Enterprise Initiatives

I have spent a lot of time recently questioning the leadership of IT organizations who become a cost center due to a "keeping the lights on" mentality and have asked the question Are we Sleeping at the Wheel?. The other day I stumbled across a great article (thanks to some of my pals from Twitter land) that really hits the nail on the head. This is a must read article that brings to light what I think is the main reason why many IT leaders are missing the boat on emerging technology trends. The article is written by Steve Andriole is called Managing IT: Changing Our Minds (About Everything) and discusses how IT leaders who have been around a while have to let go of solutions of the past and totally change the way they think. Here are a few excerpts...

Here’s the deal. The world has changed – forever. First, hierarchical management structures will weaken as we continue to globally decentralize our business units. We have to change the way we think about control, standardization and the overall governance we bring to technology acquisition, deployment and support.

Here is his thoughts on Open Source which I have been championing for quite some time...

Open source is here to stay. Even the established vendors have “embraced” open standards. They have no choice. Do you?

And what about cloud computing?

We need to change how we think about cloud computing from an incremental shift in technology offerings to a whole new way of acquiring, delivering and supporting digital technology

Here is my favorite...

Debating endlessly about whether or not open software, cloud computing or SaaS have any merit is a waste of time – and most likely a diversionary tactic designed to slow – if not outright kill – the pace of change.

Please take the time to read the entire article. I think the message is an important one. If you are an IT leader who is missing the boat, you need to reevaluate your positions on the emerging technologies and solutions. If you don't you are damning your organization to more years of fire fighting and being a bottleneck to the progress of the business. Don't miss the boat!

An article written by Joe McKendrick called SOA eased the way for recent shotgun financial mergers inspired me to take this discussion one step further. To me, the biggest benefit of SOA done right is agility. I define agility in IT as the ability to adapt to change at the speed of business. Companies that invest in architecture, specifically in SOA, are in a much better position to adapt to mergers and acquisitions, connect to partners and suppliers, take on new business opportunities, and continually drive down the costs of maintenance and support.

I read many blogs and subscribe to numerous group discussions on SOA, EA, and cloud computing. There is so much discussion arguing the semantics, the ROI, and the viability of these technologies/architectures that it sometimes becomes discouraging. At some point we need to hike up our boot straps and invest in our business's future and stop fire fighting. Those companies that invest now (and do it right) will create a competitive advantage over those that do not. Here are just a few of the harsh realities that our businesses are faced with:

• Decreasing margins
• Fierce global competition
• Mergers/ Acquisitions/ Consolidations
• Recession
• Demanding, connected, and empowered consumers
• Increased regulatory constraints
• Dynamic business requirements
• Green initiatives

All of these things mentioned above are issues that we must deal with on top of our company specific issues and requirements that are far exceeding our capacity. To keep up with demand we need a flexible and agile architecture so we can make configuration changes instead of code changes, empower business users to change business rules instead of requesting expensive development projects, and leverage partner and supplier services instead of building everything from scratch, thus reinventing the wheel.

IT is only a cost center if the IT leadership allows it to be. The role of IT should be to innovate and help the business achieve its goals. IT must invest in strategies and architecture to allow this to happen. It is too easy to say we don't have the time, resources, and money. That's a cop out. As I have said before in my article The keeping the lights on mentality

The key business driver in a "keeping the lights on" shop is minimizing costs (usually over anything else). Which makes me wonder why more shops in this mode do not go down the outsource IT path. If lower cost is so important and large innovative initiatives are typically out of the question, why not radically lower the cost by outsourcing IT? I am not recommending that IT shops do this, instead I recommend that IT shops become good business partners and enablers of business success. But if I was a CEO or CFO and my IT's sole purpose was to be a cost center to keep the lights on, I would try to drastically reduce that cost. After all, keeping the lights on is not a core competency of most businesses. It is a necessary evil. Having hordes of full time staffers and paying for their benefits, stock options, and bonuses just to keep the lights on is not smart business. I know my view here will not be popular with most IT folks. I am not down playing anybody's abilities here. All I am saying is that if we don't need our staffs to be innovative, proactive, and be advocates of our business partners and instead just want to the staff to think short term, there is a much cheaper model out there.

