Who’s Worth Following? – Todd Williams

Todd’s bio on Twitter says he’s an audit and turn-around specialist, IT and High Tech Manufacturing specialist, Author, speaker and blogger. I must say I’m most familiar with Todd as a blogger and haven’t read his books or heard him speak. He has some very interesting perspectives and a pretty prolific Tweeter, something I don’t do a lot of myself. Tweeting must be a learned talent, which I’m still working to fully understand its value.

One of Todd’s recent blogs “Good Estimates Only Have a 50% Chance of Being Made” ( http://ecaminc.com/index.php/blog/59-generalblog/217-2010-09-13) is an interesting discussion of why, from a purely theoretically perspective, project estimates only have a 50% chance of being met. His argument is that we shouldn’t assign positive or negative assessments to meeting individual estimates. This aligns with my experience that the law of large numbers argues that things balance out in the end. My experience is and was that it’s the task you forget to estimate that are the problem as they represent a 100% negative variance to plan.

In a comment to this specific blog, Peter Kretzsman (someone who will definitely make my who’s worth following list) points out “An IT organization which fails to deliver to expectations half of the time, as you suggest, will be regarded as hopelessly unreliable and flaky, all mathematical protestations aside”. These types of discussions, which I would really like to encourage, are where real learning takes place. Two points emerge. First, people who prepare and use estimates need to understand they are most like wrong and that their estimates need to be updated as more is learned about the project and second, what’s really important is how estimates are communicated.

Here is Todd’s information to add to your list of “Who’s Worth Following”:
• Twitter – @ BackFromRed
• Facebook – Todd C. Williams
• Web Site – http://ecaminc.com/index.php
• Blog Site – http://ecaminc.com/index.php/blog

Let me know if you think this is a valuable service and helps you define a set of useful people to follow on the social media of your choice. Also, if you think of someone I should add to the list let me know.

Footnote – Todd and I just connected today through a relationship with Michael Krigsman and his company Asuret. It’s a very small world.

William A. Crowell
wcrowell@asuret.com
Twitter: billcio
Facebook: William A Crowell
LinkedIn: Bill Crowell

Who’s Worth Following? – Paul Greenberg

I’m clearing up my “following” list on Twitter as part of my effort to develop a list of people that I see as thought leaders in specific areas who are worth following. I’m currently following just 56 people and through this process I’m hopeful I can whittle it down to a dozen or so in specific areas of interest. Paul Greenberg is my first choice in the area of CRM and SCRM.

Paul wrote CRM at the Speed of Light back in 2001 and it became known as the “Bible of the Industry”. This itself should make Paul worth following, but I would add that he is a very good writer and provides excellent commentary that is easy to read. For example in a recent blog entitled “The Naked Tweeter: Traditional v. Contemporary Channels of Influence or is it AND Contemporary….?” (http://the56group.typepad.com/pgreenblog/2010/08/the-naked-tweeter-traditional-v-contemporary-channels-of-influence-or-is-it-and-contemporary.html), Paul presents background on how he became a thought leader on CRM and the important role of both traditional and new social media.

In another blog on his web site, “Coolness AND Content – SCRM Goes Global in the Same Room” (http://the56group.typepad.com/pgreenblog/2010/07/coolness-and-content—scrm-goes-global-in-the-same-room.html) he has a podcast in which he presents how SCRM should fit into an organization’s strategy. His theme is first to define what your trying to accomplish by creating an online community and then develop a plan that accomplishes those goals. It’s one of the first descriptions about how SCRM fits that I’ve understood and got me thinking more about the subject.

In another blog he presents a list of people in various fields that he thinks are worth following in the area of CRM and SCRM “Following On More Than Friday: The Experts Worth Checking Out” (http://the56group.typepad.com/pgreenblog/2010/06/following-on-more-than-friday-the-experts-worth-checking-out.html).

Paul is definitely someone worth following. Here is what you need to know to follow Paul:

Twitter – @pgreenbe
Facebook – Paul Greenberg
LinkedIn – Paul Greenberg
Web Site – http://www.bptpartners.com
Blog Site -http://the56group.typepad.com/

Let me know if you think this is a valuable service and helps you define a set of useful people to follow on the social media of your choice. Also, if you think of someone I should add to the list let me know.

