Transitioning the IT Department into a Business Relevant Service Broker

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What has Schrödinger’s Cat to do with Enterprise IT? The famous Schrödinger’s Cat paradox explores the concept of multiple and concurrent versions of reality – all of which may be correct at the same time.
Applying this analogy to organisations, there are often multiple simultaneous versions of reality held by key stakeholders on how, what, when and where enterprise IT solutions should be applied - all seemingly valid.

The combined influences of business having direct access to an increasingly compelling range of business ready technologies and meeting short term commercial imperatives are fertile grounds for line of business executives and functional managers to feel empowered to take control of elements of enterprise IT.

CIOs faced with the constant challenge of effectively managing these multiple versions of reality recognise that this is no trivial exercise. The seismic shift from the “build it and they will come” to the “here it is, IT Department, it’s implemented, now support it” represents both opportunities and challenges for CIOs. Fueling this shift is the increasing expectation of IT by their organization that CIOs must rapidly transform their IT Departments from IT service providers, to IT Service brokers.

In this presentation Rob Livingstone explores a range of key concepts and approaches to mitigating the unintended consequences of the Schrödinger’s Cat paradox for CIOs grappling with this challenge.

Key concepts:
• Exploring key elements of the IT services brokerage model
• Understand why the ‘IT-business alignment’ mantra is likely to be suboptimal and explore a new approach.
• Explore how the conventional methodologies associated with IT strategy development should be reshaped.
• Explore some approaches to identifying and managing enterprise systemic risk associated with the transition.

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  • Transitioning the IT Department into a Business Relevant Service Broker

