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

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

IT role in Corporate Acquisitions

IT role in Corporate Acquisitions

by | 6 Aug 2015 | Consulting, Technology

IT role in Acquire, or Not-to-Acquire

The changing landscape of the IT Technology arena within corporate Merger or Carve-out

To acquire, or Not-to-acquire – The question most CEOs ask their CFO is:- Will the transaction drive financial rewards and what are the risks, but really the glaring missing player here is the CIO!

Ask yourself, How many CFOs have you come across that have a full and clear understanding of the value an ‘Open and connectable’ versus ‘out-dated and proprietary’ IT department can make in driving business revenue growth.

This means that Board Executives are negotiating in the dark and potentially loosing large percentages of cost of sale value. There couldn’t be a better time for the CEO to bring the CIO to the table.

Businesses today are under more pressure than ever to deliver value to stakeholders, particularly when undertaking bold initiatives such as mergers, acquisitions or asset disposals. This is true not only for corporate acquirers but also for private equity (PE) or Venture Capital (VC) firms, whose strategy is leaning toward add on acquisitions as a means of growing their portfolio companies.

Under the current economic conditions and the rising cost of debt, corporate business management teams will require additional focus on effort in order to restructure or streamline operations, and specifically the IT departments of acquired businesses to deliver success in the absence of financial engineering. For a while now Information Technology (IT) is fast becoming a key lever which management can use to deliver operational benefits — whether in reducing operational costs, entering emerging markets or scaling their business across multiple geographic regions. With the advances in technology and its impact on today’s business models, companies are increasingly pushing the boundaries to remain competitive. IT is one key area to do this — Technology should be looked at as a business enabler and not look at as so many boards still do today, as a cost to do business.

“The sooner that executive boards put the CIO or the IT department on their monthly agenda as a regular discussion point the better,” says Craig Ashmole, Founding Partner of London based CCServe consulting. In my humble experience and far too often I see the CIO struggling to get the ear of the CEO or even agendas on the board table; businesses need to view IT as a business enabler rather than viewed purely as a cost centre.”

Part of the reason the CIO is not at the board table is that often they do not speak the language of the business board executive. Technology scares most senior board members and until the Generation Y and Generation X group get into those senior positions we will continue to see a disparity with Technology and Fiscal business matters.

The CIO challenge is to do his/her bit too, they really need to fully engage with the commercial business functions, and stop hiding behind technology to protect themselves. The ‘head-in-the-sand’ CIO will have a rapidly growing threat from the likes of the CMO or emerging CDO Digital Officer. Understanding the business functions that deliver revenue is a key focus going forward.

With the fluid market of M&A today there are two clear distinct areas a corporate or global business can go with this. One; is to look at how costly it will be to split companies up or carve out elements that are no longer key areas of business growth for that organisation and IT efficiency should be at the forefront, not just fiscal separation.

The other area on the acquiring side of an M&A transaction – Many CEO/CFOs look at the cost of acquisition proposed by the big 5 consultancy houses, often building in huge elements of ‘cost of sale’ to mitigate IT integration risk especially where transaction teams are uncertain.

“Making ones own IT and infrastructure easy to connect with while utilising open standards or cloud services could help the process of bringing together two disparate lines of business,” Craig Ashmole goes on to say, “More importantly M&A is about the shortest time to ‘joined-up’ business revenue growth which gets the attention of the CEO. Well prepared IT and infrastructure are key success elements to that joined-up process.”

There is a large growth of non-accounting technology focused personnel being hired into the Big-5 consulting transaction teams as more emphasis is given to IT & Technology within the merger/carve-out transaction process. This however should be a balanced process, in my opinion, with ones own CIO office within the organisation. What an IT department or CIO office may lack however is in the broader wider exposure that seasoned interim independent consultants might bring to the negotiations. Independent interim IT consultants have often engaged in similar situations or have awareness skills from engaging in many other organisations as they move from assignment to assignment.

Whatever the CEO or board choose to do as they grow through acquisition, or transform through business carve-out, they have to put the IT agenda firmly on the boardroom table and should seriously consider taking advantage of the experience and quick turn-round support that so many senior and interim consultants have to offer, to support their own CIOs.

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

Gartner findings on CIO role in 2015

Gartner findings on CIO role in 2015

by | 18 Jul 2015 | Technology

Gartner findings on the CIO Role change in 2015

Takeaways from Gartner research on the ever evolving role of the CIO.

If you take a moment to scan the social media, technology is a constantly moving ball, but sadly the CIO role does not always move at the same pace and there’s a lot of discussion being written about CIOs where you’ll get a range of different perspectives — the job is fraught, constantly in flux, no one wants it, or the CIO has not moved into the digital arena fast enough.

“There is validity in all these views, some more so than others, and the fact that so many are discussing this on social media proves there’s a good reason to be addressing it,” says Craig Ashmole, Founding Partner at London based IT consulting CCServe. “What is clear to me however is the boardroom needs to take the ‘bull-by-the-horns’ now, by asking those difficult questions:- Do we have the right CIO for the job?”

It would be naive to think that the CMO or even the evolving CDO (Chief Digital Officer) role can really just walk in and replace the CIO and the company will carry on from a technology perspective. If the CIO is addressing their technology department by moving to a world of innovative leadership and commoditising the utility elements of IT then the CIO is well on the road to getting things right.

So, how to get a grip on what’s going on in the world of the CIO? Reading a recent blog I notice that it is a serious C-Change environment, here’s a rundown of some of the most recent data from research firm Gartner about the role of the CIO, from the descriptive to the prescriptive over the first 8 months of 2015.

Perception is important

According to the Gartner report “CIOs Should Consider a New Approach to User Satisfaction,” perception of IT performance plays a significant role in how CIOs view the extent to which IT is delivering on executive expectations. The unfortunate thing here, the report says, is that what executives expect isn’t always matched up with what IT is actually able to deliver. The report details better methods of gauging satisfaction by asking the right kinds of questions to the right people in the company. It describes CIOs as bridge builders, in part by “[enabling] business leaders to better interpret the needs of their organisations.”

The percentage of female CIOs has plateaued

In Gartner’s CIO Agenda 2015: A Gender Perspective, 337 of the 2,473 respondents were women, which is about 13.6% of the sample. That percentage fits into the worldwide average of female CIOs, which is estimated from 10-14%. Gartner said the numbers have plateaued and actually are fairly similar to the plateaus found in the numbers of women in senior positions in non-technology leadership roles.

Women CIOs expect greater budget increases in 2015, more so than male CIOs

The breakdown is 2.4% vs. 0.8%. It’s unclear why exactly that is, but it’s happened two years in a row. Gartner did point out that other previous data showed that when it comes to risk management, women CIOs were more concerned about underinvestment in risk initiatives. Risk data plus budget numbers might hint toward women putting more attention toward resources.

Software-defined infrastructures, IT service continuity, and integrated systems are the top 3 emerging trends that will affect CIOs’ decision-making this year.

When looking at these trends, Gartner recommends a trio of being aware, engaged, and proactive. That means tracking trends, understanding how they’ll affect current, new, or future operations, placing them on the “shortlist” for things to evaluate or implement. The report describes a situation where people expect to have access to everything always, and as a CIO, merely delivering on that expectation is the “bare minimum.”

CIOs should take another look at their company’s chief strategy officer

Gartner put out an entire report focusing on this idea, saying that culturally, even though CSOs are c-suite, they’re often viewed as “externalities” and even treated with suspicion. In the digital business era, that should be the case, and the report talks about how CSOs increasingly affect the IT and digital business agenda.

Men and women CIOs are more similar than different

One of the report’s recommendations was to avoid gender bias as it found that there are actually more similarities than differences between men and women CIOs in their approaches to leadership, how they view technology, and how they handle digital leadership priorities. For example, the top two tech priorities for men and women CIOs in 2015 are BI/analytics and infrastructure and data centre. Women put cloud ahead of ERP in the third and fourth spots, and both put mobile as no. 5. Similarities went on from there.

Publicly announced initiatives are up

When looking at the world’s largest insurers (CIOs of World’s Largest Insurers Continue to Invest in Digital Transformation), Gartner found an increase of 10% in publically announced IT initiatives as compared to 2013. They interpreted this as a possible indicator of growth in IT spending.

A large chunk of those initiatives are mobile apps and digitisation

Gartner said about a third of publicly announced initiatives were digitisation (18%) and mobile applications (15%). They recommend looking at these trends as a point of comparison and seeing where one’s own company was in relation to market trends.

One thing not addressed by specifically by Gartner however is; how the boardroom gets their CIO to change if they have not already done so. The first and primary move should consider external support to bring creative recommendations to the table the secondary move should be the actual transition based on the revised TOM.

“There is the obvious Big-5 consultancy houses that can be approached and are so often used, but don’t neglect to consider the huge pool of innovative and agile interim consulting and transformation resources from the smaller boutique marketplace.” comments Craig Ashmole. “These interim independent resources are often well qualified for this change game, especially where it’s to support existing CIOs for short periods of skills Top-up”.

Boardrooms should do less finger pointing but enable the CIO function to transition as quickly as possible and don’t look at skills augmentation as a failure but as a means to take the CIO from their present comfort zones to where the “IT Magic” is.

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