Executive Advisory Program

Outsourcing and Control

Posted by: Jack Santos

I often speak about IT trends, and one of those is what we at Burton/Gartner call “externalization”.   Invariably the question of loss of control for outsourcing engagements comes up.

One of my key points is that the ability to have multiple sources for work, partners, supplies, services  is just a fact of life – get used to it – and often a business decision.  It involves core/context thinking.  But it does have some important implications on IT skill sets, and organizational planning.

Which is exactly what Jay Leek (from Nokia) talks about in this conversation I had with him.  Jay has made creative use of external sourcing options for IT security needs at Nokia. Have a listen:

If IT was King... (but it is not)

Posted by Mike Rollings

Maybe I'm just sensitive, but the recent McKinsey Quarterly article "Using IT to enable a lean transformation" by Nicklas Ilebrand, Tor Mesøy, and Remco Vlemmix was a disappointment.

The article started out okay, "Senior leaders can play an important role in assembling a lean program by involving the CIO more closely in designing and executing the transformation."  Definitely agree that transforming one cog in a machine that needs to be redesigned is a bad idea.

The authors continued,

"At one large European bank, executives wanted to speed the account-opening process for corporate customers...While lean techniques could address these issues, the bank had experienced roadblocks in previous lean programs, which in the end failed to deliver the hoped-for returns...Operational changes failed to gain a toehold as employees fell back into their old ways of working, and the program fizzled once the start-up phase ended...Senior managers, determined not to launch yet another stalled implementation effort, knew that IT had to play a central role in the lean redesign of the corporate-account program..."

But the conclusion did not match the story, "Because IT can help not only to coordinate program deliverables but also to spot opportunities to lower costs and boost innovation, CIOs are often well placed to lead the joint effort."  McKinsey, have you been reading your own publications?

I think the article builds a case for the following conclusions, just not the conclusion that "CIOs are often well placed to lead the joint effort":

• IT is as relevant as manufacturing, marketing, sales, and other organizations as part of a business transformation.  Leaving out a major piece of the puzzle was a fatal flaw.
• Business transformation must be led by the business to succeed, and cross-functional participation is a must.  
• Don't believe that just because you tell someone to change that it will happen without support to make it happen.
• LEAN helps you focus on an outcome.  Changing the outcome requires getting all the players in the room to figure out the new play.

This is a posterchild for "how not to conduct a transformation".  I bet the authors looked at the pieces of the story that illustrate the cross-silo coordination of technology changes and for that aspect I agree, the CIO is best positioned.  But the CIO does not rule over the domain where these other failures happened -- the business.  I just don't want to see CIOs thrown under the train as they try to push transformation when the business is not on board.

Check out the other Executive Advisory Program transformation blog posts here.

Forget H1N1; focus on STS

Posted by: Jack Santos

There is a disease among us that I call STS – stock ticker syndrome.  I experience the symptoms at least once a day.  Usually it’s someone asking me if I saw their email, or me asking someone else.  And usually the response is : “No..I never got it…let me look…oh there it is….sorry”.  Or, alternatively, “No – never got it, must have gone into spam”  (usually it’s sitting in the inbox).

The real problem is that in our 21st century communication system that we have built, these tidbits of information fly in and out so fast it is easy to miss something – like watching a stock ticker.  At any given minute of any given hour of any given day, you can see the emails coming in at a regular pace.  And many people do just that – mesmerized by the pattern.

Our Gartner/Burton content and collaboration guys have a good recommendation for this: software that “pulls” relevant info forward, and pushes “irrelevant” info back.  The real issue becomes what is relevant and not.

Vendors are jumping into the fray – Facebook comes at it with a social networking bent,  Google, in its typical “throw mud on the wall and see what sticks” approach, has already introduced multiple attempts (like “Wave”) -- the latest is “Buzz” for Gmail. Even collaboration tools like SharePoint (or Lotus Notes) think they have a solution. Twitter comes at it from a different direction…make the tidbits smaller, but more numerous; so if you can’t beat STS, join it .

They fact is that it’s just life as we know it, and we’ll have to get used to high “miss” rates….which is worrisome.  I suppose the argument could be made that the only difference with pre-internet life is that now we know (or can find out) what we missed, whereas before we would have no clue, and no way to find out. I suppose so.  But this is a troubling side effect of the information society, and not something the just “unified communications” (whatever that marketing term means) can solve…..But it’s an issue we (as management) need to focus on.

Just delivering new ways of funneling more information, and no context or filtering, (like Buzz) won’t help…

Cloud-fuscation

Posted by: Jack Santos

Part of the Gartner/Burton integration plan calls for, of course, integration of benefit plans.  I have some particular insight here, since I have been on both sides of that equation – in health insurance IT, and as a health care provider CIO. 

Insurers have always been on the leading edge of technology usage – and that continues to be the case. There is extensive use of websites, online modeling, customer based data entry, and self help.  It’s cool stuff.

But it’s also an example of a nascent problem with “cloud computing” – or even its red-headed step child: e-business. 

As businesses have found that an internet-based delivery model solves many issues (and reduces many costs) they have gone at it with a vengeance. So has government – health plans are becoming increasingly complex (HSAs, HFSAs, CDHP are all in the alphabet soup), because a side effect of increasing automation is that it is (ostensibly) easier to develop more complex plans, and easier to deliver them.  Hence, like water flowing into an empty glass, the level of complexity rises.

The role of IT leaders is changing – no longer are we just the advocate of automation, we must be the advocate of appropriate and judicious automation – whether it’s through participation in business strategy, or government regulatory frameworks.  An excellent primer on this is “The Laws of Disruption – Harnessing the New Forces That Govern Life and Business in The Digital Age” by Larry Downes.

This issue is not unlike a situation I found myself in a few years ago.  After months of bake-offs, evaluations, vendor grilling, RFIs, RFPs, etc, we were about to make a major software decision, and were reviewing vendor contract terms (it was a 15-20MM dollar purchase).  Of course, the contract was internet accessible, PDF format;  And it was littered with hyperlinks to terms on web pages, references to commitments on web pages, and detailed product features on web pages.

I wouldn't sign it; they were reluctant to change it, and it almost cost the deal.

Besides the complexity of referencing material outside of the signed document, there was the issue of audit – clearly those web pages change frequently, almost at whim – with no clear audit trail of who/when/where/why.  God forbid we should get into an argument at a later date (inevitable) and both parties look at the terms – just to find they were written on beach sand that had been scoured by hundreds of successive tides of changes…..In the end, they dutifully printed out all of the referenced web pages, we reviewed them, and explicitly included them in the contract.

I submit this is an example of yet another potential unintended consequence of cloud computing; we are attracted by the dynamic and elastic aspects of cloud, but those same features can be detriments to a long term, sustainable business model. 

A potential way to deal with this may come out of design thinking and hybrid thinking approaches.  Gartner research is exploring that genre of ways to think about IT solutions, and the impact on business strategy…

When I had 20 different websites open from 5 different companies, and multiple time-sensitive modeling and data capture pages in process, it occurred to me that the benefits enrollment process is approaching lunacy-- not any one business’ fault, just a zeitgeist. I am not sure whether health care reform (if it ever happens) will worsen or improve this situation.  But issues around appropriate automation, user interface design, and silo integration are at the heart of what should be on an IT leader’s agenda for the coming years….and cloud computing will only add fuel to the fire…

Now if I can only get Fidelity to stop insisting that I only rely on web-based statements and alerts….