Separate the Core from the ContextBy Phil Garland | Posted 2011-07-28 Email Print
The IT organization has to continually lower costs while adding business value. The good news: Smart IT leaders can do both.
• Separate the core from the context. The line-of-business staff can’t experiment with financial, purchasing, inventory, manufacturing and other core technology-delivered systems—or pick them apart for non-core missions. Neither can core services, such as security. But this same level of control and rigor is not useful for many department-level activities. In fact, it can kill top-line initiatives by prohibiting experimentation with, for example, mobile apps, Web analytics, process modeling, social networking, collaboration tools, scenario planning and the use of new devices such as the Apple iPad.
We call these customer-oriented technologies and processes “context” because they refine how you strategize, explore and interact with customers in light of changing behaviors and marketplace trends—the context in which business smarts provide a top-line advantage.
One critical need is not to let the context pollute the core; another is to prevent the core and the context from becoming disconnected. Several CIOs use governance to ensure that context innovations don’t leak into the core.
For example, the CIO at a chemical firm lets business staff use Microsoft Excel to do their own unit’s financial analysis and scenario planning, but only approved analyses can make their way into the core financial system. When experimental analyses are proven to be useful for the entire business, the CIO has a governance process in place with other key business unit leaders to transition the innovation into the core.
Another CIO, at a consumer-goods company, is investing in innovation centers to provide the venue for business and IT staffs to explore context ideas and technologies. The idea is to encourage a culture of exploration in which innovation isn’t a business or IT skunk-works project done quietly or in isolation from the rest of the business, but a public activity for the company’s benefit. The company’s core systems remain under the control of the CIO, with a clear governance process at the corporate executive level to consider any changes.
• Don’t control everything to the same degree. These CIOs don’t take a one-size-fits-all approach to control. They recognize that different activities require different levels of control—and that the controls paradigm must be revisited over time. This helps them avoid expensive efforts in excessive control activities.
For example, Bechtel CIO Geir Ramleth realized that managing end-user devices such as laptops and smartphones is an increasingly costly activity for his company. As he describes in an interview in the summer 2009 issue of Technology Forecast, his vision is for “anybody to be able to have access to the right resources at any place at any time with any device.”
The path Ramleth is taking achieves security by never placing corporate data on the end device, but retaining it on highly secure corporate servers. He explains: “You can come to the BYOC [bring your own computer] model, where you say, ‘Buy anything. As long as it can connect to the network, we can offer our services to it.’” By redefining the security approach at a fundamental level, Ramleth can relax some elements of the costly, tightly controlled, end-to-end security model.
However, Ramleth insisted on highly standardized components in the data center, reducing complexity to lower costs and allow for greater scalability. Here, the tight control saved money, improved responsiveness and positioned Bechtel to swiftly take advantage of emerging public cloud offerings.