Underestimating the importance of this role could make or break your operating model transformation: here’s how to think about sourcing the role that will only increase in importance.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy and Kira Kessel, Associate at Metis Strategy
You’ve seen the virtues of transforming from a project to a product operating model: value-driven work, delivered by dedicated teams rather than through projects led by disparate team members.
But as you embark on this transformation, you’ll have to remember one thing: you can’t do it without a product owner. The strategist, the technical expert, the business savvy leader—those with all three commonly called unicorns, or rock stars—is a person not easy to find.
Product owners are the linchpin of the product operating model; on product teams, a bad engineer is one bad apple, but a bad PO can sour the whole batch. No one else has the end-to-end accountability for a product like the product owner does. No one else so consistently represents customer interests, pushes engineers to adopt DevOps and Agile methodologies, and corrals individuals to execute against a roadmap. This is a leader who thinks of technical features in one conversation and business strategy in the next. The unicorn, if not sourced with proper due diligence, will be viewed only as a creature in fairy tales.
In a traditional project model, a leader is judged based on how well they react to requests and executes on them. In a product model, however, a good product owner anticipates the customer needs and responds to them by prioritizing items on a roadmap based on the capacity of a product team.
Product owners move you from reactive to proactive.
Adopting the product model is no meager mind-shift. Broadly speaking, you have two main options: hiring or upskilling.
You might hire for either of two reasons. The first is that you may not have the luxury of time and mistakes. This is largely a matter of two things: culture and industry.
Let’s start with culture. Ask the following of your company: Is learning tolerated? Is training available? Are there resources you can use to help establish the person in their role? Is there strong leadership and mentorship? Without these variables at play it will be difficult to develop someone internally. You might need someone who has the core PO competencies and fits your culture, someone who perhaps already has the leadership chops you’re lacking—a necessary hire.
Then there’s industry. Also unable to afford time or mistakes are those industries that are heavily regulated, scrutinized by agencies and governments, or uniquely depended upon by their customers. If, for example, you work in medical, military, aviation, and so on, you may not want to risk upskilling when you need someone who can navigate complexities beyond just those inherent to a product owner’s role. These product owners will have to consider certain variables—safety, cybersecurity, geopolitical factors, and many others—that require extra attention when representing the voice of the customer.
Say you’re a technology executive at a biopharma company. Your product owner will not only need to drive innovation—putting the most promising features at the top of the backlog—but will also need to do this while adhering to regulatory constraints. For Shobie Ramakrishnan, Chief Digital and Technology Officer at GlaxoSmithKline, this looks like balancing core values like “accountable for impact” with the pursuit of AI/ML technologies to “supercharge” R&D and clinical trials.
Luxury and time, of course, is only one of the reasons you might hire. The other is that you want a fresh perspective. In particular, someone who offers a point of view you can’t train. Usually that someone comes with a mixed bag of experience: a background in product, engineering, marketing, and finance are most common. What matters is that they offer something new to your company. A leader like this may disrupt the status quo, bring innovation, and offer new ways of thinking about the same problem. They may even serve as a catalyst for change beyond your recent move to the product model.
But could you not solve these issues—the constraints of luxury and time and the desire for a fresh perspective—by outsourcing? Your contractor may not cost as much, but you may face bigger drawbacks. A contractor who doesn’t stick around will take with them the skills and experience you want an employee to share with colleagues so that expertise, new ideas, and growth of the company reinforce one another from within.
In contrast, when you retain someone full time, especially a product owner, you retain institutional knowledge, which is especially valuable when it concerns strategic areas like GenAI, data, cyber and other innovation—areas of central concern to the product owner. A good example of this comes from Zurich North America’s COO Berry Perkins, who has made it part of IT strategy to keep this type of knowledge in-house. Of course, that’s not the only part of the strategy—it also involved the establishment of nearshore competency centers that will depend on Zurich’s employees acquiring new skills and embracing new processes and technologies. Which brings us to upskilling.
You may have a unicorn in your backyard without even knowing it.
What can distract you from that realization? Budget. If it prevents you from hiring, then you may next consider whether you have the funds, and the bandwidth, to pursue training your soon-to-be product owner.
Investing in your training muscle—developing a training capability, establishing career coaching, and encouraging growth from within in other forms and fashions—could do more than just produce the perfect product owner. It will signal to your employees that you want them to stay, that their contributions matter, and that there is space for them to grow internally. Retention could soar, innovation may spike, and revenue would, inevitably, grow.
If training isn’t on the agenda, you may decide to pursue upskilling simply because your employees hold something valuable already: their relationships and their institutional knowledge. The high-performing product owner will have already built relationships with their colleagues, will know the dynamics that exist between teams, will understand the technologies used, and will be better equipped to align IT and business stakeholders. Most importantly, they will have established trust.
Perhaps not even trust is the most important thing. What could be? Institutional knowledge, which, as we’ve seen, an existing employee will already have. They will know the tools, know the processes (which they’ve seen are convoluted at times), and know the customers of the company they are serving (and can speak to the company’s competitive differentiation, not just industry norms). Best of all, they know the product—its thorns, buds, and roses.
Believing in the value of the product operating model is one thing. It’s another to embrace the transformation from project to product with eyes wide open. You should acknowledge the challenges you will encounter, most notably that this one role could make or break the transformation. So before you’re too far into the journey, remind yourself: if you don’t know who your product owner is, at least understand what will dictate whether you hire, contract, or upskill. Better to figure it out now, not later.
Company-first CIO Krzysztof Soltan and his team helped transform the construction-aggregates giant with a focus on digitizing operations, modernizing infrastructure, and overhauling how IT goes about its business.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy and Chris Boyd, Manager at Metis Strategy
In a recent “all-hands” meeting, Krzysztof Soltan, CIO of Vulcan Materials, announced his IT organization would continue its “laser focus on digital transformation.”
Digital technology, he explained, would remain a central focus of the construction-aggregates industry and would underpin customer-grade experiences increasingly expected from industry leaders. Vulcan, based in Birmingham, Ala., is the nation’s largest construction aggregates company, producing materials such as crushed stone, sand, and gravel, with strategic downstream assets like asphalt and ready-mixed in select markets. Soltan, previously a tech leader at Johnson Controls, ABB, and GE, became the company’s first CIO just two years ago and is at the forefront of the company’s digital transformation efforts.
