Benchmarking that Propels Transformation Forward

Digital transformations are even more impactful, and often more disruptive, to corporations and their cultures than traditional IT transformations, which focus primarily on systems. The business value impact can be substantial, as is the risk of failure.

Benchmarking can help crystalize targeted outcomes by identifying what measurements are most important and showing progress against both internal and external guideposts. Whether they are used to compare to a competitor, track current performance, or understand the impacts of an industry trend, benchmarking can serve as a catalyst for achieving transformation goals.

How can IT leaders can drive successful digital transformation through benchmarking?

• Engage Your People
  Ensure that your transformation benchmarking is heavily informed by the people who will actually lead and work on transformation initiatives. While external benchmarks are valuable guideposts, your people and teams know best what your organization can handle.
• Be Clear on Timing
  Benchmark early in transformation scope planning. Delaying benchmarking until you are at the doorstep of implementation risks missing key signals that can come from benchmarking at the outset of business process redesign and the insight that comes from systematically testing and monitoring early stage transformation efforts.
• Support the Leadership Conversation
  Use measures to facilitate a regular executive conversation on your company’s strategic digital health. The right high-level measures give feedback on the pace of transformation that elevates the dialog above the quarterly tug of war. The ability to continue collaborative conversations beyond your last strategic off-site can improve your partnering dynamic and keep the focus where it belongs – digital competition.

When these benchmarking steps are addressed appropriately, several enablers of transformation success are bolstered:

• Clear, shared and measurable expectations and progress milestones are set
• Feedback loops focused on tangible, actionable points are established
• Course correction earlier in the process appropriately adjusts future targets
• Effective communication that demonstrates progress and motivates people and teams

We have more to cover in our ongoing benchmarking series. For now, we would love to hear from you about what role benchmarking plays in your organizations, where you run into challenges and how you are solving for success.

Maureen Vavra

This is the second installment in StrataFusion’s benchmarking series.

Building a World-Class IT Organization: Teams and Careers

This is the second installment of a two-part series. Read Part 1 here.

The IT landscape is evolving fast and one of the best strategies for organizations to keep culture on track is to continuously reinforce the IT/business connection by encouraging teams to partner and focus on business goals. In part one of this series, we shared three keys to unlock world-class culture: articulating your message, encouraging participation, and investing in your people.

These focus areas set the stage to build effective teams and provide challenging career opportunities. How can you ensure your culture is working for you and getting the right results?  

Emphasize team building. Acquire and grow talent through interdepartmental teams.

• Commit to professional development so you have time to recruit from within and train employees from other areas when an initiative provides opportunity.
• Leverage internships to tap into bright game-changers with new perspectives around usability, innovation for applications and technology – disruption is good!
• Bump up the bonus structure for employees who successfully recruit new talent.
• Capitalize on Agile techniques to broaden job responsibilities. Dev Ops can be an open recruiting and training area for employees who want to broaden their base even if they stay in their existing department.

Support career growth:  Retain high-potential talent by providing maximum growth opportunities.

• Ensure that new employees are on-boarded, have clear role definition, are trained and have a mentor. Identify and manage poor fits quickly and fairly.
• Allow rotations into and out of IT to reinforce the value of business experience.
• Give feedback and career coaching regularly to ensure employees are developing, have a plan and know their value.
• Insist on regular training, development and new experiences, and provide the time and space for it. Set up a training sabbatical structure every few years if budget allows.

A world-class culture is one of the most effective recruiting tools you can have because the best ambassadors are your employees. Be sure to reward behavior that aligns with company values and recognize results that support the business strategies and culture. Gartner reports that as digitalization expands beyond IT into more areas of business, demand for people with specialized technology skills will continue to increase. Competing for talent is expected to get more intense. As the battle for talent escalates, companies must focus on culture and opportunities to recruit great candidates and retain top performers.

To assist with your talent quest, be sure to check out Merritt College Cybersecurity Career Day on Nov. 2.  The event will offer CISOand Instructor panels, as well as a keynote address from Cisco’s Chief Privacy Officer Michelle Dennedy.

Maureen Vavra

StrataFusion Expands Expertise in Digital Transformation and NextGen IT Readiness with Edward Wustenhoff

New Partners, Diverse Experience

StrataFusion understands the spectrum of needs clients face and is expanding its partnership with experts who are solving today’s business challenges.  Earlier this year, StrataFusion welcomed new partner Edward Wustenhoff, whose background brings exceptional expertise in digital transformation, design, management and continuous improvement.

