Buyer Beware?

A recent interim role opportunity advert listed among the required skills “extensive mergers and acquisition (M&A) experience” but on further discussion the need really seemed to be focused on systems integration.  Clearly the ability to plan a sensible integration of two or more corporate IT landscapes into a strategic coherent whole is critical in a M&A context, including re-conforming previous decisions on delivery models still meet the needs of the organisation.  However, there is equally value, potentially more value,  to be gained from engaging the CIO prior to the deal being struck rather than simply to handle the consequences.  If the acquisition is not a technology company it can be very easy to ignore hidden value or costs within its IT assets, a relatively trite example being that buying a company today with only Microsoft XP deployed on very aged computers will very quickly present a potentially material investment cost.  In a previous role I was taken along to a newly acquired company in Germany by my regional CEO on the Monday morning we took possession.  The employees joining the company were there bright and early in the very smart office but there was no IT kit on any desk as the detail of the deal had failed to actually acquire those assets; hard to believe but a true story.  It was this incident that made it very easy for me to insist on the IT team being engaged with any acquisition deal right from the start and being part of the final buy decision review process.

If anyone is needing convincing of the criticality of IT and its leader on successful M&A then point them at this excellent McKinsey article from 2011, Understanding the strategic value of IT in M&A.  If M&A is all about finding synergies then the McKinsey statistic in this article that over 50% of those synergies tend to relate to IT probably wins any debate on why CIOs should be actively engaged from the twinkle in the eye stage through to the fully integrated with no seams showing outcome.   This argument holds true if you are part of the divesting team equally and a compelling articulation of the strength of the corporate technology and how it is designed to enable rapid and low cost integration could well help close the deal.

I do struggle to understand why the CIO role in M&A is open to question but at a recent industry event I found a number of CIOs that were feeling excluded from the decision process and very concerned at the potential consequences that they would inherit and have to resolve.  The common pitfall it seemed to me listening to the debate was to express the imperative in technology terms rather than using business language and describing the concerns in terms of business outcomes that would be thwarted as well as the clear attention grabber of how much money getting the IT assessment and integration plan wrong could require.  I’m not sure it can really be that simple, but then again perhaps it might just be that straightforward?

A Rose By Any Other Name?

Over the summer there has been an increasing number of references to a new technology centric role in the IT press, the Chief Digital Officer (CDO).  I’ve come across a few heated debates on Chief Information Officer (CIO) and Chief Technology Officer (CTO) forums where people carrying either (or both) of those role titles are discussing whether actually they should become a CDO instead or if it is a new name for the Chief Marketing Officer.  It certainly risks seeing a large number of “chiefs” but is there a meaningful distinction being signaled by the emerging new role title?  In an interesting article on the CIO website, “Chief Digital Officer – here to stay or flash in the pan?“,  one CDO argues that CIOs and CTOs “don’t focus on the core business” and tend to “look at technology for technology’s sake” which would certainly raise the hackles of people in those roles!  Gartner predict that by 2015 some 25% of companies will have a CDO in post; there is even now a Chief Digital Officer Club.

What I think is going on with the CDO title is that it is signalling a focus on the external market and the how your company builds and leverages its digital assets for competitive advantage.  There have been people carrying the titles of CIO and CTO in many companies that have had that external focus and been divorced from the internal IT operations and service delivery.  However, I think the use of the “digital” word recognises that this new role is also in the traditional Chief Marketing Office territory too and declares that remit legitimate.  There has been much debate over recent years of the growing overlap in the era of cloud computing and social media of the IT and Marketing landscapes, with a clear convergence point where there is focus on embracing the ever evolving and growing digital world.  Indeed this focus on the digital world and economy was recently clearly highlighted by a global survey report from McKinsey entitled Bullish On Digital which is well worth a read.

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Ultimately what is important is that there is someone in a company ensuring that it is optimally positioned to create competitive advantage from technology and equipped compete in the digital world whatever that means specific to its business sector.  This seems to me to be an evolution of the old debate about how to ensure a strong focus on strategic competitive advantage from technology as well as on gain the scale and cost benefits available from technological operational excellence.  I certainly held CIO and CTO titled roles where that strategic market facing aspects was my core objective from the CEO, sometimes including operational IT delivery but increasingly over recent years excluding it.