Soltan and his fellow leaders attribute Vulcan’s success to many things, but chief among them is the company’s attitude toward key activities like operating and selling — “The Vulcan Way,” as it is widely referred to within the company. This orienting force has become so strong that, to Soltan and his team, it seemed only right that they should rethink IT in terms of how it might amplify the approach. As Soltan explains: “If we were going to keep up with the pace of change in the industry, IT would have to be recalibrated.”
Here, Soltan and his IT leadership team share the story behind those efforts. They highlight the mindset and approach necessary to leverage new technologies to best compete in the digital age.
As Soltan’s IT leadership team explains, Vulcan’s digital transformation turned a corner with the advent of the Vulcan Way of Selling, an enterprise-wide initiative that, through technology, aimed to turn the company’s highly manual relationship-based sales model on its head. And so it did.
Since the initiative’s launch in 2017, Vulcan has deployed myriad proprietary technology solutions that serve up real-time market insights, thereby improving experiences for sales reps, customers, and the truckers responsible for transporting goods to job sites. For sales reps, these improvements show up as more time spent talking about solutions with customers, and less time on administrative work like quoting. For customers, real-time location-tracking of materials shipment translates to better labor planning. For truckers, a seamless, paperless experience when picking up materials at a Vulcan quarry means faster delivery.
As Vulcan SVP Jerry Perkins put it at the company’s 2022 investor day, “Time is money in the construction and trucking industry, and these tools make our truckers and customers much more efficient and productive.”
The success of the Vulcan Way of Selling brought the company to an inflection point. Enterprise-wide, tech-enabled transformation programs would no longer be one-off events; instead, they were destined to become fixtures in Vulcan’s pursuit for continuous improvement.
Enter Soltan. After learning the business and getting acclimated with the effort to integrate US Concrete, which the company had recently acquired, Soltan got to work charting IT’s path forward. “Between the US Concrete acquisition and other major initiatives, we hadn’t taken a step back in awhile to reflect on how we were managing our own shop,” Soltan says, noting this isn’t unusual for companies during periods of growth.
The path to cementing Vulcan IT’s value proposition, says Soltan, would be two-fold: Invest continuously in enabling business-driven initiatives, and modernize how they manage the business of IT.
As just one example, the company has commenced VulcanX, an initiative that extends the Vulcan Way of Selling by providing best-in-class tools to the company’s Sales teams to help them win more business and deliver better experiences to customers, in the form of seamless and secure interactions. These efficiencies, the company hopes, will drive more quotes and, subsequently, higher quote-to-order conversions, all while allowing the team to spend less time on administrative tasks.
Just as important is the technical foundation on which Vulcan operates its plants. And so the company has launched another initiative in partnership with its business units to modernize the organization’s technical infrastructure, including improving the speed, connectivity, and mobility of its networks in service of Vulcan’s 10,000+ employees — qualities that will become only more vital as the company multiplies its digital capabilities.
“One reality of our business is that we have to enable modern day technology in the rugged, remote locations that are home to our plants and quarries,” says Soltan. “VulcanX enables scale and mobility in the plant with cloud-based solutions, and our modernized networks will improve our ability to capture data and to quickly drive insights for the folks running our operations.”
Vulcan’s employees can leverage digital capabilities in the field only to the extent that the company’s IT and OT systems are integrated. This reality — understood by Vulcan’s business unit leaders as well as anyone — has ultimately stood to justify, incentivize, and propel the company’s transformation.
A great deal of Vulcan’s success in managing the business of IT can be traced back to the department’s operating model. “The capabilities you deliver within IT the roles and responsibilities, and the ways of working — getting these things right — creates a solid foundation for execution,” Soltan says. To Vulcan’s leaders, it made sense, then, that the operating model should be among the first things they strove to modernize.
First, there was talent strategy — how the company would recruit and train. Of particular concern was the department’s IT career paths, which stood to be refreshed. As Soltan recalls, “We needed our paths to be more indicative of the work we’re doing. This not only helps us attract new talent but allows our team to feel confident they are adding modern skills to their toolkits.”
To this end, Vulcan leaders did two things. First, they developed a new set of career paths, including specific tracks for product management, DevOps, Data Engineering, and other sets of skills that, as Vulcan advances, will become indispensable. Second, the leaders expanded its talent pool by opening a second hub in Dallas, home to Vulcan’s US Concrete acquisition, and the fourth largest metropolitan area in the United States.
The second facet concerned projects, which experienced high demand. As Soltan explains, when digitally transforming at the pace Vulcan has, “priorities change daily, and without rigorous governance processes, it’s nearly impossible to have visibility into your IT investment portfolio.”
To rein in demand, and ensure resources were allocated impactfully, Vulcan formalized its IT Project Management Office (PMO). “The goal is to manage IT like a business,” says Soltan. “That means being clear about investment criteria for IT projects and establishing expectations for project execution that allow us to monitor value capture.”
For Vulcan, each new project introduces new applications and integration patterns into the technical estate. To ensure these can be properly absorbed, Vulcan also invested in maturing its enterprise architecture muscle. “Standards around technologies, integration patterns, and security are becoming more important,” says Soltan.
“Architecture ensures that new solutions do not render old ones redundant and that we construct things in a manner conducive to easily capturing and integrating data,” he explains, noting this will only become more important as IT/OT convergence accelerates to enable capabilities such as predictive maintenance in the plants.
For CIOs in similar sectors just starting out on digital journeys, the prospect can be unsettling, especially in light of recent technological changes — the AI craze, the pace at which IT and OT are converging — not to mention the list of demands from the business. And still, as Soltan says, one thing is certain: Technology will increasingly enable you to compete and differentiate yourself.
So if your company is like Vulcan Materials, if it has climbed to great heights despite preceding the dawn of digital, Soltan suggests you get started: “Your business leaders are smart. They know the importance of technology and of modernizing IT to compete. They have your back. So look honestly at where you are, rip off the band-aid, and start moving, piece by piece, towards your future state.”