Since joining StrataFusion earlier this year in February, Edward has been helping clients to move their IT infrastructure teams and technology toward the next generation of IT readiness for cloud, containers and distributed micro services.

Edward guides IT organizations to stay aligned with the latest organizational principles, processes and technologies. He brings a strategic mindset of how to transition IT organizations and enable new technologies for business success. Leveraging his deep understanding of all aspects of cloud services, Edward is uniquely qualified to help organizations adapt to the ever-changing landscape of IT technologies and the associated management challenges that come with transformation. With an impressive record of success gained from several decades driving design and adoption of world-class technology infrastructures, global operations management and deep technology provider understanding, Edward adds an exciting dimension of executive-level insight to advise StrataFusion clients.

Before joining StrataFusion, he was responsible for internal IT infrastructure at industry leaders like Netflix and Applied Materials. Serving as a Chief IT Consultant at Sun Microsystems, he developed and published the Operations Management Capability Framework and Model, and the associated assessment service for the Professional Services division. He also was part of the Advanced Internet Practice helping ISPs and ASPs design, deploy and manage large-scale infrastructures.

“The depth of experience that Edward brings to our partnership at StrataFusion adds another dimension of capability to serve our clients,” says Ken Crafford, StrataFusion’s founding partner. “Our clients face many challenges as the business landscape evolves, and our aim is to always have the right expertise to help navigate change and continuously improve.”

Need guidance from a trusted advisor? Learn more about StrataFusion here.

IT for Post-Internet Boom Organizations

A lot has changed in the business world following the Internet boom almost two decades ago. It’s been said frequently that all businesses are now technology businesses, like it or not. From the IT perspective, we see significant philosophical and operational differences between companies that were around before the internet boom vs. those that got started during and after. It’s logical to expect that the IT challenges for a post-internet boom company like Netflix differ greatly compared to General Electric.

Leaders need to be clear not only in how IT is operating in their organizations but also how it should be working for future success and aligning to business strategy. The characteristics of post-internet boom companies highlight clear challenges and opportunities.

For example, software development companies are finding that they spend increasing time in operational tasks competing with their directive to provide more company differentiation. In addition, infrastructure and governance aspects are scattered around various areas within the company creating significant inefficiencies.

Mature organizations now operate with a better understanding of the appropriate use of infrastructure as a service, like cloud, and recognize that a decentralized set of common skills, processes and infrastructure technologies is not the most efficient way to continue operating. Now there is a huge opportunity to integrate IT more deeply into the business with the goal of creating efficiencies in common skills, process and technologies across business organizations with the development of common platforms and services.

Successful and forward-thinking IT infrastructure organizations must continue to benchmark their progress, augment skills and reorganize around more agile and software-oriented practices. For example: adopt machine learning capabilities to facilitate continual improvement, invest in automation skills to increase deployment velocity and adopt a “rapid recovery” philosophy over a “prevent every failure scenario” attitude.

When that happens, organizations will finally be able to achieve the goal that everybody was so excited about in the early 80s and the boom of the 90s:  to unlock efficiencies, drive differentiation and unleash business innovation.

Edward Wustenhoff

Digital Transformation – is it a “thing”? or is it everything?

Digital Transformation continues to be a theme this year as we see in a number of predictions blogs and articles. But what is it?  Is it a thing?  Or is it everything?

DX has been going on in some form long before we called it that. The buzz today serves to direct our attention to the spectacular — inventing new markets, changing society. But not all companies are going to do that, or even need to. But every CIO needs to be looking at how the delivery of IT services is fundamentally changing, and understand how rapidly changing technology and market opportunities continue to impact their business.

Some things today are making DX harder and riskier than it used to be.  And those same factors also make NOT thinking carefully about DX in your org equally risky.  Some of these intertwined topics include the following:

• Rate of change
• Proliferation of technology options
• Understanding/factoring in impact on IT organizations (and the rest of the enterprise)
• Separating the fundamentally sound tech from the shiny objects
• Delivering new services at the speed the market (internal and external) wants them, with the level of control and security also needed

Planning and managing technology transformations is more difficult now than it was in past years, and it’s difficult to know what to bet on. Change is changing faster than ever before.  With new tech coming out every year and the decisions being made having multi-year horizons, how do you plan and manage the tech roadmap in this world?

This is a topic we work on with our clients, and it’s one we think about deeply at The StrataFusion Group. We’ll share some of our thoughts on how we’re doing that next time…

Reed Kingston

Organization Structure and Digital Business

In the equation of people, process, and technology, getting the “people” part right has been a tough challenge for many companies.  As technology evolves, the roles and talents needed to drive that technology and utilize it to help keep the business competitive requires constant evolution; getting the organization structure right in support of this evolving landscape has been an area we value advising in at StrataFusion.

In an earlier blog we looked at organization structure and critical success factors; now it would be useful to give further detailed thought to organization structure guidelines that are important to both traditional and digital business. Because digital business is different from your traditional data center kicking off this discussion would be some of the most important structural guidelines to consider in assessing your organization:

• Align business facing technology functions to match the business organization, this expedites specification, understanding, and support of business requirements
• Align technical development organizations along development lines and logical technical groupings to maximize development activity efficiency
• Constantly reinforce the importance of key organizational and business dependencies. The goal is to create an environment where cooperation and team focused response become the normal team response
• Create a system of organizational checks and balances. This allows your organization to be self governing, and can highlight important issues
• Be consistent in your approach, limit exceptions
• Separate your delivery function from your development function. A key check and balance that can avoid a lot of pain

Each of these guidelines could support a blog of their own, but the incorporation of these thoughts into decisions concerning how your team is organized and structured can create interactions and behaviors that can be important long term in a digital business environment.

Once you’ve assessed your answers to these questions we also believe that creating an organizational focus around rallying cries or mantra is extremely important. The idea of a mantra gives great organizational concentration, and provides a consistent focal point for how your team should be thinking.

Mantras can be a tool to guide proper organizational response

In creative organizational focus, here are some possible mantras:

• User Ownership of Systems
• Empowerment of the Community
• Standards & Integration
• Make Use of Forward Looking Development Technologies
• Business Intelligence and Knowledge Management Systems
• Right Tool/Right Place
• Flexible Systems
• Global/Shared/Local

Creating a mantra allows your team to default back to a common base – set of values, practices, and knowledge that will help them respond to questions or situations arising that are new or undefined – this is especially so in today’s digital era.  For instance, a mantra of “empowerment of the community” can help instill in your team the concept of insuring their actions result in recognition of the fact they serve a community or business and that it is in their self-interest to empower and equip that community to solve their own problems.  You can have the concept of “travel in packs” – if for those of your teams that exist in a highly competitive situation where stress is high and demands are intense and daily, a mantra of “travel in packs”  reminds them that they can count of your team for backup – you’re more than one person, they’re not alone, so that when if (for example) a website that is up 99.9999 of the time but crashes for a few minutes – upsetting c level executives – you have emotional, structural, and organizational back up.

In thinking about “Global/Shared/Local”, the mantra leads with the idea that things that data can have different types of ownership, some are universal and shared by all but require consistent management; while some can have more than one owner.

That a mantra can create organizational focus also works with another interesting potential which I call the ‘Manufacturing Metaphor’.  In the transformation to digital business this can remind you of how your digital delivery of an information product is not unlike some traditional manufacturing concepts, and incorporating some of those proven concepts into your business could be useful.

New digital business environments can be optimized by incorporating the similar concepts, processes, and flows as exists within manufacturing – digital business hold the same counterparts. For example, concepts of development engineering product engineering in manufacturing can be re-formed into as software development and operations delivery concepts in digital business; the shipping function in manufacturing is the data center in digital business. The terminology changes but the functions are similar, and taking a similar approach could favorably impact your “product delivery” process. Understanding these parallels again provides a framework within which it become easier to understand how to optimally structure your organization – with people being your most essential asset towards success.

In our third and final on blog on this topic we will be discussing the importance of infrastructure readiness on digital business delivery.

John Dick

 

Owning All Clouds

By Doug Harr

As part of my career as an IT executive for the last dozen plus years, I’ve led several companies through a process of migrating their business application portfolio to the cloud.  At Portal Software, that meant deploying SuccessFactors for HR performance reviews, and OpenAir for Professional Services Automation.  At Ingres that meant deploying Intacct for Financials, Salesforce for CRM, and lots of other cloud solutions. The approach for me reached its zenith at Splunk, where we had a 100% cloud business application portfolio, and where 50% of our compute and store capacity was at Amazon. With so much functionality in the cloud the question of roles and responsibilities became a focus for the company. In this very cloud-friendly shop, what should IT’s focus be? What level of administration of these solutions could actually be owned and delivered by departmental owners, such as Sales Operations, Customer Support Operations or HR administration?

