business technology leadership
TRANSCRIPT
AN IT WORLD CANADA PUBLICATIONPM 40063800
BUSINESS TECHNOLOGY LEADERSHIP
Throw out your five-year
IT plan Deal with disruptive
changes earlier PAGE 14
Don’t get burned by
Flame Test your IT staff
knowledge on the latest virus
PAGE 16
Groupe Dynamite has turned Facebook into a strategic tool while outfitting staff with iPads as part of a plan to attract the “omnichannel” customer PAGE 10
THEMOBILE, SOCIAL,MODERN RETAILER
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contents
INSIGHTS n OUTLOOKS n IDEAS trendlines
EX-U.S. continue on PAGE 6
Kundra, who now works at Salesforce.com, made a name for himself by developing a cloud computing strategy as the White House’s first CIO.
Public servants have think about leveraging technol-ogy to make it easier to
serve citizens rather than shell-ing out money to prop up inef-ficient programs, the former U.S. chief information officer has told a meeting of IT officials.
“The hard thing to do is be obsessed with the customer experience. That wasn’t happen-ing in the U.S. government, and for that matter it isn’t happening in most governments around the world,” Vivek Kundra told a Toronto meeting of the Informa-tion Technology Association of Canada (ITAC) last month. ITAC represents IT vendors and solu-tion providers.
Unfortunately, he added, around the world the experi-ence of most people have when
Ex-U.S. CIO warns governments to improve delivery
dealing with governments is “horrific.”
Kundra, now executive vice-president of emerging markets at Salesforce.com, was fed-eral CIO for two years, during which he gained a reputation for upturning conventional thinking in the bureaucracy. That included closing many data centres, bringing in open data projects and creating an online dashboard that publicly showed the lack of progress in federal IT projects.
In Canada the federal govern-ment released an open govern-ment plan last month, building on a number of initiatives including an open data plan.
Few in government ask “how
On the eve of its 10-year anniversary, a Cana-dian advocacy group
for open-source software in government says it’s closer to achieving its goal: saving taxpayers $1 billion a year.
Getting Open Source Logic Into Government (GOSLING) is an Ottawa-based commu-nity of open-source enthusi-asts dedicated to a freeing up the software market in the public sector. The Canadian government, they say, is spending $1.5 billion buying software that could cost only a third of that. The reason for the waste, according to the organization, is the disjointed, redundant development that takes place within depart-ments.
Russell McOrmond, co-founder of GOSLING, says the issue is not one of adopting open source platforms, per se, but rather that of different government organizations sharing their software with one another. The procurement process has also been biased in favour of large vendors, he adds, stifling competition among Canadian enterprises.
“Say the government of Canada decided, ‘let’s do an open-bidding process on sup-port contracts for LibreOffice or OpenOffice,’” he explains, comparing it to procuring licences for Microsoft Office.
“How do you do an open-bidding process for licenses for Microsoft Office? There’s only one copyright holder. So
you can’t do three bids from three competing companies offering that code. But you can do three competing com-panies offering full source to support contracts to training, on free software equivalents.”
But Allison Brooks, an IDC Canada analyst who focuses on government, says the cost argument can’t always be settled in favour of open-source. “[It’s] not always true,” she says. “Your total cost of ownership includes deployment costs, long-term management, user support. All sorts of stuff add up.”
Along with the financial issues, McOrmond also says proprietary code prevents the
Open-source in government can save billions: group
Next Issue Coming Up
A new look and feel for our publication and brand.
JUNE 2012
BIG DATA BANKING9 Lessons from our most recent
invitation-only roundtable event
CUSTOMER-CENTRIC18 It’s just a phrase until you
and your staff start living it. Highlights from Blogging Idol
PROOF POSITIVE22 George Gorsline on how to
prepare your infrastructure for long-term changes
ALSO IN THIS ISSUE4 What A CIO Should Know6 Facebook’s IPO
OPEN-SOURCE continue on PAGE 9
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what a CIO should know
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On Forbes.com, Lisa Arthur argues that within the next five
years, chief marketing officers will be spending more on IT than the CIO does: http://onforb.es/LbyUMR
Enterprise CIO Forum blogger Jim Harris suggests many new IT innovations originate from small, entrepreneurial vendors, which tend to be specialists with a very narrow focus that can provide a great source of rapid innovation. http://bit.ly/Mgd0eJ
Serena Software recently conducted a U.S. roadshow where they had attendees play a “Social IT Game” the company claims was able to reveal CIO priorities http://ow.ly/bqbHy
CFOs as CIOs? A bloggers on ValueDance makes the case for why enterprises need more IT leadership, not less -- and not just from the finance department: http://bit.ly/MCzKrs
Schneider-Electric recently posted a video interview with Dr. Arwa Y. Al-Aama, the CIO for the municipality Jeddah, who talks about technological infrastructure, budgeting, and resource allocation in the Middle East: http://youtu.be/LKoJbWJcgdk
This issue’s security quiz is about the Flame virus. In a recent Wall Street Journal article, Michael Hickins talks about why Flame should be a wake-up call to CIOs: http://on.wsj.com/L5NFVu
Facebook CIO Tim
Campos describes Face-book’s database environ-ment in a video interview posted by marketing IT firm Delplhix: http://youtu.be/kc72pScrC8w
Bank CIOs report that under-investment in Information
Management (IM) programs at their institutions is expected to continue, according to a report based on a survey commissioned by Capco and conducted by The Banker: http://bit.ly/Lx7IXf
On June 13, Dr. Wayne Brown will explain the results of the 2012 CHECS Study, which looks at higher education technology leaders and CIOs, in a free Webinar hosted by edu1world: http://bit.ly/KWNCub
Gartner Fellow Mark Raskino wonders whether CIOs could do more to help organizations combat “learned helplesness”: http://bit.ly/Lq8n0Q
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trendlines
Why Facebook isn’t worth US$100B
One thing is certain in to-day’s economic climate, internet traffic and users’
means instant and now often over valuation. It is said those who ignore history and do not learn from it are destined to repeat it. This picture of over-valuation for tech companies has started to repeat itself.
How is it that tech compa-nies are devoid of following traditional economic valuation for companies? What sets, them apart? Bankers, VC’s and angel investors seem to have a blind spot as to how tech companies are worth
way over market value. Seems that when the tech bubble crashed the first when internet start-ups were all the rage and no real way of making income they were given substantial funding although they had no real income stream. The money gained from loans and investors was used for working capital and day to day op-erations and not having a real income stream or even a plan for different revenue streams.
Just because something is a good idea does not mean there is a way to make money from it. Unless you are innovative and
can create a revenue model to support growth and sustain your company through organic means or through funding to innovate and grow only, not to run your business day to day, this seems to be what the new wave of tech companies are looking to repeat.
Analysts are quick to devalue companies on not meeting earning expectations when they fall short but how do they justify and convert hype to initial company value. Case in point, Facebook although they have the user base and has actually made some money for posted earnings is their company worth the estimated IPO and value that is placed on Facebook? Not only will Facebook have to sus-tain and increase revenue but can it grow at the same rate on which the evaluation is based? Other industry sectors do not have this type of flexibility other than tech. Google and Apple are a few of the tech companies to succeed and worth somewhat what they are valued at due to the sustainability and their ability to increase revenues consistently. Facebook has not proved that it can continue to grow at its current pace while increasing their customer base and rapidly continuing to capital-ize and grow revenues.
Recent tech IPO’s such as Groupon’s have proved that companies that have users do not necessarily translate to success. The model of freemi-um software models popping up from enterprise software to social to CRM to project management how do they make money? Some of these companies upsell additional services to make money but is that quick enough to sustain operations or to recoup the large investment made for it being freemium software?