With all the ways digital innovation has enabled companies to remain productive during the pandemic, one of the most positive outcomes is improved collaboration across traditional business silos. In my new book, Getting to Nimble: How to Transform Your Company into a Digital Leader, I discuss how enterprises have made these silos more permeable, creating greater partnerships along the way.
Consider the following five examples and how they could apply to your digital transformation efforts.
Talented technologists are in high demand at most organizations, tasked with helping teams in other divisions figure out the digital implications of their ideas and strategize accordingly. In many cases, these ideas come from the technologists themselves. Companies that provide such “T-shaped” career paths offer an enormous advantage, developing leaders with great breadth and depth of experience. When they ascend to “chief” roles, they do so with a much clearer understanding about how value is created within the enterprise.
Agile methodology has been a boon for collaboration across the enterprise.
The traditional “waterfall” method of development involves someone from the business side (outside of IT) placing an order with the IT department. The IT team then develops this order, with little input from the business side until the project is completed months later.
In contrast, agile development includes the intended audience or user of the project in development from ideation through completion. With each iteration, the user validates value, and features are amplified or turned off accordingly. In some cases, the entire project may even be scrapped as a result of what the team learns.
DevOps blends two traditionally siloed parts of the technology and digital domain: development and operations. In a traditional project development model, developers take a project from ideation through completion, and the operations team then moves it forward. There is often a moment in the lifecycle when the project is “thrown over the wall” from development to operations (even this phrase highlights the distance and disconnects between the activities of the two groups).
DevOps instead makes delivery teams responsible for production issues and fixes, whether legacy or new, drawing them into the lifecycle earlier. Greater levels of involvement and accountability make for better work products.
The migration from a project to a product orientation is another area that benefits from greater collaboration. Internal “products” are also good examples of this – think order-to-cash, onboarding new hires, or creating a mobile customer experience.
These products potentially involve great value, and the product teams are typically cross-divisional or cross-discipline: They might include tech and digital, marketing, sales, operations, and any other division to which the product is relevant. A product leader should lead the cross-functional team, and that team should be prepared to remain intact for a longer period of time than the typical project.
An early example of this type of project orientation comes from Atticus Tysen, Chief Information and Security Officer at Intuit. When Tysen became CIO, he brought with him a product orientation, defining products for IT to drive. By developing in long-term teams, each team member was able to develop a higher level of expertise in the product area than they would have in a more traditional project structure.
Data strategy has also driven more cross-functional thinking. Done well, all strategy should invite greater collaboration across traditional silos since value is truly driven at the intersection of the disciplines. Data strategy should apply everywhere data is gathered, secured, synthesized, and analyzed – across the entire company.
Many companies have found it useful to have a leader who drives data strategy on the company’s behalf. To do this effectively, that leader (whether the CIO, the chief data officer, or another IT role) should engage leaders in other parts of the company to ensure that the data strategy is as comprehensive and useful as possible.
These are just a few areas where stronger collaboration is happening across industries and geographies. Companies that fail to take advantage of these trends risk falling behind more nimble players in their industry.
Peter A. High is the author of GETTING TO NIMBLE: How to Transform Your Company into a Digital Leader (Kogan Page, Spring 2021) and President of Metis Strategy, a management and strategy consulting firm focused on the intersection of business and technology. He has advised and interviewed many of the world’s top CIOs and leaders at multi-billion-dollar corporations like Gap, Bank of America, Adobe, Time Warner Inc., Intuit, and more.
Chris Boyd co-wrote this article.
Leading digital transformations is the CEO’s top priority for CIOs, according to the 2020 IDG State of the CIO study. Doing so effectively requires an IT operating model that allows business and IT to work together to navigate a dynamic competitive landscape, a seemingly infinite set of digital tools and shifting stakeholder demands.
In our work with Fortune 500 companies, we have found IT organizations that use the traditional “plan, build, run” operating model struggle to conceptualize, launch and maintain momentum on digital transformations. To bolster their transformation capability, IT organizations across industries and geographies are shifting toward product-oriented operating models, or “product-based IT”. When done right, organizations experience increased agility, happier customers and more successful transformations.
A product is a capability brought to life through technology, business process and customer experience that creates a continuous value stream. Examples of products are eCommerce, supply chain, or HR. An operating model defines how an organization positions its people, process and technology to deliver value to both internal and external customers.
A product-oriented operating model, then, is one in which IT resources are organized around business capabilities or “products” instead of specific IT systems (e.g. SAP, CRM) or functions (QA, Engineering, Infrastructure). In this model, each product team works as if they are managing a market-facing product such as a consumer electronics device. They develop a product strategy and roadmap in lockstep with the business that clearly articulates how they will mature the product to better meet customer needs and optimize competitive positioning. Every feature on the roadmap is aligned with a measurable business outcome and goes through a rapid discovery phase to validate value, usability and feasibility before it is slotted in a sprint to achieve a minimum viable product.
Most organizations have honed their ability to deliver when the scope and desired outcome are static, but struggle when next steps aren’t defined or are painted with a broad brush. Several leading IT organizations have turned to product-based IT to cut through this ambiguity and elevate their role from service provider to business partner.
Art Hu, the global CIO of Lenovo, is one of the pioneers in the shift from project-to-product. He noted in a recent conversation that his organization grappled with the question of what to work on next after completing a series of legacy ERP integrations resulting from acquisitions. “The fundamental paradigm shift for us was that the level of uncertainty had changed when there was no longer one single imperative,” he said, referring to the ERP project. “When we took that away, it was a totally different world and traditional waterfall didn’t make sense anymore. Until we as an organization realized that, the business teams and my teams struggled.” Product-based organizations rely on continuous customer engagement to remove guesswork from the prioritization process, which often leads to better business outcomes and increased agility.
CIOs have targeted key behavioral changes to jumpstart the shift to a product-based operating model:
Project plans developed with fixed deliverables and timelines encourage predictability but rarely equate to business outcomes. This plan-driven work is increasingly yielding to continuous discovery and delivery, which seeks to answer two questions on a recurring basis: what should we build, and how should we build it? A discovery track intakes opportunities, ideas and problems to solve. Teams then engage with customers to validate that those ideas create value (desirability), will be used once released (usability) and are feasible in the current business model (feasibility/viability).
