Mark McDonald

Value creation and innovation come from thinking in new ways about organizational offerings.  Over the last 50 years there has been a progression from offerings based on products (things that you use in your life), to those based on selling solutions (products that we use for you) to selling services (that you incorporate into your value chain).  That progression, shown in the figure below, begs the question – what will we have next?

That is the question business leaders are working their way through.  We already know a few things as we try to define a world ‘beyond service’.  Here are a few things that I believe we will need to incorporate.

• It will have a deeper connection to the individual, their goals and needs
• It will be delivered via a blend of communications and computing technologies
• It will have a social component
• It will support customer self expression
• It will incorporate location and condition into its value proposition
• It will evolve rapidly
• It will not fit into any readily available category
• It will require significantly more and different data then we have now, used in different ways
• Suppliers will not define it so much as by a consensus of consumers and interested parties.

So what do you call something that is personal, technological, social, customizable, unique, informational etc.  The name is something that goes beyond a product or service, or product/service, or even the notion of ‘prosumers’ advocated by Don Tapscott.  It’s more than a facility or a platform like Facebook or your bank.

One way to think about it is to call it a “SITUATION.”

Situation could be the term for a new set of offerings that create value in the world of digitized, social, networked, personal, peer influenced world.  The idea behind a situation is to capture something that is more than providing a ‘service in context’ that type of smarter approach may be a stepping-stone, but it still more about using information to slot customers into predetermined service scenarios than really addressing the situation.

Why do we need a designation of something beyond service?

Service replaced the idea of solutions as customers wanted to leverage our resources, assets, knowledge and products into extending their value propositions.  Services freed companies from having to replicate functions that were not essential to their value creation – think FedEx or UPS in logistics, Credit Cards in Accounts Receivable etc.  These services quickly came together and are now a standard of competitive strategy.

But what happens after you give people services?  You could sell them smaller services or integrate services into larger bundles or you could think of what is the next addressable frontier in terms of creating unique and sustainable value.  Addressable expressed in terms of the ability of business and technology infrastructure and substructure that makes it possible to do something new or at a price point or at a scale or at all three that was not feasible before.

Take the characterizations mentioned above and you can think of situation as the totality of them rather than simple combinations.  Some will say so what, are not the following forms of situation:

• Context or ‘smart’ situations = service + information analytics (data, Bi)
• Location situations = service + device location information (foursquare)
• Social situations = service + social media (web casts, move on, etc.)
• Event situations = service + social media + location (concert or flash mob)
• Etc.

Yes, but we need to push beyond that, because when we do we get a definition of something that is unique to the individual and therefore a source of unique value and competitive advantage.

A situation is about a broader definition of customer need.  Need in terms of a situation exists at a point, place, condition, emotion in time.  While that comes and goes and no one is ever the same, situations are commonly understood, think situation comedy or the phenomenon of schadenfreude and you get the idea.

People are already trying to integrate and support situations on their own

You can already see situations forming as people surround themselves with sets of disparate but related technologies to build support for their situations.  Recently I was out with my son, who is working on the east coast.  We were driving in his car, his GPS was plugged in, his cellphone one, and we were running errands based on recommendations he received from Yelp!

The idea of situation as something beyond service became apparent when we changed plans, the situation changed and the value of our prior plans and preparation dropped considerably.  I would up, reassembling the situation on the GPS (new location), the phone (Texting people) all based on new recommendations from Yelp! Accessed via the smart phone.

Thinking about the future of value creation beyond service opens the door to new competitors, value propositions and opportunity.  So as you put your strategies and plans to the test for this year and the next five years or so, ask yourself are we providing products, selling services, sure but what are we doing with the situation.

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Category: Innovation Social Media Social Organization Technology     Tags: customer experience, Design, product development, product innovation

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In a prior post I raised the point of what happens when frugality fails?  This leads to the question of where IT goes from here.  While the future of IT is an ongoing concern, re-imagining that role starts by recognizing your IT mindset and the mindset of other enterprise leaders.

What do you think when you think about IT?

How do you see IT?

Its role in the enterprise, its value ?

