Tech TBM drives M&A

Tech TBM drives M&A

by | 2 Nov 2015 | Consulting, Technology

Technology Business Management Drives M&A

Throughout the entire M&A lifecycle, the CIO is poised to assess opportunities, mitigate risk and develop and executable IT plan rooted in a multidimensional, 360-degree view of the process.

“As merger and acquisition activity heats up, IT leaders need to be prepared to take a more active role in ensuring that value is properly assessed before the transaction is completed,” Comments Craig Ashmole, Founding Partner of London based IT Consulting firm CCServe. “The key is in ensuring that Boards recognise the need for the CIO involvement throughout the integration process that follows”.

With tens of thousands of M&A transactions expected this year, Steven Hall a Partner, of Emerging Technologies Group at Information Services Group (ISG) makes some clear observations around the focus of Technology within the M&A framework.

CIOs will be called on to help the board determine how the deal will grow revenue, decrease costs, and mitigate risk. The effective use of Technology Business Management (TBM), and the collaboration between IT and lines of business that it entails, will not only inform the M&A transaction during the due diligence phase, but it will also lead to a more efficient transition and a better understanding of the costs and anticipated benefits of the deal. Because TBM is a holistic framework that positions IT in a collaborative business role—one that provides data-driven assessments of its value and role—it is the IT leaders themselves, engaged at the outset of the M&A process, and through its completion, who are best positioned to help fully articulate the M&A rationale and deliver a successful process and outcome.

If one considers several M&A scenarios and their associated business objectives, it becomes clear that IT integration approaches are not one-size-fits-all. In an M&A case driven by cost reductions and improved efficiencies within the context of eliminating a competitor, the absorption rationale—although not without its challenges—is straightforward. The acquiring entity provides all IT systems, but even then the implementation or advancement of a TBM strategy requires attention during the integration. If the primary M&A goal is based on R&D, the parallel but bridged IT coexistence is straightforward, too.

An M&A rationale based on geographic expansion to increase market share also seems straightforward, but IT professionals prepared for this M&A challenge are delivering quality data to best guide the M&A strategy development, as well as execute it. That geographic expansion likely requires a hybrid response to IT systems integration with elements of the absorption model, but it also relies heavily on a “best of breed” approach that retains or recombines superior process or functionality provided by the acquired company. Making optimal decisions requires IT leaders to assess the strengths and weaknesses of the target firm’s IT systems, evaluate the portfolios of both, and deliver cost-effective solutions that drive future growth.

Throughout the entire M&A lifecycle, the CIO is poised to assess opportunities, mitigate risk and develop and executable IT plan rooted in a multidimensional, 360-degree view of the process. The CIO operates as an integral part of the organisational team within that lifecycle, but the critical and active role of IT emerges as the parties move from an acquisition and divestiture phase to executing the separation-integration process. Here, the two issues at the forefront of M&A transactions from that IT perspective—a perspective connected in the TBM framework to all other business units and processes—is to ensure that different platforms work together post-acquisition, and how to optimise the new environment and the costs involved. Doing so is not always easy, and resistance from either or both M&A parties is a given. It becomes easier when the IT leader communicates a core business case throughout the process.

Metrics are the basis for building that case, and for creating a meaningful baseline that anticipates growth and measures savings before the deal closes. But metrics are in service to more than the creation of benchmarks, and quality data is as important a communication tool as it is a standard measure for quantifying success. Data tell a story for stakeholders, and provides a common language for discussing and evaluating the M&A process to both its internal and external constituencies. When, inevitably, at some point in the process stakeholders on either side step in and say, “We used to do it better,” data provides a shared understanding between the M&A parties’ expectations and cultures.

Ideally, that data isn’t meant for looking backward or creating reports that do. Identifying data that supports TBM priorities—and designing that data collection into the toolkit—offers the enterprise an opportunity to revisit how it measures success, and maximises the foresight value of that data.

