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The 4 Zones Model: A Playbook for the Performance Zone

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The CIO is not a “Device Santa Claus”

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My good friend and technology futurist, Thornton May, clearly defined the CIO’s role when he said “…the role of the CIO is not to be a ‘Device Santa Claus’ but, rather, to craft an environment which empowers executives to create competitive advantage vis-à-vis the innovative and informed use of information technology.”

A recent McKinsey & Company survey of business and IT leaders validated that when CIOs play an active role in shaping their company’s business strategy both IT’s and the company’s overall performance greatly improve. However, when business executives were asked how well IT supported key business activities like entering new markets and driving new revenues, only 35% agreed IT played that role in their company down from 57% in the same survey two years ago.

If actively engaging the CIO in helping to shape a company’s business strategy works so well, then why are so many companies not doing it? My answer is that they don’t have a “good decision-making governance process” that aligns future IT investment priorities with critical business outcomes.

The Performance Zone: Demonstrating the Business Value of IT

The 4 Zone Model I’ve developed ( link to earlier blog http://eepurl.com/blFb3T ) is designed to enable CIOs and their senior leadership teams to maximize the business value of IT across their organizations. IT’s charter for the Performance Zone in particular is to provide new user-centric tools, services and solutions e.g., social, mobile, cloud and data analytics that improve the competitive performance of each of the company’s lines of business.

To effectively demonstrate IT’s ability to directly contribute to generating new revenues and profits, CIOs and their leadership teams must actively engage their internal business partners and users. To activate this new process, I propose that they utilize the Collaborative IT Governance Model below.

The Collaborative IT Governance Model

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From my early work in this area, I have seen first-hand how effective this model is in breaking down hierarchical, silo-based decision-making processes and converting them into horizontal cross-enterprise decision-making processes. It enables all the key stakeholders to be aligned with and committed to a common course of action to deliver the desired business outcomes. It has also dramatically increased the speed to market and throughput of major IT developmental projects.

It’s An Outside-in Approach Not An Inside-out Approach

To effectively deploy the collaborative IT model, you need to start with a common understanding of what you want the ultimate user experience to deliver to customers, employees, supply chain partners and other key constituents.

Historically IT has started with the technology it has and added to it. This inside-out approach is fine if your goal is to modernize your Systems of Record and optimize the cost of maintaining them. However, if your goal is to provide “friction-free” customer engagements then you must take a very different approach.

This outside-in approach begins by getting all the key stakeholders to address three fundamental questions:

  1. What are the key moments of customer engagement that define the success of our business or company?
  2. Who or what system represents our company at this moment of engagement?
  3. How could we strategically intervene with a new system of engagement in order to make that moment of engagement more compelling and enduring?

Some companies I’ve worked with have used a “customer touch point” mapping exercise to identify all the different touch points and eliminated those that they felt added no value to the customer. They then looked for opportunities to enhance the value of critical touch points and finally they identified gaps where they could add new touch points.

In all cases, it has been gratifying to see that when these models and tools have been utilized they have successfully demonstrated the business value of IT in multiple business growth venues.

In my next blog, I will take a deeper dive into the Incubation Zone and talk about how you can deploy our Three Innovation Playbooks model to significantly increase the ROI on your portfolio of IT investments.

As always, I am interested in your comments, feedback and perspectives on the ideas put forth in this blog. Please e-mail them to me at pdmoore@woellc.com.

The Role of IT in Big Data & Analytics: Myths, Realities & Practicalities

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By: Peter D. Moore President Wild Oak Enterprises, LLC

There has long been a challenging relationship between IT and its key internal line of business partners and other key stakeholders. Everywhere you look today someone is trying to undermine the CIO and the role and value of corporate IT:

  • Shadow IT, technology purchases that bypass corporate IT, are growing at double digit levels.
  • Long standing adversarial relationships between IT and its internal business partners and users have furthered a “legacy mindset” that believes “IT takes too long, costs too much and never gives me what I really want.”
  • Lastly, many companies still see Corporate IT as only a cost center/support function rather than a direct contributor to driving new revenues and profits.

A recent study by IDC and the SAS Institute had shed new light on this issue through the lens of Big Data and Analytics and will be the focal point of a May 15th webcast http://go.sas.com/qgw6fr. The study states right up front that “success with Big Data requires enterprise-wide data coordination and cannot be performed by individual departments or shadow information technology.” It also highlights the continuing disconnect between IT and lines of business with regards to analytics. “While IT sees itself contributing to and guiding analytics strategy, LOB is more likely to see it as a roadblock.”

