Coalface-Research

Google ambivalence

2011-11-30T16:14:00.001+11:00

My good friend Kevin loves Google. For Kevin Google embodiesmany of the virtues that make IT such an interesting and fascinating place inwhich to work. Kevin appreciates Google’s creativity. He admires its businessmodel. He harnesses its accessibility and, above all, he supports its attemptsto break the traditional software licensing stranglehold that has underpinnedthe behemoths of the software industry for so long. Kevin’s admiration ofGoogle is so high anytime I raise any complaint or problem that I have with thecompany his standard retort to me is an incredulous “Goooooogle!”

Over the last couple of months I have had a number of reasonsto complain about Google. As such, I am now much more circumspect about whetherGoogle is quite the force for good that it would have us believe. I can seethat Google is helping make key software much more affordable and much moreaccessible. I also recognise its software offerings are much more versatile.However, I have come to have serious doubts about whether Google is reallyenterprise ready and I am deeply troubled by its apparent lack of transparency.

My Google tangles began in August this year. Increasingly findingMicrosoft Outlook clunky and cumbersome Kevin suggested I give Gmail a go. Idid and, to Kevin’s credit, I liked what I saw. I was impressed by the neaterintegration of email with calendars and contacts. I liked the ability toharness powerful search facilities to find past emails. I thought the option totag emails with labels much more helpful than Outlook’s use of folders. Inshort I was sold. However, that’s when my problems began.

I have a number of email accounts. Moving the CoalfaceCommunity account from Outlook to Gmail was straightforward as Kevin had laidthe groundwork with Google from the outset when we set up the company two yearsbefore. However, this was not the case with my Coalface Research domain whichhad been set up several years before. Apparently unable to fathom that I had beenrunning this email account for some time, Gmail wanted to assign me an emailaddress that would have read “phind@coalfaceresearch.com@gmail.com”. This wasclearly not what I wanted but when I deleted this option I believe I alsosimultaneously deleted my Coalface Research blog. Unbeknown to me thereappeared to be an association between this and my Coalface Research accountwhich was apparently established when Google acquired Blogger. I suspect when Ideleted the Coalface Research email address I, by association, inadvertently deletedmy blog. I assume this because my blog disappeared at the same time. Anyway,the upshot was that I needed to ask Google’s help to get my blog back.

I cannot find adequate words to articulate the challenge Iencountered in just trying to talk to Google about this problem. It wasimpossible. I have no doubt that it would have been easier for me to have gotKim Jong-il on the phone in his lair in Pyongyang than it would have been totalk to a technician at Google about my problem! There is simply no way to doit. All you can do is communicate through a self-help support Wiki. However,even this presents problems. You cannot just outline your problem and ask forhelp. You have to put it in one of a select group of pigeon-hole options. Woebetides you if none of these options adequately reflects the problems you areexperiencing.

Even getting to this self-help Wiki was confronting.Firstly, I had to battle my way through a condescendingly written missive onthe Blogger Help forum which hectored me on the reasons why Google may haveelected to remove my blog. I clearly fitted none of these circumstances.However, before being able to proceed I had to state that I had read thesepoints and understood them. After this I documented my problem and waited.Fortuitously for me, and I’m not sure why he did so, a contributor called“Martins” came to my rescue. As I was to discover on another incident this isnot always the case.

There then entailed a six week toing and froing of emailsbetween me and Martins. Periodically, I was assured that my blog had beenrestored but nothing eventuated. There was an enormous temptation to take myfrustration out on Martins but I realised that he was the only person aroundGoogle that was offering me any encouragement. I suspected letting fly at himwould only be counter-productive.

My problems during this time were exacerbated by the factthat I was discovering intricacies to Google about which I had been blissfullyunaware. I found that even though I had used Google as my search engine for manyyears that I had Google account names and passwords and that it was even possibleto sign in to Google. These issues were inconsequential to me when I usedGoogle as a web browser. However, they became critical considerations when Iwanted to use Google as an email system because my email account and my blog weredependent on my Google account name. Failing to appreciate this criticallinkage for some time I succeeded in acquiring a myriad of passwords and loginsthat only complicated my path to recovery.

Then miraculously my blog reappeared. Mysteriously, butappropriately, it had even been assigned under my Coalface Community account. Iwrote to thank Martins for his help. He stressed that my circumstances werecomplicated and he credited the help of a Google technician called Brett whohad done a lot of work behind the scenes on my behalf. Mind you, I still haveno idea what Brett did and what challenges he had to overcome.

As you can see I’m happily blogging again. Furthermore, I amusing Gmail for both my email accounts and I do think they are a significantimprovement on Outlook. However, my experiences with Google have left me verytroubled. Kevin stresses that I need to recognise that I’m getting Gmail forfree and this implies I can’t expect Enterpriselevel support. He says my situation would have been different if I had licensedthe software. However, I wonder if that is a valid argument. Google’s businessmodel centres on advertising and the more people use its products the bigger isthe reach of that advertising. Moreover, experience has also told me that goodcustomer service is a culture and embracing a cavalier service attitude in onepart of the business will manifest itself elsewhere.

My biggest concern though is the lack of transparency that Iencountered. This is especially troubling when you consider the amount ofpersonal information that Google is acquiring about people as they use itsproducts. When the only way you can communicate with someone is on their terms,which excludes being able to talk to them on the phone, how can you elevateyour concerns with them. I’m a small business owner and I was frustrated.Imagine if I had been the CIO in a business owned by a self-made billionaire.How, in such circumstances, could you advise this type of boss with anycertainty when a problem was likely to be resolved? With IT, and especiallyemail, being integral to any modern company, we’re sitting and waiting forsomething to happen would, I’m sure, be a career ending response to proffer.

Nevertheless, there is always tomorrow. Google may have anelement about it of what my mother used to describe as the “does the King knowabout me” syndrome. However, I’ve come to realise that pride always proceeds afall. If the IT industry has taught me one thing it is that dominance is alwaysa temporary illusion. Just ask IBM and Microsoft. As such, I’ve no doubt thaton the horizon there lurks some amazing company with an incredible product set thatwill eventually challenge Google. I’m also sure that when it arrives my goodfriend Kevin will tell me all about it.

The need for agility

2011-10-18T22:08:00.002+11:00

John Foster Dulles is the man after whom Washington DC airport was named. It was probably an appropriate place for a bureaucrat to be acknowledged. He served as the American Secretary of State for President Eisenhower at the height of the Cold War in the 1950s. I give him to you today for a memorable quote of his. Foster Dulles remarked that the measure of success is not whether you have a tough problem to solve but whether it’s the same problem you had last year!

Last year IBM undertook a survey of CEOs to ask them how they perceived the current economic circumstances. As you can see in this slide CEOs described the new economic environment as substantially more volatile, much more uncertain, increasingly complex and structurally different. Furthermore, the consensus among those interviewed was that this was unlikely to change in the short term. The biggest concern CEOs had was volatility and the challenge when things are volatile is to be able to be agile and fast enough to be able to respond to these changing circumstances.

McKinsey did a study of business executives in 2006 where they explored the importance of speed and agility. As you can see on this slide agility was rated as either very or extremely important by nearly 90% of the respondents. Speed wasn’t far behind. 80% of the same respondents saw this as highly important. Moreover, the respondents reported that if their businesses could increase their speed and agility then they believed that it would enable them to grow their revenues, respond better to clients to assist with customer satisfaction and provide their companies with greater operational efficiencies.

The McKinsey study then looked at what these executives thought were holding back their organisations from being quick and agile. By far the most common response, from half of all respondents, was the complexity of their companies. People spoke of being impeded by slow, centralised or complex decision making. Often these structures have been introduced to improve governance. However, smaller, more nimble, new entrants to a market are not so encumbered. The challenge then for an established organisation is how do you eliminate complexity in order to respond to these new, nimble competitors?

The same can be said of corporate IT. Larger, well-established, organisations tend to possess more complex IT departments which are often a reflection of how their business has grown over time. Ron Ahkenas is a writer for the Harvard Business Review. In a recent interview he was specifically asked how CIOs could reduce complexity in the IT department. Ashkenas identified four areas where he thought an individual IT department created unnecessary complexity. These were: inefficient organisational designs; product and service proliferation; unmanaged process evolution and unintentional managerial behaviours.

In analysing these Ashkenas argued that CIOs first needed to determine where they had opportunities to consolidate the number of systems & functions they supported. Then Ashkenas advocated the need for a greater rigour in culling the products and services that IT supported. Next Ashkenas advised that CIOs needed to have defined the core processes by which the IT department fulfilled its mandate. Finally, Ashkenas recommended that CIOs needed to review their own behaviour to see how this might add to the complexity emanating from their department. Did the IT staff have clear role definitions so people recognised who was accountable for what? If such definitions were not in place he felt that this was a clear recipe for potential confusion.

One of the things that Ashkenas recommends is rationalising the number of applications that their business supports. I feel many CIOs would very much like to do this but see this would meet resistance from the end users of these applications. One of the things I hear regularly in my discussions with CIOs is the burden they carry in managing this plethora of applications. In putting together this presentation I went looking for some evidence of what the cost was for IT departments in doing this work. This slide show some findings from a UK research paper which set out to explore the impact for CIOs of having to maintain a plethora of different software solutions from different vendors in today’s cash-strapped corporate environment.

As you can see their findings showed that over 60% saw software maintenance as a burden on their IT budget. In fact, 40% describe this burden as significant. In addition, the research revealed that nearly a quarter of the average IT budget was spent on software maintenance and for some companies it was 100%!. Moreover, the study showed that 71% of European IT Managers expected that the proportion of their IT budget allocated to the upkeep and maintenance of software packages would increase next year. In effect, these findings highlight the opportunity cost of software maintenance. If you are too busy patching up what you already have there’s insufficient time to help the business with where it wants to go.

Perhaps though there is another way of skinning the cat. One of the attractions that we had to today’s presentation was the fact that NAB took such a radical way to dealing with its quest for agility. In many ways they thought outside the box to the challenge of maintaining their key banking applications. Moreover, they used a separate private cloud to support this new system. As this Gartner research from earlier this year shows, private cloud is still in its infancy. However, perhaps it does offer us the ability to free ourselves from supporting the quagmire of legacy systems that are endemic in more organisations. Harking back to the words of Foster Dulles, they are unlikely to enable us to do away with our problems. However, it might be rewarding for us to start to tackle some new problems for a change.

At the centre of things

2011-10-18T18:29:00.000+11:00

They say the world is cyclical. What goes around comes around, so to speak. Most of us are taught this from an early age. We study history to learn from the past and when it comes to trends to understand how better to deal with current challenges. I make mention of this because I believe the IT industry is witnessing a new cycle in its evolution. I think there is renewed faith in IT by the business. Moreover, I reckon that accompanying this is a growing status for CIOs.

In my opinion the IT industry spent much of the last decade in the doldrums. The technology largesse that accompanied Y2K subsequently acted as a disincentive to major investment in IT for many years afterwards. The dot com bust and the unfulfilled prophesies of the early Internet darlings of the stock market fostered a cynicism that IT people were somewhat ignorant of the real world of business. Then along came Nicholas Carr and his treaty that IT Didn’t Matter. For many years after I don’t think it did. It seemed that for most of the last decade CIOs were primarily tasked with doing more with less. Yet now I think the wheel has turned. Everywhere I go I seem to be encountering a growing recognition by many executives that IT is something their businesses need more of not less. They know they cannot ignore it.

One of the great pleasures I get from running The Coalface Community is the opportunity it presents me to have regular dialogue with senior IT executives in a variety of industries. Right now many of these conversations have a consistent theme to them. More and more CIOs are telling me that they are undertaking major projects in their businesses that entail some form of business transformation. Moreover, these are not changes to an application set. They are not just tinkering with the financial systems. Instead they seem to be intimately involved in a complete overhaul of their organisation, usually as a response to major challenges in the marketplace.

Changes of this nature are not for the faint hearted. They usually require a significant investment of both time and money. Yet the impression I get is that senior executives in the business are right behind these initiatives. This appears to reflect something of a renaissance in enthusiasm for IT by many such business executives. For a long time IT has been seen by many of those at the top as something of a necessary evil and with due reason. Research continues to show that the success rate for major IT projects is dire. A number of organisations have got their fingers burnt supporting major IT projects that have failed to deliver. However, many executives now seem to be appreciating that if they don’t watch out their industry sector could be turned upside down by someone much more technologically savvy than them.

There is a lot of evidence of the capacity for technology to disrupt a marketplace. The turmoil in the newspaper industry around the world is one classic example of this. Rupert Murdoch’s animosity to Google is not without reason. For centuries the newspaper operating model has been underpinned by classified advertising. However, in recent times there has been a flight of classified advertising from newspapers to the Internet. Murdoch fully appreciates that the future of his organisation is tied up in how well his business can respond to these threats. Moreover, he knows the response he takes must be IT centric. If it is going to get harder and harder to secure classified advertising then News Corporation has to develop new, alternative revenue streams. Moves towards paid content, placing web sites behind pay walls and creating multi-media newspapers are all examples of how Murdoch’s IT department is central to helping his business respond to these threats and opportunities.

Newspapers are not alone. Commercial television, the recording industry and the travel industry have all been turned on their head recently by challenges posed by the Internet. Even behemoth industries like banking are not immune from these threats. More and more people are comfortable paying their bills and doing their banking on line. These people don’t have the same need for a bank branch that their parents may have had. They are comfortable dealing online and anonymously with a Bank where they don’t know the Manager or the teller. As such, creating a new financial services organisation is much simpler. As such, the cost of entry for new financial service providers has fallen rapidly. The next Coalface Community session looks at UBank, a brand new alternative bank created by the National Australia Bank in order to respond to these very challenges posed by these new emerging entrants in to the local Australian banking sector.

There is another characteristic that comes out of my dialogue with IT executives dealing with major business transformation projects. They all talk about these change management initiatives as being lengthy journeys. The focus is not on crashing something through at breakneck speed. It’s on doing it right. The business knows that if it wants any change of this magnitude to be effective then this will not be an overnight occurrence. Radical change of this nature takes years to realise and it requires effective planning, sufficient resources and ongoing commitment.

This is why I believe there is a growing status for CIOs in the corporate world. Leading CIOs are agents of change. They are tasked with overseeing fundamental business transformations that are going to be integral to their organisation for years to come. To achieve this they must reside within the inner executive circle. This is where they will be privy to confidential, strategic discussions. This is where they will be arguing for the monies for substantial IT projects often in competition with others on the executive team who may be advocating important and scarce capital should be spent elsewhere.

These are clearly exciting times for CIOs. No one talks today about IT not mattering. No serious business executive thinks that IT is a cost to be minimised and that the CIO should just focus on keeping everything running. The long aspired entrance to the inner sanctum of the corporate executive team seems to be at hand. The task now is to seize the opportunity. If we follow the fact that business is cyclical it is probable that sometime in the future the wheel could turn in the opposite direction. However, if CIOs perform when they are in the spotlight like now it might be a long time before that happens.

Harnessing mobility

2011-07-22T15:58:00.000+10:00

Winston Churchill once remarked “however beautiful the strategy, you should occasionally look at the results”. His remarks seem particularly pertinent for CIOs equipping their organisation with mobility technology. The IT industry has long heralded the potential of mobility to transform our businesses. Users can clearly get enthralled with each new release of mobile product sets. Yet when you examine where the functionality is applied it is clear that for many mobility applications are still confined to telephony and email. When Gartner asked CIOs around the world in 2006 to identify their technology priorities for the year ahead they ranked mobility as number three. Unfortunately, when they ran the same survey this year mobility was still in the same position!

This is despite the fact that there have been many significant advances in mobility technology since 2006. The first smart phones appeared in 2007. Last year we witnessed the iPad phenomenon. This year a global study by the UK research company Freeform Dynamics revealed that over half the organisations gave 50% of their employees a laptop while over a quarter of the organisations gave a smart phone to the same percentage of staff. Nevertheless, despite wide interest in it, and I suspect many protests, it was also clear from this study that all bar the privileged few were being allocated an iPad.

Moreover, there was also strong evidence that the laptop would continue to play an important role in the enterprise for at least the foreseeable future. Over the next three years, around 55% of respondents regarded it as remaining a highly important device, a figure that was noticeably higher than even the smart phone. On the other hand, even allowing for two or three more subsequent releases, iPad type devices were only seen as being of marginal importance by then for the majority of respondents. However, there was also strong evidence that employees will increasingly be equipped with a number of devices. These figures are supported by IBRS’s own research in Australia which has found a growing trend towards key executives carrying up to three distinct mobility products.

Despite this proliferation of mobility functionality, Freeform reported that IT executives felt that the products were still immature in a number of areas. There were particular concerns around the lack of device management tools, especially those capable of supporting multiple mobile products. It seems that while systems management tools on the desktop have matured considerably in recent years they are still almost nascent on devices like the smart phone and the iPad.

This issue is reflected in the strong call for improved data synchronisation functionality across mobility devices. It is common to hear IS executives complain that Apple, for example, which has created such phenomenally popular consumer devices as the iPhone and the iPad, has a naivety, or perhaps even a disinterest, in satisfying the requirements of the enterprise. Many IT executives lament the fact that they appear to be bringing a consumer mindset to the requirements of a corporation. Data synchronisation might be a “nice to have” for a consumer but it is essential for an executive.

Aside from the systems management aspect of mobility, it is apparent that the increasing consumerisation of IT has confronted CIOs with other challenges. Another piece of research by Freeform Dynamics in 2010 examined what internal practicalities around mobility presented the most challenges to them. Top of this list, and nominated by over 60% of respondents, was the challenge of dealing with user expectations. One only has to look at the queues of consumers, and in particular Gen Y people, who are prepared to line up outside a store overnight to get the latest release of a smart phone or a tablet to appreciate the strong demands that are likely to be made on corporate IT budgets to acquire these products.

The other major challenge highlighted were issues with integrating mobility equipment to corporate applications. Nearly 60% of respondents reported difficulties in this area. It seems that while mobility advocates have long trumpeted the ability to work anywhere or anytime it seems that for many this will only apply if you using the technology for email and telephony. Perhaps this difficulty is heightened by the inadequacy of synchronisation functionality.

Nevertheless, it is security that has long been perceived as the Achilles heel with mobility. How do you safeguard corporate data when you leave the organisation’s premises? The proliferation of mobile devices and form factors obviously has the potential to exacerbate this problem. The Freeform study asked CIOs to identify where they thought security needed to be enhanced in mobility. Top of the list was a call for better security to be built in to the devices. This includes features such as stronger access control and data encryption capabilities. There was also an appreciation that security policies needed to be consistent between mobile and static devices while others highlighted the need to consider what is safe when a device attempts to connect to a corporate network, especially when this is done via a public network.

However, perhaps the biggest issue about security is the one that seems to be looming on the horizon. With the increasing consumerisation of IT many staff are arguing for what is termed “bring your own computing” or BYO. Their argument is that the devices they use at home are superior to what is provided to them in the office. Moreover, having to handle both a personal and business device is likely to lead to a fragmentation of data between the various pieces of equipment making it harder to locate vital information. As such, they argue it will make more sense all round to subsidise staff for the use of their own equipment.

The Freeform study also examined this question. 25% of respondents reported half of their employees were using personal equipment which probably shows that BYO computing is still in its infancy. However, the findings also recorded a number of concerns from IT executives with this trend. In particular, they were worried about important corporate information residing on insecure machines that may be left lying around at home. Nevertheless, most acknowledged their concerns reflected an immaturity in the BYO approach and expected this trend to gain weight as better work practices and disciplines were established around it.

BYO though does go to the heart of the mobility promise. This is the opportunity to work anywhere, anytime. It is clear that more and more employees see such a possibility offers them the real ability to strike an effective work life balance while also enabling them to be judged more on the outputs they deliver rather than their visibility around the office. As such, demands for improved mobility functionality are probably only going to increase. Who knows then how far mobility may take us. Will most of us end up as totally mobile employees? If so, could the concept of the office as a central working place be relegated to a thing of the past?

Ducks talking to chickens

2011-06-30T15:55:00.001+10:00

One of my wife’s favourite sayings is “ducks talking to chickens”. She uses it to describe the inability of one group of people to communicate with another. My wife is Chinese and I think the origins of the saying were in the 1980s when China was opening up to the world. Misunderstandings between the Chinese and foreign tourists were frequent as each realised the other had a different view of the world to their own. The conversation could be in English but the interpretation made by each party could be wildly different.

The first time I heard my wife use this saying was when she gave it to her boss. She works in the finance department of a large global retailer and she was describing the inability of some in the finance department to communicate with executives in other parts of the business. She realised that some of her less experienced colleagues had an inability to explain their actions and requests in a way that could be understood by someone who was not working in finance.

There is no doubt IT is an industry that certainly possesses quite a few people who could be described as “uncommunicative ducks”. Initially, I think this was done by design. These were the times when IT was overseen by people in white lab coats who worked in a place called the data centre where only a privileged few were allowed to tread. The mystery was compounded by the presence of a glass window which allowed people to see in to a world where they could never go. By talking about things that were not understandable to others, IT built up an illusion that it was something complex that was best left to the experts. The fact that these experts were quite well paid only added to the desire of the IT industry to keep itself above the hoi-polloi of the rest of the business.

However, as IT has become increasingly mainstream and consumerised it is clear that many in the industry have failed to understand the impact of the transition that IT has made. With IT being increasingly at the epicentre of the operations of most organisations any business change always has an IT consequence. Executives need to understand the impact of these changes and getting back incomprehensible or irrelevant answers from staff in the IT department is clearly exasperating for them.

This frustration is, I believe, one of the main drivers towards the current moves to cloud computing. Moreover, I believe this has been part of a long term trend. It follows a pursuit that began with outsourcing in the nineties and offshoring in the noughties. I contend that many business executives have long held a desire to rid themselves of the baggage of an operationally focused IT department. It costs a motza and the returns have been patchy. In fact, a COO at a large Australian insurance company once told me that after real estate and wages IT was the third major expense on the corporate balance sheet. The business is utterly dependent on IT. Yet many of those working in it seem to have no appreciation of what they can do to enhance the business that pays their wages.

It stands to reason that any executive worth their salt needs to know how the organisation can better leverage its investment in IT. They clearly want to talk to people who understand the challenges the organisation faces and who are proactive in promoting ideas and suggestions of how these challenges can be better addressed. What they don’t want is to talk to people who see their sole purpose in life is to keep the IT trains in the business running.

Several CIOs have recently told me that they think this problem is getting worse. In particular, they lament the business naivety of the recent graduates they hire. They find them obsessed with technology but unable to engage with others in the business to determine their requirements. One CIO though wondered if this had always been the case. He thought most of us usually only learn on the job. How then can a CIO help the business literacy of their IT department?

For starters, I believe there are some small things that a CIO can do in this regard. In particular, the CIO could begin by improving the level of communication of their IT staff. A simple first step would be to name equipment by the function that it performs rather than letters or numbers. The email server is down highlights the impact of the problem. Server 25 is offline doesn’t quite make the same impression. In addition, I think new recruits to the IT department should be put through some rudimentary course in public speaking. This would give them insights in how to better communicate with others. Speaking as someone who has been a Toastmaster for over 25 years, I would suggest a CIO encourages their reports to join a local Toastmasters club. I am sure many would find it an inexpensive way for their staff to become competent communicators.

In addition, I think it is important for the CIO to walk the talk. The CIO should be the person who gathers data on business challenges, strategies and objectives and who feeds this information back to their team. Their business focus will be seen by others in the language they speak, the magazines they read and the seminars they attend. All of these can be, and should be, a reflection of what they see as important for the IT department. Not only will this focus enhance their dialogue with their business counterparts but also it will help elevate the overall thinking of their IT department.

However, I think the best thing a CIO can do to elevate their IT department is to free it from the operational baggage. There has been a lot of discussion in the IT press about cloud computing, though it is quite hard to find actual IT departments that have made serious commitments to going down this path. Yet while it might not be happening now in earnest I can see something inevitable about cloud computing as the IT delivery model for the future. It delegates responsibility for IT infrastructure away from the internal IT department and ensures the remaining staff need not concern themselves with the business’s technology plumbing. Instead they must think about how IT can deliver competitive advantage to their organisation. In other words I think cloud computing has the capacity to free the IT department from its operational chains to enable it to take a more strategic perspective.

This, I believe, is the language that business executives want to hear from their IT department. IT can be a huge catalyst for change. It has the potential to disrupt and destroy long established working practices. Business executives know they need to be on top or ahead of these trends. To do this they need an IT department that sees its role as strategic rather than operational. When this happens I have no doubt that the ducks and chickens of business will be talking the same language.

What is the ROI on a DR plan?

2011-05-27T22:52:00.000+10:00

We are all lucky to be alive. According to the US based preacher Harold Camping the world was meant to have ended on May 21st 2011. Mercifully, the divine disaster recovery plan must have kicked in. However, could we be so lucky in IT? We all know that IT systems lie at the epicentre of our businesses. They are the conduit through which our company conducts its operations. Their availability is integral to the effectiveness of the workforce. Yet, despite this dependence what is the true financial impact if they are unavailable? In other words how can you cost justify an investment in DR and BCP functionality to ensure that the effects of any malfunction in the IT environment are minimised.

This is the question that the American based research company The Aberdeen Group attempted to answer in a study it conducted last year in over 100 organisations that had a formal Disaster Recovery (DR) program. Aberdeen’s conclusion was that the cost of any business interruption event was a direct correlation to the effectiveness of the DR/BCP environment. Best in class organisations had on average fewer disruptions which were cheaper to rectify. On the other hand, laggards had more disruptions which cost their business on average nearly $3 million a year.

Aberdeen ranked organisations by the number of disruptions they recorded each year, the time it took to recover from these disruptions and how close the IT department was to meeting its SLAs with the business over data availability. Best in class businesses recorded fewer than 1 business interruptions in the last 12 months from which they required less than an hour to recover. In so doing they were able to meet 95% of their organisation’s data availability SLAs over the previous 12 months. Laggards on the other hand didn’t know or measure how well they met their business data availability measures. Perhaps this was fortuitous as they averaged more than 2 business disruptions over this period which took five hours recovery time.

Aberdeen attributed the success of the best in class businesses to a number of attributes. Firstly, there was an appreciation of the impact of any business interruption. Next these organisations had a back up and recovery strategy for each critical business element and were able to replicate their infrastructure in remote locations. In addition, DR was the responsibility of a cross-functional team who utilised a documented DR plan. This team reported to an executive champion who was incentivised to reduce downtime. Furthermore, the DR plan was updated regularly to reflect any changes in the corporate environment. Aberdeen also identified some of the tactics and tools that best in class DR businesses used. Some that are noteworthy include: the use of virtualisation; the engagement of an external consultant to provide a broader perspective to DR needs, the ability to measure the cost of any downtime and, finally, testing regularly a number of DR scenarios.

In contrasting the three groups of businesses, (i.e. best-in-class, industry average and laggards), Aberdeen identified four of the biggest differences between them. The most noticeable of these was having a senior manager accountable for DR performance. Almost every one of the best-in-class organisations had such an executive assigned compared with only 27% for the laggards. Then it was interesting to note the difference between the best performers and the rest in terms of establishing cross-functional teams with responsibility for DR. The industry average group actually trailed the laggards in this regard. However, this was still quite a bit less than half of such respondents. In contrast 78% of the best-in-class businesses had set up such a team. Other areas where these best performers were distinguished from their rivals was in the area of staff training on DR policies and the regular testing of different DR scenarios.

For those wishing to aspire to the best performers in the area of DR and BCP Aberdeen make a number of recommendations in their report. In particular, they believe it is essential to measure the financial impact of any downtime in your organisation. In many ways this reminds me of the advice an earlier Coalface speaker gave at a session last August when he stressed the importance of never wasting a crisis. These crisis’s give you the ammunition to outline the potential ROI of a business case for better DR.

Aberdeen’s other suggestions are to formalise a plan that emanates from the executive down and which is regularly updated as the business changes. They also stress the need to test this plan regularly to avoid any unexpected surprise omissions in a real life crisis and to invest in duplicate equipment and image-based backup solutions to accelerate the recovery speed.

In conclusion, one of the learnings I take away from this case study is how the IT industry has grown in its capability in the area of Disaster Recovery & BCP. For a long time it seemed that these were just terms for back up and recovery. Then in the 1990s came the concept of mirrored disks, replication and data snapshots. However, while this satisfied the needs for back-up the challenge then became how quickly could you recover from these back-ups to become operational again. As such, this need led to developments with clustered data centres running in active/passive and, more progressively, active/active mode so applications ran simultaneously in different locations. Therefore, it became easy to fall back to one of these environments if there was a problem with the other one.

The goal though for many businesses remains one of ensuring continuous availability. In such an environment there is no downtime and no user is inconvenienced and unable to do their job. Recent high profile examples in Australia highlight the IT industry is not there yet. However, we should not forget how far we have come in the DR/BCP journey in a comparatively short period of time. With this level of progress the goal of being able to ensure continuous availability is something that we are probably likely to see attainable within the next decade.

Back up and running

2011-04-30T23:26:00.003+10:00

I blame Virgin. Up until late last year everything in IT seemed honky dory. However, ever since the Virgin reservation system went belly-up for a few days late last year there seems to have been a succession of IT failures that have caught the attention of the mainstream press. ATM’s have either been offline in major banks or else they have permitted unauthorised withdrawals. Elsewhere a financial institution in Queensland was off air for several days in January when both its production and back up data centres were affected by the Queensland floods. Yet to the layman all this seems inconceivable.

IT is at the epicentre of most organisations today. If your IT is down then so is your business. It clearly is a matter that regulators have recognised. Organisations like the Australian Prudential Regulatory Authority (APRA) certify the operational procedures of Australian financial institutions and one area they pay particular attention to are the disaster recovery procedures. They do this because they recognise that the integrity of any finance company is closely aligned with the robustness of its IT operations. I suspect, for similar reasons, this is why disaster recovery arrangements are a key element of SOX compliance. Similarly, I know disaster recovery is an area covered by the emerging IT governance frameworks like ISO 38001. Yet, why, with all this focus on compliance in recent years, have these IT disasters eventuated?

My colleague Kevin McIsaac eloquently summed it up for me the other day. He regarded disaster recovery as a no win topic for most IT executives. Like other security expenditure such as insurance it is a grudge investment. You do it because you have to but you hope you never have to use it. As such, there can be a tendency in even the best businesses to under invest in this area. The business is not enthused about it because they question how expenditure here will help the bottom line. IT executives are loath to highlight deficiencies here because they know they will only get lukewarm support from the business and they have other things to worry about. As such, Kevin believed many organisations took a wing and a prayer attitude to disaster recovery.

Disaster recovery will be the topic for the next Coalface session. The presenter will be the General Manager of IT at a second tier bank. One Saturday afternoon four years ago an electrician who was working to increase the capacity of the company’s data centre inadvertently plugged the wrong device in to a socket. In so doing he fused the electrics and plunged the data centre in to darkness. Pretty soon the room was full of smoke. The IT executive now had a golden opportunity to activate the company’s rigorously tested, thoroughly documented, independently audited, regulatory compliant, disaster recovery (DR) and business continuity (BCP) plans. He confidently reported to his management that he expected things would be back to normal in about four hours. Seventeen hours later, as Saturday evening rolled in to Sunday morning, he began to understand the deficiencies in these arrangements.

While the IT team eventually got the production data centre back up and running it was clear that the episode could easily have been a disaster. The following Monday the executive reported his concerns to his CEO who immediately wrote him a cheque for several million dollars and gave him a mandate to fix it. The CEO had done a rough, back of the envelope, calculation of just how much the unavailability of the IT systems for several days would cost the organisation. He realised that it would be foolhardy not to address these deficiencies in the DR arrangements.

Since 2007 the IT executive has been diligently improving the IT infrastructure in the business to enhance the effectiveness of DR arrangements. Moreover, he has engaged external consultants to help him document the necessary processes, and the personal who are responsible in each of these processes, on an easily read A3 document which can act as a key reference document in an emergency. One of the lessons the company had learned from its disaster in 2007 was that a 250 page detailed disaster recovery plan is not much use in a real life crisis. More recently, he has evolved his operations to an active-active arrangement across two remote datacentres which includes the ability to cluster a production database across the two data centres and concurrently write transactional data at both sites while retaining full data consistency.

I think he has a great story to tell. Yet I have to say I am putting on this session with some trepidation. I have quite a bit of interest from a number of members. Some have told me that they realise their company needs to do more in the area of DR, something that is highlighted by the fact that it often takes them two weeks to prepare for A DR test. Yet several other members have been quite dismissive of this topic as a session. They have told me they think their disaster arrangements are tested frequently and are well understood. They regard them as a strong point in their IT operations. As such, they doubt whether they can learn anything from someone else. Moreover, they believe the problems experienced by the Bank in question are a reflection that its DR arrangements were inadequate in the first place.

Nevertheless, in the balance of things I have decided to use this case study as the next Coalface session. I believe the growing number of high profile and prestigious organisations that have experienced significant issues with their DR and BCP plans in recent months is evidence that more needs to be done in this area. As such, I felt that the chance to hear from a local counterpart who has had to address a near death experience with DR strikes me as an invaluable learning experience for others and one that is very much in keeping with the ethos behind The Coalface Community.

However, there was also a personal factor in this. Last weekend I had my own near death experience. Driving on the wide suburban streets of Charters Towers in outback Queensland I, inadvertently, missed a STOP sign and ploughed head long in to a car on the primary road. Thanks to modern safety standards in cars my brother and I and the lady I struck walked away unharmed from what was an horrific accident. For me the episode was both a humiliating experience, given my own incompetence put three people’s lives at risk, but, perhaps more importantly, a wake up call. Never again will I deride the importance of seat belts and air bags in cars. I’m sure they saved my life. Therefore, I suppose I’m living evidence that you need to live through a potential disaster before you truly appreciate the safeguards you need to apply.

Wise counsel

2011-03-17T00:15:00.001+11:00

Recently I had the good fortune to spend a couple of days in the company of one of Australia’s foremost CIOs. This is a person who has spent over 35 years in IT including a stint working as a management consultant in America. Since the late 1990’s he has been a CIO in three of Australia’s most prestigious organisations. He now runs a department with 900 staff. The reason we were together was that he presented at the recent Coalface events in Sydney and Melbourne on how he had gone about transforming the IT operations in his organisation to enable it to facilitate a major business transformation.

What I really enjoyed about our time together was that I was dealing with someone whose wisdom about IT had come from practical experience. These experiences had given him insights on what was really important for a CIO and where he should focus his energies. He also highlighted tactics he has applied to deal with the challenges that confront a CIO. However, what made my time with this CIO so delightful was the fact that despite all his achievements in his career he was totally unassuming. Right now he is half way through a multi-million dollar project to overhaul his IT architecture. I am sure he had quite a number of pressing matters calling for his attention. Yet he willingly volunteered to take time out to talk to his peers.