Its potential?

While we all talk about what IT should do, or the problem with IT, etc.  We rarely go back and think deeply about our IT mindset, the fundamental memes, values and outlook we apply in making plans, understanding issues and measuring success.

MORE WITH LESS is the dominant mindset associated with IT, based on discussions with business leaders and CIOs.  Grounded in a view of IT as a set of budgeted resources, assets and an organization that sits within but somewhat apart from other functions in the organization, this mindset is a collection of various views that see IT as:

• An expenditure  — this mindset reverbs from both a financial perspective that sees IT as the single largest part of SGA expense and the echoes of the dot com bust where unregulated IT expenditures in pursuit of the internet promised more than they delivered.

• A commodity — this mindset is a vestige of the Does IT Matter? That was a dialogue that measured IT’s contribution to operations against business strategic value determined by driving unique and differentiating sources of competitive advantage.  For many IT failed this test as it implemented market standard systems and solutions but could not show its value.

• A constraint — this mindset arises as business volatility increased the need to change business practices and operations only to be confronted with IT being the bottleneck for change.  CIOs and IT leaders support this view when they raise concerns about security, risk and expense as reasons not to do something.

In this environment IT is a resource whose supply needs to be controlled and closely monitored lest the organization spend more than it has to.  This is the mindset that measures IT budgets as a percent of revenue (a silly measure at best), seeks outsourcing their mess for less, and asks if there are ways to reduce the cost of IT.

CIOs have played into and re-enforced these mindsets

IT strategies and plans often play into these mindsets.  Cutting costs, constraining supply, turning to IT services, chargeback or outsourcing potentially valuable aspects all enforce rather then engage the ‘more for less’ mantra – with a distinctive emphasis on the “less”!

Nothing has supported this mantra more than IT’s response to the need for radical cost cutting in the 2008 – 2009 period, where organizations reduced IT costs by more than 20% without incurring significant disruptions in operations.   One CEO remarked to me that he felt IT professionals were somewhat dishonest as ‘After years of saying we cannot cut IT, we did and nothing bad happened.’

More for less became and remains a dominant view on IT that is finding new support as business leaders compare what they can buy in the marketplace to the technology they get from their own organization.

The consumerization of IT, led in large part by smartphones, tablets and app stores associated with a company named after a fruit have created the mindset that new ideas, innovation and value now come from the outside and that IT on the inside is at best second class.

Reality is different, but too often we lead with cost when we need to lead with value, performance and results.

We need a new mindset.  I suggest a mindset around how technology amplifies the enterprise.

But what do you think?

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Category: 2012 Technology     Tags: IT strategy, Strategy and Planning, Technology

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For the past 10 years, cost has been the mantra facing CIOs and IT organizations.  Cost benefits are a factor in just about every major technology wave in the past 10 years.  Cloud, the current theme, is presented as a cost play so is sourcing, services, virtualization, open source — if I did not know better I would think that getting IT costs down is the only thing that matters.  The lead story is cost with the good business reasons for technology a secondary concern.

IT frugality can be defined as putting cost considerations at the forefront of technology decisions.

Ten years of tight budgets indicate that IT frugality has largely worked, Based on Gartner Executive Programs CIO survey results, a $100.00 in CIO IT budget in 2002 is now worth $105.50 in 2012.  Adjusting for inflation that same $100.00 in 2002 would be worth $125.75.  In other words, constant dollar terms CIO IT budgets have decreased by $20.25.

CIO IT budgets are influenced by a number of factors and the calculation reflects a global weighted average, so your personal experience will be different based on your company’s strategy, industry, geography and other factors.  This is a crude factor at best, but it indicates the extent of IT frugality.

Based on this crude indicator, CIOs been adept at managing from a financial perspective in demonstrating their frugality and their ability to do more with less. While technology advances, improved price/performance ratios and other developments have ‘saved’ IT, made it more operationally productive, has IT been recognized as a source of productivity, has this frugality made IT better?