The core thesis of the study is supported by four key findings that debunk commonly-held analytics myths. What follows is a three part review of these findings with my POV added on the Practical side of the equation.

Myth #1:

IT controls all things data

Reality #1:

Analytics is finding a home, but not in IT

Practicality #1:

As a practical matter, companies must come to the realization that in the new era of digital interactions their customers and employees are now asserting their desire and role to control direct access to and utilization off data and data analytics. As such, both IT and the LOB’s need to see the value and benefit of letting go of a silo based control model and jointly support a cross enterprise access and utilization model.

At the core of the new digital business model is a company’s ability to leverage and deploy big data and data analytics as a driver of new revenues and profits. To do that successfully requires the full participation and collaboration of all the key stakeholders in the company working against mutually agreed upon business outcomes and deliverables. No one functional area or business unit can hope to have anywhere near the desired impact that this collaborative approach can deliver.

One of the major drivers of the new era of digital interactions is the demand by customers for “friction free” engagements. What consumers are looking for from companies is to be able to engage with them as easily as they engage with their family and friends using a variety of applications and tools:

Web has made searching for information friction free
Mobile has made access friction free
Cloud has made computing friction free
Big Data & Analytics are not yet friction free

Here are some examples of companies who are working to deliver friction free customer engagements:

Charles Schwab – Remote Deposit Capture
FedEx – Re-Route Your Package Delivery Location in Transit
Hyatt Hotels – Eliminate Lobby Check-In

Myth #2:

Technology poses the biggest challenge

Reality #2:

The greatest stumbling blocks are organizational mindset and culture


Practicality #2:

I agree completely with the IDC finding. The legacy mindset about IT that “it takes too long, it costs too much and it never gives me what I really want” is a major roadblock within most organizations. To overcome these stumbling blocks, IT and its business partners to a find a way to work together to align future technology investment priorities with critical business outcomes.

This process strongly relies on the cross enterprise distribution of data, information, knowledge and expertise in order to achieve that kind of outcome. It also must recognize and account for the fact that the customer now wants, in fact demands to be, more in control of how they engage with a company instead of the other way around.

Myth #3:

Everyone understands the value of analytics

Reality #3:

Businesses have trouble articulating the value of analytics


Practicality #3:

I think IDC’s finding is very true. If you look at the whole area of big data and data analytics and you talk to someone who is not a data scientist most of them do not have a clear understanding of what you are talking about. So we need to create a common vocabulary and set of terms and definitions that allows IT and LOB executives to have constructive dialogues about how best to leverage big data and data analytics for the competitive benefit of the entire enterprise. I think we have to make it easier for people who aren’t “experts” to be able to consume, discuss and utilize data in a way that’s very different than they have in the past.

Myth #4:

You can’t have analytics without IT

Reality #4:

IT is part of the problem, not the solution

Practicality #4:

As a practical matter, you can’t have analytics without IT because they are the keepers of the critical data that is stored by the company either on premise or in the cloud. That said, IT also has to let go of their old silo mentality where they wanted to control everything. They wanted to make it. They wanted to own it. They wanted to control access to and utilization of it. That is no longer possible.

As I said above, in order for companies to provide “friction-free” customer experiences, they need to enable them to have direct access to and utilization of data and information when they want it, where they want it and how they want it.

Going forward, I think IT has the opportunity and I would even say the responsibility to act as a catalyst to breakdown the old silo mentalities within their organizations and foster the utilization of a new collaborative, cross enterprise model to engage with their LOB executives and other key stakeholders.

The Evolution of Enterprise IT

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Why it’s Critical for Companies to Achieve “Technology Leadership Competency”

A Wide Gap between Expectation and Performance: Over the past two years, The Harvard Business Review and The Economist have been conducting primary research to better understand the changing role of the CIO and IT Department. Some of the key findings from their research suggest that there is a wide gap between the role IT currently plays today versus what it should play going forward.

