by Mark Raskino | April 19, 2013 | Comments Off
Recently I noticed a Bloomberg news story suggesting that Visa Inc. might buy Visa Europe. Visa was founded decades ago as a cooperative organisation by many banks, to manage payment processing services. A few years ago it split in two and the US banks sold their stakes by IPO to form Visa Inc. The European part remained as a separate cooperative entity owned by many European banks. Now, the press speculates, those European banks need cash and selling their stakes might help raise it.
But why does this “cooperative” institution exist in the first place? Back in the 1960s and the 1970s industries like aviation and banking had to build their own networks and their own computing infrastructures to do industry wide and international processing. It made sense for them to spread the risk and capital investment load involved in such vast high tech endeavors. It also made sense to create a level playing field platform for core, somewhat commodity processes. Competitive differentiation opportunities lay elsewhere.
Fast forward to the second decade of the 21st century. The cloud is making it possible to build new industry platforms of a kind we could not conceive 20 years ago. Storage, bandwidth and processing can economically deal with real-time high definition video or instant retrieval of set of records from a lifetime’s transactional data. The business capabilities and industry models that could be built on top of this – will be amazing. But who will be in control?
When the banks and airlines created entities like Visa and SITA decades ago, there was no competition for the platform. If they didn’t collaborate to create it themselves – it wouldn’t happen. Nowadays of course, IT industry players are only too happy to use their impressive resources to create cloud based platforms for industries to gradually evolve into. However, CEOs should be wary of the smiling technology company executives lining up to offer an easy path to the future. The risk is that once they control the platform, they control your destiny.
It seems that some large, smart companies are aware of the trap. I was very intrigued by General Motors very public move last year to in-source most of its IT, including building its own data-centers. Like most car companies, GM can see that the future is the cloud connected vehicle. It might drive itself or at least park itself. It might be insured or taxed by the minute or by the mile. It will stream usage data out and media entertainment in. Now – if those are the reasons you make your buying choice – do you think the car companies should control that capability and innovating with it? Or should it be Google, or Amazon or some other - yet to emerge – technology platform player?
The book publishers have already lost a lot of control. They could have built an industry collaborative platform for distributing e-books. They didn’t club together and do that – even though the the fate of the music industry was in right front of them, as a clear example of the price of inaction. Now Apple and Amazon and Google have a big say in how the book industry works, what the price and format of a ‘book’ will be and who gets paid what share in the value chain.
I have written about this before but I think it bears restating. Look at your industry. Look at the forces of digitization ahead - including the Internet of things. Now ask – can you build a single enterprise platform that will protect your future? If the platform must be industry-wide.. who will build it? Do you trust those parties more or less than your current competition?
If the banking and aviation business leaders of the 1970s, so early in the information age, could collaborate on visionary industry-wide technology platforms – why is the current generation of business leaders, with all their IT enabled business experience, being so timid by comparison?
The ‘enemy’ you know is often the easier foe to manage. I think a lot more business leaders should be reaching out to their competitors and thinking more radically about *cooperating* to build the future platform for their own industry, before someone else takes control.
Category: Uncategorized Tags:
by Mark Raskino | April 15, 2013 | Comments Off
It is one of the big anxiety questions in modern business thinking. On the one hand economists like Tyler Cowan believe the fundamental rate of innovation is slowing. On the other hand economists like Eric Brynjolfssen think that millions of middle class jobs may soon be lost to accelerating automation. You can see a video recording of the two of them debating the point face to face here.
So who is right? This question is almost impossible to resolve cleanly with data. It is too subjective. One man’s innovation is another’s incremental improvement. How you categorize and how you count innovations is highly malleable. And since many economists still disagree on basics like how unemployment is counted or how inflation is measured – it doesn’t seem likely we will get an empirical answer to this pace of innovation question anytime soon. And yet business leaders must form a view.
The scenarios that help large companies form sound business strategies often need to look ahead 5 to 10 years For example what’s the point in a construction firm investing in its prime city real-estate, long term ‘land bank’, if nobody will need more office blocks 10 years from now?
