No one's going to complain about winning new business, but a recent deal to do contract unit repair work from more than 2,000 locations across North America posed a huge challenge for Flextronics' IT team. The customer was in a hurry to get started, and Flextronics had to first set up its IT systems that track products as they move through the product-repair process.
The old model would have meant setting up a server in each of those locations, making sure the software ran properly from each, and training the on-site people to maintain it. "Speed was the challenge," says Flextronics CIO David Smoley. That's a common CIO concern: 57% of the 203 IT leaders--all VP or C-level executives--who responded to our InformationWeek Global CIO Survey cite "can't implement fast enough" as a top concern. It's their single biggest concern.
So instead of using the old approach, Flextronics' IT team deployed the software, which is custom-built on a Microsoft stack, using Microsoft's Azure cloud service. The software runs in Microsoft's data center; the only software needed at the client's factories is a Web browser for workers to access that code. Now, getting that software into the Azure cloud wasn't a simple lift-and-drop maneuver--the Flextronics team had to rewrite 10% to 15% of its custom code. But it took less time and cost less than deploying the software the old way.
The technology's important here, since two or three years ago cloud computing wasn't mature enough for such an implementation. But more important is the attitude of Smoley and the Flextronics IT team: Faced with a business need for speed and large-scale execution, they mapped a new approach.
Amid increasing pressure in areas such as time to market, global competition, and fickle customers, IT organizations must throw out the old rulebook. That sounds like a hoot--except that a new rulebook to replace it doesn't exist, so IT teams are learning as new cloud, mobile, analytics, social, and collaboration technologies evolve quickly.
Here's our start to that new IT rulebook, one that begs to be rewritten many times over. We welcome your own revisions and additions in the comments section of this article.
No. 15 | Treat tablets as workhorses, not show ponies
IT must be open minded about where iPads and Android tablets could make employees more productive. Replacing paper processes is a start--where are employees shuffling paper forms that could be handled more efficiently on tablets? Warehouses, hospitals, and cockpits are just a few of the places we've seen. Tablets aren't for what a laptop does really well, like typing proposals. But their form factor makes them ideal for one-on-one engagement. Salespeople, for instance, are much more comfortable showing a video demo of a product using an iPad, which they can easily hand to the customer to see, than a clumsy laptop.
In the first year of the iPad's life, IT pros were hugely skeptical that tablets would matter much. In late 2010, half of the IT pros in our Outlook Survey strongly disagreed that they'd give even 10% of their workforces a tablet. A year later, after 32 million iPads had been sold in 2011, the percentage of skeptics dropped to 35%.
Tablets speak to a broader need: for IT organizations to think of the "desktop" platform differently. The desktop is now a combination of at least three platforms--smartphone, tablet, and PC--and the lines among them are blurring.
No. 14 | Blend video, messaging, data, and voice to improve collaboration
The hottest project in IT is improving employee collaboration; 39% of IT leaders in our Global CIO Survey say they have a major implementation planned this year. There's a growing sense that collaboration can be much better than it is, in two major ways. One, make it more social--mimic the energy and ease of use of Facebook. Two, pull together video, messaging, data, and voice with much less hassle, in a way that makes it a lot easier for employees to solve problems.
For its top executive council, Procter & Gamble combines analytics (more on that later) with video in a boardroom-sized environment it calls the Business Sphere. This past year, P&G built 50 scaled-down versions of that collaboration environment for conference rooms in its offices worldwide. Now, CIO Filippo Passerini plans to blend messaging, video, and analytics to provide something similar on a desktop level, what P&G is calling Business Sphere Office. Passerini says the technology pieces aren't new; what would be new is the combination of collaboration software, video, and data in an easier-to-use desktop tool, so it's simple to pull in colleagues, including those with analytics expertise, as needed to solve problems.
