In today’s fast-paced business environment, it is vital that I.T. departments have the capability of kicking things up a notch to accelerate the delivery of benefits to the business. At CIO Canada’s spring roundtable, five senior Canadian IT execs swapped insights and best practices as to how to accomplish this. Here are the highlights of that discussion.
ATKINS: Are you planning to enhance your IT organization’s ability to accelerate the delivery of benefits to the business? If so, describe one or two areas you expect to address.
TONER: Absolutely! There’s a constant pressure to accelerate delivery. Our focus to date has been around the teams and the effectiveness of the teams. What we’re doing now is focused on the process end-to-end, from concept to value in the business. I’ll give you an example of one of the things that we’ve recently introduced – instead of working through traditional waterfall methods for development at the requirements stage, we now have a facilitated session for nailing down requirements. These sessions involve dedicating resources from the business and from IT, and the facilitator works with them to ensure there’s full commitment. So the decision makers have to be in the room and they work through the commitments surrounding requirements in usually one or two days, as opposed to the project team tackling it over a period of several weeks. That’s an example of how we’re able to get the requirements sooner and therefore get the project’s decisions on ‘go/no go’ sooner as well.
KALIA: We’re doing a combination of three things. We’re also getting away from more traditional waterfall methods. We introduced agile development techniques last year and had 25 percent of our project portfolio run through a more agile development methodology, which really cut down the time from when we get clarification on requirements to the whole software development lifecycle. Projects that previously would have taken over a year, we’re now executing in ninety days, so that’s pretty radical step change. Secondly, we have quite a diversified business group — over a dozen business units — but we have a centralized IT organization. We’re trying to play with the advantage and disadvantage of that structure; we’re requiring our business units to share more than they previously did. When a company is structured in different silos, those silos often don’t cooperate. We’re forcing that cooperation to happen, through an investment committee that prioritizes across all of those business units. The third thing we’re trying to do is make sure that the IT initiatives within a business unit are aligned to the company strategy. We’re removing any unnecessary clutter from their agendas such that they’re very focused on what we’re doing. As a result, we’ve removed about fifty percent of the project requests that came through.
ATKINS: How important is business readiness and how is business readiness assured when delivery is accelerated?
CHAN: The key to getting the business ready for accelerated delivery is to break down the traditional notion of project delivery. Traditionally, when a delivery project requires some business resources, you go and ask the business and they yank somebody from a full-time job on the operation side and tell them ‘now you’re on this project’. That doesn’t work because the person is still in the day job and trying to balance the workload on the project, therefore deliverables and knowledge required from the business don’t come as quickly as they should. The key is to differentiate between project resources and operation resources. When the business understands that it will be the recipient of the benefits of accelerated delivery, it will be motivated to improvise and find ways to free up the necessary resources to help do the project work. But no matter how many resources are put on the project, the client still must be ready to accept the delivery. If you get everything ready and the client says ‘we don’t want it for another six months’, then you’re in trouble.
FISHER: Business readiness is probably one of the most critical components for success in accelerating delivery. It took us two years to be ready to adopt the methodology we’re using and to look at the changes it would bring. In our industry sector, we talk about the holy grail being collaboration. The sales force in our industry sector is in large part commissioned, and has a mentality of ‘you eat what you kill’. Moving from that traditional model to a collaborative model, where you share in the success by teaming and working in groups, takes a fundamental shift in the mindset of our professionals. Product technology that supports collaboration in a culture that’s still very focused on a commission-based model is a recipe for disaster. To be successful, it’s important that time is spent up front by IT to gauge the timing and know the answer to the question ‘Is the business ready as a culture to adopt a collaborative approach?’
DUFF: Business readiness is critical within our operations as well. What we try to do is take, on average, a six-month time period for the introduction of applications and/or technologies. First of all, we do a SWOT analysis and try to determine how the application or technology might affect the business. Very early in the process, we speak with the end users and management to get adoption. We make sure that there is funding available for whatever it is that we are trying to do. And then we focus on training, in order to reduce frustration on how the new application affects the end users and, to some degree, even management. So business readiness is assured by education and marketing, to management and the end users. And we try to indicate the value of what we are planning to introduce. With all of those things combined, we enjoy a fair success rate at implementing applications within the business.
ATKINS: Is your organization using any specific methods or practices to accelerate the delivery of benefits to the business? Briefly describe your use of such methods and how beneficial they’ve been to the organization.
