CIOs: Leveraging Social Networking for your Enterprise, what’s your grade?

Sagar Anisingaraju, Chief Strategy Officer Saama Technologies Inc.

Many CIOs are venturing beyond the risk averse ‘sustaining operations’ mode to progressive engagement using social media. That is a good start, but more needs to be done. When it comes to evaluating and implementing a traditional system of record tools such as ERP, CRM, HRMS etc., CIOs have a fairly good handle on what works and what does not for their LOBs.  A certain level of maturity has been achieved in these traditional systems and CIO offices have learned to master the best fit implementations for LOBs. A+ for the CIOs on that count. It is the social media that will, however, redefine the next generation CIO-LOB conversations and grading of CIOs.

First and foremost, CIOs have to be socially active themselves. It is difficult to lead unless you are part of the ecosystem and understand what is going on around the world you live. If you are not ready to flex your muscles in the outside world yet, corporate social networks within your firewalls are a good start. Your employees may already be communicating on Jive, Yammer, Chatter and other social platforms today while you are busy managing the business of IT. It is important that you personally take active participation in these threads.

Secondly, understand the social ‘data’ relevance to your LOBs. After all, you are the keeper of the keys to the most important data assets of your business. Form teams of innovation within IT to actively understand the relevance of social media data on each of the business lines. Block your calendar to work with those creative teams and be engaged. Let me give some examples on where you can make an impact:

Marketing: This is the holy grail of social media relevance. If you are having lesser and lesser conversations with the CMO these days, it is no surprise. CMOs always want to romance with the customers with innovative ideas while you are saddled with risk-averse approach. Let your innovation team identify a subject area that will make the CMO take notice and conduct a social media data experiment. Integrate the social media feeds (Facebook, tweets, blogs etc.) with key marketing metrics. For example, what segments of your customer base are socially active? Who among them are influencers in the social world? Will giving them a discounted offering structure enable you better conversions of their followers? What is the statistical correlation between customer sentiment on the blogosphere and customer loyalty? How are competitors using social media data in their offerings? Do not wait for the CMO to give you a go ahead to these experiments. Be proactive. Debra Martucci, CIO of Synopsys says “‘it is critical that CIO’s are full partners with their marketing organizations around how the company is and plans to evolve in the space of Social Media to communicate to their customers, partners and  employees”. The CIO-CMO partnership is going to redefine the future business successes.

Sales: See how you can help your sales folks during quarter-end to focus on the most probable conversions. Your teams already have all the historical data from the CRM system that you are managing. Identify the patterns. Use NLP algorithms and correlate the emotional satisfaction of prospects from their social footprint. Build buyer propensity models and aid the sales process. Your VP of Sales will be your champion even if you offer a slight improvement in closures leveraging social data.

Human Resources: Your global HR head is always worried with employee satisfaction and its impact on retention. Let your team analyze the glassdoor and other internal social forums. Form few hypotheses on employee satisfaction, corporate communication and retention. Run experiments to verify them with your HR data and build a probability model. Your VP of HR will be very keen to incorporate those findings in their plans.

Chief Medical Officers: If you are running a large hospital or services organization, the challenges that your Medical Officer is facing from social media are completely different. They are grappled to answer questions such as; how was the quality of patient care? Are my physicians looking at the discussion notes that my nurses prepared with patients in time? How is this Big Data relevant to my ambulatory services and profitability? Let your teams be proactive in building models for one or two of these questions and discuss with the Medical Officer on how they can use the social data to their advantage.

Audit & Risk Officers: Your Internal Audit and Risk Officers have no easy ways to understand the impact of social media risks from both regulatory and non-regulatory perspectives. What is the ‘tone’ of conversations among employees, customers and partners on your corporate’s ethical values? Is there a chatter going on some systemic fraud in your product warranty returns or claims processing? The traditional GRC systems that your audit teams are busy implementing have not caught up with the social realities of today. The internal audit teams have neither the skills nor resources to understand this Big Data tsunami that might hit one day. You can show them the direction here.