Jerry Johnson, CIO of Pacific Northwest National Laboratory, also sees this convergence coming. It's why he made a tour last month of Google, Apple, Cisco, and Microsoft, to learn more about their latest ideas. PNNL has the pieces--video, voice over IP, instant messaging, and email--but Johnson wants to pull those together in a way that's as easy to use as an iPhone. After his vendor tour, Johnson still isn't convinced there's an easy, one-vendor platform for pulling all those pieces together. But he is convinced that the technology is headed that way. Scientists at PNNL, a U.S. Department of Energy Lab, work with universities, businesses, and other government agencies worldwide, so this kind of digital collaboration will be increasingly vital. For one thing, having this kind of intuitive collaboration suite will be the only way to recruit the next generation of scientists. Says Johnson: "This is simply the way they like to work."
No. 13 | Get socially savvy
IT organizations are often on the fringe of their companies' social networking activities. They need to get immersed--not take them over, but make IT an indispensable partner.
The good news is that most companies are still figuring out their social strategy, so IT has the opportunity to position itself as a resource. Just 14% of companies have done a major project that incorporates social networks into their company's IT infrastructure, our Global CIO Survey finds. But 23% plan a major implementation this year.
One way for IT to get involved is in monitoring what customers and partners are saying about their companies on social networks--so-called sentiment analysis. Such monitoring is a low priority today; just 37% of the IT leaders cite it as important. But it will grow in importance as more companies, even in business-to-business industries, use social networks as marketing and customer support channels. For example, business-to-business electronics distributor Avnet has a social media council where people across disciplines decide how best to use the likes of Twitter, LinkedIn, and Facebook. Sean Valcamp, the company's director of IT architecture, sits on that council.
Companies may be able to launch social efforts like sentiment analysis without IT's help. At Best Buy, sentiment analysis began in marketing research; Best Buy tapped IT when it saw opportunities to scale that analysis across the company. For companies without a clear social agenda, IT might need to be the catalyst: 34% of the leaders in our survey say their companies have no plans to make social networking part of their tech structure.
No. 12 | Make the CMO IT's new BFF
CIOs have long cozied up to the chief financial officer, and that's fine. But most CFOs will forever see IT as an expense line, a support function that's essential but not a true competitive differentiator. IT needs to be much more, especially as companies put technology directly in front of their customers, via mobile apps, e-commerce, and social networking, or actually embed technology in their products, from cars to soccer cleats. To truly make IT a revenue-driving force, CIOs need to make the chief marketing officer their new best friend.
But if IT organizations want to hang with the CMO, they need to think like CMOs. Most IT organizations still see themselves as cost cutters and process improvers first. When asked about their innovation plans this year, the IT leaders in our Global CIO Survey cite cutting costs (38%) and making business processes more efficient (37%) most often--important goals they need to keep. But only 32% cite introducing an IT-led product or service, and 30% cite creating a new revenue stream or business model. Those percentages need to be higher.
IT leaders have a ways to go to win over their marketing peers: 27% say their relationship with the marketing team is poor or neutral, compared with 22% who say that about their relationship with the finance team and 15% who say that about operations/manufacturing.
Data-driven marketing and social networking analytics are places where marketing and IT groups should have a natural bond, as well as in mobile apps and websites.
No. 11 | Use mobile to change the customer experience
If you operate any physical space that people visit--a store, convention hall, jail, amusement park, hospital, funeral home--you need to think about people accessing the mobile Web there, on smartphones or tablets, and ask how that access changes their experience. Should you try to ban mobile, discourage it, or embrace it?
Retailer Target recently sent a letter to suppliers, according to a Wall Street Journal article, asking them to help it combat "showrooming," whereby shoppers check out products at its big-box stores and then buy them from online competitors at lower prices. If you're a conventional retailer, will you encourage comparison shoppers by providing free Wi-Fi in your stores, or will you resist it, as Target is?
If you run an amusement park, do you have an app to make the park easier to navigate--and easier for customers to rave about on their social networks, turning them into marketing machines? Vail Resorts did exactly that for its ski resorts with its mobile EpicMix app. Royal Caribbean in February began providing iPads in every stateroom of one of its newly remodeled cruise ships, seeing the tablets as the best way to get people information about what's happening on board, as well as to send them promotions for restaurants, spas, and shore excursions that aren't getting enough traffic.
Companies are realizing they need to improve their mobile presence: 63% of respondents to our Global CIO Survey say they'll have a major effort under way this year or next to get applications onto mobile devices. Only 18% say they have a major implementation of mobile apps today.
No. 10 | Revive in-house, custom development
Smoley, the Flextronics CIO, looks over his IT career as mostly being in the packaged apps era. Compared with custom software built from scratch, packaged software was much more predictable. In that era, when a company wanted to add a capability, the default choice was to add a module to its core ERP platform. "'Why not SAP?' was the question you had to ask," Smoley says.
He thinks that mindset is changing. Cloud-based software alternatives are emerging, but Smoley also thinks companies will return to developing their own custom software more often. Agile development practices and established development toolkits and environments make it easier for small teams to do lightweight, focused custom projects.
Some of those projects won't even require heavy-duty coding--they'll involve configuring cloud software as a platform to meet the company's specific needs. Flextronics, for example, is experimenting with using its cloud-based ServiceNow IT help desk software as a platform to meet broader production needs, like tracking a manufacturing floor problem to make sure the right expert is contacted and the problem is followed through until it's resolved.
Skills are important here, as many IT shops' development skills have atrophied. Just 40% of the IT managers who responded to our annual U.S. IT Salary Survey consider app dev a critical skill, putting it 13th on our list of 15. Many companies don't have the in-house chops to do this kind of work, and working with outside developers adds complexity. The key is to start with small projects, developing a team with custom coding skills. "Once you have that base, it becomes a tool that you can use in a lot of situations," Smoley says.
No. 9 | Keep skills in touch with the times
Going back to our annual salary survey each of the past five years, it's striking that there's been almost zero change in the skills IT managers consider to be the most critical. Preparing reports, for instance, is still cited as critical by nearly half (48%) of the IT managers in our most recent survey, exactly the same as five years ago. Have we really made no progress automating reports in five years? Analyzing data remains at 56%, unchanged from 2008. Shouldn't the rise of big data analytics have driven up the importance of that skill? Developing applications was considered critical by 40% of the management respondents to our most recent IT salary survey, up only slightly from 38% in 2008, despite the surge in mobile applications over the past two years.
Worst is that seeking out new business opportunities was cited by only 24% of IT managers in our most recent survey, down from 29% in 2008--and dead last among the list of 15 skills we asked about. The skill considered most critical, cited by 80% of respondents in both 2012 and 2008, is aligning business and technology goals. If more IT managers focus on finding new business opportunities, the aligning part will take care of itself.
Server virtualization has been one of IT's great ROI success stories--a mere 8% of respondents to our Global CIO Survey say they have no plans to increase its use. But far fewer IT leaders are pushing beyond virtualization to rethink the data center's role. About a fourth of respondents plan to rearchitect their data centers this year, and 20% already have. When it comes to using public cloud infrastructure, 26% have major plans for this year, but 38% have no plans to use public cloud services. Just 11% have a major public cloud implementation in place.
Consider what Flextronics was able to accomplish with Microsoft's Azure public cloud platform for one small but strategic computing initiative. Even if the public cloud isn't the answer, and it often won't be, you need to consider it as an option.
Replicating the flexibility and responsiveness of the public cloud in-house, a highly virtualized private cloud is a viable long-term strategy. FedEx built a major new data center in Colorado as a private cloud environment. CIO Rob Carter calls the servers, storage, and networking "workload agnostic" computing--servers that run, say, route optimization software at peak planning times could run financial software at other times. It wasn't easy, as FedEx had to rewrite apps so they run on one common platform of equipment, databases, and middleware. But the value is that it gives FedEx a new level of operating flexibility, which Carter expects will help IT move faster on new initiatives. For now, Carter doesn't see a business need to ship computing capacity to a public cloud, but the infrastructure was built in a way that keeps that possibility open.
No. 7 | Build a cloud-friendly IT shop
It's not that every app should go to the cloud, but IT should consider the cloud for every app, and it needs policies that make it easy to add such software services. Yet less than half (47%) of the 511 tech pros who responded to our 2012 State of Cloud Computing Survey said their companies are using or plan to use cloud services in the coming year. Just over a fourth have no plans to use cloud services.