“Great companies that have built a product orientation start with desirability and leverage design thinking to have empathy-based conversations to get to the core of problems,” Srini Koushik, the CIO/CTO of Magellan Health, said during a recent product management panel. Ideas that make it through discovery are added to a product backlog and are slotted into sprints for delivery based on relative business priority. Discovery and delivery tracks operate concurrently to ensure that a steady stream of validated ideas and a working product that drives business outcomes is delivered at the end of each sprint.
In a recent strategic planning session, one CIO stated that “transformation is not a part time job,” noting that dedicated teams are critical for both digital transformation and building a product orientation in IT. Teams that are formed on a project-by-project basis spend valuable time ramping up subject matter expertise and building chemistry, but then are disbanded just when they start to hit their stride. Product-based IT organizations, on the other hand, favor dedicated teams that own a product from introduction until sunset, including the execution of discovery, delivery, testing and maintenance/support. In this model, the dedicated teams become true experts on the domain and avoid pitfalls resulting from intraorganizational handoffs and revolving resources.
The increased frequency and quality of customer interactions is a hallmark of product-based IT. Ideally, customers are engaged during the discovery phase to validate ideas and prototypes, and then provide feedback at regular intervals after the product is released. If your end customer is a business unit, you should strive to have even more interactions. Some organizations have business stakeholders participate in daily stand ups, and some may even have their product owners sourced directly from the business instead of IT.
Atticus Tysen, the Chief Information Security, Anti-Fraud and Information Officer at Intuit, is another pioneer in the shift from project to product. At the 2019 Metis Strategy Summit, he emphasized that true product organizations reflect on key questions that demonstrate their strong relationships with customers. For example, do you really know who your customers are, and are you organized around serving them? Do you have metrics to measure customer happiness and show you are working with them in the correct way? “You have to have customers if you’re going to have a product organization,” Tysen said. “Product managers in a lot of ways are relationship managers.”
To achieve the benefits of a product-centric operating model, the funding model must shift as well. Rather than funding a project for a specific amount of time based on estimated requirements, teams instead are funded on an annual basis. Also known as perpetual funding, this setup provides IT product teams with stable funding that can be reallocated as the needs of the business change. It also allows teams to spend time reducing technical debt or improving internal processes as they see fit, which can improve productivity and quality in the long run.
Here are a few key steps to begin the journey…
Organizations should first and foremost target business impact when shifting to product-based IT. For example, one Fortune 500 client chose to measure Net Promotor Score to assess business satisfaction, product team velocity to assess speed to market and the number of critical defects per product to assess quality. It is also prudent to create metrics that track the adoption of key aspects of the working model. For example, you may track the percentage of product teams that have developed strategic roadmaps, or survey product teams on a regular basis to see how many feel like they have the skills needed to succeed in the product-based operating model.
Start by identifying the highest-level customer-facing and internal capabilities in the organization, such as Product Development, Sales, Marketing, Supply Chain, HR and Finance. At the highest level, these are your Product Groups, or “Level 1.” If your organization is smaller and has a relatively simple technical estate, you may not need to break this down any further.
However, we have found most enterprises with multiple business units and geographies need to do so. Inside the Sales group at a SaaS company, business processes would likely include steps such as Discovery, Lead to Cash and Customer Success (which includes activation, adoption, expansion and renewals). These may become your product groups since each of these steps involves different business stakeholders, targeted KPIs and technology components. However, the way you design your product teams will ultimately depend on the intricacies of your organization.
Absent a one-size-fits-all approach, we suggest the following guiding principles:
A key to product-based IT is building cross-functional teams that have the business and technical skills needed to accomplish most tasks inside their teams. The most important role in your product team will be the Product Owner (or Product Manager). Referred to as unicorns by some, these individuals possess the unique blend of business (strategy, competitive analysis), technical (architectural vision, technical project management) and leadership (decision-making, stakeholder management) skills and are responsible for driving the product vision and strategy and leading execution.
To fill this role, many organizations will conduct a skill assessment with their organizations to determine the skills needed to be successful, gather an inventory of available skill sets and shape a training program to fill gaps. As you structure the rest of the product team, think about how the skills of other team members can complement the product owner skill set so you are creating a strong blend of business, technical and leadership skills in the team. Beyond the Product Owner, you may have a Business Analyst that serves as a Junior Product Owner and supports detailed data and process analysis. A Scrum Master would drive Agile ceremonies, a Technical Lead would create a solution architecture and orchestrate technical activities, and an Engineering/QA team would ensure delivery of a high-quality product.
Think about IT services that are BU agnostic, needed across all product teams and in demand only on a part-time basis by the product group. These are your Shared Services. Shared Services cut horizontally across the product groups and teams. Just like products, these specialized groups endeavor to mature and develop new capabilities and empower their customers (in this case the product teams themselves).
Typical Shared Service groups include Enterprise Architecture, Infrastructure & Cloud, Security, DevOps, Customer/User Experience, Data & Analytics, Integration, Program/Vendor Management and IT Operations/Support. The Office of the CIO is an increasingly prevalent Shared Service that is responsible for defining the enterprise IT strategy, setting metrics and measuring success. Each Shared Service should publish a service catalog detailing their offerings and processes for engagement with a bias towards self-service (where possible). Shared service resources can be “loaned” to product teams if there is demand for an extended period.
IT often starts with feasibility and viability, approaching desirability only if the former two boxes are checked. Product managers need to start with desirability and build the ability to adapt their storyline based on the audience. Avoiding technical speak and endless strings of three letter acronyms will also go far in building this rapport.
Shifting to product-based IT is a major cultural and operational change. When done well, it can result in better relationships with customers and business partners, increased agility and improved business outcomes.
Principle 1: People
The first of the five World Class IT principles – People – focuses on the recruitment, training and retention of employees, to ensure that an IT department is staffed by top-tier talent and delivers excellent performance. This principle looks at multiple areas of assessment for a company’s IT department.
The first area is about inventorying existing skills. What do you know about your IT department’s skills base? Does your company’s IT department have people with the right skills (technical, management, business or other) for the job? In order to efficiently allocate talent or determine what skill gaps exist, companies need to understand the skills that existing employees have and document them in a manner that allows employees to assess themselves against the defined skills base, as well as determine which abilities they should build on. Subsequently, workforce planning should be aligned to the insights or findings from the skills inventory. Within your IT workforce, which skills should be prioritized when recruiting new talent? What does the direction of the company suggest in terms of IT skills that will be necessary? After understanding the existing skills base, it is essential for IT leaders to consider which skill sets will become increasingly important in the future, which skills gaps need to be filled and what abilities the broader company may value most.