Our latest CEO and senior business leader survey tested belief in whether technology innovation is fundamentally slowing or accelerating. Here’s the result from the North American respondents.
Bear in mind that the business leaders here were from businesses (not government) and we exclude IT industry firms from this survey (no computer hardware, software, IT services or telecoms firms). What this data tells me is that most business leaders still believe science and technology is accelerating. However a sizable minority do seem to think it is slowing down. I guess I was a little surprised that a total of 39% have a perception that it is slowing – though more than half of those only selected the weakest agreement level.
Is your CEO one of those believers in a great innovation slowdown? I think it is those business leaders, who will face the biggest disruptive shocks as digital technologies such as machine intelligence, 3D printing, robotics and the internet of things accelerate over the coming decade.
Category: Uncategorized Tags:
by Mark Raskino | April 11, 2013 | Comments Off
“We use words like honor, code, loyalty…we use these words as the backbone to a life spent defending something. You use ‘em as a punchline.”
Colonel Jessup ( Jack Nicholson ) in the movie A Few Good Men.
I will be attending Gartner’s Enterprise Architecture Summit events in the UK (May 14) and the USA (May 22) to present findings from new 2013 CEO and senior business executive survey. As I was working on the slide deck, I was reminded again about just how much weight is behind some of the simple words business leaders use, and how easy it is to misinterpret them.
More than many other professionals in business life, Enterprise Architects know just how much words matter and how the context of those words matters. Different groups or individuals within a company will use the same words to mean different things. Different interpretations can lead to sharp confrontation – as in that famous movie courtroom scene. Using someone else’s shorthand without understanding the associated richness of context that the cognoscenti take for granted, can get you into trouble.
Take the simple word “growth”. In our annual global survey we asked CEOs this year about their top business priorities and that that word came to the top of the list. Often it is given without any additional explanation. If a CEO simply says ‘growth’ should we be affronted because he didn’t expand it? Is he displaying irritation via a very terse response? In a word – No. To understand why such a single word answer is not meaningless, let’s switch context for a moment.
Imagine that I ask a group of senior IT professionals about their priorities and they all quickly agree on the single word ‘cloud’ – they can do so, because they understand a huge amount about what that word means and what it implies. There is a whole contemporary agenda behind it, they know there are difficult security issues, there are privacy issues, they know BYOD is a factor, they can describe layers like SaaS and Paas, they know there are licencing issues and portability issues and standards in development. They know what kind of corporate systems can migrate to the cloud, given today’s market and technical capabilities and what might be possible 3 years from now. A whole room of IT professionals, at a conference, who may never have met each other before – all know all of that stuff and it rises into their minds the moment somebody puts just that one word up on a screen: cloud.
The same is true when CEOs say “growth”. They know that investment capital is cheap, but certainty in markets is low. They know consumer confidence is volatile and investor tolerance is fickle. They know that double taxation is skewing US company global investment planning and that the emerging markets play is changing – with “Chindia” being a bit less of a gold rush, but Africa looking like a smart play.
The second priority for CEOs in our annual survey, was profitability and the third was cost. Some might be tempted to say “duh!” – business leaders are focused on growth costs and profitability – so what. Well profitability is a word that arose in the responses with far higher frequency than in the last two years – and that tells us something about the business cycle stage we have reached. The gap between growth and cost as priorities - has widened. That tells us something about CEO’s confidence.
Our survey this year explores CEO reaction to that everything and nothing word “digital”, in the context of another very misunderstood term: “strategy”. It also finds that more CEOs are likely to hire chief data officers, when they already have chief information officers. How’s that for a subject in need of close language scrutiny?
It’s my belief that much of the of the misalignment and misunderstanding between the agendas of business people and technology professionals begins with a simple lack of careful listening and that the roots of the problem start at the top – and then get amplified by the organisation below. Enterprise Architects occupy a key position to help the organisation perform well by understanding and translating appropriately. But that must be a two way exchange. Explaining what technology can or should do, to the business leadership team is the supply side of the equation. Strong Enterprise Architects will be equally good at interpreting the demand side – understanding what CEOs mean, what problems they must solve and then helping assemble the macro technology toolset that will help. If they do so, EA professionals can really move the needle on business results.