So IT leaders have a choice. They can refuse to invest in SOA and continue to support and maintain an inflexible environment that takes a lot of time and money to change or they can invest in the future by justifying an initiative to provide the business with flexibility, agility, and empowerment. Is it easy to do? Heck no! It requires talented staff and partners and most of all top level support. Ask yourself this question. If your company was to merge with your number one competitor tomorrow, how long do you think it would take to integrate these systems? If your competitor was buying your company and your systems were archaic and hard to integrate with, what do you think the odds are that they would keep you around? That's what I thought! Pay now or pay for it forever.

I just read Dave Linthicum's post on SOA World titled Should you Fire your CIO? This is a continuation of a discussion that has been brewing in the blogsphere for the past few months that started after the Burton Group commented that a new CIO was often a key ingredient for some successful SOA implementations.

To successfully implement enterprise wide SOA initiatives, strong leadership is required at the top of IT. The person must have integrity, creditability, technical and business know how, and must be able to lead the organization through the resulting shifts in cultural values. The problem is, as Dave points out in his article....

....in many organizations the role of CIO has resolved itself as the person who keeps things running, not the agent of change.

I call this the old "Keeping the Lights on Mentality". When IT stops being an enabler and simply acts as a cost center or a "necessary evil", then entertaining new projects that leverage one of Gartner Top 10 strategic technologies is unrealistic and doomed for failure or hardship at a minimum. Why? Because this mentality is reactive and sometimes even defensive. This mentality also does not encourage investing in the future whether that is in training employees, establishing and investing in architecture, or addressing problems with long term solutions. Instead, people are rewarded for quick fix fire fighting heroics and at the end of the day it is the user community that suffers. The users get band-aids on top of already outdated systems and are often forced to work in ways in which the technology and systems dictate, instead of the other way around.

It gets worse for the employees in an IT department in charge of "keeping the lights on". Their resumes become stale as their skills are not updated to reflect the newer technologies that innovative companies seek. The reactive nature of the culture can squash innovation and people who have valid solutions may not bring them forward because it would require more than a quick fix. In the end these types of shops become like an assembly line in nature where people clock in, work their shift, and clock out. This is not what must of us envisioned when we enthusiastically enrolled in IT related curriculums in college back in the day.

The key business driver in a "keeping the lights on" shop is minimizing costs (usually over anything else). Which makes me wonder why more shops in this mode do not go down the outsource IT path. If lower cost is so important and large innovative initiatives are typically out of the question, why not radically lower the cost by outsourcing IT? I am not recommending that IT shops do this, instead I recommend that IT shops become good business partners and enablers of business success. But if I was a CEO or CFO and my IT's sole purpose was to be a cost center to keep the lights on, I would try to drastically reduce that cost. After all, keeping the lights on is not a core competency of most businesses. It is a necessary evil. Having hordes of full time staffers and paying for their benefits, stock options, and bonuses just to keep the lights on is not smart business. I know my view here will not be popular with most IT folks. I am not down playing anybody's abilities here. All I am saying is that if we don't need our staffs to be innovative, proactive, and be advocates of our business partners and instead just want to the staff to think short term, there is a much cheaper model out there.

So to answer Dave's question, if the business wants IT to help the business achieve its mission by being proactive and innovative and IT is simply keeping the lights on, the answer to his question might be yes. If the business simply needs a low cost IT cost center, the answer may be to evaluate the outsourcing model. Keeping the lights on as a core IT function and doing it at a high cost is just not good business. That's my 2 cents.

Disclaimer: In no way is this article referring to or targeting any organization or individual that I have been associated with in my career. This is a generalized view that combines my own experiences with the experiences of thousands of other IT professionals that I have talked to, read about, or researched throughout my 20+ years in IT.

To successfully lead an IT organization, one must excel in three key areas: Technology, Business, and People.

When attempting to implement enterprise initiatives, those leaders who do not excel in people skills will have some serious challenges. For whatever reason, many IT leaders neglect the "people side of change" (listen to my podcast with ZDNet's Michael Krigsman) and do not address a critical need - Organizational Change Management.