CDO is another perspective on the debates of recent years that you might summarise as “what type of CIO are you then” (on which I have mused on previously here) and whether the “T” in CTO is for technology or transformation.  Clearly what is really key is the value the role holder regardless of title brings to their company and how they can help it to maximise the value gained from technology in the digital age.

If a new title can help deliver on that promise as the traditional IT and Marketing landscape converge then fantastic. As long as you deliver I suspect you can probably pick any name you fancy; well to a degree as I suspect that the days of deciding to be called the Chief Wizard are probably gone.

Image via Shutterstock (152010875)

The Good Old Days?

An unexpected benefit of being forced to use the London underground system on a particularly hot day was overhearing a very telling conversation by the two chaps wedged in next to me.  “It is outrageous you know” declared one chap, “they are constantly complaining about how slow we are to update our key corporate apps and how difficult they are to use!”  “Yes I know” said the other “and do you know someone had the cheek to complain about our systems being down at 3am the other day as he had assumed 24×7 delivery?”.

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The conversation then went to on reveal that these two chaps were senior managers in the IT function of a very large financial services company.  Their shared outrage was directed primarily at their internal users expecting their corporate IT to reflect the user experience and flexibility of social media but also included dismay at how rapidly they now were expected to implement enhancements and iterate the application versions.   As they exited the train the final comment I heard was a lament for the passing of the “good old days where you updated an app once a year at most and the users knew better than to complain”.

There has been a deal of material produced by analysts and the IT press on the consumerisation of corporate IT over recent years but this overheard conversation was telling evidence that this trend has indeed continued to become all pervasive.  It is undoubtedly true the users of technology within companies now expect it to operate to the same rules and pace of the social media enable Web 2.0 world (at least!). 

These expectations of easy constant accessibility, of access from multiple device types, of apps designed for a good user experience and of rapid development cycles are setting the tone for IT strategy across the business landscape to one degree or another; sometimes in hope more than expectation of delivery but part of the mind-set nonetheless.  In my view this makes the IT leadership challenge more exciting, more demanding and far more connected to the “real world”.  This was clearly not the view of the two chaps who prompted this musing! 

The challenge perhaps more than ever before is in separating need from want, in discerning business value from me too demands and in aspiring to the same design ethics for user experience as the consumer orientated cloud computing empowered arena.  Tougher role than the past, well perhaps so,  but regardless certainly a far cry from the days of my early career where the IT function often had to force fed technology to its user base rather than have it assertively and avidly demanded from them by eager technology believers.    

The more I think about that last comment the more it highlights how things have changed in corporate IT arena and indeed how much it dates me!

Image via Shutterstock (ID 73319497)

Good things come in threes!

A few nights ago I had an unique experience in a London bar, well for me at least!  A group of 2 CIO/technologists, 3 HR Directors and 3 Marketing Directors all declared the same topic as an entry in their respective top 3 challenges.   The terminology used to name the challenge differed at times, but we were all actually talking about social computing.  By this term I mean the demand for employees (often led by the most senior in the company!) to access social media sites from the corporate network and  to connect personal technology devices in the workplace.  Alongside these demands all felt pressured to ensure their company had a clear strategy for social media arena.   The resulting debate was wider ranging and grew more animated as the number of trips to the bar increased!   The senior executive “what is this stuff and should we be doing it then?” refrain generated much debate.  I was in listening mode during this segment but did point people at a recent excellent article published in the McKinsey Quarterly, “Demystifying Social Media” which I offered as valuable educational material.

The longest area of debate centred on the HR sphere, i.e. what should be encouraged or allowed and so what should the corporate policy and associated guidance material therefore state?  The technologists were keen to balance the opportunity with the need to protect corporate assets, brand and information.  The marketers were focused on gaining corporate brand benefits and cost effective social media enriched campaigns whilst managing brand impact.  However, the HR professionals were the only ones that seemed to be feeling that social computing was presenting them with far more pain than gain and  they felt forced into the position of always saying “no”.  This was fascinating as immediately the technologists and marketers all loudly declared that this was exactly how they felt as the guardians of the company from their different vantage points!  What followed was a rapid building of common understanding which at times certainly strayed into group therapy territory!