So to sharpen your thinking on how business leaders are thinking and expressing themselves – why don’t you join me, at one of our EA Summits?
Category: Uncategorized Tags:
by Mark Raskino | April 10, 2013 | Comments Off
[ Update - more articles added, from the FT, WSJ and others ]
Our new survey results show that half of CEOs can’t name a company in their industry that they admire for its use of IT. That’s not a surprise. Our survey also shows they get a lot of their ideas and information about IT from the business press yet, we know that few CIOs make a point of telling the stories of their business technology innovation successes to the outside world. Why not? You know that successful major deliveries require process, organisation and culture changes not just technology installation. You also know that stuff is hard to get right – so letting your competitors know what you did, doesn’t necessarily mean they can copy you. Anyway, you can easily leave out a few key ‘how to’ learning points if that’s a concern. But you have everything to gain. Companies admired for their use of technology are helping to build a stronger brand – B2B or B2C.
One of the joys and privileges of being a Gartner analyst is sometimes working with the press. A joy I hear you ask? Yes, really. Perhaps in the world of celebrities and politicians, journalists can be too cynical and destructive but in business and technology I always find the opposite. The technology trade press and the business press these days are staffed with only the cream of the journalistic trade. It’s very hard to get one of those jobs and you only keep it if you are very smart, very focused and very hard working. Their business and technology professional reader – that’s you – is looking for interesting information, not scandal or titillation.
When a piece of my research is made visible via a Gartner press release, I look forward to the interviews. The older experienced technology journalists ask insightful questions and also offer me their own perspectives on the the subject. They always ask me things that my research didn’t cover – and that can sometimes set up new lines of inquiry for the future. The newer, younger journalists often have fresh eyes on a subject. They come at it from a different angle and that can cause me to think differently myself. Working with the press is a symbiotic relationship. They get some of what they need for their readers, you get visibility and, assuming your story is impressive – reputation.
Companies with a strong technology reputation will find it easier to attract the better new graduates and the more talented IT and business professionals they need to compete. We know that talent attraction is a perennial concern of CEOs. Talent today is truly global. You might need to attract good people from anywhere on the planet. The modern IT press is highly syndicated and globalized. Tell your story in one place and it will travel the world. Good business IT stories in the trade press will attract the eye of the business press too.
I spent the last day and half on the phone to journalists and it was time well spent. Listed below are some of the many stories – in different languages – taken from our latest CEO survey. If you browse them, you will see a variety of different angles and focal points, as each journalist gives his or her twist. That demonstrates yet another learning opportunity for a CIO who may not be personally blessed with the greatest story telling ability. Influence within your own business, will be improved if you can find better ways to explain the value of what you do. So why not let the press help you?
