Corporate Troika + Suppliers = Successful Governance


Whether we like it or not technology has invaded all aspects of our lives with varying degrees of success. Much is written about the issues regarding IT projects going wrong, or becoming too costly, with the obligatory finger-pointing that inevitably follows.
A lot of the press coverage tends to blame suppliers for failing to deliver although some do hint at the failings of client management to control the overall the situation. Some in corporate authority (both in client and supplier organisations) work under the constant pressure of trying to do more with less, living with the continual disbelief and dismay of their customers, and denial. So how can the management of technology be improved for all involved.
What is the issue?
Before quantifying what needs to be addressed we ought to ascertain whether there is an issue to start with. Context here is also important as most organisations utilise technology, to varying degrees of success, to further their business. The bigger the investment, the greater the headaches associated with keeping it all going to everyone's satisfaction. Unfortunately it is only the ones that go badly awry that get the publicity. However it is fair to say that as the use of technology becomes embedded within the fabric of an organisation's operation, the greater their dependency upon it. Hence the consequences are extensive when it does go wrong.
Some anecdotal evidence being:

  • a. Major IT contracts going wrong souring the relationship between customer and supplier. Whether it's the suppliers inability to deliver or the organisation's inability to manage it effectively, there are no winners. Organisation's management appear to be incompetent, and suppliers incapable of delivering on their promises.
  • b. Business expectations are often unrealistically high. Suppliers' marketing campaigns certainly don't help in managing their client expectations. Business leaders see sexy, trendy advertising awnings showing the latest widget on the market and they cannot understand why that is not readily available in the workplace. In particular mobile technology which enables news, podcasts, emails etc to be delivered directly to you within minutes of anything happening and as such are seen as ‘must have' items (or toys).
  • c. Some suppliers try to put the fear of dread in customers with tales of doom and despondency relating to their installed infrastructure, particular any legacy systems that exist. It is true that any dependency on ageing system that requires certain hardware and software configurations and skills to maintain and support it, is a business risk. But you have to qualify what is meant by ageing. After all a system that is only one year old can also be a considerable burden if it hasn't been thoroughly tried and tested before it is installed.
  • d. Technological developments are outpacing demand. Today's technology is barely exploited before its replacement is available. Service and product providers are determining the pace of roadmap developments, whereas the more mundane aspects of support services and back up are wholly inadequate. Users rarely utilise the full potential of their wordprocessor, spreadsheet or email functions on their office or home computers. Even today the old 80:20 rule still applies (i.e. 80% of users only use 20% of available functionality), and yet revamped products are still being churned out. It isn't about throttling emerging technologies, we just need to get better at embedding it as a truly business enabling tool.
  • e. Business often sees the benefits on offer from adopting technology proposals but the reality of implementation and its usage is different. Business users who possibly have more powerful technology at home don't understand why it isn't available in the workplace, and at the same cost. They don't understand (and why should they) the complexities associated with getting something in and running: procurement of the equipment, project managing its successful implementation and operation, change control of effected business procedures, the training required to ensure its effective use, and the politics around who gets what, mount to what is in effect a huge investment in what is basically just IT!
  • f. Major business initiatives which are announced at the beginning of the fiscal year as being critical to the strategic growth of the organisation are often cancelled or refocused. There are many reasons for that including inability of the internal IT department to successfully implement it, or changing the business objectives, or the supplier being unable to deliver, or there is a need to reprioritise strategic initiatives. If it is the latter it is likely to be financially driven, in which case it begs the question that if it can be cancelled so easily then why did it attract the relevant funding in the first place? Particularly if it is after the project has started, when money will have already been spent, and in effect wasted. This only contributes to employee cynicism towards further investment in technology.