As one example, both at VMware, where I was program manager for their Salesforce implementation, and at Splunk, where I was the CIO, we had very strong sales operations teams, and fairly complex Salesforce environments. In those environments Sales Op’s began to take ownership of more functionality in the Salesforce suite. This included user administration, assignment of roles to users, territories to reps, and just about all reporting. This grew to include modifying page layouts, and other configuration capabilities normally owned and controlled by IT. In my view the idea of enabling the Sales Op’s team was attractive for several reasons: (1) they wanted the power to do these things (2) they were not waiting for IT on the things they felt were high priority (3) they were closer to the sales teams who actually worked inside the tool, and so they were good at interpreting issues and acting – as good certainly as an IT Business Analyst, or even someone with fairly good technical skills. In these scenarios it freed IT to work on deeper technical issues, level 3 incidents, environment management, integration, reliability, etc.

In another example, at Splunk we made wide use of Amazon EC2 for compute and storage capacity. In these cases, IT System Admins were not needed – environments were spun up and used directly by personnel in Engineering and Customer Support. This was an amazing success, and it freed IT to work on monitoring usage, working deals on cost, and managing the overall vendor relationship.

Not every department has a team or individual ready to own or take a major role in the management of a SaaS or IaaS platform. For every HR department that manages Workday, there’s a finance department that does not manage Netsuite. It depends on the tool, and the personnel. What I’ve found is it can also depend on the CFO and management of a business function – some execs are happy to have these resources placed in the business, some are more afraid of  “shadow IT spend” or they’re caught up suggesting that IT can’t deliver and granting this power is a cop-out. Actually, I had a moment like this at Splunk, where I had not adequately updated two peer execs on our intent to get more deep IT skills hired into Sales Op’s, and had to sort that one out, to make sure everyone understood this was not a shadow operation! So there can be bumps in the road, but in my view adopting this approach is inevitable really, as software platforms and micro apps are becoming widespread, and so is the ability and desire by departmental teams to be more involved in the direction of how those tools, platforms, and apps are rolled out and used.

All this speaks to the future role of IT, and I for one have lived that future, as least in part. It’s one where IT is more strategic, focused on vendor/portfolio management, integration and security. To be sure some functions that are broadly used across all departments, and some that are task specific, still accrue to IT in most cases, or to partners that offer elements of typical IT as a service (think Help Desk). But done well, each department owns more of its technology, feels more in charge of its future, its technology adoption, its responsible use, along with other benefits. And, IT focuses less on being everything to everybody, maintaining disparate queues of backlogged work, and more focused on higher level matters, transforming the business for the digital age, and accompanying delivery of more complex technical solutions.

Right where we should want to be.

@douglasharr

When Using the Numbers Makes for Good IT Decisions

By Reed Kingston

In his recent blog post, Mark Tonnesen explained why he didn’t rely on traditional business case analyses, such as value case and return on investment (ROI) evaluations, to justify IT investments. I agree with Mark that these methods too often fail to support the right projects, and can fail to expose the wrong ones. I’ll put my MIT quant hat on here for a minute: if you are using tools that are prone to both false positives and false negatives, you should be looking for a new tool, or at least use the ones you have differently.

The problem is not that the financial analysis of an IT investment isn’t important—in fact, it is imperative, as it is for all investments. A good financial analysis casts light on some of the assumptions and trade-offs that are implicit in a large investment decision.

Problems arise when an investment comes off as lower profile, as happens often when reviewing IT investments. Decision making will always be biased against standalone technology investments as these are often poorly understood. How will “we’ll reduce network congestion and improve security by x%” fare in budget meetings against the sales and marketing team (“we’ll open up more markets!”), engineering (“we’ll design more products customers love!”) or operations (“we’ll lower costs with a new production process!”). That could be a pretty tough sell.

Getting to Good Decisions

Trying to justify IT investments without a business case driven by an internal customer organization can be an uphill battle. So how can CIOs and CTOs drive support for sound IT investments? Make sure important IT investments are tied to business cases that support increased revenue, reduced costs, increased customer loyalty and lower churn. Then provide financial analyses demonstrating how the proposed IT investment supports those business cases. This step defines the strategic value of the planned IT investment, making it a much easier decision for everyone to get behind.

Reed Kingston is a managing director at StrataFusion. Contact him at rkingston@stratafusion.com; follow Reed at twitter.com/reedkingston.

Why I Never Look at the Value Case or ROI

By Mark Tonnesen

When evaluating potential IT initiatives, the most common approach is to focus on the numbers and look at the return on investment (ROI) or value case. For example, say your company is considering implementing a new Enterprise Resource Planning (ERP) system. Chances are the CEO and CFO will ask, “What’s the ROI?” Or, “If the new system will cost $10 million, can you show me how it will produce a much greater gain?”

As far as I’m concerned, though, if you’re asking about the value case or ROI when evaluating IT initiatives, you may be asking the wrong question and looking at the wrong things.

What You Should Be Asking when Evaluating IT Initiatives

What gets lost in the value case or ROI approach to evaluating IT initiatives are the bigger questions that are more important than the finance-driven calculations:

• What problem(s) are we trying to solve?
• What is the value to the business of solving this problem?
• What objective/end state can we achieve with this initiative that we don’t have today?
• What’s the best way to achieve our business objectives?
• How important is solving this problem or achieving this objective for the business’ ability to reach its goals?
• How will this help us make better decisions and run our business more efficiently?

Not Everything Can Be Measured (Using the Same Yardstick)

A problem with the ROI or value case approach is that you might be trying to quantify the unquantifiable. For example, say you are considering implementing wireless internet service throughout your office for $XX per month. How do you calculate the ROI on this? You can take a best guess at how this might improve productivity and come up with a number. But that would just be a guess. And it would ignore other factors, such as the positive impact this might have on employee satisfaction or addition benefits such as mobile applications. Once new capabilities are in place and available to the full team, they may lead to unexpected innovations and enhancements that further improve productivity. It is difficult to predict the benefits new capabilities unleash.

The Numbers Can Tell You Anything You Want to Hear

Your team’s best guess regarding the ROI of a proposed IT initiative is just that: a guess. As an example, I once worked with a large high-tech company that was big on ROI. The team worked on a series of technical support initiatives to develop self-service tools for customers. To justify these projects the team put together graphs showing a reduction in customer support cases and calls, and an increase in customer satisfaction.

Knowing what the cost of a support call, the team developed analyses that showed that the cost of each initiative was lower than the cost savings it would deliver and the projects were approved. Unfortunately, the projected savings never materialized. The team neglected to include factors such as growth, customer adoption rates, issue severity addressed by the tools, continuous improvement costs and operational support costs for the tools. An analysis that included all the right factors—beyond just cost—would have helped the company make a better business decision.

Where to Focus: Business Impact

When evaluating IT initiatives, I recommend steering clear of the value case and ROI approach. Rather than pulling numbers out of the air to justify (or kill!) a program, take a hard look at the business impact that the initiative will have. Ensure you are solving the right problem and include measurement points along the way to check whether the expected goals are being achieved.

Mark Tonnesen is a partner at StrataFusion. Contact him at mtonnesen@stratafusion.com; follow Mark at twitter.com/mtonnese.

Rapid M&A Integration

By Mark Egan

• Focus on the people
• Take an aggressive approach to migrate the new business into existing systems
• Plan to complete the work within 90 days of deal closing

Mergers and Acquisitions (M&A) are an important strategy for expanding business. Unfortunately, many times these actions do not meet their intended goals. Although considerable emphasis is placed on technology, products, and new markets, some fundamental issues are overlooked. After working on over 60 M&A transactions, I recommend that you focus on three areas: engaging your new employees, integrating the new business into existing systems, and completing all integration work within 90 days.

Engage Your Employees

First, focus on the people. Make sure that you answer their top three questions:

1. Do I have a job?
2. Who is my manager?
3. What is my scope and responsibilities?

Until you answer these three questions, employees of the acquired company are not really listening and can’t focus on integration work. Be honest with employees, especially if you do not have a role for them, and provide assistance in finding a new role and incentives to work through transition period.

Migrate New Business into Existing Systems

Next, take a very aggressive approach to migrate the acquired company into your existing systems. With few exceptions, migrating acquired company systems over to your internal systems is much easier than investing a lot of time evaluating the acquired systems. Make sure that your existing systems have capacity to support increased volumes and additional businesses. This can be done as part of your IT readiness work well in advance of any M&A activities.

Have a 90-Day Plan

Finally, have a plan to complete all the integration work within 90 days of closing the deal.  Many IT tasks, such as e-mail, unified web site, and personnel systems can be completed on the first day of operation for the merged company. The remaining tasks should be aggressively planned for completion within 90 days. This approach positions your organization to take advantage of the newly merged company to develop new products and services and sell the expanded offering to your customers.

StrataFusion works with clients to develop their rapid M&A integration programs enabling them to improve the overall quality of their work as well as reduce costs.

Learn more about “Mergers and Acquisitions” in StrataFusion’s Knowledge Center and get to know our CIO/CTO Advisory practice.