I am a huge fan of Harvard's leadership guru, John Kotter. Kotter has a proven 8-step methodology for leading through change. Here are the steps:

1. Create a Sense of Urgency
2. Pull Together the Guiding Team
3. Develop the Change Vision and Strategy
4. Communicate for Understanding and Buy In
5. Empower Others to Act
6. Produce Short-Term Wins
7. Don’t Let Up
8. Create a New Culture

For more on this topic I recommend his books "Leading Change" , "Our Iceberg is Melting", and also "Change Management: the People Side of Change" by Jeffrey Hiatt and Timothy Creasey.

And remember, now matter how good you do with the technology and business side of the equation, if people resist change your project will more then likely fail.

I was asked by Michael Krigsman to be a guest blogger on his blog IT Project Failures on ZDNet. My post focused on IT Leadership as the main cause for most failures. Read the rest of the post here.

The last few years have brought many great advancements in technology and the upcoming years promise to bring more. As companies push to drive the costs of IT down while increasing productivity and output, many large enterprise initiatives have become high priorities. The chart below shows IT's top 10 Management priorities for 2008 (source: CIO Insight):

When you look at this list it is obvious that today's IT leaders need to be experts in more than just technology. They need to understand the business and they need to have good people skills. I created the following diagram which I call the leadership triangle. I feel strongly that IT leaders need to excel in all three areas: Business, People, and Technology.




From the business perspective, not only do IT leaders need to know how the business's products and services function, they also need to be able to speak in business terms. This requires MBA type skills in the area of Finance, Economics, and Accounting. When you produce your business case for initiating a large new technology project like SOA, Green initiatives, or ITIL you must be able to describe business benefits in terms of NPV (net present value), IRR (internal rate of return), and payback periods. When dealing with infrastructure projects like disk consolidation, virtualization, and others you should understand the different rules of depreciation, lease options, contract and vendor management. The list goes on.

From the people perspective, the IT leader must be a coach/mentor, great communicator and presenter, skilled in leading through change (organizational change management), a negotiator, a sales person, and a visionary.

From a technology perspective, IT leaders must have at least a high level knowledge of a variety of areas including architecture, security, infrastructure, regulatory/compliance, data, quality assurance, operations, etc.

It is rare to find one person who excels in these three areas. If you find one, good luck keeping them around for a long time because they are highly sought out. Some companies can accomplish this by assembling a strong leadership team that works closely together towards common goals. This requires the leader of this group to be exceptional from the people perspective.

IT must embrace itself for constant change.
The next chart shows IT's top ten technologies for 2008 (Source: CIO Insight):

Some of the key IT initiatives that could come from this list are SOA, BPM, Business Intelligence, Master Data Management (MDM), Virtualization, SaaS, ITIL, Portfolio Management, Social Computing, and many others. Each one of these initiatives requires people to change the way they have traditionally worked. Some roles and skills may go away and new ones may be created. Many of these initiatives require very specialized skills and demand more collaboration across different areas of expertise, including business SMEs (subject matter experts).

But the technology is the "easy" part. Getting the business sponsors to own and help drive the initiatives and leading people through change is where IT has a huge skills shortage. Many people in IT don't even acknowledge that these two things are important. I can't count how many articles I have read that claims SOA is a failure and is nothing more then hype. The same is said for enterprise architecture (EA) where recently EA has been called a joke. The joke is that companies try these large enterprise initiatives without relevant business drivers and without having an organizational change management (OCM) plan. Many think by simply having smart technicians, they can get any IT project done.

The future will drive even more change.
Over the next few years, cloud computing will become a key driver for reducing complexity, reducing costs, and improving agility. I recently made a short vlog (video blog) on this topic. Software as a Service (SaaS) and Platform as a Service (PaaS) will cause a major shift in the way we think and work. There will be all kinds of resistance from the infrastructure and security staffers. Moving to a platform in the cloud is a threat to the current roles and responsibilities for these folks. Over time (5-10 years), PaaS will become mainstream and IT shops will likely become smaller and will definitely have a different technical makeup then it has today. People will have to retool and stay current with trends. Software will become a true engineering exercise that requires knowledge of distributed systems, security, data management, and networking. Drag-n-drop n-tier developers will become the Cobol programmers of our next decade. Globalization and social software will radically change the team structures. Project teams will be scattered across the globe. Rising oil prices will lead to more virtual offices. Ten years from now we will look back and laugh at the notion of cramming hundreds of people into cubes. Companies will be able to hire staff from around the globe and won't be restricted to local markets. Users will have the power to assemble their own applications by leveraging mashups and software in the cloud. How will we manage the future?

