How do CIOs think about IT transformation?

IT transformation has many definitions. For this reason, I wanted to hear from the regulars at my weekly #CIOChat session. Interestingly, CIOs see IT transformation as having more to do with enabling digital transformation than enabling IT transformation.

Are there things IT needs to do to respond better to operating businesses?

CIOs had many answers to this question. Some said that IT transformation should be about increasing agility, the openness to innovative ideas, the engagement with the business, and the identifying of tech debt and mitigation for it. CIOs say, for this reason, that IT should be undergoing its own business analysis to determine where IT capabilities are and where they need to be to support everything the business needs to get done.

One CIO suggested that it’s hard to believe that the IT profession has been around for 60 years. There are many old ways of doing things that need updating in IT organizations. And honestly, many IT professionals are like their business units resistant to change. Some foundational capabilities for IT are critical, but even those should be tied more directly to the business mission and goals. CIOs suggest that the IT Strategic Plan needs to outline these capabilities. They see an opportunity to help the business get their head out of whatever they are doing and get onto planning the future.

IT, at the same time, should be leading in innovation and enabling new ways to do business. It’s difficult for the business to drive this alone in the digital era. Innovation today is seen by CIOs as increasingly a partnership.

Clearly, just responding to the business doesn’t work especially when:

1. IT and the business aren’t integrated/aligned
2. IT isn’t pro-actively innovating to stay ahead of industry change
3. IT is just enabling (providing tools), but not educating business leaders how those tools can be used

It is extremely important that IT resources are aligned with business priorities. It is, also, important to build a foundation on which new business ideas can be deployed quickly. This means having an innovation discussion. CIOs suggest if the business is moving faster than IT, you get shadow IT with its cybersecurity risks and stranded data. Clearly, even with these downsides, shadow IT is seen by CIOs as a good thing. Security is a concern but adding subject matter expertise to central IT can add business value. To lead versus being led, CIOs need to know the business models of their organization. They need to see where technology is contributing and causing friction. These are areas worthy of eradication. CIOs need to seek digital solutions that enhance corporate business models, delight customers, and grow business revenue.

Should IT transformation shift resources from legacy system maintenance to higher value business innovations?

Innovation always requires a foundation from which to launch. You can’t redirect resources from infrastructure to innovation without the supporting analysis. Otherwise, you risk your infrastructure. Innovation in many cases may require new business investment.

Clearly, IT management shouldn’t be just about moving a fixed sum of dollars from one pocket to another. I personally lived this at HP Software under Mark Hurd. He stressed that all investment came from killing or starving existing product line. CIOs have learned this lesson and say you have to maintain bread and butter systems at the same time as you innovate. CIOs say that the business should find a way to fund investments that pay off tech debt unless they’re deliberately milking a cash cow business.

CIOs, however, must make the business case for investing in new systems to cut longer term costs and risks with others. They then show that value of making progress at each. Most organizations don’t have the luxury of starting over from scratch. That being said legacy systems inform much of what can be replaced or renewed.

It is important that IT not innovate in a vacuum. CIOs are typically aware of the need to replace aging systems with newer more capable systems. In the words of Peter Drucker, “if you want something new, you have to stop doing something old.” At the same time, IT shouldn’t move training dollars from older technology systems to newer technology and new technology training. CIOs believe that IT organizations need to find a way to replace old technology gracefully.

Legacy systems may do their job, quietly, cheaply, and with a minimum of human intervention. Why should you ever mess with that? You should when there is the opportunity to take real cost out. Clearly, it is valid to ask when, how, and how fast. Everyone wants to do this. It is important to start small and get some quick wins.

Should IT transformation as a goal increase the speed of internally developed applications?

One CIO said with this question, it damn well better be! IT transformation in this CIOs opinion should increase the rate of implementing change. It should, also, inform what, if any, incidents or issues exist so that remediation happens quicker. What really matters today, say CIOs, is speed in terms of market/deployment. This includes actual application performance.

CIOs suggest that doing agile right means constantly improving applications in ways that are more helpful than disruptive. But it takes time to get the business ready for releases that involve significant business change. CIOs believe that increasing the speed of product delivery with data and process integration is where transformation is occurring.

