Why Today's CIO Must Foster IT Agility
Dell CIO Robin Johnson explains how a company's lack of agility, the inability of its IT infrastructure to quickly incorporate a new business process that would give it a competitive edge, can be costly. Johnson explains why the price of this lack of agility, what he refers to as the agility tax, is too high to pay.
Wed, November 02, 2011
CIO — The job of the CIO is not what it used to be. No longer are well-run data centers and solid uptime metrics the measures of success — now CIOs run the business process and technology is the tool. The metric a company should use to measure the performance of its CIO these days is agility, and companies that don't—or that limit the ability of their CIOs to maximize agility—will struggle to compete in today's market.
Here's what I mean by agility. A few years ago Dell wanted to add a new payment type to the list of options on Dell.com. Not a major request, right? Just another button on the site. But it wasn't only the matter of adding a button. Dell's business at that time was organized geographically, with different systems in every region for the same business process. Thus adding a payment type was a layered, complex change that required synchronizing seven order-entry systems globally with five order-management platforms, then tying them into multiple regional Dell.com sites as well as the back-end financial system — and roughly 10 different customer databases.
In short, this "simple request" would take almost a year to implement.
What would be lost in that year? What is lost today every time your company's IT infrastructure can't quickly incorporate a new business process that would give you a competitive edge? That's what a lack of agility can cost you. I call it the agility tax.
It's been years since we received that request, but that scenario is still unfolding at companies everywhere. Let's say you want to roll out a new kind of product that your business has never sold before, and it needs to be sold online as a subscription. You'll first have to modify your billing systems to process subscription payments, then work the interface from the subscription payment system into your customer database. Your financial systems will need tweaking to recognize recurring revenue, and you'll require a manual order-entry process for phone orders.
Last but not least, you have to add some additional parameters to your Website because this new product is configurable. Now multiply all that by two or five or nine, because that's how many Websites you operate in the U.S. Why do you have so many? Because your company grew organically. Each time you added a new region or acquired a company, you added another site on a new server cluster in a new data center.