However, like technology, skills can quickly become outdated. Having a structured and thoughtful recruiting approach is vital for an IT department to truly become world-class, as new talent can offer diverse skill sets or fresh perspectives, revitalize existing processes and thinking. Investing in the right people, with the right skills, early on ensures that your IT department has a strong foundational talent base.
Other aspects of the “People” principle – if executed well – will also help your IT department move towards being a world-class place to work. For instance, it is crucial to clarify roles and responsibilities for employees that have various skill sets and of different levels across the IT department, as it can make it easier for employees to succeed in their daily jobs. Moreover, clearly delineating roles and responsibilities helps mitigate redundancies in teams, reduces employee frustration and improves working relationships. In turn, this allows employee performance evaluations to be more easily conducted. Performance evaluations for employees should be prioritized by management, as well as be detailed and constructive. A streamlined, helpful evaluations process can go a long way in nurturing and retaining key talent at every level of the IT department – talent that could play a fundamental role in the future of the company.
Another area that underpins the “People” principle is employee compensation and recognition. Understanding employees’ preferences for recognition and compensation helps enhance employee satisfaction and in turn, their tenure. Additionally, across many industries, IT employees are often overlooked compared to their business counterparts, as they are approached only when technical issues arise. Recognizing and compensating high performers in appropriate ways, as well as emphasizing the relevance that IT’s work has on the business, can incentivize IT employees to go above and beyond in their roles. Career planning – which is heavily related to employee recognition and compensation – is an area which IT leaders should focus on as well. Establishing clear technical and managerial tracks through which IT employees can progress, as well as providing employees with a support structure, will give IT employees the opportunity to define their career goals and motivate them to perform better.
Furthermore, although regarded as difficult to assess, the culture and work environment within your company’s IT department can significantly impact employee happiness and the department’s overall performance. Understanding the existing culture and identifying gaps that need to be filled, followed by implementing positive cultural changes can greatly improve the perception that other business divisions have of IT, as well as facilitate closer collaboration between IT and these other divisions.
In addition to the areas mentioned above, training is vital to how new employees are introduced to the IT organization, how skills are acquired and how practices are shared more broadly. How is training currently conducted in your company’s IT department and how can it be transformed? IT leaders should consider these questions when designing or implementing training, so that training for employees that is up-to-date, engaging and flexible, thereby ensuring that IT employees – both new and existing – are equipped with the necessary skills and knowledge to succeed. Finally, as your company’s IT department continues to evolve, it is essential for IT leaders to think about what the department’s retention strategy should be. A culture of merit-based advancement can help maintain those employees that are looking to develop a career and attract new talent for a truly World Class IT department.
Principle 2: Infrastructure
Infrastructure – which consists of IT hardware, software, data, components, systems applications and the service desks supporting them – is crucial to the day-to-day operations of the IT department, as well as those of the broader company’s Not only is it imperative to have an efficient, well-managed and highly available IT infrastructure, but it is key for IT to be able to translate infrastructure-related jargon into terms that can be easily understood by IT’s business partners. As such, we assess the robustness of our clients’ IT infrastructure on several elements, which we elaborate on below.
Much like Principle 1 (People), the first element of the “Infrastructure” principle involves understanding your company’s existing IT infrastructure, by creating an infrastructure roadmap that displays various components in order of business importance. This exercise can provide the IT department with a comprehensive view of existing tools and technology, help IT understand the components for which maintenance and protection should be prioritized and enable IT leaders to determine a strategy for future investments in infrastructure. A roadmap can also help with efforts to maximize systems’ up-time — another key element of this principle. As systems up-time is directly correlated to business productivity and revenue gain/loss, IT departments should engage in root cause analysis (RCA) when encountering system issues. Moreover, IT leaders should consider the different systems’ criticality to business operations – how can up-time be maximized in a way that is resource and time-efficient? These approaches to issue resolution will allow employees to apply fixes that truly address systemic problems and minimize technical risk to the business.
Overall infrastructure health is, of course, critical to business productivity and revenue attainment as well. Regularly scheduling maintenance and upgrades for all major aspects of infrastructure is a must for any world-class IT department to optimize performance. Additionally, maintenance planning should be based on criteria such as system age, reliability and cost of replacement. This list is not exhaustive, but is a good start to monitoring the status and stability of existing infrastructure. With that, IT leaders should plan to retire and replace infrastructure when appropriate and needed. Incorporating infrastructure lifespan into the IT department’s roadmapping and budgeting process at an early stage can help IT leaders plan for, as well as acquire, replacements on schedule. In turn, this mitigates the risk of a system failure or any interruption to business activities.
Nowadays, another increasingly important element of concern is infrastructure and information security. In addition to conventional physical security practices, a growing number of companies are proactively adopting cybersecurity measures, as well as revisiting existing security practices. Legislation such as the General Data Protection Regulation (GDPR) in 2018 have heightened the sensitivity of issues such as consumer data privacy. Given the wide range of potential threats to security – such as natural disaster, network attacks, viruses, fraud, espionage, data portability etc. – it is crucial for organizations to have a designated team or individual (such as a CISO) whose responsibilities are completely security-oriented, rather than assign security as a second or lower-priority responsibility to existing management The CISO and their team should also be up to date on new security threats and trends, industry regulations or best practices, as well as factor security investments into IT’s annual budgeting and resource planning processes. However, it is worth noting that security awareness and compliance apply to every employee – not just the CISO and their team. Approaches such as socializing best practices among employees, conducting company-wide security training or hosting security simulations can help mitigate the regulatory, financial and technical risk of a security incident.
Consequently, business continuity and disaster recovery (BC/DR) is another element of infrastructure on which companies should heavily focus. Disaster recovery is the process by which business resumes after disaster (which can be both man-made or natural) has occurred, whereas business continuity is about how business resumes during other events besides disaster (e.g. leadership changes). When engaging in BC/DR planning, companies should evaluate and identify the primary business units/functions, the people affected, as well as the underlying systems, hardware and software to be prioritized in the case of unexpected scenarios. Furthermore, it may be helpful to determine the probability that certain hypothetical scenarios will occur and develop mitigation and recovery strategies based on that analysis.