KALIA: We’ve borrowed quite a lot from extreme programming. In the requirements clarification phase we’ll develop ‘user stories’. We’ll come up with a release plan that we and the users agree with, that says ‘this is what will be developed and these are the duration cycles and this is what your end result will look like’. If we can, we try to prototype the results so that they get to see what the end results are going to look like. That really helps narrow down the scoping and requirements and prevents further scope creep after the fact. Once we’ve got into development, we have brief daily meetings between the developers and the users. That cuts down any cycle times on getting communications between users and developers to get decisions agreed. If there are technical choices that have to be made, they get rolled into those meetings. We have quite tight iterations and we stick to those — we’re trying to get down to ten-day durations; right now we’re finding fifteen is about the optimum. We’re trying to get a structure around this so that we can have daily builds of code put together. And we try to co-locate the users and the IT teams wherever possible. We find that the tighter coupling means that we can move quite quickly, and the methods we’re using call for that as well.
FISHER: Two years ago we took a radical approach and said there’s got to be a better way to rapidly deliver value to the organization. We’ve adopted something called Market Advantage, which profiles each individual within our organization and places them in a quadrant based on their personality traits. One group can be identified as marketers; a second group as sales; a third as power, and the last are typically people who assess value. For any initiative we undertake, we make sure that we target members of our IT group to the specific traits of the individuals in the business unit. By aligning our project teams based on these traits, we can drive out specific objectives that both sides buy into. We make sure a traditional user, with the appropriate traits, is involved in the assessment of the requirements for the project, and in the delivery. By using this methodology, we find we can very quickly deliver a system to the end user, whether we develop it ourselves or procure it. And we can also scale it globally. We can take the same model and move it from Canada to the US, Asia Pacific or Latin America.
ATKINS: How important are personal relationships between people in the IM/IT group and the business departments to accelerate the delivery of benefits to the business?
DUFF: Personal relationships are very important, and in some cases even critical to the organization. And this is true at all levels, from desktop support all the way up to senior management. We have a policy that if anybody has a complaint about anything within the organization, they can go all the way up to the CEO. But don’t just come with a complaint; you’ve got to have either a recommendation or a solution to what’s bothering you, either as an end user, as an agent, or even as a manager. I think that has sparked a lot of discussion, and from that we’ve managed to clear up a lot of issues.
FISHER: We have an expression in our organization which says ‘we should not have artificial harmony’. What that means is that we have a commitment to be open with each other — and personal relationships are probably the easiest way to reduce artificial harmony. In the ‘Market Advantage’ model I described earlier, our IT community tends to occupy a quadrant that’s related to power and authority. Where we’re traditionally weak is in marketing and sales. Hence, we’re poor negotiators. When we meet a business unit leader and go through that negotiation process, inevitably we lose the negotiation. But personal relationships help foster a bond. That bond doesn’t eliminate differences of opinion, but it gives you ways to make things work. The key to good negotiating is coming up with mutually satisfying terms, and successful projects are based on the ability to negotiate successfully between the business-unit community and the IT community. So we’ve got courses to help our IT employees bridge the gap in understanding how a salesperson thinks and how we react to situations.
ATKINS: It’s frequently necessary to temporarily increase internal delivery capacity to accelerate the delivery of benefits. How does your organization prefer to temporarily increase capacity and why?
TONER: One of the things we did in the last year is change IT from a typical organization with expertise organized and reporting to various IT managers to one where we’ve taken all of our development resources – business analysts, developers, testers and so on – and grouped them in a resource-managed pool. The managers are responsible for the effective deployment of the resources to the right project at the right time. The difference here is that when you’re trying to increase your capacity, you don’t need to negotiate with several line managers to free up the resources. It’s done through a process of resource management that’s controlled through a central group. That has cultural implications because most individuals prefer to have clarity around who their boss is, even though they work from project to project. For many years we had a traditional hierarchical structure and it was something people were comfortable with, so the cultural change that accompanied this restructuring was an important consideration. But what it has done is allow us to increase the utilization of the individuals in the IT department in the same way that a professional IT organization focuses on utilization. Without adding people, it has increased our capacity, because there’s less down-time between projects for many of our resources in IT.
ATKINS: In identifying opportunities to accelerate delivery of benefits to the business, how important is it for the CIO to be an integral part of the senior management team?
CHAN: In the context of accelerated delivery, I think it’s even more important that the CIO be connected to senior management and the day-to-day key business decision makers. The business of change is so dynamic these days. Technology has enabled some of these changes to be made faster and your competitors are able to come out with competitive threats all the more quickly. So to respond in kind, you need to have a very dynamic IT organization, and part of that is having the decision process made easier by having direct input and direct response from the head of IT. I doubt that any business now would tell you that IT is not mission critical. IT is probably, by percentage, the most significant expense within any company, and if you look at the scope of risk represented by that amount of money, there is absolutely no reason why you don’t want the person who runs the IT budget in the senior management suite.