Vendor Management Officers: Your VMOs are dealing with several vendors both onshore and offshore. Is the social media giving any additional insights into these vendors? For example; are there unethical manufacturing practices followed by any of them? Are there any hidden risks in using those vendors for your business? Focused search and analysis of social media can give you leading indicators about your critical partners. Provide these inputs in a systemic way to your vendor management teams and help them strategize better.

There are several other specific examples, but I am sure you understand both the gap and the opportunity. When you actively engage and show LOBs on how they can take advantage of social media with specific data driven experiments, you will start noticing results. Today, you may not have the skilled resources, such as data scientists to do these tasks. You need people with knowledge in sampling methodologies, working with large data sets, conducting experiments and correlating with business questions. You need advanced tools for performing these experiments. They need investments, yes! But unless you invest today and help create these systems of differentiation to your LOBs, they would be looking elsewhere for direction while you are keeping the lights on.

Once you decide on being proactive in helping your LOBs with social intelligence, the actual implementation is not that difficult. In all probability, you are already providing detailed scorecards to your business users about, uptime, service levels, infrastructure, service costs and other key IT metrics. Include LOB specific social intelligence insights as part of your arsenal.

Your social media relevance to the line of businesses may only be at a C+ today; but do not worry! Most of your contemporaries are at a D+ and it is still a level playing field for now.

Further Reading:

The CIO Diaries – An IT perspective on business transformation

Sagar Anisingaraju, Chief Strategy Officer Saama Technologies Inc.

Limitations of organic growth are forcing companies to look at innovative ways to improve market share and profitability. Business transformation strategies are evolving more rapidly than any time in the past. For any of these transformation plans, be it: M&A, new product introduction, geographical expansion and others to succeed, the CIO office needs to play a key role. Let us analyze some perspectives with which CIO could look at these strategies and proactively work with the business.

Risk Approach: How do we handle IT Risks from this new transformation strategy? Do we have a formal process to identify, assess, manage and plan for risk mitigation? What parts of the business strategy gets effected if these IT risks occur and what kind of risk tolerance business needs to account for?

Cost Approach:  After this transformation is put in place, what will be our IT Service cost structures? Will they significantly improve or decrease? Are we going to be in line with the industry benchmark? What will be the Bill of IT for each LOB after the transformation is put in place? Can I do predictive analytics and generate a future state of cost allocations?

Social Media Impact: What will be the influence of social media on our business? The company that we are acquiring has a totally different perception in the market place. What is the blogosphere telling about them and what concepts are being discussed among their Facebook pages?

Project Approach: What is the impact on our Innovation to Sustaining Operations ratios? Does the new strategy bring an imbalance to our time tested IT Strategy on the way we execute our business?

Business Value: What will be true business value that IT can generate to each LOB after the new business transformation is put in place? Is it better than before?

Prescriptive Outcomes: Can I generate constraint summaries and optimized IT Service options under the new transformation? What will be the prescriptive outcomes from an IT perspective to justify the new business strategy?

Once the CIO office is equipped to provide meaningful information on each of the above, CIO will be in the forefront of innovating business transformations than merely implementing them.

Further Reading:

The CIO Diaries

cio finalSagar Anisingaraju, Chief Strategy Officer Saama Technologies Inc.

CIO — “I am managing ten applications, eighty five virtual machines, four networks, twenty five IT projects and three data centers. Why can’t the CFO understand what we are doing for the company?”

CFO — “Every conversation from these IT guys is around allocation of more IT budgets.

Where is all the IT-spend going? What is the impact if we change the capex allocation for next year?

CIO — “I am managing ten virtual machines and allocated twenty five IT resources to support the sales function. The Sales GM should have a happy face in our briefing today..”

VP Sales — “Our IT seems to be extremely busy but only reasonably successful in providing value to us. My field sales still can’t get their quotes online at the right time when customers need it. Need to bring this up today.”