The traditional approach in M&A circles has been all about percentages, and how to achieve a certain percentage as a measure of cost—but we know now that is impractical, and subject to far too many contingencies to offer the most realistic portrait. Reducing costs to a percentage—as opposed to reducing costs with performance metrics in place for a greater understanding—will only lead to greater risks elsewhere. This strategy, moreover, often fails to accurately evaluate specific, real-life scenarios.

If the costs for services are truly understood through a TBM process both comprehensive and focused, then the “big picture” can supplant the percentage mandate and lead to more intelligent decisions and the M&A discussions that surround them. For example, if the costs are understood but still seen as too high, then the discussion is no longer framed as, “Reduce it by another half percent.” More important, the strategic possibilities and conclusions are no longer derived from conversations that fail to capture critical information that the TBM model makes available. The discussion about where to cut or eliminate becomes more focused, and is a more reliable measure of very specific services, or a better evaluation of operational IT choices to move more on-premise to an as-a-service environment. These approaches deliver value during the M&A process, but it’s important to design them to extend beyond the moment.

Steven goes on to state that: From a TBM standpoint, the M&A process itself is not a departure from “normal business,” rather than an expression of it. The CIO and other organisational team members leading through each M&A phase need to design plans that are reusable, support continuous improvement and remain flexible enough for agile and intelligent responses in the changing business environment of the future. Just as IT leaders are tasked with the systems integration that the M&A process demands, so too is a leadership team whose basis in TBM positions the M&A experience itself within the wider data-driven future of the enterprise.

Technology Business Management

The biggest challenge in M&A, is achieving that common language, and this requires a rapid adoption of TBM principles, knowing what is being spent in both organisations, and how they align. Achieving the desired M&A outcome with a clear shared understanding not just from an IT perspective but within a TBM framework creates the optimal environment for success during the M&A cycle.

Corporate Boardroom Tech Challenge

Corporate Boardroom Tech Challenge

by | 15 Oct 2015 | Consulting, Technology

Are Chairpersons Preparing their Boards for Technology Readiness

The shocking truth about the lack of technology awareness on many corporate Boards in top British firms is exposed!

Executive directors are usually selected for their leadership qualities; they often have experience with general management or leadership experience rather than narrow expertise or technical acumen. So the big question is why should knowledge of IT be an exception?

“Scouting the net to see what topics I could find on the subject of bringing the CIO to the Board table I came across an interesting article from Jean-Louis Bravard, Chairman for DotLondon.” States Craig Ashmole, Founding Partner of London-based CCServe Consulting. “I could not agree more with some of the findings from Jean-Louis so Non-Executive Board members should be actively targeting sound Technology experts.”

A few months ago Jean-Louis decided to look into the professional experience of non-executive directors at the major banks listed in Britain. Like almost every other major industry today, banking relies on hugely complex, enormously expensive technology.

Jean-Louis goes on to say; So I was curious as to whether the individuals charged with corporate governance would have any more than a layman’s knowledge of IT. I discovered that only one bank had a board member with some direct experience in technology and in that case it was as a sales executive.

I’m afraid this is typical not just in banking but across most major industries. Technology is the most important agent of change today; hardly any industry is immune to both its value-creating and disruptive potential. Yet I perceive a large gap between the direct experience of non-executive directors and the experience required to challenge and support chairmen and CEOs in their quest to bring the best technology to their business.

The truth is that many industries today employ outdated technology. Consumer banking is one — layers of technology have been implemented since the 1960s and almost nothing has been taken out. A total overhaul is required. There are countless other examples. Fax machines remain the preferred way to share health care data in most countries despite the fact that the cloud could theoretically allow clinicians to instantaneously share medical records. Chalk remains the technological tool of choice in most education settings. Utilities have only recently begun to add sensors throughout the electric grid and add smart meters in homes and business.