I doubt it.  A decade of IT frugality with limited catastrophic IT failure seemed to prove the point that IT is a cost rather than a capability.  The result is a cycle of cost cutting, benchmarking, renewed cost cutting, etc.  Each cycle was driven by macro-economic conditions and micro-executive vision about the role of technology.  So long as you were measuring IT spend as a percent of revenue, you could claim success as it appeared that IT frugality worked – we were getting more for less, right?

While IT spending appears to be in check, what has happened to company capability and corporate IT?

I believe that IT frugality has failed.

Failed in the sense that IT frugality has not delivered ‘more‘ so much as it has cost ‘less‘,

Ten years of tight budgets have changed IT costs but done less to raise IT capabilities.

IT frugality has required CIOs to devalue IT, lowering its unit costs either through sourcing, services, the cloud, renegotiating supplier contracts or cutting IT resources.

These strategies have worked by emphasized the “less” part of IT Frugality and in many cases failed to deliver more to the business.

How can I say that?

Because, the average IT organization is still plagued by the issues it faced a decade ago: weak alignment, poor project performance, limited skills, constraining complexity, lagging legacy systems, a overall weak benefits realization performance. All of these are issues that IT cannot invest its way out of.

All of which create a cycle that re-enforces further IT frugality rather than looking for IT re-imagine its role and how technology amplifies the enterprise rather than just having IT continue to automate and administer back office systems.

The simple answer is to spend more on IT. But I am not so sure that more money is the answer.  Sure IT budgets need to keep pace with the rest of an enterprise’s operations, but throwing money at IT does not solve these problems.  CIOs need more resources, but they also need to reform IT, change the way it works, manages, plans and measures its success.

Frugality begets more frugality.  Reform requires thinking differently.

What do you think?  About IT frugality?  About IT reform or re-imagination?

More on that subject in latter posts.

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Maximizing IT performance by amplifying performance rather than administering a budget

Technology > IT

2012 begins a pivotal three years for IT

PS:  I borrowed the title after reading Peter Coy’s article in Bloomberg Businessweek, December 26, 2011-January 8, 2012 Page 48.

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Category: 2012 Economy Leadership Management Strategic planning     Tags: 2012 planning, amplify, CIO Leadership, CIO strategy, CIO-Forum-NA, IT strategy, Strategy and Planning

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Last year, CIOs responding to the Gartner Executive Programs CIO Agenda indicated that it was time to re-imagine IT.   Re-imagining IT meant recognizing that business priorities and technologies had changed enough for IT to rethink its role in the enterprise and its value proposition.  For some this meant adopting cloud technologies to reallocate resources from operations to growth and transformation. Re-imagining led others to address IT productivity and cycle time to increase business relevance.

Re-imagining the idea is powerful, but it begs the question –  Re-imagine into what?

This year’s CIO survey provides an answer – re-imagine it into an amplifier of the business.  This led to this years CIO agenda report entitled “Amplifying the Enterprise” which was announced in a press release today.

Amplification, which involves taking a signal adding energy to it and sending it externally, provides an apt metaphor for the role of technologies like mobility and cloud.  These technologies create new channels and platforms for reaching new customers, engaging existing customers and supporting revenue growth.

Amplification also involves handling feedback.  Improperly handled feedback creates that stretching noise that you here when someone uses a podium microphone while they are wearing a lapel microphone.  Feedback related technologies include analytics and social media, which provide better ways to understand and capture what, is happening inside and outside your organization.

Taken together, the signal and feedback constitute a new view on “the experience”.  For most that experience is the customer experience which is essential to driving both growth and removing unnecessary cost, for more details follow this link.

The quality of amplification rests in large part with how the amplifier eliminates distortion.  Its true that distortion can be a form of music, but there was only one Jimi Hendrix so distortion for most of us is a source of cost, complexity, poor service and things that just make it harder to get things done.  For CIOs and their business peers, technology can eliminate distortions caused by duplicative processes, applications, inefficiencies etc.

CIOs in many industries will focus exclusively on eliminating distortions in 2012 as they face severe economic, financial and other challenges.  This is the year to emphasize eliminating distortion rather than reducing the cost of distortion.