Clearly, IT budgets in many organizations are shrinking. Meanwhile, the death by a thousand cloud services is coming. CIOs ask for this reason what are the lead measures that can be committed to in digital transformation processes? Do they involve the following?

• Adopting and adapting frameworks
• Aligning or integrating
• Re-factoring with an eye toward rapid scaling

Any organization that is not constantly increasing velocity and value is falling behind, whether related it be for things purchased or internally developed technology.

Investments as a goal should aim to increase IT’s time-to-value. Whatever solution selected needs to best fit business requirements – internal applications, cloud/SaaS migration, or citizen developers with low code/no code tools. IT organizations today clearly shouldn’t only build applications.  For smaller places, it would be unsustainable except for trivial coding efforts.  

What should be on the CIOs list for IT transformation projects?

CIOs suggested interestingly cultural change is needed before technology change. Under this mantra, there is always a need for IT transformation. CIOs believe like any proper digital transformation, you start with culture, products, markets, and increasingly customer experience/employee experience. CIOs must formulate and communicate a vision for the future IT. Tools will come and go, but agility, architecture, alignment, and capabilities will pay dividends forever.

Prioritization and focus should be on what will drive the most value. IT having knowledge of their organization’s business models should be on the list. Other things that should be on the list include aligning IT governance with corporate governance and quality initiatives. For these reasons, CIOs believe transformation initiatives need to be aligned across the entire business. And this includes aligning enterprise architecture with these initiatives collectively.

All of this leads to a better environment for transformation projects across the board. Additionally, CIOs stress the need to create learning organizations with TQM, Lean Six Sigma, and COBIT 5. You should start with tech debt issues, paying a lot more attention to delivery time.  Without adequate funding, there’s a risk of implementing a time-reduction strategy that gets you to where everyone was 5 years ago, but not to where they will be 5 years from now.

Deep review of new directions to address tech debt, using the cloud where it makes financial and innovative sense, and maintaining a stable infrastructure throughout all the change. If you subscribe to Senge’s 5 disciplines, say CIOs, systems have a way of pushing back. This means you must deal with tech debt and work to replace bad habits with good ones.

Should IT transformation consider fixing the mess of integration?

CIOs say that IT leaders need to understand the messes and prioritize the eradication of them. Messes are barrier conditions. Good CIOs for this reason focus on identifying and removing barriers that have become impediments. Streamlined, simple architecture leveraging APIs and microservices with a SOA philosophy–this is key to creating an adaptable infrastructure of applications that can keep up with the business and be governable and maintainable. Your goal should be no more point-to-point integrations.

For some, their role will be coordinating the contracts between vendors providing and integrating their solutions. Here, you must also consider capacity and capability of IT to fix messes while delivering IT transformation. Talent matters a lot here.

The problem is the mess can prevent transformation expected by business customers. Most of the tech debt issues occurred because we did “bad” things because of how they were done and “good” things because of their business outcomes.  Continuous re-factoring for granularity, scalability, and API use (creation/documentation) can address many issues.

The mess of integration is more severe than it has been. In the old days, IT organizations could toss things back and forth with SQL. Or use a structured enterprise bus technology. Now it is a greater mess in that APIs are limited, slow, and inconsistently designed. It makes sense, for this reason, to review all value streams and processes and improve on a regular basis the velocity and value delivery. More often than not processes “of a certain age” are ineffective. A continuous process improvement capability is a critical success factor.

CIOs insist that the definition of architecture transcends applications. It’s the slowly-varying picture of what the business should achieve its long-term objectives. Business and IT should have things modeled (formal or informal) before a specific application design is discussed. One CIO suggested here if you desire to be a “fluid” enterprise, you should have a streamline integration architecture by putting in place an iPaaS. CIOs, in fact, insist that integration is a key foundation to transformation programs. Organizational leaders, say CIOs, need to break organizational silos, share data, and connect experts into collaborative practices. And of course, this has big implications for cybersecurity, privacy, and information governance.

Parting remarks

CIOs want to do many things in IT transformation. This includes fixing how integration is done and jettisoning existing tech debt. CIOs, also, attach importance to helping to drive real business innovation. So, as it should be, IT transformation should always be done with the business in mind.