The main reason for this lag is that the project horizon of most IT overhauls goes beyond executive tenures. The cost of overhauls can run into the billions of dollars, the risk of overruns and even failure is high, and that means that many executives kick technology refreshes into the tall grass. Of course, this leaves too many companies vulnerable to technology-fuelled disruption. Few expected Apple to disrupt the music industry (with the iPod and iTunes), communication (with the iPhone) and now potentially consumer banking with ApplePay. Amazon dramatically impacted not just book shops but shopping; Google is now a verb. Who would argue against a future in which disruptive services continue to impact everything from healthcare to retail to personal finances?

Only a multi-year, board-level sponsored effort can ensure a responsible IT overhaul. But without IT expertise at the director level, how can a board truly make an educated decision and, more importantly, follow it through until the end of the project, adapting the design of the overhaul over the course of years to take advantage of rapidly changing technology and consumer behaviour?

The Remedy

Craig Ashmole goes on to suggest, “We need to ensure that corporate governance includes sufficient oversight of technology, and companies should be following basic principles” such as:

  • Hire a technology expert to your board. That is probably the most difficult task and it is very industry dependent. Give priority to individuals with experience scars, both success and failures and who continue to be involved with technology. This means look ‘Outside the Box”, be receptive to new talent, perhaps those new to NED or Board roles. Technology moves too fast for “stale” talent, however well-informed innovation leaders should be sort who can rapidly educate the board. Be prepared to rotate this role every few years.
  • Don’t rely entirely on Big-5 advisers. Many boards rely on technical advisers and Big-5 consultants to assess their firm’s technology needs. Too often the corporate advice these advisers offer is generic. It’s often focused on the competitive environment — used to reassure management that it is not falling behind rivals. This leads to the predominance of the lowest common denominator.
  • Ask tough questions about technology spending. Using Moore’s Law, zero-based budgeting would call for technology spending to fall each year by about 30%; in most companies spending goes up by at least 5% annually. Part of the reason is that CIOs are not rewarded for taking out old code and old hardware; instead they “layer” old technology on top of ancient technology, bad on top of worse.
  • Understand the cyber threat. Unfortunately, new technology opens up vulnerabilities even as it creates value. Total security is not possible, but understanding the risk-benefit trade-off is essential. A recent survey by the Ponemon Institute, sponsored by Raytheon, found that 80% of boards do not even receive briefings on their company’s cyber security strategy.

Poor corporate governance remains a problem at many companies and is a complicated challenge that goes beyond a shortage of technology expertise. But this scarcity of technology experts is one of the easiest problems to fix.

The Board Chairperson Challenge

The Board Chair should test their company’s preparedness to handle technological change by mapping current and future challenges to their current non-executive directors’ pool. They will almost surely discover there is a gap between their team and their corporate needs; using the suggestions above should help the board bridge the gap.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Whos running corporate tech strategy

Whos running corporate tech strategy

by | 7 Sep 2015 | Consulting, Technology

Gartner’s views on who will be running corporate technology

CIOs are fully aware they need to change in order to succeed in the digital business, 75% of IT executives say that they need to change their leadership style over the next three years

In August 2013 Gartner came up with three distinct roles that it thought would much more closely define the job of the digital chief or CDO in a rapidly changing tech world. So where does that put the CIO now in 2015.

According to a report that Gartner produced on the topic there were three new executive roles potentially filling the gaps left by CIOs who are more interested in ERP than accepting the challenges of the broader digital strategy of the business.

Gartner’s survey of 2,800 CIOs in 84 countries showed that CIOs are fully aware that they will need to change in order to succeed in the digital business, with 75% of IT executives saying that they need to change their leadership style in the next three years.

There has been much discussion and blogging on where the businesses were going with regard to their CIO existence and this was driven largely by CIOs not prepared to move away from historic comfort zones like application services and ERP. There is no doubt that the evolving digital world has exposed gaps in digital leadership and has in many cases led to the creation of the chief digital office (CDO) role, which the analyst house said would exist within 25 percent of enterprises by mid-2015.

