Providing IT on the CHEAP?

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CIO to CRO – Chief Revolution Officer?

Thankfully, in this age of “build ‘em up, knock ‘em down” business models, where organisations have to keep a weather eye on the market and potentially disruptive new entrants (what price “Porter’s Five Forces Model” these days?) at a massively increased pace over even ten years ago, we now see IT in its true light – strategic driver.

I don’t want to wander into the world of “DevOps” in this little missive. I’m more interested in how the world of the CIO has changed through various phases:

  • Board-level ‘glorified IT Manager’
  • Board-level executive with responsibility for anything which is touched by a computer
  • Board-level interface between peers and the IT function
  • Soon-to-be-replaced-by-Chief Marketing Office Board member
  • Chief Revolution Officer

This has gone through an increasing wave of responsibility, through a minor hiccup to the point now where the role of a CIO is becoming more entrepreneurial and a key driver of the business. The CIO holds the “keys to the kingdom” in terms of a panoramic view of what is available in the IT and services market and the team which can be managed, directed, coerced or pushed towards delivering the new orthodoxy in a business.

With due respect, a CFO isn’t likely to have the overview of the IT market to build a strategic framework for moving the business into better profitability or new markets. The CMO will have a view of the outputs that Marketing wish to achieve, but may not have the expertise to interrogate current systems to understand where best to source the inputs. Being “output-centric” can lead to the inefficiency, redundancy and inaccuracy of using multiple inputs which may be expensive, contradict each other or generally just add weight and overhead to delivering an output.

The sales director won’t really have time to care until a new market is opened up, or the current market can be better served by the business (cynically – ‘cheaper’) – and why should they? The CMO will know the shape of the market and what is being demanded from customers and this can be verified with feedback from a sales director, so Marketing can be the conduit for reporting on the changing shape of the business’s market. The CIO then brings their knowledge and experience to provide what is required.

The CISO doesn’t really care about any of this, as long as it’s all secure (you can mentally insert ‘smiley face’ emoticon here!)

The issue at hands here is that business instinct is not to trash and burn everything which came before, as a response to new opportunities or market changes. No one can afford to run a business which changes the basic plumbing every time a headline appears about a new market development.

My team is working to a framework which is a ready-reckoner for meeting business requirements within the parameters of a working business.

For want of another acronym, it is known as “CHEAP”.

C – Cost. Is our response to this new opportunity worth the investment? Ultimately, if we discovered a niche in the market for advertisement-driven search engines which Google hadn’t considered, could we ‘tool up’ fast enough and with enough margin after paying for development, hardware, marketing and so forth to make the expenditure worth the return?

H – Holistic. Does this new driver ‘fit’ with the resources we have? Do we need to hire new talent with specific skills? Are these skills being offered at a ‘scarcity’ value (i.e. more expensive) or are the skills commonly-available in the market? Do we need new systems, services, architectures? Will they run with our current setup, or do we need to run a parallel environment to meet the market’s needs? Refer to ‘Cost’ (above) for further guidance.

E – Efficient. This is more a process-driven thing. Can we use this new market driver to increase efficiency, or will it require extra work on current processes in order to achieve (possibly) mutually-exclusive outcomes? Can we look into improving efficiencies by addressing the ‘Holistic’ (see above) element of the framework, i.e. can we re-purpose our current environment to offer everything required by the business within acceptable performance parameters?

A – Agile (or ‘Agility’). How quickly can we deliver? Is our developing operational environment ‘elastic’ enough to deal with new requirements from the business? If not, can any of the requirements of ‘C’, ‘H’ and ‘E’ (above) provide a counter to the requirements to be agile? In other words, agility is something we should consider as we move the business forward and is the “wheel within a wheel’ for development of our operational environment. Cost, the ‘holistic’ nature of our operating environment* and ‘efficiency’ shouldn’t be a brake on our capacity to create a ‘can do’ environment as blocking agility will eventually block all of the ‘CHEAP’ framework.

P – Performance. This shouldn’t need to be explained, except… Too little investment in the operating environment can lead to the equivalent of running a business which provides accurate weather reports for yesterday. Obviously, not very ‘saleable’. The other side of this particular coin is the creation of an expensive operating environment which gives accurate weather forecasts for six weeks’ time, at a high cost. This will have certain limited customers, but it will be way above the price palate for most consumers and so market expansion will be a slow, painful process. ‘Right-sizing’ is a little simplistic in this element of the framework, but it does have a bearing. There needs to be a little ‘elbow’ room within the performance envelope so that ‘A’ (above) is not undermined.

*’operating environment’ includes systems, hardware, processes and people


This framework is obviously common sense. Sometimes, though, we need to step back and look at a scenario with ‘common sense’ written down in a handy format.


 

As the role of the CIO/CRO develops – as it inevitably will – a framework like ‘CHEAP’ might be a touchstone for taking a ‘sense check’ on the never-ending revolution which happens within business. By failing to grasp the simple outline of CHEAP a CIO might begin to see their investment in staff, training, hardware, systems and services begin to spiral out of control as they seek to achieve the requirements of the business is a rapidly-evolving or revolutionary market environment.

The antonym of ‘CHEAP’ is “EXPENSIVE”* and this is true for any business. Either look at what is happening to the business and provide a supportive, responsible and responsive ‘cradle’ for new business opportunities within the CHEAP framework, or try to prevail like King Canute by trying to repel the tide and find out how expensive such an mindset is to the profitability and longevity of your employer…

* I can’t think of the elements for making ‘EXPENSIVE’ into an acronym. May the ‘X’ could stand for ‘Xcuse me – how much?!’

** I know that King Canute was trying to prove to his courtiers that he wasn’t ‘all powerful’ before anyone picks a hole in that simile.

 

Mark Evans

A full partner and Management Board member in the largest global quantity surveying practise, a highly experienced Chief Information Officer / IT Director with a proven track record of success, building strategic international technical support teams delivering at the highest possible level. Acknowledged for management capabilities by attaining the CMgr FCMI (Chartered Manager Fellowship of the Chartered Management Institute) and leading award-winning ICT teams, as well as one of the first senior IT managers to specify and deploy Cloud computing technology in the UK. Skilled in promoting business awareness, producing successful programme / project strategies specialising in change management and associated services. I have spoken at several UK "C-level" international conferences on the subject of Cloud Computing in London, Manchester, Glasgow, Munich and Athens. Expertise includes - cloud implementation, strategic planning, network development and deployment, team leadership, change management, performance optimization, global outsourcing, P&L, Prince2 Practitioner, ITIL Foundation, solution delivery, personnel management, communication management, cost reduction, customer service management, business improvement, vendor management, coaching & mentoring.

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