News / October, 2015

Making IT decisions when the “next big thing” arrives every week

By Christopher Null at TechBeacon, October 6, 2015

Read original article here - http://techbeacon.com/making-it-decisions-when-next-big-thing-arrives-every-week

 

In a recent opinion piece in Computerworld, Thornton May said that CIOs are overwhelmed by big technology decisions to a historically unprecedented degree. He put into words what has long been a popular opinion and serious concern among tech pundits: "Two decades ago, 'next big things' came along at a leisurely pace," May said. "Today, they surround us."

The broader idea is that the rate of tech innovation has become so rapid that decision makers no longer have the luxury of being able to reflect on whether a technology is good for the business. They fear that if they don't implement those next big things, they risk being beaten in the market by competitors who do. We have too many choices but not enough time to properly consider any of them.

Is overload from too many "next big things" a legitimate concern? I spoke to a number of CIOs and enterprise IT leaders, and surprisingly, none of them thought this represented a real problem. In fact, they unilaterally felt the opposite was more likely to be true: Yes, IT has more big decisions to make than ever before, but those decisions are much easier to make today thanks largely to today's rapid, small-scale testing capabilities.

Let's dig down a little deeper and see why they feel that way.

 

It's not about the technology, it's about the business

"It sounds harsh, but the best advice I can give a CIO is to stop acting liking a traditional CIO," says Phil Manfredi, former chief strategy officer and deputy state chief information officer for the state of Arizona. Manfredi, who now has his own IT consultancy, Zuggand, says the first step to understanding major changes is "to make sure that the technology initiatives align to the business goals and leadership's vision."

"At the state, I used what's called a management by objectives (MBO) approach. I first read the governor's policy agenda to see what her objectives were. Then, I created three high-level objectives that helped support her strategy. From there, each objective cascaded out to multiple 'winning priorities'—that's what we called them—and then those cascaded out to individual initiatives and projects. We then reviewed them with the governor's office so that they could prioritize the initiatives. From there, you have buy-in and support."

Tony McGivern, CIO of credit analysis software company FICO, elaborates on the subject of this changing dynamic, saying, "That's what the job is. The job is more and more to be the facilitator and translator of the consumption of technology services in the context of your business, and less and less about being the builder of infrastructure. As CIO, your role is to help the business units understand how they become more productive with your services."

Rather than chasing newfangled technologies and big dreams, Manfredi chased business goals. Only from there do you back into the technologies that can help you achieve those goals. "Most organizations don't have infinite resources, so then you have to draw the line as to what you can accomplish with the budget and resources you have available," he adds. Building support from the CEO (or in this case, the governor) and peers at the CXO level is crucial once a potentially beneficial technology is identified.

"In all of this, it really helps if you have strong direction from executive leadership," concludes McGivern.

 

Cost-benefit analysis should be second nature by now

How do you know if a technology is going to be worthwhile? Any CIO worth their salt should be well versed at developing a cost-benefit analysis of any new technology, say CIOs in the trenches. Quantify project costs and benefits, assign risk factors to both, and determine whether the project is likely to generate profits.

Only 10 years ago, this analysis might have been prohibitively difficult. But today, costs are more transparent than ever, particularly when considering cloud-based services, which are often priced on a per user basis and are detailed up front. Benefits may be harder to quantify, but "there's almost always a model," says Jon Huberman, current CEO of Syncplicity and former CEO of Iomega. "Someone's selling the product to CIOs, and they are justifying that with a pitch. Whether the model is accurate is another question," but determining that accuracy is just another step of the cost-benefit analysis.

For larger enterprises, the bigger and better question is whether a new technology will be impactful enough to move the needle of profitability. Many a technology has been presented as the next big thing, only to eventually be realized as having a relatively minor impact on the business.

"More than one leading CIO has talked in terms of the three percent rule, or the $1 billion rule," says Joan Wrabetz, CTO of QualiSystems. "They are always looking for a change to their systems that gives them a three percent change in speed or margin, or $1 billion in savings over three years. They try new technologies and if they don't show the promise of a change of that magnitude, they throw them away and move on. If they do have the potential to help in a big way, they deploy the technology widely as fast as they can."

Analysis doesn't have to be this extreme—particularly if you aren't yet at the multi-billion dollar level—but it does suggest a simple framework by which technologies that turn out to be the next small thing can be quickly discarded.

 

Analyzing new technologies is a fundamental part of the job

But wait, the argument outlined by May posits that there are simply too many options to do a cost-benefit analysis of all of them. In an era of technology glut, who can afford to consider hundreds or thousands of different possibilities simultaneously?

That argument doesn't fly with working CIOs who, in a nutshell, suggest that if you can't quickly look at a new technology or service proposition and decide whether or not it's worth seriously considering for your organization, you aren't doing your job.

"Part of what we get paid for is being able to quickly understand the impact of new technologies on the business," says McGivern. "A good CIO has to be able to understand the ramifications of a new technology—OpenStack, platform as a service, containerization—and quickly be able to answer questions [of whether they're worthwhile]. That's what the job is."

Put simply: CIOs who complain that tech is moving too fast shouldn't be CIOs.

 

Testing new technologies is trivial

One of the greatest advantages a CIO in 2015 has is the ability to quickly test almost any new technology in either a virtualized or production environment to see if it delivers on its promises. Twenty years ago, a CIO considering a new technology was often faced with two choices: roll it out to the whole organization and hope for the best—think of a huge-scale SAP or Oracle implementation in the 1990s—or decide to skip it altogether. Pilot projects often had limited value and were frequently impossible to quantify from a cost-benefit perspective.

Things have changed drastically on this front, particularly in the last few years. Today, testing a new technology is often a trivial affair and something which a crack IT operation can complete in the space of a day or two, complete with metrics and a thorough understanding of whether it is appropriate for the organization.

There's no need to worry about the outcome of a big bet because "you don't have to take big bets any more," says McGivern. "You can do a proof of concept, fail fast, and nibble away at a problem. You can designate a small part of one business unit to test out a technology and see whether it does what it promises. It's just not a big deal."

"ERP and CRM implementations back in the day were huge projects, massive undertakings that would truly make or break the business. Today that's not the case. The tech world is a more defined place now," McGivern adds. "The rise of mobile and the consumerization of services has changed every piece of software that gets written. Even enterprise applications are expected to look like consumer services now and be as easy to use and have well-documented APIs. Back in the day you didn't have that. You had to build everything by yourself."

McGivern says that thanks to this consumerization of enterprise services, he was able to test, evaluate, and roll out a brand new cloud-based human resources system with ease. "Five years ago that would not have been possible," he says.

 

Understand the broader corporate landscape

Huberman posits that technological change can also be easier in some organizations than others. "CIOs are primarily driven in one of two ways," he says. "One is by fear, the other is by the desire to add value. There's a continuum of offense and defense, but most CIOs are probably mainly on one side or the other."

Huberman has deep experience working with some of the most defensive organizations around. He worked with Tiburon, which made 911 systems and other software for fire and police departments before being acquired by TriTech Software. "These customers are extremely driven by fear. The whole industry is on the defensive," he says. As such, any future technology developments have to be couched in a way that they protect the company's investment and minimize its exposure to risk. But by understanding that those are specific goals of these organizations, the CIO is better able to calculate whether a new technology investment is appropriate and eliminate many next big things from consideration early on. "They may be motivated by fear, but that still has value."

On the other hand, Huberman also cites another client: a Major League baseball team. "This CIO sees his constituency as the team, the owners, and the stars. He is motivated by making their lives easier, better, and more efficient, and IT is seen as a business partner," he says. This client has a broader ability to take risks and fewer consequences for projects that don't pan out. Here the primary question becomes, "How difficult is it to try, and how difficult is it to get out of if it doesn't work?"

 

Caveats

Of course, it would be foolish to suggest that IT has become a wonderland where a CIO need only flip a switch to test a new technology, then flip it back off if it didn't achieve its promise. Analysis still takes time, effort, and money—and external pressures can throw a wrench into the process, too.

"A lot of new tech is driven by someone other than IT," says Huberman. "How many times has a CEO said to a CIO, 'I read about this in the Wall Street Journal,' or, 'My friend's company does this. Why don't we do that too?' The CIO has to come up with an answer—either run with the idea, or shoot it down." If you're trying to decide between building an Android app and an iOS app, but your CEO loves Apple, you may not have a choice. Pressure from executives and from end users to adopt hype-driven technologies isn't going away soon.

For McGivern, compliance issues are on the rise as a potential obstacle to rapid prototyping. In fields like public safety, healthcare, or industries where consumer data protection is becoming a priority, even experimenting with cloud services can create regulatory headaches. McGivern worries that in the face of continued data breaches making headlines, these compliance laws are going to become even more restrictive over time.

Manfredi notes that organizations need to remember that next big things tend to be sequential, and that even if you do miss one, it's usually not the end of the world. Any truly big thing will always be succeeded by a bigger thing. As such, there's no need to panic. "Use these initiatives to leapfrog generations [when you need to]," he says. "As Wayne Gretzky once said, 'Skate to where the puck is going, not to where it has been.' "

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