IT Leaders need to change with the times
So what does this all mean? When you add up all of the things I just mentioned, the role of management has become far more demanding. If your managers are struggling today, how will they survive tomorrow? Just think of the cultural and ethical ramifications of managing a remote team of workers from around the world. IT leadership will be even more demanding then it already is and we already have a shortage of leaders who excel in all three areas of the leadership triangle. So how will we solve this dilemma? Currently, many IT shops just "stay the course" and do not adopt any of these large enterprise initiatives. In the future as cost reduction becomes a matter of survival, many of these initiatives won't be optional.

Unfortunately, I don't know the answer to my own question. There is already a skills shortage in IT across the board. There isn't a shortage of people applying for management and leadership positions, but there sure is a shortage of people who are qualified! Where will the next generation of leaders come from? How many companies will recognize the importance of the leadership triangle? How many more IT projects will fail before somebody does something about this dilemma?

What do you think needs to be done? How will we overcome the Leadership shortage?

I have worked on many large enterprise initiatives over the years. Some were successful and some were not. As an avid researcher of my trade, I have also read about many failures of large initiatives. Being the lessons-learned kind of guy that I am, I always try to understand what worked and what didn't so I can make sure that the next enterprise initiative can avoid failure. Whether you are implementing SOA, Enterprise Architecture, forming a PMO, introducing a new programming language, or merging with another company, I have seen a consistent pattern of failure that can be summed in the following 10 categories:

1. Poor Communication
Enterprise projects usually impact a large amount of people. This requires constant communications to all levels of people throughout the organization. A strong communication strategy can help with this. Use a combination of town hall meetings, portals, blogs, group meetings, emails, wikis, bulletin boards, posters, and any mechanism you can think of to get the word out. In larger companies, this can be a full time job for somebody.

2. Underestimating or ignoring impact of change
This is another way of saying poor change management. People need to know WIIFM (what's in it for me). Resistance to change can kill any project. Your initiative must have a champion who carries a lot of clout. The leadership, lead technicians, project managers, and all of the visible people in these projects must be positive forces and constantly promote the vision and the future state. I wrote a post called BPM, SOA, and the Swing Voters that discussed how important it is to stay focused and positive and not to show frustration. People will feed on the attitudes of those leading the initiatives. You must address resistance head on and address people's needs to help them turn the corner. For those who just refuse to buy in and become roadblocks, show them the door!

3. Lack of Leadership
IT Leadership requires excellence in three key areas: Technology, Business, and People. If the leadership is missing any of the three components you are doomed. I have seen some projects succeed where the leader was not technical but relied on strong technical people below them. I have never seen a large enterprise initiative succeed when the leader did not have people skills. Not having the business knowledge often kills projects because the projects tend to be done for the sake of technology and not for business reasons. In this case you can deliver the most impressive solution in the world, but the business might reject it because their needs were not taken into consideration. The leader must work just as hard if not harder then the people on the team. I have witnessed one "leader" assign his team a ton of work over the weekend and then left at 5pm on Friday and said "See you Monday". That created an all out revolt. The leader must have integrity or nobody will follow.

4. Lack of strong executive sponsorship
For these projects to succeed you must have somebody high up in the organization with a lot of clout. There will be many obstacles to overcome and key decisions to make. You need somebody strong to help make and enforce those decisions and remove major hurdles so the team can get the work done. This is a critical part of change management.

5. Poor project management
Scope creep is a project killer. Managing scope and requirements are the key to any project. Often, large enterprise initiatives have a ton of logistics that need to be identified and managed accordingly. These initiatives also tend to span multiple teams across various departments. The project manager must coordinate all this and effectively communicate to people at all levels. And don't forget risk management!

6. Poor Planning
This could also fall into a category of unrealistic expectations. Initiatives like SOA require a well thought out strategy. Many IT shops do not have the patience for this and rush into their project head first without a clue of how to actually accomplish their goals. When it fails they claim that SOA doesn't work. If you are going to take on a big culture changing technical project take the time up front to do the necessary research and create a roadmap. Then put a plan together to get you from initiation to implementation.