It seems that if you are Tech Company you may be subject to false valuation numbers which may not be bad if you are the company receiving the valua-tion. It seems that the principle of making profit from your com-pany has been clouded by the second generation of the tech bubble as investors get caught up in hype rather than actual results. In the Dragon’s Den and Shark Tank the investors (the sharks) do not invest if a com-pany does not have revenues. Seems to me if they do not put their own money on the line should tell you something about company valuation.
—Dylan Persaud of Eval-Source blogs for us at
ITWorldCanada.com
do we architect our systems around our customers,” he complained.
In deciding how to deliver service governments need to ask what the end user feels: For example, what is the experience of a single mother who lost her job and applies for unemploy-ment insurance, or a high school graduate applying for student aid, he said.
Before becoming U.S. CIO Kundra had extensive experience in government, including stints as director of infrastructure tech-nology for a county in Virginia, assistant secretary of commerce and technology for the state of Virginia and chief technology officer for Washington, D.C.
In November, 2008 he got his first whiff of things at the federal level when he was named a member of President Barak Obama’s transition team.
He was named federal CIO in the spring of 2009 and stayed until last August, when he left for Harvard.
As a member of the Obama transition team, Kundra and others cast a jaundiced eye on the $80 billion a year the federal government was spending on IT with sometimes ineffectual results – including an ERP project that had stalled after 10 years. Some US$27 billon in IT projects were either over budget or behind schedule (or both).
Among his first acts as CIO was to stop all ERP projects until they could be evaluated.
Read more: http://bit.ly/KEsmt4 or visit http://www.itworldcanada.com for more Canadian IT News
Another was to promise Congress to set up an online listing of all federal IT projects and their status (called the IT Dashboard) along with photos of the federal department CIOs overseeing them and the heads of the IT vendors supplying products – and a place where citizens could leave comments.
“The impact of that was one that within days one of the agencies halted 45 projects, and terminated four of them.”
Kundra also pushed depart-ments to get rid of systems and adopt cloud computing alterna-tives where appropriate.
In his speech he urged govern-ments around the world to look
at their citizens not as subjects but as co-creators of democ-racy. They should see publishing government-held data online as a way to fuel job creation – opening the way for software developers to create new apps, for example.
Governments have to realize that with the Internet and social media power has shifted into the hands of citizens, he said. Through such tools they are demanding better service from governments and businesses, he said.
“That is why for governments around the world it is so critical to change from being closed, secretive and opaque to be open, transparent and participatory”
– Howard Solomon
EX-U.S. continued from PAGE 3
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trendlines
Two Canadian financial institutions are using SAS analytics software to take
calculated risks based on their big data flows.
Scotiabank, a longtime SAS customer, has been using Base SAS to program risk models for their lending portfolio. Jonathan Audino, director of informa-tion services at Scotiabank, says the bank is now automating its internal reporting func-tions within SAS, allowing it to deliver summaries faster and dig down into transaction-level data where needed.
“A lot of times our busi-ness partners, when looking at summary data, they may have
questions about the atomic-level data,” says Audino. “They may recognize patterns and they want to understand more. SAS allowed us to do that quickly, provide that feedback back to the client.”
The analytics software also integrates nicely with the bank’s backend infrastructure, he says. “We’re heavily invested in DB2 and SQL Server, and it also helped us pull data on the mainframe side, so we’re able to bring that data together into a SAS dataset.
“And then we can actually write back…we haven’t seen that in some of the other vendors.”
Meanwhile, Aviva Canada Inc. is using SAS analytics products to estimate risk in insurance
Hoping to take some of the stress off its groaning “big iron,” Canadian Pa-
cific Railway will soon be rolling out a hybrid cloud.
CP realized the company’s leg-acy data centres couldn’t keep up with customers’ demand for self-service applications, includ-ing those accessed by mobile devices, so it began to build a private cloud for its Canadian op-erations, which is linked to the Amazon public cloud, serving its offshore interests.
“One of the biggest impedi-ments we’ve had to acting in IT is the lead times to get new infrastructure for development, for test, for experimentation purposes as well as production purposes,” said Stuart Charl-ton, executive IT advisor at CP.
The company has several data centres, running a mix of mainframes and mid-range systems. As a massive, long-established company constrained by the weight of its on-premise backend infra-structure, CP’s IT department
Canadian companies use analytics for risky business
coverage, identify fraud and run its Web services.
Michel Sabourin senior Manager of data analytics for the insurance company, says in one week, SAS BI Web Ser-vices replaced a system that had taken Aviva took four months, $70,000, and plenty of Java programming to create.
“Now we can send requests to SAS Web Services and it’s as simple as the other solution we designed. It’s very, very nice for us,” says Sabourin.
The new Web interface, he adds, is giving Aviva “a lot of flexibility that may not be found in other companies right now.”
“Now we’re starting to play with Google, overlaying our information,” says Sabourin.
Maxime Lafleur-Forcier, manager of actuarial research and development at Aviva, says the company harvests textual data to model insurance risk.
For example, the company can analyze insurance claims to see how often water leaks originate in a pipe, or a window.
“People “think that what they enter is not going to be looked at. It’s not true anymore,” says Lafleur-Forcier.
“It’s a good source of informa-tion [that] can be used at differ-ent levels,” he says, “one of them being fraud.”
Aviva can also compare the data it collects against warranties on particular products; if a roof comes with a 20-year warranty but is shown over time to suffer defects after 15 years, insurance rates can be adjusted accordingly.
This will translate into a more accurate pricing structure and eventually, lower costs to the consumer, the company says.
Sabourin says the possibilities offered in big data analysis are transforming the company.
—BB
CP gets agile with hybrid cloud
often had to “slip things under-neath it” when new projects came up, Charlton said.
He describes the traditional way IT is consumed as a “tax,” or demand driving supply. Invariably, he says, IT will constantly have to react to increased demand.
“With a private cloud you’re separating the supply from the demand,” he said. “You’re pur-chasing capacity independent of the demand and then you’re tracking the trend.
“So, it’s a separate pro-
eXtreme Scale was developed for distributed caching in cloud environments.
The railway’s public cloud is being used by several hundred developers in Calgary and overseas, in India. Its data centre in Singapore serving off-shore customers has a secure link back to headquarters in Canada, Charlton said.
Jorge Garcia, an analyst at Montreal-based Technology Eval-uation Centers Inc., said the way the railway is approaching cloud computing is forward-thinking compared to the way other large enterprises are doing so.
“As far as I have seen, it’s more like a reactive process, not a predictive process,” he said.
Garcia said the synergy between CP’s public cloud and its offshore business is also interesting given predictions in the past about the demise of traditional outsourcing.
“Many people thought that with the adoption of cloud solu-tions much of the outsourcing will be gone, which is not hap-pening here,” he said. “In a way, they’re saving costs.”
—Brian Bloom
cess—it’s differ-ent. The demand no longer drives the supply. You’re just predicting it and you’re buying the capacity ahead of time because you’re making the assumption that it’s cheaper to have excess capacity on the floor just in time
than it is to wait. Because waiting is the killer.”
A combination of cloud technology and agile software development methods have al-ready paid off, said Charlton. CP was able to complete a massive “mission-critical” project last year in the record-setting time of two months, he said.
“We really knocked it out of the park,” he said.
Charlton added that CP is using IBM WebSphere eXtreme Scale “heavily” for its software development in the cloud. P
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I’m sure there’s more than one CIO or IT manager in a small to mid-sized firm that
has occasionally wished they had the IT budget and resources the size of, say, a large bank or insurance company. Imagine the possibilities!
