a success requisite is transformation of the less attractive, unseen back-end.

Unfortunately, buyers have limited spending appetite and budget, and CIOs coming under intense pressure to add business value are vigorously channelizing these budgets into development of front-end-centric digital initiatives. I believe this myopic strategy is flawed, and will show its glaring weakness in the coming years.

Consider the impact of a sole focus on front-end digital initiatives without augmenting business process or technology operations. For example, a bank’s mobile sales force can open a customer account in 10 minutes or sell financial products using a banking mobile app, However, as the back-end operations and other business processes needed to make the account functional are still the same, the customer does not get the true benefits of this banking mobility. Or, when an online retailer develops a mobile app where customers can place orders, but the back-end processes and technology operations are same as customers placing an order through the online portal, the availability of one more access point for customers does not fundamentally impact the business.

Enterprises need to go full hog to leverage the disruptive power of digital services. A piecemeal approach will eventually hit a wall, and business leaders’ frustration will grow. To ease this, business leaders must understand and collaborate with the operations department, and push the operations manager to introduce digital transformation within the core technology operations and business processes.

Customers have always been at the center of the universe for successful companies, and digital transformation will not change that. However, extreme customer-centricity without suitable investment in back-end operations or business processes that drive customer delight will result in a grand failure. Enterprise buyers need to judiciously invest in technology solutions across their business and internal processes to create a vibrant “digitally aware” organization that understands the impact of this transformation. The impact should be pervasive and touch upon each aspect of the business.

Digitization of business processes across an organization presents a tremendous opportunity to leap ahead of the competition. But make no mistake…it’s a high investment, high risk, and high return game. Organizations that have the required mettle to make technology pervasive in their front-, middle-, and back-end operations will not only survive, but thrive.

All I Need to Know Is Men Are Stupid And Women Are Crazy | Sherpas in Blue Shirts

April 22, 2014

Comedian George Carlin commented that men are stupid and women are crazy — and that the reason that women are crazy is that men are stupid. My observation is that it’s a strikingly similar dynamic to what’s occurring in large enterprises’ spend decisions in the global services market today.

Business stakeholders are “stupid.” They’re off doing their own thing, making snap decisions, stringing together solutions with half-tested as-a-service offerings and believing those solutions will scale up to meet enterprise production needs.

CIOs are “crazy.” They’re tearing their hair out, so to speak, in frustration over the business stakeholders’ actions. They try to engage business stakeholders in conversations, but the biz folks don’t have time for that. Furthermore, the CIOs’ funding has been taken away and given to the business stakeholders.

There is no time to plan, so CIOs must show a complete offering rather than going through a meticulous planning process. And CIOs are told they are accountable for security and compliance, yet they are not given the ability to shape the new solutions going in place. The situation is turning them into crazy people.

Why they talk past each other

CIOs and business stakeholders march to different drums, thus frustrating each other to the point of being stupid or crazy.

But in a way it makes perfect sense since both operate in their own world. And neither perspective is irrelevant. It’s just that the perspectives and operational goals differ in those two worlds, so they misunderstand each other. The business units misunderstand the CIO, and the CIO misunderstands the business units. In the words of Winston Churchill, they are two nations divided by a single language. They both talk technology, but they talk past each other because they come from completely different places.

Carlin’s opinion is that as long as men are stupid, women will be crazy. My opinion: As long as business stakeholders focus on business needs that get met in immediate gratification through SaaS and proofs of concept, the CIOs will be crazy. Look out for some very complicated discussions when it comes to funding and scaling the SaaS and proofs of concept across the enterprise.

Changing Influence in Tech Spend | Sherpas in Blue Shirts

April 16, 2014

Recently I had a conversation with an executive at a large software house known for its ERP. One of many things that struck me in our conversation was the change in whom the sales team targets. Their primary target is no longer the CIO; now it’s the CFO.

Apparently, in today’s business outcomes-driven world, CIOs are no longer authorized to drive tech spend decisions of this type, nor do they have the ability to write the check.

As I reflect on this change in decision rights and executive focus, I don’t find it at all surprising; after all, it is consistent with what I’ve blogged about several times. As she put it, the reasons for buying technology today are driven much more by business need and the impact that the technology can drive; it’s increasingly less about the technology itself. In this shift in mindset, the CFO and senior business stakeholders have become more influential because they have the best understanding of the business impact needed from the technology.