The first thing I picked up from him was the importance of developing an effective team around the CIO. In his case, with a staff of over 900, he had 50 direct reports. However, he did not see his role as one of micro-managing them. Instead he believed his task was to hire effective people and to empower them to deliver. Of course he recognised that the buck stopped with him. As such, there was no way he could abdicate responsibility, especially on a project of this magnitude. However, rather than telling people what to do he choose to monitor how they were performing through the regular staff meetings he held with his team.

This reasoning lay behind his decision to eschew comprehensive outsourcing. He had learned from bitter past experience that outsourcing could leave the CIO holding the baby without control of the resources needed to fix a problem. As such, he had determined that whenever external agencies were engaged they must be beholden to the CIO. This meant that while they could oversee an element of an IT operation or service delivery these external personnel had to answer to him.

Another area where he had a strong focus was on understanding the skill sets the IT department needed and then recruiting to ensure these skill sets were at his disposal. He saw that any change management task required people with certain attributes to make that change happen. In his case these included skills like enterprise architecture, major project management or SAP implementation experience. In a competitive hiring market these skills were usually in short supply. As such, he applied KPIs to his recruitment agencies. He ranked them by the calibre of candidates they put forward for positions within his department. Three inappropriate candidates and the recruitment agency was relegated down the list. Those at the top of the list had the first opportunity to fill any vacancy he had.

However, while he didn’t see his job as one of deep technical understanding or knowing the minutiae of any project he very much saw his job as one of effectively communicating with his organisations executive team. He placed particular importance on explaining the complexities of the IT overhaul in layman’s terms. For example, he used the differences between Lego and Duplo as a way of describing the challenges of integrating different systems. He also drew one page diagrams which pictorially showed what needed to be done and the progress the department was making towards these goals. He regularly updated these to show the steps forward that had been made.

He also had an interesting approach to winning the support of key executives. In his case the CEO was the sponsor behind the transformation project. While he reported to the CEO he also appreciated that he was competing for that person’s time. Moreover, when he joined the company in 2006 the CEO had been at the helm for 15 years. He realised that he had to quickly win this person’s trust and support. His approach had been to identify the trusted advisors of the CEO. These people would be easier to reach. Furthermore, if he could win them over they, in turn, would influence the CEO.

In many ways this typified his approach to the role of CIO. If thirty five years in IT has taught him anything it was that the industry is all about people. He didn’t strike me as someone over enamoured with technology. Our discussions weren’t punctuated by excited thoughts about how some new technology or other was a radical breakthrough. If he had an iPad I never saw it. The words cloud computing never came up once in our discussions. However, there was a lot of talk about things like needing to buy the pizzas when his team was working long hours on a new project or taking time out with his department to do team building activities to help generate an esprit de corps.

Every three years the Standish Group publish data about the success rates for IT projects. They make for sobering reading. The latest data was published in 2008 and revealed that only around 35% of IT projects succeed. In Standish’s terms this equates to them being delivered on time, on budget and with all the promised functionality. This means that 65% of the executives who sign off IT projects end up disappointed. In addition, Standish’s studies show that the smaller an IT project is in terms of time, personnel and monies the more likely it is to succeed. This CIO was doing almost the exact opposite. The IT transformation project will take around seven years. It involves hundreds of people and is expected to cost over $500 million. Yet it has been going four years already and the achievements to date are impressive. Certainly, for such a high profile project there has been nothing calamitous to report.

When we were relaxing after the events I commented how appreciative I was that this CIO had given so generously of his time to support The Coalface Community. He told me he had done so because the IT industry had been good to him and he now felt it was time to put something back. The audience certainly felt he did rating his presentations very highly. Moreover, if any of them take away just a portion of the ideas he articulated then I am sure he will certainly have helped improve, at least in Australia, the delivery performance of IT in business.

The morning after the night before

2011-02-28T20:56:00.004+11:00

I’m afraid to say it but I think the IT industry in recent years has been drunk. Unfortunately, the source of our inebriation has not been a Grange Hermitage, a Laphroaig whiskey, a Moet champagne or even a boutique beer. Instead, I believe that since 2004 the IT industry has been intoxicated by an article that appeared in Harvard Business Review in 2003. I think ever since then much of the thinking about IT service delivery has been clouded by this article.

The discourse from which the IT industry suffers its hangover was the Nicholas Carr essay titled ‘IT Doesn’t Matter’. At the time this set off a veritable bush fire of a debate in IT circles about how organisations should invest in technology. At the heart of Carr’s article was the contention that IT’s potential for competitive advantage was temporary. For example he believed that the first bank to introduce an Internet banking facility had a competitive advantage. However, Carr argued that it was easy for the Bank’s competitors to see what it had done and emulate it. As such, he saw that the competitive advantage that the first bank had gained was transient.

Carr argued that these circumstances mandated the need for organisations to take a conservative approach to their technology investments. He saw that those who went first in implementing some new IT functionality usually bore a much higher risk. They needed to iron out bugs, develop fresh operating procedures from scratch, endure the change resistance from affected staff and face the prospect that the investment might fail. Those that followed did so in the knowledge that at least the functionality had been made to work elsewhere.

However, the part of Carr’s article that has most affected the IT industry has been his contention that if IT did not offer a competitive advantage then it should be viewed as a utility. Carr argued that the goal with most utility services was to get them as cheaply as possible. He advised businesses to take a conservative approach to IT investments. He saw that by buying mature technology they would get the most bang for their IT buck. He also advocated the mantras of rationalisation and standardisation as a way of eliminating waste.

If you think about it his arguments have heavily influenced IT thinking over the latter years of the last decade. This has been a time when a focus on ITIL and service management has been pervasive. Much greater focus was given to operating frameworks like governance models and project management offices. Moreover, this has been an era when standardised and integrated systems predominated. Furthermore, this was followed by the consolidation that was facilitated by virtualisation, much of which was driven by a recognition of the low levels of asset utilisation in many IT departments.

Don’t get me wrong. I think much of these developments have been very beneficial for most IT departments. They have imposed a much greater rigour on those working in this industry. We all now know the world doesn’t owe us a living. There is much greater focus on the business outcomes that have been realised by the monies spent on IT. These developments have ensured a much greater clarity in the rationale behind an IT investment and much greater scrutiny of the resulting projects.

However, this focus has also given rise to the command and control IT department. These are the ones where consumers can have any colour they like as long as it’s black. This does make sense. Eliminate variety and the cost to produce and support is much lower. The factory automation of the twentieth century taught us that lesson. Unfortunately, this era coincided with the emergence of the entry in to the work force of the digital natives. These were the children for whom much of their recreation revolved around technology. As a result, they didn’t take kindly to being shoe horned in to corporate technology solutions that were inferior ro what they used at home.

However, I think a more important result of the command and control IT department was that it created an attitude where IT staff saw the problems before they saw the opportunities. A classic case in point was the recent use of Twitter by the Queensland Police. Traditionally, emergency services have relied on local radio stations and newspapers to inform citizens who were in the path of floodwaters or bush fires. This though usually entails a delay between a warning message being issued and it being acted upon. In the inquest in to the recent Black Saturday bush fires in Victoria this was one of the lessons that was highlighted. Therefore, the Queensland Police Media Unit, (not its IT department), decided to trial social networking tools like Twitter and Facebook as a way to keep people informed. The results were extremely positive. Yet a command and control IT department would probably have been more worried about “inappropriate use of Twitter”. An innovative one would argue that in the balance of things saving a life in the Lockyer valley was more important than the danger posed by an inappropriate Tweet about an attractive Policewoman.

The dialogue I am currently having with CIOs increasingly revolves around what they need to do to turn around this state of affairs. More and more I get the impression that CIOs recognise it is futile for them to spend inordinate amounts of their time to try and be some sort of modern day equivalent to a Spanish Inquisition for computer orthodoxy. Instead they see that what business wants from its IT department is for it to be much more assertive about promoting ways that technology can enhance the processes that underpin the business. I equate this thinking to some sort of corporate painter painting the business landscapes of the future. .

However, in order to do that we need to find some cure for the hangover. An inebriated mind is usually one that is dulled. Yet to be a painter the mind needs to be open to possibilities. As such, I think we need to recognise that while much of the work we have done in IT over the last decade has improved IT service delivery it is not an end in itself because one thing we have definitely learned over this period is that IT really does matter. All CIOs need to do is show the business how!

Painters and Policeman

2011-01-28T16:44:00.007+11:00

One of the things that I really enjoy about running The Coalface Community is the insight it gives me in to what is top of mind for CIOs at a particular moment. It can be uncanny. I can organise a group of meetings with a number of CIOs and then find that a particular topic keeps getting raised in each of these separate meetings. It can almost feel like everyone has got together before the meetings to compare notes. It can seem as if everyone in the industry is working for the same company or the same executive. Moreover, these issues are seldom the things that the IT press are writing about.

I’ve just had one such experience. Last week I had ten meetings with IT executives in a diverse group of companies. These ranged from financial services, the public sector, a major distribution company and an industry association. Yet, in their own way, each of these people described a pretty similar challenge that faced them. They all recognised that they needed to change the focus of their IT department away from being a technology policeman and more towards a painter of corporate possibilities. As I heard them I recognised they were all saying that the overriding focus of IT on operational efficiency, which has dominated the thinking for much of the Noughties, has just about done its course.

In my mind much of the focus on operational efficiency was a hangover from one of the most influential recent articles on IT, Nicholas Carr’s IT Doesn’t Matter’ article which appeared in Harvard Business Review around mid 2003. In it Carr argued that IT was primarily a utility within most businesses and its potential for strategic transformation was largely transient. As such, Carr recommended that the goal for most organisations with technology should be to take a conservative approach to investments and seek to deliver it for least cost.

Coinciding with an economic downturn in the US the article helped unleash a strong focus in IT over recent times on areas like standardisation, asset utilisation, (and by association virtualisation), governance, ITIL/process management, 6th Sigma and lean service delivery. This has very much been the IT era of command and control. The CIO and their team tell the users what to buy and closely scrutinise the costs to deliver. Yet almost unnoticed by the IT department this was also the era of the digital native. In society at large, IT was now very much mainstream. Consumers were as important a market for technology as corporations. Frequently, these users had better IT equipment at home than in the office. Not surprisingly, they were increasingly questioning what value their IT department bought by dictating what they could use.

To identify a problem is one thing. To do something about it is quite another. My discussions identified the approaches these CIOs were taking to transform the IT department. Above all what they showed was that such a transformation is a multi-faceted challenge. I choose my words carefully, and I say them with some trepidation, but I suspect this is what is known as a paradigm shift!

For the CIO in the Financial Services her task was to change the 60 staff in her IT team from being order takers to the proponents of the new ideas. Her focus had been on establishing a suggestion board where staff could suggest potential projects that the team could undertake. She would then get her team to vote on which of these suggestions they thought had the most merit. In so doing she wanted to encourage her team to think beyond the technical complexities of their work to focus more on how IT could make the organisation more effective.

I then met a CIO working for a high profile company that distributed expensive luxury goods across Australia and New Zealand. He supported a number of autonomous operating units which had different priorities. His day-to-day challenge was portfolio management. However, underneath this was a realisation that much of the bread and butter activities of the IT department brought little value to the business. Much of this was determining which equipment to standardise on and policing telecom usage all of which resulted in friction between IT and the business. He felt that it would be better to hand these responsibilities, and the associated budget that came with them, back to the business. Let them choose the laptop, the tablet, the cell phone and the call plan they want and let them pay and manage for them out of their own budget. The IT department would then be freed from these operational tasks and better able to use their time proposing projects where IT could bring value to the business.

From this discussion I went to meet a CIO running one of the largest IT departments in the country. His challenge is that the underlying business model of his organisation is under threat and the fragmented nature of IT is seen by the business as a major impediment to the organisation’s ability to respond. However, this CIO works in the public sector. As such, he has to transform his IT department with a complete inability to retrench any of his staff, even if their skill sets are obsolete! For him the task is one of communication. How do you keep key stakeholders in such a transformation informed and supportive!

Finally, I had two discussions on the potential for social media to enhance dialogue between an organisation and its key stakeholders. Interestingly both centred on how social media could enhance the ability of an emergency service to reach people likely to be affected by a natural disaster like a flood or a bush fire. Traditional, emergency service personnel use local radio or newspapers to reach these people. However, when circumstances can change rapidly these mediums are not that affective. Instead, when 90% of Australians are purported to own a mobile phone would Twitter or Facebook messages, sent via SMS, not be a better way to reach people. I was told that the Queensland Police set up a Twitter account during the recent floods which attracted over ten thousand followers. Moreover, the online feedback from those who had used these services has been extremely complimentary.

The real irony though was that these ideas for the deployment of social media had come not from the IT department but from the media units in the two emergency service organisations. The reality is that a command and control IT department would probably be too concerned about the possibility that a social networking site could be used to send an inappropriate remark about an attractive new policewoman rather than advocating that it might save a life in a flood. Those I met all seemed to agree. IT Departments needed to be much more focused on the potential of technology rather than seeking to avoid the problems it might cause.

For my part I left with a very positive feeling from these discussions. This seems a very positive time to be in IT. The sentiment from business is that IT is more than a mere utility. There is recognition that not only is it integral to the way the business works but also that its creative application can dramatically change the effectiveness of that business. As such, for some one charged with organising events where IT executives recount their implementation experiences, I suspect there are likely to be many interesting case studies available for future Coalface Community sessions.

Don't let history repeat itself

2010-12-31T18:01:00.004+11:00

For a young industry with comparatively little history it is amazing how often the lessons of the past get repeated in ICT. It is almost as if many IT executives have a death wish. You see them embark and continue on journeys where all the evidence is that it will end in tears and acrimony. Yet somehow they seem to believe that for them things will turn out differently. This is despite the fact they know that if and when things turn to custard it will always be known as a failed IT project, not a business one.

From my thirty years in the ICT industry I can identify at least four examples of this phenomenon. My favourite example where IT departments set themselves up for failure is implementing any software product that has a .0 in the release number. Years and years of IT experience should tell anyone in this industry that the first release of any piece of software always has a bug. Why should your users have the frustrations of being the first to experience this bug, especially if you have paid for the software? You may well have users clamouring for some feature in the software but the grief you will encounter if the new release is unreliable will be much greater. The bugs will hit the users when they are dealing with clients and new sales opportunities. They may not thank you for it at the time but taking a conservative approach to software upgrades invariably means that your operational systems will be stable and the users can get on with their jobs unimpeded by any software glitches.

My other examples revolve around project management which I believe is probably the most critical requirement for the CIO role. The first of these is where the end users continually fail to turn up to the ICT project steering committee meetings. While the occasional nonattendance of key business executives is understandable their repeated absences is surely a sign that these personal have higher priorities on their agenda. Yet it is rare to find a CIO with the courage to then close down the project. Without the active involvement of impacted end users they must know it is unlikely the delivered systems will satisfactorily address their requirements. Furthermore, without this it is highly improbable that they will have any sense of ownership of the systems that get delivered. As such the CIOs will be setting themselves up for a failure that is likely to haunt them for many years to come as they end up supporting and modifying an unloved business system that no one embraces.

Despite this, it is common to find IT departments persevering with such projects. Somehow, I suspect, many CIOs seem to feel an obligation to carry on. They may think that given the money for the project has already been allocated and that there has been a significant investment of time on it this is what is expected of them. However, my observation from discussions with CEOs is that they would much prefer to have a CIO with the courage to stop such a project at such times than one who is willing to gamble ongoing resources for an outcome that is likely to be unsatisfactory.

In a similar vein another of the examples of where history repeats itself in the ICT industry is when CIOs persevere with a project after the key executive sponsor has left the organisation. All projects need a key executive sponsor if they are to succeed. This is the person who recognises the need for the work. This is the executive who convinces their peers to allocate money and people for the task. However, such executives usually have a personal commitment to the work that ensures they drive it towards the outcome they desire. Corporate history shows us that such commitment cannot be easily replicated by the person that replaces them. On the contrary, it is human nature to try and stamp your own mark on a new role you take on. This means, usually, you actively disown anything associated with your predecessor. At the very least CIOs should recognise that such a circumstance is a trigger to halt a project, at least until a new sponsor has accepted stewardship for the activity.

My final example of where CIOs fail to live and learn is in the area of change management. The empirical evidence from the track record of IT projects all points to the same conclusion. The bigger the project the more likely it is to fail. Nevertheless, there is a remarkable enthusiasm among many IT departments to bite off more change than they can chew. The Standish Group’s long-standing and continuing research highlights that the most successful IT projects take less than six months, involve less than six people and cost under $750,000. Why then do I keep reading about proposed multi-million dollar IT projects that are going to be delivered several years in to the future? Perhaps it’s just bravado. The growing popularity of Agile as a development methodology may well indicate that more and more IT departments are digesting the elephant of change in bite sized chunks. Yet I get the impression that the temptation to be a change hero for some CIOs is still far too strong.

A CEO once complained to me that the problem he experienced with CIOs was that they were too conciliatory to requests from the business. He said he would have much preferred an IT department that was much more willing to challenge any requests from end users rather than one who unwisely embarked on projects whose chances of success were slim. He argued that not only were money and time lost on such ventures but also there was an opportunity cost of missing out on other projects which could have been successful.

I know a common frustration for many CIOs is overcoming the poor perception of it held by many in the business. However, as the saying goes, “God helps those who help themselves” and that means CIOs need to be assertive about which projects they decide to support. If they don’t then they will end up finding out that the truth of another popular saying – “those that don’t learn the lessons of history end up repeating them”.

Cloudy with a little sunshine

2010-11-16T15:44:00.003+11:00

The IT industry has spent so much energy over the last couple of years talking about clouds you could be forgiven for thinking it might have usurped the role of the Bureau of Meteorology. Mind you given the Bureau’s track record for forecasting accuracy many in IT would probably feel quite at home there. Moreover, it seems there are just as many varieties of ICT clouds as there are meteorological ones.

A recent review of Cloud Computing by the UK based analyst firm Freeform Dynamics posed the question just what is cloud. Not surprisingly for the IT industry it reached the conclusion that the definition depended on just who was trying to sell you something. This answer though did highlight the versatility of the cloud approach. To some it is about delivering services over the Internet as and when they are needed. To others it is about utilising the Internet to harness external infrastructure such as servers and storage to compliment your own. This is extended by other proponents of cloud like Amazon who argue that it provides an opportunity for a CIO to provision infrastructure for short term or spasmodic needs such as application development. Then there are those who advocate that Cloud represents Software as a Service or SaaS which entails accessing external applications like Salesforce.com on a pay for use basis rather than licensing these applications internally. Finally, there are the Cloud supporters who argue that this represents a move to the IT data centre architecture of the future where no one owns anything.

In the uncertain post-GFC business world of today many of these arguments clearly resonate for many businesses, especially from a financial perspective. With IT typically the third biggest expenditure item in most corporate budgets, after staff and real-estate, it is a conspicuous cost that many executives probably feel needs to be better contained. In moving IT investment away from big ticket capital expenditure towards an incremental, pay as you go, approach Cloud clearly has appeal. This use of operating expenditure to recoup ICT costs also appears to offer a better way to attribute IT costs against the business units that are actually using the ICT services.

To many ICT executives this promised greater transparency in accounting for the IT budget clearly has appeal. However, many also recognise it has the opportunity to free many staff in the IT department from operational housekeeping so they can make a greater contribution to the strategic aspirations of their organisations. A Telstra/MIS Magazine study in 2008 of Software as a Service revealed that 45% of IT executive respondents were attracted to this approach as it freed them from the need to install and maintain software. Moreover, 37% of respondents to the survey also saw that SaaS would liberate them from the never-ending task of application upgrades. IT executives believed that these benefits would lead to cost savings.

However, the same survey also highlighted concerns that local IT executives had about going down this path. In particular, there were strong concerns about security and recognition that management of the corporate data was too important a task to leave to others. This no doubt reflects the fact that corporate data is probably a company’s greatest asset as well as the increasing privacy obligations being placed on businesses to safeguard the data details of their clients. Besides security the other issue the survey highlighted was a concern among IT executives that if there were no Internet service available many users would be left with an inability to access the applications through which they do their jobs.

Interestingly, these security concerns are supported two years later by the Ernst and Young 2010 Global Information Security Survey. One aspect of this study was devoted to issues around Cloud Computing and, in particular, respondents were asked to nominate what they saw as the security challenges of Cloud Computing. The findings revealed that the chief concern of IT executives with Cloud Computing was data leakages where confidential or sensitive data was forwarded to outside parties. There were also worries about an inability to track what happens to company data and fears that unauthorised parties would be able to access corporate information.

Nevertheless, despite these worries many ICT executives also realise that Cloud Computing is a phenomena that they cannot just ignore. Business demands greater transparency in where it spends its money. As such, all executives have a responsibility to be measured and creative in how they spend money. The days where large capital IT projects were the norm are probably numbered, particularly when the evidence is that many of the resulting IT assets are under-utilised. Moreover, the ability to access resources on an as needs basis and better attribute these expenses to the business unit accountable clearly has an appeal for CIOs subject to the relentless scrutiny of their peers as to why ICT budgets are so high.

Therefore, it seems that the decision for many IT executives is not whether they will deploy Cloud Computing but rather where they will do so. In this regard the thoughts of the US consultant Geoffrey Moore may be helpful. Moore believes that as a starting point in their Cloud Computing deliberations CIOs need to distinguish between whether an application is a core system or a context one. He classifies those as core as the ones that offer competitive differentiation and which are, typically, mission-critical. He regards context applications as usually internal ones that support business activities like Human Resources and Payroll.

In Moore’s mind the unavailability of a core mission critical application can threaten the viability of the organisation. As such, he advocates that these should always be run internally behind the organisation’s firewall. On the other hand he believes that anything context and non mission-critical should always be placed in the Cloud. However, he also recognises that there are occasions when a context application can be mission critical, (e.g. Payroll systems on pay day), and there are times when a core application is not mission-critical (e.g. many Business Intelligence systems). Moore believes that the job for CIOs debating the applicability of Cloud Computing is to focus their energies on determining if it makes sense to put core non mission-critical applications in the Cloud and whether it is better to run a context mission-critical application in-house.

In the end, though, perhaps the biggest question mark hanging over Cloud Computing is a philosophical one. It is human nature to trust what we can control. Cloud Computing entails delegating some of that control to someone else. Letting go is never easy but holding on is not always productive. Yet if organisations are going to be competitive CIOs clearly must help them by being more productive themselves. As such, ICT executives are probably likely to find, at least for the foreseeable future, that the IT industry is going to continue to outdo the Bureau of Meteorology when it comes to talking about the potential of clouds.

The sum of the parts

2010-10-22T05:50:00.004+11:00

Stoke City Football Club, I suspect, is not something that is likely to be of much interest to many who choose to read this blog. However, every league, in every sport, in every country has a Stoke City in their midst. This is a team that is always the bridesmaid and never the bride. This is a team which makes an art form of snatching defeat from the jaws of victory. This is a team that can only be supported by a true optimist, one who genuinely believes that Cinderella might actually go the ball. Mind you, after many years of suffering supporting Stoke City I’ve often wondered whether the real quality needed is not optimism but rather masochism.

Nevertheless, right now supporting Stoke City has been the easiest it’s been for over 30 years. They have a side that can more-or-less hold their own in the top football league in Britain. While they are unlikely to win trophies or league titles they now win or draw more games than they lose. For a team with limited resources this is no mean achievement. Much of the credit for this must go to the team manager, Tony Pulis. Over the past eight years Pulis has rescued Stoke City from the slippery slopes of imminent oblivion and laid solid team foundations. This very much augers well for the future for Stoke City aficionados like myself.

Why though do I choose to highlight the achievements of Tony Pulis in a blog dedicated to the IT industry? The reason I do is largely the result of a discussion I have just had with a Melbourne based CIO. This CIO works in financial services. His specific sector is pretty specialised and subject to repetitive changes in government regulations. As such, it really does not lend itself to package solutions. Like all its competitors, his organisation has elected to develop and maintain their business systems in-house. Moreover, the systems are extremely complex. The CIO estimated that he oversaw more than a million lines of code.

Our discussion revolved around application development but it had wider ramifications which is where I’ll bring in Mr Pulis. This organisation has been an extremely enthusiastic supporter of Agile programming. This is an approach to application development that revolves around small teams developing and delivering new functionality in short timeframes. This CIO spoke about his department having a fourteen day turnaround from the provision of user requirement specifications to having some working program.

There is a lot of research in to Agile programming that has some very encouraging findings. The evidence seems to be that it creates tangible application functionality in a shorter timeframe which encourages user involvement in application design and greater ownership from them when the systems are finally delivered. However, its success is very much dependent on the teamwork displayed by the Agile programmers who are creating the code.

This is where the CIO had his challenges. How do you reward the efforts of a team? How do you set KPIs for a team rather than an individual? Typically, performance reviews and metrics in modern organisations are done on an individual basis. In many ways individual responsibility is what modern capitalism is all about. Collective targets are seen as something of an anachronism that belonged in the failed economies that laid behind the former Iron Curtain.
However, modern sport shows that teamwork is a key component in the success of an organisation. Michael Jordan, the famous American basketball player, once remarked that “talent wins matches, teamwork wins championships”. In other words if a sports team is going to succeed it must harness the collective talents of all its members. This is especially the case for a team like Stoke City with limited resources. The only way it can compete with the big boys is to beat them on teamwork.

If the Stoke City Manager Tony Pulis has one key attribute it is the ability to get his players to work as a team. This is much easier said than done in the world of elite sport. Pulis is dealing with players with enormous egos. They are at the very top of their profession. Yet to succeed they must be willing to subjugate their egos for the benefit of the team as a whole. This will entail them being prepared to be dropped if they don’t have the attributes needed to overcome a particular opponent. It requires them to be prepared to keep going when things look too hard. Above all it requires them to help set up others who may end up getting the glory.

One particular teamwork challenge that faces Tony Pulis right now is how to find a role for probably the most skilful player he has in his squad. This player on his day is a match winner. However, he also has a tendency to run hot and cold. If he doesn’t perform in a team like Stoke he places a much greater burden on his colleagues. As such, Pulis has, of late, decided to leave him out. This approach is not particularly popular with the Stoke fans many of whom believe the team is losing the talents of one of their best players. However, Pulis probably feels a more consistent team player is more valuable to him than an erratic talent. He also may hope that his approach encourages the player in question to try and prove him wrong.

The challenges facing Tony Pulis today had a number of surprising similarities with those facing my CIO contact. He too has staff in the IT department who seem to believe they possess skill sets that give them certain privileges. If he panders to them he runs the risk of unsettling those in the department who are not complaining and pulling their weight. However, if he doesn’t pander to these petulant personnel he realises he could well lose key skills that may be difficult to replace. Agile compounds these challenges because it revolves around team collaboration.

The CIO would like to structure incentives and bonuses that recognise the team as a whole. He believes that this will encourage co-operation between his staff that will achieve better business outcomes from the application development groups. Yet he clearly finds that there are few precedents in the business for such an approach. It was clear that he is getting little help from his HR department in this matter.

I write this a few days before an upcoming match between Stoke City and Manchester United, probably the biggest team in English football. Right now there is turbulence in the Manchester United camp. Its star player, Wayne Rooney, has said he feels that his abilities are not being adequately compensated. He wants a transfer to another team. A team that is known as United has to live up to its name otherwise they might find that a solid team of battlers like Stoke City will bring them down. As you can appreciate, I live in hope!

Show us the money

2010-09-29T17:49:00.001+10:00

I have long believed that one of the joys about working in the IT industry is that there is always something new to learn. You can have an entrenched view that there is only one way to do something then, lo and behold, someone proposes an alternative approach. These new alternatives can be varied. They can be work practices, technology or even whether one tactic is right or wrong. Recently, I had just such a revelation.

For a long time I have held the view that one component of IT Best Practices is the need to establish some form of chargeback arrangement between IT and the business. I had seen the light in the logic of the argument that without some form of cost recovery mechanism for the delivery of IT services the perception was created in the minds of the end users that IT was free. As such, what was to stop them trying to get as much of it as they could? In such circumstances I could see that it would be next to impossible for a CIO to try and regulate end user demand. However, if their requests for service were accompanied by a bill perhaps then they would be better able to assess whether this request was really important or not.

However, at the first session of the newly established Coalface Community the speaker argued with conviction that her organisation had decided against the application of an IT chargeback model. This really surprised me as she headed up IT in one of Australia’s fastest growing financial services organisations. Moreover, her CEO was formerly the CIO in the business so I knew he would be well aware of the difficulties the IT department would face in trying to match the plethora of demands from the business with the funds allocated in the IT budget.

This CIO was equally surprised when she joined the business five years ago to find that the organisation had no chargeback model. She remarked that large swathes of her time at her previous employers seemed to have been spent either defining what the chargeback arrangements would be or defending the charges against an attack upon them by those who incurred them. Yet, despite regular reviews of whether the company needed to change its position, she has found that the absence of chargeback has not been a hindrance in her dealings with the business.

Increasingly her sentiments seemed to be shared by a number of others who question whether chargeback breeds an adversarial relationship between IT and the business. A fairly pedantic and zealous implementation can create a perception of unnecessary red tape and a suspicion that the IT department really should have better things to do with its time. If previously no cost recovery existed it can be very challenging to get an end user to now support the impost of a cost recovery arrangement for IT. Moreover, many IT costs are unavoidable for most business users so trying to charge them for incurring these expenses is seen by many as something akin to a tax. How, users might ask, does a chargeback arrangement on such services do anything to influence their consumption of IT.

Furthermore, if the goal of chargeback is to link consumption with cost it is a challenging task to determine just what costs have been incurred. Take, for example, the cost for providing an email service. The truth is that there is no easy way of capturing all the equipment utilised by a simple transaction like sending an email. Then there is the need to educate the business about the full extent of the costs of this equipment. All many users will see is an email client on their desktop. The servers, security software, networking equipment and storage required to underpin a fully functioning corporate email service lay largely hidden from view for most users. Airing these expenses for the first time is likely to come as a nasty shock to business executives, especially those more familiar with the relatively modest charges imposed by the telcos for Internet services to consumers.

Unfortunately, if this process is not handled well the implementation of a chargeback arrangement could become counter-productive. It may well encourage these users to shop around to compare prices. This could prove a huge and unnecessary distraction for a CIO as they try and explain why certain offerings may be more appropriate than others. The exercise may also create an impression in the minds of end users that IT may not have been assertive enough is organising corporate contracts, especially if a supplier sees value in creating some mischief with an aggressively priced lost leader.

The evidence seems to be that chargeback should not seek to be an exact science. Too much work is required to achieve that precision and even then the likelihood is that there will still be many imperfections in how costs are determined. Instead, consultants advise that really the aim should be to provide some general indication of where IT expenses are incurred. This indication then enables a CIO to show why an IT budget is the size it is and to reveal what impact any cuts to this budget might have on IT service delivery levels.

One CIO I have read about has even coined an interesting term to describe this approach. He argues that we should not be talking about chargeback which has implications of IT departments replenishing their coffers with the hard earned cash of their corporate comrades. Instead he prefers the term “showback” by which he is implying the aim is to show the business where their IT investments are going. He sees that this transparency will go a long way to highlighting how behaviour patterns by them influence the amount of money that the business needs to keep spending on IT.

Nevertheless, in the end, whatever the approach that is taken, I still believe that there is a need to try and establish some way of impressing on the business the financial consequences from their use of IT. With IT being at the heart of most organisations the task for most CIOs is deciding how and where to prioritise their investments. In reality these decisions must emanate from the business. However, the CIO probably has to be the catalyst in getting them to reach these decisions. In this regard showback, chargeback or whatever you call it definitely is a key components in helping these people with these choices.

Back to the future

2010-08-29T11:25:00.003+10:00

After 30 years in the IT industry I can well and truly say “I’ve seen it all before”. It is ironic that even in a fast paced innovative industry like IT the reality is that there really is nothing new under the sun. No where is this more evident than in that relentless conundrum of how best to structure IT service delivery? At the one extreme there are those who believe strongly that centralisation leads to standardisation and more effective cost control and support. On the other hand there are those who firmly believe that placing the IT assets closest to the business provides the organisation with the information necessary to empower local decision making. For much of IT’s existence there has been a tug of war between these two arguments.

In recent times the forces of economic rationalism have encouraged a growing trend in many businesses towards centralising the IT operations. However, the authors Quinn, Cooke and Kris in their book ‘Shared Services: mining for corporate gold’ argue that there are degrees to this centralisation. Their evidence is that about half the businesses that go down this path only get as far as the first stage, the physical centralisation of their IT services. More advanced organisations progress from here to foster a new “Shared Services” operation which brings together functions like IT, Finance and HR that are frequently duplicated across divisions, subsidiaries or operating units in order to offer these services more efficiently and at a lower cost to the rest of the business as a whole.

Typically, under this type of arrangement new governance arrangements have to be established. In particular, focus is given to performance metrics and to the task of cost recovery. Quinn, Cooke and Kris see this can evolve to a more commercial arrangement where the new Shared Services unit has to bid for the business against external suppliers ostensibly to offer the client the opportunity to select the most cost-effective solution. The final destination in the centralisation journey that they outline is where this business unit completely divorces from its original parent and becomes a separate entity competing against other service providers to win business from external clients. In Australia we have seen organisations like BHP and Qantas create such units from their IT departments. However, it is fair to say that neither was successful in the long-term.

When looking at what has motivated organisations to embark on the Shared Services journey a recent research study from Accenture, ‘Multi-function Shared Services’ (2008), shed some light. By far the dominant reason was the ability to deliver service at incrementally lower costs. Moreover, many see that this benefit will increase as the Shared Service arrangement grows because the operation will gain economies of scale benefits through leveraging the existing infrastructure investment to serve new clients or to deliver new services.

However, the Accenture research highlights another element in the motivation for implementing Shared Services. This is the expectation that it will help facilitate organisational change. The establishment of a Shared Service operation provides a business with the opportunity to re-engineer business processes and to redesign the IT architecture for the new entity. A side benefit of this is that these processes can become independent of specific equipment, applications and operating systems. As such, it can be easier in the future to change these processes again if business requirements dictate.

Another comparable benefit is that Shared Services can establish a consistency for a how a service is delivered in a diverse business. This uniformity can facilitate a pursuit towards best practice as it encourages an examination as to how these services can be streamlined to cut out unnecessary components. Moreover, at a more operational level, this uniformity enables staff to move easily between different divisions of the business since they already have an understanding of many of the common operating procedures.