Now imagine the headaches.At an invitation-only
roundtable this week, I hosted a handful of CIOs from some well-known local firms to discuss the theme “From Per-formance To Value: IT Transfor-mation in Canadian Financial Services.” Given the fact we had a few competitors in a room together, I agreed to keep all comments off the record. But I’ll say this: there was a big gap between the technologies and priorities we had identified
– cloud computing, big data, social media and mobile – and where they are investing their time and dollars.
In fact, as we moved around the table the challenges and pain points experienced by the banks and insurance compa-nies sound a lot like those of their smaller counterparts. They’re burdened by legacy infrastructure and wondering how much more they can layer on before the whole thing falls apart. They’re grappling with bring-your-own-device (BYOD) policy requests and they’re constantly trying to explain technology realities to their business department peers. The biggest area, regulatory and compliance requirements, is somewhat more prominent
in this vertical, but it’s safe to say most of them aren’t staying up at nights wondering what to do with Facebook or what ap-plications to put on employees’ mobile phones.
If they care about anything trendy, it’s big data, and no wonder. Improved analytics allows them to address other issues, such as how to better en-able cross-channel experiences in their customer base, the development of new products and services and possibly even reduced costs. But as part of our discussion we recruited Rob Burbach, a senior analyst with IDC Financial Insights Canada, to present some of the com-pany’s research, and he sounded a warning note about big data that is worth hearing among other IT leaders.
“We’re all in that first f lush of excitement around big data, and everybody’s getting their feet wet,” he said, “but I think we’ll soon enter those post-honeymoon blues where you start to realize the all the im-pacts on financial controls, and the integration issues, which are huge.”
We traditional look to financial services, like the auto industry, to be the early adopters of technologies and techniques that pave the way for best practices to be developed across other sectors. While BYOD, mobile, the cloud and social media may not be areas where the big banks and insurance firms will lead, big data is another matter. This is an important lesson, because as the roles mature we tend to treat CIOs as a group with common goals, common strug-gles, common points of view. It may be time to re-emphasize the impact of vertical market inf luence on IT leadership, and what kind of knowledge needs to be cross-pollinated from one CIO to another. Financial services is not about dollars and cents but about relation-ships between people and institutions. So is the ongoing study of IT management.
—Shane Schick
public from keeping their government under scruin-ity. Policy is “translated” into a language like Python, he says, just as it is from English into French, except in this case, it isn’t made available to the public.
“Making sure that government is transparent to their citizens shouldn’t be seen as, ‘ok, how much money does that cost and should we just shave that democracy aspect off our budget?’ That, to me, should be fundamental to the op-erations of government.”
Duncan Card, partner and national co-chair of technology, outsourcing and procurement at Bennett Jones LLP in Toronto, says he doesn’t necessarily agree that having proprietary code in government is infringing on the liberty of Canadians.
“There are other ways of dealing with government transparency than at the foundation or cornerstone level of the software they use,” says Card.
Making code available to the general public could lead to a “mob mental-ity of oversight,” he adds, weakening the ability of government to do its job. In some cases, it could even be dangerous, he says.
“There are security issues associated with disclosure of code for critical infrastruc-ture,” says Card. “Think of the cyber-security implications of critical elements of IT infra-structure being made public.”
But Joseph Potvin, co-cordinator of GOSLING, contends that the opposite is usually true. “Something can only be secure if the security people have access to the source code,” he says, using the example of seismographs to monitor the nuclear test ban treaty. “All of those seismographs are running what is referred to as ‘stripped-down Linux,’” Potvin adds. —BB
Big data lessons from Canada’s big banks
OPEN-source continued from PAGE 3
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EXAMPLE OF IT TRANSFORMATION
A
One of Canada’s fastest-growing retailers shows how it is trying to engage the elusive “omnichannel” customer
By Shane Schick
cio canada JUNE 2012 I T Wor ldCanada.com 11
Alexia is the fictional but representative example of the target customer Michel Joncas and his colleagues keep in mind as they develop the technology that powers the Garage chain of stores that operate in shopping malls across the country. On the other end of the spectrum is Rachel, a single 28-year-old who rents a small loft, is confident, witty and likes to have fun. A Rachel is more likely to shop at Dynamite, the other brand of stores the company owns and operates primarily in Quebec.
It’s not unusual for major retailers to create personas of the most likely people to come to their stores, but traditionally that kind of information would have primarily been useful to the marketing and sales depart-
ments. Joncas, however, used Alexia and Rachel as the build-ing blocks for an IT strategy that begins with internal hardware and applications to increase efficiencies along with external customer-facing social media tools that nurture relationships with both new and loyal custom-ers. As the vice-president of IT at Groupe Dynamite in Montre-al, his efforts may be indicative of major changes affecting the retail industry – changes that will largely depend on a skillful blend of both consumer and enterprise technologies.
Joncas was the keynote speak-er at an event hosted by IDC and the Retail Council of Canada in Toronto in April that focused on the “omnichannel” customer. In other words, customers that
eet Alexia. She’s a 16-year-old girl-next-door type who lives in the suburbs. She’s close to her parents, does well in school and gets a weekly allowance. She likes casual clothes with a sexy fit, and tends to dress like her friends for acceptance and reas-surance. She aspires to be an adult, but is sometimes
childlike. Outgoing and well-connected to her friends, she has started discovering new things and wants more of them – namely travel, cars and boys. And to do that, she often feels she needs to look the part.
12 cio canada JUNE 2012 I T W o r l d C a n a d a . c o m
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may use a retailer’s Web site, its Facebook page, the actual store, a 1-800 number or a combination of channels to engage with the com-pany. While many U.S. chains have already been rolling out customer-facing apps and revamping internal IT infrastructure to create greater throughput and efficiencies, the pic-ture here is far less bright. Accord-ing to a survey of approximately 150 retailers IDC conducted earlier this year, only 14 per cent of Canadian retailers fall into the camp that has successfully transformed store expe-riences through mobile technology. The majority, 35 per cent, admitted they are essentially “non-mobile” so far, with only potential plans for pilot projects.
“A lot of it is about thinking about the theatre of the store – What does it feel like to the customer?” said Leslie Hand, research director of IDC Retail Insights. “What will make them want to shop at your store more than anybody else’s?”
Late last year an article in Bloomberg BusinessWeek talked about the rise of the “mission shop-per,” who comes to a store with all their online research complete, with no intention of staying any longer than is necessary to grab an item and pay for it. Retailers are now reconfiguring stores to encour-age browsing, the magazine said, with wider aisles to accommodate strollers, along with lower shelves and displays so shoppers need look no higher than 10 feet.
For Joncas, it all starts with better service, which is why Groupe Dyna-mite is doing a pilot program that will see iPads distrib-uted to employees along with IP phones. “We had two-way radios in
the past, so the business case was
all based on the ability to broadcast messages to our employees from a central office,” he said, adding that the devices will also offer access to Web-based applications. “Instead of going to a computer, they can do it in a store in any area. That increases productivity.”
Groupe Dynamite will build upon that productivity by funneling more information to store associates, like a live feed on traffic data, what’s happening in the store, conversions, sales, and so on. The stores use cellular waves as a backup in case of emergencies. “You have to have a plan B when the phone line is com-pletely ripped in the shopping centre or things like that,” he said.
Groupe Dynamite provides available and secure Wi-Fi access for its entire office community. Its infrastructure includes Motorola RS409 scanners, EWB100 push-to-talk over WLAN enterprise wire-less badges and the Digi Connect WAN series of cellular/WiMAX gateways/routers provides serial or Ethernet to high-speed cellular capability. There’s usually a very small back office in each store or warehouse, but, “Working on a computer in the back not really ef-ficient,” Joncas said.
While empower-ing employees is important, getting closer to customers is critical. Joncas said Groupe Dyna-mite realized early on that its target market was likely to be highly engaged in social media,
which why it started establishing a Facebook presence almost two years ago.