“The exciting news for CIOs,” says Gartner, “is that despite the rise of roles, such as the chief digital officer, they are not doomed to be an observer of the digital revolution.”

According to the survey, 41% of CIOs are reporting to their CEO. Gartner notes that this is a return to one of the highest levels it has ever been, no doubt because of the increasing importance of information technology to all businesses.

So where are we now? Is that percentage correct? Probably not far off but Gartner see that figure rising to 50 percent in heavily regulated industries such as banking and insurance.

Gartner believed 18 months ago that the role of the CDO would need to be broken down even further into three distinct roles rather than just one, into digital strategy advisers (DSAs), digital market leaders (DMLs) or digital business unit leaders (DBULs). In effect these roles replace three distinct ones from the pre-digital technology age: The back office, front office and head office.

The Digital Strategic Adviser (DSA) is there to advise the board, CEO and executives on the question, “How will we survive and thrive in an increasingly digital world?” Gartner said this exec “may also lead teams executing on this digital vision particularly when combined with another role, such as CIO or digital business unit leader”.

The Digital Marketing Leader (DML), will ensures that the end-to-end marketing strategy and its execution is as good as it can be with top-notch design and creation of digital products and a focus on new markets and channels. The DML will have a special responsibility for market retention – holding on to customers, and so may have a marketing background.

The Digital Business Unit Leader (DBUL) is “the CEO of online/digital business units”, Gartner said. The DBUL is defined as focusing solely on online or digital channels and digital products and services. The business model and products sold by this business unit “may or may not be the same as those sold by other business units”. says Gartner. This could be a role filled by the CIO — at a stretch.

Reports from the Gartner Symposium in 2014 highlighted another Gartner finding: While CIOs say they are driving 47% of digital leadership only 15% of CEOs agree that they do so.

Similarly, while CIOs estimate that 79% of IT spending will be “inside” the IT budget (up slightly from last year), Gartner says that 38% of total IT spending is outside of IT already, and predicts that by 2017, it will be over 50%. This is a “shift of demand and control away from IT and toward digital business units closer to the customer,” says Gartner.

One of the interesting shifts noticed is being driven from outside the company’s control, as Gartner further estimates that 50% of all technology sales vendors are actively selling direct to the business units, not IT departments.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Shadow IT and the CIO

Shadow IT and the CIO

by | 4 Sep 2015 | Technology

Do CIO’s just turn a blind eye to ‘Shadow IT’?

The debate goes on as many CIOs remain the ‘IT Technology Gatekeeper’ versus embracing ‘Shadow IT’ to become the innovation leader

IT governance in the era of shadow IT is one of the most important CIO change areas for the 2020s as lack of control or focus on Shadow IT growth will create further insignificance for the CIO role.

Interestingly by 2020, more than 35% of organisations’ technology budget will be spent outside the IT department, according to estimates from analyst Gartner.

This trend will have profound implications for the role of IT professionals and the IT team.

The growth of “shadow IT”, as it has become known, has been given impetus by the growth of consumer technology and cloud computing, which make it increasingly easy to deploy technology without going through the corporate IT department.

At the same time, businesses are under pressure to adopt new technology quickly, and realise they can often deploy more rapidly by bypassing the IT department.

“IT suppliers are also part of the shadow IT problem because they will bypass the CIO if they can see a faster result,” said Craig Ashmole, Founding Partner of London based IT consulting CCServe. “Talking with a CIO recently over coffee, he told me that he had learned from a chance conversation with one of his suppliers that his company was spending a substantial sum on a new IT system, when asked who they were dealing with, he was told someone in Procurement.”

Now that got his attention. Ensuring that shadow IT is managed and governed properly is a challenging task for CIOs. If you know why there is shadow IT, you can do something about it so make sure you put the tools in place to address that root cause.