The CIO has been a fixture in the corporate office for nearly three decades, yet the gulf between this discipline and the Lines of Business seems to be getting wider. In fact, the more IT spends, the less seems to be the understanding with other departments. A few forward looking organizations are able to leverage IT as a strategic value differentiator, but a clear majority continues to relegate it to the odd position of high-priced commodity.

CIOs need to take proactive steps in bridging this gap. Collaborative and forward looking analytics is one way to go. Simple business value framework can be built as a starting point to broker and collaborate a conversation. Key performance indicators that matter to the GMs should be demonstrated as outcomes of managing complex elements such as virtual machines, networks and IT projects. The GMs should be given an opportunity to challenge and change IT scenarios and visualize potential impact to their business. IT Innovation vs Sustaining operations should be made visible in an intuitive way that the LOB understands.

Compared to the complex applications that IT is managing today ranging from Big Data to cloud to mobility, the collaborative analytics approach pales in comparison. The data is all available in internal systems. If only the CIO cares to look into it and invest in running IT as business!

References:

1)      Whether IT matters or not, we need to measure its value to business!

2)      CIO Analytics: An intutive approach to run the business of IT

A phased approach for business value planning of IT Services – Part2

Sagar Anisingaraju, Chief Strategy Officer Saama Technologies Inc.

In the last post, we have discussed the first two of five phases in business value computation of IT Services. To recap, the five phases are:

  • Phase-I: Business-IT Alignment
  • Phase-II: IT Service Impact Planning
  • Phase-III: Planning the Effectiveness & Availability of IT Services
  • Phase-IV: Measuring the Value of IT
  • Phase-V: Outcomes

Let us see the specifics on Phases III to V below.

Phase-III: Planning the Effectiveness & Availability of IT Services

In this phase, business and IT service owners sit together to review and plan on improving the IT Services for enhanced business value. Both teams come prepared with data points on current effectiveness and availability values of each service offering. For matured organizations using ITIL (V3) approach and automated Service Request Planning, the federated CMDB infrastructure provides these data points. Past SLAs, unit costs of service, consumption metrics, benchmark service costs, CSAT scores, current perceived business value are some of the attributes that form the basis for finalizing how effective the specific IT service should be for the planned period and what should it be its availability. A standardized 0 to 10 scale is recommended for all services so that the business value can be rationalized. IT should be prepared to show the unit cost and projected budgets for implementing the revised values. Impact of these revisions on ongoing projects, staff, assets needs to be understood along with the rationale for these changes in the context of IT Risks.

Completion of this phase gives base line service level expectations for the IT Service owners. The business owners will get a clear view of what to expect and the projected IT Service Bill for the agreed services. Benchmark comparisons with best in class and comparative companies are made and a finance and service plan is clearly defined leading the way to a consistent and rational way to measure the IT value on business.

Phase-IV: Measuring the Value of IT

Once the process outlined from Phase-I to Phase-III is complete, the measurement process is purely empirical. One or more metrics can be defined and the dependencies can be tuned to arrive at a measurement framework for business value. A simple linear business value computation is shown below.

Let us take an example of Sales LOB in a consumer products organization. In this example, the Sales LOB manages direct and indirect sales and bulk of its revenues comes from online and mobile platforms. The Sales LOB uses four IT Services for its service delivery: Network Operations, Mobile Delivery and BI Reporting. Let us call these IT Services: ITS1, ITS2, & ITS3. The business value of each of these IT Services for Sales LOB are then defined as:

Business Value of IT = (ITS1_EFF + ITS1_AVL) * ITS1_IMP

Where ITS_IMP is the impact of the given IT Service for the LOB, ITS_EFF is the effectiveness of the provisioned IT Service and ITS_AVL is the availability of the IT Service for the LOB.