While these were the objectives people sought from Shared Services the Accenture study revealed that these were also the outcomes. 80% of respondents to its study had achieved cost savings from this centralisation. 76% had been able to achieve economies of scale delivering new services over the existing infrastructure investment. More than half of the respondents also reported that they had progressed towards best practice and had found that Shared Services had helped their organisation respond better to change.

Yet if these encouraging outcomes are possible it begs the question why isn’t everyone creating a multi-function Shared Services department? The answer, as is almost always the case with IT, boils down to the challenge of change management. The Accenture research highlighted this in several ways. It asked respondents what they saw as the key challenges that confronted them in a path towards a multi-function Shared Services. The top two concerns were staff resistance to change and executive reluctance to relinquish control. Next were issues around trust and getting executives to think beyond their own silos to realise the potential of leveraging synergies with their organisational compatriots.

Not surprisingly these challenges proved all too real. Every respondent reported they had encountered change resistance from key stake holders affected by the establishment of a Shared Services operation. The same was true with the challenge of getting functional leaders to relinquish control to the Shared Services unit. In addition, the challenge of overcoming a lack of trust in the new unit was encountered by nearly 90% of research respondents.

Many of these challenges have proved the undoing of Shared Service implementations. As recently as June this year Anna Bligh, the Premier of Queensland, reported that her government would “abandon the one-size-fits all shared services model as the exclusive model for corporate services across the whole of Government”. The catalyst for the announcement was significant payroll problems in Queensland Health. Moreover, a report by the state’s Auditor-General highlighted that poor governance structures had contributed to the problems experienced by the State in its move to Shared Services.

Interestingly, the Queensland University of Technology could have perhaps helped the State government address some of these problems. It published a research report in 2006 which examined the lessons from Shared Service implementations. This report identified six key factors necessary for a successful shared service implementation which are: top management support (Shared Services crosses corporate silos); determining which services to include and exclude from the Shared Service arrangement (perhaps not payroll!); the importance of getting staff onside; the need to establish effective governance structures; balancing process redesign with reshaping staff roles and building a new culture.

In the end it seems that Shared Service is just another example of the old adage that IT would be really easy if it wasn’t for the people. It highlights that even the best logical arguments are undermined if the change management components are not adequately handled. This is a truism that most joining the IT industry discover in months rather than years. Yet, as the Queensland State government example demonstrates, it is still perplexing why so many IT projects overlook the fact that if they really want to be successful their real task is all about change management.

Cuckoo in the nest

2010-07-26T17:21:00.003+10:00

Cuckoos were one of the main items of discussion at a recent dinner meeting of my Toastmasters Club. One of the members had just seen a documentary on them and was marvelling at their ability to hoodwink other birds in to looking after their offspring. Apparently, cuckoos of various shapes, colours and sizes exist all over the world. As such, their distribution indicates that their modus operandi is a well-developed and highly successful tactic in the animal kingdom.

I mention cuckoos because I’m wondering whether Apple has taken a leaf out of their operational manual. Where once many organisations viewed Apple products as undesirable interlopers today their presence in the corporate world is not just accepted but almost positively embraced. Like the cuckoo it seems that Apple products have become ensconced in the corporate world without the support of the IT department who now, like the surrogate parents of the cuckoo, find themselves actively supporting this intruder.

I had first hand exposure to the growing presence of Apple in the enterprise on a visit to Melbourne last week. Over the three days I met with 15 different IT executives. Two of them bought iPads to the meetings while most of the others told me that their businesses had already acquired them. Given that the iPad was only released in Australia on May 28th, less than two months ago, this take up of a non-standard, unproven, new product is pretty impressive progress. Moreover, for Apple this acceptance compliments the increasing presence of the iPhone as the executive mobile email and smartphone of choice.

The primary reason most people I met gave me for the acquisition of the iPad was because of a request by board members for their board papers to be delivered on them. A recent article in The Australian highlighting the adoption of the iPad by South Australian Health Minister John Hill outlined why the iPad is an ideal tool for board and cabinet members. According to Hill the iPads capacity to “carry a whole lot of documents, which can be referred to portably and remotely is fantastic”. In this regard the iPad is more convenient and, probably, safer than reams and reams of paper.

What is interesting in this example is that the choice of technology platform has been made by the user rather than the IT department. Moreover, this is a technology platform that is essentially embryonic. It is hard to believe that Hill came across the iPad by chance. It is more likely that he has been drawn to investigate it because of the mainstream media attention given to it. Alternatively, he may have been an iPhone user who was selectively targeted by the Apple marketing machine. Whatever the circumstances his actions have probably ended in his organisation the long-accepted IT corporate strategy of a common or standard operating environment (SOE). When users are deciding the technology they will deploy it makes it hard for the IT department to argue that enforcing an SOE is in the best interests of the business.

This undermining of the acceptance of an SOE is a fairly recent phenomenon. As recently as a couple of years ago the need for an SOE was, more-or-less, unchallenged. Today there is an increasing view that such an approach is unenforceable. End users are not willing to accept that the tools of the white collar trade should be determined by IT Steering Committees or a product selection team. Instead they want to use at work the tools they use at home. In effect, individual consumers are determining what products will be adopted in the enterprise

Research published last month by IDG Research Services gave some insight in to this phenomenon. The study examined what it described as “user driven IT”. It discovered that in 66% of organisations the selection of which smartphone to deploy is either determined solely by the end user or else is a joint decision between the IT department and the user. For tablet PCs like the iPad this drops to 51% of organisations. Clearly then my recent experiences in Melbourne are increasingly part of a global movement. In fact another part of the IDG Research Services study found that 75% of those surveyed believed that there was an increasing trend to consider the input of users when determining corporate computing devices.

What challenges though does this present. One CIO I met recently in Sydney even went so far as to predict that these trends signalled the eventual demise of the CIO role and the formal IT department. His argument was that there is no real value-add in a CIO keeping the technology wheels of business running, especially if it means that the CIO finds themselves constantly trying to defend technology decisions made in the interests of standardisation and lower operating costs. As far as this CIO is concerned the reality is that today most end users have better technology in their homes rather than their offices. As such, many would prefer the business incorporate their home equipment rather than use what they see as an inferior product.

Nevertheless, there is another side to this coin. I find CIOs questioning whether Apple is well positioned to support the needs of the corporate world. The CIO predicting the demise of the CIO role told me that Apple required each iPhone to be registered with them separately. There was no enterprise support agreement available. Moreover, if the organisation wanted to write and run an application on the iPhone Apple advised that they first needed to vet the application and it could only be downloaded to the iPhone via iTunes. The CIO felt that while such an impost might be acceptable for an individual consumer it presented an unacceptable level of bureaucracy for a CIO in a large, fast-paced and dynamic organisation.

The other issue that is raised is one of security. The IDG study was sponsored by RSA, the security division of EMC, who probably sought to highlight the security implications of the increasing proliferation of consumer equipment in the corporate world. In this regard RSA may well have a point. 40% of the respondents to the IDG study indicated that their company’s security teams are not calculating the risks associated with consumer technologies.

However, I suspect that the real challenge that consumer devices pose is that they threaten the integrity of the corporate data resource. While viruses and spyware are increasingly routine hazards that confront IT users they at least can be identified and contained. I’m not nearly so confident about the threat of data leakages. It is much more probable that the ad-hoc integration of consumer equipment in to corporate networks is going to lead to critical files being left on this equipment when their owners leave an organisation.

In fact this was my response to the CIO who questioned the longevity of the CIO role. The consumerisation of IT may well mean that CIOs are likely to have less and less involvement in the technology directions of their organisations. However, I wonder whether this may be a good thing. The real challenge that most organisations face is leveraging their information resource for operational advantage. As data volumes grow this challenge is only going to escalate. Moreover, it requires deep knowledge of a business to structure and classify these resources for ease of access. As such, I suspect it is highly unlikely that any cuckoo could successfully penetrate the business nest to usurp the CIOs role in this area. Mind you, given the rate of success for cuckoos, I’m not sure I’d want to hold my breath on this!

False promises in the cloud

2010-06-27T23:50:00.001+10:00

The topic of cloud computing continues to fill the content of IT magazines. The accompanying adverts in the same publications extol its virtues. Any self-respecting IT conference organiser would feel naked if it wasn’t on the agenda. Hardly a week goes by when I’m not invited to a Webinar on the subject. The IT research companies seem to have a production line that is churning out reports and analysis on the take up of cloud computing. Yet the reality out there in user land is that most IT executives I talk to feel the vendors are not walking the talk when it comes to delivering the promise of cloud computing.

Let me say at the outset that I can recognise its appeal. Cloud computing appears to promise the nirvana of utility computing. This is the ability to resource up or down depending on the current business workloads for IT. I know this is something dear to the hearts of most IT executives. They wrestle daily with the challenge of determining just how much resources are needed by business applications. Typically, there is a lot of guesswork in doing this.

Business demands for computer processing power can vary significantly. For example, there can be times in the business cycle when there is a spike in the workload placed on business systems, (e.g. end of quarter reporting cycles). Furthermore, when new applications are installed the IT department has no way of really knowing in advance what impact this will have on the IT environment. In the past the standard response has been to overconfigure the systems to ensure there is sufficient capacity available if or when it is needed. Yet this can leave IT resources sitting under-utilised for long periods and it opens the CIO up to charges of being profligate with the company’s monies. With the costs of IT subject to ever-increasing scrutiny most IT executives are keen to avoid such accusations.

Cloud computing seems an ideal solution to these needs. It conveys the impression that a CIO can pull in extra computing resources as and when they are needed. The capacity management conundrum would appear no more. As with other utilities we consume all you need to do is turn on a tap or flick a switch and that extra processing power is at your disposal.

This is particularly appealing in business right now. The past two years have been a roller-coaster ride for the stock-market. No one can say for certaint that the global financial crisis is behind us and quite a few economic pundits are predicting that the world will experience a ‘double-dip’ recession. In such uncertain times what business needs more than ever is the agility to respond and adapt to whatever are the economic circumstances that eventuate. Cloud computing would seem perfect for these times.

Yet in my dialogue with IT executives I hear a pretty consistent complaint about it. The cloud computing packages being promoted offer none of the flexibility and agility that CIOs desire. Instead, vendors seem to be viewing cloud computing as a variant of the traditional outsourcing service. Their packages are for three or five year fixed periods for the delivery of a specified amount of IT functionality.

The inadequacy of the vendors approach was highlighted for me recently by a CIO in a major distribution company. This organisation has exclusive distribution agreements for leading brand name consumer products from around the world. In such an operating model there is only a limited surety of supply. It is quite possible for the manufacturer of a key product line to terminate a distribution agreement with only a few months notice. Business executives are looking for IT to help them respond nimbly to these challenges.

As such, this CIO began to investigate potential cloud computing solutions. He was particularly keen not to be locked in to any long-term arrangements as he had no certainty what his organisations operating model would look like three years out from now. Instead he wanted some IT service delivery arrangements that revolved around a short term contract that could be adjusted if the business needs suddenly change.

You would have thought his requirements would have been tailor made for cloud computing. Alas, he was to discover this was not to be the case. Instead he found that cloud computing was yet another example of IT suppliers over-promising. His main need was for an IT network delivered within a cloud structure that would allow him to scale it up and down if his organisation opened or closed offices or if it won or lost key distribution agreements.

The response from the telecommunications suppliers he spoke to was that they would provide his network requirements on a fixed service agreement over a three year contract with penalties if he sought to break the negotiated terms. This was exactly what he did not want. The CIO was mystified why a consumer can negotiate a twelve month contract for a service such as wireless broadband but the minimum option for a business is thirty-six months. The CIO in question could have lived with a twelve month contract as that would have corresponded to his budget cycles. However, he found absolutely no willingness to propose twelve month arrangements from any of the telco’s he encountered. As such, he has decided that he has to go back to the old provisioning model of buying the equipment, overconfiguring to address subsequent fluctuations in business needs and running it all in-house.

My IBRS colleague Kevin McIsaac has a good analogy for where he believes cloud computing fits in. He sees parallel’s with our use of cars. Most of us have a need for a family car to handle the majority of our own transportation needs. Kevin equates this to the need for businesses to run their own core business systems. However, Kevin says there are times when we might need to rent a car as we might need a car in a different location or we might need a specialist vehicle like a Ute for a one off job. In addition, we might have a need for a taxi for spasmodic local travel needs when it is not appropriate to drive ourselves. In such cases Kevin equates these uses to when a business might need an external service or cloud computing provider.

I can recognise the validity in Kevin’s analogy. However, taxi and hire car companies succeed because their pricing structure is palatable for their clientele. My observation is that cloud computing companies also need to make their service offerings palatable for their customers. They have to price it so users can leverage the flexibility, adaptability and agility that cloud computing can offer. If they cannot do this then I suspect the IT airwaves will move on from cloud computing in the not-too-distant future and the functionality will go down in the IT record books as something that looked appealing but which failed to live up to its promise.

Take it easy on that IT governance

2010-05-30T01:07:00.002+10:00

A CIO at a leading financial services company in Sydney recently changed my thinking with regard to IT Governance. Up until then I had formed the impression that a lack of effective governance was the main reason why the IT industry has a track record littered with so many disasters. As such, I had come to the conclusion that if you want to make sure the monies you invest in IT deliver business outcomes then you need to be rigorous in the application of governance structures to the IT function.

However, this CIO argued that IT needs to be much more pragmatic in how it applies governance. In her mind she feels that many in IT are pursuing governance with the same vigour that those on the extreme left and right in politics pursue their ideological agendas. Unfortunately, as with politics, she believed that the zeal of the extremists can often act as a turn off for those who could most benefit from better IT governance.

Her views had been shaped by the attitude of her CEO. She had found that her CEO had a tendency to equate IT governance with more bureaucracy. He wanted an IT department that could enable the organisation to be agile and responsive to market opportunities. Unfortunately, many of the IT governance structures he had encountered in the past were overburdened by too much focus on processes and procedures. He had found that such rigidity often frustrated his organisation from responding to these market opportunities.

Nevertheless, this CIO also realised that there was a lot of merit in having a governance framework. Like many CIOs she faces the constant battle of trying to do more and more with less and less. She understands that in her organisation, like the vast majority of businesses, IT sits in the epicentre. Wherever there is change there is an IT ramification. The task for many CIOs, like this one, is often to determine what not to do. These hard decisions can only really be successfully made within some effective governance mechanism which provides the proper processes to determine demand and project prioritisation.

The trick this CIO felt was a need to determine some form of balance between risk taking and slavishly following the rules. She felt that businesses should take a leaf out of the way that most governments approach economic policy. Since the Industrial Revolution government economic policy tends to alternate between a laissez-faire approach and a more regulated one. Often governments believe that there is a need to encourage entrepreneurs and innovation. As such, they will loosen the reins of government as a way of stimulating new business initiatives. However, as the world found with the Global Financial Crisis, after a time an unregulated market tends to end in spectacular failures. The lack of controls can encourage recklessness where people pursue short term financial goals that can have devastating long term consequences. Therefore, as we are seeing now, governments progressively start to tighten the reins to impose some rigour and accountability on the markets. Unfortunately, over time these regulations become an impost that act as a deterrent to investors. This then results in a decline in economic growth, there is a corresponding rise in unemployment and eventually the government comes under pressure to liberalise the market. When they do the economic cycle starts again. Such manoeuvrings have tended to characterise the economies of most Western governments since the Second World War.

Interestingly, this CIO suggested that this had many parallels with how CIOs needed to approach the task of governance. In particular, she stressed that the priority for CIOs was to view the need for ICT governance in the context of where a business is at currently. A business that is under the pump probably requires a more innovative and risk taking approach to ICT governance. ICT might be a source of new products or a way of eliminating inefficiencies. On the other hand executives in a business that has been growing rapidly over a number of years must realise that eventually they need to use governance as a way of establishing some rigour and stability to ensure the gains they have made are consolidated.

What I liked about this thinking was that it highlights the fact that ICT governance is not an end in itself. Like all governments the structures for governing need to evolve in keeping with what is going on around them. However, in my mind such an approach to ICT governance runs contrary to much of the current conventional thinking on this topic. The modern trend has been to advocate the need for businesses to embrace comprehensive governance frameworks like Val IT from the IT Governance Institute or the ISO/IEC 38000 international standard. These though are so thorough that they can be off-putting for the uninitiated. However, for the converted they run the risk of being interpreted too dogmatically. Such CIOs might see them as a panacea for many of IT’s past ills which they clearly are not.

Instead what I heard this CIO say was that the application of ICT governance needs to be much more pragmatic. She believed it was wrong for IT executives to view governance in black and white terms. In her mind the real challenge all CIOs face is improving business outcomes. Therefore, the goal of ICT governance is to help the business towards these ends. Sometimes a business needs a greater focus on discipline. Sometimes it needs to be prepared to take a risk. The reality that CIOs need to understand is that when applying enhanced governance one size does not fit all. Their governance structures need to adapt to current circumstances. As in politics this is often more art than science. However, CIOs should note that the politicians who master this challenge are the ones who usually keep on governing!

One born every minute

2010-04-26T14:04:00.008+10:00

They say there’s one born every minute. Painfully, I have to tell you last Tuesday I happened to be that one. I left my office to go to my regular lunchtime stretching class and returned to find a security alert on my computer. My machine was infected. I needed to download the latest version of Internet Security 2010 to address these problems. What happened next was an education for me on the risks associated with eCommerce. Despite nearly 30 years in the IT industry, and an arrogant belief that I could spot an online hoax a mile off, I fell for this con trick hook, line and sinker.

I can assure you that the screen that greeted me looked highly plausible. Take a look at the picture at the top of this blog and ask yourself who you think authored this software. I mean it even has the Microsoft icon. Or does it? Who else but Microsoft could call their product the XP Security Tool 2010? XP was my operating system. Who else but Microsoft would know that? I suspect if I took the time to look in fine detail the word Microsoft would be nowhere to be seen.

Anyway, the product advised me to register if I wanted to get rid of the security breeches on my system. There was an option that offered me the opportunity to register later. Since I already had the CA Security suite I selected that option. Unfortunately, this option gave me no respite. The reality was that the only way it seemed that I could get round this screen was to register. This entailed buying the product. I had a busy schedule in front of me. I cursed the apparent aggressive marketing of Microsoft which seemed to make an assumption that there was no alternative solution to my needs than their application. I was though re-assured by a 30 day guarantee allowing me to return the product if I wasn’t happy.

No sooner had I paid my money than I got an email from the other party complete with my registration details. As soon as I registered the apparent security breeches were deleted. Moreover, an option appeared asking me for any feedback. By now I was ropeable so I sent off an email, to Microsoft I assumed, complaining bitterly about my experiences. I got a response with a fairly incoherent message in rather poor English. Bloody offshoring was my instant reaction to it.

However, I now proceeded to compound my stupidity. The response did sympathise with my predicament. It told me that these pop-ups were not related to the Antivirus program but were created by a partnership company whose services had since been discontinued. The email offered me the ability to disable these annoying pop-up screens. All I had to do was to run an attached program. Like a lamb to the slaughter this is precisely what I did. I ran a program which didn’t appear to do anything and only then did I start to suspect something might be up.

I went looking for XP Security 2010 on the Internet. My worst fears were confirmed. This was a bogus program. Moreover, it slowly dawned on me that I had given the culprits my credit card details and had executed a program they had sent me which had probably impregnated my computer with Spyware. In effect, my computer was the IT equivalent of up a creek without a paddle. I began to appreciate that my only surety would be to re-initialise my hard disk. Bang goes my long weekend I thought.

However, there were to be other lessons in this episode for me. In particular, I was surprised to discover that several of those who I had thought would be on my side in this matter projected indifference. I notified CA of my plight as soon as it happened. I was critical that this program had slipped through the firewall and been undetected by my security program. I am still waiting a response to this email five days after the event. I have not even received an acknowledgement from the company that they have received my email. This contrasts dramatically from the support I have received from Sophos, another IT security vendor.

When I realised that CA would offer little immediate assistance in determining if any Trojans or Spyware were on my computer I went looking for help on the Internet. Sophos offered a free 30 day trial of their security suite. Moreover, their support team deciphered the program I had inadvertently loaded and re-assured me somewhat that it was probably not Spyware. The impression I very much gathered from these two responses was that if you valued IT security then you should enlist the services of a specialist company rather than a generalist. It was clear to me that Sophos live and breath IT security and that they were as interested in learning from my experiences as helping me address the problems I had encountered.

I was also somewhat disappointed in the initial response I got from my bank, Westpac. As soon as I realised the implications of what I had done I contacted their fraud squad to outline the circumstances. After all I had been hoodwinked so I expected some support. However, their fraud squad advised that because I had voluntarily given my details, albeit under false pretences, they did not regard it as fraud. Instead they told me the disputes department would be in touch. After three days they hadn’t so I went back to Westpac. Finally, I did get some re-assurance from an attentive staff member but she was the third person I spoke to about the matter. I must say I was surprised by the nonchalant response. I had expected that banks would be much more passionate about securing the integrity of Internet commerce. After all it is very much in their commercial interest for it to grow isn’t it?

The final discovery was that the Secure Sentinel credit card protection I had acquired several years ago did not offer quite the security I had perceived when I took out the cover. Fraud and deception were not covered under its arrangements. I only had protection if I lost my card and someone discovered it and used it pretending to be me. I’m now very much questioning the value such cover really gives me.

However, probably the most important lessons I learned are personal ones. In retrospect, I realise that my first action should have been not to get frustrated and to shut down the computer. This would definitely have given me time to think. Moreover, it would have enabled me to go to another computer to do some background checks on the XP Security tool 2010. Even if I had to go to someone else’s place to do this check I’m quite sure the time to do all this would have been a lot less than the time needed to cancel my credit card and to re-initialise my hard disk.

In summary, I realise that I made quite a few errors of judgement in this matter. I had assigned myself a degree of IT competence that was inflated. My familiarity with IT and the Internet has probably bought with it a certain level of contempt. Yet my one consolation is that I have been given an unexpected education on IT security. It was Oscar Wilde who once said that experience is simply the name we give our mistakes. As such, I hope my experiences can help you avoid my mistakes if you ever find yourself in the situation that confronted me last Tuesday.

CIOs don't own social networking applications

2010-03-21T21:23:00.002+11:00

The other day I met a CIO at a large financial services organisation in Melbourne who surprised me. He told me that earlier in the week he had spent three days off-site with his executive team. They were assessing how the organisation could best utilise social networking sites like Facebook, MySpace and LinkedIn. However, what really intrigued me about our discussion was the fact that the IT department had not instigated the off-site. Instead, it had been convened by the business executive. In effect, it appeared as if IT was being bought along for the ride. Yet the more I thought about this state of affairs the more I reflected “Why not”.

Social networking may well be one of the vogue terms of today’s IT industry but I don’t meet many CIOs who appear genuinely enthused about it. In fact one of the charter members of The Coalface Community made a plea that he’d come on board as long as we didn’t overdo social networking. He had had some pretty dismal experiences attending social networking seminars. He felt that, like much of IT, this was a topic that generated a lot of hot air but little business benefit.

Such circumstances activate the warning bells for most experienced CIOs. They know from bitter experience that what starts out as a business project is almost always branded an IT one if that project fails to deliver. The embryonic nature of social networking is testimony to the fact that its application, potential and benefits are all somewhat unknown. Unfortunately, without an understanding of the desired goal for social networking any investment in it is something of a gamble. The danger many CIOs feel is that if the benefits are not readily apparent the business will soon lose interest in the activity and the IT department will be left holding this social networking baby. As such, they will end up the owners of any potential project disasters.

With its lamentable track record of success there is zeal among executives in most businesses in measuring the outputs from IT related investments. Yet it appears that other parts of the corporate domain seem to get off scot-free. The biggest investment any business makes is in people. Yet I’ve not heard of any benchmark undertaken to assess the effectiveness of the hiring decisions made by the HR department. Marketing is another area where there seems to be little rigour applied to measuring the effectiveness of their investments. Henry Ford remarked nearly a 100 years ago that he wasted half his advertising budget but he wasn’t sure which half that was.

Yet for IT it seems that business executives always need to know the ROI from an investment in technology, right down to the last dollar and cent. There is usually derision when CIOs try to talk or quantify the ‘soft’ benefits such investments generate. As such, given these circumstances, you can bet London to a brick that the same scrutiny is likely to be applied to any investments in social networking in the years ahead. It is no wonder then that many IT executives fear they are on a hiding to nothing with this functionality.

That’s why I find myself increasingly in concurrence with the approach being taken to social networking by the finance company I mentioned in the introduction to this blog. This organisation sees that social networking provides it with an avenue to construct a relationship with its customers. The finance company recognises that this dialogue will afford it greater insights in to the profile of its clients as well as how they use its products and their experiences of this use. There is not a marketing department worth its salt that would not feel enriched by such information. However, it is heartening to see that the marketing team also recognises it must drive this project forward.

To all intents and purposes the IT component in social networking is incidental. IT is a vehicle to get marketing to a desired destination. However, to arrive at this destination it will be beholden on marketing to do the driving and to determine the route they should take. If they are unable to do that then there’s little the IT department can do to help them. There is sufficient data in the public domain which highlights the increasing popularity of social networking sites. However, if they don’t use the social networking sites provided by this finance company then that will be a failure of the marketing department not their IT counterparts.

Most marketing campaigns entail something of a gamble. Will TV be a better medium than radio to promote a product? Is it worth spending extra to secure the endorsement of an A List celebrity or can you spend less on an up-and-coming personality who might prove a better long term bet? Will Google ‘hits’ translate in to actual sales or will print advertising have more influence on the end consumer? These gambles are part and parcel of working in marketing. IT on the other hand strives for more definitive outcomes.

One of the frequent comments I hear in my work is that there is no such thing as an IT project, only business ones with IT components. I contend that this truism is no where more evident than in the domain of social networking. Yes we are using the Internet and search engines. I suspect there is something that IT can contribute in how we structure, capture and store data. However, in the end, I firmly believe that CIOs should not own corporate investments in social networking. IT staff are not the people who have the expertise to determine how to drive people to these sites. They are not the ones who should decide how the site should be laid out or what inducements should be offered to encourage people to contribute to them. IT staff cannot shoulder the responsibility for policing them to weed out any inappropriate use or comments. All this work must be done by their business peers.

I suspect that the real surprise for me in my meeting with this finance IT executive was the realisation that he was working for a business executive who were acknowledging their responsibility for making IT work. They saw that IT could enhance their corporate capabilities. They realised that IT had a role to play in making such business projects succeed. However, they also understood that they had to oversee this project if it was to achieve its desired outcomes. I suspect that given their commitment such success is significantly more probable. If so then it is likely that I’ll become less and less surprised when I hear about businesses where the executive team are taking the lead in a new application for technology.

A landmark judgement for the ICT industry

2010-02-01T17:31:00.003+11:00

It was Helen Coyne back in my old NCR days who first told me the difference between an IT sales person and their used car equivalent. According to Helen the used car sales person knew when they were lying. However, a fascinating court case in the UK may well mean that this is no longer the case. A judgement has just been passed in the six year legal battle between British Sky Broadcasting (BSkyB) and EDS. The case concerned a large and unsuccessful IT project in BSkyB. This judgement, because of its precedent implications, promises to have huge ramifications within our industry.

The background to the case was a £48 million contract won by EDS in 2000 to provide BSkyB with a new customer relationship management (CRM) system. BSkyB is the UK’s dominant PayTV provider. It was probably attracted to CRM because of its purported ability to help organisations better serve their clients. Unfortunately for BSkyB it found the resulting performance from the EDS CRM system was unsatisfactory and, as a consequence, the company experienced an unacceptably high turnover of customers.

By 2003 BSkyB terminated the contract with EDS. It then decided to develop the system in-house. This took a further three years and cost £265 million. Unable to reach a settlement with EDS for what it argued were substantial losses, BSkyB elected to sue the company. It claimed that EDS lied about the resources, cost, timing, technology and methodology involved in the project, and argued that its false representations led to EDS being erroneously selected over rival bids. EDS denied making fraudulent representations and contended in return that the problems with the project were mainly BSkyB’s fault. In their opinion BSkyB was an IT client that didn’t know what they really wanted.

It took a further three years for the trial to get to court. Although both parties had contractually agreed to limit EDS’s liability at £30 million, BSkyB argued that the cap on damages did not apply because of EDS’s deception. It initially sought damages of £709 million. Proceedings began in October 2007 and lasted nine months. Despite the original contact being worth £48 million it has been reported that both parties have spent in excess of £65 million in legal fees. Moreover, the legal significance of the case, and in particular the precedent repercussions, is reflected in the fact that it took the presiding judge, Mr Justice Ramsey, a further year-and-a-half to deliver his verdict. This was released on Australia Day 2010.

Justice Ramsey ruled that EDS had given fraudulent representations relating to the timing of the project, but dismissed BSkyB’s other claims of deception. It appears that much of the rationale for the judge’s verdict relating to the timing of the project related to his view that Mr Joe Galloway, who led EDS’s pitch for BSkyB’s business, had been "cavalier" in providing estimates of timing for the project that he knew were not backed by sufficient analysis. In the words of the judge "I am driven to the conclusion that he proffered timescales which he thought were those which Sky desired, without having a reasonable basis for doing so." He remarked that "he knew that no proper analysis of time had been carried out and he knew that he had no basis for saying that go-live could be achieved in nine months and complete delivery in 18 months." The judge added: "In my judgment his conduct went beyond carelessness or gross carelessness and was dishonest."

Why then is this decision significant for the IT industry around the world. In essence, it makes IT suppliers responsible for misrepresentations made by sales people on the company’s behalf. Most ICT contracts will have clauses in them that seek to limit liability. However, if an ICT sales person makes a fraudulent misrepresentation in order to secure a deal then the contractual liability cap does not apply. In the BSkyB and EDS case the judge determined that EDS had given assurances to BSkyB in terms of the timeframe to install the CRM system that it knew were “either false or at least reckless as to their truth”.

In effect, the BSkyB and EDS judgment establishes the precedent that a rogue IT vendor sales person can potentially expose their company to unlimited liability for a fraudulent misrepresentation they might make in a tender process. Such misrepresentation could include, amongst others: claims about how long it will take to install the system; what ROI or other benefits that could be obtained from the project; or what experience the vendor has with similar installations. In a delicious sense of irony for many in ICT the emotions of fear, uncertainty and doubt, which have long been used by IT suppliers to influence potential clients, are now key matters that IT suppliers themselves need to consider when promoting their wares.

As a result, suppliers will need to become much more circumspect when trying to sell their services to avoid the risk of misleading their potential customers. They will need to make sure that they gather evidence from past projects on which to back the promises they make. No longer will the ICT sales people be able to dismissively tell their in-house support colleagues not to confuse selling with installing. Any promises made must be able to be delivered. As a result, Helen’s joke would no longer be pertinent. ICT sales staff have to know how to distinguish between fact and fiction.

I suspect much of this may not be a bad thing. Anything that improves the success of ICT implementations will be to the benefit of the ICT industry as a whole. The judgement could usher in a new era of professionalism in ICT. However, I’m not holding my breath, at least in the short-term. Joe Galloway, the salesman whose gung ho adventurism started the whole EDS/BSkyB saga, has a number of recommendations on his Linkedin entry which trumpet his professionalism. The impression conveyed is that these people define his professionalism as his determination to win a deal rather than a desire for a successful outcome for the client.

There was a perceptive comment on a blog article about this case in the middle of last year. The writer argued that it was about time IT suppliers were brought to task for their charlatan behaviour. The writer was sick of witnessing technology being promoted as a silver bullet rather than as an enabler of business operations. In his words IT delivery is not rocket science and it is about time it was run and measured by a profession rather than by a bunch of cowboys.

Last year I bought a new car for the first time in ten years. Much to my surprise it was a delightful experience. In particular, the sales lady who looked after me was attentive to my requirements without being the least bit pushy. She got both the sale and a delighted customer. It was evident to me from the way she handled the sale that the motor trade has gone a long way to improve its professionalism. The BSkyB and EDS case in Britain highlights that our industry still has a lot to learn in this regard.

What lies ahead?

2010-01-25T17:12:00.004+11:00

Edward R Fielder was not a man I’d ever heard of before. As far as I’m now concerned, the more’s the pity. He strikes me as someone who had that enjoyable trait of being able to combine pearls of wisdom with good humour. He had a fairly distinguished career as an economist and he served as Assistant Secretary of the Treasury during the Richard Nixon presidency. However, while he may have earned his living as someone expected to predict what the economic future might entail he was also someone clearly able to appreciate the nonsense of trying to do it.

One quote of his that was particularly memorable was “the herd instinct among forecasters makes sheep look like independent thinkers!” As someone who has worked around the area of IT research for the best part of the last twenty years this was very much a sentiment that resonated with me. The ICT industry is blessed with a plethora of pundits who all seek to impress and dazzle us with their intellect. Yet despite the avalanche of analysis that emanates from these sources there is a depressing uniformity about much of it.

Perhaps it’s the fast paced nature of the ICT industry that draws people to the need to make or read such forecasts. Much of the investment in ICT is in infrastructure that supports new applications of technology. Yet financing infrastructure is a challenging task as executives need to be convinced that the investment in it is necessary. Researchers seek to help CIOs in this task by highlighting potential trends which in turn gives the CIO data to support potential business cases.

Unfortunately, there is a large element of self-fulfilling prophecies behind many of these forecasts. If a distinguished research organisation like Gartner predicts a rapid growth in a particular technology in the year ahead it is human nature for many CIOs to investigate the use of such functionality. If potential clients are starting to include certain products and services in their considerations then they are likely to be open to sales calls that seek to promote this functionality. This in turn leads to sales. It is very much a moot point whether this would have happened if the growth in the use of the technology had not been predicted by a research company in the first place.

As I write my inbox is full of such predictions from these gurus about what 2010 will entail for the IT industry. Very much flavour of the month in most of these forecasts is cloud computing. Gartner predicts that cloud computing will be so pervasive by 2012 that 20% of businesses will own no IT assets. IDC believes that in 2010 cloud computing will expand and mature as a strategic battle for cloud computing leadership emerges. The Yankee Group is also bullish about the chances of cloud computing in 2010. It estimates that half of US enterprises will invest in cloud computing, largely because of capital expenditure (capex) constraints imposed because of the fragile state of the US economy.

However, as far as the CIOs that I talk to are concerned, the jury is still out to the merits of cloud computing. The eyes of quite a few glaze over at the mere mention of the words. Others question the robustness of the solutions. They suspect that behind the hype is little substance and are critical that key issues like security and storage are seldom addressed in the cloud computing marketing paraphernalia that has bombarded them over the past year.