    1. 1. Transitioning the IT Departmentinto a Business Relevant Service Broker Keynote Address CIO Summit, Grand Hyatt Melbourne, Australia 27th Feb 2013© All rights reserved. Rob Livingstone Advisory Pty Ltd. Unauthorized redistribution prohibitedwithout prior approval. ‘Navigating through the Cloud’ and ‘Success is our story, let’s make ityours’ are Trademarks of Rob Livingstone Advisory Pty Ltd.
    2. 2. Agenda1. Context2. Disruption: CIOs weathering the sea of perfect storms3. Schrödinger’s Cat: Alive and well in Enterprise IT?4. Enterprise IT: Concurrent multiple versions of reality5. The Mythology of ‘IT-Business alignment’6. Enterprise IT: From broken to broker7. Move spotlight from technical risk to systemic risk
    3. 3. 1. Context“If you cant explain it simply, you dont understand it wellenough.” - Albert EinsteinCIOs can play a dual role:•Lead the transformation of theorganisation through appropriatetechnologies and innovative processes•Educating key stakeholders aboutoptimal adoption of emergingtechnologies with known value and risk interms that users understand.
    4. 4. 2. Disruption: CIOs weathering the sea of perfect Session 6 storms Flickr.com
    5. 5. 2. Disruption: CIOs weathering the sea of perfect storms The senior ranks of IT are finding themselves in the ‘perfect storm’ arising from the combination of forces: •The first, and most influential of these forces in my view, is the increase uncertainty and volatility facing Australian organisations, whether public, private or government. This tends to drives executive decision making which is increasingly focussed on the short term. •The second influence is the fundamental shift in the expectations of enterprise IT by other executives and the business as a whole. This is a direct consequence of having first hand exposure to user friendly, low cost (or free) consumer grade IT technologies and solutions, and pervasive marketing from IT vendors.
    6. 6. 2. Disruption: CIOs weathering the sea of perfect stormsThe senior ranks of IT are finding themselves in the ‘perfect storm’arising from the combination of forces:•The third is internal inconsistency of business strategies acrossbusiness units. This presents a challenge for those in IT leadershiproles, who are expected to respond to inconsistent short termdemands, some of which are fragmented, not always well thoughtthrough, potentially contradictory and not always in the long term bestinterests of the organisation.•The fourth is the expectation that IT leadership should not appear astechnologists. The ‘new IT leader’ should be able to communicateclearly in ‘business speak’ and turn technical, governance and riskcomplexity into plain language.
    7. 7. 2. Disruption: CIOs weathering the sea of perfect storms December 2012 http://info.publicintelligence.net/GlobalTrends2030.pdf
    8. 8. 2. Disruption: CIOs weathering the sea of perfect storms We are not alone!Legal Process Outsourcing organisations bypassing lawfirms• Consumerisation of Law?“As more and more companies bypasslaw firms and go straight to LPOproviders, Australian firms are nowrealising the influence LPO providershave in the market and are turning tothem to co-pitch for new clients.” http://www.lawyersweekly.com.au/news/power-shifts-to-lpo-providers
    9. 9. 2. Disruption: CIOs weathering the sea of perfect storms We are not alone!Session 6 http://www.news.com.au/technology/indian-websites-do-your-homework-for-2/story- e6frfro0-1225953223266
    10. 10. 3. Schrödinger’s Cat: Alive and well in Enterprise IT? Why IT is like Quantum mechanics? From end user’s perspective, the complexity of IT is mostly acknowledged, little understood, and seems to provide the platform on which modern life appears to depend! Schrodingers cat is a well known illustration of the principle in quantum theory of superposition, proposed by Erwin Schrodinger in 1935.
    11. 11. 3. Schrödinger’s Cat: Alive and well in Enterprise IT? ? www.zazzle.com
    12. 12. 3. Schrödinger’s Cat: Alive and well in Enterprise IT? Schrödinger’s cat and enterprise IT? Schrödinger’s Cat is alive and kicking in the Enterprise….. •Concept of multiple and concurrent versions of reality in respect of IT, all of which may be correct at the same time. •Simultaneous versions of reality held by key stakeholders on how, what, when and where enterprise IT solutions should be applied - all seemingly valid.
    13. 13. 3. Enterprise IT: Concurrent multiple versions of reality http://www.theperceptionconundrum.com/ Everyone is a consumer of technology in one form or another and therefore is entitled to an opinion…….
    14. 14. 3. Enterprise IT: Concurrent multiple versions of reality Why enterprise IT is like Broccoli? From end user’s perspective, it’s bland, not sexy, has the occasional bug in it, but it’s recognised as being important for the health of the organisation. Most importantly it’s how it’s presented that’s the kicker. • As a CIO you may know what technology best suits the organisation, but is that version of reality commonly held? • Consumerisation of IT, mobility, BYOD, Cloud and other influences of emerging and disruptive technologies are rapidly reshaping the perception of enterprise IT by their users • This perception becomes their reality, which in turn influences decision making
    15. 15. 3. Enterprise IT: Concurrent multiple versions of reality Importance of actively managing stakeholder perceptions • IT’s influence on the enterprise’s view of the use of technology being diluted • Achieving all IT departmental KPIs and service levels alone is no longer a measure success. • Remove any defensive barriers Question: What specific strategies are you adopting in managing stakeholder’s perceptions?
    16. 16. 4. The mythology of ‘IT-Business alignment’ Is IT-Business ‘Alignment’ desirable? • Alignment implies no real interaction and never meeting, merely travelling in the same direction? • What does alignment say about players travelling at the same pace?Session 3
    17. 17. 4. The mythology of ‘IT-Business alignment’ Technology environment – High rate of change New, relevant, cost effective IT systems and solutions are appearing monthly! Business environment – Organic rate of change It’s going to take us agesSession 3 to plan your new structure and processes
