Secret CIO: Stop Making Stupid Software Decisions - InformationWeek

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IT Leadership // IT Strategy
Commentary
12/15/2014
08:36 AM
John McGreavy
John McGreavy
Commentary
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Secret CIO: Stop Making Stupid Software Decisions

The way we evaluate and implement software is broken. Stop shooting for consensus from line-of-business VPs and start asking IT to become business experts.

Many companies in our industry are looking to replace their legacy software with shiny new applications. It's a "Will it run on my iPhone?" sort of dysfunctional decision process. On our way from doing software reviews to embarking on multimillion-dollar software implementations, we'll make many stupid decisions. Here's the standard drill.

We decide we need new software, mostly because we're sufficiently spooked by "digital disruptors" creeping into our neighborhood. We do a strategic assessment, producing a heat map or some form of criticality analysis.

The consultant hired for our strategy review has, naturally, won the engagement for the software selection. He encourages us to form a cross-functional team, comprising operations and administrative people from different parts of the company, for two key reasons. One, we need buy-in to succeed, and that will come from being part of the selection decision. Two, a sound assessment process requires many disciplines. One department, especially IT, just doesn't know enough.

[Some products just invent themselves. For a chuckle, read 9 Implausible Tech Products For 2015.]

And here is where we get stupid. Individually, many line-of-business people are brilliant. But assemble them in a room with a software sales pro and they become very stupid collectively. And if the sales pro has invitations to the next Salesforce.com Dreamforce shindig in his pocket, watch out.

These line-of-business experts have, generally speaking, no experience whatsoever in what they're about to do. They've never been part of a technology assessment process before. They can't separate fact from fiction, as they have no training for that assessment. They don't know the difference between useful flexibility and productivity-killing complexity. They barely understand the tech jargon: cloud, on-prem, software-as-a-platform, virtualized this and that, AWS, blah, blah, blah. They want out of the process before they're even in.

Most LOB experts focus on the here and now. That's what lines of business are all about. But we make major software investments for the future, for requirements we don't necessarily have yet, for the business we want to create. It's difficult for most LOB managers to step into a software assessment project and shift their perspective. They're not being replaced during the evaluation, so they're distracted by present-day work.

The three major players in this type of software project have three different objectives. The company wants to power current and future business capabilities -- to increase customer value and create competitive advantage. The consultancy wants to establish a reasonably lengthy strategy and review process that aligns with its time-based compensation model. The software vendor wants to sell as many seats or subscriptions as possible, preferably this quarter.

I don't envy the vendors in this situation. Who do they sell to? Who has the power in the room? The marketing VP, who wants the software to integrate with her department's online store and e-commerce platform? The finance manager buried in Excel hell who's looking for some slick-looking analytics and BI solution? The VP of IT who wants/doesn't want to move to the cloud? The Millennials in the room (assuming they showed up for the meeting) looking for everything mobile? Or the head of Plant A, who wants the new system to look exactly like the existing system, because he can't afford any disruption in production? Or does the vendor seek out those who do understand the total company strategy and attempt to present a case for software that will power the future? ("All of the above" just isn't possible.)

I've watched four sizable companies go through this type of selection and implementation process for ERP software in the last five years. In each case, the start-to-finish time was more than four years. And more than a year after implementation, the companies still aren't back to where they started.

One of our operating divisions will face this type of decision in the not-too-distant future, and we can't afford to take this dysfunctional path. I have to find a different way. It all starts with executive support and CEO sponsorship, but that's just not an answer to this problem. A "gets it" CEO removes barriers, but he doesn't effect success.

My current thinking is to start building a team of technology experts who will become completely knowledgeable in their functional areas of business. They will be IT specialists in LOB clothing. They will become the business design and solutions team, with full authority to create a new business model for the division through technology-enabled changes. And they -- and only they -- will review the various options and decide on our path forward. And for their efforts, they will be well rewarded.

This will take some time. I'd better get started. We can't afford to make stupid decisions.

