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Innovating is Key in a Recession - Page 1

Apr 7, 2009
By

Allen Bernard






I spent an interesting and enlightening day last week attending a small, invite-only CIO conference at The Ohio State University's Fisher College of business. In attendance were about 25 CIOs and a few vendor-sponsors and guest lecturers. The theme was "Advancing Your Competitiveness In A Recessive Economy".

Well known IT Futurist and CIO Solutions Gallery co-founder Thornton May kicked things off by equating the current economic conditions to war. But this war is all about innovation, cash and change; not bombs and bullets. Still with bombshell after bombshell coming from the business world these days, it is an appropriate analogy.

Like September 2001, the world changed forever in September 2008. In one day all of the old rules of finance and investing were transformed. The resulting credit crisis has tranformed how companies run their operations and look at risk. The problems this historic moment wrought are the same for everyone in the C-suite: how to make sense of what happened; how to survive what happened; and, finally, how to benefit, if possible, from what happened.


Most exec's are still in phase I & II of our new reality. How to benefit from the current situation is still a bit opaque at best. Continuing his war-time analogy, May talked about the OODA Loop; something fighter pilots learn early and do continuously. OODA stands for observe, orient, decide and act. Like many things military, businesses have picked up on OODA as a way to mitigate risk and take measured action. In these times, nothing could be more important. While survival is the paramount concern these days, how you survive is equally important. The old way of getting through downturns by, among other things, cutting IT to the bone may actually prove immensely damaging to your company once things begin to turn around.

The best way to survive this downturn--if you have the resources--is to prepare for the inevitable rebound by investing in change. Obviously, change is a mailable term but in this context if it doesn't positively effect the bottom line, the top line, increase efficiencies or generate cash in some other way, then it is not the change your company needs right now. Simultaneously, this change has to help make your company better prepared to handle the turnaround. Luckily, many of today's most popular trends--SOA, data center consolidation, SaaS, managed services, open source software, Cloud computing, etc.--can, if done right, do just that.

Innovation

According to May, innovation should be at the heart of CIO's thinking these days. "Innovation is the re-conversion of invention into cash," said May. In many businesses today IT is the driving force behind innovation and, as the head of IT, the CIO needs to be the standard bearer. This means it is up to you figure out what the business needs from IT and then work to get it done. You do this by asking and listening. Forming committees, as one guest speaker does, that meet monthly to review projects so everyone on the business side knows where IT stands and what it being done.

Speaker X, as I will call him since the conference was not open to the public, leaves 90% of the IT decisions up to the business. The 10% IT decides revolves around what technologies will be deployed, not their purpose. He uses his CFO to kill pet projects so IT doesn't become the heavy in the eyes of the business. He cultivates relationships and demands business sponsors for all projects. He reports to the CEO but also works very closely with his seven presidents and embedded business analysts (BA) to ensure IT is providing each division value and benefit. From an IT perspective, he has transformed a once hodge-podge, ad-hoc, one-of-everything, order-taking IT organization into a model of shared services and platforms.

To accomplish this, X's IT governance process leans heavily on both the business and finance to come up with a shared vision. His BAs supply him with the business opportunities IT can influence and then X involves finance to get them on board before any project moves forward. He then holds a monthly meeting where all of the division presidents are expected to attend. Twice a year the CEO is there, as well. "If you want your project to get done," says X, "you better show up." And, surprise, surprise, they all do. It helps, of course, to have the CEO and company owner squarely on your side but this approach can be replicated even if you do not have such an enlightened management team.

To keep projects on budget, X adds a 30% buffer to every proposal and makes finance, not IT, report on ROI. This keeps management happy and allows X to practice "fire prevention" not fire fighting. And this leads to a proactive, innovative IT department that is viewed as a center of value creation, not a cost center. But, first things first, says X: you have to get the business behind IT and drinking the Kool-Aid, as the expression goes, before you sell the budget and the capex.

According to X, innovation starts with governance. Without it, all of your efforts will not be as effective. Speaker Y, on the other hand, looks to project management and business process re-engineering to keep the IT departments she manages on track and in line with business needs. Y defines portfolio project management (PPM) as knowing what people are doing and how much time everything takes. She leans on SDLC and ITIL methodologies to keep things on track, and she uses dashboards extensively to keep everything flowing and the business informed. "If management doesn't have good data, they can't make good decisions," she said.

Because businesses are still highly inefficient entities that are only now seeing the value IT brings to the table (maybe because it is only now that IT is providing that value - something to think about) revamping inefficient business processes can provide you with the opportunity to show your worth in troubled times.

 

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Tags: IT budgets, IT Leadership, innovation, best practices, IT architecture,
 

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