“We discovered we simply have to listen to our customers,” he said. “When we launched a text message promotion, we could measure on our (customer) surveys if there was
an impact. It’s the same thing with Facebook.
While the Garage brand has some 310,000 Web mail addresses of cus-tomers, it has more than 455,000 Facebook connections, making it an increasingly strategic channel. One of its early successes was conducting a contest to search for a real-life Ga-rage model, where photos would be uploaded and voted on through its Facebook page. This was supported by in-store collateral with QR codes to drive further awareness. Joncas said the company has also used Facebook polls to better understand its target market.
A more recent contest featured videos that indicated a fighting couple could either make up or breakup. Customers could vote on how the story should end by sending a text message vote to Facebook, or even to YouTube.
“You have to have people dedi-cated, full-time, looking at this,” he said. “That’s one of the most impor-tant lessons we’ve learned.”
While the custom-er-facing and in-ternal IT Joncas is using to transform Groupe Dynamite serve many busi-ness needs, he told the IDC event he realizes there’s a need for better in-
tegration. That’s one of the reasons why, last year, Oracle announced that Groupe Dynamite had signed on as a customer of its Retail Suite for POS. This includes Oracle Retail Merchandising System, Oracle Retail Store Solutions, Oracle Retail Demand Forecasting and Oracle Retail Price Management. “We want to link all of these things together.”
IDC uses a maturity model to gauge the level of interactive re-tailing in Canada, Hand said. The model ranges from non-mobile to foundational (where retailers are
cio canada JUNE 2012 I T Wor ldCanada.com 13
doing pilots around mobility), engaged (where they’re making specific mobile investments), empowered (where they have enabled upsell/cross-sell apps, as well as apps for customers), to transformed retailers that fully empower employees and customers. Only 14 per cent of retailers in Canada, however,
are in the engage to transform phases, according to Hand. Most are doing nothing at 35 per cent. That’s a problem, because given the nature of this market, the competition around interactive retail is bound to get intense without warning.
“While I was here, I visited
the Toronto Eaton Centre,” she said. “I didn’t do an exact ac-counting, but I estimated that maybe 40 to 50 per cent were global retailers, brands I sees everywhere she goes around the world. Some of these com-panies, they just have to decide to turn it on anywhere, and then it’s here.”
This is a portrait of the “omnichannel” shopper, the kind of customer all Canadian retailers need to begin cultivat-ing, according to the research director for IDC’s Retail Insights division, who spoke at a summit on retail and mobility in Toronto last April.
Hand defined omnichannel shoppers as those custom-ers who want to interact with retailers via multiple channels, but who also want to see consistent levels of service, regardless of touchpoint. This means trying to get that per-son standing in the checkout aisle to look up from their de-vice, see other items on a shelf or talk to an associate on the floor. It also means location-based offers via SMS or text message, and even point of sale kiosks inside the store.
“They need their sales staff not running around the store putting product away, but helping the customer with mobile devices,” she said, describing the ideal state as “O3” – omnichannel optimiza-tion and orchestration.
A good example of a Cana-
dian retailer who has already started down the path to O3 is Black’s Photo, which in the last year has added more than 350 kiosks to their chain and built out a significant portion of their business online. Accord-ing to Phil Chapman, vice-pres-ident of imaging and business development at Black’s Photo Corp., a big shift happened when the company was acquired by telecommunica-tions carrier Telus Corp. Now, every Black’s sales associate is carrying a smart phone with them, and has rolled out apps that let customers order prints for pickup and pull images from Facebook or Picassa for printing.
“Our focus is about being on the go. More images being captured now than ever. The problem is that people may not be doing anything with them,” he said. “Our job is to make sure they do.”
While Hand praised Ca-nadian Tire for its apps and kiosks as well as a recent e-commerce app from Sears Canada, most of her more cutting-edge examples of mo-
OMICHANNEL RETAILERS IN ACTIONLeslie Hand is standing with her legs slightly apart, her head bowed over the smart phone in her hands, pretending she is in a checkout line frantically doing price comparisons before handing over her credit card.
bile retail were based on work by U.S. firms. Some ideas that Canadian SMB retailers might steal include:
• Guess: Using customer re-lationship management (CRM) data, the company is allowing customers to share offers and product info with friends via social media platforms like Facebook, and pushes targeted and personalized content and offers. • REI: Rather than try to avoid comparison shopping, the outdoor clothing chain has mobile apps and Web sites that encourage consultative/interac-tive selling, showing technical characteristics that differenti-ate various product lines. This information is being delivered on a kiosk as well, with mobile POS planned later this year. • Pacsun: The clothing manu-facturer has created a photo-based electronic “lookbook” where you can engage with someone in the store and walk through outfit combinations on a tablet. • Lowes: In an effort to appeal to home renovators, an applica-tion called MyLowes allows customers to easily track their online and in-store purchases so they’ll only get exactly what they
need for a particular project.• Stop&Shop: We’ve all gotten used to self-checkouts like those stationed in IKEA, but this grocer’s app lets custom-ers scan items on their own iPhone as they shop. This can make it easier for stressed out parents, because the child can do the scanning, increasing en-gagement. Once they’re done, customers simply walk to the self-checkout lane, scan their frequent shopper card and pay.
Hand also profiled up-and-coming retail chains that Cana-dians may never have heard of, like C.Wonder, which sprang to life complete with mobile POS, a mobile inventory system, inte-grated RFID, and even apps that allow adjustable lighting and choice of music in fitting rooms.
“You just have to imagine: What if you didn’t have all this legacy business and technol-ogy, and could start from scratch?” she asked, adding that retailers should study customer behavior to ensure they optimize the right channel for the right purposes. Smart phones might be great for re-search, but holding up a tablet, she said, “This is the device where they tend to actually pull the trigger and buy something.”
—SS
14 cio canada JUNE 2012 ITWorldCanada.com
e-commerce
The way employ-ees, customers and partners interact with
technology is changing — and these changes are affecting processes, systems and cultures. And while most CIOs are aware of the evolution toward social business, it’s not always clear how to evolve their own business, and even the role of CIO itself.
Businesses are facing massive and unprecedented levels of change, thanks to cloud, social media, mobile technology, big data and the consumeriza-tion of IT. They have up to five generations in the workforce, from digital natives to digital immigrants, and often have to deal with stagnant or declining IT budgets.
Consumer-oriented business models are changing the role of the CIO; the three-year ERP project with a five-year pro-jected ROI is a thing of the past. Technology is changing too fast, and business leaders want to see results in months rather than years.
“It’s pretty scary what’s hap-pening with business models — they’re being created, being
destroyed and being created every three years,” said Ray Wang, principal analyst and CEO of Constellation Research, at NetSuite’s SuiteWorld 2012 conference held in San Francisco last month.
“If you had a five-year IT plan in 2008, you would have totally missed Facebook, cloud and mobility, and you’d be sitting there with some ugly architec-ture,” said Wang. “These forces of consumerization are happen-ing right now and happening very rapidly.” These forces go beyond an employee using their iPad at work. “B2B and B2C are destroyed — it’s back to people to people,” he said.
“I believe social, mobile and cloud is how all apps will work — if they’re not working that way today,” said Zach Nelson, CEO of NetSuite. Customers want to interact across myriad devices, whether smartphone, Facebook page or point-of-sale system, and the business has to recognize the customer across every one of those channels. Business users expect a business-to-consumer experience. Even retailers buy-ing products from a supplier want that B2C experience.
“Apple defined a new set of
experiences, and the consumer expects that from others,” said Nelson. That extends to busi-ness apps, including commerce. “The commerce space is going to change rapidly,” he said, add-ing that ERP, CRM and global capabilities (multi-tax and multi-currency) are the neces-sary building blocks for deliver-ing this Apple-like experience in the business space.