William A. Crowell

wcrowell@asuret.com
Twitter: billcio
Facebook: William A Crowell
LinkedIn: Bill Crowell

Who’s Worth Following?

I’ve spent the last year or so blogging on various topics associated with the leadership role of the Chief Information Officer (CIO). I’ve also developed a list of people I’m following on Twitter, Facebook and LinkedIn. Since I’m now retired I’ve had the time to do this but in the process I’ve come to understand how difficult it is for CIO’s to become engaged in these new social media communications platforms. Time and information overload seem to be the prime culprits.

So I’ve decided to provide a service to my fellow CIO’s by developing a list of people worth following on Twitter, Facebook and LinkedIn. My first recommendation is Chris Curran who is the CTO of Diamond Management and Technology Consulting and his web site http://www.ciodashboard.com. Chris and his Diamond associates cover a broad range of topics of interest to CIO’s that are focused on the management of Information Technology (IT) to provide optimum value to the organization. What I like best about Chris’ site is it’s tag line “cutting through the noise”. This is exactly what CIO’s want.

Here is what you need to know to follow Chris:

Twitter – @cbcurran, #ciodashboard
Facebook – Chris Curran
LinkedIn – Chris Curran
Web Site – http://www.ciodashboard.com

Let me know if you think this is a valuable service and helps you define a set of useful people to follow on the social media of your choice. Also, if you think of someone I should add to the list let me know.

William A. Crowell
wcrowell@asuret.com
Twitter: billcio
Facebook: William A Crowell
LinkedIn: Bill Crowell

We Still Don’t Know How To Manage IT

I just finished listening to the recent press conference of Secretary of Defense, Robert Gates, on his planned restructuring and rationalization of the Department of Defense. I was struck by his description of the IT function within the Department as inefficient and the duplication of basic IT capabilities across the organization. It sounded as if every command at all levels had their own independent IT functions.

This in and of itself is not surprising in a large bureaucracy, but it does cause one to wonder who is running the show. There is an overall Department CIO and most likely many Command level CIO’s. I’m sure they all want to protect their turf but there is a more important public service responsibility to run IT in as cost effective a manor as possible using the technologies available today.

Addressing this problem requires that senior management at all levels understand two basic principles of managing IT. First, the value of IT is delivered through applications and the design, development or purchase of these applications needs to be close to and under the control of the end users. Second, the technology tools supporting these applications (data centers, servers, networks, desktops, mobile devices and most support functions) need to be managed at the enterprise level of the organization. The reason is simply that there are enormous economies of scale in acquiring and managing these resources.

One additional reality is that end user demands drive the need for IT resources and this demand needs to be controlled in two ways. First, the enterprise needs to make sure the capability being requested doesn’t already exist within the organization to avoid duplication. Second, truly new capabilities need to be justified by a strong business case.

So what does DOD need to do to get it’s hands around the issues it faces? Here are some ideas:

1. Consolidate data centers into an overall DOD network. EDS and all the major outsourcers have known for years that there is an optimal size for a data center, and all suboptimal centers should be closed and their functions transferred to the enterprise’s data centers. I’d did exactly this years ago at McGraw Hill and we generate substantial savings, though I admit it was a difficult political job. I also supported doing this in Oregon’s state government, proving the politics can be overcome if the rational is strong enough.

2. Consolidate networks which are a major IT expense and in most cases duplicative and overlapping.

3. Virtualize servers where ever possible. We all know that servers dedicated to a single application are typically underutilized and that the technology now exists for servers to support multiple applications.

4. Centralize the purchase of desktops and mobile devices to gain the purchasing economies of scale.

5. Centralize all support functions into centers of excellence.

I would not be surprised if DOD could cut it’s IT cost by as much as 50% without negatively impacting service. This was exactly my experience at McGraw Hill when I was asked to rationalize the IT organization in the early 1980’s.

The principles for effectively managing IT in large organizations is not a mystery and they have been proven over and over again. Unfortunately, there have been classic failures in applying these principles, the Texas and Virginia debacles come to mind. It’s essential that leadership at all levels clearly understand they are wasting valuable resources that as Secretary Gates said can and should be redeployed to meet the organization’s primary mission, goals and objectives. Selling these principles to the organization’s leadership and then executing these principles is the primary mission of the Department’s CIO.

