| CIO Insight: The goal of service-oriented architecture is to design and develop all the business functions that go into a software application as independent "services," which can then be combined in different ways to complete a number of different processes. Because the same service can be used for different applications, it can be reused as necessary. The result: a more efficient use of IT resources. One analyst predicts that many future IT organizations will be organized around collections of related services, rather than around vendor products as they are today. As promising as SOA sounds, it has encountered resistance. One of the biggest challenges of SOA, says a Forrester analyst, is getting the right people to champion the business and IT connection. The experiences of two companies are shared. | Sponsor: ROS Incorporated | | Learn Secrets of Superior Outsourcing Programs
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Intelligent Enterprise: While nearly every company understands the benefits of data mining, it can be tricky getting started, says this author. As with many IT implementations, the business should come first, he says. Identify and prioritize a list of opportunities that can make a significant impact on the business. Then for each opportunity, create a list of expected data issues, a modeling process description, and implementation and maintenance plans. He offers detailed advice on building actual data mining models, implementing them, assessing their impact and maintaining them. While it's a complex task, he simplifies it by presenting it in three distinct and relatively easy-to-digest phases: business, data mining and operations. Computerworld: Few folks would think to compare a CIO to a farmer. This author, the CIO of Network Services Co., does — and convincingly so. He likens the four quarters of a company's year to the four seasons. Like a farmer, a CIO should tackle certain tasks in certain quarters if he wants to increase his chances of a good yield. The Cliffs Notes version: Initiate major development projects in Q1; achieve the first set of project milestones and make any needed corrections in Q2; build new systems and enhancements and get them into production in Q3; and begin planning ahead for the next year in Q4. | | Special Offer: Free White Paper Understanding the Total Cost of Ownership of IP Telephony Solutions
In this study conducted by an independent research and consulting group, the often-hidden costs associated with IP telephony ownership are revealed. Discover this analysis methodology for determining TCO based on six cost categories. It's highly flexible and can be used to generate similar benchmarking for many different sizes and types of deployment comparisons. Check it out today! | | | | CIO Update: The author, the CIO of Intel Corp., stresses the importance of cutting IT costs while generating business value. Intel has been able to do so, he says, by shifting from traditional IT metrics, such as network capacity, to more business-oriented measures, such as customer satisfaction and profitability. He offers a list of five best practices: Run IT like a business; measure and manage IT value with a consistent and repeatable methodology; move toward continuous process optimization and IT modernization; measure and manage overall IT capability; and characterize the costs and risks of not moving forward. It's a lot of the same buzz words we've heard before. But they carry added weight coming from someone who walks the walk. Intel's IT initiatives created more than $2.5 billion in business value for the company from 2002 to 2004. SupplyManagement.com: This article summarizes several interesting discussions from a recent Logistics & Supply Chain Forum, including the need to adopt a holistic view of supply chains — which is especially important for companies doing business in the global arena — and the continued desire for new technologies to address supply chain issues. The top takeaway is for companies to stay in close touch with their customers' needs. Without this step, said one speaker, all of a company's technology, process re-engineering and training will simply be a waste of time. Wisconsin Technology Network: IT departments and HR departments will need to work together more closely than ever before to address technology-related issues such as employee bloggers and workers toting iPods to the office, opines this author. He calls the need for social policies a whole new wrinkle in IT/business alignment. IT should be ready to lend a hand as HR grapples to create policies for employee-centric technologies such as instant messaging, he says. | IT Marketplace | | | | | Tell the IT Business Edge audience of technology decision makers about your product, service, event, or job. Click here to list it in the IT Marketplace! | | 3 QUESTIONS:
Talk Business to Me
With Bobby Cameron, vice president and principal in Forrester Research's IT Management research team. He recently authored a report entitled "Are CIOs Too Tech-Oriented to Communicate Well with the Business?" Question: You found that CIOs spend an average of 38 percent of their time dealing with business issues, and that 78 percent spend less than half their time on these issues. What are some of the reasons CIOs aren't devoting more time to the business — especially since that's what so many companies say they want their CIOs to do?
Cameron: Most IT shops are in enough disarray that it takes a lot of focus for the CIO to pull the disparate technical elements together. They need to just focus on picking up the biggest messes. Also, a lot of CIOs just don't have the business commitment they need; they don't have that kind of control. Companies where CIOs have the ability to drive spending — GM is a good example — gain a lot of efficiencies by focusing on consolidating their technologies so that business processes can run the same across the company. Question: Your research also seems to indicate that poor communication is a key reason for a disconnect between IT and the broader business. What are some of the issues contributing to this lack of communication?
Cameron: If you come from a tech background, you tend to speak in technical terms — and that's not what the business wants to hear. I had the painful experience recently of working with a CIO on a major IT strategy presentation. He just couldn't make himself stay away from the acronyms. We weren't more than half a minute into the presentation when the CEO interrupted him to ask, "Where is my consumer data?" The CEO didn't want to hear about the CRM system. He wanted to hear about the business models it supported, how the system could help the company launch new products. Question: How can CIOs communicate better with line-of-business executives?