At the conference, NetSuite announced its commerce-as-a-service offering, called SuiteCommerce, a commerce platform that supports any device and any business model, which is integrated into back-office commerce operations.
“It’s not ecommerce, it’s commerce — it’s a single Web site channel,” said Nelson. “There are so many (channels) there basically are no chan-nels.” Commerce-as-a-service envisions many, many other touch-points, he added.
“Many of our retailers are seeing more than 10 per cent of transactions flowing in through iPads,” said Andy Lloyd, general manager of ecommerce with NetSuite. That means business requires a responsive design, one that adapts to the device it’s
A social business backgrounderThere’s more to it than Facebook and Twitter. A recent conference brings experts together to share emerging best practices By Vawn Himmelsbach
A few years ago, CIOs helped to drive multimillion-dollar IT projects. Today they’re under pressure to re-duce costs while navigating disruptive technologies and delivering on innovation.
According to Ray Wang, principal analyst and CEO of Constellation Research, today’s CIO has four roles:
• CHIEF INFRASTRUCTURE OFFICER: the traditional CIO as we’ve known it, tasked with keeping the lights on and managing legacy environments (cloud will play a key role here in cost reduction efforts)
• CHIEF INTEGRATION OFFICER: connecting a hodge-podge of internal and external ecosystems (from customers, suppli-ers and partners, whether legacy processes or newer cloud-based approaches)
• CHIEF INTELLIGENCE OFFICER: getting the right information to the right person at the right time with the right security model to empower the business with actionable insights
• CHIEF INTELLIGENCE OFFICER: identifying new and disruptive business models, from cloud to mobile apps to BYOD
In some organizations, CIOs are assuming all four roles — and can deliver on all four roles by upgrading their skill sets, said Wang. But in a larger company, a CIO could charge lieutenants with one or more of these functions. In some cases, a shadow CIO-like organization could emerge on the business side to fill some of these roles, and business leaders with a leaning toward technology could evolve into the Chief Intelligence Officer or Chief Innovation Officer.
THE FOUR ROLES OF THE CIO
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being accessed from, and one that isn’t going to lock the busi-ness into any one decision.
“Our view of social is different from other app vendors,” said Nelson. “We focus on business processes — where are the social touch-points in business pro-cesses and how do we enable that? That’s what SuiteSocial is de-signed for,” he said in a press Q&A at the conference. “Our strategy is more about socializing our data and putting it into whatever receptacle the client is using.”
These trends affect everyone, from Fortune 5000 to Fortune 500, said Bill Briggs, deputy CTO and global digital lead with Deloitte Consulting. But how do they build the foundations of their companies on those trends? A CEO of a bank will tell you that processing transactions is already a difficult task. These new expectations will affect op-erations, from employees, part-ners and vendors to competitors, consumers, and fans.
“Social is not about the social platform, though that’s inter-esting,” said Briggs. “It’s about influence and intent.” Similarly, mobile is not about the mobile platform. “It’s how do I rethink the business, can I take advan-tage of the context of who my customers are and what they’re doing at the point of busi-ness contact?” Businesses are fundamentally going to market differently, and the most suc-cessful post-digital efforts will be driven by customer engage-ment, he said.
Today, because of the cloud and big data, we can run mas-sive queries and models we could never have conceived of before, he said, but businesses need to figure out how to use that to affect business change — they need to retool, reorganize and reposition the interaction between people and technology.
“It’s not just do what you’ve always done differently, but do fundamentally different things,” said Briggs. Plan big, start small, fail fast and scale soon. If you don’t execute your IT strategy in 12 months, it’s probably going to be irrelevant.
Channels will change over
time and more digital chan-nels will emerge, said Wang. At its heart, a social business is a series of design principles and processes to create one channel of communication with indi-viduals. Rather than B2B or B2C, we’re seeing the emergence of P2P (people-to-people). “You play different roles in your life, but marketers market to you as one individual,” he said. “P2P is cre-ating a shift (and that) requires a different way of thinking.”
Esteban Kolsky, principal and founder at ThinkJar LLC, says we should avoid calling it social business — it’s just the next evolution of business. It’s not about socializing, but about how to collaborate and co-create. “If you can do that, then you’re what most people would define as a collaborative business,” he said.
“The biggest hype is that by implementing social media chan-nels like Facebook you actually become closer to the customer, which is nonsense,” he said. “We’ve deployed hundreds of channels in the past and never become closer to the customer. You need to realize that your business has to change.”
The purpose of social business channels is to create value for the business and the customer. But it often breaks down behind the scenes because those chan-nels are not designed for that; if customers are complaining over Twitter, that social business channel has little value if the business isn’t following up with those customers.
“Facebook has no place in a discussion of social business,” said Kolsky. “Facebook tried to get into business and it failed. You don’t go onto an online network to be sold to. You are there to interact with your friends. General Motors has just withdrawn from Facebook. It’s not for enterprise business and it’s not a social business topic.”
A lot of businesses believe if they deploy Twitter for cus-tomer service and Facebook for marketing that simply by having a presence they are becoming a social business, said Brian Solis, principal analyst at Altimeter Group. In fact, that can perpetu-
ate the problem; they underes-timate what social is and what it means to the business.
“A lot of this discussion around social business has not gotten to the level of making a business case,” said Solis. “Busi-nesses failed at F-commerce (Facebook-commerce) because they f-ed it up. Look at GM’s ads and you see that GM has other issues beside Facebook.” We need to get to more of an adapt-able framework and develop an infrastructure that can adapt to experiences, not react.
There are benefits to social business in terms of ease of use and deployment, but it still re-quires a huge amount of invest-ment from a behavioural change perspective. “CRM fails because people don’t take it seriously, they don’t adopt it properly,” said Martin Schneider, research manager of 451 Research. The same goes for social business.
“This is an ERP conference, but we’re talking about B2C2B, treating people as people rather than accounts,” said Schneider. “The idea is that the experience
is enhanced, multi-channel, consistent across channels and managed easily. That’s what’s really cool. Social business is not about social media, it’s about the way we interact in new ways.”
But this is going to be a tricky balance. “I had to leave my Twit-ter handle in my last job,” said Schneider. Many businesses are still operating with Old World principles: This is my brand, I own you. A social business oper-ates with New World principles, where personal branding can further an employee’s own career while furthering the business. “I don’t think the legal ramifications have gotten there yet,” said Wang.
For the next-generation CIO, the challenge is putting all of this together and creating a new business model, said Wang. The CMO says keep is simple, scalable and sexy. But CIOs want safe, secure and sustainable.
This is the new corporate digital divide: Those who get disruptive technology vs. those who don’t. “The gap is going to be huge,” said Wang.
FIVE STEPS FOR DEALING WITH DISRUPTIONThere’s so much candy out there, CIOs have to figure out the right business case for the right disruptive technolo-gies. “You don’t want another two-year ERP project, only to discover it doesn’t work three years later,” said Ray Wang, principal analyst and CEO of Constellation Research.
CIOs are facing a number of challenges, such as dealing with the next-generation customer experience (via mobile and social channels) and bringing commerce capabilities onto mobile platforms. There’s also Big Data, analytics and perfor-mance managemewnt, which are useless unless they provide insights to action to help front-line workers. And then there’s the consumerization of IT, which includes making BYOD use-ful for organizations and managing the devices brought in.
WANG HAS IDENTIFIED FIVE STEPS TO HELP CIOS DEAL WITH DISRUPTIVE TECHNOLOGIES:1. Discern hype from reality and garner executive support.2. Identify meaningful metrics and incorporate social into business models.3. Choose the right tools and foster internal collaboration, scale to match demand and ensure long-term funding.4. Keep up with social innovations.5. Develop social business governance.