All of these points lead to the model below that positions key technologies and their role in amplifying the enterprise.

Is this model perfect, no.  But it does provide a way to think about Technology and its various roles in the enterprise.  We need a new way of thinking because the nature of Technology has become greater than the nature of traditional IT. CIOs, IT leaders and others may want to consider how their IT strategy, plans and actions support amplifying performance – turning up the value of technology without creating distortion or negative feedback.

I believe this is important because when you talk about IT most business leaders think of IT as automating back office business and management processes.  That is true, but that way of thinking leads to a view of commodity-based services or a cost-based zero-sum game.  It is not that this game is wrong, but playing a game of ‘how low can you go’ or ‘doing the same with less’ is one we have been playing.  It is one that limits an organization’s future.

Thinking about Technology as an amplifier reflects the innate capabilities of things like mobility, cloud, analytics and social media.  These technologies are  externally focused.  Without changing the way we thing, we will bend externally oriented technologies back internally to fit our existing model.

Force fitting technology into old management and strategy models is a little like buying a sports car only to drive down to the grocery store.  Sure you will look cool doing it, but you could have done so much more – you could have amplified the enterprise, you could have re-imagined Technology.

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Category: 2012 Leadership Strategy     Tags: 2012 planning, amplify, CIO Leadership, CIO strategy, Strategy and Planning, Technology, Technology Leadership

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Technology is becoming more important than IT.  Now that may sound strange, after all what is the difference between technology and IT.  For years the answer was, not much.  Corporate technology centered on automating corporate business processes such as ERP, CRM, SCM, PLM, etc.  These technologies requires corporate IT to acquire, install, tailor and operate on behalf of the organization. Emerging technologies were co-opted into this model through consolidation of start-ups or ‘maturing’ of the new technology.

A significant part of the Internet has become ‘corporate’ as it has been structured, organized and packaged along either infrastructure or business process automation lines.   While not all of the web is that way, the dominant way of thinking about technology has changed the application of the web to business.

The view of IT as technology applied to automating, structuring and managing business processes via applications and operations has dominated our thinking for the past 30 years – making technology and IT synonymous from a business and operational perspective.  We assess new and emerging technologies based on their progression from raw ideas and machine capabilities into a set of structure solutions that allow anyone with the resources to reach the plateau of productivity.

New technologies like mobility, cloud, analytics and social challenge this view.  These are generative technologies, like the PC or Internet they provide the basis for creating new solutions and innovation.  They are a base set of technologies for amplifying the enterprise, changing its external relationships, how it handles feedback and eliminates distortions internally and within its value proposition. These Technologies can include IT, but they can also go beyond our traditional notions and concepts of information technology.

How?

Well through a view of Technology as a means to open markets, attract customers, retain their attention, change their behavior, participate in value creation etc.  Mobility, cloud, analytics, social and the new range of technologies can do more than manage predetermined, prescriptive back office business processes.  They can bring information, access, context, values, behavior and a range of other things together to change the meaning of products, services, and work rather than just changing the way people work.

That view is emerging, but it is not from IT, it is from business leaders who are Technology Savvy.  The difference is important to consider.  Technology Savvy executives see technology as a means to create an external outcome, one in the marketplace, with the customers, within the offerings etc.  These leaders are concerned with behavior, choice, context, engagement, attention, motivation, etc.   They not IT Savvy in the traditional sense, as they are less concerned with internal operations, the limitations of legacy, etc.  Notice the distinction between Technology and IT?

By now you are saying that a business needs both Technology and IT savvy and you are right.  After all the innovations and excitement generated in the front office needs to be delivered in the processes and hard work at the back.  You see this right now in discussions around mobility as people are looking for standard solutions to ‘manage’ mobility, control it, integrate it, operationalize it – put a fence around it even though we are just beginning to understand the free range of innovation surrounding it.  That’s not a criticism of the need for emerging technology to mature, but it is an observation that we often want our Technology to grow up into IT solutions too fast.