KALIA: Over the last decade, it has become a best practice to have the CIO as an integral member of the senior management team, and I can’t see it any other way. There are a lot of companies that have the CIO reporting to the CFO or COO, and I think that they will eventually be, if they aren’t already, at a competitive disadvantage. If the CIO’s job is to apply technology to advance the company’s goals — either growth, most efficient cost of operations, competitive advantage, or all of those — then companies lacking that competence within the senior management team are going to make sub-optimal decisions. Their competitors are going to do better. And most if not all companies these days are either promoting themselves, selling themselves, or integrating themselves with their suppliers through the Web, so they’re very dependent on technology. And again, that’s influencing the way they operate their management and business processes, and the way they relate with their customers. So I can’t see that you can do business today without having IT competence at the highest level in the company.
ATKINS: Are there any key success factors that are required to accelerate projects or activities without sacrificing quality or unduly increasing risk?
FISHER: We’ve found that perhaps the most critical success factor is getting full participation of the key sponsor very early, be it the business manager or an executive. From the inception of the idea, to the early development of a project plan, to the commitment of a business case, it’s critical that you get that sponsor involved up front. Without that sponsor, things just fall off the rails. Secondly, you have to get an early reference. We typically do rapid pilots with small focus groups of users to make sure that if it’s a proof of concept, it works. And from that we can get a reference for the rest of the user community. What promotes momentum is making sure that users continue to see value in the development of the initiative. As quickly as possible, you must put something tangible in their hands so they can start seeing some benefits and it stays on their radar screen. So marketing is critical to long-term viability. You’ve got to market the heck out of the project until it gets implemented.
DUFF: One of our key success factors is our size. Being small enables us to enjoy a very quick turnaround; there’s not a very large group to convince it’s the right thing to do. But more importantly it’s the business involvement themselves, the managers, who are very forward thinking. They embrace technology. They see IT as the enabler to get a lot of the things that they are looking to get done within the business — productivity gain and so forth. So adoption by management at a very early stage is another key factor.
CHAN: Our ability to adapt the technology investment plan to the reality of the business is crucial. We have a management committee that consists of all the stakeholders, all the decision makers, and that committee allows us to make decisions quickly when there is a major impact to the technology investment plan that requires reprioritization of what we do. We also have a pretty flat organization. As the CIO, I report directly to the CEO, and whenever there is a decision affecting any technology initiative, we can contact three or four of the key decision makers and make the decision on the same day. Having the short decision loop is key to making sure that we maintain the currency of the investment plan and our prioritization process. Also, our divisions operate pretty autonomously; we don’t have to ask for permission to do certain things on a day-to-day basis. And because we have this tight communication loop among senior management, people with autonomy know enough not to make decisions that would disrupt the technology plan.
ATKINS: Will reuse technologies such as Services Oriented Architecture (SOA) play a significant role in accelerating the delivery of benefits to the business in your organization, and if so, when do you expect the impact will be felt?
KALIA: We’re looking at a number of things in parallel. We’re very keen on establishing SOA, but it’s not something we’re rushing into because we think there’s an enabling infrastructure that has to be created first. The infrastructure consists of technology, but it also consists of knowledge. So what are we doing for reuse? We’re reducing a lot of choice. We’re actively decommissioning some of our systems. That forces people to share and use a single platform for multiple business units or multiple purposes. We’re also standardizing our technology choices; we’re not allowing our IT staff to make decisions about the latest, greatest tool they want to download over the Web. If they’re going to do that, it’s in a controlled sandbox. In terms of technology infrastructure, we weren’t making sufficient use of technologies like middleware, so that’s something we’ve recently been pushing through our organization and getting people trained up in. Right now, we have a few hundred technology Web services; but we have only about twenty that are business functions, and we’re looking to expand upon that. I think you’ll see the ratio start to change, probably next year. I think 2007 is when we’re going to see the payoff, and some traction on SOA.
TONER: The important thing to focus on is not to have each project start from scratch in terms of the environment, the tools and the processes needed for reuse. You have to make the investments necessary so that you have those things done for all projects. For us that’s a significant challenge. Part of the reason is because our forum for investment decision making is one that involves the business in a large way, and it’s more difficult for the business primes to get an appreciation for the investment in the architecture and the tools that could apply to many projects, so we often look at business cases on their own. The strategy we’ve taken is to try to build it one block at a time and focus on some of the areas where we think we can get benefits early. And it really is around changing the underlying processes that many projects can use, and putting platforms in place that many projects will use. That way you can leverage some of the functionality that’s created in one project to benefit another project.
ATKINS: Time is a significant benefit to preparedness to accelerate delivery of any IT/IM capability. For really big activities that have whole project portfolios, such as acquisitions by your organization, is IT/IM management involved from the outset?
DUFF: We definitely have to be involved at a very early stage to evaluate, do a cost analysis, and also to analyze and evaluate whether or not there would be an impact to our current business. For example, an acquisition could take the business in a somewhat different direction and cause us to put projects on hold that we are currently working on. We might even have to defer projects altogether, simply because the whole atmosphere might change. We were just acquired by Cushman & Wakefield, which is a huge global organization, and they have systems that could benefit our operations here in Canada which may replace some of ours, so we need to analyze those systems to determine what part they might play in our environment.
