Mark McDonald

New Realities require new rules, some of the forces shaping the future of the enterprise and IT

Please note this is an excerpt of the Keynote address delivered at this year;s Gartner Symposia in Orlando Florida, Cannes France and Sydney Australia.

CIOs and IT leaders are accustomed to change. It is part of the territory. The change facing CIOs and IT leaders is often driven by new technologies creating a cycle that provides a way for them to separate hype from realities.

Economic conditions have shaped the changes facing CIOs for the past few years. Responding to economic conditions is painful but fairly straightforward set of actions as CIOs faced the need to fit resources to revenues. However, things have changed as the economy has changed

The power of unprecedented choice
The freedom in a wild open world
The change in emphasis from outputs to outcomes

The power of unprecedented choice

Choice has always been a factor in IT. We have had to make choices between Buy vs. Build, Outsourcing or shared service, best or breed or suite. These were technical choices based on a single fundamental assumption – the work would be done by the captive IT organization.

One of the new realities facing CIOs and IT leaders is the introduction of choice into the IT equation. Based on light-weight technologies such as infrastructure as a service, software as a service and IT services. The enterprise has choice and its getting more every day. More than 5 billion apps have been downloaded from Apple and Android app stores already. Many of these apps are supporting business activities.

IT professionals may not see this as choice or see choice as positive. To IT, choice feels like a loss of control. Savvy CIOs and IT leaders recognize that control is a symptom of choice and the look to make IT the object of choice for their enterprise by making IT easy to do business with, reducing IT cycle times and increasing IT’s responsiveness.

You can choose to ignore choice, by ignoring its underlying technologies. Cloud, SaaS, social media and mobility are rapidly evolving and providing a platform for choice. We can say that these technologies are not ready for prime time, but it’s a short term view.

Remember about 10 years ago when the reality was offshore outsourcing. Back then IT leaders objected to turning over IT responsibilities outside of IT, giving them to people who are located halfway around the world. Security, reliability, trust, and other things were all used as objections at the time, but today we have a multi billion dollar global outsourcing market.

These same issues exist for the Cloud as well. But they will be resolved.

Choice can challenge the IT organization, its processes, practices and attitudes. Leading CIOs are getting ahead of this by providing choice, shedding commodity services and concentrating on the things that matter.

A Wild Open World.

The world is no long closed to choice, information, capacity, or technology. This has done more than create an open world. Its created a Wild Open World. A world where value creation, innovation and cost reduction – will all come from unlikely sources.

Its an open world as this information reaches far beyond social networking. People leave a trail of what they’ve done online, leaving a rich body of information about their interests, intentions and activities. This is not just about ‘big data’ more data from more sources. It’s also about the nature of that data and how the boundaries between roles and responsibilities, between internal and external information, between personal and professional, between clients, partners, competitors, suppliers are blurring to the point that you cannot see them any longer.

Employees create personal profiles on public social networks to reach customers, manage their skills and open themselves to the wider world. This is not as much about creating a ‘personal brand’ as it is about having a universal business card. For exmaple, I sat next to a CIO in a meeting who was looking up the other CIOs on these sites. About 20% of the CIOs at the meeting were not in the social network and he decided that these were people he did not really need to talk with.

Enterprises need to recognize what the people are doing – their people, their partners, prospects, and customers. The new reality of Wild Open World as it offers new ways of looking at the enterprise, its services, how it operates. It offers new ways to create value by transforming services, engaging customers and re-engaging employees.

The shift from outputs to outcomes

The third reality facing CIOs and IT leaders is a shift from outputs to outcomes.
Outputs are the things you produce. For a manufacturer its items produced, for a service company its customers served, for government its programs executed, etc. IT has outputs as well in terms of projects completed, budget run-rate, servers deployed, network uptime, and so on.

Outputs provide a way of assessing cost and risk. They say little about value or innovation. Even when your IT Scorecard is ‘balanced’ it only talks about what we do rather than the value we create.

Outcomes are about the results, the things that are tangibly different in your organization. Outcomes are the customer experiences you create, the performance improvements you realize, the engagement you achieve with your associates.

It is easy to get outputs confused with outcomes, but the difference matters in the new era. One way to see the differnce is to look at the reviewer ranks on amazon.com. Amazon assesses their more than 1.1 million reviews in tow ways. Outputs — the people who create the most reviews, which at the time of this post was a person named Harriet Klausner who has placed nearly 24,000 reviews – she’s the #1 reviewer in terms of output volume.

Amazon also measures reviwered from an outcome perspective. Here A. Chandler is the most helpful reviwer with 98% of readers finding her reviews helpful, so she has earned the #1 ranking as she is rated as the most influential reviewer.

As a CIO or an organization– how do you want to be measured?

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Category: 2011 Economy Strategy     Tags: 2011 Planning, Economic conditions, IT and Business, Strategy and Planning, symposium, Technology

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