The realities of the back office do not negate the differences emerging between Technology and IT.  If it does, then the promise associated with mobility, analytics, cloud, social, etc. will falter. They will be come new ways to do the same old stuff.  They will focus on a different approach to automating business processes rather than creating new levels of innovation, value and advancement.

The alternative is to think about Technology as including but being broader than IT.  That view keeps the door open to the generative possibilities of current and future emerging technologies.  It keeps the focus on how technology changes the business externally, rather than automating and integrating internally.  It creates a path for current IT professionals to do more than fit new code, devices and computing into old paradigms.

It provides a way to think of how Technology Amplifies the Enterprise.

Related Posts:

Why the back office may never understand the front office

The future of the CIO lies in addressing issues no one else is thinking about

The structures required for supporting the next generation enterprise and CIO

What should we call IT in the future?

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Category: 2012 Innovation Re-imagine IT Strategic planning Technology     Tags: 2012 planning, amplify, Business Strategy, eme, Strategy, Technology Leadership, Value of IT, web 2.0

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Amplifying the enterprise involves turning up the value of technology in the enterprise.  Eliminating distortion is one of the ways that technology amplifies the enterprise.

Distortion refers to the internal complexities; costs, duplication and redundancies that make it harder to get work done. Think about the things that get in the way, make it difficult for customers to understand or transact business with you, provide inaccurate information, basically anything that consumes effort without creating results.

Look for distortions by applying a few ideas:

• Identify areas where headcount has increased at a rate faster than revenues or business activities.  Chances are the people are being put in place to manage distortion, particularly in customer sales and service areas.  As one CIO put it, ‘we use people as middleware for poor process, system and product decisions.

• Evaluate support areas that should be creating scalability through productivity enhancements.  Measure actual transaction volumes against average costs as expense may increase due to transaction growth rather than expenses increasing because we are creating more work.  Transaction growth may require productivity improvements, things that create more work are distortions.

• Look at manager to staff ratios, the span of control should be stable or growing.  Pay particular attention to ‘professional’ jobs in your organization as often people are promoted to management roles to address compensation issues rather than being part of an organizational strategy.   If the need for managers has increased over the last five years, this is a sign of distortion.

• Think about how much multi-tasking you ask your people to handle.  Multi-tasking are a sign of distortion as incremental and accumulating change requires people to take inconsistent responsibilities.

Here are a few thoughts on things that may be driving these and other types of distortion in your enterprise:

• Incomplete or unfinished post merger integration plans. You were going to fix that but it was postponed.
• Multiple product codes, processes, systems that perform similar functions but can be consolidated.
• Remnant organization structures, for example country management activities that remain even after you have moved to a regional structure.  Or teams that have persisted because of personality rather than responsibility.
• Similar systems that work with the same data, these can most likely be consolidated as they may have different pasts but the data tells you they have a shared future.
• Old business rules implemented over the last 5 or 10 years that are no longer required, but remain in effect.
• Sources of waste, or muda, which exist both in the business organization – apply lean principles to everything.

Eliminating distortion requires focus and resource, which can be difficult to obtain.  Consider establishing a ‘sinking fund’ to support the first wave of elimination and refresh this fund with achieved savings.  This allows savings to accumulate in the organization while managing distortion elimination efforts.

Gartner’s Andy Kyte says everything in your organization had parents at their beginning.  Those parents own the solution and who wants to see their child removed.  You have to ask if the solution is creating more value than the complexity it creates.  It may be time to create a new family, as in the Brady Bunch, with processes, groups and activities.  Its not that something is going away, it is going to a better place.

Considering the sources of distortion represents an important strategy for CIOs and IT, particularly as those that have gone through multiple waves of cost cutting, contract negotiation and sourcing.  Repeating those same tactics results in diminishing returns, rather than getting to the causes and sustainable solution to distortion.

Distortion drives cost, reduces customer service, decreases agility and ties up resources that are needed for change.   You can lower the cost of distortion by outsourcing, renegotiating contracts, etc.  But amplification requires eliminating distortion to sustain results.