TONER: Aliant was originally created through the merger of four public companies into one, and to this day it’s considered one of the most complex mergers we’ve seen in Canada because of the nature of four publicly listed companies being brought together. IT was very much a key part of that integration, and some of the learning from that had to do with the importance of making business decisions around what you do with your IT to support the merger. There’s often a tendency to try to fully integrate all of the underlying processes and systems to be one when you’re bringing several companies together, but there’s also the practicality of business change, and the practicality of priorities in investments. So we went through a process, even prior to the merger, of determining which areas were essential to our success to bring from four down to one. And making those conscious decisions with the business became a very important step in the process of merging the companies. To this day, there are still aspects of the business that have remained the way they were at the time of the merger, but they’re conscious decisions that were made together.
ATKINS: How does your business measure benefit?
DUFF: Return on investment is one of the critical things that we look at, but another key indicator of success is the productivity gains. We look at what applications or technologies we can bring to bear to do things better and free people up so that they can do the things that they should be focused on in the first place, rather than spending a lot of cycles on mundane jobs or work that could be automated. Soft component productivity gains are very hard to quantify. You have to relate back to them after the project has been implemented and has run for a period of time. But we’ve been very successful, and we’ve actually been able to measure productivity gains.
CHAN: Our primary measurements are the obvious ones from a shareholder’s perspective: revenue growth and increasing profitability. Obviously, to achieve those things, you have all sorts of hard and soft measures, including client satisfaction, which is probably key to revenue growth, and employee satisfaction, which is key to delivering on time, quality, and those sorts of things. At a more micro-level you can have very finite and tangible measurements imposed on project delivery, and there are many professional disciplines to govern those types of activities and give you measurements on delivery. Also, in terms of the capabilities you’re building, there is the measure of how successful you are competing in the marketplace. If you don’t have the new capability that’s required in the market, then obviously that will impact your revenue.
ATKINS: What activities should CIOs pay attention to in order to accelerate the delivery of value to the business?
FISHER: My advice would be to invest in training, from two perspectives: traditional technical training — and here you want as much diversity as possible — and training in the softer skills. As an IT organization, it’s incumbent upon us to understand our business and to understand how we could interact with the business. So looking at the softer skills — how you relate to the user community — is very important because that’s the only way you achieve relationship building.
KALIA: Having a lot of scrutiny across the organization on some key business metrics, with very regular review, enables a kind of togetherness across the company so that people understand why certain metrics are important, whether it’s revenue or customer attrition or whatever the top eight or ten may be. There should be a necessary few metrics that you continue monitoring across the company, and those can change as your company evolves from one state into another. Having a lot of visibility of those metrics internally across the organization can rally people around the important things. I also think you need over-communication of goals and methods and business plans — things that flow from the business metrics and that you’re already analyzing and spending a lot of time on. I don’t think you can ever communicate enough, and that’s why I say over-communicate.
TONER: You need to take deliberate steps to engage employees – guide them through the steps that will enable them to understand the priorities and the performance of the business. Take them through, on a regular basis, the results of the business. For example, take the time to help them realize how they impact the bottom line. Get them excited about teamwork and collaboration with the business. IT generally involves investments that are labour-intensive, and as a result your people are your greatest asset to success, and if they’re highly engaged you’re going to get better performance from your solutions, you’re going to have better delivery of benefits to the business on an ongoing basis.
DUFF: Item number one: involve users and management as early as possible in the discussion of the pros and cons of whatever project you are working on. Item two: market the technology or application to demonstrate what you are trying to achieve or what benefit it will have to the organization. Item three: consolidate and standardize on everything from the desktop to back-end applications, and if this is done correctly, it will set the foundation for anything and everything you want to add on in the future.
CHAN: Enhance the capabilities and flexibility of people by increasing their skill sets. We talk about the big challenge of matching resources to projects to overcome the resourcing challenge that we have. If over time you start cross-training people — making them multi-talented, instead of one-trick ponies — you will increase your flexibility in assigning the right resources to the right project. There will be less training time required to be productive, because the skills will already be embedded in the project. Also, by virtue of that, people will be able to do a number of things within the project, allowing you to reduce the number of staff involved. This will also cut down on the number of miscommunications, which impede the speed of the projects.
–David Carey is a veteran journalist specializing in information technology and IT management. Based in Toronto, he is editor of CIO Canada.
–Tom Atkins is a Certified Management Consultant specializing in program management and strategy development. He can be reached at [email protected]
–CIO Canada’s spring roundtable was sponsored by xwave (www.xwave.com), a full-service information and communication solution provider.