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The author, the real-life CIO of a billion-dollar-plus company, shares his experiences under the pseudonym John McGreavy. Got a Secret CIO story of your own to share? Contact [email protected] View Full Bio
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yalanand
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yalanand,
User Rank: Ninja
12/31/2014 | 2:19:45 PM
Re: Stop Making Stupid Software Decisions
@SunitaT0: Not always does this experiment have good results. Since you yourself said that people exchange "don't come in my" stares, such kind of an experiment may crack the relationship between two departments completely. That would simply be disastrous for the company. 
yalanand
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yalanand,
User Rank: Ninja
12/31/2014 | 2:17:38 PM
Re: The Necessary Long-Term View
@hgolden913: I agree with you. Working with both of the sides must have helped you a lot in the industry. However I must tell you that this kind of collaboration are rarely seen due to frosty relations between departments.
hgolden913
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hgolden913,
User Rank: Strategist
12/30/2014 | 11:56:06 AM
Re: The Necessary Long-Term View
@sunitaT0: I've been on both sides of the fence. After math-comp sci major in college, I started as a computer programmer in a bank. I didn't understand banking or accounting. Some years later I studied accounting and became a CPA. Both IT and business people need to understand each other better. IT may be "efficient," but some IT people need to understand the business's needs better. For example, f I could make more money for the company by wasting computer resources, that's the right decision for the company, even if IT doesn't understand it. (Note: That isn't usually the trade-off.) The point is that IT and business need to work together to understand business needs and IT capabilities. Humility on both sides would help a lot.
SunitaT0
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SunitaT0,
User Rank: Ninja
12/30/2014 | 10:52:52 AM
Re: The Necessary Long-Term View
"IT should look at what is going on outside of IT and try to help change happen."

@hgolden913: The reason why IT department guys are not popular with other departments (I've seen "don't get in my way" looks exchanged between business experts and IT guys more than often) is because IT guys work efficient, and they criticize anything that isn't as efficient as they are. Maybe some workplace ethics would make both of these departments to become level headed and contribute towards the development of business in the market.
SunitaT0
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SunitaT0,
User Rank: Ninja
12/30/2014 | 10:47:40 AM
Re: Stop Making Stupid Software Decisions
@xerox: No, you perfectly make sense. The reason why CIO's complain the kind of work environment hinders their ability to think is because they don't use the resources at their hand, and go by the book. In my experience, I've seen unorthodox practices in an IT company (that involved merging/swapping the roles of business experts and IT guys) have resulted in better performing of those particular departments that were involved in the experiment. 
zerox203
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zerox203,
User Rank: Ninja
12/16/2014 | 1:37:31 PM
Re: Stop Making Stupid Software Decisions
Happy to have your insight, John, and if I'm not mistaken, it sounds like I'm seeing a recurring theme in each of your points - all this IT investment is for naught if a) it doesn't solve the company's actual  business problems and b) the users don't invest in it, like it, and use it. That may sound like a deceptively obtuse point, but I actually think it's kind of simple. The idea that people (in your example, the LoB folks) who don't know how the rank and file employees are working (like those people at Plant A you mentioned), don't know what the real business problem they're trying to solve is, and just shove something down the pipeline anyway is all too common, but it's inviting failure. This is not a new phenomenon - the difference is, thanks to modern IT, there's no reason it has to happen anymore. The technology is all caught up, and we have to accept our responsibility as IT people if it's IT who is not.

One great suggestion I've heard before is to embed IT specialists in each other department or business unit, not unlike what you're suggesting. It was actually here on InformationWeek, I think, but it was a long time ago, I don't know if I can find the link. They'll have the specific responsibility of knowing what IT processes and technologies are currently in use at that business unit, as well as being responsible for coming up with innovations there. It's their job to be able to translate company-wide IT initiatives into a language their department can understand, as well as collaborating with the other embedded IT people to know how the business units work together, bridge the IT gaps between each other's departments,  and come up with new IT solutions that will help these departments work together and collaborate better, faster, and more easily. I liked that idea a lot.
hgolden913
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hgolden913,
User Rank: Strategist
12/15/2014 | 1:44:50 PM
The Necessary Long-Term View
I agree with your approach, but it will take time. At least you are getting started. So many CIOs still see their role as what I call "digital dial tone." The job is really far more. CIOs are in a position to lead their organizations into the future, but they must realize that they need to bring the business units along. This means developing subject matter experts who also understand what IT can do, and can separate sales talk from reality.

I favor outreach to business units to develop IT-savvy resources who are open to process improvements. IT should look at what is going on outside of IT and try to help change happen. For example, look at financial processes. Do you find a rat's nest of spreadsheets with little control? If so, this tells you that IT needs to help finance rationalize the process. However, IT must enable finance to own the problem and the solution, not simply take over and propose a huge project.

As long as IT is viewed as a cost center, it will be starved of resources. Business leaders must learn to see IT as integral to their organization and fund IT as part of their profit center. Getting to this point is the essential role of the CIO.
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