Phase-V: Outcome

In the outcome phase, prescriptive reports on business value of IT Services for each line of business function are generated along with predictive cost of service.  For a given business unit, both IT and Business owners will be able to verify the variances of plan vs actual of each IT Service and can perform fine tuning as needed. In matured organizations, these outcome reports are integrated to internal Service Request Management, CSAT Surveys, Service Costing, Strategy Planning and other systems.

A phased approach for business value planning of IT Services – Part1

Sagar Anisingaraju, Chief Strategy Officer Saama Technologies Inc.

Business value planning of IT Services can be conducted in a phased approach. Depending on the organizational culture and IT maturity, the time for each phase may vary but the activities under each phase are more or less the same. We can broadly classify the planning into five phases.

  • Phase-I: Business-IT Alignment
  • Phase-II: IT Service Impact Planning
  • Phase-III: Planning the Effectiveness & Availability of IT Services
  • Phase-IV: Measuring the Value of IT
  • Phase-V: Outcomes

Let us see what can be accomplished in each phase.

Phase-I: Business-IT Alignment Phase

This is a basic handshake phase where each business service owner of a business unit agrees with the IT organization on what IT services are being utilized and planned for the business service. Based on historical organizational data, a preliminary mapping can be arrived at quickly. At the end of this phase a formal understanding of the dependencies of each business service on the IT services will be completed. This formalism will be the basis later for arriving at costing, budgets, asset procurements, projects, SLAs and CSATs.

Phase-II: IT Service Impact Planning

In this phase, business service owners and IT Service owners agree on what impact the specific IT Service has on the Business Service. Historical organizational data and intuition are the initial reference points to create the impact values. The impact values may be categorized into three values: HIGH, MEDIUM, LOW.  This phase is a contentious phase as both business and IT organizations may have a completely different view of impact. An as-is impact scenario and planned scenario may be a desirable way to get an agreement in this phase. The IT organizations have to ‘sell’ the value of each IT Service to the business from a variety of perspectives including unit cost, benchmark costs and value impact.

At the end of this phase, both IT and Business organizations will have a clear understanding of inter dependencies and impact values so that business value can be systematically measured and planned at a later stage.

I will explain the remaining phases in the next post.

Measuring IT Services for success: A LOB-CIO conversation

Sagar Anisingaraju, Chief Strategy Officer Saama Technologies Inc.

In the earlier posts I explained how three attributes namely: Impact, Effectiveness and Availability can be used to measure the value of each IT Service for a given Line of Business (LOB). Easy as it might sound, the devil is however in the detail. In real world, for each LOB the unit of measure to perceive the value of IT Service is completely different. For example in a product centric organization the Engineering division looks at IT Services as enablers to help them in timely release management of products. For Sales LOB, IT Services are enablers of sales whether it is online or offline. For the Finance team, IT Services may be all about timely management of quarterly reports and numbers.

So in our business value of IT measurement model, we will have to introduce the concept of Unit of Measure (UoM). The UoM will be different for each LOB. Based on historical nature of business and types of products and services being offered, the IT teams can prepare a set of UoMs for each business function and compute the business value in those units.

The business value computation of each IT Service using the UoMs will be iterative and I don’t expect that we will be able to get it right the first time. IT and LOB may not have the same level of understanding on the direct value of IT in the units discussed. How many CIOs can empirically say that due to my IT Services 1 & 3, the Sales team achieved 5% more sales this quarter? The UoM based value computation takes us closer to that goal. The attribute values of Impact, Effectiveness and Availability will be better understood once the CIO is able to discuss the value of IT Services in the units that directly affect the LOBs.

Visualization helps. Once the framework is established, it is easy to build a simple what-if based dashboard pre-populated with data and levers. For each LOB, the levers will be same (Impact, Effectiveness & Availability) but the resultant outputs will be business value of each IT Service in the unit of measures that business understands. This visualization will lay a foundation for a measureable and meaningful LOB-CIO conversation to plan IT Services.