The lesson for a global services business

If the technology players are shifting their focus to the CFO as the influencer of tech spend, I think this underlines the changing dynamics or decision rights for the global services industry and the imperative to engage with and serve others outside of the CIO.

Will Cloud Kill The CIO? Survey Says No | Gaining Altitude in the Cloud

March 26, 2014

Sometimes it’s hard to distinguish the facts from hype in enterprise cloud adoption. This is why Everest Group and Cloud Connect continue to conduct our annual joint survey to understand why and how enterprises are migrating to the cloud, and what they are migrating to the cloud. Check out my blog on InformationWeek for more findings on the Enterprise Cloud Adoption Survey. Here’s an excerpt:

If supermarket tabloids covered enterprise cloud adoption, their headlines would scream “The CIO is Dead,” “Security Concerns are Old News,” and “Cloud Makes Consumption Easy—No External Help Required.” And as we perused these headlines in the checkout line, we would wonder how much truth lay behind the hype.

To distill fact from fiction, the Everest Group launched the Enterprise Cloud Adoption Survey in 2012, in conjunction with Cloud Connect and UBM TechWeb. We have just completed the third annual survey of enterprises and vendors and will share the results in Las Vegas on Monday, March 31, at Cloud Connect Summit, co-located with Interop.

Why Healthcare IT Security Must Be at the Forefront of the CIO Agenda | Sherpas in Blue Shirts

March 26, 2014

Considering the nature of regulations and the sensitivity of personal information, one would assume that IT security is a top priority in the healthcare space. However, an estimated 29 million+ patient health records have been compromised, (classified as HIPAA data breaches,) since 2009. The number of health records breached in 2013 jumped a whopping 138% over 2012. Serious security flaws have even been detected in Obamacare’s much-touted flagship health insurance exchange website, HealthCare.gov, including severe lapses spanning JSON injection, unsanitized URL redirection, user profile disclosures, cookie theft, and unprotected APIs.

An Afterthought

The pace at which IT is changing the healthcare landscape makes it a prime target for malicious activity. Industry headwinds such as big data, payer-provider convergence, BYOD, HIX, EHR/EMR, and the Internet of Things (IoT) are adding to the healthcare information security conundrum. Patient records have become increasingly common in the fraud marketplace. When combined with other data sources such as insurance and medical data, the problem assumes more alarming proportions.

And it’s not a case of absence of punitive measures. Under the new HIPAA Omnibus Rule (effective from September 2013), firms face fines of up to US$1.5 million in the event of a violation (“willful neglect that was not timely corrected”). Europe has enacted several data security measures. Even before the latest regulatory rulings, insurer WellPoint was fined US$1.7 million after its online application database exposed information concerning more than 600,000 patients.

Feeding the problem

Although CIOs often list security as a priority imperative, it just doesn’t translate into actual spending. This discrepancy can be attributed to a confluence of reasons. The problem originates in a lax culture regarding IT security. The majority of information security breaches are highly avoidable, and most lapses can be traced back to sloppy system administrator password practices, careless sharing of sensitive information, failure to change default login credentials, among others. Healthcare information security is still not a top execution priority for most personnel, and most security programs are hampered by lack of relevant expertise and attention. Regulatory inconsistencies compounds the issue, i.e., multiple agencies are involved (FTC, FDA, FCC, to name a few), and their often divergent mandates contribute to the travails of healthcare IT security stakeholders.

Healthcare IT security roadmap

Stakeholders – both buyers’ internal IT teams and third-party service partners –face an increasingly complex technology conundrum. Any mitigation strategy should incorporate leading practices utilized in similar initiatives:

Conduct a thorough risk-assessment to proactively identify and secure vulnerabilities
Establish clear level-driven permission policies (on a need-to-access basis) applicable to data, applications, and devices (keeping in mind expanding BYOD policies)
Institute appropriate staffing practices to make sure personnel with relevant skills are given charge of security tasks
Ensure adequate personnel training and sensitization toward information security
Implement best-in-class encryption standards
Collaborate with business associates (held to the same standards as HIPAA-covered entities) to establish processes and enforce standards
Evaluate the security strategy along a security versus accessibility paradigm
Drive synergy between the business and IT vision to avoid incoherent implementation resulting from disparate imperatives

Ultimately, any healthcare IT security policy has to encapsulate the individual needs and challenges of various stakeholders – patients, providers, payers, and third parties – to ensure equitable access and health information exchange for coordinated care. The unenviable task of securing healthcare information in the onslaught of exploding devices and touch points calls for a carefully thought-out and implemented approach. But first, healthcare IT security must make a monumental shift from being an afterthought to being a primary strategic imperative in any plan design.