CIO magazine in the UK also reported another aspect of the cloud computing hype that has emerged. This is the tendency of suppliers to dress up their sales as cloud computing deals. In an article titled ‘Cloud computing is dogged by spin’, CIO gave the example of CSC in the UK which it believed had erroneously called the extension of an existing contract with the Royal Mail Group to support its desktop and manage and develop its servers as the provision of “cloud computing IT services”. If suppliers are inaccurately attributing deals to cloud computing services then it is easy for a false picture to emerge about the true impact of the functionality.

Next on the list for most of these forecasters were social networking solutions. IDC believed that 2010 would be the year that social media hits “critical mass” in terms of acceptance and adoption. It sees the fusion of business systems with social/collaboration software and analytics in to what it described as “socialytic” applications. Gartner is more specific. It believes that Facebook will be the hub or common denominator for social network integration and Web socialising. No one though seemed to be prepared to advise how these applications would be integrated with other corporate applications like customer relationship management or business intelligence or to assess what security risks such integration might pose.

There was also consensus that green IT was likely to have a big year in 2010. Despite this being trumpeted by the IT industry as the next big thing for at least the past three years the soothsayers of this industry were not bashful about claiming big things for green IT in the years ahead. Gartner suggests that by 2014 most IT business cases will include carbon remediation costs. IDC believed that rising energy costs and pressure from the Copenhagen Climate Change conference will make sustainability a source of renewed opportunity for the IT industry in 2010. Presumably renewed opportunity implies that they think this time the forecasts for green IT might actually come true. Unfortunately, for the forecasters their predictions may have been made before the failings of the Copenhagen conference were apparent. Given the limited outcomes from the conference I suspect most businesses will continue to sit on the fence with their response to climate change, at least for the time being.

Notwithstanding this, the final area of agreement for the industry researchers was that the IT industry was likely to grow this year. From its traditional supply perspective, IDC predicts a 3.2% growth for the IT industry as a whole in 2010. Gartner approached this from the demand side and expected IT executives to increase their spending by 3.3% in the year ahead. This though was more optimistic than Computer Economics which only saw a 2% median annual growth in IT operational budgets this year. Nevertheless, the underlying message from all sources seemed to be that this looks a promising year for those of us in the IT industry.

If the projected financial upturn does eventuate then there could be a renewed vigour for IT in 2010. Yet my advice to CIOs would be to wait and see. Twelve months ago the same researchers were predicting that 2009 would see an acceleration in the take up of cloud computing and would also be a good year for green IT. Back in 2003 I can remember Gartner predicting wide take up of RFID by 2010. The reality is that the road to hell is paved with good intentions. In this regard another quote of Fiedler’s is worth remembering. He advised that those who live by the crystal ball soon learn to eat ground glass.

Will the IT industry come full circle?

2009-12-18T09:29:00.001+11:00

I have just returned from a very enjoyable lunch with my colleagues at IBRS. We were reviewing our progress in 2009 and setting directions for 2010. However, we also used the time to discuss what developments we have seen in the industry over the past year. One of my IBRS colleagues is the ebullient Dr Kevin McIsaac. Kevin is someone I always find with an open and left-field perspective on things. He has just come back from Oracle OpenWorld in the United States and was prophesising that the IT industry was about to come full circle.

When I started in the IT industry in the early 1980’s it was common for CIOs or their then equivalents to describe their IT department as an IBM or Digital site. Frequently, they would use the nickname of that supplier to describe these affiliations. People were DEC or Big Blue users. By this they implied that their organisation had a single sourcing strategy for their IT needs. They got their hardware, systems management software, storage and professional services needs, (though interestingly rarely their application software), from a single supplier. Then along came Open Systems.

If it did anything the Open Systems movement introduced the first real level of competition in the IT marketplace. Businesses discovered that there were significant cost advantages in using common operating environments like UNIX. This gave them a wider access to packaged applications and the ability to select between alternative hardware suppliers on which these applications could run. This in turn gave rise to the emergence of a systems management tools that could oversee the operations of UNIX computers. Then storage vendors realised that they could create disk-subsystems that could run on a multitude of vendor’s UNIX equipment. All of a sudden CIOs got in to the habit of sourcing from many suppliers and then overseeing the integration of these various components.

Today no IT executive would regard themselves as captive to the products of a single supplier. They would feel they are locked in. They would worry that they had not secured the best pricing for IT by testing the market. However, most would also acknowledge that this freedom has come at a large cost. This cost is the time and effort required by IT staff to integrate the products in to an effective corporate IT architecture.

Kevin contended over lunch that all this could be about to change. He believes that the industry is going to come full circle. He was predicting the emergence of an elite group of vendors who would become a single source solution to most of the needs of a CIO. His thoughts had been influenced by a provocative corporate vision that Larry Ellison had espoused at Oracle OpenWorld. There he outlined Oracle’s strategy to be the modern equivalent of IBM in the 1960’s and 70’s, namely a dominant supplier that CIOs went to for most of their IT needs.

This would certainly explain the thinking behind Oracle’s moves to acquire SUN Microsystems. Oracle is already supreme in the relational database market. It is also well equipped with ERP and CRM applications and possesses under its banner business intelligence software and systems management toolsets. SUN would then cover for Oracle the hardware and storage needs of a CIO. All that would be outstanding in being able to offer a near complete IT architecture for a CIO are networking and communications components. What this space as they say?

If world dominance is Oracle’s intention I suppose I’m in two minds about this strategy. I do know that many CIOs are exasperated by the challenge of co-ordinating the offerings of multiple suppliers in to a single business IT architecture. A myriad of different vendors makes change management in any form a nightmare. Furthermore, I suspect that many of the older guard of CIOs reminisce fondly about the days when they followed IBM’s Systems Network Architecture. This was a world where everything worked out of the box, where there was one contact point for systems support and where they didn’t have the challenges of dealing with hordes of vendors who all wanted their business.

However, a quick glance at history reveals that megalomania is rarely something that is worth encouraging. The associated power tends to breed an indifference to the needs of individuals. It easily creates an arrogance that is not conducive to listening. Megalomaniacs tend to believe they are omnipotent and know best. It’s their way or the highway as far as they are concerned.

Moreover, I think such dominance stifles innovation in most marketplaces. The Open Systems movement of the early 1990’s may never have arrived at the nirvana of complete application and data portability. However, it unleashed an energy and inventiveness that has significantly propelled this industry forward. For example, the Internet had been around since 1969 but its potential was only really unleashed after Open Systems had championed a whole new era of creativity. Why were we not talking about going online in the 1970’s world of IBM and the BUNCH?

All this is not to take anything away from Oracle in general or Larry Ellison in particular. Any self-made man who can become the third wealthiest person in the world is undoubtedly astute and intelligent. His entire business career has given the IT industry many great products. While most IT companies eventually whither on the vine Oracle continues to blossom. All this must owe much to the vision and leadership of Larry Ellison. Clients who invested in Oracle in the 1980’s have found that they have backed a supplier who has been in it for the long haul.

However, a world of Oracle dominance goes against my strong belief that variety is the spice of life. The more choice we have then we tend to find the better the quality and options available. This for me is a much more enriching experience than the old Henry Ford maxim that you can have any colour you like so long as it’s black. Mind you the thing about going full circle once is that the IT industry can do it again. If a concentration of powers in to a few elite IT suppliers stifles innovation and creativity then a whole new era of Open Systems could emerge as a counter response. Perhaps that will be the subject of discussion for a future IBRS luncheon.

Will the video tsunami swamp your business?

2009-11-28T00:56:00.002+11:00

Is there a tsunami approaching the IT networks of most organisations? The indicators are that the explosive growth in the use of video could well swamp most corporate networks over the next three years. Research by Cisco, monitoring global Internet traffic, indicates that there will be a 37% CAGR in the use of video between 2006 and 2011. Much of this growth will be as a result of video content being distributed between PCs via the Internet. Cisco highlighted this phenomenon by the example of YouTube, a company less than five years old. Internet traffic generated by YouTube in 2008 was greater than the Internet traffic for the US as a whole in the year 2000.

Interestingly, research in the USA looking at the demographics of those who watch or download Internet video acknowledges that while those most likely to do so are aged between 18 and 29 some 46% of respondents aged between 50 and 64, and 39% of those aged over 65, had downloaded and watched videos on the Internet. Clearly, then Internet video usage has very wide appeal across all aged groups. What’s also interesting is that they are watching video on a variety of devices with screens ranging from mobile phones to PCs and TVs.

One of the things about corporate video is that the barriers to video production have been removed. These days you no longer need to be a movie producer to create an online video. Moreover, this output can be created on a variety of devices. People speak of the democratisation of video production. The result is that it is much easier to create and distribute videos and to incorporate them in to corporate communications like newsletters, podcasts, events, marketing material and instructional information among many potential applications for the technology.

It appears that the potential uses for video technology fall in to five broad categories. Firstly, there is its use in digital signage. Here you will find videos with advertising messages running on screens in places like department stores or shops at the airport. The next use is desktop-to-desktop videoconferencing such as the use of video in Skype telephone calls. The third category is high definition video conferencing functionality like Cisco’s Telepresence which offers a whole new user experience compared with earlier versions of video-conferencing. The fourth category is the increasing use of video for security in closed circuit TV (CCTV) surveillance. It has been estimated that such technology is so prevalent in the UK that there is now one CCTV camera for every 14 people in the country. The final use of video is as a training medium in classrooms, conferences and seminars.

Much of the reason for this growing use of video appears to be the impact it has on the user experience. Studies show that video outperforms all other visual formats as an instructional medium. Other research from eMarketeer, who track Internet advertising, reveals that online video adverts have much higher click through rates than banner adverts. In fact user interest in video adverts has given rise to a whole new phenomenon called viral advertising where a clever or funny video advert will get forwarded by one consumer to another. This user engagement is probably one of the reasons that eMarketeer predicts that there will be nearly a tenfold increase in expenditure on online video adverts between 2007 and 2012.

A recent report by the Aberdeen Group titled ‘Enterprise Video Collaboration – the return on investment’ (ROI) highlighted that the main drivers for the use of video in businesses were: an improvement in communications with dispersed or remote staff (43%), enhancing communications with external partners and clients (36%), a need to reduce travel time for staff (30%) and a way to curtail increasing corporate travel costs (29%).

The Aberdeen paper also looked at where video application had led to performance gains in organisations. It identified five areas: product development; talent acquisition; customer care; sales and project or case management. Others describe the potential benefits in terms of expense reduction, creating competitive advantage and as a contribution to corporate social responsibilities, in particular as a way of helping businesses reduce the greenhouse gas emissions generated by airline travel.

Nevertheless, any effective business case has to set the right corporate expectations. It can’t just outline the potential benefits. It must also identify the likely costs that will be encountered and the challenges that need to be overcome. The evidence indicates three major challenges that need to be addressed. Firstly, video is infrastructure investment. Therefore, IT executives need to be collecting metrics on its impact on corporate productivity as this data will be needed to underpin future business cases to expand its use. Next, the user experience must be easy and uplifting. Many older workers will have a fairly jaundiced view of video technology from past video conferencing experiences. This time the user experience with video has to be different. Finally, there’s a need to construct an architecture to handle the workloads and performance requirements associated with video.

Video has significant implications on the IT environment. Video traffic has different characteristics than other data on the network. In a non-video world data can be sent as packets where the transmission could be intermittent so long as everything eventually arrived in one piece. However, with video the data has to flow as a consistent stream as it is often being viewed simultaneously. As a result, certain functionality is needed by a network in order to predict and adjust bandwidths to cope with video workloads.

How then can organisations make effective use of video in their businesses? Firstly, there is the need to build a video-enabled architecture as a foundation stone from which applications can then be rolled out. This is different from how many organisations utilise video today. Often they select applications based on business need and worry about the network requirements as an afterthought. Once the architecture is in place IT executives can then work with the business to determine the most suitable applications to harness this functionality. However, probably the most important change is to the corporate thinking. Video must be recognised as a viable new delivery mechanism. As one analyst has remarked, video has to become part of the business DNA.

One organisation that has such a characteristic is the UK retail giant Tesco. It’s IT Director recently advised that he expected video to form the foundation in many of the company’s applications, especially the way it interacts with suppliers, customers and employees. Tesco has earned a reputation as one of the most creative global IT shops. It has shown how IT can contribute to competitive advantage. Tesco’s example is that progressive organisations will make more use of the functionality. As such, IT executives need to make sure their IT network can handle this workload. Otherwise they are likely to find themselves swamped by this video tsunami that is coming their way.

Big brother is watching

2009-10-28T09:55:00.001+11:00

While I have now spent more of my life in Australia than in Britain I still retain a great interest and affection for the country of my birth. I correspond regularly with friends living there, I frequently read British newspapers and I follow my soccer team passionately through various web sites. All this interaction makes me appreciate how much there is in common between the two countries. Many concerns faced by Australians are remarkably similar to those confronting people in Britain. Therefore, it is perhaps not surprising that many of the approaches to tackling these problems are similar. These similarities are particularly top of mind for me at the moment. I have just returned my first visit to Europe in ten years.

Right now the number one IT issue in Britain is the availability of fast broadband access in rural areas. Just like their Australian counterparts farmers in these regions are arguing that the use of the Internet is an essential part of the modern business. In particular, they make the point that fast Internet speeds enable farmers to be up-to-date with volatile commodity prices and that this knowledge empowers them in negotiating acceptable returns for their livestock and produce when they take it to market.

Prince Charles is a passionate advocate of the need for government to disperse fast broadband access beyond the urban fringe. Without it he fears that rural communities will be even more marginalised in the modern world. The Prince sees they will not be viable bases for business and that there will be an increase in the numbers of young people from these areas drifting to the cities to seek work. As you can appreciate you could easily transpose these arguments in to an Australian context. However, just as in Australia, the naysayers are grumbling about whether these problems are real and questioning whether the necessary investment to address them is affordable.

While there was some comfort in seeing it really is a small world the recent trip was also quite a confronting one for me. It highlighted how much Britain had changed over the last decade. The confidence of ten years ago has clearly evaporated. Quality television is about as common in Britain as it is in the USA. On a personal level it was sad to see the demise of sentimental landmarks like my local pub while Cardiff, where I went to university and began my working life, has had so much development over the last ten years that I found myself completely disorientated as I drove around once familiar suburbs.

Change is perhaps to be expected over such a period of time. Mind you there was one change I encountered that took me by complete surprise. Nobody forewarned me about the teaming mass of speed cameras that now populate British roads. The country is literally awash with them and, unlike in NSW, there is very little warning of their presence. For example, a short three kilometre trip to the local park in an upmarket suburb of the Potteries required me to run the gauntlet of at least five inconspicuous speed cameras. What was once one of the great pleasures in Britain, going for a leisurely drive in the country, has turned in to a neurotic nightmare where you spend more time watching the speedometer than the road ahead.

Technology has obviously facilitated this. However, its application in Britain is getting increasingly more sophisticated. It is now being used to calibrate the time taken to drive between two points. From there the computer can quickly calculate whether the speed limit has been broken in achieving this time. Moreover, speed cameras are increasingly linked to the computer at the vehicle licensing centre based in Swansea. The result is an instant matching of offending vehicles with owners address details so infringement notices can be automatically generated. The fines in the mail so to speak!

There is a lot of disquiet about this use of technology in policing. I heard it described as ‘robotic’ policing. Because of speed cameras there are now fewer police highway patrol numbers. Yet, there is no evidence that they have done anything to increase road safety. Road fatalities have actually increased in recent years. Really dangerous motoring activities like drink driving are caught by police on the beat not cameras in the air. There is deep suspicion in Britain that the whole exercise is all about revenue raising for depleted government coffers.

Why though should we here worry about this Orwellian application of technology? Well, given my observation that policies tried in one country tend to be adopted in others, I have deep suspicions that what I saw in Britain could be the harbinger of things to come in this part of the world. Take NSW where I live. The evidence points to a likely change of government at the next election in 2011. The state finances look parlous and aside from the electricity network most other public assets have already been privatised. How then can a new government raise the necessary revenues?

What about looking for ways to make the police service more self-sufficient? Law and order, along with hospitals and education, is one of the biggest items in the State budget. Why not examine how you could reduce these costs by increasing the revenue from these activities. It could be argued that fines from speed cameras only apply to those who break the law. Unfortunately, it is becoming increasingly harder not to. Figures show that one in five drivers in Britain have been caught for speeding since 1996.

One of my European contacts described the current British policing methods as going from trying to reduce crime to penalising it instead. Unfortunately, this comes at great cost to the relationship between the police who uphold the law and many of the people they are meant to protect. People who lose prized clean driving records for minor speed infringements are unlikely to look as favourably on those implementing the law. Yet police need the everyday support of the law-abiding public to tackle most serious crimes.

I have little doubt that technology can do much to make the world safer. However, I also believe that in an increasingly online world, it can also undermine personal relationships. People trust those they meet and know. Much of the success of community policing initiatives revolves around such interaction. Technology should support police not replace them. Unfortunately, in a cost conscious world there is always a temptation to take the cheapest path and staff are everyone’s biggest expense.

Hopefully, Australia will not go down this path. The Conservative opposition in Britain, who look likely to win next years election, have promised a review when they come to office. That is likely to be before the next State government election in NSW. As such, hopefully by the time this happens the UK will have a more balanced approach to its use of speed cameras and any incoming government here will not see any policy ideas to emulate. I hope so. Big brother was the tool of an imaginary and insecure dictatorship not a peaceful and vibrant democracy like Australia and Britain.

The four biggest IT developments of the last thirty years

2009-09-24T00:01:00.005+10:00

I began my career in the ICT industry on Monday June 1st 1981. This was the day I joined the NCR Australia graduate trainee program. Less than two months earlier I had arrived in Australia armed with a degree in Town Planning Studies and not much else. After a month of working as a wine consultant trying, and failing, to sell expensive French wine to small business operators across suburban Sydney an advert placed by NCR promising careers in computers caught my eye. I remember thinking at the time “that sounds as if it has a bit of potential”. How right I was!

In the nearly thirty years since I have seen IT go from the backroom to the boardroom. I have found myself working in an industry blessed with the energy of creative entrepreneurs whose ideas are changing the way in which we live and work. To my delight I have discovered that in IT there is always something new to learn. As I’ve written before, in many ways I believe that IT is the latest iteration of the industrial revolution that began over two centuries ago in northern England. The computer has just replaced the steam engine as the agent of change.

However, I thought I’d try and provoke a bit of controversy in this blog by identifying what I think have been the most significant IT developments I’ve seen in my own career. In my opinion I think there have been four technologies which have had the most impact on the ways we live and work. I’d be interested in your thoughts on my selections and what you think are the most significant technology innovations you have seen in your lifetime.

My first selection happened within two months of me starting in the IT industry. I remember staring in to a shop window in North Sydney at an advert built around Charlie Chaplin. I have to confess that I didn’t quite know what to make of it. I certainly failed to realise at the time that the PC would become the de-facto work tool of most white collar employees across the world. I suppose some will claim that the PC began well before IBM took an interest. However, I believe that the IBM imprimatur gave it corporate respectability.

For me the real impact of the PC has been that it democratised information technology. Prior to its arrival true computing was the domain of the corporate data centre. The PC made computing power available to nearly everyone in the developed world. In so doing it helped smash the mystic that had developed around IT. Suddenly the language of computing was in the mainstream. As far as I’m concerned this has been both a blessing and a curse. This understanding has forced the IT industry to be more business orientated. However, it has also led to many business executives championing IT change projects without a full understanding of the issues they need to address. A classic example of this for me was the dot com bubble where business exuberance for the potential of technology was well ahead of reality.

However, one thing you learn working in IT is that there is always a gap between marketing hype and product acceptance. This is what Gartner refer to as the ‘hype cycle’. The real impact of the PC was about ten years after the IBM PC appeared. Despite working in the 1980’s for three IT vendors I didn’t have a PC on my desk until 1989 when I joined Unisys. However, the delay between release and acceptance for my next nomination was even longer than it was for the PC.

Although the Internet was first conceived in the 1960’s it largely lay dormant until the availability of the World Wide Web in 1991. However, since then it has definitely made up for lost time. A study last year by A.C. Nielsen revealed that Australians are spending more time online than watching TV. The Internet has revolutionised the way we shop, read news and communicate with friends and contacts. For many it is an alternative entertainment channel. It has dramatically undermined the business models of commercial television and newspapers. It even influenced the outcome of a Federal election in Australia. I don’t know when the ALP’s promised National Broadcast Network will be completed but I have little doubt that when it does arrive the changes the Internet has produced in our lives up until now will be swamped by even more radical new developments that will affect where we live, how we work and how we interact in society.

In particular, I believe the potential of the Internet has been unleashed by the mobile phone. This is the next major technological innovation of the last thirty years that I would like to highlight. From the old to the young and the rich to the poor almost everyone now owns a mobile phone. It has become the universal terminal. Moreover, it means that people are largely contactable wherever they are. The result has been the acceleration of the pace of business. There is little time for anyone to stop and stare in the modern world.

For me one of the intriguing aspects of the mobile phone has been how it has become the receptacle for a number of other technologies. You can use it to read your emails, to browse the web, to play your music, to record your appointments and to take your photographs. This probably means that my final nomination is likely to become obsolete as a discrete device in the near future. Nevertheless, I still believe that its functionality has been the cause of radical changes in our lives.

I believe the digital camera is up there with the PC, the Internet and the mobile phone as one of the four major technological innovations in the last thirty years. They say a picture paints a thousand words but until images could be digitised it was cumbersome to leverage them to illustrate documents and presentations. The digital camera has enabled images to be captured and displayed much more easily. For many tradesmen and designers this offers a viable way of developing a portfolio of their work to help in their marketing. It means that video now embellishes web sites. Images are now transportable and easily shared. This in turn offers many new opportunities in fields such as remote learning, security and high definition video conferencing to name but a few.

After thirty years I still get a lot of excitement out of working in the IT industry. It has dramatically changed the world in which we live. Moreover, I believe that there are still many more changes to come from IT. As such, it will be interesting to see what major developments the IT industry recruits of today will look back on when in thirty years time it is their turn to reminisce about their careers. I don't know what these developments will be but, whatever they are, I’m sure these recruits will, like me, still be able to reflect that in IT there really never is a dull moment.

A continual conundrum

2009-08-26T23:16:00.002+10:00

Winston Churchill is reported to have described Russia as a riddle, wrapped in a mystery, inside an enigma. He would probably have been even more puzzled by the discussion that has raged in the IT industry over the years on whether IT departments should be centralised or distributed. This is a definite conundrum. Every few years the IT department in many an organisation is either all bought together as one central unit or else distributed out so it can be closer to the business. Throughout its history, no one seems to have a definitive answer on what is the best way to structure an IT operation.

I have just had an enjoyable meeting with the IT Infrastructure Manager at a leading Australian company. I asked him what IT projects had recently been undertaken in his organisation. It transpired that one of the largest recent activities was the assignment of IT Managers from the central IT department back in to the business units in a sort of account management role. It had clearly been a positive experience. It had given these staff a much better perspective of where IT could help the business. In fact my contact, tongue in cheek, even dryly lamented the extra work he was now having to do because of the many valuable improvement suggestions made by these reinvigorated IT staff.

Yet over in the Australian Public Sector right now it is an entirely different story. A number of the State governments are actively moving to establish centralised Shared Service models as a way of consolidating their IT services. Typically these entail the creation of a central management unit for IT, (e.g. CenITex in Victoria), which will oversee the delivery of IT for a group of government agencies. Moreover, government IT operations came under the close scrutiny of Sir Peter Gershon last year and his ensuing report trumpeted consolidation and shared services as a way to make significant reductions in the cost of IT to a government. As a result, it looks like we shall see even greater moves in this direction by Australian governments in the years ahead. Who then is right? The fact that businesses have vacillated with whether to decentralise or centralise for so long is probably the best indicator that there is merit in both arguments.

The centralisation of IT allows skill sets and equipment to be amortised across a number of business units or agencies. For IT staff it offers them a clearer career path which can make the recruitment of specialist skill sets easier. Centralising resources should avoid the unnecessary duplication of hardware and software licences. This in turn should help bring down ongoing operating costs such as maintenance. Furthermore, centralisation should enhance the processes for the management of data or information resources. Comprehensive backup routines should be easier to enforce. Data duplication can be avoided. Consistent data definitions should be straightforward to impose from a central management entity.

However, there is definitely another side to this coin. Centralisation tends to disempower the end users of the IT assets. They tend to be the recipients of a service or system. The mindset that is created by this is that they are being given something from someone remote. As such, there tends to be less scope for them to interact with the IT department to suggest modifications, enhancements or new applications. Moreover, the systems they receive might also serve a number of other operations. This multi-function requirement is likely to mean that the actual systems are something of a compromise solution for an individual business unit. Hence the experience of the organisation I met with recently which has begun to disperse its IT staff. It has found that these employees are uncovering a host of pertinent, but previously unknown application needs. With the constant friction in the relationship between IT and the business these types of insight for IT can be a vital way for the department to enhance its reputation in the eyes of its main clientele.

If, as research regularly shows, the biggest challenge confronting IT is the task of aligning IT with the business then this close proximity between IT and the business is surely a positive thing. It makes dialogue between both groups easier. The IT department gets to know the personalities of the people who are its customers. The end users can build more personal relationships with the people providing the IT service. Such interaction can go along way to better understanding people’s needs and challenges.

Yet the IT department cannot wash its hands of the challenge of delivering more cost-effective services. IT is a big ticket item on most balance sheets. As such, its practitioners are obligated to show a duty of care in spending these monies wisely. They must be open to exploring ways that efficiencies can be achieved in the delivery of IT services to the business. Arguments about economies of scale and eliminating unnecessary duplication resonate with senior management charged with running a tight ship. As a result, they have an instinctive attraction to operational models like centralisation and shared services.

However, IT is increasingly at the epicentre of most modern businesses. Therefore, the premium challenge IT presents to the business is not about delivering IT as cheaply as possible. Instead it is about how useful are the services it delivers. IT is about effective output much more than cost minimisation. The annals of IT history are littered with examples of organisations that have implemented major projects to cut IT costs only to find that they have ended up with an even more ineffective IT operation, albeit one that may cost them less. Despite the presence of organisations like Woolworths in Australia and Tesco in the UK, where the smart deployment of technology has led to market domination, the need for the executive to focus on IT outputs before costs is not very well appreciated.

Perhaps there is a middle ground where IT staff are based in the business and the IT infrastructure is managed centrally. However, I have heard from many that this type of structure often results in the remote IT staff feeling isolated and stuck in a career dead end. Those that have gone down this path have invariably decided to return to either the centralised or distributed operating model.

However, perhaps there is nothing wrong with these ebbs and flows in structuring the IT department. They are possibly a reflection of its iterative evolution. With each change of direction something new is learned about how IT service delivery can be enhanced. The moves to centralisation tend to highlight how and where inefficiencies can be reduced while decentralisation usually reveals new opportunities for IT to add value to the business. To the outsider repetitive restructuring may well be bewildering. However, as Winston Churchill was to discover about Russia in the Second World War, just because something is perplexing does not mean that it cannot contribute something valuable to the cause.

I've looked at clouds from both sides now

2009-07-24T15:58:00.001+10:00

It was Wordsworth who reported that he wandered lonely as a cloud that floats on high over vales and hills. I suspect if he had elected to do his wandering in 2009 it would not have been such a solitary experience. In today’s world of ICT it looks as if every man and his dog is up there in the clouds. Probably no words have been more hyped up this year in our industry than the expression cloud computing. It seems to have that magical ability to offer all things to all people.

For most the appeal of cloud computing is that it appears to provide the potential for organisations to reach one of IT’s fabled destinations, the world of utility computing. This is the land where all the usual corporate headaches with ICT magically fade away. No longer do you need to invest extensively in your own ICT equipment and applications. These are owned and managed on your behalf by a remote supplier that you can connect to via the Internet.

If you want some IT functionality then all you need to do is to flick a switch or press a button and log on. As in other utilities, like the telephone or electricity, a meter records your consumption. At the end of the month or quarter you get a bill for all the resources you have utilised. No need to worry then about infrastructure refreshes, software release cycles, ICT staff skill sets or even program patches. All that will be handled in the clouds. Users concerned about escalating IT costs have a simple choice. They can either pay up or reduce their own consumption. Alternatively, as with many electricity services, cloud computing could possibly offer off-peak tariffs where the parsimonious could decide to do their intense processing in the midnight hours when it will probably be cheaper.

As a result cloud computing looks a tempting proposition, especially for businesses which see their ICT expenditure as a bottomless pit. However, like most things in this industry things are not always as clean cut as they might first appear. In fact, the topic of cloud computing generated a very lively discussion in a series of executive roundtables I recently hosted. Interestingly, there was a stark difference in attitudes towards it among those at the Melbourne function and those at the Sydney equivalent.

The debate was sparked by an attendee at the Sydney event. His organisation tended to run its IT equipment for a very long time. As such, it is now in need of an urgent refresh. His initial plans involved making a significant commitment to virtualisation. Lately though he has been wondering whether he should not go straight to cloud computing. His thoughts found a lot of support among the Sydney attendees. Several CIOs, no doubt exasperated by the relentless expense of managing the corporate desktop, had investigated Google’s desktop applications. They had clearly been impressed by what they had seen. These looked feature rich applications. There were some question marks about how well they would integrate with core business systems. However, it was clear that a number of these IT executives believed it would not be long before Google’s office applications would be a viable alternative to the Microsoft suite.

Down in Melbourne it was very much a different tale. Here there was much cynicism that the IT industry was being held captive to vendor marketing hype about cloud computing and that the expectations set by this marketing exceeded the current capabilities of the technology to deliver. It was noteworthy that IT executives at telecommunications vendors were perhaps the vaguest about the merits of the functionality. Whatever packages the teleco’s are producing to woo potential clients to cloud computing had clearly made little impression inside their own premises.

Nevertheless, my own expectations are that cloud computing will see significant growth over the next few years. Many businesses do not need much convincing that the overheads of managing IT infrastructure are onerous and offer little real advantage. The ability to outsource these responsibilities to a supplier with a cloud computing offering will have definite appeal even if the cost benefits are not quite as attractive as first envisaged. Yet I suspect that there are many other aspects of IT where it would be foolhardy for a progressive business to abdicate responsibility. Areas like business intelligence, supply chain management and eCommerce are key functions where in a competitive industry sector the astute application of technology is often the difference between a market leader and an also ran.

Doing these applications in-house brings a level of attention to them that even the best service supplier would have difficulty matching. The sophistication of these applications is a reflection of industry knowledge. Often they need to be tailored to the specific requirements of key trading parties. This intuition and insight is not something that a general cloud computing supplier could easily acquire. Moreover, unlike other utility services much of an IT service must be dynamic. IT must adapt to changes in business circumstances. Only those close to the business will have the wherewithal to determine how the business systems should be adjusted to address these new requirements.

There is also another area that distinguishes IT from other utility providers. IT systems contain confidential data. Client contact details, transaction or sales records, bank account or credit card information, financial records and sensitive correspondence are all types of data that most businesses would not want to fall in to the wrong hands. In a cloud computing scenario where will this data reside and who will have access to it? Which jurisdictions will govern the responsibility for the protection and privacy of the data? The likelihood is that it will be where the data is located not the country of origin. It was significant that when the NSW Department of Education selected Google to provide email services for its students it stipulated that the servers running the email must reside in Australia. I suspect that a prescient executive in its operations foresaw the potential issues that could arise if they did not.

Mind you, I do not believe that any of the matters I have raised will be showstoppers that will hold back the development of cloud computing in its entirety. Instead, I believe they reflect a need for an understanding about where the parameters of cloud computing should begin and end. This knowledge will only come about as more organisations embrace these services. Their real-life experiences will help guide those that follow. The two-sided debate on cloud computing at the recent roundtables was not about the suitability of the technology, rather it was to do with how and when you alert the business to its potential and what expectations should you set. Over the next few years, those contemplating wandering in the computing clouds are unlikely to be alone. They should find they will be joined by a number of other companions who will help them successfully progress in this journey.

Why I hate PCs

2009-06-30T16:43:00.000+10:00

My current laptop was purchased in September 2005. It has not proved to be the most reliable machine that Toshiba has ever produced. In a little over three years I’ve encountered: a faulty fan that was fixed under warranty; one unreliable USB port of only two on the system; a need to replace a failed screen and a broken screen light. Yet, if the truth be known, I was willing to keep this laptop for the rest of my days on this earth. I’m even prepared to patch it for eternity.

That was until along came Kevin Rudd. The Australian Prime Minister has people like me, Australian small business owners, very much in his sights. He believes that we can re-energise the flagging economy. As such, he has very kindly offered us a tax credit of up to 50% of the cost of any capital purchases we make in 2009. Which ever way I looked at it this seemed like a great reason to update my computer. I also thought it was about time I traded in my trusty ten year old Toyota Camry. Yet my experiences of the two new products I’ve just acquired are radically different.

My new Toyota hums. It is clearly a significant improvement on what I previously had. It is more solidly built and a much smoother drive. Moreover, there are a number of new features and components that have added to the capability of the car. However, it has also been relatively painless to get to grips with all these new features. The same though can not be said for my new PC. The machine has a much faster processor and twice the memory of my earlier machine. Unfortunately, I’ve exhausted two days of my life getting it to a state of semi-readiness and, even now, I’m not convinced I’m any better off than I was with my old laptop.

Unlike a car there seems no sure fire way to tune a PC. In the background there is the perpetual presence of firewalls and anti-virus software munching up the system resources. Then there are mysterious programs in memory which seem impossible to turn off but which are churning away seemingly oblivious to whether I need them or not. I have worked in the IT industry for nearly 30 years but despite this experience I am regularly confronted by obscure messages pointing at errors or problems. How the novice is meant to make sense of all this is beyond me.

Then there is the challenge of moving everything from your old system to your new one. At least moving the data across is relatively straight forward. All you need is an interim hard disk drive to which you can copy the data from your old system. Then all you need to do is to attach the system to your new computer and you can download your data files. However, moving your applications across is much more complicated.

If you have the original disks all well and good, providing of course you understand your licence obligations. I had assumed that you were permitted to run the software both on a principal machine and a back-up system. However, Microsoft advised me that my version of Office 2003 was licensed to a specific machine and that I would need to licence new software for my new PC. However, Microsoft no longer sells Office 2003. I had visions of being made to migrate to Office 2007 just so I could maintain application compatibility between my two laptops. Fortuitously, Brisbane based Thunderbird Software came to my rescue with a new licence for Office 2003.