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Category: 2012 Strategy Technology Tools     Tags: 2012 planning, amplify, CIO-Forum-NA, cost cutting, Economic Recovery, IT strategy, Strategy and Planning

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In times of economic adversity, conventional wisdom calls for conserving cash and capital.  Firms have amassed record amounts of cash as governments face deep cuts in the fourth year of five-year plans.  Leaders know that the future requires re-imaging the enterprise rather than repeated waves of belt tightening. Nowhere is this more evident than in IT.

Cutting IT is not the same as cutting other functions.  IT spending is peculiar because it’s indirect.  Properly managed, IT spending changes performance disproportionality more than it costs. IT is particular to your firm resisting ‘best practice’ or ‘across the board cuts’.  This is not to say that IT budgets cannot be cut, but that blindly cutting IT saves pennies but locks in a legacy of inefficiencies sealed in silicon.

Maximizing the value of IT requires changing attitudes from administering an IT budget to applying IT to amplify business performance.  Leaders amplify their organization by concentrating on IT productivity’s numerator – value created rather than just denominator cost.  This helps them avoid the fantasy of ‘more for less’ by doing the following:

• Focusing on few projects.  Nothing focuses managers like a crisis and focusing IT on fewer, more important things creates results now rather than dissipating them by spreading resources like peanut butter.

• Shortening planning, project and governance cycle times to keep IT’s limited resources concentrated on the most important things and management agile to respond to change.

• Changing IT’s cost structure rather than the budgeted spend by adopting cloud and other light weight technologies, dropping underused systems, software and hardware to reduce the per unit cost of IT.

• Measuring IT value based on changes in business performance rather than costs.  IT has no value and no place in the budget if it does not raise performance.

• Managing IT productivity not projects.  Changing the way IT works to be more productive rather than choking off IT resources and expecting IT to muddle through.

• Stopping demand management and starting benefits realization.  Do not deny yourself the ability to improve, rather concentrate your attention on realizing improvements.

These steps lead to technology that amplifies business performance.  Sure it is easier to administer an IT budget but all that gets you is fewer activities with even less results.  It is better to think small about IT, in terms of how it can have short, sharp and focused impact rather simply lightening the weight of an already blunt IT organization.

Here is a test of whether you are managing IT budgets or managing business results.  The average IT organization spends 70% of its budget on running the business and 30% on changing the business.  Your CIO is able to cut the ‘run’ component by 10%, moving from 70% to 63%, what would you do with that money?  Do you save it? Or do you re-invest it in change by increasing change spending by 23% moving it from 30% to 37% of the budget?

It is not a test of IT.  Rather it is a test of your confidence in management and their ability to realize business benefits.  You take the 7% savings if you have no confidence in your management otherwise you know that the 23% increase makes sense because you can manage the business benefits.

It is natural to reduce budgeted cost in the face of a downturn.  That approach works best when costs are directly tied to business activity – sell less and you need to make less.  IT is connected to the cost structure of your operations.  Treat it as another administrative expense and you degrade performance across the board.  Combine limited IT resources with strong benefits realization and you amplify business performance and organization wide results.  The choice is yours.

Note this post appeared as an interview in the Financial Times.

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Category: 2012 Economy Strategic planning Strategy budgets     Tags: 2012 planning, amplify, CFO, CIO strategy, CIO-Forum-NA, cost cutting, Economic conditions, Strategy and Planning

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One of the issues facing CIOs in 2012 is the apparent conflict between growing revenue and cutting cost.  While IT may be asked to do both, in reality plans and priorities fall heavily on the cost cutting side limiting IT’s impact and value.

Customer Experience brings a different perspective to issues of revenue and cost. This is one of the issues discussed in this post and a topic at the upcoming Gartner CIO Leadership Forums being held in March in London U.K. and Phoenix Arizona in the USA.

Executives and strategists assume a mutual exclusivity between customer intimacy (growth), operational excellence (cost) and product leadership (innovation).  You can do one or another but not both and certainly not all three. But now each is in service of the other and your strategy is one of emphasizing one or another rather than subjugating two to the others.

In 2012 doing both is more important than ever.  Revenue growth and cost cutting are top ranked strategic priorities in the 2012 CIO survey. But how is this possible? How do you connect strategies calling for revenue growth with plans for continued cost cutting?

