A New Role for the CIO: Reducing Complexity

 
 
By Ron Ashkenas  |  Posted 2009-12-08
 
 
 

Most technology organizations today are under pressure to provide greater value with smaller budgets. To meet this challenge, CIOs and other senior IT leaders can use complexity reduction as a key strategy to reduce costs and create an organization that can better leverage technology.

Here’s a case in point: When Ford Calhoun was the CIO for GlaxoSmithKline (GSK) Pharmaceuticals, he simplified and de-layered IT’s organizational structure, streamlined development and support processes, eliminated duplicate applications and focused the entire IT organization on a common framework for doing business. With this approach, over the course of several years, Calhoun and his team lowered the cost of IT by hundreds of millions of dollars, reduced the average cycle time for the completion of business application projects by 75 percent and more than doubled the calculated ROI in IT—while also launching new strategic initiatives in infrastructure service, Web enablement, ERP and collaboration tools.

The gains that GSK achieved through complexity reduction can be found in many technology organizations. The key is to accept the fact that, while some complexity is inevitable, much of it is self-generated and can therefore be reversed. Based on this understanding, there are four areas that CIOs can explore to reduce complexity: inefficient organizational designs; product and service proliferation; unmanaged process evolution; and ineffective but unintentional managerial behaviors.

In each of these areas, CIOs and senior IT leaders need to ask the right questions to engage their staff and their business partners in a dialogue about simplification opportunities. Here are some of the questions that can be asked in each category:

1. Inefficient organizational design:

• Are there opportunities to consolidate similar functions or units (multiple help desks, for example)—physically, virtually or managerially?

• Are you clear about which functions should be close to your customers and users (such as applications development) and which should be centralized or offered as shared services (such as data centers)?

• How many managerial layers are there between the CIO and first-level IT professionals? Can layers be reduced and spans of control increased?

2. Product and service proliferation:

• Does your company regularly sunset or decommission products and services so that IT resources can be redeployed on new products and services?

• Have you prioritized the IT products and services you provide to internal users and been tough about which services you can’t offer? For example, do you have a standard desktop suite and refuse to support nonstandard applications?

• How well do you test the impact of new applications, products and features on the overall performance of the network—and make sure that they integrate successfully into the existing architecture?

3. Unmanaged process evolution:

• Have you identified the core processes for IT—the processes that need to run smoothly and efficiently for the enterprise to be successful?

• Do you have metrics and a simple dashboard that transparently tell managers and staff how the various processes are performing?

• Do you have streamlined, effective governance processes in place for IT—including security, risk management, budgeting, capital allocation and talent assessment?

4. Unintentional managerial behaviors:

• To what extent have you clearly conveyed the strategic vision and goals for IT to your people? How well can your people articulate the contribution that technology makes to your company’s strategic goals?

• How much time do managers in IT spend in meetings? Are they well-planned and well-run with clear goals and outcomes?

• To what extent has the “presentation culture” obfuscated issues and slowed decision making? Have you created ways to reduce the size and complexity of presentations?

CIOs and the senior executive team can accept complexity as an inevitable consequence of life in today’s global, technology-driven company. But like weeds in a garden, unchecked complexity will eventually choke an organization, make it difficult to get things done, drive up costs and constrain growth. As an alternative, CIOs can make complexity reduction an ongoing part of their strategy in a way that not only reduces costs, but also helps the rest of the enterprise thrive. 3

Ron Ashkenas is a managing partner at Robert H. Schaffer & Associates, a Stamford, Conn., management consulting firm, and the author of the book Simply Effective: How to Cut Through Complexity in Your Organization and Get Things Done (Harvard Business Press).