I outlined how in a previous CIO role it had taken a trio of senior managers across IT, Marketing and HR to define and enact a clear strategy and related set of policies for the social computing arena.   We had also shamelessly learnt from others, good examples being the IBM Social Computing Guidelines and the HP Blogging Code Of Conduct.  I would also flag here a fantastic resource I recently found in this area collating policy/guidance material from leading corporate across the global, the Online Database Of Social Governance.   There were also key lessons learned along the way which we then embedded in our policy, e.g. the importance of employees being clear that use of their corporate email on a social website associates them with the company brand and they cease to act as private citizens; seems very obvious now but it wasn’t at the time, least not to us.

The key lesson I’d took from that initiative way back in 2011 (seems like a lifetime ago!) was it required the IT, Marketing and HR functions to be both aligned and actively engaged to support each other.   It required a collective response to ensure that the company maximised the value and mitigated the risks.  The art of the possible joined with a focus on understanding the imperative to act but ensuring a precise and evolving articulation of the policy and guidance to guide our people.  The debate and the consensus reached that night simply confirmed those lessons still hold true.

This blog post was also shared on The Business Value Exchange,

Skating on thin ice?

I recently met the CIO of a large technology company on the banks of Stickle Tarn below Pavey Ark in the Lake District.  We both had dogs that we were restraining from leaping onto the frozen tarn and worrying about a third dog that was right out in the middle of the ice.  We turned to each other to comment on the idiocy of allowing the dog onto the creaking ice and realised that we had meet in 2012 at a conference.  We decided to do the walk back down to the New Dungeon Ghyll Hotel together and chat over a pint or two.  During our descent I (rather boringly!) asked what was his number one concern right now in a work context. The reply was not what I was expecting although you would always assume it is in the top 10 worry list items for any CIO, it was data loss.   They had noticed an increasing level of attack on their network and web facing servers over recent months and were working on the premise that it is primarily aimed at intellectual property theft rather than the data and systems they host for clients.  After an interesting discussion of the security issues and approach being taken on which I must remain silent we moved on to other topics.

Over the last few pints before we parted company we talked about the shadow IT and budget raider issues I blogged about in my last post.  I was not surprised that he confirmed the issues were real to him and ones he was experiencing within his company.  He was more bullish about handling the challenges that some other CIOs with whom I’ve discussed the topic but agreed they were current and requiring time and attention to address.

Later that week I read a report published by KPMG on data loss which I was planning to talk about in this post.  However, earlier today I read a great blog post on the same topic/report by Sarah Green on the Harvard Business Review site so will instead leave you to read it here.

As a result I have room to talk about a related bee in my bonnet instead!  The point in the report on technology companies being one of the primary targets for hackers was telling as I am convinced that Apple have been hacked. 

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I think the system relating to Apple iTunes gift cards has been compromised.  I was recently given a £15 gift card which when I tried to redeem it was declared by iTunes to have “already redeemed”.  Now this was a brand new untouched card from which I had personally scratched off the code cover myself so I knew that this could not be true, unless the card was a duplicate or the underlying system compromised.  Expecting that a) Apple would be helpful and refund my money and that b) this would prove to be an isolated issues caused by a system glitch I contacted Apple and searched the support forums. 

What I found was a number of people posting with similar stories of woe across different countries and that the unhelpful implicit “well you must be mistaken as that code is reporting as already redeemed” position taken by Apple support was consistent.  My card was apparently redeemed in June 2012 so clearly my trying to redeem the same code in January 2013 meant I was the one at fault.  There is even a video of a chap posted to the Apple support forum using a clearly virgin card and obtaining the “already redeedmed” message; last I read he had made no progress in having Apple accept that there was a problem and he was not trying to re-use an old card.  To my shame I gave up arguing with Apple as for £15 it was simply not worth the hassle (and as it was a gift I lacked a receipt to prove date of purchase), however I certainly will not be buying any iTunes gift cards in the future and I remain convinced that their system has been compromised in some way.  If you are interested here is one of the support forums where people are reporting the issue.