7. Trying to do it cheap
Another common mistake. Organizations want it all, but they don't want to invest the time and money. I have seen many projects get completed using this strategy, but they almost always run over budget, are late, are missing many features, and have many various quality or process issues due to the quick-n-dirty approach. Remember, the dirty stays around long after the quick is gone. Doing things cheap often costs more in the long run. I have witnessed many projects that didn't fund the appropriate number and types of resources. You wind up not creating documentation, not having the bandwidth to sufficiently test all of the use cases, not having time to architect it right, and you burn people out in the process. Another issue is that underfunded projects usually don't provide the team with the necessary tools to do the job and do not prepare the organization for life after rollout. Even worse, you may wind up picking the wrong vendor, whether it is software or professional services. Picking the wrong vendor can be disastrous.

8. Lack of technical knowledge
I'll use Enterprise Architecture as an example here. If the person leading an EA initiative does not have a solid understanding of architecture, application development, security, infrastructure, process, and the business, you might as well not even start this initiative. You can have all of the leadership and communication skills in the world but if you lack the technical know how you are doomed. Many enterprise initiatives are very expensive undertakings. Don't pick a leader with the "I stayed at the Holiday Inn Express" mentality. You wouldn't ask me to remove your appendix so why would you have somebody with little or no knowledge of the technology at hand lead your enterprise initiative.

9. Lack of sound business case
You can get all of the other issues right but if your solution has no business context then you are wasting your time. I have seen this happen with many SOA projects. IT teams with great intentions go off into their ivory towers for months or years and come out with tons of great documents (usually outdated) and a nice service oriented architecture. Then they try to convince the business to use it. Good luck. Justify these initiatives with business drivers. I have beaten this horse to death on this blog (here, here, and here).

10. Poor vendor management
I have seen this happen far too many times. Somebody hires a high priced group of consultants and let's them run wild. Consultants goals are similar to your goals but that is not a good thing. Both the consultants and your goals are to make as much money as possible for the company. The difference is you are trying to maximize profits for your company and they are trying to maximize profits for their company. If you don't manage them closely they will succeed at their goal and you will fail at yours. Also, the consultants will not have to stick around to support what they build, but your team will. You should make sure that what they build meets your requirements, your standards, your needs, and your timelines.

Summary
I have a saying from my 20+ years of working on IT projects. It goes like this.

"I have worked on so many projects that I know all of the things NOT to do."

That's the easy part. Knowing what to do is much harder. I'll leave you with this post called EA, SOA, and Change which has a very successful formula for enterprise initiatives.

1. Build strong business case
   
2. Secure executive sponsor and top level buy in
   
3. Create a Road Map
   
4. Communicate the Road Map
   
5. Empower Others to Act on the Road Map
   
6. Start small, deliver early and often (agile)
   
7. Expand, add incremental value
   
8. Govern

For those of you that know me, you know that I am a huge fan of the New York football Giants. As I bask in the glory of the greatest Superbowl upset of all times, I can't help but reflect on the amazing transformation that Tom Coughlin engineered over the course of the year.

As the 2006 season ended, the promising Giants finished as a team in decline with players calling out coaches, countless mistakes being made at crucial times, and sub par performances being displayed on a weekly basis. The coach and his young QB were being chased out of town. For some reason, the Giants gave Coach Coughlin one last chance. So how did he respond?

First, he was wise enough and open enough to perform an assessment of the performance of his players, the team as a whole, and most importantly, of himself. He listened to the constructive criticism of his bosses and players and decided to make some changes. What he found was that his vision was not fully understood by all of the players on the team. So he formed a leadership committee made up of various players on the team who could help him clearly communicate the vision. Better yet, he let the players select the leadership team. Since the players participated in forming the leadership team, it gave them a sense of ownership in the process.

During the course of each week, Coughlin and the leadership team would meet and discuss strategy for the upcoming game. The players, highly respected veterans like Michael Strahan and Antonio Pierce, would spread the word to the younger players in a language that they could understand. This did a few things. First of all, the leadership team now felt accountable because they were given ownership in the process. In order to clearly communicate to the other players they must fully understand their coach's message. The second thing it did was give the vision creditability since the message was being delivered from highly respected players in the trenches.