I would appreciate your thoughts on this blog through your comments or you can contact me direct at any of venues below.

William A. Crowell
Wcrowell@asuret.com
LinkedIn: Bill Crowell
Twitter: billcio

We Need Outsourcing Marriage Counselors

CIO Magazine had a very interesting article by Stephanie Overby published this week entitled “Don’t Mess with Texas: 7 Lessons from State IT Outsourcing Disasters”. Her 7 lessons learned from IT outsourcing debacles in Texas, Virginia and Indiana included:

• You Get What You Pay For
• You Get What You SLA For
• When the Going Gets Tough, The Tough Go Public
• You Can’t Sue Your Way to a Better Relationship. But You Can Try
• Outsourcing Means Never Having to Say You’re Sorry
• Outsourcing Will Not Cure Internal Inertia
• If At First You Don’t Succeed, Try Again. And Again

The article goes on to say “It took San Diego County two outsourcing contracts—and three different CIOs—before it got its outsourcing deal on the right track”, which is a reference to a May 2006 article that Stephanie wrote (“Government Outsourcing: San Diego Tries to Learn from Contract Mistakes”).

The problem with Stephanie assessment, especially the idea that San Diego got it right the second time around, is the belief that the outsourcing contract is the basis for success. My argument is not that having a sound contract is a bad idea but simply that any third party relationship has to be based first on a solid foundation of mutual respect, empathy and trust.
The contract is like a prenuptial agreement, if things don’t go well it’s the basis for resolution of any disputes. Once the marriage is consummated and the deal signed, the players on both sides need to work on developing their relationship.

The starting point for this relationship is mutual respect. The client needs to understand that they have hired expertise in IT from the outsourcer because IT is not their organization’s core competency and that their organization has made the outsourcing decision based upon a belief that the outsourcer will provide more efficient and effective IT services. Anyone in the client organization that is not committed to these fundamental principles should not be involved in the outsourcing relationship.

From the outsourcers perspective, they need to demonstrate from the get go their core competency in IT and clearly document the ways in which they are improving the efficiency and effectiveness of the IT services they are providing. The profitability of their relationship should be the result of the superior services they are providing and not the principle goal of the relationship. Here again, any member of the outsourcing vendor that doesn’t embrace these principles should be removed from the account.

Empathy is a second essential element of the third part relationship. The client needs to understand that their outsourcer is not a charity and needs to generate a reasonable profit if the relationship is going to be sustained over the long run. The outsourcer needs to understand their client’s cost concerns and make sure they are clearly demonstrating that their services are competitive. Empathy implies flexibility on the part of both parties. The client’s demands must be reasonable and not place an unfair burden on the outsourcer and the outsourcer must be willing to give when there are issues with the quality or effectiveness of the services being provided. If the outsourcer has over promised the services they can provide for the price they quoted, not an unusual situation, then these issues need to be addressed head on. The question can best be addressed by determining a fair price and an appropriate discount that reflects the outsourcer’s prior commitments.

If mutual respect and empathy have been established, then the conditions exist to build the third leg of the stool – trust. Trust clearly takes time to develop and is the most valuable element of any relationship. Any actions by either party that would violate the others trust is a strategic relationship issue and needs to be effectively addressed by the senior management of both parties. Nothing can cause a relationship to unravel faster than the loss of trust.

If your considering outsourcing or have already entered into an outsourcing relationship, develop a sound contract and then put it on the shelf. Focus on developing a solid relationship based upon mutual respect, empathy and trust, and my bet is you’ll never need to refer to the contract again or at least only in the most unique circumstances. If problems develop, consider working with a marriage counselor before ending up in a failed relationship.

William A. Crowell
wcrowell@asuret.com
twitter: billcio
LinkedIn: Bill Crowell
My Blog: https://bcrowell.wordpress.com/

Why is being a CIO such a tough job? The role as Change Agent

In my experience when you join an organization at the CIO level you are most likely being hired as a change agent. You’re being asked to fix a dysfunctional IT unit, lead a major systems modernization effort, establish an IT strategy for the organization or fix a failed project. Seldom if ever do you join a stable organization with the goal of implementing a well-defined IT strategy. Your role by definition is that of an agent of change. In this context I’ve asked the question, what are the pros and cons of the change agent role?

Since being a change agent is typically a central part of a new CIO’s role, it makes sense that we need to understand the change process and where we are in that process. Abbie Lundberg’s recent blog entitled How to Survive in a World of Constant Change presents a simple and straightforward change model that I’ve applied throughout my career, without even knowing I was doing so. The model has three stages:

1. Unfreeze – preparing people for change.
2. Change – implementing the change.
3. Refreeze – assuring the change becomes the “new normal”.

As I look back, when I’ve taken the time to unfreeze the organization and make sure people understand the problems we face and the opportunities that fixing the problems enable, then the changes can be developed and implemented on a collaborative basis by a team committed to the changes. I’ve not focused specifically on the refreeze phase of the process but it makes sense that once the changes are implemented people need time to adjust to the new normal.

The challenge for the CIO is to fulfill the change agent role without getting pigeonholed as a techie or Mr. Fix-It. Therefore, before diving into fixing specific problems, the IT organization should collaboratively develop a strategic plan with significant input from the business. The plan should clearly define:

1. The current situation with specific examples and data that support the team’s conclusions. Defining and communicating the problems created by the current situation is an excellent way of unfreezing the organization from long held and in many cases spurious beliefs.
2. The future state providing a vision of where we want to be and the benefits of getting there. This is a second element of unfreezing the organization and preparing them to implement the changes that it will entail.
3. A detailed implementation plan laying out what will be accomplished, when, by whom and the estimated costs and benefits. This becomes the blueprint for change, sets expectations and provides a baseline for measuring and communicating progress.
4. A control cycle that reports progress, lessons learned and updates to the plan. This is essentially the refreezing process designed to demonstrate a new level of expected performance from IT.

It’s been my experience that joining an organization, as the new CIO, positions the individual to be a major agent of change. However, the drawback is that your peers view your plate being full as a defensive measure to keep you from examining their operations and recommending specific changes. If people don’t perceive a clear need to change they will in my experience resist change.

All too often we in IT think in terms of all the ways we can apply technology before allowing the organization to unfreeze. We need to understand the problems or challenges that the organization faces before we offer solutions. Moreover, these solutions need to clearly address the problems or challenges and equally clearly define costs/benefits in business terms. Specifically, how will the solution enhance customer satisfaction and revenues, lower operating costs and/or reduce investment in assets required to operate the organization.

In summary, to maximize the opportunities that the change agent role provides and minimize the drawbacks take time to unfreeze the organization, provide a clear vision of the future and the path for getting there and allow time for the organization to refreeze and adjust to the new normal before continuing the move forward.

William A. Crowell
wcrowell@asuret.com
Twitter: billcio
LinkedIn: Bill Crowell
My Blog: https://bcrowell.wordpress.com/

Why is being a CIO such a tough job? Understanding ROI

In a previous blog on this general topic, I mentioned the importance for the CIO to understand Return on Investment (ROI) and its purpose in the area of financial management. Historically the concept of ROI and its various measures including payback period, internal rate of return (IRR) and net present value (NPV) were designed to allow an organization to rank alternative capital investment opportunities with different cash flows as part of their capital budgeting process. Those with the greatest ROI relative to risk were selected and funded.

As I learned in graduate school, one of the most common mistakes people make in applying ROI methodologies is to focus on the measurements themselves and not the underlying assumptions surrounding the cash flow forecasts that produce the ROI. Here is an example from my own experience.

When I was the CIO for the Department of Human Services (DHS) in Oregon, we initiated a state wide data center consolidation project. Seventeen agencies participated and DHS was the largest. The capital investment was estimated to be approximately $24.0 million to build a new state of the art data center. In order to justify the investment the Department of Administrative Services (DAS) was required to show a two year payback in cost savings, based solely on projected personnel savings (i.e., you don’t need 17 data center managers in a consolidated facility). A two year payback is roughly a 50% IRR.

When the project was completed, DAS and the state legislature considered it a failure because the estimated personnel savings were not achieved. To fill the hole, the state agencies who participated were required to cut their budgets by the amount of the shortfall, which displeased the agency heads and agency leadership in general. It was seen as another IT fiasco. What went wrong?