Modeling IT Services for business value measurement

Sagar Anisingaraju, Chief Strategy Officer Saama Technologies Inc.

In the earlier article, I explained that whether IT is considered as a strategic differentiator or a commodity, organizations need to come up with a consistent framework to measure its value to business on an ongoing basis.

One way to come up with a measureable framework is to think of business and IT organizations as a set of service providers to their respective constituents. The line of business units (LOBs) provides a set of business services to customers and internal IT organizations commits to providing a set of IT Services to these LOBs. Once we have this high level IT Service delivery based organizational model in place, it is a matter of arriving at proper attributes of measurement.

For each IT Service, we can define three key attributes: Impact, Availability and Effectiveness. Depending on the organizational maturity and IT automation, we can compute the numerical values for each of these three attributes for every IT Service that is being provisioned to a given LOB. The business value of an IT Service can then be numerically defined as a weighted average of these three attribute values.

Let us take an example of Sales LOB in a consumer products organization. In this example, the Sales LOB manages direct and indirect sales and bulk of its revenues comes from online and mobile platforms. The Sales LOB uses four IT Services for its service delivery: Network Operations, Mobile Delivery and BI Reporting. Let us call these IT Services: ITS1, ITS2, & ITS3. The business value of each of these IT Services for Sales LOB are then defined as:

Business Value of IT = (ITS1_EFF + ITS1_AVL) * ITS1_IMP

Where ITS_IMP is the impact of the given IT Service for the LOB, ITS_EFF is the effectiveness of the provisioned IT Service and ITS_AVL is the availability of the IT Service for the LOB.

Once the numerical values for the Business Value are computed, we can represent them in an easy to understand visualization dashboard. The power of this model is that the LOB owners can visually understand the business value of IT Services that they are using and can have a meaningful discussion with the CIO office to improve the effectiveness of these IT Services. The CIO office can articulate its Services and set a stage for proper IT Service Planning exercise for each LOB.

We have seen how a simple measurement framework can be defined for IT Services planning and delivery. Three key attributes names, Impact, Effectiveness and Availability are the basis for our measurement framework. We can look at how these attributes are calculated in different types of organizations in subsequent posts.

Whether IT matters or not, we need to measure its value to business!

Sagar Anisingaraju, Chief Strategy Officer Saama Technologies Inc.

About eight years have gone by since Nicholas Carr famously argued that “IT Doesn’t Matter”, in his often quoted article in Harvard Business Review. Countless rebuttals and affirmations have since been posted all over the cyberspace. Whether IT is a mere commodity or a strategic value to business, what cannot be escaped is a need to empirically measure it.

If IT is indeed a commodity like electricity and water, the CIO office has to generate and send a monthly utility bill to business. If IT is a strategic differentiator, then the CIO office has to give empirical business value measures and ensure that the value differentiation of IT is sustained for business growth. In either of these scenarios, it is imperative for the CIO to provide a structured way to measure the business value of IT on an ongoing basis.

A service oriented approach of IT offerings gives us a measurable framework. In this approach, CIO office commits  to provide a set of IT Services. Each IT Service provides value to multiple business functions with SLAs. For example, an IT Service called ‘Email Management’, may provide all the required email management services to the business functions. Where IT is perceived as a commodity, the utilization of IT services under each business function is tracked and a user bill is generated each month like an electricity bill. If the CIO is up for a challenge, along with the IT bill a benchmark comparison can be provided so that business knows if they are paying more or less for that service.

In organizations where IT is considered strategic and not a mere commodity, the same service oriented approach works but the measurement framework is more involved. We need to define a set of parameters for each IT Service and come up with a standardized measurement approach. I will discuss them with some examples in my next article.

In conclusion, whether IT is a commodity or strategic differentiator, we have to come up with a consistent measurement framework and map its value to business. IT Services based organization structure gives us a means to arrive at such a framework and it is immaterial whether Nicholas Carr is right or wrong.

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