Those using cloud-based apps like them--81% say they're better or equal to in-house options. Despite the fact that such apps can be launched more quickly at lower cost, IT organizations often wait for business units to push for them. IT needs to build models for purchasing, integration, monitoring, compliance, and support. Among companies using cloud apps, 47% rely on custom coding using the vendor's API to connect internal systems to cloud-based software, rather than using an integration platform. To track cloud app performance, just 28% use their own advanced monitoring tools. A shocking 24% don't monitor their cloud apps.
Avnet CIO Steve Phillips has told his IT team that every software RFP must consider at least one software-as-a-service option. To move a $26.5 billion-a-year global company, it can take that kind of directive from the CIO. Security concerns and compliance rules might scuttle using a cloud app, as could pure economics (monthly subscriptions aren't always cheaper than conventional up-front payments and maintenance fees). But cloud software shouldn't be overlooked because IT doesn't have sound operating procedures around it.
No. 6 | Get ready for 'bring your own cloud'
After initially resisting the movement, most IT shops are finally at peace with BYOD (bring your own device). Some CIOs are evangelists for it. If you own an iPhone or Android phone, most IT shops will put your work email on it, and the company might even help pay for the phone service.
Now IT shops need to ask themselves how they'll respond when the BYOC (bring your own cloud) wave starts to crest. Think of these as personal clouds. Apple's iCloud, for example, offers users 5 GB of free storage to access documents, music, and photos from any device, and Apple's touting its new Mountain Lion operating system as the first Mac OS X release "built with iCloud in mind." Dropbox, which has 45 million users, provides 2 GB of free storage space. Google has long been rumored to be planning a storage service, but with Google Docs, it already offers a cloud-based option for collaborating and putting loads of content online.
IT organizations can resist and then succumb, or they can help their companies' employees figure out how to deal with these personal clouds. "I envision we'll end up with a private Dropbox or iCloud or SkyDrive or something that can also integrate with a public cloud in some fashion," says Johnson, the CIO of Pacific Northwest National Lab. And if PNNL builds that kind of in-house service, it could very well need a way to include both professional and personal data, he says.
Information security used to focus solely on protecting the perimeter through network firewalls and remote access controls, Johnson notes. Today, PNNL's security team focuses more on protecting the container via identity and access management, workstation firewalls, and configuration management on devices. Looking ahead, he sees a shift to "protecting the information"--knowing if a particular combination of user, device, and software can be trusted with access to a certain type of information. Perimeter and container protections will remain, but companies will add information-aware security. "This is the new world of defense in depth," Johnson says.
The challenge for PNNL is to provide that kind of protection while letting scientists inside and outside the lab share increasingly large and sensitive data sets. "We jokingly say that cybersecurity put the 'no' in innovation," Johnson says. There will always be tension between security and openness, but unless security leaders show an ability to balance risk and business need and solve problems, people won't bother to ask for help. "If we always say no, people are afraid to ask the how question," he says.
No. 4 | Create analysis tools, not stale reports
The old business intelligence methodology of delivering backward-looking reports doesn't work anymore--even if you digitize that data and call those stale reports a dashboard. Instead, IT needs to provide data views that tell people what's happening and also let them dig into why it's happening and plot what to do about it.
About one-fourth of the respondents to our Global CIO Survey cite getting better business intelligence to employees more quickly among their three most-critical innovation plans for this year. Fifty-seven percent say they plan to expand BI this year or next. It's essential that CIOs use those projects to provide decision-making tools, not just take-it-or-leave-it data.
Passerini, Procter & Gamble's CIO, argues that IT organizations shouldn't even try to figure out all the data employees need to make decisions. Instead, they should create a first-class way for employees to access and analyze data, which P&G has done by giving 58,000 employees a "cockpit" of data feeds that they can configure. Then IT must make sure there's a clear channel for people to request data they don't have.
Passerini admits that this approach is "putting the cart before the horse," because it creates a way for people to access data before the data exists. But the old model--waiting for IT pros to figure out what data execs want, collect and cleanse it, and then deliver it--has failed. Only once executives are talking about data, trying to use it to make real business decisions like whether to cut ad spending or improve store displays, will everyone have a stake in collecting the data and getting it right. IT can then respond to the "pull" for data, he says, rather than push out what it thinks is best.
