Want To Go Digital? Fix IT Fundamentals First - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Blogs
Commentary
2/11/2015
11:06 AM
Connect Directly
LinkedIn
Twitter
RSS
100%
0%

Want To Go Digital? Fix IT Fundamentals First

Zimmer Holdings had to go back to basics in its journey toward becoming a more digital business.

It always amuses me when IT folks talk about whatever-the-new-thing-is as if it's a silver bullet, as if common sense and fundamentals cease to matter. That's why I found the messages of one keynote speaker at this week's Frost & Sullivan CIO conference to be so refreshing and on point.

Cloud ERP: 9 Emerging Options
Cloud ERP: 9 Emerging Options
(Click image for larger view and slideshow.)

Scott Caudill, VP of application & solution delivery for Zimmer Holdings, a medical device company, showed how there are no silver bullets, and how a focus on business fundamentals is indispensable when getting our organizations up to speed on new technologies and practices. In Zimmer Holdings' case, the new thing was digital business.

Caudill described Zimmer Holdings in 2010. IT spending was growing at a faster rate than that of larger organizations. Lots of shadow IT existed. There was no tight connection or alignment between IT and business units. Its ERP was 23 years old, and the infrastructure similarly venerable. The company had 500 systems and 1,000 disparate interfaces to those systems. Employees often scraped data into Excel and Access databases, instead of relying on enterprise systems.

The lofty goal was to change the 90-year old orthopedic business model to be patient specific. That is, in the same way that FitBit helps you customize your workout plan, Zimmer sought to customize the patient's medical care. Specifically, the management team wanted to move into new products and services, including digital products, such as the ability to personalize knee surgery to allow the surgeon a greater degree of accuracy. Caudill said that those efforts are now bearing fruit. But to get there, the company needed to fix IT.

(Image source: Public Domain Images via Pixabay.)

(Image source: Public Domain Images via Pixabay.)

The first task was re-connecting IT workers to the organization's mission. Caudill said that meant getting the IT team to understand how the work it does actually creates value for the business. You can't get more fundamental than that.

As a consultant and as a turnaround CIO, my observation is that most dysfunctional IT organizations have their problems rooted in just this type of disconnect. If IT workers don't understand why new projects and applications matter for the business mission, no amount of new management, technology, or techniques will save that organization.

Caudill also emphasized quick wins. "Quick wins let you drip new capabilities to the organization while turning the IT battleship around," he said.

I give this a big amen as well. If IT has underperformed, business-unit leaders develop a learned hopelessness and don't really believe that things are going to change, even if a new, seasoned IT leader takes the helm. You can tell them all you want, but until you show them, they won't really believe it. Those quick wins are the key way to show, not tell.

Accountability is a two-way street

Quick wins, and bringing mission, purpose, and accountability to IT are important fundamentals.

But another fundamental to good IT is making business units accountable as well. They, too, are sometimes part of the technology problem.

Caudill's first business accountability mechanism was to implement activity-based costing, where every IT request has a price, and is either reported or even charged back to business units. This practice makes sure that service users understand the financial, not just operational, impacts of their decisions. He said this practice was a significant component of his digital IT transformation.

I asked him if there had been any challenges with implementing activity-based costing. "Yeah," he said with a laugh. "We found that the operations group had been getting a free ride to the tune of $8 million a year." Ha-ha -- only serious.

Activity-based costing is notoriously challenging, especially if IT is actually charging back the cost of services. Caudill said that they implemented reporting (sometimes called "showback" instead of chargeback) in the first year, followed by chargebacks in following years. "It was a partnership with finance," he says.

It absolutely must be. You don't like rogue IT; finance doesn't like rogue finance.

Though he emphasized partnership, Caudill also showed what peer accountability looks like. While some less functional IT organizations ruefully plow ahead when departmental stakeholders disengage from projects, Caudill takes a tough love approach. "If business leaders don't show up to status calls, we stop the project," he said.

Those who think that digital initiatives, or any other aspirational or innovative business change, can be slapped on like paint on a broken-down barn have it all wrong. All you'll get is a broken-down barn with a shiny coat. It won't actually keep the rain out. Caudill's story shows that your organization can get there, too. It just takes the courage to focus on the foundation while everybody else is talking about the coat of paint.

Attend Interop Las Vegas, the leading independent technology conference and expo series designed to inspire, inform, and connect the world's IT community. It happens April 27 to May 1. Register with Discount Code MPOIWK for $200 off Total Access Conference Passes.

Jonathan Feldman is Chief Information Officer for the City of Asheville, North Carolina, where his business background and work as an InformationWeek columnist have helped him to innovate in government through better practices in business technology, process, and human ... View Full Bio
We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Slideshows
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Commentary
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Commentary
If DevOps Is So Awesome, Why Is Your Initiative Failing?
Guest Commentary, Guest Commentary,  12/2/2019
Register for InformationWeek Newsletters
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll