The CIO's innovation dilemma

The CIO's innovation dilemma

Summary: The often uncomfortable relationship between IT and business is nothing new but has taken on fresh piquancy. The visibility achieved by the impact coming from the use of socialprise I have seen among major brands fuels that debate.


The often uncomfortable relationship between IT and business is nothing new but has taken on fresh piquancy. The visibility achieved by the impact coming from the use of socialprise I have seen among major brands fuels that debate.

There is a history here and I sense that Mike Krigsman's 'IT extinction' post was designed to take a specific view that reflects long term user frustration at what they see as an often intransigent and power crazed organization. As with all such positions, it reflects a partial reality. It is easy to understand how IT managers or those that routinely engage with IT decision makers might be concerned at Mike's position. My colleague Vinnie Mirchandani had this to say:

I am amazed how arrogant the category of social software really is. Why does it feel the need to boil the ocean, change the enterprise? It has its role particularly in collaboration - but along side not instead of CRM, SCM, ERP, security, telecom and a bunch of other software categories. It needs to do its job well, not worry about the rest of the enterprise. When it hones its focus and shows appropriate payback, it will find the CIO or IT is not the enemy. Just a bunch of folks trying to juggle a wide range of competing technology initiatives.

Vinnie then goes on to talk about the shift in reporting responsibility away from the CFO towards the CEO in companies he advises. In our Google Group, he made the point that over the last years, IT has made great strides in reducing cost through activities like outsourcing. Despite the negative attention towards IT, I regard these as highly positive moves.

After the over selling (and buying) around Y2K, CEOs needed to bring IT spend under control, hence the role of the CFO. Now it seems, that spend has been exhausted or at least reduced to the point where it no longer matters. The net effect on IT budgets means innovation is genuinely hard for the CIO yet demands remain.

Michael Stonebraker, the man behind Ingres and co-founder of Vertica recently said to me that: "In data warehouse operations, DBAs are under the gun. They're overwhelmed with user requests or demand but don't have the right tools for delivering solutions." The specific context for that discussion is for another post but the point is well made. He is describing a typical IT pain point where socialprise or new innovations can come to the rescue. So what about the place of IT in all of this?

Let's not forget that IT has had the soulless task of bringing together many many disparate systems and it is therefore hardly surprising they want control over new things coming in the door. In the meantime, socialprise vendors work their way around IT with aggressive pricing and friendly interfaces that pass the 'my mum could use this' test. On-demand models save users the problem of installing and maintaining solutions while the seductive lure of ducking out from beneath the tyranny of the email inbox resonates with users in many departments. There comes a point though where IT has to be involved.

In a recent interview, Ross Mayfield, president of SocialText and another Irregular noted:

Five years ago, we didn't deal with IT at all. But now we end up working with IT because it's an inevitability. We have things like an admin dashboard that we developed for IT, but pretty much every other feature beyond that is flat and accessible by every single other user. And that's purposeful, because otherwise what you end up doing is creating tools of control, and tools of control creates a barrier to collaboration. If you want to accomplish very big things with technology, it's not just IT; it's line of business management engaging the base of stakeholders and champions.

Ross's argument is based upon the assumption that many of today's internal business problems center around two things: exception handling and collaboration, both of which are inherently human activities. He gives the example of wiki being used to assist call centers in problem solving.

Wiki is possibly one of the easiest socially oriented solutions to sell into enterprises because the shared benefits are strikingly easy to see. It is when you start combining the emergent technologies of wiki, blog, IM, interactive multi-media and RSS where things get muddied. These evolving products play directly towards the integrated consumerization of technology and the consumers that many businesses are trying to satisfy. Business has finally realized that the transaction based approach to service as epitomized by ERP and 1990's CRM doesn't work. In contrast, the new breed of software holds enormous promise, is delivering value and is satisfying the board level imperative of improving effectiveness, not just efficiency. It's an entirely different mindset that puts the order to cash transaction into background and brings service into sharp relief. This is an alien world for many folk in IT who have been conditioned to build control over repeatable, automated processes based on architectures that were never designed to support the ad hoc, infinitely variable nature of problem solving at the interface between one person and another. I think this lies at the heart of the dilemma faced by many IT organizations and not, as Mike largely suggests, a combination of turf defending attitudes, understandable though they may be. Put another way and to quote from Ed Yourdon in an earlier Project Failures post:

Because IT is clearly so critical to the day to day operation of almost any large organization, IT has to serve as somewhat of a gatekeeper guarding the crown jewels, so to speak, so that they don’t get damaged or hacked into, either by insiders or outsiders. That has become a more pervasive and annoying responsibility.

Part of the alignment problem we see when users get excited about new technologies is the notion that IT is preventing the users from getting their hands on these technologies themselves. That sets up a bunch of conflicts.

What we're seeing is the wholly human problem of an organization that has been variously called upon to deliver 'value' from an evolving IT landscape that once placed emphasis on control but which now demands productive innovation. Both demand very different ways of working, require different disciplines and absolutely require change.

Change is one of the hardest things that humans have to address as this 2007 article by Joaquim P. Menzies for Candid CIO amply illustrates:

Bottom line: those spearheading change projects in organizations – and CIOs are increasingly finding themselves in this category – are in effect treading a very difficult middle ground between sensitivity and decisiveness; between attempting to get grass roots buy in for a change from all stakeholders – and then forging ahead even in the midst of resistance (and handling this resistance firmly and creatively).

Keeping to this middle ground is getting very difficult today. With many large business all sorts of external and internal pressures are forcing them to introduce change very quickly – usually with less than heartening results.

Last year [2006], in an IBM survey of 765 CEOs, more than 80 per cent admitted their organizations haven’t been very successful at managing change in the past.

Menzies argument centers on the negative impact of trying to do things too quickly, something I see reflected in the urgency of those pounding the socialprise drum. Right now there is a sense that if 'we' don't change and do it right now, then we're going to be eliminated from the competitive landscape. Fortunately, business leaders and IT are not that easily persuaded.

In closing, I'm reminded of the words used by 'Captain' in Cool Hand Luke to express the problem of Luke's rebelliousness: "What we have here is a failure to communicate." If socialprise wishes to become a leading category for IT spend then perhaps it needs to drink some of its own Kool-Aid. It can draw from Ross and others' experience as one of the legs upon which IT can be brought to the party. Then maybe we'll start to see the breaking down of the siloes that allow enterprise to effectively address the tough problems that innovation seeks to solve.

Topic: CXO

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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  • Holistic approach vs Google or Microsoft

    Great stuff, Dennis.

    A lot of companies treat the enterprise like medical specialists. They love the kidney and that's all they worry about. Google is explicit that they want to work around IT. And Microsoft clearly focuses 100% on IT at the exclusion of business users.

    The reality is that everyone has a role and companies who recognize this and build for it can achieve a lot of success. Every one of our customers has a wide cast. Quarterbacking is the business/exec department. IT is an important platform enabler. HR is a key role for proficiency and cultural challenges. And so on.

    It's easy to throw IT or HR under the bus. But as it applies to "the Socialprize" they can have a seat at the big table and not be marginalized or at odds with the business. That's what we see everyday.
  • Innovation will only come

    from those that really care about computing AND their employers at the same time. The previous moves towards minimal IT salaries played into Microsoft's hands, not the businesses.

    We're now seeing a sea-change, where a lot of smaller salaries will be reused instead to pay for more highly skilled people, and things will be more development centric, not support and upgrade centric.

    With a little bit more insight, these CFO's will learn how they can have fewer IT staff producing far more benefit to the company.

    Hint #1 - It won't come from people who are only capable of learning Microsoft products. (Think how much that will save in itself).
    • ...and not just Microsoft

      Thank also about the other large incumbent players. Curiously, I think ORCL has a lot to lose here but that's for another day.
  • It's not about "crown jewels" or change...

    Most time and energy in Enterprise IT departments is spent supporting legacy systems. It's the hodge-podge of disparate systems that drags down efficiency. Ironically, it's the very "get it done" attitude (rather than "get it done right") and the driving for arbitrary timelines that forces IT to make decisions that are good in the short term, but extremely poor in the long term.

    In order to come in on time and under budget, IT is often forced to implement solutions that work right now, but put the group in a terrible position, both for support and growth. Too often new systems add to complexity instead of removing it - the exact opposite of scalability.

    IT budgets shrink because the group is seen as wasting money, efficiency goes through the floor, CEOs and CFOs get angry and start talking about outsourcing. Users get frustrated and find ways to get their work done despite IT.

    To stay in the game, in most cases, CIOs have to *stop* focusing on alignment, and start focusing on efficiency. Pare down the services IT provides and do them really well. Push hard to get rid of old crap that doesn't play well with the rest of the systems. Get rid of dead weight in the staff.

    Only after an IT department has become extremely efficient should it begin to align with "the business" and then on very specific terms. This may not mean "total control" any more these days. However, if IT consistently delivers on its own terms, proper expectations are met, and cycle reverses.

    Splitting IT into two groups just becomes a management nightmare. As easily as it is to draw clean lines of responsibility on an org chart, there is seldom any such thing in reality. If you have IT group 1 and IT group 2, you can be sure that wherever the twain shall meet, you'll wind up with pissing contests, finger pointing, CYA e-mail chains, frustrated users and angry people in the C-suite.