First and foremost, setting an ROI goal for this project at a two year payback or 50% IRR created the wrong incentive for management. In order to achieve this goal, DAS artificially reduced the number of staff required in the new consolidated data center and accelerated the staff reductions to increase the projected savings and achieve a two year payback. This was a mistake and lead to the perception of a failed project, reinforcing my earlier point that the validity of the cash flow projections is paramount. So where did Oregon go wrong?

Essentially, the cash flow projections didn’t reflect reality and were backed into in order to achieve an arbitrary ROI goal. Here are some examples of items that were overlooked:

1. In the out years, the new consolidated data center had the capacity to provide computing services to all state agencies. This benefit was not estimated or included in the cash flow projections.
2. The project consolidated 17 separate agency data networks generating significant savings not included in the cash flow forecasts.
3. The consolidation of the data centers freed up valuable real estate in agency headquarters that was not valued or included in the cash flow forecast.
4. The construction of the data center was completed on schedule and at a cost $2.0 million below the budgeted $24.0 million.
5. Positions were eliminated (approximately 30+ at DHS) and the people who were in these position were able to fill other jobs that were vacant, leave state government for the private sector or retire.
6. The need to invest in 17 separate facilities going forward was avoided but again this benefit was not estimated or included in the cash flows. The State wouldn’t accept cost avoidance as a benefit but maybe this has changed after Katrina and the Gulf of Mexico oil well blowout.

Bottom line, an IT project that produced substantial benefits to the State over the long run was deemed a failure due to highly suspect ROI analysis and guess who took the heat, the CIO’s. In reality and taking into consideration all the benefits produced, if this project achieved a 4 year payback and only a 25% IRR, that’s a lot better than I’m doing in the market.

Why is being a CIO such a tough job? Meeting the tactical and strategic elements of your role

In my last blog on this topic, I raised the following question. What other executive position provides services to every other aspect of the business and what are the implications of this unique role? Generally speaking from my experience the only other functions whose primary role is to service other areas of the business are the “staff” functions. These include human resources, public relations, and to some degree, finance. The “line” functions including marketing, sales and operations are customers of these staff services and rarely if ever have an internal services role. They are totally focused on servicing the firms’ customers and creating and delivering high value products and services.

What makes IT unique is the intensity of the services it provides to the organization. Some examples;

• Are the organizations desktop, laptop and more recently mobile devices working properly and being properly maintained? Are the users properly trained? Are these devices secured?
• Is the firms networks, both voice and data, meeting the organizations requirements and properly secured?
• Are the organizations primary applications working properly and being adequately maintained? Are these applications technologically obsolete and need to be upgraded or replaced?
• Is the organizations data safe, secure and properly structured to meet the organization’s needs? Is the organization taking maximum advantage of data management and discovery tools?
• Is the organization Internet presence meeting its needs?
• Etc…, etc…, etc… and the list goes on.

The point is, unless these and other basic services provided by IT are “buttoned up”, there is likely to be little chance to become a strategic partner with the line executives. This means that the CIO must first assure that his/her department is delivering its services in a high quality and reliable fashion and seen as meeting or exceeding the expectations of the organization. Depending on the situation you face, this requirement of the CIO can take a significant amount of time.

So what is the solution to this dilemma, the desire to focus on the strategic business needs of the organization and the basic responsibility to assure that all IT services are being effectively and efficiently delivered? I think the starting point is to assure that your direct reports have the requisite skills to provide top quality IT services and to do this is in a way that reflects a high level of customer service. As the CIO, you need to communicate to your C-level peers that you understand these responsibilities of your position and make sure they know who specifically within your organization is responsible and accountable for the provision of these services. You also need to listen to and understand your peers’ views on the quality and level of service that IT is providing.

Having set the proper level of expectations on basic IT services, the CIO needs to sell their C-Level peers on the potential opportunities to apply technology to increase revenues, reduce costs and lower asset investments that collectively increase the profits and returns of the business. There are many ways to accomplish this but one of the best is to demonstrate your understanding of the business and where these opportunities exist.

One approach to getting there is to create a small group of analyst that have strong business and IT backgrounds and imbed them in the line organizations. These analysts should study all of the organization’s processes and identify where IT investments can have a significant impact and build the business cases that justify these investments. They should perform this role on a collaborative basis and in partnership with the line organization.

Dealing with this dilemma in the CIO’s role between tactical requirements and strategic focus is a challenge. It must be addressed head on and in a way that assures that IT has the opportunity and capability to be a strategic partner with C-Level peers.

