Wednesday, December 5, 2012

The 2012 Election is Over, But...

Even though the e-ink on the ballots is just beginning to dry, today alone I've already seen talk about a possible run for the Commander in Chief in 2016 by both Clinton and Ryan.
 
As I sit in Albany, NY in between meetings a block away from many state government buildings to type this, I am not shy about saying that I abhor politics and politicians in general.  But it's not them per se that bothers me as much as it is their utter lack of ability to deal with the biggest plagues this country has seen during the past 4 1/2 years since the great depression.

Long Term Captial Gains
In recent months, there was much ado about long term capital gains tax rates, which was hard to escape when people like Warren Buffet said (paraphrased) that there was something wrong when he's paying a lower effective tax rate than his administrative assistant.  And who can forget the ballyhoo surrounding Mitt Romney's tax returns, especially after it was revealed that his effective tax rate for 2011 was under 15%?

Should these men (and others) be vilified?  Certainly not.  If there exists a legal way to lower your taxes then berating them is in essence shooting the messenger.  Fix the problem instead of trying to punish the people who are doing what they are legally allowed to do.  And yet our duly elected officials in Washington, D.C. can't seem to determine what needs to be done or are unwilling to do it.

As far as the "what needs to be done" part goes, first it's worth the time to understand that investments, especially long term ones (held longer than one year), are essential to the growth of our nation.  Long term capital gains tax rates are necessarily lower to encourage people to invest in businesses rather than put their money in interest bearing vehicles like municipal bonds.  (I am not saying there is anything wrong with bonds.  But they are issued relatively rarely for big infrastructure projects typically so the effect that investors can have on the growth of the economy is somewhat limited as a result.)  This financial motivation needs to be preserved at the same time that we resolve the quandary that has resulted because the ultra-rich are able to throw fistfuls of money at the stock market to the point that they are getting sub-15% tax rates like Mr. Romney.

How do we meet these goals that seem to be at odds with each other?  In my opinion, the answer is simple:  replace the flat capital gains tax rate with a percentage discount of the effective tax rate based on the Adjusted Gross Income.  Using a 15% discount for the sake of example, Mr. Buffet's AGI would put him in the highest tax bracket (currently 36%) so the capital gains tax for him would be 36% - 15% * 36% = 30.6%.  He receives a material financial benefit for investing in the businesses that make this country strong, and the Federal Government gets just over double the tax revenue as well.

Depressed Housing Market
Another issue that has effected people in all income brackets is the housing market.  While I'm not naive in thinking that the mortgage industry was the sole cause of the financial crash in 2007, it certainly was the catalyst that started the chain reaction, ultimately claiming Bear Stearns and other financial institutions as a result.  The Occupy Wall Street movement capitalized on the situation stating that Wall Street got a bail out while those who were left with underwater mortgages because of their shenanigans were unable to bail themselves out much less expect someone else to help them along the way.  (Let's ignore the impotent mortgage modification programs that the Obama administration instituted.)

I bought a 600 square foot, one bedroom apartment in a nice area of Long Island, NY around the time that the market reached its apex.  And soon after, my wife got pregnant with our child requiring us to look for a larger place to live so I put my apartment on the market.  18 months later after selling at a 30% loss based on my purchase price I found out that I could not deduct the loss from my tax returns.

To me this seems outright silly.  I can deduct long term capital losses in the financial markets, so why can I not do so with a long term investment in housing?  While I have yet to find a confirmed answer to this, I can only speculate that it is meant to prevent people from intentionally selling at a discount, yielding a substantial tax deduction for them and a very cheap house for their children, for example.

The merits and demerits of this preventative approach can also be debated for hours, but in the end we have to assess the macro level view, which is to say that our steadfast refusal to allow these long term losses to be deducted has cost our GDP more than the loss of potential tax revenues that could have been avoided by savvy investors.  In other words, the longer we avoid taking drastic steps to alleviate the backlog of houses that cannot currently be sold due to the unwillingness for banks to approve short sales, the greater the impact that the extremely depressed housing market will have on our overall economy.

Unemployment
Finally, it has been noted several times in the media that unemployment has been inflated primarily because companies are hoarding cash to hedge against the risk that changes in corporate taxes will impact them significantly.  They are scared silly, and other items with significant financial impacts (such as "Obamacare") haven't helped either.

And yet I read that during the current negotiations to avoid the so called "fiscal cliff," the GOP offered as part of their plan to close several tax loopholes that are well documented and have existed for some time.  Why are they only now saying they are willing to do this?  The moment anyone says "well, now we're willing to do this," corporations want to run for the hills.  (Disclaimer:  I have not looked into the specifics of the loopholes offered by Speaker Boehner on behalf of the GOP so it is entirely possible that none of these are related to corporate taxes.  I would find this extremely unlikely given the propensity of the GOP to protect lower tax rates on individuals, especially those in the upper income class.)