Finally, IT leaders should focus on improving their service desk (or help desk). It is vital for the help desk to build credibility among its user base (i.e. employees from the rest of the company), since the help desk is often regarded as the face of IT by the rest of the company and can play a small but significant role in deepening relationships between IT and the rest of the business. True World Class IT departments will recognize this and enable their help desk to provide the best services possible, as well as leverage the help desk to boost IT’s reputation for creative solutions. For proposed ways to enhance the help desk function, please refer to the book World Class IT by our CEO, Peter High.
Principle 3: Project and Portfolio Management
Project and portfolio management is becoming more and more essential for IT departments, as the need for greater transparency continues to increase. Previously, a lot of business executives did not always understand what went into procuring, creating and maintaining technology and as such, were often reliant on the cost and time estimates provided by their IT departments. However, recent reporting regulations as well as rapid digitalization of business and commerce means that companies now need more clarity and insight into where investment in IT is going. If executed well, several components of project and portfolio management can distinguish a World Class IT department from its peers – idea generation, prioritization, budgeting, portfolio management, project management and execution, quality assurance (QA) and post-project analysis.
First, idea generation is a process that is often problematic for companies. Many companies only allow more senior staff members to generate and submit ideas for projects, or give staff a limited time window to submit their ideas. These rules often lead to ideas not being sourced from the broader employee population and cause ideas that emerge outside of the submission window to be held off until following years. Given all of these issues, companies could establish a clear governance structure, comprising several review committees of appropriate business and IT stakeholders. This approach could help align idea generation to the company’s overall strategic goals. Within the governance structure, each committee should have clearly designated roles and various levels of the company should be involved, to ensure that perspectives and feedback are representative of the broader employee base. The submission and review process for ideas should also occur more regularly, rather than once a year. Once determined, projects and portfolios should then be prioritized by the review committees. There are many ways to do this, but several criteria to be considered include: strategic fit, cost to benefit analysis, project interdependency, qualitative benefit versus change and risk analysis. For further elaboration on each of these criteria and how they affect the prioritization process, please refer to World Class IT by our CEO, Peter High.
Furthermore, budgeting can occur more easily once projects have been prioritized. By allocating funding to projects in order of priority, the IT department can set an expectation of projects that will be deferred to the next budgeting cycle. Budgets could also account for projects that may emerge later or throughout in the year, to encourage innovation within the department.
Good budgeting, in turn, helps the IT department better manage its portfolios. However, what defines good portfolio management? Several suggestions include: regular meeting cadences, establishing a program management office, effective project monitoring via dashboards and other tools and so on. When it comes to portfolio management, one key challenge that many companies face is the inability to cancel projects, as sunk costs are often used to justify continuing non-performing projects, rather than canceling them and redistributing resources to other initiatives. True World Class IT departments are unafraid to delay or cancel non-performing projects and reallocate resources to initiatives that they know will create more value in the long term. Similar to portfolio management, IT leaders can rethink their approaches to project management and execution. It is interesting to note that true World Class IT departments typically have a well-developed, well-documented project methodology or toolkit that is applicable to and can be tailored to all kinds of projects. In particular, project managers should play a dynamic role in leading and coordinating the teams for the project, monitoring milestones, etc. IT leadership can significantly encourage active and diligent project management by identifying the appropriate talent, as well as recognizing project managers for their efforts. As such, effective portfolio management, project management and execution can enable IT to maximize performance and deliver better results.
Moreover, quality assurance (QA) is often overlooked by many companies, but is critical in ensuring that any technology released by IT is high-performing, high-quality and does not require constant fixes. Some high-level suggestions for bettering QA processes include clearly defining quality gates and involving QA early on in the development lifecycle, but this list is not exhaustive. World Class IT departments have no qualms reviewing and revamping QA processes as needed and ensuring that they are consistent across portfolios and projects. Similarly, performance reporting can be done on a more regular basis to ensure that resources allocation, obstacles and milestones are all being tracked. In particular, World Class IT departments also track benefits – financial or otherwise – after projects have been completed, as such accomplishments can significantly boost IT’s credibility. Finally, post-project analysis is extremely valuable, as it provides the IT department with benchmarks and lessons learned for future project development and idea generation. All of these components combined can truly help IT become more efficient, organized and an example to follow by its business counterparts.
Principle 4: IT-Business Partnerships
Often considered the “holy grail” of an effective IT organization, IT’s strategic alignment with the rest of the business is no longer a nice-to-have, but rather a necessity in today’s digital marketplace. IT’s alignment with the rest of the organization hinges on five key components: cross-organization communication, IT-business strategic alignment, innovation, IT strategy and internal IT communication.
Beginning with communication, it is important to note that true World Class IT organizations do not solely rely on top-down messaging. Rather, top performing organizations establish information channels at every level between IT and the rest of the business. When successfully implemented, IT is simply considered “part of the team” and less of a reactionary internal service provider. Looking inward into the IT organization itself, there must be robust lines of communication underpinning IT’s role as an internal strategic advisor and enabler. Some of the biggest challenges (communication or otherwise) within IT teams stem from artificial organizational barriers and getting mired in the technical details behind a plan. While not apanacea, rotating employees through IT departments and adopting Agile-style approaches to work are two approaches that can help address poor internal IT communication challenges. Mature internal and external (to the rest of the business) communication habits are hallmarks or any true World Class IT organization.
In the midst of effective IT and Business Partnerships lies strategic alignment and innovation. Firstly, each party must have their own documented (and used) strategy to guide both daily and long term decision making. With established strategies in place IT and Business leaders can upgrade their conversations from tactical question exchanges to comprehensive collaborative sessions. IT’s role is to both follow and adjust to the direction the business is heading while providing subject matter expertise and driving decisions around technology investments made by both the Business and IT. In well functioning IT-Business Partnerships there is a healthy sense of co-dependence and trust that allows innovation to truly take root and grow. Without alignment around common goals and a sense of team innovation cannot thrive. In well functioning organizations the line (or wall) between IT is blurred and the strengths of each group underpin future success
The concept of IT-Business Partnership may sound simple, but even digitally native organizations can struggle sharing resources and ideas for the common good of the firm. Moreover, leveling the field between IT and the rest of the business should be a top priority for any IT leader serious on maturing her organization.