William A. Crowell
wcrowell@asuret.com
twitter: billcio
LinkedIn: Bill Crowell
My Blog: https://bcrowell.wordpress.com/

Taking the Strategic Perspective, It’s A Two Way Street

A recent article in CIO Magazine entitled “What CEO’s Expect” and sub-titled “Chief Executives want CIO’s who look outside the company walls to find new business opportunities” is certainly a move in the right direction but unfortunately not a perspective shared by many CEO’s. Here is an example from my own experience as the CIO of a major mid-western publisher.

Back in the late ‘90’s, the Internet was just beginning to evolve as a major new medium for publishers. The general wisdom was magazines need to have a web site but they shouldn’t consider electronic publishing of the magazine. For purely business reasons this never made sense to me for several reasons.

First and foremost, there was the clear opportunity to substantially change the cost model for publishing a magazine. Production cost for printing paper and ink and distribution cost including postage and single copy sales discounts would be totally eliminated. Added to these measurable cost savings:

· Lower costs can be translated into lower subscription and single copy prices presenting an opportunity to boost circulation which also translates to greater advertising revenues,
· Electronic publishing over the Internet opens up a global market also increasing circulation and advertising revenue opportunities,
· Editors can embed links to additional background materials increasing the value of the editorial content,
· Advertisers can embed links in their adds and offer readers incentives to click and buy, and
· Readers can be electronically notified of new editions through e-mail and can store editions electronically.

Are these substantial opportunities to increase revenues, expand markets and lower operating cost strategic? I certainly think so but alas there were no takers. Even today, with the notable exception of CIO Magazine which now offers a complete electronic edition of the magazine, there are few, if any, magazines embracing an electronic publishing strategy.

The only objection I ever heard to even exploring the idea of electronic publishing was that the readers wouldn’t be interested in an electronic version of the magazine. I don’t know if this is true but it would be interesting to learn how many readers of CIO Magazine have converted, since we can presume they are a technology savvy audience. Moreover the marketplace is clearly evolving in these directions with new devices like iPad, Nook and Kindle. I have read the Harvard Business Review on Nook but the design was so bad I dropped my subscription. They should check out CIO Magazine’s electronic version, which is top notch.

The point here is simply while the CIO needs to provide thought leadership on how technology can be applied to the business, the business leaders need be more open and less skeptical of these new ideas. It turns out that change is challenging to everyone, including the CEO.

The Laundry List

Executive Search firms are, I think unwittingly, defining the CIO’s role in largely tactical terms in the position descriptions that they develop. In a recent description for a CIO position I noted that 18 separate responsibilities were identified in what I refer to as the “Laundry List”. Essentially, this Laundry List is equivalent to defining the CEO’s role by listing in detail every functional activity of the organization over which he presides. Moreover, I am not sure any single individual’s performance can be evaluated against 18 separate areas of responsibility.

The solution is for recruiters to define the CIO’s role from a strategic, senior executive perspective as they would any other executive position. Here are some ideas they should consider:

Responsibilities:

• Provide strategic oversight and thought leadership on the use of technology to assure maximum effectiveness, efficiency, flexibility and productivity of the organization is achieved.
• Participate as a member of the executive team on all strategic initiatives to assure that appropriate applications of technology are being applied.
• Serve on the organizations capital budgeting team to assure that appropriate technology investments are being funded and that desired returns are achieved.
• Periodically brief the Board of Directors on all aspects of the organizations IT strategy and investments. (Note: Board access is critical to positioning the CIO as a senior executive leader within the organization.)
• Assure an effective management structure is in place to oversee the efficient and effective delivery of IT services and support. (Note: This assumes that day-to-day management of IT will be delegated to assure the CIO has time to focus on the strategic application of technology to the organization.)

These are 5 and not 18 specific functions that a CIO can and should be focused on performing. There is no need to describe the elements of an IT organization in a position description or to list every issue/area within the scope of the IT function.

I would appreciate your thoughts on this topic and if you agree with my premise, encourage you to pass this along to the executive recruiters you know.

Bill

William A. Crowell
wcrowell@asuret.com
twitter: billcio
LinkedIn: Bill Crowell
My Blog: https://bcrowell.wordpress.com/