Don’t ban shadow IT

Banning shadow IT is not the answer, using a policing term if you ban Shadow IT you will find it will just go underground and purchased secretively or departments will creatively purchase in small quantities or under supposed project costs to get what they want.

The biggest usage of Shadow IT seems to be in three areas:

1) Mobile phone data and photo usage which includes tablets and home PCs and general MDM

2) Chatter, Social Media or Communications apps like, Yammer, Chatter, iMessage, Facetime, Facebook, Instagram, Twitter or WhatsApp etc – A huge choice here!

3) Cloud based applications for data storage or project sharing and such as BOX, iCloud, Dropbox, SOS etc

Embrace innovation and stimulate employees to share ideas or concepts that would improve working conditions or make their job easier or even enable costs to be reduced – these are the core ideas that could be consolidated into internal IT development to see the practicality of business improvement. This will also instigate an element of wanting to enable the IT department to make new ideas work rather than being seen as a gatekeeper and preventer of technology usage.

The role of the IT department should be to set expectations for employees, not to control the way they use technology by treating employees in this growing Gen-Y environment as technology savvy. Treat them like you would executives in the business, with trust, while educating all staff on best business practice and how to control data leakage, just as you would a CFO in the pub watching his favourite team not to discuss sensitive fiscal details with his mates. Building this inner trust with staff is stronger than telling them what they can or cannot do. It should be clear however the ramifications should someone fail this trust and that’s often a better approach.

Marketing people don’t really want to run IT systems. The CMOs just want their systems to scale and to work; they don’t want to have to maintain IT systems, or take responsibility for them working. So they are usually more than happy for the IT department to step in and provide support.

Move from in-house to cloud

Organisations should be moving away from providing IT in-house and towards buying in standard services. We should be using the cloud to put in place a platform, an ecosystem that you can offer to the business for a unit price and with well-understood service-level agreements.

The role of the IT department will not be to deliver the systems, but to work with external providers to offer the service quickly, for the best cost. Utility services can also be moved out and managed by outsource service companies that can often provide these services better and at lower costs. It is this speed to market and ability to scale that dramatically reduces the need for shadow IT.

“The skillset of IT professionals will change and is already doing so. Rather than being technology experts, their role will be to work with business professionals to evangelise the benefits of IT and assist innovation while being an IT enabler.” Comments Craig Ashmole. “This is possible when basic non-revenue generating IT utility services are managed by third parties, so that the core in-house IT function can focus on innovative improvement.”

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Boardroom Technology time bomb

Boardroom Technology time bomb

by | 27 Aug 2015 | Consulting, Technology

Board member time bomb for those not focused at Technology

We should actually be concerned about things boards are ‘NOT’ discussing

There have been many articles written about placing IT technology agendas on the boardroom table and also many recent blogs about the potential demise of the CIO role as the CMO or CDO leap forward into the limelight of corporate awareness. This is not surprising as in many corporations today the CIO or technology officers still do not have a voice let alone a seat at the boardroom table.

CEOs and their executive leadership teams should recognise that if they don’t have the technology knowledge at their fingertips then they are making corporate decisions in the dark. Boards should be building technology agendas into the core of their medium term business strategy, if they don’t want to be overtaken by their competition. The digital agenda does drive business growth and in turn revenue and market share – so this is why CEOs should be consciously recognising technology does have a say in the way that the business grows.

“One area of change I see in the corporate executive shuffle of today’s businesses is the aspiration to own the digital space”, comments Craig Ashmole, Founding Partner of London based IT consulting CCServe. “Marketing executives understand the digital needs and CIOs feel threatened that they do, but it is Technology that’s required to make it all happen”.

Technology executives need to move with the times supporting marketing initiatives, being creative while efficiently using technology and becoming enablers rather than gatekeepers, then gaps wont develop within the executive ranks nor will ‘shadow IT’ proliferate over the corporation.