My particular thanks this time to journalists Stephen Pritchard, Cliff Saran, JaneMcCallion, Toby Wolpe, Martin Veitch, Joachim Hackmann, Yves Grandmontagne, Paul Taylor and Clint Boulton & Michael Hickens
UK Managing people and CEO sentiment Financial Times podcast (1m15s )
UK What is a ‘digital strategy’? Information Age
UK Gartner CEO survey 2013 reveals uptick in IT investment IT Pro
UK CEOs optimistic about IT innovation and investment, says Gartner Computer Weekly
USA CEOs Welcome Chief Digital Officers to the C-Suite Wall Street Journal blog
USA Financial Times: Business leaders embrace ‘digital’ Financial Times
USA Tech jobs: CIOs look safe, IT managers face chop, chief digital office … ZDNet
Germany Mehr Geld für Mobile und Social : Zuversichtliche CEOs investieren … CFOworld
Germany Zuversichtliche CEOs investieren wieder in IT CIO
Sweden Hälften av storföretagen har digital strategi IDG.se
Netherlands Ict-sector werft weer volop Telegraaf.nl
Netherlands Nieuw leiderstype verdringt IT-manager Computerworld.nl
Spain Solo la mitad de los consejeros delegados tienen una estrategia … Ticbeat
Italy Gartner, 2013 anno di svolta per gli investimenti IT Corriere delle Comunicazioni
Portugal 52% dos CEO tem uma estratégia digital mais clara Computerworld
Brazil Maior conhecimento de TI dos CEOs impulsionará investimentos em … CIO
India 52% Of CEOs Have A Digital Strategy: Gartner BizTech2.com
China 盖特纳:调查显示全球IT行业投资势头稳步上涨 搜狐
Russia Gartner: около половины руководителей имеют стратегии … Компьютерное Обозрение
Category: Uncategorized Tags:
by Mark Raskino | April 2, 2013 | 1 Comment
At our CIO leadership forum event in London in March, Dave Aron and I ran a panel discussion session with 4 top executive search consultants who specialise in information and technology leadership roles.
In the course of a rich debate for over an hour we covered many issues. Here are just a few of the insights from the panelists.
- Demand for top tier IT leaders is up year over year – by around 40%
- There’s a big trend in CEOs asking for digital leadership skills
- The CEOs are asking for both CIOs with more digital skills and for distinct ‘chief digital officers’
- On the majority of occasions where a ‘headhunter’ is assigned, the last CIO was pushed out (rather than resigning, or retiring)
- CIOs who lose their jobs rarely understand why – even afterwards
- Performance related pay is becoming a bigger part of the package and examples of pay related directly to revenue growth are appearing.
However, when I asked the audience, how many of them would like to consider becoming a chief digital officer in the next 2 to 3 years – only about 15% raised their hands. Dave and I were surprised that the appetite isn’t stronger. Today’s CIOs should probably be more bullish and lean into this opportunity. Ask what ‘digital’ means to your business today. It probably isn’t as exotic or challenging as you imagine - deeper online market penetration, more use of social and some mobile apps are usually the first things that get mentioned.
Our thanks Cathy Holly, Olaf Pripp, Kevin Sealy and Tim Cook for delivering an excellent session to the audience of over 250 CIOs who attended this year’s forum.
Category: Uncategorized Tags:
by Mark Raskino | March 25, 2013 | Comments Off
Last week glassdoor.com, a business social networking site, published its 2013 listing of the top 50 CEOs as rated by their own employees.
The list is always interesting to review. It has limitations of course, for example most users of the site are US based, so companies in other countries don’t get so much attention.
Here are a few things I noticed:
* There was only one female CEO in this top 50. As a percentage that’s below the 4% representation of women CEOs in the fortune 500
* There are very few manufacturing companies. Services firms of all kinds are well represented.
* A company with dual CEOs is at number 2. The idea of dual CEOs is often questioned, but in this case it seems to be working – for the employees at least.
To get on this top 50 list, your CEO must have a rating of over 80% from more than 100 employees. My own firm has the former, but not the latter.
My suggestion: look up your own company to see how your CEO is rated. If he or she has less than 100 ratings in the last year they won’t appear in the top 50 ranking. However you can still see how well they are doing by comparison.
Category: Uncategorized Tags:
by Mark Raskino | March 14, 2013 | Comments Off
Over the last few weeks, I have been reminded just how far ahead some businesses are in the great race of the information age. We are now at that stage of the marathon where the field is stretching out and the gap between leaders and laggards is getting bigger. Here are the ‘datapoints’ that set me thinking:
* Large UK supermarket chain Morrisons has announced it will provide an online grocery shopping service from 2014. I think I still have a very faded receipt from my first online grocery shopping experience with Tesco – dated 1996.
* I have been reminded via several client interactions that global standardised ERP operations for a very large corporation seem to be programmes that take 6 to 8 years to implement, and in some cases corporations have needed 2 goes to get it right. Perhaps that’s why our latest CEO survey data shows again that Nestle is admired by other business leaders for its strategic use of IT. Yet some large companies are only embarking on that journey today – having put it off for many years.