Principle 5: External Partnerships:
Within many organizations IT is the largest spender and consumer of 3rd-party products and services. Given this concentration of vendor spend, business leaders often lean on IT to drive bottom-line savings by cutting (or increasing) vendor spend inline with the prevailing business climate. The existential (and real) threat of budget whiplash can wear on vendor relationships and breed conflict where partnerships should thrive. The best IT organizations know and segment their vendors, they apply rigorous and fair procurement processes and manage vendor relationships on an ongoing basis. Given the rate of technological change it is unreasonable to assume that IT can deliver an organization’s entire technology needs on its own, but there needs to be a thoughtful strategy behind why work should be done outside the organization’s own four walls.
Establishing governance, process and accountability with vendors begins with adequate vendor segmentation. Segmenting (or organizing) vendors by factors such as their size, strategic importance and total spend will help shape the proper vendor relationship and drive the most value. Taking a one-size fits all approach that treats independent contractors the same as the IBMs of the world can both snuff out potential value-add from smaller contractors, while not providing proper performance controls for large managed service providers. Understanding where each vendor fits across a continuum of factors will help both the procurement process and in-life vendor management.
The best IT groups work hand in-hand with central procurement teams and often form joint or independent teams that can leverage IT’s technology expertise to vet potential suppliers. The procurement process is the time and place for rigorous and fair governance to shine. It is here that inlife performance metrics, penalties and incentives will be set. It is also the beginning of a vendor’s formal relationship with the organization and it sets the tone for the rest of the partnership.
Lastly comes in-life Vendor Management. The best IT organizations recognise this as a discrete function outside of the upfront Segmentation and Procurement processes. It is here that relationships with both key and commodity vendors are built and SLAs are monitored appropriately. This function can be dispersed across organizational subunits or IT can build its own Vendor Management Office, the key is to make sure someone is responsible for each vendor, their performance and the overall relationship. Most vendors appreciate a more hands on approach as it gives them more feedback to improve their own internal contract and service management practices. Moreover, while there should be individuals directly aligned with each vendor Vendor Management is the responsibility of everyone who works with a given vendor. By establishing and more formalize structure, individuals on the IT team are able to better raise grievances and praise and key vendor resources have one place to do the same.
As an IT organization aims to become true World Class it is important for External Partners to not be forgotten. External Partners can help IT deliver its strategic edge both internally and for the end customer. By conducting sound Segmentation, Procurement and Management practices IT will be helping set its partners (and ultimately itself) up for sustainable success.
8/27/2018
By Peter High. Published on Forbes
Understandably, we often read of former business stalwarts that become disrupted by digital native organizations, losing stature and market share along the way. Harvard Business School professor Sunil Gupta has written a book entitled Driving Digital Strategy, A Guide to Reimagining Your Business, providing a framework for businesses to follow to avoid this fate while thriving in the digital economy. Best Buy has gone from showroom for Amazon to a legitimate competitor with it within the realm of consumer electronics. Traditional media company, The New York Times has created a thriving digital product behind a carefully designed paywall. John Deere has formed a data-analysis arm to complement its farm-equipment business, substantially growing its business in the process.
(To listen to this interview in podcast form, please click this link. To read future articles like this one, please follow me on Twitter @PeterAHigh.)
Peter High: I would like to start with your new book, Driving Digital Strategy, A Guide to Reimagining Your Business. This is a topic that is on the minds of many technology executives who lead immigrant organizations as opposed to digital native organizations. The challenge these digital immigrants face is profound given the legacy systems they have in place and the enormous scale on which they need to be transformed. Where do you believe these executives should look to begin this transformation?
Sunil Gupta: For the legacy companies, it is a more significant challenge than for a startup since a startup begins with a clean slate. With these legacy companies, I compare this transformation to changing an engine on a plane that is on fire while it is flying. Established companies must strengthen their core business while simultaneously building for the future, which is a daunting task. In my last ten years of research, which culminated in my book, I have found that there is not a single place that you need to touch for digital transformation. Instead, there are four broad parts that organizations need to look at more closely.
I do not believe that there is one single part of the organization that needs to change, but instead all four of these parts eventually must come together to make that transformation.
Regarding where to start, I would always recommend starting with the end consumer. This allows companies to understand how the consumer trends are changing, how the company’s value proposition is shifting, and if the company can solve the consumer pain points in a different way than what was previously done.
To read the full article, please visit Forbes
8/14/18
When Alvina Antar joined subscription-based software company, Zuora, four years ago as the first ever CIO, she did so after having been a customer of the company when she was the Director of Mergers & Acquisitions for Dell Information Technology. From the customer’s perspective, she recognized that means of procuring technology was shifting in many cases toward software as a service (SaaS) models where companies paid only for what they used. Zuora has dubbed this model as the subscription economy. As Antar notes, “Modern consumers are shifting from traditional ownership and demanding new consumption models which allow them to subscribe to the outcomes they want when they want them.”
Antar has fostered a community of CIOs from across Zuora’s customer base to foster learning and collaboration in new ways. She is also changing the way in which the IT department does things, as she has developed a Zuora on Zuora program, where IT acts as the company’s first and best customer, offering insights into Zuora’s product offering. She describes her experience and the implications of the subscription economy in this interview.
(To read future interviews like this one, please follow me on Twitter @PeterAHigh.)
Peter High: Please describe Zuora’s business, and your role as CIO.
Alvina Antar: Zuora provides cloud-based software that enables any company in any industry to successfully launch, manage, transform, and thrive as a subscription business. Our vision is simple: we call it “The World Subscribed.” It’s the idea that one day every company will be a part of the Subscription Economy. My belief in our vision and seeing it first-hand as a customer is the reason I joined Zuora four years ago.
Our mission is to enable all companies to be successful in the Subscription Economy and our solution is purpose-built for dynamic, recurring revenue business models. Zuora Central is the system of record for subscription businesses. It functions as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-cash process, including billing and revenue recognition.
