Dreamforce 2008 Postmortem: The End Of IT As We Know It, Part III
Posted By Larry Dyson, Director of Services, November 21st, 2008
Dreamforce 2008 was great. It wasthe largest expo I have seen at the event and the salesforce.com organizers really out-did themselves. Thanks to Salesforce for a great event!
So far we've talked about what is happening to IT departments all over the world and why it's happening. This time let's look at this challenge from a budgeting perspective. Also, I’ll share some tips for those IT members who see your department declining on how to save yourselves and your department.
Aside from IT people and failing processes not changing with the needs of the business, there is a deeper issue that is affecting the success of technology in the corporate space. There are two questions organizations should ponder.
Where does IT really belong in the company?
So many times, I've seen where the IT department reports up through some part of the company that doesn't generate revenue for the company. They perform vital business functions for the company like creating widgets or reporting financials to the street but don't generate revenue. Because of this, IT is constantly operated under a cost containment model.
To be clear, I don’t believe that all IT departments have become so lethargic and so inflexible that they have outlived their usefulness.
In many cases, the issue is not whether IT is a good corporate citizen (attentive, cost conscience and communicates early and often). That’s great IT as far as I’m concerned - but it’s still operating under a cost containment model. Its goal to stay under annual budgets, fix PCs, keep the network operating and basically staying the course don’t jive with the needs of a growing business.
If you've ever spent much time around a sales or marketing department, you know that needs change by the minute. Departments are required to do a 180 and move in a new direction. This is the speed at which technology needs to move in order to be agile enough to truly serve a company. And this is where IT has performed so miserably.
For example, I worked for a top wireless company for 6 years. In this company, the marketing department had their own IT department. This was because the CIO and the 300+ person IT organization couldn't get new ads on the web sites and new functionality to the users on the web-enabled phones fast enough. In other words, the innovation that was really needed, the big IT department couldn't provide.
It's very simple. How can Joe the IT guy be motivated to work all night to get that new web content up for marketing when the criteria that Joe is evaluated on at the end of the year has nothing to do with marketing goals? In the revenue generating parts of companies the message is "move fast, if you make mistakes, re-group and move fast in another direction". In IT the message is "Perfectly plan it all out in the beginning, make everything very structured, if you missed something or make a mistake, you're faulted for it and there is rarely any celebration of success when it's over". Could these two environments be any further apart? So, what we are talking about is focus, value and relevance. A split is needed between traditional IT responsibilities and business technology.
If you are an IT project manager, how often have you found yourself presenting a budget for a project that will benefit marketing because it is web site related or HR because it is HRIS related, etc? Why isn’t that department head making the case for his/her department’s need for innovation? Because IT is supposed to have the budget for software and technology projects, right? But isn’t this funding misplaced? For example, it seems to me that the only way to ensure a successful outcome of a Sales technology project would be to have Sales drive the project with their funding and people. This would accomplish several critical goals of a successful business technology project that is usually overlooked.
Executive sponsorship would be ensured because of the budget investment by the department. And more than likely this Sales project would be attached to Sales business goals for the year which would hold everyone’s attention. Then, champions of the new Sales solution would be chosen and they would be the early adopters that would provide user feedback throughout the lifecycle of implementing and using the solution. The result: user owned applications where the user is actually invested in the success of the solution they use to do their jobs every day. And because they have been invested in the process from the beginning, they take pride in its success too.
So, to review, rewriting the manual on business technology budgeting and spending gets you executive sponsorship, business goal alignment, user adoption and the results would be revenue enhancing. It pays for IT things and the business pays for business innovation. In this environment, the need for a business solutions officer quickly emerges. This is a tech savvy business person that has no ties to IT and is focused on constantly increasing business agility. Implement this in your company and, congratulations, you’ve just liberated your technology innovation budget from an IT budget that has 1000 other line items (excluding yours and is sure to be cut in half-- especially in this economy). And remember, IT’s first order of business is to keep the lights on first and innovate second. You’re free!
IT Survival Tips
If your company tends to move slower and take longer to make moves it’s probably not possible in the near term. So here’s what you can do. You have a new goal. You have to change IT so that your CEO can see that IT is a critical driver for your growing business. And by the way, you’re probably not going to have much help. As most of your superiors aren’t interested in business goals or are focused on keeping costs down, you are more or less on your own. Here are 3 major factors in your future success and the success of IT.
Follow this if you want to see definite positive change in your company. Warning: Disrupting your environment is rewarding in the end but it can be very painful on the road; so be ready.
- Say no to projects that are not directly linked to business goals
Take a stand. Real business goals have tangible results like revenue. For example, increase leads by 10% or decrease time between cold calls by 30 seconds. Most companies lay out over-all business goals at the beginning of the year. Take the initiative to find these if you don’t know what they are already. Only when technology projects boast benefits of enhancing revenue rather than reducing costs will they prove their worth to the CEO.
- Upgrading my ERP to version 90.0. Do I get fries with that?
Why spend money on upgrades when there is no new innovation delivered? I never understood this, but then I never understood the benefit of pigeon holing my business into a big ERP in the first place. There are too many good on-demand alternatives for all pieces of the business to not at least trade the cost of one upgrade for a proof-of-concept on one of these platforms. - Change how IT is evaluated
When you attend a quarterly company meeting, and department representatives stand up and talk about quarterly results, how is IT represented? If IT is measured by how many help desk tickets closed last quarter, you have your work cut out for you.
Create what I call an innovation index. If new functionality is delivered to a part of the business, make sure you know how they were operating before and how they have benefited from what IT delivered. Keep track of this and your key performance indicators will bubble to the top. These are the things your CIO should be talking about at the quarterly meeting. This builds confidence with the company and with IT personnel.
Spend less time in data center status meetings and more time in sales and operations meetings. Get a feel for the pulse of what it going on and think of ways that your knowledge of automation can benefit everyone. And most important of all, deliver! When you’ve been given the chance to shine, finish! Don’t blame problems on this person or that person or the server went down or whatever. Get it done! No whining, ever! Maintain a positive attitude. This is contagious and you’ll find more people that want taste of what you are offering. Good luck. You’ll need it.
To your Success,
Larry