So why is it that corporate technology seems to be so cumbersome, as opposed to being agile, nimble, flexible, as are the demands of modern business practice.
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So where are we?
Most strategic initiatives rely on an effective technological infrastructure. Failure to deliver on any technological programme has a significant impact on the implementation of a corporate strategy. Failure to successfully implement a strategy reflects badly on senior management: staff and the business markets lose confidence in their stewardship. In a recent survey only 20% of business strategies are effectively implemented, and only 5% of the employees understand the strategy. Now the failure to deliver on a strategy cannot be solely down to the unsuccessful implementation of related initiatives, and in cases where it is it, isn't just those in the IT department who should be taken to account.  Others should shoulder some of the responsibility.
IT no longer stands alone in the corporate world as a sole support service as it has become intrinsically integrated with existing business practices and other support services. Financial and HR services are heavily reliant on an efficient technological infrastructure to deliver their own cost effective services. Business initiatives tend to be complex programmes of work with many people having a vested interest in the outcome. The situation is further complicated with the advent of shared services where the formal integration of working practices, and hence the dependency upon end-to-end services, is key to its operational success. An important factor in the successful integration of shared service environment is dealing with the different cultures that exist within them.
As a consequence the Chief Information Officer (CIO) has many demanding customers all requiring complex, some integrated, solutions.
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Dealing with the differing cultures and their nuances within co-operating core support service groups, which form a shared service, can be particularly daunting. Each individual group have their own established and often complex business processes which makes true integration difficult. Also, these groups have historically been competing with each other for funding and resources. The complexity of relationships is exacerbated further with the advent of globalisation. Standardising on an infrastructure that bridges country and area boundaries requires significant investment.  There are many influencing factors to consider ranging from business politics, differing regulatory and legislation compliance issues, different hardware and software platforms, varying relationships with suppliers (some having been built up over a number of years),  and personal agendas and aspirations to overcome.
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Globalisation is clearly a key element in any organisation's strategy and it affects all areas of its operation. Global strategy isn't just technology-centric, it will clearly effect all business units and core service groups (such as Finance, HR, etc). The jigsaw becomes quite complex.  A CIO has to juggle all business and support service demands that are country based, align any IT strategy with that coming from a global perspective, and then secure the relevant budget to make it happen. No mean feat. If any aspect of it goes wrong then the fingers will be pointing at the CIO.
Demands for an effective technology infrastructure are going to increase, as will business dependency upon it, to effect its growth strategy, but so will the pressures increase to reduce costs wherever possible. No one ever questions the demands for more technology even though most business users are likely to suffocate under the amount of information being generated for them to process. The incessant business demand for more technology to produce even more information presents increasing pressures on the existing infrastructure.  Data storage and the ability to effectively manage its capacity given the constant demand for more is a challenge, as are the proportionate increases in operational costs. Bandwidth of key communication links is another important issue, particularly when connecting to an outsourced processing department. Securing the organisation's information assets is necessarily sophisticated to combat the increasingly complex attacks that it potentially faces. The list goes on.
Although the phrase of IT is common parlance for the underlying technology enabling services, it is no longer about the complexity of computing as it was ten years ago. Technology is a better description as it reflects more than just the data capture and processing components.  Mobile phones, PDAs, biometrics, new storage mediums, mirroring techniques, satellite communications, remote monitoring tools for supporting 24/7 operations, and disaster recovery facilities are all technologies that require a technical, near academic aptitude. There is also a requirement to keep abreast of all the latest developments in the plethora of methodologies and tools for managing projects, service performance, and system capacity. To expect a CIO to be on top of these emerging and developing technologies in addition to protecting the organisation with appropriate information-related policies, whilst ensuring that that technology-based investments are business enabling, is unreasonable.
A Chief Technology Officer (CTO) is a role that can assist with controlling the situation by taking over the technical governance aspect of the tasks. The role of CTO used to be more common but was often seen to be too R&D focused with very little business relevance. The embodiment of technology within the fabric of commerce and the need to safeguard against any incident, coupled with continual technological advancements enable us to re-visit the roles of CIO and CTO. Although many CIOs may feel that the creation of a CTO may be a dilution of their role (and they may push back through fear of losing their job) it is important that such roles are seen as a symbiotic relationship for the good of the organisation.
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Governing
Corporate governance in its simplest form consists of two components: business and technology governance. Technology governance covers all aspects surrounding the organisation's investment ensuring its conformance to industry standards and future proofing wherever possible. Business governance encompasses all those necessary administrative related tasks that enable an organisation to keep trading, legally and without fear of litigation.
One way of providing the holistic governance required is to appoint an internal troika of CIO, CTO and Business Sponsors. The stewardship this offers to executive board members, employees and customers alike provides the confidence that there is commitment to its strategy and all steps are being taken to ensure the enablement of business initiatives.
One of the most over-looked roles in governance is that of the business sponsor. The business sponsor(s) is both an ambassador and liaison between those who are charged with overseeing effective technological investment and the main stakeholders. Executive board members, senior partners, or senior industry line specialists often get frustrated with the lack of technology enabling their efforts to generate growth. Although their public support for the work done by the various ‘back office' teams is unwavering and laudable, an internal ‘blamestorm' can easily manifest itself when initiatives are failing to deliver or are cut through the need to reprioritise.
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Business users need to be assured that decisions are taken for the right reasons, and that has to be communicated effectively to them in a language and context that they will understand. The ambassadorial role of the Business Sponsor is crucial here. The rationale behind decisions to cut or reprioritise key initiatives needs to be business based as it will impact the strategy of the organisation. Too often such decisions are seen to be solely technology driven without any due regard for the impact on the business, which doesn't exactly foster good internal relationships. It is in the corporate interest to get business contribution at all stages - those driving for technology investment need to be reminded of the business requirement and to keep their feet firmly on the ground, whilst the expectations of business users need to be carefully managed.
The roles of CIO & CTO