However, for those applications where I did not have the disks I had to download new versions of the program from the Internet. Often this entailed me rummaging through old emails or my disk systems looking for correspondence with verification codes. Occasionally I needed to Google search the companies in question in order to contact them to ask for these details. A week after my PC arrived I still haven’t managed to load all the licences I own on to my new machine.

Moreover, there are still several other items outstanding. I haven’t even looked at how to get my old email archives on to my new laptop. Copying my Internet favourites across has proved more complicated than I expected. As such, using the Internet beyond Google requires a search for the desired URL addresses. Then when I’m accessing the Internet I have to endure an endless stream of questions from the firewall software asking me to verify whether each request for access is or is not permissible.

All in all the process of migrating from one laptop to the other is a tedious distraction that I could do without at present. The result is that I have decided to carry on with my old patched up Toshiba for now. Instead my partner and my children have been given use of the new machine. I can assure you that I have not been so generous with my new car. For the time being at least that’s mine!

Surely though I should be feeling some sense of elation about having a new computer. I should be drooling over the faster processing speeds, the quicker searches, the lighter weight, the more responsive keyboard and the wider screen. Yet I’m not. I know in talking to others that my experiences are a common occurrence. Twenty five years after it first appeared in earnest in the corporate world the typical PC is still a very cumbersome machine with an agricultural user interface. They may call it the Personal Computer but the last thing you can say about the PC is that it’s personable.

I find it difficult to imagine that someone at Microsoft has not recognised that there comes a time in every PC’s life when you need to put it out to pasture. Therefore, in such circumstances there will be a need to move applications and data from an old machine to a new device. Yet no apparent thought appears to have been given to what must be any everyday requirement. While the boffins focus their energies on combating copyright theft the user is left to muddle through as best they can. The attitude seems to be if they loose days at a time in migrating to a new PC then that is no concern at all for the company that makes most of its money on the success of the PC as a business tool.

I keep hearing that things are different for Apple users. Up until now I have not considered the Apple Mac as a viable alternative to a traditional PC. I’ve most fretted about the likely complications in transferring files with other parties. This is a common requirement of mine. However, if someone could show me that my concerns in this area are unfounded then I wouldn’t hesitate to make the move to the Mac when either of my two PCs expires. Moreover, if the Mac lives up to half the hype I hear about it then I suspect I will afford it the same love and devotion that I give my Toyota Camry’s!

A new look at reality

2009-05-31T02:17:00.008+10:00

Andre Mendes is the most impressive speaker on IT that I have ever heard in a 29 year career in this industry. I put him well above vendor speakers I have heard like Bill Gates and Charles Phillips, (the President of Oracle) or any CIO from any major corporation in Asia Pacific who might have spoken at an IT Executive conference I’ve attended or chaired. Andre is that good a public speaker. In many ways I think Andre is IT’s nearest answer to Barack Obama. I definitely feel that ‘yes I can’ when I walk out of an Andre Mendes presentation.

When I first heard him speak Andre outlined the change management challenges that had confronted him as he helped move the extensive Public Broadcasting Network in America from analogue to digital. I was deeply impressed by how he had confronted the need to change work practices that had sustained many of the employees in this organisation for most of their careers. Yet Andre had achieved this not by trying to railroad through his plans but rather by understanding that for many of these staff the change was akin to a grieving process. He empathised with their distress as they mourned old, familiar ways of doing things but he was also able to convince them of the need to embrace the changes that would enhance the success of the organisation to which they had devoted their careers.

Today Andre works as the Senior Vice President, Strategic Planning and Global CIO at the Special Olympics, the not for profit organisation that oversees Olympic tournaments every two years for athletes from around the world who have intellectual disabilities. It is reflective of Andre that after leaving the Public Broadcasting Network he chose to turn his talents to another organisation that requires a commitment to a cause and an ability to get by on the smell of an oily rag. In his new role the speech he delivered called on CIOs to recognise that they were integral to the success of any business today and, as such, he challenged them to have the courage to seize their rightful place at the epicentre of decision making in the modern business.

One of the things I most enjoy about Andre’s presentations is that despite his many accomplishments Andre is not an American who likes to big note himself. He is the first to acknowledge where his judgement has been poor. However, he is also someone open to advice. As a result, his presentations are both thought provoking and humble. These are qualities he carries over in his day to day dealings with people. Andre is someone with whom you can debate ideas. I also particularly like the fact that he not only appreciates how and where technology can change a business but also the fact that this potential is meaningless and will never be realised if the issues of change management are not also given equal importance.

I make mention of this because I had the good fortune to catch up with Andre when he was in Sydney earlier this month. Over dinner I asked him what he thought was the next major technology that would revolutionise business. I must say that I was surprised by his response. When Andre suggested it would be virtual reality I must say that I looked at him rather incredulously. I had been somewhat underwhelmed when I had spent time exploring Second Life last year. Andre noticed my scepticism and surprised me by telling me about an Australian company I had never heard of called Exit Reality that was at the forefront of virtual reality development. He then elaborated on why he thought this type of functionality would be the next technology to revolutionise business.

He outlined how he saw Virtual Reality enhancing a retail purchasing decision. He asked me to imagine having a real life avatar that is the spitting image of me. He said that this duplication would be consistent right down to my suit measurements and shirt and shoe sizes. Andre then told me to make a picture of myself visiting a virtual shop that carried all the stock of its real life counterpart. Here my avatar could try on shirts, shoes, suits and trousers so I could assess which ones suited me the best. I could invite partners, friends and family to take a look and get their feedback. Eventually, Andre believed I would be able to determine what worked best for me. I could then visit the store to purchase the goods or else order on line and ask for it to be delivered. Andre saw that this type of interaction by an increasingly IT savvy consumer would become increasingly more common. It would provide the consumer with a way to make a more informed decision and assist the shop by minimising its stock and retail overheads.

This was just one way that Andre considered that virtual reality could empower a consumer by giving them a chance to sample and review something prior to purchasing. Andre thought that much of what we buy currently entails a calculated gamble. Yet, he saw that companies could, through virtual reality, provide the consumer with some better way to assess products prior to making that commitment. Andre believed that this application of technology would grow rapidly in the coming years.

Andre also thought that virtual reality would allow manufacturers to do trial and error on potential designs prior to commencing production. He was particularly enthusiastic about what virtual reality could do in nanotechnology and how this would be of great benefit to the pharmaceutical industry. Andre envisaged how virtual reality would allow scientists to experiment with combinations of different molecular designs to help with trial and testing in the design of new drugs. Mind you, I have to say that by now Andre’s thinking was going well beyond my comprehension.

Nevertheless, notwithstanding my intellectual limitations, the dinner with Andre that evening reinforced my view that ICT is a wonderful industry in which to work. It is an environment that attracts creative and imaginative people who are looking at new and better ways to do things. One of the things I admire about Andre is the practical success he has achieved as a CIO in two organisations blessed with limited resources. Yet I suspect it has been Andre’s ability to absorb, filter and practically interpret the new thoughts and concepts that are constantly emanating from this industry that has been the key to his success. If you ever get a chance to hear him speak don’t miss it. Andre’s contribution alone will make any conference where he is on the agenda a worthwhile investment of your time.

Planning for the future

2009-04-30T21:15:00.001+10:00

Australia is undoubtedly the lucky country. It is far away from the troubles of the world. It is blessed with a nourishing climate. It is endowed with plentiful resources. It is a young country possessed with the joie de vivre of youth. It is little wonder then that the national catchphrase is “she’ll be right”. Why wouldn’t someone expect things to turn out all right when they live in a place as fortunate as Australia?

Yet, as with everything in life, there’s always a downside. In the case of Australia this downside is the temptation to be complacent about tomorrow. If life is bountiful today why do you need to worry about the future? That can surely look after itself. As such, you find that Australia is not a country where many go to bed fretting about the future. Unfortunately, this nonchalance means that people tend to put off making the hard decisions.

Nowhere does this manifest itself more than in the deplorable state of critical infrastructure in the country. In the railway boom of the nineteenth century this lack of foresight resulted in the piecemeal establishment of six separate railway gauges. A hundred years after the advent of the motor car cities the size of Sydney and Melbourne are still not completely connected by a freeway despite the fact that the national capital sits midway between them. More recently, successive governments have continually danced around the need for a second airport in Sydney while the inadequacies of port facilities at places like Newcastle and Gladstone continue to hamper the resources industry, the countries main source of income.

However, this nonchalance to infrastructure has other wider ramifications. The inadequacies of the national infrastructure have lead to a majority of the Australian populace being crammed like sardines in to a few scattered urban conurbations spread around the national coastline. The only effective way to get from one to another is through frequent air services. Despite the fact that much of the wealth in Australia is derived from regional resources the Australian Bush typically loses out when any investments in infrastructure are being made. Australian’s regional citizens complain frequently, but in vain, about the state of their roads, their inadequate mobile phone reception and the dearth of medical services to name but a few of the infrastructure components whose absence continues to hold back the development of other population centres in the country.

Nevertheless, there has been one notable infrastructure exception to all of this. When it came to equipping the country with a telecommunications network in the nineteenth century Australia’s Victorian forefathers undertook the task with gusto. They immediately recognised that the telephone had the ability to shrink distance. Initially, the benefit was seen as a way of rapidly connecting the remote colonies to the mother country. Over time, though, they began to appreciate that the telephone had the capability to unite people across the length and breadth of the country.

I make mention of all this because of the debate that has arisen over the announcement by the current Federal government that it intends to roll out a national fast broadband network across Australia to the homes of 98% of the population at an anticipated cost of $43 billion. My initial reaction when I heard this news was one of Eureka. At last we had a government with some balls to do something decisive about infrastructure. This was a government that was not prepared to procrastinate about addressing what I strongly believe will be a critical need for this country in the 21st century. Yet others were much less welcoming of the announcement.

Their response was to cast doubts about the wisdom of this investment. Where’s the business plan they shrieked in response. Where’s the content that will drive the need for this infrastructure they questioned? Why isn’t the private sector doing all this they queried, seemingly oblivious to the current economic crisis and the turmoil that has consumed Australia’s dominant telecommunications supplier for the past few years. Others even wondered whether Australia actually needed a fast broadband network.

I felt like directing these antagonists to their local state or national archives and asking them to see if they could find the business plan that had supported the original rollout of the first Australian telecommunications network. I suspect it would be a fruitless search if they bothered to try but it would perhaps have highlighted to them that very few key decisions are done on the basis of a business plan. As someone who has spent a career in IT a common industry trait is the number of major companies who were formed from a business plan written on the back of a napkin! In other words your instinct either tells you that something like a fast broadband service will shape this country in the 21st century or else it doesn’t.

The reality is that the opposition when they were in government never really understood the IT revolution that was happening around them. Their energies in this portfolio were largely focused on the privatisation of Telstra. They seemed to think this would galvanise the sector with entrepreneurial energy and investor funds. Instead after ten years of relentless effort they found they had created a behemoth that to many seems answerable to no one. With a dominant market share Telstra saw little value in making huge major investments in new infrastructure, especially given how poorly its stock price had been performing.

I believe that to his credit Kevin Rudd realised early on that something drastic needed to be done if this stalemate was to be overcome. In fact, I believe that his early commitment to a new broadband network resonated with many who had long been frustrated by the lack of action in this area and helped project Kevin Rudd as a potential Prime Minister who more understood the future needs of the country. His election campaign never looked back afterwards. Moreover, I think his subsequent plans for financing it through a public-private consortium and through the creation of a new entity to initially manage the new network are sensible approaches in the current economic circumstances.

I for one await the completion of the promised network with a great deal of anticipation. I can envisage that it will be the mechanism that empowers our businesses to compete on the global stage. I can see that it will truly help open up Australia by making location irrelevant. Organisations or employees could elect to base themselves somewhere that suits their lifestyle but which still enables them to work productively. Finally, I can see a way that the divide between urban and rural Australia could be plugged. Mind you, I fully expect there will be budget blowouts in rolling out the network as experience tells me that big projects are always over budget. Moreover, I would not be surprised if it was a year or two late in being completed. However, when it is finished I know that there will be Australians for generations to come who will be grateful that in 2009 Australia finally had a government equal to their Victorian predecessors who were prepared to do something about the need to truly develop this country.

This is what I would do

2009-03-30T12:04:00.000+11:00

I write as a Telstra shareholder. Like many Mums and Dads in the late 1990s I was tempted by the first partial float of the company. For a time things went extremely well, so well in fact that when the next partial privatisation of Telstra was announced I put myself down for an even greater number of shares. Unfortunately, it has been pretty much downhill all the way ever since. Right now the share price for the entire company is worth less than the share price at the time of the first partial float in 1997. As such, given these circumstances, I have more than a passing interest in what direction the new CEO will take Telstra when they come on board later this year.

In fact this was the very question I was recently asked by a journalist. She wondered what I would do if I was given the opportunity to succeed Sol Trujillo. I first answered by saying what I would not do. This was that I would seek to avoid any major focus on cost cutting and, in particular, I would reject any personal key performance indicators that linked my own bonuses, or those of my key staff, to the company share price, at least in the short term. This has been the path pursued by Sol Trujillo and the result has been death by a thousand cuts.

Anyone who has had any dealings with Telstra over the last few years will have encountered a fairly bunkered down, keep the world out, job survival mentality amongst its staff. Given the fate of the company’s share price this was perhaps understandable. Sol clearly saw his challenge was to drive the operational efficiencies that would restore the analysts’ faith in Telstra. However, this focus came at the expense of harnessing the considerable expertise that has always been within the company. The result was the departure of many able middle managers who knew the business and were technically competent but who felt their talents would be better appreciated elsewhere.

Nevertheless, I believe that with the economic downturn the circumstances have changed. The share market is unlikely to recover its heady heights for the foreseeable future. In fact, much of the current debate centres on a need to eschew short term performance metrics and, instead argues that businesses should focus on assessing CEO performance over a three to five year horizon. As such, the task for Sol’s successor should be to inspire and motivate the Telstra workforce towards a vision they paint for the future.

The challenges now ahead for all businesses are to entice consumers to open their purse strings by stimulating latent demand. The general sentiment today is one of apprehension. People feel it is better to pay off debt or save money for a rainy day rather than to acquire something new. Therefore, they need to be inspired out of this anxiety. In my mind this requires all organisations to place creativity and innovation ahead of operational efficiency. In many ways operational efficiency is now no more than a given. The successful CEOs of today need to realise their priority is to unleash products and services that capture the attention of an increasingly anxious consumer.

I don’t believe the challenge will be any different for the new Telstra CEO. Australians are sophisticated and knowledgeable consumers of telecommunications. As such, they are open to looking at creative ways of doing things in this marketplace. Telstra has strong footholds in the fixed line, mobile, broadband and Pay TV markets. What new products could transcend these different sectors? I would bet London to a brick that there are people in Telstra today, at the coalface of the business, who would have strong ideas of potential new offerings that could help the company distinguish itself.

Speaking as a consumer of telecommunications I can see many products that would attract my attention. For instance why is my wireless access to broadband restricted to my own modem and office premises? Why cannot this service follow me as I travel around Australia and even overseas? Surely, all I should need to do would be to logon to a public wireless modem and use the sign on name and password that works in my home office. I would probably need to pay more for such a service but I would expect these costs would be much lower than the exorbitant rates that hotels and internet cafes typically charge to use the Internet.

I’m sure there are many other such services that experienced telecommunications staff could devise. However, before such ideas can eventuate there needs to be a culture that actively seeks such contributions. Therefore, the challenge for the new CEO is to create a corporate atmosphere that encourages staff to make such suggestions. Only then will Telstra be able to harness the expertise which has always been in the company but which has probably languished in a corporate environment where staff were typically seen as no more than costs to contain.

Nevertheless, I don’t underestimate the challenge. In these uncertain times there is no such thing as job security. Against this backdrop the new CEO needs to inspire their troops to contribute. It is the sort of backs-to-the-walls leadership that generals need to inspire in their troops when they are under fire. History shows us that those generals who have the most influence on their troops are those who put themselves alongside their soldiers on the front line. Such leaders walk the talk, are accessible, are candid with those around them and value the contribution and commitment of their foot soldiers.

In my many dealings with Telstra going back over twenty years I have regularly encountered employees whose commitment, expertise and knowledge has impressed me. Such people may have lain dormant during the Sol Trujillo era. These were times when all that was asked of staff was to do and die. Putting your hand up was probably only going to expose yourself and make yourself vulnerable when executives were looking for sacrificial lambs in the next cost cutting exercise. However, the economic downturn means times have changed. Capable employees will be Telstra’s salvation in the long-term. What is more, I suspect that unleashing their ideas will do much more for the long-term Telstra share price than any cost cutting has ever achieved.

We're still babes in arms

2009-02-24T00:52:00.003+11:00

Tuesday April 7th 1964 was the day that it all really began. The Oscar for Best Picture had just gone to My Fair Lady, The Beatles topped the charts on both sides of the Atlantic with ‘Can’t buy me love’ and IBM decided that wouldn’t it be lovely to try and prove the Fab Four wrong by releasing their new 360 mainframe.

This was a major milestone in the IT industry because these were the first computer systems to be built around a common architecture. In effect this meant that a customer could buy a small system with the knowledge that they would be able to migrate the applications and peripherals on that computer to a larger machine if their needs grew. The result was that for the first time many organisations felt comfortable investing in a data processing device. The numbers of computers in use grew dramatically. The System 360 opened up computing to business and, by association, our profession began.

It is worth remembering that 1964 is less than 50 years ago. IT is so ingrained in the modern world it is sometimes easy to forget that this is a profession that is very much in its infancy. As with all infants there is still much to learn. IT does not have the luxury of other disciplines like accounting or architecture or medicine or engineering which have evolved over centuries. These established professions have extensive bodies of knowledge that they can draw upon. There are precedents to guide practitioners encountering present day problems. The relevant training and qualifications required to join their ranks are understood. IT, by comparison, is still very much finding its feet.

There is also another factor to bear in mind about IT’s youth. For most of its existence this has been a supply driven profession. This was typified by IBM’s release of the 360. Suddenly, more and more people were required to support the machines that were sold. As such, the focus in the industry has long been dominated by its suppliers. Even now, nearly fifty years later, it is common to read IT magazines and newsletters where all the stories are about product releases and technical functionality. We breathlessly await what will be the next big thing. Regrettably, the IT executives who are charged with realising this potential are almost always overlooked.

Nevertheless, despite the pre-eminence of IT in the modern world work needs to be done before IT can acquire the same level of esteemed respectability that is enjoyed by its rival professions. In particular, two things stand out in my mind. The first is an understanding of the training required to formulate an IT professional. The second is an agreement of how IT should best be governed in a business.

Typically, university degrees in computer science have a technical bent. They emphasise the intricacies of technology and systems development. This is easily understandable. Most of those lecturing tertiary students in computer science have this orientation. It is rare to come across computing courses which give an equal focus on the soft, people skills and tactics that will assist these new graduates when they interact with their business colleagues in the corporate workforce. The result has been the common derision about IT executives not understanding the business. These IT executives soon discover that their technical knowledge is irrelevant if it does not help produce better business outcomes. Unfortunately, better business outcomes for most executives are to do with things like share price, customer retention and profit rather than getting a system back on air or ironing out a system bug.

Work has been under way for some time in a number of places to address these deficiencies. Other professions like accounting have long recognised the need for practical post-graduate qualifications to verify the capability of a practitioner. Several IT industry bodies have attempted to do the same for our profession. However, in the tight job market for IT skills in recent times employers have shown little support for such IT qualifications. This may change with the downturn when organisations may be more selective about the skills of those they hire for the IT department. However, it is likely to be a slow process before the idea of certifying the skill sets of IT practitioners takes hold.

The other area where I believe IT needs to focus its energies to improve its standing as a profession is around determining the appropriate governance structures for the delivery of IT in a business. Few people without the qualifications would quiz the recommendations of a lawyer or an engineer. Yet all-too-frequently IT executives find their opinions questioned. It seems that any executive who can create a spreadsheet thinks this knowledge equips them with the expertise necessary to determine how best to invest in IT.

In many ways I liken the business/IT relationship to driving in different parts of the world. Drive in a country like Singapore and there is a quick appreciation that this is a country where most drivers have an understanding of the road rules and etiquette. The result is a sense of order. Everyone knows their obligations. I equate this to businesses where IT and the business are working in harmony delivering highly effective IT operations.

Yet in other parts of the world I have visited driving is the antithesis of order. The streets are grid-locked, the laws are flouted, the general rule seems to be every man for himself and you feel you are taking your life in your hands just getting in to a car. That anarchy for me is synonymous with a business without strong IT governance structures. These are the organisations full of disparate systems that have been acquired to solve immediate needs with no thought of how this equipment and associated data will integrate with what is already in place. These are the businesses where the IT department always seems to be in a frenzy but no progress ever seems to be achieved. These are the places where solutions that are delivering strong dividends elsewhere never seem to bear fruit. Moreover, a typical feature of these companies is the steady churn of CIOs as the executive go repeatedly searching for some messiah who can take them to IT’s promised land.

Fortunately, the need for IT governance has gained increasing traction in recent years. A number of experienced IT practitioners around the word have recently helped define a global standard for IT Governance (ISO 38500). Organisations like the IT Governance Institute in the United States and the Office of Government Commerce in the UK are defining the processes and activities that underpin an IT Governance framework like ISO 38500. In themselves these are not a panacea to the IT governance challenge. However, they constitute a growing body of knowledge that provide reference points to an IT executive seeking to establish much stronger IT governance structures.

Our industry is definitely evolving. We may not be as mature as other professions but we are making progress towards that destination. Like a young child encountering bumps and bruises while it tries to walk we too are learning from our mistakes. Most forward thinking executives know their organisations would be lost without IT and as the profession gains in operational expertise that dependence will get even stronger. IT has come a long way in less than 50 years and I have no doubt it will go much further in the next 50. In fact I suspect our centenary on April 7th 2064 should be quite an occasion to celebrate.

Real security is about changing hearts and minds

2009-01-14T23:12:00.001+11:00

One of the most able administrators in the dying days of the British Empire was Gerald Templar who served as British High Commissioner in Malaya during the Emergency. He arrived in 1952 after his predecessor had been assassinated and with rising concerns that the country was drifting towards anarchy. Yet by the time he left in 1954 Malaya was well on its way to a peaceful independence. Templar achieved this by recognising that the best approach when dealing with alleged grievances was not through “pouring more troops into the jungle, but in the hearts and minds of the people”.

I suspect quite a few of today’s CIOs should take heed of Templar’s tactics when looking at how best to address their own security challenges. The task of securing the IT environment is certainly not getting any easier. Despite the economic downturn two independent global studies last year by Ernst and Young and PricewaterhouseCoopers revealed that around 50% of CIOs surveyed expected their investment in IT security to increase in 2009. As both reports highlight, in the integrated, globalised business world of today the integrity of an organisation’s information asset is an essential component for success.

Yet the evidence from both studies seems to be that CIO’s are ‘going through the motions’ in addressing IT security threats. They seem to be operating under a belief that because they have purchased new security solutions and because they have satisfied legislative compliance requirements they are somehow more secure. This was perhaps best illustrated for me by an example provided of Hannaford Supermarkets in the United States. This sizeable retail operation suffered from a significant theft of customer credit and debit card data over a three month period in early 2008. Yet, as this was happening, the company was trumpeting that it was compliant with the new Payment Card Industry Data Security Standard (PCI).

In fact the very thing that PCI was designed to prevent occurred in a high profile organisation that had made a significant commitment to complying with this standard. Clearly, as the Hannaford example demonstrates, compliance does not ensure security. Instead, the practices inherent within the security standard have to become part of the culture. Unfortunately, it would seem that in their approach to compliance requirements too many CIOs see the task at hand as one of being able to tick boxes. However, without living and breathing the controls within the compliance regulations there will be no real protection.

In a similar vein the same could be said about the escalating investment in IT security technology that both reports highlighted. The days are long gone when IT security was seen as virus protection and the use of firewalls. The use of more advanced security technologies like data encryption is growing around the world. Moreover, users have taken significant advances in securing their Web/Internet capabilities with large numbers of CIOs deploying the protection provided by secure web browsers, content filters and website certification. More are also using virtual private networks to safeguard remote access to their systems.

These responses are encouraging. I have no doubt that this functionality will assist in providing greater protection to IT environments. However, I very much doubt that this is all that is required. Unfortunately, it seems that too many CIOs are looking to technology to be some sort of silver bullet that will solve all their IT security hassles. In my mind that can be the only explanation of why a large number of CIOs are still not doing more work in establishing IT security plans and standards. The Ernst and Young analysis reported that only 30% of CIOs had implemented a recognised IT security standard and that 29% had no documented information security strategy. The figures were even more troubling in the PricewaterhouseCoopers study which showed that only 59% of those surveyed had an overall information security strategy.

These low adoption rates for security standards and strategies are a concern. In the words of the PricewaterhouseCoopers report these approaches articulate “coherent, enforced and forward thinking security processes”. Embracing them is a recognition that effective IT security can only be provided through a change in corporate culture. Documented strategies and standards aim to do just this. Using technology to enhance security without an appreciation of the full change management task does not show much real resolve for the task at hand.

This weakness was further evidenced in a shocking ignorance that many respondents had to the number of security incidents that had taken place. 35% of respondents to the PricewaterhouseCoopers study were unsure how many security violations had occurred in the past year. Furthermore, 46% did not know the nature of these breaches and 42% had no insight in to the source of the incident. While it might be unreasonable to expect a CIO to have a handle on all these events this overlooks the fact that proper procedures were clearly not in place to document the security infringements that had taken place. Moreover, these findings also highlight the likely absence of a review process in many businesses which should provide the analysis to ensure that these security threats do not re-occur.

These drawbacks are compounded by the growing use of outsourcing in the provision of IT in business. Recent research by Ernst and Young in Europe showed over a third of organisations were planning to, or had, embraced IT outsourcing. Yet very few respondents seemed to attach any rigour to assessing the security capabilities of these third party suppliers and partners. 29% of respondents to the Ernst and Young study stated they performed no security reviews or assessments of how these third party organisations were protecting the information assets of the business. In many ways this security nonchalance can only be a matter of concern for these suppliers. They are likely to be blamed for any security incidents that occur. Yet they are obviously working for a client with a corporate culture of being lackadaisical in its approach to the challenges of dealing with IT security.

This then brings me back to the example of Gerald Templar. He recognised that in subduing the security threats confronting his administration he could not just deploy more and more resources. He saw that in the end the real challenge he faced was winning over the people affected. In a similar vein the same could be said about IT security. It is undoubtedly a good thing that business is prepared to invest more monies towards IT security. However, eventually they will want the assurance that these investments have been productive. If the IT department keeps getting more and more money but the problems of IT security keep escalating then the only real outcome will be a further blemishing of IT’s already tarnished business reputation. Instead CIOs need to demonstrate that only when IT security is owned by everyone in the business can the challenges around it be overcome. As Gerald Templar demonstrated back in Malaya in the 1950’s, this requires IT to win over the hearts and minds of the IT user community by showing them why supporting this task is in their best interests.

IT's competitive advantage

2008-12-31T18:36:00.002+11:00

If you ever have cause to question IT’s ability to deliver a competitive advantage then take a look at the retail industry. There you will find examples from Australia and the United Kingdom that show just how the astute application of technology can transform the dynamics of a marketplace. In both countries, in a comparatively short period of time, one organisation has harnessed IT to become a virtually unassailable market leader while, on the other hand, the ineffective application of technology has left an erstwhile strong competitor desperately playing the no win game of catch up.

When I left the UK in 1981 to migrate to Australia the pre-eminent supermarket chain was Sainsburys. However, by mid 2008 research from TNS Worldpanel showed that it had slipped to third place in its share of the UK grocery market. Its market share was about half that of Tesco which had 31.6% of the British grocery market. Yet back in 1981 when I left Britain the Tesco brand was something of a music hall joke. It was synonymous with cheap, uninspiring supermarkets. In the intervening years Tesco has turned around its fortunes to such an extent that over ₤1 in every ₤7 of UK retail expenditure takes place within a Tesco store. This transformation owes much to the imaginative application of IT which has underpinned astute retail marketing strategies.

The first example of this was the promotion of a loyalty card in 1993. At the time the executive realised it had little insight as to who were its customers. The loyalty card helped Tesco profile its customers by enabling it to analyse their purchases so they could direct targeted promotions to them. For example the appearance of nappies in the weekly shop of a loyalty card client would most likely indicate the arrival of a new baby. Such a customer could then be sent promotions around items such as baby food, milk formula and, of course, nappies. Alternatively, their bond with Tesco could be strengthened through a voucher for a complimentary bottle of champagne to celebrate their new offspring. These are classic examples of business intelligence in operation yet they were happening about ten years before the IT industry had come up with this moniker.

However, the area where IT plays the most prominent role within Tesco would be in the automation, streamlining and acceleration of its supply chain. A recent research study on supply chain management by international food and grocery specialist IGD has ranked Tesco as ‘best in class’, a position it shared with other prominent global retailers such as Wal-Mart, Aldi, and Ikea. In contrast Sainsburys attempts to enhance its supply chain have been characterised by repetitive failures. In fact implementation failings in this area a few years ago necessitated the need for Sainsburys to resort to manual processes for stock ordering.

A similar tale has unfolded in Australia in recent years. Its grocery market has been dominated for a long time by Coles and Woolworths, (no relation to the American retailer), which together have about 79% of the branded, packaged grocery market. However, in recent times Woolworths has begun to steal a march on Coles with 2008 data showing that Woolworths had just over 44% of this market compared to Coles with around 34%. Many in the industry trace this dominance to the arrival of Roger Corbett as CEO at Woolworths in the late 1990’s.

During his time as CEO Corbett unleashed Project Refresh, a major re-engineering effort which helped transform the company’s supply chain. This project has been reported as costing Woolworth’s over $1 billion yet it has returned savings of more than $7 billion. Moreover, the efficiencies generated by these systems have widened the gap in supermarket sales with Coles, helping generate at least $150 million of extra gross margin and creating an advantage that compounds over time. In contrast Coles, like Sainsburys in the UK, has failed miserably to emulate the supply chain efficiencies provided by the IT systems of its major rival.

Good supply chain systems like those at Woolworths and Tesco revolve around excellent inventory management. These help automate the management of stock right down to an individual store level. The results are higher stock turns and more accurate demand forecasting which ensures less capital is tied up in the warehouses as idle inventory. Moreover, the key items in most supermarkets are perishable goods like dairy products, fruit, vegetables and bread. As such, a high stock turnover ensures that the products customers buy are fresh and that less is allowed to waste away. For customers these cost savings usually translate in to price reductions.

These improvements in inventory management are then coupled with strong warehouse systems at a consolidated number of key distribution centres. These systems focus on better asset utilisation within these enlarged warehouses. They achieve this through a better structuring how stock is stored. This accelerates the retrieval of popular items. In addition, these systems can incorporate forthcoming shipping requests to automatically generate work schedules for warehouse staff that can seamlessly enhance their operational efficiency.

Another important component with a state-of-the-art supply chain is the integration of the warehouse with a transport management system. In fact one industry expert told me that in best practice supply chains the operations within the warehouse are usually driven by when the trucks will arrive on the premises. This dictates what items need to be delivered where and when. The result is that the operation of delivery trucks is optimised so minimising the times when they are waiting or travelling with no load. This expert argued a convincing case that these practices are genuine contributions by the retail sector towards greater environmental responsibility as greater truck efficiency will lead to fewer journeys and, thus, greater fuel savings.

Throughout all these components within the supply chain are two key considerations. The first is that these are mission critical systems in a large retail operation and any down time is dead money for the organisation. Secondly, the focus is on delivering greater efficiency from both assets like stock and capital but also from the staff who work there. All this might appear on the surface as a relatively straight-forward application of IT to a business. However, this view trivialises the massive change management that has been necessary to generate these efficiencies.

The systems have required whole new ways of working. They have displaced the significance of many of the buyers who are traditionally the key staff in a strong retail operation. They required business partners with robust technology, industry expertise and a commitment to delivering results. Yet, above all, they have required key executives to take a leap of faith with the potential of technology and to then drive the ensuing projects to ensure they realised this potential. In the case of Roger Corbett he elected to invest a billion dollars in a totally revitalised but unproven operating model even though his company was the market leader at the time.

Retail is understandably recognised as a tough industry, especially in the grocery area. Margins are typically tight, stock has limited shelf life, operations are relentless, customers are demanding and loyalty is often limited to the last buying experience. There is no margin for error in such an environment. However, in the case of both Tesco and Woolworths the effective deployment of IT has helped transform these businesses in to world leaders. Often the achievements of the IT industry can be taken for granted while our failings can hang around to haunt us for years to come. Yet, as these retail examples highlight, any company that wants to become a market leader must first have the commitment to determine where and how IT can help their business blossom.

All those years ago

2008-11-18T11:44:00.000+11:00

As the New Year begins to unravel I am quite sure there will be a lot about 2059 that will continue to surprise many of us in the communications equipment industry. However, rather than look forward to what these unexpected developments might entail I thought there might be value in looking back to remember how far we have come since 2009. When you work in such a fast paced industry as ours it can be easy to take radical change for granted. Yet the last fifty years have been punctuated by many significant developments that have transformed our working and recreational lives.

Perhaps the biggest cultural change is the fact that we no longer refer to the information technology or IT industry. This name reflected the fact that the earliest computers sought to help organisations make more informed decisions. However, the evolution of communication technology since the advent of the Internet in the 1990’s has made distance irrelevant and has accelerated mobility. However, this functionality is only part of the reason we now work in the CE (communications equipment) industry. The name also recognises that this functionality has also dramatically enhanced corporate dialogue and communications everywhere.

Looking back, when I examine how users worked with communications equipment in 2009 the one word that stands out in my mind is cumbersome. People back then seemed to be saddled with a plethora of different devices each of which largely served a single purpose. Firstly, everyone had what was called the mobile phone. While it could be used to send messages, and it did give rise to a whole new language called texting, by and large its primary purpose was to talk to someone. There were small devices called Blackberry’s that besides being a phone could be used to send electronic messages or emails. In fact the former US President Barrack Obama even confessed to being addicted to his. However, for any intense written correspondence most people preferred to use a small portable machine known as a laptop computer. Outside work the hottest consumer technology was a device known as the iPod produced by a company called Apple. This could play songs and videos and it was common to see whole hordes of people walking along the street with wires dangling from their ears as they utilised their iPod.

We have probably forgotten the challenge scientists had in integrating all these machines in to one universal device. Each had different sized keyboards and screens which reflected the different user interface requirements of each piece of equipment. However, the first big break through came when scientists in Singapore made radical improvements to speech recognition software. No longer did most people need to type in their thoughts or instructions. Instead the user could converse with their machine and be assured that their wishes would be understood. Overnight this negated the need for keypads and keyboards. A standard input device was now common across all communications equipment.