Board members should take their quota of responsibility to open up wider discussions around how the company grows its business efficiently using technology otherwise they are likely to fall behind. As a counter argument the CIO or technology leaders need to do their bit, which requires them to better understand how to be a commercial business leader not just a ‘tech-na-geek’ hiding behind technology – the CIO role needs to be a commercial business leader who understands where innovative technology will make a difference.

When a company grows through acquisition or chooses to carve-out non core elements of its business, this is another compelling reason to have ones IT technology ‘in-shape’ enabling the ease of separation or reducing merger ‘join-up’ time, which obviously reduces cost of acquisition.

So some areas of food for thought!

How well is the present IT Technology strategy delivering?

By putting the CIO or the technology agenda on the agenda of the boardroom table will enable all executives to better understand their position in the marketplace. The CIO needs to be able to articulate this in business language not technical language.

Can you clearly establish business efficiency from ones technology?

The CIO should be making rapid change or transformation within his department, moving day to day functional utilities services, like IT desktop support, software application management, Network / Telecoms services into more efficient engagement models some of which may well be outsourced service partners. The focus for internal resources can then be more effectively focussed at innovative solutions or applications that will drive corporate business and revenue growth. In other words move away from the old school technology ‘Ivory Towers’ and massive IT departments to mean lean agile innovative technology enablement.

If you are an ecommerce organisation; have you addressed a payments, mobility strategy?

One of the biggest areas of growth/change presently is in the mobile payments and Near Field Communications (NFC) areas. With Apple and the mobile market place looking to drive payments with your smart phone and the Credit Card banking players trying to open up automatic payments by NFC and chip-and-pin touch payments there’s a lot going on.

With the likes of electronic payments company’s such as the traditional PayPal and SagePay we are also seeing the big power houses of both Amazon and Google engaging and driving electronic payments strategies. More recently the major European region the acquisition of Skrill by Optimal Payments has created a new power house payments group which will see rapid technology advancement.

Do your customers have the tools or applications needed to do business with you?

The CIO or IT Department has for so long been inwardly focussed and this has to change. The old school approach of saying that the service or application has not been approved or developed by the IT dept. so it is not permitted to be used; has to go. IT should be the enabler when users bring new ideas to the forefront while looking to how they could efficiently bring new services or applications into the business in a controlled and security conscious manner.

Is security a worry for you? If it’s not then you are in trouble already.

This has to be the one area that you should never say never. The likes of the recent hacks like Ashley Maddison, Sony Pictures Entertainment and Apple iCloud should be a constant reminder that one should never be complaisant when it comes to data security and in keeping your customer data or PII Personal Identifiable Information (email, tel numbers, credit card and passwords) secure. This is a wide subject but should in all respects have a dedicated leader within the business driving this department ensuring that you keep your business safe from the world of hackers and fraudsters.

“So the time bomb that needs to be subdued is the ever widening gap between corporate board members and the understanding of the value technology brings to a corporation.” Craig goes on to say, “Corporate decisions; like where to expand the business geographically or whether to go through with an acquisition should not be made in the ‘dark’, and it is technology that could potentially make the difference to success or failure with those corporate board decisions.”

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Merger IT Survival Tactics

Merger IT Survival Tactics

by | 21 Aug 2015 | Consulting, Technology

Survival tactics during a business merger

When engaging in a merger or acquisition the complexity of issues for consolidation of staff and technology becomes a highly charged and often underestimated undertaking.

Apart from the obvious joining up of financial and fiscal systems in an acquisition, IT plays a major role as different IT systems must be consolidated and made to work together, in order to reduce acquisition cost creep. Bringing in senior consulting skills from outside the company to manage the Transformation programme or IT change could be as critical as the target acquisition for the business.