Peter High
8-10-2016
Excerpt from the Article:
Greenwich Associates is the leading global provider of market intelligence and advisory services to the financial services industry. The company specializes in providing fact-based insights and practical recommendations to improve business results, and the insights and advice provided is based on the company’s business expertise and research that the team conducts with influential buyers of financial services. The buyers include fund managers, hedge funds, pension funds, endowments, large corporations, small and midsize businesses, and consumers.
Isaac Sacolick joined the company as Global CIO in January 2015 to lead Greenwich Associates’ Business Transformation Initiative, develop its data technology capabilities and to establish its product management practices. To accomplish this, the Digital Business Group (the rebranded IT department) rolled out business intelligence tools, a content management system, new market research tools and upgraded CRM and sales management capabilities. CIO Insight contributor Peter High discusses with Sacolick some of the nuts and bolts that were required to make the initiative ready for action.
Peter High: Part of your focus has been on developing subscription-based revenue for your firm. Please describe the service and the value it has derived.
Issac Sacolick: Greenwich’s core business has historically been delivering consulting, advisory services and market research to banking executives. Much of the insight delivered to clients has been through proprietary data that we source on service quality, market share and other benchmarks as well as research on topics including customer experience, payments, fraud, e-trading, blockchain, and other technology innovations in financial services.
Greenwich is extending its consulting practices to include subscription-based analytical products and services. In some cases, this includes tools that provide customers access to the underlying data visualizations and benchmarks. Using these tools, clients can perform their own analysis on how their products are performing, determine what accounts are at risk, research new opportunities, or develop strategic plans to grow market share. We are also integrating with our customers’ analytical tools, data warehouses, CRM systems, and research tools to help enable the use of our own analytics and research in their workflows.
Peter High: Can you describe how you partner with Greenwich Associates’ Chief Data Officer and CEO to establish the firm’s product strategy?
Issac Sacolick: The three of us along with our SVP of Product Management form a steering meeting that sets strategy, develops plans on transforming existing product offerings, reviews business plans for new investments, and considers partnership opportunities. We bring different knowledge, skills and experiences to the table and have different roles working the details of our product strategy. For example, our CDO may propose a repackaging of our data into a workflow that matches customer needs. Our SVP of Product will then test the concept with customers, and I will review the technology as well as sourcing requirements, while ensuring the product planning is executed efficiently. When we have concepts that resonate in the market, our CEO will consider how we communicate internally and align business leaders to revenue targets or operational changes.
As a team, we’re all focused on developing product pipelines, transforming how we sell, and growing, our analytical capabilities aligned with customer needs.
Peter High: Please describe JavelinStrategy.com and Market Structure and how your team has worked to get these off the ground.
To read the full article, please visit CIO Insight
6-20-2016
Thrifty White may not have the broad footprint of a national player, but the company’s continued focus on health-and-wellness initiatives sets it apart from the competition in small towns and cities in the upper Midwest. The company is 100 percent owned by the employees. Thrifty White believes its greatest asset is its employees who cooperate in the spirit of teamwork to help the company continue to grow and prosper. The company also prides itself on helping the communities in which it does business.
As CIO, Matt Ode ensures that all areas of the business (from executives to staff) are working together executing on the corporate strategy. This includes both top- and bottom-line projects and initiatives across the organization as well as regulatory and security items as they continually emerge. As he tells CIO Insight contributor, Peter High, he also believes that technology will shape the company’s future.
Peter High: What are your priorities for the year ahead?
Matt Ode: Our goals for 2016 are to grow our specialty pharmacy volume, grow our long-term care pharmacy business, and continue to focus on our retail pharmacy operations. One area in which we have taken the lead is in medication synchronization. Kicked off in November 2011, the program synchronizes all of a patient’s prescriptions and enables patients on multiple medications to pick up their prescriptions at once. On the day of pickup, the pharmacist will review the prescription list, monitor changes after doctor or hospital visits and check for possible drug interactions. We have over 61,000 patients on this program today and they love the convenience and how it significantly improves their medication adherence.
High: Please describe your organization structure and the size of your team.
Ode: Our organization structure is composed of the following areas. We have 31 people in IT today. I started as an IT team of one so I take a lot of pride in our team and how it is positioned today as a strategic enabler of our business.
Pharmacy Team: responsible for all design and development of our proprietary pharmacy system. Allows us to be nimble as changes in the marketplace seem to happen at a rapid rate these last several years. Med Sync program mentioned above was completely developed and implemented within our in-house system.
Infrastructure Team: responsible for 2 server rooms, disaster recovery facility, connectivity, security, and all associated hardware/software/mobile/network equipment.
Business Applications Team: responsible for all applications used in the back office and retail store teams – intranet/internet, HR/Financials ERP, data warehouse, content management systems, and cloud applications.
Store Systems: responsible for all store systems including physical desktops/laptops, printers, POS systems, and automation equipment at both store level and central fill sites. Includes Help Desk as well.
IT Business Partner/Project Manager: individual who works directly with the business executing on corporate strategy and managing incoming requests that then are prioritized in quarterly executive review meetings. Key role recently created in the last 2 years based on Joe Topinka’s book IT Business Partnerships. Also serves as a project manager that can be plugged into any IT/Business initiative. Previous background in IT software/database development a must from my perspective along with excellent communication skills.
High: What are your strategic priorities currently?
Peter High and Chris Laping, CIO of Red Robin Gourmet Burgers, speak with XChange Events at their Midsize Enterprise Summit 2012 in San Antonio, Texas after their on-stage interview for the Forum on World Class IT.
Meet the new IT leader—an executive intensely focused on building out an unparalleled IT core while increasing the business value of IT. Those two initiatives are what motivate the next-gen CIO. This session will unlock the secrets to breaking through by sharing innovative ways to manage projects, forge partnerships with internal departments and influencers and execute on a vision for driving business value and change. No matter what the critics say IT is uniquely equipped to drive change and foster innovation.
This interview is with Chris Laping, who is not only the CIO of Red Robin Gourmet Burgers but the Vice President of Business Transformation and Peter High, President of Metis Strategy.
To watch Chris’ full video interview with Peter, please visit his interview page on the Forum on World Class IT.