A Cinderella Wish: Why Application Management Needs a Fairy Godmother | Sherpas in Blue Shirts

February 7, 2014

For a very long time, application management has been the red-haired stepchild of the IT services world. Taken for granted, it has silently done its job without complaint, and essentially remained an IT function, far removed from the hurly burly of what business needs.

However, as the industry evolves to answer increasing business demands, the pressure is on service providers to transform the application management function. The application management system of the future needs to address three key issues faced by CIOs.

Productivity: Most large enterprises have exhausted the offshoring potential of application management. The focus has shifted to non-linear cost saving models.

The application management model of the future must offer industry standard toolsets and automated processes, and identify deviations from coding best practices to enable continuous improvement. It must do so over an industrialized global delivery platform.
Business IT alignment: Over the years, large enterprises have tended to accumulate heavy sediments of legacy applications that bloat the portfolio and eat up valuable budgets. The application portfolio now faces ruthless rightsizing, and IT needs to provide full visibility on where business is spending its IT budget.

The application management function needs to provide usage and billing visibility at multiple levels of aggregation 24/7, on a real-time basis, on desktops and mobile devices.
Future readiness: The world is going SaaS in front of our eyes. Application management needs to support this fundamental industry change.The modern application management function not only needs to straddle legacy and SaaS application architectures, but also offer a proactive roadmap to application modernization.

Unfortunately, many enterprises are still missing most of these elements. Contrary to popular opinion, the highest level of application management sophistication is not achieved by offering increased offshoring. Nor is it achieved by migrating from staff augmentation to managed service models.

Application management, just like poor Cinderella, is tired. Is there a Fairy Godmother who can ease its burden and get it the support it needs?

Photo credit: Dayna Bateman

What I Learned at Cloud Connect: The Cloud Is Moving to a Different Level | Gaining Altitude in the Cloud

November 1, 2013

My first impression when I recently attended this year’s Cloud Connect conference is that there is a significant increase in interest in all things cloud, as there were more attendees than at last year’s conference. What impresses me most as I reflect on the case studies and insights discussed at the event is the fact that cloud services are showing clear signs of moving from the domain of the business users into the core of the enterprise. And there is a completely different kind of usage of the cloud at this core level.

At the business-user level, cloud provides a fairly straightforward capability, whether that be CRM through Salesforce or application development and testing through Amazon. But when the enterprise adopts cloud, usage and benefits move to another level.

One of the most notable case studies presented at Cloud Connect highlighted how Revlon completely transformed its IT to the extent that it was able to create a degree of flexibility that it had never known before.

Revlon’s cloud benefits included a significant $17 million reduction in cost while providing agility in rapidly developing applications and the ability to move applications and functionality around the world at a whim.

The most striking aspect of value Revlon achieved was its disaster recovery capabilities. The night before Hurricane Sandy hit, Revlon moved the processing in its data center on the East Coast to a Mid-Atlantic location. Then they discovered that during the hurricane there were no users on the network, so they were also able to get through their release updates at the same time.

This enterprise-level agility in moving workloads around while also creating rapid application releases — and at a much lower price point — brings to light the potential for cloud to change how IT is done in enterprises.

Only a year ago we saw cloud services validated primarily by the business users. This year’s Cloud Connect case studies demonstrated that validation has moved into the core of the enterprise with CIOs fundamentally embracing it to the degree that it completely changes the way they do business.

What will be the cloud’s impact over the coming year?

Download the Revlon case study

Watch the Everest Group Vice President Jimit Arora’s video interview with David Giambruno, Revlon’s CIO.

Announcing our inaugural conference: Everest Group Engage, The Pragmatic Edge: Designing Your Future. Learn more.

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