“Board members all know that a merger has risk which needs to be managed — not only politically but technically. It’s about how to reduce, what I call, post-merger ‘Join-up time’ that really makes a successful acquisition.” Suggests Craig Ashmole, Founding Partner at London based CCServe Consulting. “In my opinion an executive or board appointed key ‘Point-of-Contact’ is required, bridging the Board with the Operational side of the merging companies, and someone without emotional ties to those same employees.”

In a post-merger situation making the right choices and decisions and pushing the right buttons to get things done on time and under budget are key objectives – not easily made when one is personally professionally close to individuals that you might be releasing as a result of consolidation. This is where the independent approach works best; as senior skilled Change consultants don’t carry baggage, they carry the ability and gravitas to understand what needs to be done, make tough decisions, and to attempt to do it under budget.

“In a recent M&A due diligence exercise I was engaged, one of the key factors observed and what ultimately resulted in a successful acquisition was ‘being transparent’ in dialogue between the acquirer and the acquired parties, so ensure to have a functional communication strategy in place”, Craig goes on to say.

Reading an interesting article by Mary Shacklett I found some key and not-so-obvious points which endorse what I consider key actions while driving an acquisition or carve-out, namely:-

1: Understand what is really at stake

Mergers aren’t just “clinical” projects that convert systems so they work together. For IT and throughout the organisation’s involved, mergers mean that some jobs are likely to be consolidated as well. Some staffers are going to keep their jobs while others might not. Then there comes the bun fight of who’s more skilled or who has more value for the business. Not forgetting IT staff also have technical allegiance to systems that it may be familiar with. So if a favoured system is designated for termination, there could be fear and bitterness especially if it eliminates particular technical skill sets required. IT engineers are often creatures of habit.

2: Consider sabotage in your risk management strategy

Consolidation between two companies often creates a “victim” company whose systems are going away, where IT staffers may be uncooperative or withhold vital information needed to safely convert their systems to the new platform. This is a subtle form of non-cooperation, so not really pure “sabotage” but one done to try to hold on to their positions and in some cases where severe elements of this happen as pure anger and desire for the acquisition to fail.

Something not to be missed is the inherent risk of converting what I call bespoke unprotected and unsupported applications or “black box” solutions without clear documentation. If it’s a high dependent application then this is high risk for open standards conversion.

3: Communicate the “Good” the “Bad” and the “Evil”

When project news is bad, give it to the people in what I refer to as no-nonsense straight-talking and as quickly as possible once it’s been brought to your attention. Some project managers struggle to deliver bad news, then small problems fester until they become insurmountable. Seasoned interim business executives understand how difficult system consolidations are, so are usually strong executive stakeholder managers. A seasoned Business Change consultant will also quickly see the development of out of place staff actions or activities which may well prevent corporate data loss or fraud. I have even seen IT staff loading servers and PCs onto trucks when moving departments and then selling them on from their garages.

4: Lay out your staffing plans as soon as reasonably possible

If some staffers are going to lose their positions because of the merger, ensure to negotiate reasonable settlements and provide employment assistance for them as part of the cost of acquisition. This should be managed and actioned as early on as possible to prevent disruption of those staying on. Get new organisational structures communicated sooner rather than later as this provides untold stress and drops staffing moral the longer it is left.

5: Ensure that there is a vendor strategy

Vendors don’t like to be the ‘fall-guy’ in an acquisition so be prepared for some vendors to be unusually and sometimes unreasonably slow to respond to requests for de-commission programs, especially if they start to throw their contract terms at you.

The vendor contract should be reviewed early on to understand the risk factors for a de-commission. Also in my view you can use the ‘stick and carrot’ approach as no vendor wants to have the market told that they have lost a key account and in the carrot method giving a vendor more of the ‘pie’ can enable more favourable cost points or better contract terms.

So in Summary

One cannot ever overdo visibility in a Change Transformation project so keep the executive stakeholders appraised on the complications and sensitivities, and of course, the achievements as they come – weekly communication in my view with the use of visible colour coded charts and a big favourite of mine the RAG chart ( Red Amber Green; charts on all workstreams) as most often project success is when the executives are in knowledgeable control and there are no sudden curve balls thrown in their direction.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Dual paths of the CIO Role

Dual paths of the CIO Role

by | 16 Aug 2015 | Consulting, Technology

Why do we spend so much time scrutinising the role of the CIO?