Cameron: Getting into an executive business school program is critical. You want to get to where you understand the balance sheet, which is ultimately what the business guys care about. And you need to spend a lot of time with business people; build your strategies through interviews with them. A multi-disciplinary governance committee is an excellent practice to put into place. Then you have the discipline of setting business objectives with the business guys and determining how to measure results in ways that are relevant to the business.
Finally, the whole notion of running IT like a business is critical. You need to focus on using technology in areas where it offers a competitive advantage and be able to set objectives based on the values the business cares about. I'm not sure it's the techies who will drive this. Some people only like the technical aspects; they are not going to be able to warm up to the business side. They may go off to work for somebody like Accenture or IBM or Wipro. Anecdotally, I'd say about 70 percent to 80 percent of most IT shops today are the techies. In the future, I think it'll be more like 20 percent. It's going to become more about the services layer on up. | | Also from IT Business Edge: Voice & Data Convergence Voice & Data Convergence examines the strategic and tactical implications of emerging IP telephony technologies, from VoIP services to advanced CRM systems to security considerations. Find out what every IT decision maker should know. Click here to sign up! | By the Numbers
80 percent Reduction in production lead times enjoyed by Trek Bicycles after the manufacturer adopted the kaizen management philosophy. 95,000 The number of annual H-1B visas allowed under a proposal recently approved by the Senate Judiciary Committee, up from 65,000 such visas a year currently permitted. 56 percent Companies that use 20 or fewer different metrics to monitor their IT activities, according to Forrester Research. Twenty-two percent of companies use 20 to 30 metrics, while 5 percent use 60 or more. Breaking Headlines
Tekrati: Enterprises will be increasingly influenced by the consumer market in the next decade, postulates Gartner. IT vendors tend to focus their strongest innovation efforts on the consumer market, where the chances for a quick profit are higher, the consulting firm says. Employees then incorporate technologies they have adopted as consumers into their workflows and processes at the office. The consumer market, rather than the traditional military and business markets, will drive much of the industry's research and development, Gartner says. SiliconValley.com: A Senate committee on Oct. 20 OK'd a nearly 50 percent increase in H-1B visas, which allow U.S. companies to hire skilled foreign workers. IT executives, including Microsoft's Bill Gates, have lobbied for an increase in the number of such visas, which critics say lead companies to pass over American workers in favor of less expensive foreign employees. Under the proposal, the annual number of H-1B visas would increase from 65,000 to 95,000. The Judiciary Committee approved the measure after rejecting an earlier proposal that would have upped the number to 125,000 a year. The measure also would raise the fee employers pay for each six-year visa by $500. It must still be approved by the full Senate before heading to the House of Representatives. Enterprise Content Management 365: According to a survey by enterprise content management provider Stellent, three-quarters of IT managers report being frustrated by inefficiencies in their information management. Sixty-eight percent of managers surveyed by Stellent said too much time and money is spent on managing and searching for information; 59 percent expressed concern that information was inaccurate or outdated; and 57 percent worried about compliance. The survey found that the amount of information retained by companies is growing at a rate of 40 percent a year. Even though this is a vendor survey, the numbers sound spot-on. (Free registration required)
Emerging Trends
vnunet.com: Measuring and monitoring the benefits delivered by IT is becoming more important in enterprises, and many CIOs find that established financial measures such as ROI and total cost of ownership don't cut it. Traditional IT metrics such as system availability and transaction response times are a necessary part of good IT governance, but they do not express benefits in terms business execs can understand. Business and IT must work together to establish meaningful metrics, agree several analysts interviewed for this article. Tips for doing so are offered, complete with real-world examples. Short on time? Scroll to the end, where the article is nicely summarized with a concise list of best practices. CIO.com Australia: The author describes his post as executive director of information management for the Nova Scotia Department of Justice as the natural progression of the CIO role, based upon a holistic approach to information management that is not limited to IT. He is responsible not only for IT, but for privacy and access, policy planning and research, records management and library services. He characterizes the position as one that focuses on broad strategy rather than on nitty-gritty operational issues. A key task is chairing an IT steering committee that helps determine whether proposed IT projects reflect organizational priorities. The benefits include improved accountability, enhanced cooperation between information management functions, better IT/business alignment and more common IT solutions. IT Jungle: In this thought-provoking column, the author likens the technology market — specifically servers — to the automobile market. It's not as big of a stretch as it sounds. While vendors and analysts like to endlessly debate techie-tech points like system speeds, CIOs just want to know how technology can help them solve their business problems by generating a strong ROI, lowering IT complexity and making operations more agile. Just like cars, almost all servers on the market today perform well enough to meet most users' needs. As it becomes more difficult for vendors to differentiate their products on a technology basis, smart vendors will instead create ways of better serving business needs. IT Business Edge: Aligning IT & Business Goals
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Ann All covered a variety of business topics as a newspaper reporter before switching to automated teller machines — which, unbelievably, are just beginning to migrate to a Windows-based platform and more modern networking technologies like TCP/IP — as the editor of online trade publication ATMmarketplace.com. She can be reached at investments@itbusinessedge.com. | | |
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