No. 3 | Plan to adjust, don't plan to be perfect
Rick Roy is CIO at CUNA Mutual Group, which provides services to credit unions, and he was meeting with his senior IT leadership early this year about their technology road maps, which generally look three to five years ahead. Someone asked about mobility. "I said: 'I think the road map is one year, and everything we're doing today might be throwaway in three to five years,'" Roy says. It surprised his team. He explained that they still need a strategic plan. But with the amount of change in mobile, Roy urged his team to be careful about costs. You can't buy a fleet of mobile devices that require a three-year life span to deliver ROI, because the technology's changing so fast they might be obsolete in 18 months.
Listen to what's not in Roy's message: Wait and see how mobility shakes out before doing anything. There was a time when most IT shops could afford to be fast followers, waiting until a tech segment matured before jumping in. With consumer-driven tech cycles, IT needs to make sure it isn't waiting and seeing its way to irrelevance. If a project involves consumer-driven technologies, like mobile devices, IT must adjust to their six- to 18-month product life cycles, not the classic two- to three-year enterprise life cycle.
PNNL's IT organization lays out a long-term plan as a baseline, knowing that it will change. That way, if someone comes back the next year and wants to shift 180 degrees, Johnson can ask what has changed so drastically to require the shift.
No. 2 | Deliver IT projects in weeks or months, not years
As noted at the beginning of this story, the top worry for the IT leaders in our Global CIO Survey is that they can't implement fast enough to meet business goals, cited by 57% of respondents. The next biggest worry--not having enough budget--is fairly close, cited by 48%, followed by having no system to prioritize projects (22%), having a poor understanding of customers (17%), and having poor relationships with business units (15%).
Let this soak in a moment: IT leaders know what needs to be done, but the big problem is execution. Where do projects bog down: requirements, development, buying, testing, rework?
For an example of the needed sense of urgency, consider the goings-on at Starbucks last fall. In the last week of August, Starbucks' executives, led by CEO Howard Schultz, decided that the company should try to do something to help create jobs. By Nov. 1, the company had launched "Create Jobs For USA," encouraging customers to donate $5 and get a wristband--money that, along with $5 million from the Starbucks Foundation, a nonprofit group would lend to small businesses with the goal of adding jobs. The project meant creating a new website (createjobsforusa.org) and a Facebook page with options to donate online. IT did some work, some was outsourced, but "IT is part of the discussion about whether something should be outsourced," says Adam Brotman, Starbucks' VP of Digital Ventures. Create Jobs wasn't an IT project; it was a company project with an "as soon as possible" deadline, so IT couldn't afford to gum up the works. Think Schultz would have accepted a six-month timeline when the whole point was that the U.S. jobs recovery was coming too slowly?
When a new project comes up, you need people calling IT for advice on how to make it happen on deadline. Too often, the stated or unstated feeling is, "If we call in IT, this will never get done in time."
No. 1 | Really know who buys your product
IT leaders are pretty cocksure they have this one cold. Only 17% of the respondents to our Global CIO Survey say "understanding external customers" is a concern. The only factors they cite as less of a concern are having good business unit relationships (15%) and having the right outsourcing ties (13%).
And yet, when we look at IT leaders' priorities, they don't look intensely focused on customers. Just 12% cite "engage customers in news ways" as one of their top innovation projects for 2012, and just 24% cite "improve customer service." Cost cutting and process change lead the priority list, suggesting an internal focus.
Business technology leaders need to make sure that the rank-and-file IT pros really understand what matters to their ultimate customers. At CME Group, the commodities exchange company that includes the Chicago Mercantile Exchange, IT pros test trading system upgrades from the offices of hedge fund customers, knowing that even millisecond disruptions matter to those traders. For Vanguard, the mutual fund company, all employees, from CIO Paul Heller to entry-level IT pros, take a turn answering phone calls from customers. When Stephen Gillett started as CIO of Starbucks in 2008, he spent his first week as a barista--and quickly learned how long it had been since the cash register systems had been upgraded.
These are token gestures unless they turn into action. IT leaders must connect what they and their teams do to what customers want and need. They need to follow the lead of the 32% of IT leaders in our survey who say they're driving new IT-led products.