Much of the reason is probably as a result of the pace of technology change

With every major computing paradigm that comes along driven by vendor marketing departments, CEOs tend to worry when their competitors do well at quarterly fiscal announcements that they are leveraging technology better, potentially asking:-

“We must not have the right kind of CIO!”
“We have an operations person, but we need an innovator!” or
“We have a visionary but our operations are inefficient!” or
“Our CIO is not technical enough!” or “Our CIO is too technical!”

Having recently read a report provided by CA Technologies on the ‘Changing Role of IT’ it is bound to raise even more questions about the role of the life of the CIO role.

According to this research, more than 70% of CIOs are reporting to CEOs, which signals a rise in the strategic significance of IT; however a mere 14% of CIOs see their role as a driver of new business initiatives. Also from the research, many CIOs have finally been able to strike a 50-50 balance between spending on new products versus spending on maintenance; but despite this success in IT investment management, CIOs are giving away their budget: More than 35% of IT spending is occurring outside of the IT department, or what is commonly called ‘Shadow IT’.

With technology now becoming as ubiquitous to a company’s operations as the finance function, we may have to be realistic to the notion of saying farewell to one centralised technology leader in the business. Realistically technology strategy, spending decisions, and resources will extend out of IT into other business functions or external third parties due to demanding digital agendas in order to serve all of a company’s technology needs.

According to the report the CIO role is evolving along two interesting parallel paths:

The Chief Innovation Officer:

One group of CIOs will travel on the innovation path. These CIOs will leave IT operations to someone else as they focus on the convergence between engineering, R&D, and software development. They will build organisations populated by entrepreneurial types who look toward data, software, and even business processes for new revenue ideas. They will meet with external customers, forge partnerships with universities, launch innovation labs, acquire technology services, and lead the charge in getting their business’s executives to focus on the future. These CIOs can create a vision of future products, business models, and customer engagement channels, and they have the credibility to inspire their colleagues to believe them and to follow.

The Chief Shared Services Officer:

CIOs that have spent their careers running air-tight operations might just not have the gene for business model innovation. Or maybe they have the gene, but their CEOs do not see them as innovators. All is not lost for this breed of CIO however. Having spent their careers managing large operations that deliver a complex array of IT services to tough customers, these CIOs will outsource more and more of IT and free themselves up to manage other key business services. Just because IT operations are being commoditised does not mean that “operational CIOs” should be commoditised, as well. If they play their cards right, CIOs who excel at running IT as a support function, will expand their roles into other shared functions, like legal, procurement, and HR.

This CIO might even wind up in the new Chief Business Process Officer role beginning to emerge in the executive suite corridors. These CIOs will hand innovation over to those business executives who are clamouring for a piece of the IT budget. But rather than be relegated to an IT services babysitter, these CIOs will take their considerable expertise with business process change, continuous improvement, project management, and vendor management and bring a new era of leadership to their companies. These CIOs will run IT organisations that are largely outsourced; they will populate their organisations with people who have expertise in vendor management and a wide array of business processes while maintaining corporate process standards and SLA’s.

“Technology certainly is turning the whole businesses upside down, as CEOs everywhere struggle to find the best way to manage and leverage IT.” commented Craig Ashmole, Founding Partner of London based CCserve consulting. “This is why so many industry experts are talking about the CEO having the CIO at the boardroom table, as IT done ‘right’ will be critical for Digital proliferation and business market growth.”

It makes sense that as technology increases its impact on businesses, the role of the technology leader will evolve. The key for every CIO today is know which path plays to your strengths, and get a grip with the evolution and be the new technology leader of the 2020’s.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe