Corporate Boardroom Tech Challenge

Corporate Boardroom Tech Challenge

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The truth is that many industries today employ outdated technology.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

Failing Corporate Recruitment Processes

Failing Corporate Recruitment Processes

Top Frustrations for Interim Consulting and the Divide between the Corporate Recruiting Process

Are Corporate HR addressing the hiring process for Interim Consulting staff in a manner that befits their experience levels and capabilities?

The gulf between hiring Interim Consultants vs Permanent employees

There is a “gulf of expectation” between employers and contractors over how long the hiring process should take. A white paper by a top London recruitment specialist firm looking at maximising the value of Contractors, surveyed over 500 self-employed workers and hiring managers across the UK, it found 95% of interim contractors expect the hiring process to take no more than three weeks. However, over half (52% of employers) expect the negotiations to take much more than this, leading to frustration among the interim and self-employed candidates.

The ‘gulf’ is in the HR functions recognition of remuneration method between Interim versus Permanent. Permanent roles once hired enjoy ‘gardening leave’ income waiting to start new roles. Interim Consultants, on the other hand only invoice for working days actually delivered, while also easily being disposed of without typical employee benefits if programmes are stalled or shut down. The recruiting process fundamentally forgets these key differences when delaying decisions take place.

weeks graph

It’s natural that experienced seasoned Interim Consultants view this approach less favourably. We understand seasoned Interims are typically on the upper end of consulting day rates but often more qualified than the role, which brings real additional value for an employer. If Interims were being placed quicker could these day rates become a little more competitive? Well that’s an interesting angle. Employers risk losing high-skilled, specialist Interim candidates if they drag their heels during the hiring process.

The Hiring process of Interim Consultants and full-time employees should certainly be looked at separately with regard to decision process, delay and skills requirements from both the in-house HR and recruitment firms.

The Pigeon-Hole approach

Something quite common in the corporate hiring process is the HR list of skills and requirements for a position, but sadly this has created what we all know in the recruitment game as the ‘Pigeon Hole’ effect often phrased as ‘the computer says NO’!

Recruitment agents are good at pigeon holing candidates, after all it suits them to place candidates in the ‘holes’ that their clients are looking for because that is when they get paid. It’s also easier to have a robot application throw out 90% of the applicants. I often find recruitment agencies, just don’t get it, when you have a conversation on soft skills like personality management and ability to deliver, which cannot be placed in a category. Agencies, however tow the line HR departments lay out as the competition is so high. The focus on finding senior level personnel or Interim Consultants who can actually get the job done with the ‘right’ business acumen is more often clouded by tick box lists of  superfluous certifications or skills often only required for staff that “actually write the code”, so as to speak.

Corporate HR pushing CV’s back into the Recruitment process

An activity often found in the corporate HR function is; pushing CV’s of candidates received directly from their careers web portal back into recruitment firms to process, and dare I say it, to be “pigeon holed” again, but this time paying an exorbitant extra marked up cost for the privilege. Where’s the logic in that? Please remind me, what was the HR function established to do again!

While accepting the different levels of candidates required for hire across an organisation there should, in my humble opinion, be a more recognised respect within the HR process for the senior end of the spectrum especially with regard to Interim Consulting roles. These roles often support the executive CXO layer or head of departments, so perhaps a little more respect from the HR function as if they were hiring their own Executive layer. It’s not  difficult to pick out the quality of seasoned Interim Consultants, especially those that might have approach firms directly. Interims very often spend substantial time researching target clients, before reaching out to key members of the organisation for consideration. The HR function seems to have missed an opportunity here, and that’s to use basic common sense in recognising which CV’s need to be pushed out to recruitment firms and which should be channelled directly to the HR Director – there’s a massive cost implication to corporations based on the action taken here.

So is hiring the right skills too robotic?

The 2015 recruitment market is certainly a buyers’ market and sadly that depicts the way skilled resources are being treated today. In my experience, including views from many Interims I have spoken to, we all feel the same; There’s very little respect of the experience and skills Interim candidate can bring by both HR departments and the recruitment firms.

The buyers’ Market has tarnished the Interim process too, as agencies become more blasé and have less time to read the true value of soft skills Interim candidates bring. As an Interim Consultant, I often try to establish and build a relationship with agencies that one sees as professional enough to put your resume and credentials forward, but that’s becoming an impossibility when one cannot even get a call returned. We are seeing a washing away of valuable soft skills like executive layer stakeholder management, empathy and people impartiality so often required in programmes to get the ‘job done’.

I would go as far as suggesting that senior level Interim roles require more than the 40 second CV scan more junior roles get from agencies today. Along with this, the demand for CV’s to be short means Interim CV’s are harder to garner the wider capabilities, usually due to the number of roles they have typically engaged. I very often find myself following up with a skills matrix and a more detailed introduction letter to try to raise profile visibility.

Who are the winners and who are the losers?

Well that’s an interesting debate indeed. Trying to put a fair spin on this I would suggest the recruitment firms are really the winners, the losers are the corporates. Corporations tend to pay way over the odds for the senior layer of employees or Interim Consulting resources. Remembering that the interim market look reduce gap between assignments, so added delay in the hire process will inevitably get reflected in day rates. You will always get more qualified Interim than what’s actually being sort so corporates should look to take advantage of that, but pushing CV’s back unnecessarily into recruitment firms to process will increase day rates to justify all the recruitment firm activity.

“This is not a witch hunt on the recruitment firms out there,” states Craig Ashmole, Founding Partner of London based IT consulting CCServe. “I have many good colleagues in that field, but I do question the lazy approach the corporate HR function takes for not recognising senior level skills that come to them in the first instance.”

Many executives have said, ‘The rates that Interim Consultants charge makes hiring these skills so much more difficult to justify’, which does pose the question, what will be the ramification to Consulting? I fear that the losers with be the corporations for not getting their HR house in order, from a cost and access to skills perspective.

Balancing the argument, recruiters and hiring managers are often not on the same page. Yes, there are the small percentage of hiring managers who are savvy about hiring and deeply involved in the process. However, the large majority of hiring managers could do a much better job of “participating in their own roles” and understanding the processes. The amount of times I have heard a corporation has gone out to source an Interim role draining both candidate and recruitment firm time only to say; “We have decided to source internally”.

Hiring managers, the corporate recruit firms and the HR function all working together can lower the cost of hiring, improve the quality of skilled resources while reducing the time to fill.

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

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

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