However, while this was a major advance there was still the challenge of overcoming the wide variety of screens that existed. We should of course be thankful for the efforts of those Japanese scientists who managed to create the fold out screen. Using the transformer toys of the 1980’s as their inspiration they created a design that in one instance could be compact and in another could unravel to display an A4 sized screen. All of a sudden users had the screen versatility that had eluded the industry for almost 75 years. The result of course was the emergence of the compact multi-functional Won-One which has been embraced so enthusiastically across the world. Even my 75 year old grandmother says it’s the best thing since sliced bread.

Nevertheless, it is unlikely that the Won-One would have been adopted so enthusiastically if the CE industry had not also made major changes to how users acquired the programs to run on it. Back in 2009 if you wanted to use a program you actually had to purchase it from the people who had developed it. It was even common to see such software on the shelves of major department stores. Unfortunately, every few years you had to repurchase the software again so you could ensure you had the latest version.

This whole licensing regimen became a huge administrative burden. It made moving to newer equipment unnecessarily complex, files became unreadable if a source program was lost and many organisations found themselves needing to dedicate huge amounts of manpower to ensure they were not illegally utilising unlicensed or unauthorised versions of these programs. In fact one vendor called Microsoft was renowned for undertaking spot checks to see if businesses were contravening its licensing arrangements. As such, there was strong user support when more and more of these software companies began to harness the cloud computing model as a way of distributing their software. Being able to pay for a program on a per use basis, rather than via a permanent licence, seems pretty obvious today. However, back in 2009 the idea was seen as quite radical.

Yet this change has significantly opened up the CE industry. Suddenly organisations found it much easier to try new or alternative offerings. Files had previously been hard coded to the program from which they originated. However, once vendors recognised that users could easily trial and get accustomed to new programs they realised it was to their advantage to incorporate the ability to read multiple file types in to their programs. This is turn lead to the development of common file formats. This saved vendors time and effort in development but also soon became a sought after feature that helped boost the adoption of these applications.

The result has been the dramatic growth in interoperability which characterises the CE industry of the 2050’s. Back at the start of this century such freedom was a dream. Instead organisations bemoaned the existence of islands of technology where whole rafts of corporate information were marooned on separate pieces of equipment. This change owes much to the emergence of service oriented architecture or SOA in the early 2000’s. While initially some cynics sneeringly dismissed it as Snake Oil Architecture there was sufficient appreciation that in a fast paced global business world it was folly not to provide a communications architecture that could easily adapt to the constant evolution of client organisations.

These changes are just a few examples of how much I think the communications equipment industry has progressed for the better in recent years. It is also interesting to reflect on the role we in Asia Pacific have played in this evolution. While there were some who doubted that the Asian Economic Community (ACC) could ever be a credible force it is clear that the national cooperation it fostered has unleashed a spirit of creativity and innovation among people in this part of the world. The ACC bureaucrats in Bangkok have certainly had their share of critics but we in the CE industry are definitely indebted to their forward thinking. They have undoubtedly helped our industry move on from the Dickensian times that existed all those years ago in 2009.

Good governance means effective crises management

2008-10-20T00:29:00.000+11:00

Those of you who live in progressive modern cities like Singapore, Kuala Lumpur and Hong Kong should spare a thought for us poor souls living in Sydney. By comparison Sydney at the present time has a touch of the third world about it. New South Wales (NSW), the state in which Sydney is located, appears to be falling apart at the seams. Critical infrastructure like roads and railways are failing on a regular basis. Investment in schools and hospitals appears to be lagging. Projects are announced then quietly abandoned. The departing Treasurer has predicted a massive budget shortfall. Unsurprisingly the populace are very disgruntled. A recent poll revealed that only 26% of voters were satisfied with the performance of the NSW Premier. Soon after he resigned.

I mention all this because, in many ways, I see strong parallels between an ineffective government and an ineffective IT department. Both have a sense disorder about them. Both usually have a track record of unfulfilled promises. Typically, there are insufficient funds for the tasks at hand yet the budget always seems to be in the red. Finally, there is a besieged element about both of them. Strong levels of dissatisfaction are expressed by their customers.

I use this example because I am a firm believer that in the area of governance IT executives need to examine what constitutes good government and, above all, a good leader. In these observations IT executives will start to get insights that they need to embrace if they want to run an effective IT department. The current credit crisis is very much a case in point. In my mind it has been characterised by the decisiveness shown by Gordon Brown. He has quickly sized up the situation and acted. What is more he has influenced a number of other world leaders to follow his example. The result has been a renewed confidence in his leadership abilities. The lesson for CIOs is that each challenge presents an opportunity for them to engender confidence and support. However, to do this they also need to be decisive.

Once politicians have the confidence of the electorate they are bestowed with authority. Unfortunately, without that confidence they tend to be treated with disdain. An example of this right now is George W Bush. His words to soothe nervous investors during the crisis in the financial markets seem to have had exactly the opposite effect. Beleaguered CIOs can expect the same treatment from their end users. Therefore, to get a chance to govern CIOs must demonstrate their abilities through how they handle crises in the business.

Once they have secured the confidence of end users the challenge then for CIOs is to determine how they are going to retain that confidence. The CIO needs to leverage this trust. Ideally they should use it to establish a governance framework for IT. This framework would describe how IT related projects will be agreed, financed and monitored. This will be critical if the conflicting demands for IT resources are to be prioritised and if the potential risks associated with most complex IT projects are to be minimised. However, this framework will count for nothing if it is imposed by a CIO who does not have the support of the business.

Nevertheless, politics also shows CIOs that once earned power and authority can still be transient. Again the example of George W Bush is food for thought. His incumbency holds the record for the greatest gap between the peak of his popularity and the depth of disapproval towards him. In 2001, after September 11, 92% of those polled gave him their support yet by the financial crisis of September 2008 only 19% approved of his presidency. As such, CIOs must appreciate that very little of the support they might hold among end users can be regarded as rusted on. The task at hand is to constantly renew their mandate among their clients through showing their mettle in life’s vicissitudes.

One of the biggest conundrums in IT is why so few CIOs ever progress to become CEOs. After all there is perhaps no executive role that gives a wider perspective on all facets of the business than the CIO position. While people like Ralph Norris and Brian Pink have made this transition they are very much the exception rather than the rule. For my part I suspect this lack of career advancement reflects the fact that very few CIOs have seized the opportunities presented by some emergency in the business to make a name for themselves as a possible corporate leader. As the saying goes cometh the hour cometh the man. In NSW we are still waiting for that person to arrive and in the end we won’t care where they come from. I suspect that will also be how the Board and Shareholders feel in any company that is wrestling with problems.

CIOs who have consistently displayed their credentials in corporate crises and who have built up an effective IT department through establishing a strong governance framework are ideally placed to assume the mantle of business leadership. However, they must remember that this responsibility is not going to be delegated to them. As in the political world leadership tends to pass to those with the courage to assume it.

It's all about the people

2008-09-26T21:44:00.003+10:00

I have just returned from organising and chairing the annual New Zealand CIO conference. It is an activity I really enjoy. I am friends with many IT executives there from my days when I ran the InTEP executive group. The IT community is resourceful and you tend to encounter many innovative approaches to common business problems. I also enjoy the intensity of an IT conference. In a short space of time you get the opportunity to network and discuss problems with like minded souls. In addition, it provides you with an up-to-date snapshot of what’s going on in the industry. However, I also find that in each conference I attend there is usually one common thread that runs through the proceedings. This was again to be evident for me.

Beforehand I caught up for dinner with Garry Collings, an experienced CIO who has held prominent senior IT executive roles in several major companies in the country. If there is a fine art to being personable Garry has mastered it. However, he is also passionate about the IT industry so it is as much stimulating as engaging talking to him. Interestingly, in recent years Garry has elected to step outside the corporate world. He now works as something of a CIO trouble-shooter. He gets called in to organisations having difficulty with IT to assist them establish effective structures and disciplines around the delivery of IT services.

Garry told me that in his work as a trouble-shooter he has come to realise that ultimately IT is not about processes. As someone who regards service delivery as sacred Garry was challenging one of the tenements I hold about IT. However, Garry argued that the first focus for a CIO must be on the people. He believed you must understand the characteristics and traits of your IT staff so you can match them to the most appropriate roles in the service delivery processes. Garry now recognises that it is a recipe for disaster trying to shoe horn a staff member in to a role that is outside their comfort zone. Instead he believed the challenge was to identify which personality traits were needed to fulfil each part in a process.

In effect Garry was the first person at the conference to raise the topic of strategic human resources (HR). It was a subject I was to hear again and again over the two days of the event. The opening keynote speaker was John Key, the current Leader of the Opposition in the country. His speech outlined the role he saw for ICT in a future New Zealand. Encouragingly he did not see IT as a cost to be curtailed. Instead he recognised that the challenge was to release the potential of IT to be a catalyst for change. In his view if New Zealand was to compete in a world of globalisation government needed to inculcate a creative attitude to IT within its populace.

John was followed by a presentation from Ron van de Riet, the CIO at Kiwibank. In the space of six years since its inception in 2002 this company has shaken up the banking sector in the country. It has won awards for offering the best value products and has higher customer satisfaction ratings than the four large Australian-owned trading banks that dominate the banking scene in New Zealand. Ron credited much of Kiwibank’s success to a willingness to be innovative with technology. However, the Bank has also recognised that the strength of its brand is underpinned by a high performing culture among its employees. Ron described this as championing human capital management and a major part of his speech looked at how the bank was developing this within its staff.

The importance of people in the success of an organisation was next raised by Jon Macdonald, the CEO of Trade Me. Trade Me is a true dot com success story. It began life in a small apartment in Wellington in 1999 as a New Zealand equivalent of eBay. Seven years later the founders sold the company to Fairfax Media, the publishers of this magazine, for $700 million. Today research shows that the Trade Me group of web sites collectively generate just over 50% of all web-page traffic originating from New Zealand-based servers.

The Trade Me lesson really centred on the importance of innovation. The company has grown by espousing a culture that embraces one new strategic direction every year. However, among the seven key points for success that Jon outlined was the importance of looking after your staff. The company is consistently rated one of the best places to work in New Zealand. The studies identify that Trade Me staff feel respected and engaged and acknowledge that the executive give them the trust and freedom to perform. The result is that the company rides on their enthusiasm.

The final speech on the first day was a dinner talk from Dave Currie who was the Chef de Mission for the New Zealand Olympic Team at Beijing. For a country of four million people New Zealand consistently punches above its weight in the Olympics. This year it won five gold medals. However, Dave’s speech was about the challenge of managing a team of single-minded, competitive, high-performing athletes. His message though was equally applicable to a CIO running an IT department. To get the support of your team you first have to understand their needs and then show them trust.

The need for staff empowerment also featured prominently in a presentation delivered the next day by John Peebles. John runs an executive recruitment company in Auckland. Earlier this year he was ranked by BusinessWeek as one of the most influential ‘headhunters’ in the world. His speech looked at the skill set challenges facing the IT industry and highlighted the fact that with the increasing retirement of the baby boomers there is going to be a huge shortfall in the job market around the world. As such, John argued that people with skills will be in the ascendancy and are going to be much more selective about where they work. In John’s opinion this trend would be compounded by an excessive executive focus on cutting overheads like staff to improve short term bottom line performance. In his mind if you want loyalty you have to give it. John highlighted the benefit of doing so. He quoted research from the Australian Graduate School of Management that there is a strong empirical evidence of a relationship between how you manage people and corporate financial performance. To this end John argued for an increasing investment in staff skills development by New Zealand companies.

I suppose that in the end the New Zealand CIO conference only reinforced what I already knew. The only difference in any business is the quality of its people. As my mother used to say you need to treat others how you would want to be treated yourself. Unfortunately, this basic common sense is something that many businesses have overlooked for far too long. However, the lesson I took away from New Zealand seemed to be that people in IT at least are starting to make amends for that lost time.

A late convert

2008-09-11T15:24:00.000+10:00

I must admit to being something of a late convert to the cause of virtualisation. I suppose my scepticism reflected the normal ‘been there, done that’ response of someone who has been in this industry for over a quarter of a century. Was virtualisation yet another attempt by the IT industry to dust off something that has been around for years and to masquerade it as the next best thing? However, I have recently done a series of presentations that looked at what CIOs needed to do to help their organisations respond to the global down turn in the economy. As a result, these events made me look at virtualisation with a new set of eyes. From this examination I have now come to the view that virtualisation does indeed represent a major new development in the delivery of IT to the business.

At the outset I saw that virtualisation is an obvious way that a business can get more use from its existing IT assets. Clearly, if you partition a current server in to a number of virtual servers that all run on this one device then this will increase the utilisation of the server. Research shows that many existing servers are seldom running near full capacity. Therefore, it would appear that there is lots of opportunity for virtualisation. Moreover, such consolidation would allow an organisation to retire a number of servers which would help reduce expenditure on hardware maintenance and would, probably, simplify the systems administration task.

Nevertheless, as I found out during the seminar, it is not quite as easy as that. All three suppliers, to their credit, stressed that virtualisation probably requires a technology refresh if it is to be effective. As such, if the existing equipment is still functional then the cost savings argument, while strong, is going to be something that comes more in to play when that equipment comes up for renewal. Mind you virtualisation could probably enable just one new server to replace a number of existing devices. Moreover, such retired devices could still play a useful role as backup devices in business continuity plans. Therefore, virtualisation may also have merit even if a number of those existing devices have not been fully depreciated.

However, what really won me over to the cause of virtualisation was the operational flexibility that it afforded. My analysis of the Australian economy revealed just how turbulent are the economic times in which we live. In November 2007 the All Ordinaries stock market index in Australia rose to a record high. Yet by the end of June it had sunk 17% below where it was in July 2007. According to the Sydney Morning Herald this signalled the biggest annual fall on the Australian stock market in twenty six years, a period that even included the share-market crash of 1987.

For CIOs such turbulence requires significant flexibility in their IT infrastructure. There is a need to reassign things quickly to deal with rapidly changing circumstances. In the traditional IT architecture such dynamic adaptability is limited. However, it is clear that this is not the case with a more virtualised environment. Virtualisation enables redundant capacity to be quickly allocated to a new need. Take for example the trials and tribulations of end of the month reporting. For a few days each month the servers supporting the Finance Department could be supplied with additional resources to tied them over.

This flexibility can also come in handy elsewhere in IT. The Conference Board research shows that CEOs identify their number one challenge as ‘excellence in execution’. In other words they recognise that in the fast paced business world of today it is vital that the business does it right first time. There is no margin for error. However, what happens if there is any failure in the IT environment. Typically, this would mean that some applications or business units would be off the air. Many affected staff would be unable to do their work. In a virtualised world, though, things are different. The virtualised environment could quickly be assigned to another working physical server. The business users would still be able to do their work while the incapacitated server was being fixed.

It is perhaps then not surprising that 72% of respondents to a recent IDG Research Services study reported they were currently investing in server virtualisation. However, the same study highlighted that this was not the only area where CIOs were utilising the virtualisation concept. In particular two other areas stood out in the same study. 41% of respondents were investing in storage virtualisation and a similar number were committed to desktop virtualisation.

While Storage Area Networks (SANs) have assisted with the centralisation of storage, virtualisation enables files to be stored across SANs. This is particularly useful for ever expanding files like databases or email repositories where there is a need to add extra capacity when file size limits are reached. As with server virtualisation this flexibility in a storage environment provides people like systems and database administrators with the ability to handle capacity management issues without needing to bring down the system.

Leaving a legacy

2008-08-23T07:20:00.005+10:00

It takes a brave person to tackle a hard challenge. Most of us recognise that these are likely to be thankless tasks. The chance of failure is high so you might spend a lot of effort getting nowhere. Why risk your career or reputation on something so difficult? Yet for some people the very fact that it is a challenge seems to make the task more compelling. They see that in mastering the improbable they have an opportunity to make a difference and, perhaps, to leave a legacy.

I say this because of the untimely death from cancer of a good friend of mine. Dr Derek Binney passed away in May. He was only 54. I got to know Derek comparatively recently through his work as Chief Technology Officer at CSC Australia and as the Director of their Office of Innovation. In these positions Derek examined trends in IT technologies and issues affecting IT investments. His role was to assist CIOs in the design and justification of ICT investment proposals. For someone used to the relatively narrow time horizons of ICT vendors I found Derek to be a revelation. He was someone that understood that the real challenge facing this business is not making the next sale. It is about tackling the business perception that IT never delivers.

In the last fifty years ICT has transformed business. It has improved record keeping. It has streamlined processes. It has empowered decision makers. It has accelerated transactions. Yet the reward for all these efficiencies is that it is viewed, at best, by many executives as a necessary evil. Like Henry Ford and his advertising budget, they suspect they probably waste about 50% of their investments in IT. Unfortunately, they don’t know which 50% that is. Derek agreed to try and do something about this. He elected to tackle probably the thorniest challenge facing this industry. This is the task of quantifying the value that is generated by an IT investment.

There are a number of reasons why business has such a low opinion of IT. As the Standish Group point out in their long-running research, the success rate for IT projects is lamentable. While things have improved in the last decade, 65% of IT development projects are still delivered either late, over budget or without some of the promised functionality. This means that 65% of executive sponsors of an IT project are likely to end up disappointed. In the eyes of many experienced executives such a track record means that IT is synonymous with failure.

This reputation is compounded by the difficulty of quantifying the full impact of an ICT investment. How do you put a value on the impact IT investments will have on areas such as improved customer service or in enhancing employee decision making? Worse still the benefits reaped by an IT investment are likely to be in other parts of the business. Here the business executive will claim the credit while the IT department is lumbered with the cost. If you take the banking industry as an example the reward for the operational efficiencies generated by ICT investments like ATMs and Internet banking has been that, in Australia at least, most of the IT departments have found that a lot of their work has been outsourced for supposed cost-efficiency reasons. On the other hand the business executives who have most benefited from these ICT generated cost-efficiencies have, typically, been recompensed with significantly improved salary packages.

It seems that unless this industry can help the business put a value to the benefits that IT generates then it will always be condemned by those who control the purse strings as a cost centre rather than a business enabler. Yet this challenge has faced the industry ever since organisations began to invest in data processing back in the 1950’s. However, despite this, Derek did not shirk from the task when he was commissioned by the Australian Government Office of the CIO (AGIMO) to help it determine the intangible capital value that is generated by an ICT investment.

Initially, Derek started by looking at the existing approaches organisations took to determining the value generated by ICT. In this analysis Derek included evaluation techniques such as discounted cash flow, net present value and internal rate of return. He found that all these methods were primarily financial models that sought to translate the benefits associated with a given ICT investment in to cash flow or financially recognisable and recoverable forms. In Derek’s mind such a translation was not only, at best, a guesstimate but also it downplayed the significance of the potential benefit.

As his starting point to come up with something different Derek used the work of Karl-Erik Sveiby and his associates. Sveiby first advocated the need to capture the intellectual capital of a business on its balance sheets back in the early 1990’s. He argued that if you look at the book value of a business and compare it to its market capitalisation the latter is usually much higher. In his mind this difference represented the intangible value that was generated by the people, processes and reputation of an organisation. Sveiby called this value intellectual capital. Derek took this further and segmented it into three components: structural capital; human capital and relational capital. These components then became central to the eventual framework he devised for measuring the intangible value of ICT investments. Derek called this framework The Tripartite Model of Organisational Intangible Resources.

The first of the components in this framework is structural capital which many of us in ICT would recognise as the structures (e.g. ICT equipment) and processes that employees develop and deploy to be productive. Derek saw the effectiveness of this capability produced value to a business. The next component is human capital which was seen as the value generated by the skills and competencies of the staff in an organisation. The final component is relational capital which is something akin to what accountants classify as ‘goodwill’. Derek saw it as the value arising from an organisation’s relationship with external stakeholders such as clients, suppliers and the community.

Derek recognised that in each of these three components ICT can contribute to the intangible value of a business. Therefore, he began to identify the ways in which ICT could create value in each of these areas. From his analysis Derek identified 24 areas or elements where intangible value could be generated from an ICT investment, (see attached diagram). He recommended these elements be inserted in to the tripartite model he devised. This model is in effect a table where each of these 24 elements are a separate row while the columns examine four ways in which each element can contribute value, both directly and indirectly, to the business.

Derek stressed that there is as much art as there is science in his approach. He acknowledged that he had not devised a simple mathematical formula where an objective, unarguable value was produced. Instead he recommended that the model be used more as a lens or magnifying glass. He saw its worth as more of enforcing a discipline that recognises the wider context of the benefits that will arise from an ICT investment. He appreciated that the associated values arising from each element in the tripartite model are subjective and are likely to vary depending on circumstances. Nevertheless, the examination forced by the application of the tripartite model forces the organisation to highlight where an ICT investment may generate intangible value to the business.

Derek’s work was accepted by the Australian Government Office of the CIO and AGIMO plan to incorporate the concepts and framework developed in this research in the Australian government’s Business Case initiative process and its ICT Investment Framework gradually over the next few Federal government budget/planning cycles. Nevertheless, Derek was the first to recognise that his research is work in progress and he was keen for input from others in to how the tripartite model can be enhanced. To this end he established a discussion forum to facilitate the dialogue at www.govdex.gov.au. I would also encourage you to type his name into Google to get more detailed information about his work. Derek, unfortunately, never lived to see this discussion and his work blossom. Nonetheless, I suspect that his legacy may well be that ICT begins to better articulate the significant value it creates for the business.

Strategies that suit the times

2008-07-22T00:44:00.004+10:00

We have just witnessed one of the most turbulent financial years for a long time. A Sydney Morning Herald article on July 1^st, which used the above illustration, highlighted that on November 1^st the ASX 200 stock-market index rose to an all time record high. Yet by the end of June it had recorded its biggest fall in 26 years, and it has carried on falling since then. Stocks in the finance sector fared particularly badly, dropping more than 35% over this period, as the fall out from the American sub prime crises has, in this world of globalisation, hit financiers hard across the globe. On the other hand, energy stocks had a stellar year surging 35 per cent while raw materials and commodities rose 17 per cent to meet the growing demands of developing countries like China and

India

.

Australian consumers have also faced tough times. Interest rates now stand at their highest levels since 1996 as the Reserve Bank has sought to dampen demand in order to tackle a worrying growth in inflation. In the March quarter this rose to 4.2%, its highest level since 2001. This inflation increase was no doubt influenced by the surge in the price of petrol as those same developing countries which are taking

Australia

’s commodities are also now competitors for the global stocks of oil available. Little wonder then that Roy Morgan Research recorded consumer confidence in Australia in June 2008 at its lowest level since the recession of 1991-92.

Against this backdrop there are clearly signs of anxiety among executives in Australia’s businesses. The NAB’ Business Survey and Economic Outlook report in July 2008 highlighted that business confidence is at a depth not seen since the September 11 attacks. This sentiment was supported by the findings in May of the Sensis^® Business Index which revealed that 46% of respondents considered that the economy was slowing and 44% expect economic conditions to be worse in twelve months time. Outside Western Australia, where 45% of respondents were upbeat about the current Australian economy, there is no hiding the fact that Australian business executives feel pessimistic about the year ahead.

Naturally, their chief worry is the current economic environment. They recognise that not only will the turbulence in the share-market discourage investors but also that the rising price of petrol will flow through to the cost of distribution which, in turn, will be passed on to consumers in the form of higher prices. This is likely to exacerbate the problem of low consumer confidence which in turn will negatively influence their expenditure which will then hurt corporate profits. Moreover, the cost and challenge of raising capital is likely to increase these difficulties. In fact, the PWC Business Insights report in May showed that more than half the Australian respondents expect the credit crunch to either delay or stop their corporate development plans. Furthermore, the Sensis^® research revealed that 29% of local companies had reduced capital expenditure in the last quarter and 33% expect it to fall in the current quarter.

It would be naïve of IT executives not to expect these trends to impact IT operations in their businesses. It is probable that this impact would include cuts or capping in IT budgets. Furthermore, a freeze in recruitment or head count reductions is possible. This is likely to lead to vital skill set shortages in the IT operations of Australian companies. However, it is unlikely that the demands on the IT department will diminish. In fact 17% of respondents to the Business Insights study reported that, after the strong local economy and strategic initiatives, new technology and business process redesign were the key reasons for their organisations meeting or beating their revenue targets in the past year. In the current tough economic environment the IT department can expect it is probable that more-than-ever the business is likely to be turning to the IT department for help.

What help then can IT offer the business right now? I would caution against proposing bold new initiatives that could transform the business. This is a time when executives will be risk averse. Instead the most helpful thing IT could do is either automate manual operations or streamline existing processes. However, before doing that IT will probably need to provide evidence that it practices what it preaches. If, as CIO Magazine reports, Australian IT executives regard aligning IT to the business as their main priority, how then should local IT Managers respond to the current economic circumstances affecting their organisations?

I believe CIOs need to get on the front foot and be proactive in promoting projects that involve rationalising their IT architecture and IT expenditure. I think doing such activities before being mandated to do them will win the IT department kudos. It will be seen that IT is a team player helping the business reduce fixed costs at a time when the company is facing challenges raising capital. Activities that are likely to help in this regard could include the consolidation of servers and storage through virtualisation, thin client computing and blade technology. I consider that such approaches will minimise the overheads of systems management and hardware maintenance. In addition, they will also help trim the escalating electricity costs which are fast becoming a burgeoning expense for IT operations in many businesses. This will also help executives in organisations who now have a need to trim their carbon footprint. Moreover, with capital an increasingly expensive commodity, CIOs should also make more of an effort to acquire their IT resources through alternative financing methodologies such as rental agreements and operating leases. These not only involve smaller upfront financial outlays but they will also help bring down capital expenditure on the corporate balance sheet.

In my opinion all these activities will not only reflect empathy by IT executives to the demands currently confronting their business colleagues but they will also help place the IT department ahead of the curve in satisfying the relentless challenge of aligning IT to the business. Furthermore, when the economy improves in

Australia

, which it will, such strategies will help free funds that can then be applied by the IT department towards more innovative technology investments.

The key to success

2008-06-23T16:34:00.000+10:00

I have just read an interesting interview in The McKinsey Quarterly with Marina Levinson, the CIO of NetApp, a fast growing data storage and content management vendor. Starting life in 1992 NetApp now has annual revenues of around $1 billion per year. Levinson has won a number of awards in her career for her work as an innovative CIO including CIO Magazine’s CIO 100 Award for innovation in 2001 and for agility in 2004. As such, McKinsey was interested in exploring the approaches Levinson has taken in managing IT in such a dynamic environment like NetApp.

Levinson saw that her key priority was to build an IT department that could help rather than hinder the speedy expansion of the business. As such, her first action after joining NetApp in 2005 was to conduct high level interviews with executives to identify the biggest problems the company faced. Unfortunately, this analysis revealed that NetApp had something like 200 areas where there was a critical process gap that could prevent the swift scaling of IT to deal with the rapid growth of the organisation.

Unfortunately, launching a broad organisational transformation was out of the question in a business like NetApp. This was a results driven organisation where outcomes were measured in 90 day cycles. If results were not quickly visible then questions would start to be asked. However, Levinson also knew that effective change management would take much longer. Furthermore, because of the company’s rapid growth it had focused its energies on getting new sales rather than bedding down business processes. Yet, Levinson understood that improving business processes had to be part of her long term strategy for the IT department.

At the outset, Levinson elected to focus the IT department on the top five critical process credibility gaps that could prevent NetApp scaling up its business. However, while her department was attacking these five challenges it also developed a road map of where it wanted the business and technology to go. Subsequently, the company revisits this road map every year as Levinson recognises that problem areas will change and that IT needs to be agile enough to make the necessary adjustments to support the new corporate priorities.

However, in the long term her priority for the IT department was seen as building systems that allow NetApp to be closer to its customers. In particular, she differentiated between standard systems and innovative ones. The approach with standard systems like finance and HR, which are important operational components but not strategic, was to use popular package applications. However, in areas where the business believed it could gain competitive differentiation Levinson supports in house custom developed solutions that will help it get to market faster than its competition.

While these methods were of interest the aspect of her management that most caught my eye was Levinson’s approach to the management of her staff. She is a strong advocate of account management in the organisation of her staff. Interestingly though, unlike the traditional method of account management, she has decided to allocate these staff by process group rather than by business unit. In her mind this perspective gives her employees a holistic understanding of the process which then allows them to focus on ways these processes can be improved. She also saw that structuring IT this way would help with the prioritising demand for IT resources within the company and help avoid the usual problem where those who scream the loudest get all the attention from IT.

The other challenge with her staff that Levinson recognised was getting them out of what she described as the “order taker” mentality. In this situation the IT employees see their priority as asking the business what it wants and then supplying it. Instead she believes that it is better her staff know the challenges the business faces so they can then come up with creative solutions to the overall need. In her opinion this approach changes the relationship between IT and business from one of where IT is servile to business demands to one where it is treated as an equal partner. Levinson believes that this cultural change has been key to the success of IT within NetApp as it has encouraged original thinking from the IT staff and has ensured that underlying problem areas are addressed in total rather than having just the surface symptoms addressed.

Levinson has been an IT executive for over 25 years and a leading CIO for nearly ten. Her career focus has largely been within high tech companies where often she has to showcase the company’s own technology to external clients. This gives her the unique perspective of being both a client and a supplier to the organisation and she believes this experience has given her a solid business insight which has helped underpin her success.

In her summary comments Levinson stressed that strong business knowledge is the key to success for any CIO. She said that you can always hire someone with technology knowledge but someone with a unique knowledge of the operations of the business is not easily acquired. As such, she believed that a CIO with such an insight was someone who was worth their weight in gold. They could enable an organisation to fulfil its business strategy but could also demonstrate to the executive that an effective IT department can provide a business with a real competitive advantage.

The history boys

2008-06-05T00:12:00.006+10:00

History was always my favourite subject at school. It just seemed to capture my imagination. Living in Britain I was reminded every day that real people from the past had shaped the world in which I lived. However, for much of my time in the IT industry I believed that I was dealing with the future not the past. Yet, over time when I stopped and reflected I began to appreciate that in working in IT I was really a cog in the wheels of history. I was employed in an industry whose evolution was going to be closely studied by the history students of the future.

My argument centres on the fact history tells us that since the agricultural revolution began in the early 1700’s one industry has tended to dominate the global business world for a period of time. The agricultural revolution heralded the increasing urbanisation of society. Then the textile industry became predominant as business looked to clothe the new urban populace. This then gave way to the emergence of the railways which addressed the need to transport goods between population centres. From there the automobile industry became pre-eminent in the early decades of the twentieth century as society addressed the need for door to door transport. Finally, the computer industry emerged in the 1950’s to replace the automobile industry as the global super industry.

In each of these cycles the key industry has been pre-eminent for somewhere between 50 to 75 years. Moreover, the industry that emerges to become the dominant global force of capitalism typically, in some way, arises out of a deficiency in the one it is replacing. For example, once the agricultural revolution enabled the world to support a greater populace there was a need to clothe them. This requirement helped spawn the improvements in textile production. Once the clothes had been produced there was a need to transport them. Initially, the response was to build canals but railways soon offered a faster and more efficient mode of travel. In turn this was superseded by trucks and cars. Then these haulage companies needed information to improve bookkeeping and to allow better decisions on logistics.

My point, as shown in the attached illustration, is that, if these cyclic trends are maintained, IT’s time in the sun looks like it is soon coming to an end. With apologies to Charles Babbage, but if we agree that the first computers emerged in the early 1950’s then we are well in to that period when IT is about to be supplanted as the pre-eminent global industry. What then will replace it?

This was something I recently discussed over coffee in Sydney with the Queenslandentrepreneur Kelvin Davis and his colleague Marisa Wiman. My own view is that telecommunications has begun to supersede computers as the dominant industry. It has even become fashionable to talk about the ICT industry recognising that communications is an inherent feature of the modern IT infrastructure in business. However, I believe that has something of the tail wagging the dog about it. The emergence of devices like the i-phone and the Blackberry reflect the fact that what is the computer is being absorbed by the phone. Moreover, the most interesting emerging developments in the ICT space are typically communications centric. Things like social networking, mobility, video-conferencing and RFID revolve around functionality afforded by telecommunications.

While Kelvin did not disagree with my thoughts his own view was that entertainment would become the dominant industry of the next 50 years. His argument was that there was an increasing blurring between what is IT and what is seen as fun. The most obvious example are the social networking sites but digital TV, pay TV and other forms of interactive media would also be popular forms of entertainment that have emerged with the evolution of the ICT industry. In fact, Kelvin’s views reminded me of the argument I heard regularly in my youth which contended that technology would free people from work and herald a time where the main industry would be helping people occupy their increasing leisure time.

The reality has not quite panned out in the way the pundits of the 1970’s envisaged. Life today for many is characterised by long hours and an intrusion of work in to home life routines. Those battling such stress would probably give a wry smile to claims they are imbued with an inordinate amount of extra leisure time. Yet ICT has afforded greater flexibility in work patterns with telecommuting being utilised by more and more people. Perhaps then it will also distort what are working hours which in turn will allow the intrusion of leisure activities in to traditional working hours. I am conscious that many organisations are now wrestling with how or if they allow employees to use Web sites like Facebook.

It will be interesting to see what emerges for future students of history to study. Will there be more life in the telecommunications revolution we are currently witnessing or will the formats of online entertainment continue to evolve? Whatever, I have no doubt that people like me employed in the ICT industry are playing our parts in helping continue the evolution of our society that began with the agricultural innovators in the early 1700’s.

Cutting change cuts costs

2008-05-19T14:26:00.000+10:00

Every now and then you come across something that can stop you in your tracks. I had such a revelation recently when I was reading a white paper titled ‘The Miracle in Detroit: Putting the ROI in to ITIL’. This paper argued that IT is now integral to the business yet at its heart the IT department is all about change. Most costs in IT essentially relate to implementing change and the subsequent management of that change. Hence, if an executive wants to look at how they can curb IT expenditure then what they first really need to do is to identify what changes they plan to eliminate. Moreover, in keeping with its title, the article argued that since many of the ITIL processes relate to IT change in its many manifestations, (i.e. configuration management, release management, change management etc.), by helping an organisation better manage such change it is possible to use change metrics to determine the ROI in the implementation of ITIL.

The article was the result of a brain storming session among a group of American CIOs who were looking at how they could argue an effective business case for the adoption of ITIL. Eventually, one CIO in Detroit came up with something quite simple that really struck a chord. This CIO used the example of the corporate fax machines. He asked what the cost of running these was. In most cases it is negligible. They are set up and then overseen by office secretaries who replace the consumables when needs be. When they break down they are usually retired and replaced with a newer machine. However, the CIO said that when he looked at the areas where his IT staff members were spending the most time it usually revolved around change, either in planning for it, testing it, rolling it out, recovering from the effects of it or, belatedly, discovering what things should not have been changed. Invariably the CIO found that when something goes wrong his department begin the resolution by focusing in on what is different.