* In the context of data driven business thinking and a truly advanced capability in business intelligence, some companies like P&G with its real-time cockpits, or those who understand what a chief data officer is for – are at least a decade ahead. Their advanced are as much in management culture and discipline as they are in information systems and data sources.
One question that immediately arises, as in any race, is whether the laggards or at least the chasing pack can catch up. It is certainly a very hard task. It’s difficult to buy and install a whole competency. You might buy another firm in your industry to acquire the skills and knowledge along with the systems – but that option isn’t always available. Morrisons took an equity stake in the US company Fresh Direct 2 years ago. The business press has speculated that Morissons might buy Occado – and the firm itself has openly discussed partnering with them. Whatever happens, playing catchup in a major technology enabled strategic capability like online grocery at scale, is an endeavour that takes many years.
I think it is likely in many cases, that a gap whch took 10 or 15 years to open up, might be closed in half that time. After all – the knowledge is codified and transferable via consultants, packaged software and talent acquistion if not by M&A. But to fund the work required over 5 to 7 years, to catch up with a competitor on a strategic capability that matters – you will need good strong cash flows from other parts of your current busness capability.
In 2013, the laggards in the technology enabled strategic capability race are busy thumbing through rolodexes looking for head hunters, who can find them a “chief digital officer” or similar leader to accelerate their catchup. They must also hope that the non-technology business strategy ideas that were apparently more attractive a decade ago, will continue to yield the investment they need to fuel the gap closure project ahead.
Category: Uncategorized Tags:
by Mark Raskino | February 28, 2013 | Comments Off
I read an interesting article this weekend about what Mike Lynch (founder and former CEO of Autonomy) is doing now. He’s continuing what one might call his life’s work – creating highly successful, big technology businesses in Europe and more specifically in the UK. His large new venture fund wants to put an end to that nagging question – why are there no Google’s (Facebook’s, Amazon’s, etc. etc. ) arising in Europe? He thinks we have the original science and the skills, both technical and entrepreneurial. However the really talented people always seem to have to move to the US – often California specifically – to make their ideas fly. It’s an old argument. I have been hearing versions of this ‘silicon valley envy’ my whole working life in IT – 30 years.
Mike Lynch believes a big part of the problem is getting the right kind of venture funding in place and that’s what he’s trying to fix. I can’t doubt him – I don’t know that much about tech venturing. You see I don’t come from the IT industry. I come from the IT industry’s customers – the kind of companies that buy and apply the fruits of technology progress, to make their own businesses more effective.
For Europe to find the economic growth revival we all need, it has to work a lot harder on productivity. Since we don’t want to lose our hard won social advances like minimum wages and good safe working conditions, we are not going to compete with the industrialising sweatshops of the emerging markets. But we must compete with their rapidly advancing knowledge economies. The first part of the answer to that is education and on that score we are doing OK. We have advanced university systems that hone many of the finest minds. Europe is not struggling or failing to produce top end intellectual talent.
However – for a knowledge economy to thrive it must also invest in the tools that will make those talented people as productive as they can possibly be. Not ‘good enough’ tools but world class tools – the very best we can get. That’s what European CEOs must attend to. Mike Lynch and people like him are setting out to improve the ‘supply side’ of the equation – they will create ever more advanced technology tools. He is putting a very large amount of his own money where is mouth is.
European CEOs should match Mike Lynch’s move – by investing to fix the demand side of the technology equation. The reason is not to make markets for the new tech vendors, but to seriously improve the quality and productivity of the knowledge work that is essential to our advanced economies. A ‘stretch and make do’ attitude to technology investment within firms is still far too prevelant – even among those that have large cash piles on their books. How many European workers, when they get to their desks each morning, can truly say they have the very best information and technology systems to work with? How many can say that their business models are keeping pace with the digital era, or that the products and services they offer are being digitally enabled?
