He who has the gold rules... why CEOs should take ownership of IT investments

In the next couple of years, we are expecting a massive growth of the digital universe.  Mobile devices like smartphones and tablets are rapidly outpacing the traditional desktops.  By the end of 2011, there were in fact more mobile devices than people on earth. By 2015, Gartner expects that more than 3 billion people will be online and of course all these digiphiles come with a digital footprint.  Through their mobile devices they all take part in a global sharing frenzy where everybody happily adds to an ever increasing mountain of data. Big Data is what they call this piling up of data and it should be on top of every CEO's agenda.  Big Data is not an IT issue, it is going to be a real business challenge in 2012 and beyond.  It will require substantial investments in technologies that enable enterprises to store and mine the information haystack. On top of that, other evolutions like the cloud, IT consumerization, social media waves and the Internet of things are getting ready to disrupt business-as-usual.

In essence, these might look like technology trends but in fact they are all business trends that come with a techy flavour.  These evolutions will fundamentally change the way we will be doing business in the future.

The gold rule: he who has the gold, rules 

For decades, we have tried to figure out who should be in the driving seat for formulating the firm's technology strategy.  In an ideal world, business and technology planning go together like horse and carriage but in many cases, we have put the cart before the horse.  No way you can come up with a decent IT strategy if the strategic direction of the company has not been formalized and vouched for.  And if there is no business strategy to align with, where does this leave your IT department?  Well, they are flying blind.  Flying blind basically means that - without a proper business roadmap - you are heading for a collision course and this will hurt big time.

BCS, The Chartered Institute for IT, found for example that only one in eight information technology projects can be considered truly successful (as in meeting the original time, cost and requirements criteria).  They calculated that the cost of project failure across the European Union was €142 billion in 2004.  The Standish group comes up with similar figures (their CHAOS report is a must read for every CFO by the way). That is a lot of money down the drain and the only person who can stop this is the CEO.  The CEO is ultimately accountable for the Profit and Loss of the company and has to ensure that  investments, be it in marketing, R&D or technology pay off in the long run. It is up to the CEO, together with the board of directors of course, to ensure that the firm's resources are well spent and that there is a decent return on capital employed (ROCE).

How to protect your gold

The typical medium-sized or large company will spend between 1 % up to 10 % of its annual operating revenue on IT and you can be sure that a substantial percentage of the total investment budget will vanish into thin air as a result of misalignment.  So what's the best way to avoid these disinvestments and subsequent dilution of resources?  There is only one way to fix this... in my view, it is time the business took ownership of the IT investment strategy.

Not sure where to start? Well, no worries... together with IRM UK we are running a seminar on successfully aligning business and IT end of March. During this two day seminar (click here for the agenda), you will learn everything you always wanted to know about the mechanics of alignment. You will learn how to connect the dots between people, processes and technology and discover why intelligent governance is the key to protecting the firm's IT turf.  You will meet peers with whom you will work on topics like Enterprise Architecture and IT marketing.  During these two days, you will discover how to manage the alignment journey like a business transformation program...

There are still a couple of seats left so grab the opportunity and protect your gold: register here and get ready for the new economy!

Source: practicalanalytics.wordpress.com via Jeroen on Pinterest

Time to RAISE the bar

What's the role of IT in today's enterprise? Well, it depends... It depends on the industry sector, nature of your organization, culture and maturity of your enterprise IT. Henderson and Venkatraman already described four IT archetypes back in the Nineties by taking four different perspectives to the role of IT and the business:


1. Strategy execution: this is the traditional perspective in which business strategy drives organizational design, and organizational design determines what IT infrastructure and processes will be needed. Business management makes strategy, and IT management implements it.
2. Technology potential: business strategy is still the driver, but collaborates with IT to work out a strategy to support the business strategy and the corresponding specification of the required IS infrastructure and processes. This is IT in a reactive role. The business drive the technology vision and IT assumes the role of architect.
3. Competitive potential: In this perspective we are looking at new technological solutions to gain competitive advantage and enable growth.The IT department is the catalyst for business change i.e IT-enabled innovation. The business are visionaries and see how they can transform the business with technology and create a competitive advantage.
4. Service level: In the last perspective information is the core product. Business management prioritizes which IT investments and determines the IT playing field. The role of the IT is to make the business succeed through service excellence.

However, while the Henderson model describes who is driving the IT strategy, it does not mention the basic building blocks of your IT strategy. That's where you can use my RAISE model. RAISE describes the core functions of your IT department along five dimensions:

R = Reduce costs

A = Access information anywhere

I = Improve operational efficiency and effectiveness

S = Secure data and channels

E = Enable growth


I found that this model is easy to work with as it helps organizations to cluster their technology opportunities and define priorities in each domain. Curious how to embed this in your 2011 IT strategy? Well come and find out during IRM UK's workshop on strategically aligning business and IT on 25 and 26 November in London. Click here for more details on the program and prepare yourself for jumping the curve with your Enterprise IT. 

Business/IT alignment is a dead horse

Is business/IT alignment a topic in conversations on a social platform like Twitter. How much Buzz is there on business/IT alignment or  business/IT fusion. After all, this has been topping the charts of CIO priorities over the last decade or so. Most of the tweets referred to an article posted on www.searchCIO.com that discusses the importance of business/IT alignment in today's context of growth, cost reductions, enterprise productivity, need for innovation and IT effectiveness. Hardly conversation starters if you ask me. I do appreciate Gartner's view though on the role of the CIO when they say and I quote

"You (i.e. CIO) 're not the bottleneck. You're not the long tail. You're not the reason why they can't implement strategy," McDonald led the cheer. "You own the speed of execution because you can't touch anything without touching IT these days. As your companies look to go for growth outside of home markets, as you diversify products and services to address ever-fracturing markets, you are the means for scale."

The article also mentions the E square philosophy: Efficiency and effectiveness or as Gartner fellow McDonald puts it Productivity and Effeciency. Business/IT alignment resembles a lot to riding a dead horse story in a way... When your IT department lack the fundamental skills to deliver strategic initiatives on scope and on time, keep the lights running at all time, create a positive customer experience and pave to the way to enterprise growth... your IT department is the dead horse.

This is how the story begins....when you discover you are riding a dead horse, the best strategy is to dismount. However, we often try other strategies with a dead horse including: 

buying a stronger whip; changing riders; saying things like "this is the way we always have ridden this horse; or appointing a committee to study the horse; or arranging to visit other sites to see how they ride dead horses;or increasing the standards for riding dead horses;or appointing a tiger team to revive the dead horse; read full story here.

In a business context, your enterprise and IT go together like a horse and carriage. That's why we call it enterprise IT... Now, if you have a dead horse in your organization and it is called IT, then why not attend IRM UK's forthcoming seminar on Successfully Aligning Business and IT. It's going to be a discovery journey in the wonderful world of technology, strategy and changing the culture in your IT shop. Targeted both at a business and IT audience, you will learn more about the alignment trap, intelligent governance, E square, Enterprise 2.0 and the marketing of IT. The seminar is on 25 and 26 November in the Hatton - I hope you will join us in the conversation on in London or tune in to twitter #BITA2010