Keep experimenting, said Wang. Learn what didn’t work and don’t make that same mistake again on the next project. “None of this matters unless you have business value,” he added.
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* Source: 2012 Technavio – Global Cloud Security Software Market©2012 Trend Micro, Inc. All rights reserved. Trend Micro and the t-ball logo are trademarks or registered trademarks of Trend Micro, Inc.
18 cio canada JUNE 2012 I T W o r l d C a n a d a . c o m
soft skills
In the intervening twenty years, Dilbert’s been in sales, in marketing, out with people who buy his corporation’s products and services: he’s not just a back-room engineer any longer.
And neither are you. But there are pitfalls on the way to negotiate.
IT’s great advantage as an organization is that it slices horizontally across the enter-prise, touching every part of it. Not only is every other part of the organization a client to be served, there’s often an advan-tage to be had by linking across those different domains.
IT’s great weakness, in turn, is often that it is seen as remote and unresponsive, popping in occasionally and promising much, but failing to deliver in a timely manner.
That’s not my view, by the way: it was the view of over five thousand interactions with business leaders in a study of IT effectiveness done over a seven
year period. They were asked to rate their IT counterparts on two axes: how dependent they felt their part of the business was on current and future infor-mation technologies, and how credible they thought their IT organization was at envisioning and delivering the future.
High dependence but low credibility was a very common outcome. Unfortunately, that translates into “get a consult-ing firm” or “get an outsourcing partner,” not “call IT.”
So long before IT has pipe-dreams of being out in the field influencing end customers, it looks like an ongoing program of credibility improvement on the customer-centric axis is still in order.
True … but we’ve lost a few more years. More products and services from enterprises are in the hands of end customers. From apps delivered to customer devices, to Web presences, to kiosks, to technology embedded
and interacting in the field, more of the technology base that used to be internal only is bridging the gap and going external.
Marketing, sales, the cus-tomer care centre, field opera-tions and the like will still be the primary face of the enterprise to that outside world — but it’s a world IT had better understand well to be able to serve well when their internal clients bang on the door and say “everything! yesterday!” — as they will.
Unfortunately, not everyone in IT (or in any department; IT’s just feeling it more heavily than others) is good at client interac-tions. IT in particular attracts a high percentage of introverts and intuitional thinkers, neither of whom necessarily do well in “getting out there”.
Customer-centricity should, therefore, be a manager’s chal-lenge: how do I work with each person’s strengths to make the department as a whole custom-er-centric, welcomed, credible.
The A to Z of customer centricity
Bruce Stewart is a 38-year veteran of IT management and a former Gartner and
META Group analyst. This article is a
collection of his posts.
A longtime IT leader used our annual Blogging Idol contest to ruminate on how technology groups can increase their value By Bruce Stewart
We’ve known for well over two decades that IT needs to be a client or customer-centred organization. Still, there’s a lot of people in IT who still fondly live up to Dilbert’s “day of
getting a new computer”, humming “People, people who don’t need people…” while he sets it up.
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Customer-centric organizations are managed differentlyIT has often prided itself on being focused on the tasks at hand. Whether these are the tasks of processes or the tasks of projects, “getting them done” has ruled.
Unsurprisingly, given that most people in IT management were moved up from IT work, that management expectations — especially when constructing performance plans and reviews — focus on tasks to do and tasks done, and less on the human side of the equation.
Regardless of who gets defined as “the customer,” a customer-centric IT organiza-tion requires a management revolution.
IT managers must become people managers: developers of people and strengtheners of people, in particular.
Start with each person’s strengths: Canadian management practice often focuses on what wasn’t done, what wasn’t done well enough or frequently enough, and on where to improve.
Here’s the thing: each person has distinct competencies, rooted in who they are as a person. Although we write job descriptions as though people are easily replicated cogs in a machine, each member of staff is actually unique. Good customer-centric managers recognize this, and use it to their advantage.
Mary is a star when you need a white paper, think piece or idea-spreading presentation built. George, on the other hand, is a whiz at delivering the message — just don’t ask him to create it. Susan is superb on analysis, number-crunching and verifying, but can’t speak business for love or money. Nate is a natural problem solver, but hitting a deadline for a task isn’t really his forté. So it goes.
Tailor each person’s contribu-tion to the team as a whole to their talents, natural inclina-tions and types of success, and the overall ability to serve, influence and even direct the customer goes way up. Mind you, as the manager, you’re go-
ing to have to actually spend far more time on people issues than you have up to now.
Demand the heights on strengths, and just enough on weaknesses: When it comes to performance, you need to adopt a double standard. Weak areas will come into play, so be satis-fied with “just good enough” there. In areas of strength, however, targets and demands should be a real stretch, both in terms of quality and results.
Lower, as well, the number of things you’re rating, bundling them into a few broad categories. You want your people to be flex-ible, adaptable and innovative in dealing with their customers: you have to give them the manoeuvr-ing room to do so. If you tell them too much about the “how” of their job, by overspecifying result areas, you squeeze that out — and your customers perceive your organization as unresponsive.
You’re far more likely to have the team succeed — and each person succeed, stretching far beyond previous norms — if you do. High-performance teams speak to your customers, in turn: they build credibility (which, in turn, brings more demand your way).
Be more available than they are: It may sound trite, but as a manager in a customer-centric organization you need to be more available than any of your staff are. That’s so you can coach, help them when they ask, be available to meet clients when they need you there.
Most managers have calen-dars that are double (or more) booked weeks in advance. Yours should be as clear as possible. Customer-centricity is some-thing like sales: district and regional sales managers are able to cover for and support their sales representatives on a mo-ment’s notice, or go to a dissatis-fied customer within a day or so to put out a fire. Partners in charge of accounts at consulting firms work the same way. So the models are there.
Customer-centricity is a cul-tural shift, first and foremost. For IT, it’s also one that works against
decades of embedded practice. But IT organizations have man-aged it, and you can, too.
Customer-centric IT needs information skillsThere’s a key area in which IT can establish itself not only as a customer-centric organization, but also as a credible and useful business partner — a “vendor of choice,” not a vendor by organi-zational fiat.
That’s in the organization, use and presentation of information.
IT folk often think of informa-tion as something that’s just pres-ent in systems. It actually needs to be designed to be effective.
Clients and end customers are both typically as bad at this as anyone else. (I’m sure you remember all your information classes in school, right? Oh, that wasn’t in the curriculum?)
While there’s been organiza-tions that have created Informa-tion Management and/or Re-cords Management groups, and staffed them with graduates from an information studies faculty or certificate holders in the field, the curriculum studied there tends to focus on unstructured data and documents rather than on taking data from systems and turning it into information.
Both matter — but since the typical information studies program disdains the informa-tion technology field, there’s an opportunity for IT professionals to broaden themselves and serve their enterprises better here.
Here are some of the key things to deliver:
Digital Curation of the Enter-prise: We’re used to thinking of backup as something fitted into the schedule. If you needed — for a legal proceeding, a regula-tory intervention, or a compli-ance challenge — to establish what could have been known at a known point in time, can you? (That these checkpoints would also help your business conti-nuity by getting past the “key system” or “we only have budget for…” problems is a much-need-ed bonus.)
Information Appliances: You can train until you’re blue in
the face, but the average person doesn’t have the ability to visual-ize how to effectively pivot data, combine streams, etc. — so it needs to be built for them. These can then be delivered as reports or pre-coded tools for items like Excel, but they could just as easily be apps on devices. (Here you’ll combine information studies, IT and good statistical/mathematical roots.)
Improving the User Experi-ence: Every shared service you offer, every system delivered from a package, is a suite of compromises. Why has Apple done so well in the past decade? A relentless focus on the user experience (from how a box gets unpacked onward). There is no reason not to provide tailored user experiences, honing front ends to precisely fit the needs of those using the services, all working off your common back ends. Don’t believe me? Do you know anyone using SAP’s workflows and approval mechanisms where managers are forever behind on providing those approvals? Chances are, they’re uncomfortable with the SAP user experience — and their position in the organization means they don’t have to master it. A custom app handling just the approvals would go a long way to overcoming this.
Information and Records Man-agement applied to Databases: IM and RM people are used to working with enterprise content managers. Database people aren’t used to thinking of the manage-ment of records. Bridging this gap is a major opportunity area to serve the enterprise better. This also improves the information studies approach to information architecture by making it a part of solutions architecture, instead of the separate discipline it is now.
Those are four; there are more opportunity areas beyond this. Providing services in these areas will build IT a customer-centric reputation, because you’ll be solving real problems: the same kind Apple does. Remember what Jobs said? “I don’t use market research, because people don’t know they want something
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new until they experience it.”
What internal customers need most from ITPart of being customer-centric (as a business strategy) is figuring out what your potential customers’ unmet needs are.
As these are unmet needs, they may not be able to articu-late them directly to you. Re-search, however, has dug some of them out.
Barely-repeatable Processes: Almost all the IT systems deliv-ered in the typical enterprise are designed around the notion that the process is repeatable. That’s “the” process (as in, there’s one) and “repeatable” (as in, every time, the same steps in the same sequence are followed).
If you’ve ever been on the phone with a company where you are asked for ten different pieces of information in the same sequence (the “protecting personal information process”) when they called you, or you’ve ever worked with a Web site where you must enter the fields in sequence (because what you type in this field changes the subsequent ones), you’ve expe-rienced this “one size will fit all” mentality in action.
Real operational interactions, however, have other consid-erations. Sometimes minimal information is sufficient. Some-times the person interacting follows their own sequence and the person serving them knows it’ll work out better if they go with that. Always, everyone in the interaction wants to get to a satisfactory conclusion faster.
IT has suffered from process-centricity for many years: most of our architectural and analysis processes are designed to work out all the exception
use cases around
a spine of “the process”. It’s time we moved away from that to modularity, more flexibility, more adaptable approaches.
Access not Limitations: Busi-ness leaders bemoan the silos in their organizations constantly. Our access controls often reinforce those silos, instead of helping to break them down.
Data and information are not assets owned by an individual group. They are enterprise assets — and as such should be widely available. This implies three big changes: a presumption that ac-cess is permitted, not restricted; ways to find what you’re looking for that give you the right infor-mation, usefully organized; and, where possible, conflicts have been resolved for the person ac-cessing the information.
This implies the use of cataloguing and library science skills just as much as an attitude change. It also implies putting some of those skills into services like the help desk, able to assist a client in getting what they need.
Scenarios for the future: The enterprise turns to marketing to understand pricing, product extensions, new threats and op-portunities. The enterprise turns to operations to understand how to make order of magnitude changes in the time, cost or effec-tiveness of doing the firm’s busi-ness. It turns to finance to under-stand its future cash positions, the long-term uses and abuses of debt (including depreciation), and what to do where to optimize the firm’s results. So what should the enterprise turn to IT for?
Different scenarios, expressed as narratives, expressing how the enterprise changes if things
are done (or not done).Narratives are es-
sential: technophobia is still a factor. A century has given a minimal understanding of some of the terms of finance, an equally
technical vocabulary and body of knowledge.
The future architecture, for instance, ought to be able to be painted in words that
need no acronyms or product/vendor names. “Every new or replaced system moves to the best price-performing option at that time, so that over time we bring the costs much closer to the best the technology market can offer” is narrative; “we are mov-ing to virtualized LAMP-stack commodity servers split between the data centre and the cloud” is technobabble and fear-inducing.
Customer-centricity is hard: it’s a major change to IT’s own ways of working. But the payoff is to become a key part of formulating the future of the enterprise (and the security of your jobs) rather than reacting to decisions already made.
Your clients need you to make this journey — because it’s how they’re securing their futures, too.
Characteristics of the customer-centric IT groupNot all IT groups are built the same way, or operate the same way.
They may have most of the same elements and job titles, but they work differently.
Customer-centricity should, if you’re serious about it, show up in the way you organize and work far beyond actual interac-tions with your clients.
A BIAS FOR ACTION: The backlog is utterly hated by the customer-centric IT group. What that means in practice is that teams are always doing — not meeting, studying or waiting for funding.
Customer-centricity, there-fore, probably takes away the no-tion of the dedicated team, and works with pool structures so that all the developers are busy knocking items off the backlog constantly, shifting from one project to the next.
Architects are constantly working to make solutions more modular, and easier to change, to facilitate more rapid delivery. There’s far more effort put into the enterprise architecture to define rules of engagement, and far less into nit-picking indi-vidual solution architectures and designs.
While it’s not necessary for
agile or other “faster” develop-ment methodologies to be used — I’ve seen very customer-cen-tric IT groups still resolutely in waterfall methods — the average project size falls significantly, and the goal is to ship. They see “everyone gets something regularly” as delivering desired function repeatedly, rather than “well, we’ll have to do this proj-ect for HR, because they’ve been waiting four years now”.
A BIAS FOR BUSINESS: Not every solution has to be perma-nent, or even require a project to accomplish. Customer-centric IT groups are masters of the temporary answer: here’s a set of reports against the data for now, then here’s a bridge that links two existing systems together to do this, then here’s a module.
They recognize that by the time their client has asked for something they’ve already iden-tified the need — and thus the faster something can be deliv-ered, the better the relationship gets. Eventually, architects can start discussing coherent futures because of that track record and not be considered irrelevant!
They know that small, quick methods aren’t the end point, but neither do they cost much, so they’re also easy to discard. They’re constantly looking for ways to clean up the portfolio as they go along.
They also are good at the word “no”. Clients often ask for things out of frustration. Especially when the user experience is being changed, they’re willing to do the field work to refine the request and keep the UX as simple and clean as possible, rather than just add buttons, bells and whistles.
A BIAS FOR CONNECTION: You find “relationship managers” less frequently in customer-centric IT, mostly because many people are trained in the requirements of being a two-way communica-tor. Most people who interact know enough about finance to do quick-and-dirty estimates on the spot, so they don’t say “yes” even
soft skills
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by implication to things that are just not going to be possible.
Outside the IT group, its in-ternal organization is irrelevant. When a problem gets dumped on the conference room table in an architecture meeting, the archi-tect steps up and owns it rather than saying “call the help desk”. The question of “who to call” never comes up: anyone will do, because they’ll make it happen on the inside.
Paradoxically, these organiza-tions often do fewer newsletters, and publish fewer metrics: they know that these aren’t adding the value that getting things done does.
Getting to customer-centricity requires that the phrase “they need to understand…” get set aside. With it goes the engineer-ing or expert mindset. Yes, IT has these skills, and has its own issues, just like any other department.
But they’re kept in house, where they belong.
Don’t alientate your customers to reach out to clientsCustomer-centric IT often brings up the question of whether or not IT is (or should be) serving real customers — you know, the ones from outside your enterprise, who pay in cold hard cash?
There are many good reasons to start to figure out how to provide needed services to your enter-prise’s customer base. But it’s a road fraught with peril, as well.
Do you remember how you feel in IT, when one of your vendors goes out to the business and sells their solution around you?
That’s how many in the busi-ness — your “official” clients — will feel about you, if they think you’re working around them.