    18. 18. 4. The mythology of ‘IT-Business alignment’ Some considerations: • How well do your business strategies represent the real world? Shelfware? • What’s the degree of maturity of your business strategy? • Non IT Executives should not expect IT to be submissive in accepting business strategies, and merely ‘meeting the demands of the business’. o Recognition that an effective, trusted and engaged IT function has the potential to drastically transform the organisation. • Structural alignment of IT to the organisation should be consciously thought through. This is much more than the ‘who the CIO reports to’ o How, when and where should aspects of the IT function be centralised, federated, and for what business objective, and overSession 3 what periods of time? o What forms of hybrid structures are effective? o The role of vendors should be clearly articulated
    19. 19. 5. The mythology of ‘IT-Business alignment’ Some considerations: 1. Traditional alignment methodologies are often time consuming, somewhat bureaucratic and fail to capture the critical subtleties of the real world. 2. Accountability for those influencing the decision making process (… it’s called ‘politics’!) 3. Alignment is nirvana if the business strategy is inconsistent, lacks coherence and fragmented across business units. 4. Alignment is not the end goal – effective, close coupled coordination supported by a clearly articulated and acknowledged shared accountabilities between IT and influential organisational stakeholders 5. Business unit management incentive schemes can beSession 3 counterproductive. What financial incentives to business executives have for the (long term!) success of enterprise IT projects?
    20. 20. 6. Enterprise IT: From broken to broker? In July 2012 Gartner predicted that “by 2014, 30% of midsize-to- large enterprise IT departments will become brokers for cloud services consumed by their companies” The reality is that effective IT departments have always been brokering a range of services for and on behalf of the business, irrespective whether cloud or not…. ……..however the landscape is changing somewhat.
    21. 21. 6. Enterprise IT: From broken to broker?Takeaway: Flip from service provider to service broker:• Hone vendor management and governance skills• SaaS: Strategy as a Service: Proactively deliver business relevant strategies to meet defined or expected changes with agility. Take the challenge to the business! Stress test any assumptions.• Clearly define the accountability locus for enterprise IT across the organisation. - What’s in-scope for the management of IT services? - What’s negotiable in the IT portfolio of services? - What’s non-negotiable in the IT portfolio of services?• Dominate the role as trusted advisor, not consultants or vendors!• Proactively articulate the implications for disruptive and emerging technologies for your organisation before you’re invited to comment - Be seen and operate ahead of the curve
    22. 22. 6. Enterprise IT: From broken to broker?Importance of Brand, Marketing and Communications for effectivebrokerage•The internal IT brokerage model should be seen as a true businesswithin a business.•Technologists (engineers, scientists, etc) do not always recognise therelevance and importance of acquiring ‘soft skills’ and relatedcapabilities to their projects, initiatives and even their own careers.•If IT does not sensitively and deliberately control its brand througheffective marketing and communications initiatives, others will.•Does the brand of the IT broker function align with the brand of theorganisation?
    23. 23. 7. Move spotlight from technical risk to systemic risk Technical Risk: “All systems are running perfectly, Captain!” Systemic Risk: “What iceberg Captain?”
    24. 24. 7. Move spotlight from technical risk to systemic risk • Historically, IT’s domain of risk management largely related to technological and security risks and their organisational impacts. (Think ISO27001 etc.) • Inventorying and categorising risks does not necessarily expose systemic risk • IT should be a driving force in shaping the discussions relating to systemic risk at the enterprise level. Why: • IT has a unique perspective of the organisation: • Cross functional and detailed view on how the organisation works (current state), and therefore identify potential opportunities that individual faculties do not. • Technology pervades all aspects of the organisation. • Senior executives may have limited view on how, precisely, their organisations operate. • IT understands interconnectedness and information taxonomies.
    25. 25. 7. Move spotlight from technical risk to systemic risk Lift the lid on systemic risk • Play an active part in discussions on latent systemic risk associated with inappropriate adoption of emerging technologies • Ensure key stakeholders understanding how current decisions could influence future risk profile in a volatile environment • Clarity over the positioning of all aspects of risk need careful dissection amongst the noise and mixed messaging.
    26. 26. 7. Move spotlight from technical risk to systemic risk Embedding IT transformational capability Transform IT staff at every level • Transforming internal IT capability to meet new demands • Moving internal IT staff up the value chain • CaaS: Introduce the concept of your ‘Career as a Service’ • Set expectation of volatility, managing commoditisation of skill • Educate in the identification of systemic risk
    27. 27. ThankYou!ROB LIVINGSTONE- Fellow, University of Technology, Sydney- Principal, Rob Livingstone Advisory Pty LtdW: www.rob-livingstone.comE: rob@rob-livingstone.comP: +61 2 8005 1972M: +61 419 632 673F: +61 2 9879 5004Tw: @rladvisory © All rights reserved. Rob Livingstone Advisory Pty Ltd. Unauthorized redistribution prohibited without prior approval. ‘Navigating through the Cloud’ and ‘Success is our story, let’s make it yours’ are Trademarks of Rob Livingstone Advisory Pty Ltd.

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