  • Nearly half of CEOs feel IT should be a commodity service purchased as needed
  • Almost half of CEOs rate their CIOs negatively in terms of understanding the business and understanding how to apply IT in new ways to help the business grow
  • 57% of the executives expect their IT function to change significantly over the next 3 years, and 12% predict a “complete overhaul” of IT in their company
  • Only 25% of CEOs thought their CIO was performing above his or her peers

Unfortunately for many companies, the overhang of legacy thinking about IT has permeated the ranks of the C-Suite to a point where they have lost the ability to recognize the value of technology as a source of innovation and transformation that can deliver new revenue and profits for the business. Part of the responsibility for this current state of affairs rests with the CIO and IT Group who have willingly or unwillingly allowed themselves to be put into the cost center/support function pigeon hole. In these cases, the CIO does not report directly to the CEO but rather to the CFO or Head of Operations. As such, the primary focus is on how cost efficiently they can operate and maintain the company’s enterprise IT architecture and systems.

While optimizing the “run the business” IT expenses for a company is not a bad thing, taken to an extreme it can completely neutralize the ability of technology to “change the business” by directly contributing to creating new and compelling ways to engage with employees, customers, supply chain partners and other key stakeholders. These new terms of engagement are redefining the competitive boundaries of most industries and failing to stay abreast of them will result in a significant loss of market share and market influence.

Some Early Examples of Success: The good news is that there are some early examples of how forward thinking CEOs and CIOs are working together to build a “technology leadership competency” throughout their organizations.  Here are some of the actions these early adopters are taking:

  • First and foremost the CIO must report directly to the CEO and be a full participating member of the company’s senior leadership team
  • In some cases, companies have gone so far as to create a separate board level technology committee, just like an audit committee, whose sole focus is to monitor and help ensure the company is getting the highest return and value from its IT investments
  • CIOs are realizing that they must evolve IT from a “developer of services” to a “sourcer of services” and focus on the cost benefit tradeoffs between in house services versus outsourced services
  • CIOs with help from CHROs are reassessing their IT group’s organizational design; the core roles their IT leaders must play to drive major transformative initiatives and the new skills and capabilities they must possess to play those roles
    • At a high level, business oriented IT skills and service based roles are gaining increased importance over the build/deploy/support roles of the past
  • CIOs, CMOs and Business Unit Leaders are embracing a new model of “collaborative IT” where all the key stakeholders work together to align technology investment priorities with critical business goals and outcomes

Some Challenges to Overcome: While these early actions can be very helpful in defining a roadmap and go forward game plan, the HBR research shows the harsh reality that a good percentage of CIOs and their IT Departments are facing.

Based on some of my recent work, I have seen first-hand that the vast majority of current IT job descriptions are well past their sell by date. Traditionally IT professionals have been recruited for their technical skills not their leadership/relationship skills. As such, when they get into discussions about new business IT requirements, they don’t have the requisite sales skills to persuade the business partner that their recommendation is the best solution.

In other cases, IT professionals spend a disproportionate amount of their time and resources “putting out fires” and doing “work arounds” for individual businesses so they never get the chance to truly get out in front of a major change and develop an enterprise wide solution that creates sustainable value.

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Some Actions to Consider:

  • To create true “technology leadership competency” a company must be prepared to make an all-out commitment from top to bottom to move the IT function out of the engine room and up to the bridge where it can help chart the future direction of the enterprise. This means that the CEO and other members of the C-Suite must see the CIO as a full card carrying member of the senior leadership team.
  • They need to recognize and leverage technology as an essential component to successfully engaging their employees, customers and other key stakeholders in this new digitally empowered environment.
  • They must also realize that they need to do an overall assessment of the new skills and capabilities that senior IT professionals must have in order to be on an equal footing with their business partners and users.
  • The CIO and the IT Group should develop a new cohesive strategy that allows them to identify behaviors and actions they will stop doing e.g.: just being order takers along with new behaviors they will adopt e.g.: being catalysts that drive technology enabled innovation throughout the company.
  • The CIO should create a series of thought leadership forums e.g.: Webinars, Town Halls, Brown Bag Lunch Sessions where they can interact with key internal stakeholders and talk about the major transformative shifts going on in enterprise IT and where they will have the most impact on the performance of the different business units and key support functions.
  • The IT group should create and utilize a series of performance measurement tools including an internal IT Net Promoter Score metric to measure the group’s ability to meet or exceed its internal business user’s needs and expectations.

While this will be a challenging journey for many companies and their senior leadership teams, it will be a journey that defines the legacy of successful leaders versus leaders who fall short of meeting this challenge.

As always, I welcome your comments and feedback along with any suggested actions you think companies should take to achieve technology leadership competency.