I’m fully in favour of IT pro-fessionals improving the com-pany’s Web presence — building apps that help the customer base work with the company — a host of things that face the outside world. Not only is it good for the firm when you bring specific IT capabilities to bear like this, it’s good for the IT group, too,
which gets a very different kind of learning experience working with the outside world than with the inside one.
But there needs to be policy in place that both your business clients and you work within, or it’s a sure bet that whatever you do, you will be blamed for. Especially if you succeed.
This is yet another one of those places where a governance board — a permanent business + CIO executive body guiding the enterprise’s returns on IT and IT work — is the right answer. When an account executive’s, call centre supervisor’s, or marketing manager’s knickers get twisted because “you stepped on my turf”, it’s a very different outcome when their leadership is on side with what you’re doing ahead of time versus when your CIO has to try and defend your actions after the fact.
Most organizations haven’t gone down the governance board route — yet. They’re still struggling along, expecting the CIO to carry the load alone. That may make for heroic imagery, but it constrains opportunity, increases costs, increases dis-agreements and makes for a less than optimal life for all involved.
Governance boards not only are overwhelmingly of the cli-ent base, they’re charged with optimizing return on investment as opposed to protecting manag-ers’ egos. They deal in principle, policy and strategy: if it is an en-terprise decision that customers should be treated better, both the business and IT are going to be set to doing exactly that.
Now you’re not the enemy — you’re an approved (and approved-of) resource. You’re part of your client’s team, now both helping the customer.
Customer-centric behaviour for IT should begin in house, dealing with clients. It’s a way to get the governance questions out on the table so that the CIO can champion getting the structures she/he needs to succeed, like the Board. Then taking the initiative with external customers (and suppliers) becomes an enterprise
priority, and you’re helped to succeed at it.
There’s enough prior alienation out there for years to come. Don’t foolishly add to the pile. Build from the foundations, upward.
Recongizing the limits of cusotmer centricityWhen I think about customer-centricity — and I don’t care whether we’re talking about external customers or internal clients at this point — I think about what it takes to be a suc-cessful business.
You invest in product develop-ment, in service definition, in marketing, in supporting tech-nologies and processes. You go to market with them. If you get it right, you are rewarded with people exchanging dollars for your offering.
Do it right, get more, and get them back again and again. An Apple Store versus a Dell Indian Call Centre, to quote another Blogging Idol contestant.
But the IT organization in an enterprise isn’t a business in this sense. It can’t raise inves-tors, hold funds for future use, allocate them freely to initiatives to see whether they guessed right about the market.
IT is a department, and plays by internal rules. It has a budget, oversight, a backlog of demand (whether any of it makes sense or not), priorities established outside IT to deal with …
That means over-promising (by implication, even if you’re careful about what you say and do) and under-delivering (if not by your own efforts, then when the next “10% across the board” or “change of direction: this is on hold” comes down on you) are real risks.
IT isn’t a business free to risk and either be rewarded or die trying.
It’s an indigestible fact of life (when you’re in another group),
as essential and as easily turned into a reason to hate
as is finance, HR, legal. Somehow, the common service functions of an en-
terprise are supposed to able to do things instantly, cost noth-ing, know everything yet keep their mouths shut (because we, this particular business depart-ment, is in charge!), anticipate needs, never make a mistake, save us money, require nothing of us. (At least, that’s a pretty common modus operandi.)
There are customer-centric practices that are worth adopt-ing: you catch more flies with honey than with vinegar, as they say. They’ve been discussed over the past few days by the many contributors to this topic.
Without governance sorted out across the enterprise, none of those elements of the typical modus operandi are likely to change. It’s only at that level that the underlying issues of responsibilities on both sides of the equation can be sorted out, and where lower level people suddenly find the executive for their area doesn’t support “blame the IT guy” and “expect the impossible” as unwritten policies any longer.
Then, too, not every IT organization should be overly customer-centric. Engineer-ing cultures, highly outsourced environments (where a residual “Office of the CIO” tries to hold the pieces together), ones where the mandate is “squeeze cost out of this, then squeeze again and again” are three of a number of environments where those ex-pectations work against the ex-pectations a proactive customer-centric push would set up.
To be truly customer-centric you’ve got to do the top-down, bottom-up and middle-out pieces all in tandem. You’ll know you’ve done well when that mo-dus operandi changes.
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George Gorsline has been an IT leader at Interac Association, Toronto East General Hospital and CIBC. He is now a consultant with IT Initiatives.
action item
CIOs have wrestled with future proofing their IT infra-
structure for years. Because hardware and its depreciation are part of the cost of IT services, business users and the CFO have focused on these as a critical part of calculating the value IT contributes toward corporate success. This is a short-term tactical view. The strategic view is one fo-cused on sustainable value from IT services that enables the company to evolve its processes and business model to effec-tively to meet and anticipate a constantly changing market.
Obviously the bottom line is a key component of the value IT must deliver to the com-pany. Accounting rules, often with built-in five or seven year assumptions on hardware life are at odds with the reality of obsolescence or severely reduced cost effectiveness in three years or less. As a result, much effort has gone into outsourcing, less for improved services than as a work-around for the “book value problem.” Cloud computing is now emerg-ing as yet another and perhaps more satisfactory approach as it moves the focus from mitigating asset depreciation on the balance sheet to service delivery. While cost control is always important, targeting hardware costs distracts the discussion from business pro-cess efficiency and effective-
ness that can and will create real sustainable value to ensure the company’s competitiveness in the long term.
The first generations of IT focused on automating manual tasks within existing manual processes to gain efficiencies. The rise of the spreadsheet gave us a view of the balance sheet and other financial informa-tion that was easy to share and update, with graphs and confidence that the numbers were added up correctly. Later we learned that directly replac-ing manual processes with equivalent automation didn’t necessarily produce the im-provements hoped for. It wasn’t that people were slower or more error prone than machines, rather the processes themselves needed be redesigned to take advantage of automation. This
The proof is in the degree offuture-proofing
gave rise to business process re-engineering, a misnomer as many processes weren’t engi-neered in the first place, rather grew in corners, scratched on the back of envelopes, or that’s the way Jane did it twenty years ago. The horror stories about large cost overruns from failed or late implementations of ERP / SCM / CRM systems show that for the most part, that’s as far as we’ve been able to go.
These approaches are still
focused on tactical goals, solving yesterday’s problems for today, and won’t necessarily create sus-tainable value for the company. The challenge is to put in place systems that can evolve with the company’s needs as it responds to the ever changing market and that offer the capability for the company to drive the market in new directions. Does your CRM system already understand and integrate social media? If so, you’re ahead of most, but what about the next great thing? A more likely answer is that your CRM system is barely integrated into the rest of your systems and whatever social media presence you may have is still stand-alone. There’s a lot of tough work ahead.
CIOs must take the strategic view that IT infrastructure isn’t the hardware, software, cloud, or whatever is the technology de jour. The company’s IT in-frastructure is the applications and tools that run the business. Future proofing them is a far more difficult task. The very specifications and assumptions that are critical to deliver im-proved capability also lock your company’s business processes into today’s environment that
new technology and market-place changes will make obso-lete or not cost effective next week. That’s a paradigm we understand for hardware, but have yet to fully appreciate where it counts, in the delivery of business processes with sustain-able corporate value.
A daunting task? Ab-solutely, but critical to the
longer term success of your company. It’s about taking that mission statement and corporate strategic plan as a blueprint for today, not left to the five-year IT strategic plan to worry about what it really means in two or three years. It’s about continuing to educate yourself and your business users to think in the short term for the improvements and solutions to today’s problems to ensure that your company has a future. Equally important is a commitment to educate yourself and the rest of the C-level team on investing in the flexibility needed to deal with tomorrow’s market, regardless of what it may turn out to be.
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