Boards of Directors must ask – what is our company doing to invest in information and technology that can make us more effective and could we be doing more to make that go faster? CEOs who don’t have big digital business ideas and plans to invest are stuck in 20th century thought patterns that will not serve Europe well.
Category: Uncategorized Tags:
by Mark Raskino | February 5, 2013 | Comments Off
Answer: on their way, starting with the banks.
In December we published research into the role of CDO (Login required: www.gartner.com/id=2273816 ). We conducted most of the interviews over the summer months. When compiling the list of interviewees it quickly became apparent that most of the professionals currently holding the actual job title “chief data officer” are in the United States.
However there are a few in Europe and we are starting to see more. Just like the US, this new trend is centered strongly in the Financial Services area – and particularly the banks. Clydesdale Bank, Credit Suisse, HSBC, Royal Bank of Scotland, Yorkshire Bank and others now have this role. Of course banks are some of the most information intense kinds of business, so we should expect them to spearhead any IT related trend that might lead to competitive advantage. But they are also under a lot of regulator and stakeholder pressure to be more transparent and able to answer questions on their operations. Stronger business data governance and policy is very important in that endeavor.
Have you spotted any interesting new bona fide “chief data officer” positions in Europe recently? Let me know.
Category: Uncategorized Tags:
by Mark Raskino | February 4, 2013 | Comments Off
The IT industry new concept naming agency fouled up again. We have two new, important C-level executive roles emerging and they have the same name! Its no wonder corporate leaders so often fail to comprehend, or invest in, the big ideas IT people are trying to promote. ”Cloud”, “Big data” .. we don’t make it transparently easy and obvious do we?
So there are two C.D.O.s in town: chief data officer’s and chief digital officers. They are not the same. They don’t do the same things and they aren’t being created for the same reason.
Chief digital officers are usually being created in enterprises that must do a lot of online interaction with many customers - usually consumers ( or citizens if it is government ). The whole digital channel space just gets more and more complex. If you have multiple departments or business units, then you multiply that by multiple services and add in multiple device types (PC, Smartphone, Tablet, self service kiosks) and all the relevant intermediary and professional services relationships.. pretty soon you get to a combinatorial management problem. Just making your company look coherent is a challenge – but making sure you are optimizing the opportunity is really hard. Yet, from the CEO’s point of view, business outcomes are more and more dependent on getting all that ‘digital stuff’ right. That’s why somebody get’s put in charge – a chief of the digital interactive opportunity and strategy.
Chief data officers are also being appointed because there is a real complex need arising. It’s the sheer amount of data large corporations are creating, storing and applying and the importance of that work as a core part of enterprise performance. It has always been true that heads of IT and even CIO’s are not really chiefs of information. They are in charge of the systems that contain it and through which it flows. But they don’t have purpose and policy control. They are not usually given the right to decide what information the company holds, for what business reason. That has always been a responsibility of ‘the business’. However, that responsibility has been diffuse and as both the challenge and the opportunity of complex information has risen – some companies and government agencies have realized somebody really needs to be in charge of this “asset”. It seems to be mostly financial services and large government agencies that are passing the threshold of need first.
Both kinds of CDO are real – not future ideas from analysts, consultants or executive search firms. People have been appointed into roles with those actual CDO titles, at companies you have heard of. Go ahead and Google them. Neither role can can be dismissed as a boardroom fad – they have both been in play for several years. In fact they both point to important and growing changes to information and technology leadership that will gradually reshape the work of the CIO .. and the CTO .. and the CISO.
Some people think research firms like Gartner are responsible for making up new industry terms. That hardly ever happens. Usually, we have to analyse and reflect the working terms that industry professionals have come up with and are starting to use. In this case, I guess the best we might do to try and help, is to offer a shorthand way of separating the two CDOs. CdigO (see-dig-oh) and CdayO (see-day-oh) perhaps? No, I don’t think that will stick.
It seems there will be quite a bit of information and technology c-suite role confusion over the next few years – at least in the names.
Category: Uncategorized Tags: