CIOs – not CEOs – can drive business transformation, say Forrester

A recent report from Forrester “The CIO’s Role in Business Transformation.” and summarised by CIOInsights

http://www.cioinsight.com/it-news-trends/cios-not-ceos-can-drive-business-transformations/?kc=CIOQUICKNL07092013STR1TOC&dni=67554356&rni=24626076

identifies that technology is usually at the heart of most business transformations and that CIOs are therefore well-positioned to lead transformation projects. Yet, not all CIOs are well-suited to such a role. The report loosely categorises CIOs into IT soldiers, leaders of IT, change consultants and transformation leaders.

The report aligns well with many of the discussions we have in our sales and business development training and maps well with how we define different types of CIO, according to their priorities and attitudes. It links well too with IBM’s Essential CIO study which categorised what business expects of its IT function from leveraging the existing IT investment  through to pioneering business transformation.

What’s evident is that CIO and the business need to be clear about the role of IT, its potential to make a difference and what they expect of the IT leadership. It’s also evident that companies that see the potential of technology to drive new business opportunities are those most likely to move ahead of competitors playing the ‘wait and see’ game. Balancing risk versus reward is always key and Accenture have an interesting report on this: Strategic planning is dead, long live strategic planning.

The Forrester report will no doubt spark some interesting conversations within IT functions and boards. CIOs have long been tasked with stepping up to the business plate. As technology increasingly underpins competitive advantage, these skills will be essential in both IT leadership and in their suppliers. Are you ready to move up a gear?

Making business sense of the cloud

Cloud’ is a hot topic but despite the sky high (excuse the pun) promises and expectations it’s not all things to all people or a panacea for all IT. Here we try to give you the low-down on what cloud can – and can’t – do for business.

At the moment it seems we have ‘alphabet as a Service’. Prefix aaS with any letter you like and it probably means something to somebody. We talk about ‘the cloud’ as if it’s one thing but ‘cloud’ services come in many different forms and what’s right for one company or one software application isn’t right for another.

The commercial story

We all know that the key business priorities are GROWTH (in a flat economy) & PROFIT, mainly through greater efficiency. To achieve these aims companies need to create operational versatility and join up silos to get everyone working together as ‘1 company’.

For IT this means 2 things

  1. Engage more closely with business – IT as business enabler

AND

  1. Control & manage costs through greater efficiency.

That usually means reduce complexity, reduce large capital expenditures and respond faster and more proactively to changing business needs. Sometimes these can feel like painfully conflicting demands yet a well-designed and streamlined IT environment that leverages & integrates cloud services in the right way delivers a platform that brings together and addresses these challenging demands. Critically, it brings this capability within the technical and commercial reach of the mid market in a potentially ‘game-changing’ way.

The cloud landscape

Understanding the cloud landscape is pretty complex even for cloud technologists but here are three aspects that can cause technical or commercial confusion.

1.’ Cloud’ is a very generic term for pretty much anything that is not delivered in-house! The most common forms of cloud are ‘Software as a Service’ i.e. the delivery of user applications as a subscription service and the delivery of IT services, infrastructure, resources or platforms as a service. There is no single definition and no ‘one size fits all’.

2. The level of support and resilience offered varies enormously from no guarantees at all to full Service Level Agreements and penalty clauses.

3. Cloud is not necessarily cheaper. Cloud moves much of ICT from a capex to an opex model and so it smooths costs over time and makes cost management more predictable. The real business advantage, and cost avoidance over time, comes from the flexibility and scalability to change, the freeing up of internal resources to focus on engaging with the business and from avoiding the costs and business barriers associated with running old and legacy equipment.

Business triggers

So when’s the right time to start the journey?

Common business triggers include

  • Changes in how IT and business engage
  • Changing working environments (eg mobility, flexible working)
  • Business change programmes
  • ‘One company’ initiatives and restructuring
  • New business applications
  • Improving collaboration with 3rd parties or other locations

Common technology triggers include

  • Server upgrades, refresh  or virtualisation / rationalisation
  • New or upgraded applications (or requirements to extend  access to applications to new sites / partners)
  • Technology review
  • Back-up/business continuity requirements
  • Security review
  • Supplier / service contract rationalisation

The 5i Training view

So, with our feet on the ground, what’s our view of the cloud?

You only have to look at the market statistics and predictions so see that deployment in the cloud is a growing trend that is only going to accelerate as the commercial model becomes well-established.

We also know that one size does not fit all. It never has for on-premise solutions and managed services and it won’t in the cloud. Neither is cloud ‘all or nothing’.

Each company has its own start point and its own goals so each needs a joined up ICT plan that is based on what’s right for that specific business – commercially, technically and financially.

It’s far too easy to oversell the benefits of cloud without really quantifying the value a potential customer might receive. That leads to a pipeline that quickly withers at the qualification stage.

Those offering cloud services need to be clear about their value proposition and how it addresses the needs of their customers. With that understanding, and a clear methodology for customer migration, cloud providers can start to deliver on the promise of the cloud as a platform for business flexibility, efficiency and growth.

Defining business value

What is ‘business value’ and how do you align and articulate value to a customer?

It’s a question that generates a lot of discussions and definitions during our workshops but there are two general truths which emerge – value is measured in different ways by different people and it means nothing if it’s not relevant. In business terms that means it must contribute in some definable way to the company’s vision, strategy, corporate objectives and execution plan.

To sell in this challenging but opportunity-filled market means truly understanding how your proposition delivers value to your customer and articulating that value in a meaningful way.

Any service or solution that delivers value will do so across one of more of the following levels. Correctly identifying the type of value you are offering and then building the right message for the right people will help you to avoid feature and price wars and develop a more business-led approach to engaging with your customer:

  • Cost efficiency: value at this level is about cost savings (not necessarily cost cutting!). For example, from a collaboration perspective that means reducing costs in areas such as telephone calls, travel, maintenance or call centre staffing. But here’s the key – it’s got to be a clear cost-saving. Nothing fluffy.
  • Resource effectiveness: here value is about optimising the resources you have, usually through process improvement. Improving sales win rates, getting product to market quicker and improving customer satisfaction ratings are all ways in which companies might demonstrate and measure better use of resources and optimised processes.
  • Strategic acceleration: at this level, business value is about how you support the business to better set, adjust, communicate and deliver against its strategic goals than it otherwise could. Often, from a technology perspective, it’s about how you enable your customers to be more versatile and agile – particularly in this current economic climate.

If you can’t map your value into one or more of these areas – go back to the drawing board and re-qualify whether you have a sales opportunity or fully understand your customer’s needs.

Working from the first principle of your customer’s strategic business goals and the key objectives they are driving towards will give you a clear yardstick against which to measure the value your proposition offers and how to build your sales strategy.

And one final thought – most companies are seeking better alignment between IT and the business and are looking to IT to build better business cases. This model doesn’t just help you – it helps your IT sponsors to build their case and ensure IT truly delivers on its promise of business benefit.

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