Another important thing that Coach Coughlin did was emphasize the importance of every single player's role and how it related to the overall mission of the team. The Giants, unlike the mighty Patriots, were not loaded with superstar talent. Only one player made it to the Pro Bowl this year. They were, however, solid at every phase of the game (offense, defense, special teams). This was due to the fact that everybody knew what their job was and what was expected of them. Backup players prepared as if they were starters. As starters fell to injuries, backups (mostly rookies) stepped in and filled roles without the team missing a beat. There was truly no "I" in team.

So let's summarize. The creation of the leadership team accomplished the following:

• Clear understanding of team's vision
• Participation in overall strategy
• Constant feedback
• Clear communication
• Accountability
• Buy-in
• Shared goals
• Clearly defined roles and responsibilities
  

This sounds like a successful formula for any kind of transformation. You don't have to be shooting for a Superbowl to take action like Tom Coughlin did. If you want to be the best leader that you can be, make sure you have a method of achieving the eight items that I listed above.
If you are trying to transform your IT organization, look at Coach Coughlin's recipe for the 2007 season. If you want people to change, first change yourself. Otherwise, the message you send is everyone needs to change except me. Value every person in your organization and clearly define their role and the importance of it to the organization as a whole. Surround yourself with leaders and change agents and have them spread the vision. Taking that burden solely on your own shoulders is challenging and can be viewed like a dictatorship. And finally, don't listen to the nay sayers who tell you that it can't be done. You can accomplish anything if the whole team is buying into the vision.

Go G-Men!

In response to some feedback from my favorite critic James McGovern, I will discuss the impacts of leadership on corporate behavior. But first I want to clarify for James the intent of the article that he critiqued called Blogs- the innovation escape hatch. In this article I discussed how social networking allows people to speak more freely and be more innovative then they can be in a corporate environment. I was not discussing social networking in terms of a corporate technology or tool. I was just reflecting on how great it is to see people like James express their views without having to be politically correct all of the time. Oh, and one last thing. James, I don't work for CIO.com. They asked me to participate in their blogging community (for free). So anything I write is my opinion and does not reflect the opinions or beliefs of CIO.com. Enough of that.

Leadership drives corporate behavior. Many people confuse management with leadership. I have seen many people in leadership positions over the years perform entirely tactical duties and not put forth and execute anything strategic. Managers are tactical and are responsible for getting work done. Leaders are transformational and focus on people and culture. There are two basic approaches to leadership that produce two entirely different outcomes, production-oriented leadership and employee-oriented leadership. The production-oriented leader is one who focuses mainly on the technical or task aspects of the job. This type of leadership focuses almost entirely on the bottom line. Organizations with this type of leadership tend to have the following characteristics:

• Sweatshop mentality
• Strong reliance on outsourcing
  
• Frequent layoffs
• Low morale throughout the workforce

Production-oriented leadership can be very successful in terms of financial numbers, but it is usually at the expense of people. In cultures like this, introducing intangible technologies like social networking is a challenge. Without a cut and dry ROI, most initiatives don't stand a chance. Social networking is a transformational technology that can create huge increases in productivity, improved communication, employee morale, and innovation. But production-oriented leaders will be challenged to see the benefits and embrace the change.

Employee-oriented leadership emphasizes interpersonal relations and focuses on employee needs. When these leaders say that "our most important assets are our people", they actually mean it. They understand that higher morale leads to higher productivity which results in improved financial results. Organizations with this type of leadership tend to have the following characteristics:

• Thrive in innovation and creativity
• High productivity
  
• High morale
  
• Low turnover
  

Technologies like social networking can thrive in cultures with employee-oriented leadership. Social networking's strength is the power of groups. When people can collaborate freely on an idea, the idea gets continually refined and improved with the collective intelligence of many. If a corporate culture encourages this type of behavior, the sky is the limit on the gains in productivity and innovation. Social networking doesn't just happen within the corporate walls. Corporations can create powerful social networks that branch out to their customers and partners as well. Would we still need to do those painful annual customer and employee surveys if we had a social network in place? Social networking gives you real time unfiltered feedback that you don't need to hunt for. This is information at your fingertips that you can act on immediately.

Here is a great video from YouTube for those unfamiliar with social networking.