The CIO then argued that it is possible to quantify change in IT operations through three key variables. These are: the number of requests for change (RFC); the number of changes actually made and the number of releases that are implemented (a release was defined as a batch of changes grouped together that entailed build, test and implement processes). Moreover, when an examination is made of the variables on which ITIL processes are dependent it is clear that there is a direct correlation between the extent of these variables and the complexity of the organisation’s IT processes.

The paper looked at five ITIL processes. These were: change management; release management; configuration management; incident management and problem management. In each case the amount of work entailed, and the amount of costs incurred, related to either the volume of requests for change, the number of releases or the amount of change projects underway. As such, the paper argued that if an organisation could track the number of these activities it could build a model based on this data and determine how much it was costing the business to perform these functions.

However, as a starting point the CIO brain storming session believed it was important to analyse the key characteristics of organisations that were operationally efficient with IT. The group identified four elements. These were: the frequency of change; the percentage of change happening outside the change management process; the number of people with responsibility for implementing change and the percentage of total changes that occur in the last third of the change control window.

Firstly, the American CIOs saw a direct link between the frequency of change in IT and the operational efficiency of the department. They believed that organisations at the bottom of the efficiency curve have changes happening continuously. As such, the first step towards operational efficiency was seen as the implementation of weekly change windows which are the times in a week that are set aside for the implementation of any system modifications. Moreover, the CIOs believed that if an organisation could move to monthly change windows that this would generate even more cost savings.

However, what the discussion also highlighted was that while many organisations believed they had established change control windows to manage change activities in IT many modifications in the IT operations were still happening outside these timeframes. Those CIOs present acknowledged the difficulty IT staff have in juggling conflicting priorities. When a service is unavailable they are under pressure to restore it as quickly as possible. As such, there is a strong temptation to bi-pass the change control window and to implement ad-hoc changes. In addition, many organisations find the controls and documentation required by management are so cumbersome that many employees seek to work around it, rather than use it, in order to get their job done. The result is that this informal implementation of change is usually the cause of an increase in incidents and problems down the track, often because these changes go unrecorded.

Furthermore, many organisations try and cram a large number of changes at the end of the change window. Good practice usually entails introducing change in the first third of the window, testing change in the second third and, if there is a problem, to back out the change in the last third of the window. However, things tend not to go so smoothly in the real world. Often a project starts falling behind schedule and the response is to increase the number of changes introduced in to a change window. Typically such changes are introduced in the last third of the window when the realisation dawns that the project is running late. However, those CIOs at the brain storming session believed that they could tell when a project was going to cause problems by looking at the change control window to see if someone was scrambling to get changes completed in the last third of the time allocated. Such changes tend to be the source of future difficulties.

The CIOs considered that there were four steps in implementing ITIL to address these challenges. Firstly, there is a requirement to start measuring the amount of change happening in an organisation. This highlights the extent of this activity and will allow the IT department to suggest how to improve the efficiency of these changes. Next there is a need to quantify the amount of informal changes being undertaken. The white paper suggested that this could be achieved by correlating all the known and approved work with the actual work happening on the systems themselves. The CIOs believed that revealing the extent of this work, and its potential for future problems, encouraged self-regulation of it by employees.

The third suggested step was to diarise the changes made across all the IT equipment as this highlighted to everyone in the IT department what is happening on a given set of servers. ITIL requires IT staff to change the way they work and the need for this can be a hard battle to win. However, by recording changes and assessing their future impact on the IT operations can provide the evidence to reinforce the need for a change in work practices. The final step proposed was to then encourage IT employees to self-regulate their change management activities. It believed that this was best achieved by allowing these staff to see how a better approach to change management, through the use of ITIL, can save their business thousands of dollars over time.

Besides the revelation of the link between change and cost in IT operations I suppose I found two takeaways from this informative white paper. Firstly, I saw that CIOs need to impress on their business counterparts that in IT change costs money. If this link can be understood then the business can appreciate that if they want cost savings in IT operations then they first need to distinguish between those changes that are essential and those that are just nice to have. On the other hand my other takeaway concerns IT staff themselves. I was left feeling that they need to recognise that while the business is constantly looking for greater operational efficiencies this can be achieved by more avenues than closing down projects or making staff redundant. In particular, if IT can be more effective in how it handles change then the IT operation itself will be able to deliver much more to the business. ITIL has been the catalyst for a new way for CIOs to look at their work practices and I suspect that, as this white paper shows, CIOs will keep discovering many other benefits that it can provide their business.

The staff selection process

2008-04-30T19:21:00.000+10:00

I have just returned from a very enjoyable visit to the USA. While there I spent time with Professor Geoffrey Xie, a recognised authority on computer networks, who works in the Department of Computer Science at the Naval Postgraduate School in Monterey. I also caught up with André Mendes, a past winner in America of the IT Executive of the Year award. André is CIO at the Special Olympics headquartered in Washington. While my visit to the USA was in part holiday I was also looking for potential subjects and speakers for the upcoming CIO Magazine conference in Auckland later this year.

Much of the dialogue with these prominent IT professionals was stimulating but one point that André made resonated with me. We were discussing the IT skills crises and how a CIO can go about addressing these shortages. True to form André had some original and perceptive comments to make. Firstly, he gave little recognition for candidates who possess MBA type qualifications. Secondly, he believes that the IT industry needs to realise that many potentially valuable employees can be recruited from outside the profession in diverse disciplines such as music and psychology. In his experience such people can not only help a CIO fill the staffing shortcomings but they can also stimulate valuable new thinking in the activities of an IT department.

In particular, André was scathing about what he described as the emergence of an MBA industry. He believed that the main motivation many reputable academic institutions had in offering these types of courses was financial. As such, he considered that they were in reality prostituting their excellent academic reputation built up over many, many years. He gave examples of some American universities now charging over $100,000 for an MBA course. He wondered how they could justify these exorbitant fees. In André’s opinion they are charging these sums because students are willing to pay these amounts just so they can embellish their resume with a masters degree from a big name business school. To many of such students the content of the course is irrelevant.

André has found that the result has been the arrival in the IT job market of a plethora of graduates who may well have MBAs but who have little else to go with it. In his experience many of these people believe that their new academic qualifications entitle them to a six figure salary on entry to the workforce. Moreover, they tend to look down disdainfully on the more mundane tasks which are part and parcel of the learning curve for any new employee in the IT department. Furthermore, he notices that they are often reluctant to roll up their sleeves and get stuck in during times of difficulty. André told me that in a past life he fired two employees with MBAs from world renowned business schools. He found they did not deliver in the real world and they were also a disruptive influence on the operations of his IT department.

Instead André is now much more willing to look outside the nine dots when he comes to reviewing potential candidates for roles in his IT department. He mentioned in particular that he has been very impressed with graduates who come from the music and psychology disciplines. He believes that music teaches people structure and form and that such insights are extremely important when looking at processes and systems. (Interestingly, he is not the first prominent CIO to advocate that some of the best new IT hires are musical graduates. Tom Oleson, who for many years was CIO and then CFO at John Hancock, the American Financial Services company, also spoke glowingly to me of how well such people had adapted to work in the IT department). As for psychologists André feels that they are ideally equipped to help an organisation implement change. Their training is about understanding people and situations. Since much of the work of a CIO is about introducing change André has found such insights are invaluable in helping influence end users to embrace new systems and processes.

André also made another telling point when it came to recruitment. He thinks that organisations should place an emphasis on hiring IT executives from outside their own market sector. Frequently, he will encounter businesses in say the finance industry that are looking to hire an IT executive who must have finance experience. In André’s mind that is only propagating unoriginal thinking. The familiarity such people have with industry work practices means that they are unlikely to challenge the “we’ve always done it this way” attitude. Instead, he believes employees from other industry sectors feel less constrained in challenging traditional work practices. André has the view that the role of IT must be to question conventional systems because only then can a CIO look to effectively streamline work processes and practices. As such, he makes a point of hiring people from varied industry sectors as he has found that these employees will find it easier to query established work routines.

Having been in the IT industry for over 25 years I left my meeting with André reflecting that he had made many salient points about the task of IT recruitment. In my time I have seen both acute skill shortages and significant IT unemployment. As recently as 2002 research by the Australian Computer Society revealed that IT unemployment in that country was running at almost twice the national average. However, right now the talk in Australia and elsewhere is of skill shortages in IT. Yet, at the same time, the tertiary institutions are complaining about unfilled places in IT courses no doubt because students have been scared off by the unemployment worries of a few years ago.

It seems that the demands for IT executives are cyclic and these cycles probably go hand in glove with how the economy is performing as a whole. Nevertheless, this industry has always had an ability to embrace outsiders. I speak as someone who entered IT from town planning and I have met many effective industry executives who have had no formal IT training. Perhaps then it was fitting that I should have been be in America at the time as I can see many parallels between the IT industry and America in their track records of absorbing newcomers with a can do attitude. André Mendes is an acclaimed CIO with an impressive track record and his advice would seem to be that for CIOs challenged by finding staff the answers probably lie in getting back to the traditions of the industry by looking for recruits among anyone whose main attribute is to give IT a go.

The nightmare from Telstra

2008-04-10T08:49:00.000+10:00

Here is my nightmare. This is a personal account of my dealings with Telstra, that behemoth of the Australian telecommunications industry. Perhaps your experiences are more positive. If so then I am envious. However, for me, thanks to Telstra, the last week and half have been the IT equivalent of having your wisdom teeth taken out without the use of an anaesthetic. It has been an experience that I would not wish on my worst enemy.

It all began around the middle of March when Brad Starr from the TSA Telco Group came in to my life. Brad had the effortless charm that I expect makes him a very successful sales person. I’m normally extremely dismissive with telemarketing calls but there was something about Brad’s approach which drew me in. “Write this down” was his opening line and before I knew it I had recorded what looked like a very enticing telecoms package. Brad advised me to compare this with what I was already paying and we agreed a time when he would ring me back to get my thoughts.

The sums added up. It looked like I could reduce my costs and significantly increase the services available to me. I had had some problems with Optus in the past but for the last year things had been very stable. I really had no reason to change my Telco supplier. However, my monthly download was only 2 GB and this was seldom enough. As such, when Brad called back he didn’t really have to do much to convince me to switch. However, one question I did ask was to query the quality of service. I had heard some horror stories about Telstra. How good was it I wondered? Brad advised that it varied and that much depended on who you ended up with. These were to be prophetic words.

My next interaction with Telstra was to be a pre-installation call. A very friendly lady called Kelly advised me that Telstra needed to schedule a suitable time when they could switch me over. She warned that I could be without an Internet service for up to 10 days as they first had to switch my phone over before they could install the Internet services. As luck would have it I was off to the United States in a couple of weeks so we arranged to do the switch on April 9th, the day I was leaving. Before finishing the call Kelly confirmed my contact details. I asked for all correspondence to go via my PO Box.

As such, I was somewhat surprised to find a letter from Telstra in my home mail box the following weekend. This letter was to thank me for choosing Telstra as the preferred telecommunications provider and to advise me that the switch of my telephone number to Telstra would take place on April 2nd. This was one week earlier than I had requested and threatened to leave me without an Internet service for the week before I left for America. This was a time when I had a need to be in regular email contact with a number of people. Urgently, I rang the Telstra number on the letter. Unfortunately, it was Saturday and the working hours of this unit were Monday to Friday.

Nevertheless, first thing Monday I rang Telstra. I had expected a “no worries we’ll amend it type of response”. I was to be sadly disappointed. Even though it was two days before the switch over, and even though I was a new customer who would be significantly inconvenienced, I was told in a curt tone that the switch over date was irreversible. I must admit that I then swore. However, recovering my senses I remembered that there was a telecommunications ombudsmen. Perhaps they could persuade Telstra to come to their senses. Again I was to be disappointed. They just handed me back to the Telstra complaints division. Ominously, my call to this business unit was greeted with the answering message that advised me that “at present there are a large number of telephone enquiries and it may be better to call back on another working day”. It was a message I have encountered every time I have rung this business area in Telstra. This was to be my first takeaway. If at any time you are envisaging switching your telecom provider first call their complaints unit and see how long it takes them to answer and compare that with your current provider. After all, if it takes any supplier an excessively long time to respond you might reasonably conclude that they are perhaps inundated with complaints. This might be a forewarning of things to come if you end up using this supplier.

Eventually, I got through to Michael who did his best to reassure me. He promised to make enquiries and call me back. True to his word he followed through but he did not have good news for me. He confirmed that the seriously inconvenient switch date was irreversible but he promised to see what could be done to expedite the turnover time. Later that day he called me back with Tanya from Big Pond who offered to pull out all stops to speed up the process. She said I’ll let you know when the switch over happens and inform you of progress along the way. Michael assured me it was unlikely to take ten days. “I live up the Blue Mountains and it only took me two”, he advised. Living near the centre of Sydney, (as I do), he reckoned it would probably take three days max.

I spent the Tuesday frantically sending out emails in anticipation of being off the air for a few days. Come Wednesday the switch over happened at 9:30 am. I had received no prior warning call from Tanya. As such, I tried to ring her to find out what was going on. My next discovery was the sheer difficulty of actually reaching anyone in Telstra by phone. For a phone company they seem to have an aversion to receiving phone calls. No one seemed to have a direct line. Every call put you through to a switchboard. Even when I got through I got the impression Tanya was being elusive and evading my calls. I took little comfort from a co-worker who laughed when I advised him that I had been told that Telstra were trying for a two day installation. My grief was compounded when promises that Tanya would call me back came to nothing. In desperation, I tried to ring Michael back in the complaints division. Unfortunately, Michael had by now flicked my case over to his Big Pond counterparts. A voice mail there asked me to leave a message.

The call back came the next day just as I was about to leave for an important meeting. A helpful and calm lady listened to my troubles. She told me that my order had been cancelled and she gently advised me that probably the best thing I could do, given my time demands, was to see if I could return to Optus. I took up her advice and tried Optus. They did answer the phone significantly faster than Telstra had done, (in my experience a useful barometer of an organisation’s attitude to customer service), but, unfortunately, there was little they could do. According to Steve at Optus I would have to give up my phone number which, given that it is embedded in business cards and stationary, was not a practical option. As I bid him goodbye, wondering at the same time what had happened to the promise of number portability, I decided to return to battle with Telstra.

I had found the contact details for Brad Starr at the TSA Telco Group and, since I was in this predicament due to him, I wondered what he might be able to do to help. However, the phone number I had been given by Brad was for a general switchboard and, according to the operator there, it was impossible to be put through to the outbound sales marketing team. She did though put me through to Anya who was overseeing my account. Anya assured me that my order had not been cancelled. She was also extremely interested in finding out the name of the person who had recommended I return to Optus which I declined to provide. Instead I pressed her for some insight in to what she could do to expedite my order.

By now it was a day and half after I had been prematurely cut off from my Internet connection. Yet Anya told me that this action had not been recorded in the Telstra systems. This was significant as it would be impossible to order the modem I needed for Internet access until the systems could recognise my number as belonging to Telstra. I was told that Kelly, who had originally scheduled my switchover on April 9 only to be overruled, was monitoring the systems on a constant basis and that Anya would call me back first thing in the morning to advise me of the status.

Anya called around 11:00 am on Friday to advise that the switchover had now been recorded and the modem had, thus, been ordered. I was told that the next step now was an assignment note to be issued. This would enable it to be collected by Australia Post who would then deliver it to my address. However, until the assignment note was issued she regretted that there was nothing she could do to hasten up the delivery. Nevertheless, she would again monitor the systems to let me know the status. By Monday morning I had heard nothing from Anya. However, I did get a call from the nice lady in the Big Pond complaints department who told me that the assignment issue had yet to be issued. She sensed my utter frustration and promised to get back to Anya to ask her to follow through.

On Tuesday, after returning from an early morning swim, I found a note from Australia Post. There was a parcel for me to collect at the local Post Office. I was pleasantly excited even though no one had told me about it. I rushed down to the Post Office. Could my ordeal be close to an end? Well the parcel was from Big Pond and it was my modem. All I had to do now was to install it. Easy peas I misguidedly thought to myself. Unfortunately, the installation then hit another snag.

Apparently, I was supposed to have received an email telling me that my ADSL line had been connected. As I pointed out to Telstra it is a bit difficult to receive an email if you don’t have an Internet connection. Anyway, the upshot was that to get an ADSL connection, and thus get the Internet, it needed someone to switch on the ADSL connection for my phone line at my local Telstra exchange. The Big Pond person advised me that this was not scheduled till the following day. In desperation, I went back to Anya to see if she could accelerate this. At the end of the day she told me that there was nothing she could do as there was no one available to do the work. However, she did tell me that if the engineers had determined my needs were urgent then they would have expedited the work! All I could do she said was wait till the Wednesday.

This is where I currently stand a week after the unscheduled switchover was forced on me. I expect my ADSL link will be activated tomorrow but if the whole dreadful episode has taught me anything it is ‘take nothing for granted’. As luck would have it I was right. Even after the engineer switched on my ADSL connection at the exchange I discovered a ‘robot’ had to be called in to cross check and confirm the arrangements. This activation step has cost me another half day and left me with a frantic few hours sending out emails before I left for America.

So what have I learned from this dreadful experience with Telstra. As mentioned before, my primary learning is that if you are contemplating switching any supplier first test their complaints department. Place a dummy call on the system and sense whether your request is handled swiftly or do you, as I encountered Telstra, get the impression the organisation is being swamped with so many complaints it cannot handle them all. If I had done this beforehand then I would have been unlikely to have completed my Telstra order and so would have been saved all the ensuing grief I encountered. Offers like the one I received from Brad can be very tempting but are, in fact, next to useless if these offers are not backed up by adequate service.

My other observations relate specifically to Telstra. Across the organisation there seemed no full understanding of the business processes. This was most highlighted by the two days I lost awaiting someone to switch on my ADSL link at the exchange. This step in the process seemed to take Anya by surprise. I think this lack of confidence in the knowledge of the processes was also reflected in the succession of promises I received that were not fulfilled. Statements like “we will do the switch on April 9th” or “it won’t take more than three days” or “we’ll monitor the progress and keep you informed” were all hollow promises because I think no one knew what reality was. Secondly, I have no evidence that anyone was ever able to circumnavigate a process to expedite my order. Every time there was something scheduled it was unable to be moved despite the great inconvenience this caused me as a customer. This included the unrequested installation date, the delivery of the modem and the switching on of the ADSL link at the Exchange. I got the impression, which has been confirmed by the experiences of others I have spoken to, that the needs of the Telstra engineers took precedence over everything else, including the needs of the customers who pay their wages. My final observation was that all the processes seemed sequential. It never seemed possible to activate a step along the way at the same time another step was taking place. For example why couldn’t the ADSL link at the exchange be activated when the switch over from Optus took place or why didn’t this switchover trigger the order for the modem in the system. Both these actions cost me several days. Surely any process taking seven days has scope for being accelerated.

These process inefficiencies must be the bane of all Telstra employees, especially those in the IT department. I am aware that, in recent times, one prominent highly paid CIO lasted less than a year in Telstra while her predecessor lasted barely two. I can certainly now understand what must have been the frustrations that hastened their early departures. However, my final thoughts are with the unfortunate Telstra personnel who over the years have manfully struggled on to paper over all these cracks in the system to placate the wrath of what I expect are many unhappy clients. I felt they were a bit like the foot soldiers at the battle of the Somme as they valiantly laboured on against impossible odds. If Telstra is ever to recover to the heady heights of its past then it will require a leader who can first harness this commitment. These will be the personnel who will transform the corporate culture on the ground that can then make it a dream for future clients to do business with the company.

The mark of a professional

2008-03-31T16:28:00.000+11:00

It was an impressive occasion held in the ballroom of a five star central Sydney hotel. After four years part time study my partner was finally graduating with her CPA qualification. She was not alone. There were over 200 people doing the same thing that evening. As each received their certificate cameras flashed and the room resounded with applause. However, amid this euphoria, I could not help but reflect how the Australian Computer Society (ACS) was such a pale imitation of its accounting counterparts.

I was curious to find out just what the CPA did that attracted this support. A member of their executive committee told me that there are 75,000 members in Australia. Their competitor, Chartered Accountants, has 40,000 members. The smaller National Institute of Accountants has around 12,000 members. In 2005 the ACS had about 12,500 Australian members out of a potential membership of at least 220,000 ICT professionals. It is clear that while the accounting associations are seen within that industry as vital professional organisations to join very few of their IT counterparts feel the same way towards the ACS.

My CPA contact assured me that this high membership was not done out of any sense of bean counter philanthropy. Rather the accounting organisations had worked to address a fundamental challenge facing their industry. You see anybody can call themselves an accountant. As such, these accounting organisations appreciated that unless they were vigilant in providing some certification of the calibre of the accountant being hired the reputation of the industry as a whole could be seriously undermined.

Doesn’t that sound eerily familiar to the challenge facing the IT industry? It has been said that there are more cowboys in IT than in Texas. The Standish Group reports that nearly 65 per cent of IT software projects fail to meet either time or budget or promised functionality objectives. You would think that an organisation like the ACS would be relentless in doing something to address these circumstances. Yet the sad truth is that the attempts by many well-meaning, intelligent and dedicated people to galvanise the ACS on the importance of certification have come to nought.

Certification was first promoted in the early 1990s with the establishment of the Certified Member of the Australian Computer Society (CMACS) qualification. In an editorial at the time ComputerWorld heralded this initiative as the most significant thing the ACS had ever done. This highly practical, non-technical, course was championed in the ACS by many prominent IT industry figures and its evolution and refinement benefited from the guidance and management of one of Australia’s foremost adult educators.

Regrettably, after 15 years effort building an increasingly business relevant IT qualification this vision and commitment to raise the reputation of the IT profession through CPA style professional development has not really come to fruition. It may still be supported by some in the Society but this is certainly not visible to the wider IT community. Infighting within the ACS appears to have succeeded in defeating it. Several prominent academics from the IT teaching departments in tertiary institutions felt threatened by CMACS, feeling it would undermine their post-graduate courses. Since the ACS was founded by such people in the 1960’s they have always been a significant power broker over the directions of the society. For many of them the ACS is a place for earnest seekers after technological nirvana. The role and value of IT in the modern Australian business has never really appeared to trouble them.

Today most of the original champions of CMACS have left to fight easier battles. CMACS has become the CPEP (Computing Professional Education Program) qualification but seems to languish without the passion and commitment of these original stalwarts. Throughout all this the vast majority of IT executives in this country look at the ACS ask themselves “why do I need to join them”.

Security and the business

2008-03-03T01:32:00.000+11:00

I have just spent two days at a major IT security conference in Kuala Lumpur. This provided me with a very useful insight in to the increasing security difficulties that confront CIOs today. One speaker outlined what are likely to be the next wave of malware that will disrupt our IT operations. Another educated me on how viruses can spread between mobile phones. Then the final presentation enlightened me on why using laptop computers in wireless internet zones at airports and coffee shops could be a significant security risk. Consistently, I found the speakers were knowledgeable, passionate and articulate about their subject matters. Yet I must admit I left the conference concerned whether these messages would ever bear their desired fruit. Were we just preaching to the converted? What would CEOs make of these messages I wondered?

This is a real challenge for many CIOs. When you look at what CIOs identify as the most frustrating aspects of implementing IT security high up on that list is the challenge of getting the support of the senior executive. A common complaint is that IT security is seen as an IT issue rather than a business responsibility. Yet if we position IT security in a language that is only understood by the cognoscenti then I fear we will only make this task even more difficult.

As I see it the problem centres on the tendency of the IT industry to present security in the context of having solutions to the challenges. The speeches at the conference in Malaysia tended to follow a common pattern. Firstly, they would outline an issue. Then they would explain how technology needed to be used to defeat these security difficulties. The underlying message seemed to be that the CIO had to apply some toolset or other and then these problems would be defeated. Unfortunately, the likelihood is that new security problems will materialise to take their place. In the end the CIO taking a pure technology approach to IT security is left looking a bit like the cat chasing its tail. The desired goal will always prove elusive.

I must stress here that I am not criticising the technology. Nonetheless, it is a fact of life that complete security is an unrealistic expectation to set. As President Eisenhower once remarked, “complete security is only achievable inside a prison and then you have no freedom”. If CIOs spend their time and efforts trying to ensure complete security they will only fail. Moreover, they will also disappoint their business executive and add to the existing executive impression that IT never delivers on its promises.

No country in the free world has probably been more vigilant about security than Singapore. Yet, as I write this column, a massive manhunt is underway for a major terrorist suspect who has managed to escape from captivity in the island-state. This is a salutary example to CIOs that in the area of security no plans are foolproof. Nevertheless, Singapore has established a three member Commission of Inquiry to investigate the escape to determine what went wrong and how this episode could be avoided in the future. Singapore has a strong security conscious culture and, in my mind, this is what businesses need to embrace if they want effective IT security. Like in Singapore, such a culture sees security as an ongoing learning process rather than a destination. However, to achieve this CIOs need to determine how they engage business executives on the topic of IT security.

Above all, I believe that to get business involved CIOs and their suppliers have to present IT security issues in a business context. The business is not interested in the specifics of malware. The challenges CEOs talk about relate to efficiency, growth, innovation, securing executive talent and customer loyalty and retention. I have no doubt that IT security has the potential to affect nearly all of these issues. Nevertheless, if the IT industry focuses on the technological minutiae of the security challenge most business executives will switch off. Instead IT needs to understand how to articulate the security challenges around IT in a language the business can understand. The technology issues are for the deliberations of IT staff only. The people who write the cheques for IT security expenditure need to have the importance of the task explained to them in a different way.

Let me explain by referencing the work of The Conference Board. This global organisation undertakes an annual survey asking CEOs to identify what they see as their current major challenges. The 2007 report lists the top three issues facing CEOS around the world as: excellence in execution; sustained and steady top-line growth and consistent execution of strategy by top management. Over 30% of the 769 CEOs who responded to the survey identified these issues as top priorities for their organisations.

Vulnerabilities in IT security will clearly have an adverse effect on a business striving for excellence in execution. Fixing a virus outbreak or a denial of service attack will distract resources from other more important tasks. Similarly top line growth is achieved by an emphasis on fulfilling strategic goals. Operational issues like security lapses will not grow the business but they can definitely impede this objective. I also believe security has a part to play in assisting with consistent execution of strategy because security considerations should be part and parcel of those strategy deliberations. In effect, the true case for an IT security investment is one of opportunity cost.

Business needs to understand that IT security is a necessary cost of modern business. Do you make this expenditure in advance to prevent things happening or do you spend money to fix problems that have occurred? The reality is that retrospectively addressing security will be a much greater cost to the business than doing it upfront. Done in advance a security investment can be seamless, done after the event it is extremely disruptive. However, to garner executive support for being proactive on security CIOs need evidence to impress what these likely costs will be. My suggestion to CIOs would be to track high profile breaches of IT security and to discuss with the CIOs affected by them what the full costs of these were to their operations.

I have no reason to doubt that the issues raised by the speakers at the security conference were valid. I fully expect the solutions they proposed would work. I expect many delegates left the event better equipped to deal with the task of IT security. However, unless we have executive support I suspect many CIOs will still find it frustrating providing this protection. If CIOs can position the task as one that will help executives meet their objectives then I believe they will find the task much more rewarding. They will still need to attend security conferences to keep abreast of new developments in the IT security field. However, when they return to their organisations afterwards they will know that they will have the full support of the executive team in tackling these matters.

Where the bloody hell are you?

2008-02-29T01:47:00.002+11:00

What is it about IT buzz words? Before you know it they sneak up and are all over you like a rash. Right now wherever I turn everyone seems to be talking to me about presence. By this I’m not talking about presence as in the Christmas variety, though I suspect a few IT suppliers out there might be excited by what this might deliver for them. Neither am I talking about presence in the Alfred Hitchcock context, though it wouldn’t be a buzz word would it unless it was cropping up ad nauseam in IT vendor presentations. Instead what I’m on about is presence in regards to what the Australian Tourism Board once articulated as ‘where the bloody hell are you?’

Presence has arisen in recent times within the framework of Unified Communications. This concept recognises the increasing difficulty people are having in actually making contact with others. It is one of the great ironies of the modern world that at a time when people have never had so many communication options available to them it has never been so hard to actually talk to someone. A former colleague at IDC once advised me that if you ever get handed a business card where someone has listed their switchboard number, their direct line, their mobile number, a home number and a pager service then you can bet London to a brick that this will be a person who it is impossible to reach.

Unified Communications has been around for some time. I was first introduced to it by Unisys in the late 1990’s. Back then the aim seemed to be to address the frustration people had in dealing with a multitude of voice mail facilities. However, since then it has lain dormant only to suddenly emerge as a hot technology topic sometime during last year. Many credit the catalyst for its revival to Generation Y employees and their favoured use of instant messaging. The result has been that it has become increasingly challenging determining the best communication medium to reach someone. When is instant messaging more appropriate than either email or a mobile phone. Above all Unified Communications seeks to avoid the ultimate telephone nightmare ........ being told your call is important even though no one seems interested in answering it.

Unified Communications seeks to provide an answer to this dilemma by integrating all the various communication mediums offered by a business around a single control centre dashboard. This service centre can advise the status of each of the communication mediums that are available for each employee. For example if the mobile is switched off and the staff member has advised that they will be in a meeting then it could be recommended to the caller that the best way, currently, to reach this person would be to send them an email. Alternatively, if they were at their desk but on the phone then it might be suggested to the caller that they send them an instant message.

However, sometimes there can be no substitute for the direct person-to-person dialogue of a telephone call. Unified Communications can assist this inter-action by advising a staff members’ whereabouts. This is realised by integrating the Unified Communications facility with the corporate calendar system. As a result, if someone were on holiday, inter-state or in a meeting the caller would gain an appreciation of when they can call. While this will not make the call happen it will take away the uncertainty of when the caller will eventually be able to make contact over the phone.

Most of us realise that there are many problems with today's corporate communications. Corporate Interactive Voice Response (IVR) systems seem more designed to frustrate outsiders from actually contacting anyone in the corporation. Email systems are overloaded and many genuine emails are lost to spam filters. A lack of personal assistants means that no one is usually available to advise how and when the staff member sought can be reached. Yet dialogue is at the heart of business and, whether people like it or not, we are all in business together. Therefore, presence may well be the technology answer frustrated clients and suppliers have long been seeking. It may well ensure that we know when and how best to reach someone. If presence can help make corporate communication less painful and more rewarding this may well be an IT buzz word that no one gets tired of hearing.

Alive and kicking

2008-02-19T18:51:00.001+11:00

Back in the early 1990’s Craig and I were sort of competitors. We both worked for Unisys. At that time the company was in financial strife and there was speculation that it might go in to Chapter 11. My role was UNIX Marketing Manager while Craig looked after the mainframes. Both of us believed that we were the answer to the company’s financial woes of the time. For me all the company needed to do was to roll away its mainframe legacy and to position itself as an ‘open systems’ supplier. Craig on the other hand believed that what was required was to encourage the existing mainframe base to invest further in their systems.

My views were in line with the conventional thinking at the time. The argument ran that the mainframe was dead. It was too expensive. The operating system was proprietary. There were limited software solutions available. Unless Unisys moved this base to UNIX our competitors would do it for us. Craig passionately challenged this view. He argued that UNIX was still an immature environment. The transaction processing needs of the mainframe users required sophisticated systems management toolsets that UNIX did not possess. Any intense processing needs would be unable to be adequately supported by UNIX and any mainframe users migrating to it would have serious performance issues. He believed the mainframe would be around long in to the next century.

Craig’s advocacy had many supporters in Unisys and eventually won the day. Moreover, the strategy proved the correct one. The mainframe base remained largely loyal and helped the company recover financially. Today, eighteen years on, the mainframe still lives not only in Unisys but also in several other IT suppliers. Ironically, it could be argued that the mainframe market is now probably more robust than UNIX which has had to deal with competition from Microsoft and Linux. Despite repeated regular prophecies that the mainframe is dead it is still very much alive and kicking.

Mainframes seem to possess a level of performance and functionality that the more generalist operating systems have never been able to emulate. This may reflect the fact that the mainframe was the first computer. They were developed largely to address intense and demanding transaction processing loads. Typically these were in high profile environments like banks, betting and airline reservation systems. Such applications needed rich systems management tools that enabled transactions to be recovered and safeguarded in the event of a processing failure. Moreover, these applications needed to be specifically written for these computers to leverage this functionality.

More generalist operating systems like UNIX, Linux and Windows had a very different start to life. These sought to provide computing for the masses. The early applications developed for these environments rarely needed intense transaction processing functionality. As such, the importance of robust systems management tools was less important. These tools have appeared subsequently but are very much playing catch up with the feature rich functionality available with systems management tools in the mainframe world.

The result is that in many cases migrating from a stable, robust mainframe environment to a server environment running a more generalist operating system poses a significant gamble for many mainframe users. These organisations process enormous numbers of daily transactions on their mainframes. Any downtime is a major cost to the business. Why take the risk of migrating from a successful, stable environment to an unproven environment because you might save some money on your hardware and software. For many large enterprises dealing in heavy transaction workloads that is a risk management decision that does not stack up.

However, I’m wondering now whether we might even see a renaissance of the mainframe. This thought was triggered by a presentation I recently attended on the topic of green IT. The speaker argued that virtualisation functionality could enable a single mainframe to replace countless numbers of individual PCs and servers. Moreover, this approach would replace the energy consumption of many machines with the energy efficiency of one. Furthermore, this would simplify the task of overseeing a multitude of personal computers and it may provide for greater security of the information as it would be controlled from one location. As such, the speaker believed that environmental needs could see a whole new life for the mainframe. As he said it an image of my old colleague Craig came back in to my mind. I could just see him looking at me and smiling as he said “I told you so”.

Preparing better business cases

2008-02-13T13:24:00.000+11:00

I am afraid I am on my hobby horse again. Yet it continues to amaze me how difficult it can be getting local business executives to respond to a genuine research project. Right now I am midday through an interesting project that requires me to undertake a very short and simple survey of business executives. I am seeking to understand how organisations place a book value on their core software assets. Do they treat them as a liability or do they treat the expenditure as an asset and capitalise the expense. My study requires respondents to answer around 20 questions, the vast majority of which require them to rank an option. It is something they should be able to do in five to ten minutes and for this time they will get a free copy of the final survey report.