You connect revenue and cost through the customer experience.

Gartner defines customer experience as: “The customer’s perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier’s employees, systems, channels or products.”

Think of the customer experience, as CRM on steroids and the problem is one of tradeoffs.  It costs money to create an experience.  You are back to an either/or choice:  spend more on the experience or spend less and live with that experience.

Leaders see the customer experience as a focal point to grow revenue and cut cost. The customer experience is the focal point where customer intent meets company complexity and that bridges revenue and cost, see figure below.

Create a superior, a simple, an engaging and powerful experience and you will grow revenue. Deliver that experience requires cutting the internal clutter that makes it hard to do business.  This view creates a focal point for both rather than a forcing function requiring a choice between revenue growth and cost cutting.

Externally, its logical that in a world of increasing choice customers will chose the best value proportion AND the easiest way to do business – the experience.  Marketing knows this and is investing in technologies outside of IT all in the name of revenue, brand and the experience.

Internally, we know that time and accretive leadership have created unnecessary complexity.  The case for eliminating any one of part of that complexity is weak as they all had a reason to be there in the first place. Concentrating on enhancing the customer experience challenges gives you new reasons to reconsider internal complexity and a different case for their consolidation.

Managers face tough choices everyday.  They trade between options to achieve their objectives.   Leaders see things differently and create new connections that find new answers beyond simple choice.   Leaders see customer experience as an opportunity for technology to amplify their ability to generate revenue through attracting and retaining customers while cutting costs by eliminating duplications in the business that detract from the experience.

Combining revenue growth, cost cutting and customers is not easy.  It requires leadership which is why it one of the topics we will focus on at this year’s CIO Leadership Forum.

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Category: 2012 CIO Management Strategic planning Strategy Technology     Tags: Business Leadership, CIO Leadership, CIO-Forum-NA, customer, customer centric, Innovation, IT strategy, Strategy

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Business Week, Wired and the Economist published articles in December about social media and its role in social unrest.  The articles described how social media has enabled everything from peaceful protests to looting via ‘flash robs’ that actively monitor and coordinate their actions around police movements.

Executives reading these articles could understandably equate social media with unrest, a lack of control, instability and mob rule.  Is that a wrong way to look at what has happened in 2011?

Yes, the legitimacy of a technology cannot be determined only by its applications or the behavior of users is wrong.  Social media may have lowered the barriers to organizing legitimate demonstrations or illegal activity, but social media is not the source of either.

People have always and will always find ways to use technology to meet their needs, whatever those needs happen to be.  The printing press, radio, the telephone, cassette tape recorder, fax machine each been applied to challenge authority and create revolution in the past.

Rather than associating social media technology with social unrest, executives should consider the power and potential inherent in capturing the attention of thousands, engaging their interest, coordinating their activities and creating a collaborative experience based on their interests and passions.   What could your organization accomplish if people did more than just come to work, turn in their eight hours and then go home?

Mass collaboration is the term we use to describe what happens when large groups of people come together to accomplish a mutual purpose that creates value.  Social media provides the technical means for mass collaboration and in the case of protest movements in 2011 the ability of thousands to communicate, share, build upon each other’s ideas and take coordinated action.

It takes more than technology to create a mass movement or mass collaboration.  In our study of more than 400 applications of social media for the book The Social Organization, we found that successful firms applying mass collaboration leverage collaborative communities, purpose, technology and new styles of management to tap into the energy and experience of their people.   They need all of this to create meaningful business results including:

• Engaging customers, prospects and associates to learn more about their needs, desires, interests in order and build a shared context for new products, services, processes and offerings.
• Connecting consumers from shelf to seed with farmers to dialogue on food and food safety issues.
• Facilitating customers helping each other to get more value from your products and services
• Coordinating and sharing advice about critical decisions within your organization, increasing your ability to act based on facts and actively enlist people in change processes
• Improving the adoption of health and safety practices to reduce the potential for injury in the workplace.