It has to be said that business representatives are often reluctant to pick up the challenge that being a sponsor brings, but the need to assure that technology investments are business enabling is crucial. It should also be stated that CIOs and CTOs are not the technology geeks that they used to be. They are much more business orientated and often make proposals based on business criteria rather than just technological developments.
However there needs to be clear distinction between the roles of CIO and CTO. The way in which technology has become embedded within the fabric of commerce dictates that CIOs need to be much more commercially aligned than they were a few years ago.  Commerciality here is not just about finances, it is about knowing the legal and regulatory impact that technology could have on the organisation. Any infrastructure investment needs a thorough risk assessment from both business and technology perspectives, and not just in relation to implementation but also its ongoing operation, support and maintenance. Potential solutions are far too complicated for just a CIO to deal with.
The CTO needs to be technically minded, with an R&D bent, and can articulate those potential benefits and risks into a business impact assessment. The skills should complement that of the CIO.
The work of the troika needs to be assisted by good quality service providers. Service providers often bemoan the relationship with their customers as being one-sided. And to some extent it always will be, certainly for consumable items. However within the context of providing  complex business solutions there needs to be a maturing of attitudes from both sides of the relationship.
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Reducing the complexity
There are a plethora of models that reflect the inherent complexity of infrastructure services and their interdependencies. Some models, particularly those from product suppliers tend to minimise the complexity by focusing on specific components - e.g. network connectivity, data storage management, information workforce platforms, mobility, small business packages, etc. Although such products are presented as being ‘open' with numerous interconnectivity options, they are by definition individualistic. It is rare to get a picture that encapsulates the complexity that is inherently present within business solutions. In order to get an understanding of the complexities involved and the intricate nature of the relationships of those involved, the model presented here has three main constituents.
The Business Culture layer is primarily concerned with ensuring that technology is effectively implemented within business processes without placing the organisation at commercial risk. Information Management Tools is about ensuring that the right tools are being used within the business, where the focus should be on getting the right information to the right person at the right time. Concerns here are about ensuring they are cost effective, secure, business applicable, and future-proofed. Technological Infrastructure is primarily the underpinning technology upon which everything relies. Knowing the operation and performance of each component and their end-to-end integration into an holistic, cohesive system that is business enabling, is essential.
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The roles of CIO and CTO functionally overlap in the area of Information Management Tools. Clearly there will individual instances where the CTO will get involved in Business Culture issues. Likewise there will be times when the CIO will delve into the idiosyncrasies of the Technological Infrastructure. By sub-dividing the responsibilities up in this way it enables each one to focus on specific areas of business technology management. It enables the individuals concerned to develop their personal network of contacts with business and suppliers, as appropriate. It also means that there is focus when developing Global and Area contacts within the organisation which are essential when dealing with industry standards, procurements, outsourcing, etc.
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transSupplier's Role
Technology suppliers tend to have a more torrid time with their large corporate customers than they do with their high  street outlet or those online. When I say torrid I mean a relationship that blows hot and cold. One minute the supplier is au fait with the strategic aspirations of their corporate customer which has been shared, for which a bespoke solution will be proposed. Other times suppliers are left out in the cold, unaware of the bigger picture and are only involved in the discussion for point solutions.
The high street or online customer simply gets provided with options that have been designed to meet the requirements of customers based on market research and customer feedback. The relationship tends to be more straightforward mainly because the stakes are not so high as they are in the corporate world. Why is the relationship between those who are charged with the responsibility to oversee corporate investment in technology and those who are potentially providing solutions and services so volatile? The issues are to do with complexity: Complexities of technology and their integration with other supplier offerings; complexities of business relationships; complexities of individual personalities and relationships.
The relationship with suppliers needs to not only involve those with technical and service delivery specialism, but those with a penchant for maturity and commitment. Too often suppliers are seen as those who are keen to get the contract, but left wanting in supporting its implementation and operation. Indeed the urgency with which issues are addressed once the order is signed is often a concern. It is essential that suppliers attain the trusted status they seek, and indeed need, in order to become an important component in the governing process. Knowledge of specialised, emerging technologies is crucial in today's business markets. Client's need trusted suppliers as partners if the complexity is to be effectively managed.
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An exemplar supplier should have three key strategic layers within its operation with demonstrable benefit: The three key layers being Business Attitude, Managerial Qualities and Portfolio Services. Business Attitude is about ensuring that the manner in which a supplier conducts their business is at least as professional as that demonstrated by the client. Managerial Qualities is a key layer within the supplier model as it shows that any supplied service will be managed to the same, if not higher, standards of delivery as the client would adhere to. In such circumstances the supplier should act as an extension of the client organisation in the delivery of technology services to its business users. Portfolio Services is about the range of services offered, individually and holistically.
A supplier needs to address not only the portfolio of services it offers, but also the way it manages and presents itself. A trusted relationship needs to be constantly assessed, reviewed and revisited if it is to last.
In reality it may not be possible to find a supplier with a service portfolio that meets all business requirements.  It may not even be appropriate. However, for large corporations it would be ideal to establish a ‘partnering' relationship either with a key supplier, or selected ones, to support essential infrastructure services and provide access to R&D developments. Where there is a potential CTO gap in the troika, suppliers could offer surrogate CTO functionality, ensuring that organisations are aware of emerging technologies, roadmaps, technical risk assessments,  global strategies, etc.
If a consortium approach is appropriate then it needs to be clear who owns what responsibilities (for which they will be held accountable) in the Business Attitude and Managerial Qualities layers. This isn't about legal positioning (if it ever gets to that point then the relationship is truly broken) it is simply about establishing a mature and professional relationship that can be trusted.
Success
Coming up with ideas is one thing, making them a reality is another. Making it happen successfully is a totally different thing altogether. Successful governance is critical for commercial success. Sometimes phrases such as control and stewardship are used instead. Here the concern is about the adoption of appropriate governing processes for the effective deployment and operation of business enabling technology.
 Governance is nebulous. As such it is crucial that when a new governance model is proposed there are clear criteria against which its success, or otherwise, can be judged. Tangible, clear governance metrics need to bridge the domains of technology and commerce. Such criteria could cover such issues as:

  • Assessing whether the Return On Investment (ROI) for strategic initiatives were as fruitful as projected.
  • Determining the improvement in the Total Cost of Ownership (TCO) of embedded technology as the governance model is applied.
  • Assessing how technology has enabled business growth and reduced operational costs.
  • Improvements in customer satisfaction with on-line and end-user services.
  • Quality assurance of support services including improvement criteria for business critical and outsourced services.
  • Total Quality Management (TQM) of end-to-end business processes.

It is important that there is a degree of realism about what can be achieved and over what timescale. There will be influencing factors over which the technology governing team have no control whatsoever: e.g. company mergers, environmental disaster, economic downturns, etc.
Summary
Although the journey to effective governance is long, establishing the role of CTO and getting effective business sponsorship will provide suppliers the opportunity to get an effective ‘seat at the table'. Should clients procrastinate over establishing the troika, suppliers could steal a march on them by forming effective consultancy and managerial teams that demonstrate the maturity that is so much sought after. Certainly developing metrics for effective governance would be a decisive step forward in demonstrating supplier commitment. Certainly forming any governance board with operating towards some basic metrics would be a significant step in the right direction.
About the Author
Dr. Stephen Pratt has many years experience of integrating technology and business strategies within large corporate organisations, the most recent being the IT Director for Ernst & Young UK. Being head of IT and a key member of a shared service organisation, Stephen had to deal with the many demands facing senior management: i.e. do more with less, ensure service quality is not compromised, embrace the concepts of outsourcing, and take advantage of the benefits of globalisation, to name but a few.

Prior to holding a senior managerial position within a large corporation Stephen held positions as a consultant for government departments and suppliers, and as a senior academic.

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