I know everyone is very busy. I appreciate that many sales people can trick people by saying they are doing a research project when what they are really trying to do is to gather information for a sales call. I also acknowledge that many businesses are sensitive about sharing confidential information that might be a competitive advantage. However, if someone is a bona fide researcher, and has a track record of doing this for many years, then surely it is in the executives’ best interests to try and support such efforts when they can. After all they can always respond anonymously if they want.

Research provides overall insights as to what is happening in a local market and surely those insights can only help any senior IT executive. I mean it is not as if CIOs think that the task of preparing business cases for IT investments is an easy one. If you look at the results of most surveys which ask IT executives what they see as their major challenges then you will regularly see two issues high up on that list. The first of these is inadequate budgets. The second is the difficulty of proving the value of IT. In fact CIO Australia, in its 2007 ‘State of the CIO’ survey, revealed that Australian CIOs regarded these, respectively, as the second and sixth biggest barriers to their job effectiveness.

How then can these issues be addressed? Now I might be biased but surely some independent local research could go a long way to helping in these matters. If a CIO believes their IT budget is inadequate on what are they basing that assumption? If they can pinpoint what other businesses of a similar standing spend each year on IT then if their own figure is below that norm a case can be more effectively made that the investment in IT by the business is insufficient. However, without that insight the financial needs of the IT department will be a much more subjective matter.

The second issue of proving the value of IT has long been a thorn in the side of the CIO. This challenge was compounded in 2003 by the Nicholas Carr piece in The Harvard Business Review which argued that ‘IT doesn’t matter’. Mind you, as one IT executive once reminded me, shut down the corporate email for 5 nanoseconds and then see how many business executives would argue that IT is unimportant. However, in many ways this dialogue typifies the challenge that confronts CIOs. The business cannot live without IT but often sees it as no more than a necessary evil.

Again local research can help the CIO with this challenge. Firstly, it provides comparative data. It shows what other organisations are doing. It identifies technologies where businesses are increasing their investment. Such uptake might warrant the CIO checking out this functionality to ensure their organisation does not get left behind. On the other hand research also helps the CIO to distinguish between the hype that plagues this industry and reality. It equips the CIO to better answer the perennial executive question of “why aren’t we doing this”. There are a lot better things for IT executives to do than run around investigating vapourware.

Let’s take the example of the current survey I am doing. This seeks to determine if organisations have a true appreciation of the value and importance of their core software assets. Without this insight it would be easy to agree to discard long established and proven legacy systems in favour of a generic ERP package. However, if that software is seen as an asset that has been capitalised the business will better appreciate the cost of doing that upgrade. If the core software is seen as a liability that has been depreciated to nothing then it will much more difficult for the CIO to argue that these assets are too important to throw away.

I also believe that an appreciation of research will help inculcate a culture that recognises the need for metrics in other parts of the IT department. For example, what is best practice in IT service delivery capable of achieving? As in sport, before you can answer that question you need to know what the best are achieving. If not then you might get disillusioned striving for the impossible. Moreover, your paymasters will also have a better idea of how your operating performance relates to your peers in other businesses. Again this information takes subjectivity out of the dialogue on what IT should be delivering.

However, I think there is another aspect to the matter of research. The longer I have been an IT analyst the more I recognise that IT executives must gather insights in to what their executive peers, especially the CEO and the CFO, are thinking. This entails finding out what is revealed by research that has targeted them. In this regard I believe the best place to start is at The Conference Board website (www.conference-board.org). This organisation, for want of a better description, is a global club of CEOs. Each year it conducts a worldwide study looking at what CEOs identify as their major challenges. The research is very reasonably priced (under US$300) and is carried out every 18 months. By my reckoning any CIO wanting to align their IT department with the business would be wise to address the major CEO challenges identified by The Conference Board.

There are also three other places that I would recommend where useful CEO and CFO research can be located. The first of these would be a subscription to the McKinsey Quarterly, a very modestly priced research service that regularly surveys senior executives around the world for their views on a variety of topical issues. Next I would look out for the annual CEO report produced by PriceWaterhouseCoopers. This free report has very valuable statistics revealing CEO views around a current hot topic. The final CEO research I would suggest is undertaken by The Economist which publishes a complimentary annual report documenting CEO priorities for the year ahead. From my experience all three sources provide very valuable ammunition that will embellish many a CIO investment case.

I would like to conclude by asking you to envisage a world where no one in your country responds to any survey. In such a scenario the only information available to you would be from different countries with different cultures and different economic circumstances. You know that any arguments you propose using these statistics could easily be shot down. All your executives would have to say is “so what, how does this relate to us” and you would not have an answer. Instead if the data is local it will be much harder to challenge. All it needs for this to be reality is for you to support those calls from local researchers like myself asking for your assistance. You will find that a small investment of your time will generate the evidence that will make the challenge of preparing a business case so much easier.

Gunfight at the OK BI saloon

2008-01-29T10:27:00.000+11:00

Well it has certainly been an action packed year in the Business Intelligence (BI) marketplace. Gartner, in a mastery of understatement, has described it as a ‘flux’ phase for BI. It seems a bit more like gunfight at the OK BI saloon to me. In the past twelve months most of the major independent BI suppliers have been gobbled up. Things got going in February with Oracle’s acquisition of Hyperion. Then in October SAP purchased Business Objects. Finally, IBM entered the foray when it bought Cognos in November. The result is that, aside from the specialist statistical software suppliers like SPSS and SAS, there is hardly a standalone BI vendor left.

What really has been going on behind the scenes to motivate such a frenzy of activity in a specialist market in such a short period of time? For my part I think there have probably been two major catalysts for all this action. The first of these is BI’s abysmal track record. Almost the first promise IT gave the business was information at your fingertips and for many businesses their executive are still waiting. The second of these are the moves by Microsoft to embed more advanced BI functionality within Office applications.

Let’s examine these thoughts in a bit more detail and start with BI’s track record. BI has masqueraded as a succession of names in the course of its history. Its first manifestations were as a query language which sat on top of an application and enabled a user to interrogate the data being captured. In the early 1990’s these evolved in to executive information systems which encapsulated more sophisticated query and reporting tools. However, soon businesses began to realise that interrogating application data in real time was a massive drain on processing resources which seriously impacted the performance of core business systems. As such, data warehousing applications emerged where data was transferred to separate databases where it could be catalogued and interrogated offline. The BI applications of today combine data warehouse capabilities with advanced analysis functionality.

As these systems have evolved businesses have gained greater insight in to the challenges of utilising BI. Above all they have found the biggest issue is data quality. For a long time the IT industry has appreciated the maxim garbage in garbage out. However, this really fails to capture the data quality challenge. The problem is not people entering inaccurate data but rather the fragmented nature of business systems. Often these separate business systems serve different business units and the meaning of common data terms within these systems can vary widely.

One senior IT executive at a major Australian bank once advised me that at least 70% of the effort and expense his organisation incurred in establishing a data warehouse was in the task of cleansing the data to iron out these disparate definitions between systems. In fact, as recently as 2006, The Data Warehouse Institute (TDWI) reported that 83% of IT executives surveyed said that their organisation had suffered problems because of poor data management. The dominant problems were inaccurate reporting and arguments over which data to trust.

ERP sought to eliminate this data fragmentation by creating a comprehensive suite of integrated business systems. However, it has proved impossible to provide an ERP set that addresses all facets of an organisation’s operations. As such, I believe that the move by the major ERP vendors into the BI space reflects a desire by these suppliers to solve the problem of disunity in corporate data. However, instead of trying to integrate everything upfront the new approach looks at using BI tools as the mechanism to achieve this at the back end. Furthermore, such an approach can leverage the 80/20 rule. After all much of the data definition work could be a standard element of an ERP implementation or upgrade. Therefore, the focus of the data cleansing efforts would then fall on those business systems outside the ERP application.

If the example of the IT executive in the Australian bank is anything to go by then this would greatly simplify BI implementations. The laborious data cleansing activities could be reduced significantly. The result would be that users would be able to harness the BI applications much more swiftly. If so then it is likely that the initial enthusiasm users have for a BI implementation would be easier to sustain. It could also go a long way to helping IT fulfil its original promise to the business of providing them with information at their fingertips.

However, the next challenge then becomes training the users to harness the BI applications. Training can be a contentious area for many users. It usually requires them to take time away from their day-to-day activities which means that they then get behind in their regular work. In many cases users can find IT training less than satisfactory. Typically, it is theoretical rather than structured around examples taken from their actual work. As such, many organisations tend to under invest in IT training hoping their users will learn on the job after a new system has been installed.

However, there are certain applications where users are proficient. Typically, these are the desktop applications, and especially the Microsoft Office suite. Users are usually very open to further training in these applications because they tend to be common across businesses. As a result, a user knows that a good understanding of these programs is important as the skills gained will be transferable to any new job they take. This attitude is particularly prevalent towards Excel which has become the de-facto analysis tool for most senior executives and finance staff.

The result is that many BI suppliers will tell you that their biggest challenge is getting users away from Excel. Many users want to use their knowledge of Excel as the way to interrogate corporate data. In fact it is not uncommon for users to download data from a data warehouse in to a spreadsheet so they can analyse and manipulate it. Unfortunately, this defeats an investment in BI. It also means that important business decisions are being made on obsolete data as spreadsheets are usually not as frequently updated as data warehouses. This lack of currency of data in spreadsheets is behind the observation that 90% of the data in spreadsheets is wrong. In fact this became such a issue for a major retailer in New Zealand that they ended up stamping ‘certified true’ across all reports generated by the data warehouse. In any corporate dispute over the facts a report produced from the data warehouse always took preference over information provided from a spreadsheet.

However, Microsoft is now making a commitment towards expanding its SQL Server product line to become the platform for its new range of BI offerings. In addition, it has also acquired the Officewriter product, a tool that will provide BI report writing capability within Excel. The promise is that users will have BI functionality available to them within Excel which negates the need for them to learn a new product. Moreover, they can get this functionality without having to leave a product where they spend a good proportion of their working day. The result could be that BI becomes as mainstream as other Office applications like Word and PowerPoint. If so then the ERP vendors could find that they lose ownership of the corporate data to Microsoft. If this were the case then the ERP vendors’ prominence within the corporate IT department could diminish. Hence the ERP vendors move in to the BI space could indicate a defensive strategy against Microsoft’s BI intentions.

Microsoft does not have the best track record of delivering on time. As such, the ERP suppliers probably have sufficient time to integrate and consolidate their BI acquisitions before Microsoft becomes a force in the BI arena. However, I’m not certain that CIOs should be troubled by any of these corporate machinations. At present it is early days and the real results of all these BI acquisitions and product announcements will take time to materialise. Instead, the challenges for CIOs are the things they face today. Therefore, any BI requirements they have should be assessed against what is the best product now rather than what might be available in the future once the BI market has settled down.

The managerial merry-go-round

2008-01-11T18:45:00.000+11:00

It may have escaped your attention but Sam Allardyce has just parted company with Newcastle United. He had been Manager of the football team for less than eight months. Yet the Newcastle United board were dissatisfied with the progress the team was making under his stewardship. This is despite the fact that it has been over 80 years since Newcastle United, one of the most successful and best supported teams in English football, were last crowned as league champions. Moreover, Allardyce had achieved surprising success with his previous job before Newcastle. Over seven years he had transformed Bolton Wanderers, an unfashionable team with limited resources, into a team that qualified for a major European competition. Why then had the Newcastle United executive board been so impatient?

The more I think of Allardyce’s departure the more I realise that football managers and coaches have a lot in common with CIOs. They both seem to carry a fair weight of unrealistic expectations on their shoulders. Both are allocated a budget that is meant to achieve positive outcomes but which is usually less than necessary. Moreover, they both find themselves dealing with an executive impatient for success and frustrated with what appears slow progress. In the end it is common for these executives to believe that all they need for success is to lure someone from another organisation to be their saviour. Meanwhile, the person replaced moves on to another company with the hope that this time they can be a success. As my partner reminds me, one person’s trash is another person’s treasure.

In my time running the InTEP executive group I used to see a lot of this managerial merry-go-round. You would see CIOs recycled from one organisation to the next. The smarter ones usually lasted around two to three years and then jumped ship. On their arrival they would give an impression of action by creating change, typically through restructuring, outsourcing or replacing a key vendor. However, just when it seemed that they might be held accountable they always seemed to land some new high profile position that they just couldn’t turn down.

On the other hand there were those CIOs who were like the Allardyce’s of this world. They wanted to build something for the long-term. They had been around long enough to know that no IT Rome was built in a day. They understood that creating a successful IT department required instigating processes where the responsibilities of IT staff and business users were documented and understood. The work was long term and was not sexy. Yet it laid the foundations for an effective IT department.

When I was running IT Executive groups it was, typically, these IT Managers and CIOs who made the best impression with me. Often they were not media savvy and they seemed to eschew self-promotion. Yet they instinctively knew what needed to be done and were not afraid to try some left-field ideas. Often the executive was impatient and they never got to finish the job. However, when they had an executive with patience you were witness to the transformation of a moribund IT department in to one that hummed. In football parlance they led the team into Europe.

It is worth remembering that the most successful football manager in England has been Sir Alex Ferguson. He has won more trophies than any other manager in the history of English football. Yet it was not always that way. He joined Manchester United in 1986 after an impressive track record of bringing success to smaller, unfashionable teams. However, Manchester United was the biggest team in England even though it had not been League Champions for over twenty years. It took Ferguson nearly four years to find some success and more than six to win the League title. Before this success arrived there was much unrest among the supporters and calls for his dismissal. Yet the executive had the courage to be patient and today their faith has paid dividends for Manchester United in leaps and bounds.

I am sure there are lessons that many organisations investing in IT could take from football management. Like football, victory in IT only arrives when solid foundations have been laid. Until then all the money in the world is unlikely to bring success. Instead patience and persistence are always the keys to long-term success. This may not provide instant gratification to long suffering executives but, as I suspect Newcastle United will soon discover, there are very few messiahs around who can lead you to the Promised Land.

Backwards and forwards

2008-01-04T00:21:00.000+11:00

Early January is probably made for introspection. As John Lennon succinctly put it, another year over and a new one just begun. Therefore, I thought I might echo those sentiments by looking back at the year that has just been in IT and looking ahead as to what I think might eventuate. However, I’ll try and not give you the usual technology summations and predictions that you get from most of the analyst companies. Instead I’ll try and focus on one development from the past year and one for the current year that I think will have a major influence on how the CIO will go about their work.

I think perhaps the most important management development in IT in 2007 was the growing awareness that the security challenge was less one of withstanding an external attack and more one of protecting the information within the IT systems. This recognition was perhaps best highlighted by the unbelievable incompetence of the UK government which managed to lose the contact and bank account details of the 25 million recipients of child benefits. These were copied, unencrypted, on to two CDs and sent through the internal mail from whence they disappeared.

Given the sensitivity of this information, especially if it fell into the hands of fraudsters, the lack of thought applied to securing the data was appalling. The government denied that the data was lost due to a systemic failure and instead blamed a junior official for not following proper procedures. Yet it was also clear that these actions reveal a culture where the junior official saw nothing untoward in copying and distributing information of such sensitivity. In a nutshell the episode demonstrated that organisations can worry all they might about viruses and worms but protecting the data itself is really the task at hand. The latest computer virus might disrupt proceedings for a day or two. Losing sensitive client data may cost you significant business customers and land you in some unpleasant law suits.

For my part I saw that during 2007 this issue of data security was one that was attracting the attention of a diverse group of IT players. In the first instance the traditional security providers are appreciating that their product portfolios need to include applications that can restrict access to important data. Then the storage suppliers are realising that addressing these issues also requires businesses to think more carefully about how and where they file information electronically. Finally, the enterprise content management providers are beginning to understand that security of content is as important an issue as availability of that content.

In looking ahead my view is that the most important technology that will emerge in 2008, and which will increasingly impact the CIO in the years ahead, will be the iphone. I make this prediction based on the understanding that there sits mothballed on my desk a bulky Nokia precursor to the iphone. Nevertheless, despite the availability over a number of years of several similar smartphone products that combine PDA functionality with that of a mobile phone, I believe the Apple product has the capability to change the dimensions of these phones from being expensive niche products to the pre-eminent mobile phone technology.

Firstly, I believe that users are already finding themselves cluttered with mobile functionality. Obviously, they have to carry their cell phone. In addition, no self-respecting business executive today feels complete without the push email capability of the Blackberry. Added to this is the need for many to carry a laptop while PDAs are still popular. Outside the corporate space a lot of people find it beneficial to carry a digital camera while the iPod has managed to transcend the Generation X and Y consumer and gain a strong hold among the Baby Boomers. In particular, many such users are appreciating the benefits of a device that not only provides a portable music collection but also allows them the opportunity to play podcasts of training material or business discussions. Moreover, the ability of the iPod to hook in to most car stereo systems also adds significantly to its portability.

The iphone offers the opportunity to encapsulate all this functionality into one convenient device. While other smartphones have appeared to offer this promise I think there are two reasons why the iphone will set the benchmark. Firstly, it appears that Apple has remembered that first and foremost the iphone must be an easy to use mobile phone. After all this is the primary need and too many smartphones, including my redundant Nokia, failed largely because they are a cumbersome cell phone. Secondly, I think the iPod capability will be a real winner. This is a core competency of Apple whose experience has led to a solution that reflects an increasing corporate understanding of consumer needs in this space.

In many ways I believe the iPod functionality could well prove to be Apple’s ‘gotcha’ in the corporate smartphone sector. Many CIOs are unlikely to stand in the way of an executive who expresses a desire for an iphone, especially if a business case can be made that it will eliminate costs associated with other devices like Blackberry’s and laptops. As long as the iphone is dependable and in the right cost ballpark the iPod functionality could be the hook that captures the attention of senior executives. This may well seem like the tail is wagging the dog. However, I always remember Tom Hopkins advice that, above all, selling is about stimulating emotions. I have no doubt that the iPod functionality of the iphone will have a certain prestige that other suppliers may find difficult to emulate.

Nevertheless, I think I should put some qualifiers on this iphone prediction. Firstly, I suspect we are looking at a trend that will probably reach its zenith in about five years. In these cost conscious times organisations are unlikely to drop what they have to get an iphone, especially since it is still a somewhat fledgling technology. However, over time the product will mature, corporate mobile plans will come up for replacement and the iphone will then become part of those deliberations. I believe that steadily a momentum will be created that will see the iphone become the cell phone of corporate choice.

For the CIO I believe that this will have a number of significant repercussions. It will make them question whether they should continue down the Blackberry path. It will lead to deliberations about whether some mobile staff can replace their laptops with iphones. If so there will be implications both on security and on a need to transfer files between iphones and the corporate network. In particular, I would expect the battery life of devices will become an important component in these considerations. In this regard the early evidence is that Apple needs to do much more with the iphone.

I suppose I will know how accurate this analysis is when I come to look back on things in January 2009. One of the great joys about working in ICT is how you can be surprised by new developments. Great plans and prognosis can be hijacked by the unexpected. Many CIOs may find this frustrating. Nevertheless, it is these new developments that keep the ICT industry bubbling. Moreover, it is the reason why analysts like me spend time in introspection trying to foresee these trends.

The servers never down!

2007-12-21T18:48:00.000+11:00

Who am I to argue with The Bard? I heard in the BBC/PBS documentary series on ‘The Story of English’ that 25% of the language owes its origins to the creativity of William Shakespeare. His observations of the workings of human beings and his quotes have inspired people around the world for close to 500 years. Yet when he says “a rose is a rose by any other name” I have to disagree. You see my observation is that CIOs who think their choice of words doesn’t matter could find themselves at a decided disadvantage in their dealings with their business counterparts.

Let’s take the expression “the servers down”. I’d bet London to a brick that hardly a week goes by when some member of most large IT departments do not utter these annoying words. Yet what impression do these words make on the business. In the first instance they imply little appreciation of the impact of this state of affairs. As the server is “down” a section of the company workforce will be unable to do some or all of their work. It could be handling email correspondence, updating records, recording transactions or reviewing inventory availability. All these actions require the server to be functioning. Yet the throw away line “the servers down” implies it is a technology issue. It fails to credit the impact of the neutered server on the business.

As such, think how the IT department could better express this state of affairs. Let us assume that the Finance server is not working. If the IT support staff reported that the people in accounts cannot do their work it has a much more powerful interpretation. Above all, it acknowledges the business impact of the server being offline. While these business people may still not be happy they do, at least, appreciate that the IT team is aware of the significance of the interruption. It may take the IT support staff just as long to get it up and running but at least the business knows that the technicians have some understanding of their plight. In effect the problem becomes not one of getting the server back up but rather one of getting the Finance department back to work.

In this regard I think that there is a lot to be said for naming IT infrastructure after the business functions it supports. I mean why can’t the PABX just be called the telephone system? After all that’s what it really is. Furthermore, it is common practice to place servers in business units like Sales, Finance and HR. Why then cannot they be referenced by the name of those business units? As in the example above such a simple naming convention reinforces in the minds of the IT department the role that equipment plays in the organisation’s operations.

Some may well dismiss this as pedantic semantics. I though beg to disagree. If you talk to business executives one of their regular grumbles about IT is that the people who work there don’t speak their language. IT people are seen to regard technology as their comfort zone and to be oblivious to the importance it has in the business. In my view this means that IT people, in particular the IT support technicians, need to stop looking at the equipment as technical toys with which they can tinker. Instead, acknowledging the business functionality it provides is recognition they understand the business dependence on it. In fact, The Bard had something to say in this regard with which I most certainly do agree. After all it was Shakespeare who reminded us that “it is a wise father who knows his own child”.

Will you be the champion for ITIL 3.0?

2007-12-12T11:19:00.000+11:00

It can take an awfully long time to be an overnight success story. It is worth remembering that even ‘The Beatles’ took five years plugging away in night clubs and church fetes before they were eventually discovered. The IT industry has a number of its own examples of hot products that took years before they found recognition. The Internet was defined in 1974 but even as recently as 1995 Bill Gates could write a book called ‘The Road Ahead’ and fail to mention how it would transform our lives. A similar phenomenon is ITIL which first saw light of day in the UK in the mid 1980s. Today there is hardly a serious CIO who has not embraced it. However, it has taken a long time to gain traction and, even now, it is only just gaining significant support in the

United States

.

My view is that something has to be right for the times. The Beatles sound captured the energy of the 1960s. The Internet needed Tim Berners-Lee and the World Wide Web in the early 1990s before it was viable. Similarly, ITIL needed IT’s track record of failed projects before CIOs could begin to recognise that IT itself was not a silver bullet. If it was to work it had to be implemented and managed appropriately. In fact I believe the emerging popularity of ITIL is a reflection of how the IT industry has matured over the last twenty years.

ITIL itself has not stood still. It had a major revision in 2000 with ITIL 2.0 and just recently ITIL version 3.0 has been released. This has required me to undertake quite a bit of research. I deliver a workshop on IT Best Practices which includes a section on ITIL. I strongly believe that ITIL, with its focus on services and processes, is a way that CIOs can leverage best practice and ensure that they do not reinvent the wheel in their day-to-day operational activities. However, much of my material made reference to ITIL 2.0. As such, before I could deliver my workshop in December I recognised I needed to acquaint myself with the differences in ITIL 3.0.

I was surprised to find that this was not a straight forward task. I had expected to find a few articles that outlined a checklist of what was different between versions 2.0 and 3.0 of ITIL. I was looking for some simple diagram that encapsulated these changes. Alas it was not that easy. It quickly became apparent that 3.0 represents a major redevelopment. In particular, it was clear that 3.0 projects a different way of looking at the relationship between IT and the business.

ITIL 2.0 looked at the challenge facing the business and IT relationship largely in terms of incidents and processes. An incident was an event such as a user problem or a software update. A process was the approach taken to address this task. ITIL sought to identify what incidents needed to be managed (e.g. configuration management, change management, demand management etc.). However, each process could be addressed in isolation, even though their requirements were frequently interlinked. In fact, the typical starting point with implementing ITIL version 2 was to examine how mature and efficient were the core internal IT processes and to begin where these were weakest.

ITIL 3.0 takes a different tack. It embraces all of ITIL 2.0, and introduces a number of new processes, (e.g. Request Fulfilment, Service Portfolio Management and Service Catalogue Management). However, it repackages itself from a focus on individual processes to one of an integrated service delivery framework. It also introduces the concept of a lifecycle in the delivery of these services. This entails examining services in the pipeline (proposed or in development), those in the Service Catalogue (live or available for deployment) and those that have been retired.

At its core ITIL 3.0 revolves around a Service Catalogue which encapsulates all the services that the IT department can provide to the business. Moreover, it outlines these from the perspective of the three key constituencies for IT in the business: the consumers and end users of IT services; senior IT and business managers and IT workers and managers. It recognises that each of these groups will view these services from a different angle and need different guidance about how to implement and monitor them. In particular, it appreciates that business people want insights as to how their investments in IT deliver value. However, it also recognises that users have to realise the part they play in effective IT service delivery. As such, they must be accountable for how they consume IT services.

Springing from the Service Catalogue are the five services that cover the lifecycle of each component of the catalogue. These cover the Service Strategy which is the process of translating business needs into an IT strategy. From this Service Design determines how the service will be delivered (e.g. will it be outsourced or done in-house). Then there is a need for Service Transition where they are introduced in to a business. From this Service Operation is applied which considers how they are managed in a production environment. Finally, there is the need to consider Service Improvement to examine how to improve services after they have been deployed.

ITIL 3.0 has been developed in response to a number of criticisms levelled at the former release. In particular, there was a view that by focusing too heavily on process optimisation ITIL 2.0 made the assumption that best practice in service delivery was always cost beneficial. However, this ignored the fact that in the end processes are implemented and services adopted to solve problems. Moreover, the only arbitrator who can decide whether those problems are solved are the users themselves. As such, ITIL 3.0 places a strong emphasis on achieving IT financial cost transparency. Its language speaks of investments (information technology) and returns from these investments (services) managed by the investor (the business). It also embraces budget planning and value assessment.

The challenge though is where to start. It has taken several years for ITIL 3.0 to come to fruition and its arrival in May 2007 was several months later than expected. Moreover, the starting approach taken with ITIL 2.0 is unlikely to be applicable with ITIL 3.0. In the previous iteration of ITIL an organisation began the journey by assessing where its key processes were weakest. However, ITIL 3.0 places more emphasis on the full lifecycle of the key IT services. As a result, most of the initial ITIL 3.0 material advises businesses to begin by deploying a Service Catalogue based on ITIL 3.0 guidelines. However, while ITIL 3.0 is still in its infancy the challenge facing many organisations is that there are few reference sites with sufficient experience from which a CIO starting the new ITIL journey can learn.

ITIL 3.0 is clearly a more mature offering than ITIL 2.0. It represents wider thinking of how an organisation can achieve greater cost efficiency and effectiveness in the delivery of IT services to the business. It has actively sought to address the identified shortcomings in ITIL 2.0. However, like everything new in this industry it needs CIOs to embrace and champion it. Clearly, this is not a role for those who eschew the bleeding edge. It is unlikely that there will be no teething issues with ITIL 3.0. Furthermore, the consequences of these teething problems are perhaps more challenging than usual for CIOs because ITIL 3.0 requires active business participation. Any flaws encountered could certainly expose the CIO, especially if they have been strong advocates of the benefit of ITIL.

Yet the growing popularity of ITIL is evidence that best practice organisations have increasingly recognised that the ITIL approach is a key component in effective service delivery. ITIL is the mechanism to ensure wheels are not reinvented and that resources are not deployed fighting the same fires again and again. Therefore, I have no doubt that there will be prominent CIOs who will emerge with the courage of their convictions to actively embrace ITIL 3.0. As such, when they do they will build up a body of operational knowledge that will ensure the continuing success of ITIL.

Marriage counselling

2007-12-07T00:22:00.000+11:00

Ian Angus, who was NCR Australia’s Managing Director in the mid 1980’s, was the first IT executive to advise me to look at the relationship between a CIO and their IT supplier as a marriage. I have, subsequently, heard this advice on many occasions during my IT career. The implication is that problems and challenges are inevitable in both a marriage and an IT project and that the secret for success is communication. While Ian’s advice certainly helped me in my work life it failed, unfortunately, to make any impact on my own marriage. Ours was one of the 40% of Australian marriages that are reported to end in divorce.

Recent research from the Australian chapter of the Institute of Arbitrators and Mediators (IAMA) indicates that the links between marriages and IT projects may, perhaps, be even closer than we might think. According to their research, conducted in Australia last year in conjunction with the local Computer Society and the Project Management Institute, it seems almost the same percentage of IT and matrimonial partnerships end up in difficulties. The evidence is that 46% of IT projects result in some sort of dispute. Therefore, like a marriage, it is clear that IT executives, whether they are vendors or end users, will at times need some external help in problem resolution.

Maybe then there are other lessons that IT executives can learn from matrimony. For a long time the only recourse that sparing spouses had for settling their difficulties was through the courts. However, it was clear that these outcomes were often fraught with failings. As a result, overtime a series of facilities have been developed to which couples can turn to when their marriage hits problems. Resources like counselling, mediation and arbitration are all designed to provide a less antagonistic environment for resolving problems. In the end the court is usually a rubber stamp for actions decided elsewhere.

Unfortunately, it seems that in IT disputes the court is seen, all too frequently, as the first port of call. In recent years it has been common to find entire conferences devoted to writing better IT contracts. The inference is that this will make your court case stronger. Yet the IAMA research highlighted that of the various dispute resolution avenues available the highest level of dissatisfaction was with litigation. Around 50% of respondents were either very dissatisfied or dissatisfied with the outcomes. Clearly the adversarial nature of a court case can be an unpleasant experience. However, other concerns raised were to do with the cost of the process and the time taken before a resolution was determined.

Not surprisingly, the IAMA research showed that a very high proportion of these IT disputes centred on disagreements about the project scope. In fact, nearly 80% of respondents indicated that their disputes revolved around misunderstandings about what was agreed and what was delivered. As a result, the IAMA argue that one way the number of disputes in IT can be reduced is through better project management. Yet I wonder if it’s as simple as that. The industry has been talking about better project management disciplines for as long as I’ve been in IT and that’s over 25 years. Clearly, something else needs to be done.

In this regard I wonder whether IT can take another leaf out of the marriage book. I think it is time for this industry to give more emphasis to a role for neutral mediators who can work with both IT suppliers and CIOs to determine how problems can be amicably resolved. Interestingly, this has been increasingly happening in the building industry in recent years, another sector where disputes are common, and the outcomes seem impressive. The evidence is that faster resolutions are achieved and these are usually more creative, flexible and cost-effective.

As someone who has been through a marriage breakdown I know from first hand experience that it can be exasperating, frustrating and mentally draining. No side wins during the process. Yet it was only when we drew on mediation that we started to gain an agreement on how we could go forward. The mediation process brought calmness and objectivity to the dialogue which made it easier for the parties to appreciate the other person’s point of view. The evidence from the IAMA is that, rather than wallow in some quagmire of discontent, many local IT projects could similarly benefit from mediation. Who knows what might eventuate. Perhaps CIOs and IT vendors could even live happily ever after.

Information Technology...its part in his downfall

2007-11-27T15:19:00.000+11:00

I am not sure there will be many in IT who will lament the passing of the Howard government in Australia. For someone in the industry that has lived through the entire era it was always apparent this was a government much more at home with wheat and wool rather than bits and bytes. Even though the Internet emerged during their time at the helm there never appeared any spokesperson from the government to champion the transformation potential of the technological revolution. Depressingly, I was once informed by a source at the Australian Computer Society (ACS) that one Howard Minister who held cabinet responsibility for IT was even incapable of using a PC. His PA had the daily chore of printing out all his emails so he could read them.

I first wrote about the then Federal government’s neglect of IT back in 1999 in a column in CIO magazine titled Canberra concerns. At that time the government was still in its infancy and had come to the ridiculous conclusion that outsourcing Federal government IT functions lock, stock and barrel to American multi-nationals was a way to generate major cost savings. As I pointed out then there was little proof anywhere that outsourcing IT could save money. Moreover, this policy undermined a vibrant IT community in Canberra which had traditionally played a vital role as a catalyst in embracing and implementing new and emerging technologies in Australia. Yet it took close to four years before the policy of enforced outsourcing was abandoned. In the end the death knell was delivered by a series of senate hearings and an Australian National Audit Office report. These revealed that after two years the outsourcing initiative had cost nearly three times what was budgeted.

My next exposure to the Howard government’s indifference to IT was in the area of IT unemployment. In 2002 I was assisting the ACS with its in-house research requirements. This was a time when a recession was biting in the technology sector. Many ACS members were complaining strongly about their inability to find work. Yet, at the same time, there was talk of a skills shortage and the government was sanctioning the immigration of IT workers. The ACS believed that before it could lobby the government there was a need to try and quantify the problem. As a result, the ACS carried out the first study of IT unemployment in Australia. It discovered that it was then running at twice the national unemployment average. Yet rather than join a debate on how to address this problem the Federal government instead decided to shoot the messenger. On flimsy grounds it ridiculed the ACS and the findings.

Then we get to broadband. While the Howard government was so fixated on the sale of Telstra it paid little notice to the growing discontent about the quality of broadband services in this country. Unable to recognise that broadband was a modern business imperative, and with little appreciation of what really constituted a fast Internet connection, it buried its head in the sand. Evidence that Australia was starting to trail the developed world in the quality of its broadband services was haughtily dismissed.

To his credit Kevin Rudd decided in one of his first policy announcements to place the Internet needs of 98% of Australians ahead of the superannuation needs of Commonwealth civil servants. He took a bold gamble because his proposal to use The Future Fund to finance the roll out of a new fast broadband network left him open to criticisms that he would be cavalier with government spending. Yet this initiative clearly resonated with a public increasingly frustrated by the inadequacy of the Internet services currently on offer. Moreover, it helped paint Rudd as a person who understood what needed to be done for Australia to be a competitive 21^st century economy. In fact, his embrace of broadband and IT, along with his support for things like tertiary education and climate change, helped paint Rudd as a man with a plan.

I am not certain why the Howard government was so disinterested in IT. My suspicion is that the enthusiasm towards the potential of IT shown by Paul Keating, Howard’s predecessor as Australian Prime Minister, meant that Howard always looked at the industry with some suspicion. Furthermore, I suspect that the technical complexities of the industry discouraged interest when there were perhaps easier things to grapple with. Nevertheless, this is all in the past and speculation. Today we have a new Prime Minister and after 11 years in the wilderness it looks as if IT will again feature more prominently in the thoughts of the Australian Federal government. More deliciously, it is indeed ironic that IT, an industry ignored for so long by John Howard, could actually turn around and play such a key role in the demise of his unlamented government.