It is convenient to equate the value and legitimacy of technology on its application.  Based on social media’s recent press coverage, it would seem that no executive in their right mind would welcome much less sponsor these technologies in their company.

Step back and think about what the technology enables in order to understand the potential of social media based mass collaboration.  Mass collaboration, via social media is a technology that creates and sustains meaningful results in your organization where the only unrest is that of your competitors,

Related Posts:

Why social media is not enough to become a ‘social organization.’

Every organization is social, but few are social organizations

Welcome to the Social Organization

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Category: Innovation Social Media Social Organization Strategy Technology     Tags: Social Computing, Social Organization, Technology

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Every year is important and pundits, myself included, contribute to the annual strategy and planning cycle that is based on the premise that the coming year must be the most important year.  That position makes sense when you consider that without a compelling plan for ‘next year’ the CIOs and IT organization will not get the attention, participation and resources to continue and create value.

The 2012 planning cycle will be my ninth with Gartner and working with CIOs in Executive Programs.  During that time, I have observed that change in IT happens not in annual cycles but in three-year waves.   The 2003 planning cycle was my first with Gartner, but I believe as I go back through my notes that there have been three cycles since the turn of the millennium.

• 2000 – 2003 focused on demonstrating IT’s business relevance as executives scrutinized the business value of IT following the dot.com bust and related recession.  CIOs during this period faced the need to prove that IT matters and face of increasing commoditization of technology products and services.  Financial requirements drove the first wave of outsourcing, typified by blockbuster long-term single source providers who would take over and deliver ‘our mess for less’ IT.

• 2003 – 2006 can be described as the ‘business-ification’ of IT.  This was the period when IT was supposed to run more like a business by defining its business in terms of IT services, service levels and new forms of finance and costing models.  Functions and services that could be provided better, faster and cheaper externally drove the growth of the multi-sourcing marketplace. This was the heyday of models like ISCO and IS Lite both sought to run IT like a business and eventually generating revenues on its own.

• 2007 – 2011 cycle, the one we are completing now, could be described by the consolidation of IT cost, as economic, technical and operational realities required CIOs and organizations to cut costs in the face of economic and financial realities.

While we can debate the exact dates, themes and timings the broad trends are reflected in the major books of the time, themes of Gartner’s symposia, etc.

2012 is a pivotal year for CIOs and IT because we are completing a wave of consolidation and cost cutting that raises the question what comes next?

A few thoughts on the pieces that are floating around that will play a role in shaping IT over the next three years.

• Technology becomes important than IT.  Technology is inherently externally facing and that will displace the current crop of IT centric internally facing transaction systems.  Mobility, social media, analytics, new interfaces are all part of an arc of technology that is much broader than IT.

• Consumer and personal tastes are driving technology and resetting expectations for IT in terms of time to market, complexity and customer experience.  IT has been used to running on its own time and it will have to change to run at the customer’s clock speed.

• Competition will center around an expanding view of the customer experience touching on channels, ease of doing business, internal complexity, cost, marketing and provisioning.  Organizations that see a next version of the customer experience as CRM on steroids will experience increasing investment and decreasing returns.

• Increasing IT workforce productivity and throughput will become a requirement with CIOs having to commit, monitor and manage year over year productivity improvements.  This will be critical to the future as right now most firms manage ‘productivity’ from the denominator of cost, they will need to raise the numerator (output) in the future.

Individually none of these issues is a ‘show stopper’ leading some to think that they can be addressed through incremental improvements and responses.  Taken together and considering implementing them in less than three years, it becomes apparent that incremental responses will not be sufficient to enable IT’s role to expand at the same rate as the expanding role of technology in the enterprise.

That is why I believe that we are leaving the world of the consolidation of IT cost and moving into a phase where technology amplifies the enterprise and the position of IT can no longer be assumed.  Why three years? It takes time to re-imagine and re-orient an organization.

Are these pivotal years for IT?  If not then why not?

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Category: 2012 Leadership Management Strategy     Tags: 2012 planning, Business Leadership, CIO Leadership, CIO strategy, Strategy, Strategy and Planning, Technology Leadership

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