It would seem that denying and ignoring the issue appears to have been a successful strategy for Apple to date.  I suspect that they will probably ride out the “noise” without any real publicity or PR damage.  However, I do think that they are skating on thin ice with this approach and eventually this type of customer angst does rebound and cause damage.  Denial of security breaches is tempting but ultimately transparency, acknowledgement of the issue and a declared plan to correct is probably the better strategy.

CIO angst over tea and biscuits

I was recently asked to chair an informal round-table meeting of six Chief Information Officers (CIO) with a lovely broad remit of “what does 2013 bring you?”.  The initial pleasure at being asked was tempered by the lack of fee, although to be fair there was tea and biscuits on offer!  It ended up being a really interesting two hours given a nice edge for me as I am not currently “in post” and so was able to be somewhat more detached than usual from the topic of the CIO challenge.

All of the CIOs felt that they were faced with even more conflicting demands that in previous years.  The general view being that they were expected to balance identifying and executing real innovations to drive revenues/operating profit  with a relentless imperative to continually reduce operating costs; alongside these demands they all confirmed that they were “just expected” to deliver a highly available IT service and managing the risks associated with technology, both traditional and those made more potent by the consumerisation of corporate IT. Blimey, but no real surprises.

Of course we could not avoid talking about cloud computing or how they were all frustrated to some degree or another with the lack of benefit they felt the out sourcing vendors were delivering.  On the last point I could not resist making some challenging points about CIOs being unclear about their objectives from out sourcing contracts and how many contracts ended up being adversarial l in structure thanks to misguided and unsophisticated thinking during the procurement process.  We ended up agreeing (more or less!) that it was possible to derive substantial benefit from out sourcing and that cloud computing representing a golden opportunity to address some legacy issues with the model.

The topic on which we spent the most time was related to funding and how their company’s were managing the investment process.  It was a common view in the room that we are witnessing the move of “shadow IT” into “legitimised business driven agility”.  It seems that for many the budget for line of business IT now lies outside of the CIO’s hands, in some cases without their having any approval role in the adoption process.  Indeed one somewhat downcast CIO confessed that they were effectively restricted to the “shared essential IT infrastructure” on which business operating units decide what to operate.  There clearly has to be a balanced between “enabling the business” and “exposing the business” as all had examples of where IT spend had taken place outside of their approval and had proved an expensive mistake.  That said when pressed a number did admit that there were equally examples where the line of business solution adopted had proved a huge mistake.  All felt exposed in terms of data integrity and system integration as a result of the new order.

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It is clearly a trend worthy of more thought and will require adjustments to the corporate operating model to optimise the value gained.  In the same general area Gartner recently issued a report talking about how the Chief Marketing Officer (CMO) in many corporate is taking over areas previously held by the CIO, particularly in companies where the line between marketing and the digital world has disappeared.

They predicated that by 2017 the CMO will be spending more on IT than the CIO.  The Gartner report is behind a pay-wall but you can find an article by Forbes has a good summary of the key points here.  The importance of digital marketing in many business sectors means that the CMO and CIO need to be become the best of friends.  Indeed I read one blog post recently that was speculating on when we would see the first CIMO, Chief Information & Marketing Officer; not a title I have yet seen but I have seen Chief Digital Officer!  Gartner sum up the challenge rather well I think with:  “CIOs face a future torn between current operations and digital opportunities. The CIO agenda for 2013 involves adopting new approaches to hunting for innovations and opportunities that deliver digital value, while harvesting greater business performance from products, services and operations.”

I was impressed that all those in the room had recognised the situation and were clearly taking action to mitigate the risks for their company and find a collaborative way forwards.  Some were clearly better placed within their organisation that others to succeed.  I plan to return to this topic in the future but in the meantime a few days after the event  I read an excellent article on CIO.COM by Bernard Golden entitled  As CMOs Grab IT Budget From CIOs, Cloud CapEx and OpEx Shift.  It is well worth a read and covers the topic in a good level of reasoned detail.  The output from the event is restricted to those attending but at some point I think it will become public domain and I will add to this post.

Finally to answer what some might feel is the most critical question on the event – the biscuits on offer were a mix of shortbread and custard creams.