These should be dealt with immediately so that corporations can have confidence in their financially ability to move forward without incurring significant additional risk to their ability to survive.  This will result in freeing up the cash that has been hitherto been hoarded for business growth activities including, presumably, hiring of additional staff to support that growth.

Your thoughts are appreciated.

Monday, October 8, 2012

A Tale of Tails

Every weekday morning, my family goes through the same routine:  I get up first and head downstairs for coffee; then our 4 year old wakes up and kicks my wife out of bed; at 8 am, I let the dog out back to relieve himself and get his morning meal ready while he is doing so; etc.

This morning, I observed something rather fascinating about our dog's behavior.  Due to the layout of our house and the orientation of the back deck, when I let him back in he takes off like a rocket.  Because we have hardwood floors, he can't turn at that speed and has to take a very circuitous route to get to the kitchen where his breakfast awaits.  I found this amusing because this is not an uncommon behavior in the professional world either.

Over the years, people often question what is more important:  design or execution.  I first encountered this seemingly philosophical (using that term very loosely) subject in college, where my professor in VLSI design stated unequivocally that a good design could be fatally hampered by poor execution.  My dog would seem to confirm this as well because even though his thought of going straight to the kitchen for breakfast is a good one, his inability to execute properly (i.e. slow down) forces him to take the most inefficient route to get to his food.

Balance is necessary
That's not to say that the act of focusing on goals should be relegated to the back burner completely.  Contrast the behavior of our canine pal with that of the Canadian rock band, Rush.  For over 30 years they have focused on one thing only:  making what they feel is the best music possible without regard to airtime on the radio or awards that they could possibly be given.  In spite of the fact that they have a rabid fan base, it is only now that they are finally nominated for induction into the Rock and Roll Hall of Fame.

Could they have arrived at this point sooner?  Yes, if they were willing to sacrifice the design of their band and focus instead on what the media expected (more radio friendly vocalist and songs to match).  But they didn't change their design even though it meant that they could possibly have never been nominated.

Careful planning to avoid unnecessary risk by developing contingency plans is a necessity to allow you to avoid making whimsical decisions on the fly that could eventually unravel your bigger plans.  But too much planning can yield an inability to execute due to a fear of never being ready.  The point here is that a healthy balance of design and execution is the ying and yang of business whether this applies to a product you are creating; your career; your ability to make a sale; etc.

Monday, June 11, 2012

Staying Ahead of the Wave of Irrelevance

Nicholas Carr wrote in the May 2003 edition of the Harvard Business Review that "IT doesn't matter."  (The full text of the article was provided online in 2007 by Mr. Carr if you wish to read it in its entirety.)  Recently, this article was resurrected for a discussion on LinkedIn after which input was solicited by the group of CIOs and senior IT people that were members of this particular group.

Predictably, everyone said "yes, IT does matter!"  Well, almost everyone did: I was the lone contrarian, which is humorous considering that IT paid my bills for 18 years, and now that I'm involved with sales to IT groups it continues to do so albeit in a more circuitous fashion.  Am I biting the hand that feeds me?

As a disclaimer, I had not read the article before this question was asked of the group nor had I read (although my management has been strongly hinting for over a year that I should) his book The Big Switch (link to Amazon).  You would think, then, that I would be against his opinion given my professional background, but instead those three words make a lot of sense.

Don't believe me?  Read on!  Of course, it will require that you accept what I've said in previous blog entries but I haven't yet heard any complaints about the premises on which my blog entries are based or the conclusions I draw so hopefully this won't be terribly difficult.

Let's quickly review a few basic postulates that I've put forth in the past:

  1. Companies exist to make money.  This is the most important statement and holds true even for non-profits because, even though they do not distribute the money they make as profits, they do make money so that they can continue to provide services to their clients.  For example, a faith-based health center isn't going to be able to provide much of anything to a sick person under the poverty level if they aren't making money.

  2. Lines of Business (LOBs) exist to make money.  LOBs are experts in market verticals or specific types of business activity and, as such, they know how to devise and execute initiatives that help the company achieve its goal of making money.

  3. IT exists because the LOBs needs them.  Without IT the LOBs would be challenged in their quest to make their initiatives successful.

At the end of the day, the only thing that matters to the Executive Management Team is the answer to the following question:  are you still on track to bring in the revenue that you committed to?  This is obviously because the only purpose of the entire company is to make money.

Having said this, the LOBs could theoretically be viewed as a black box in the following sense:

EMT:  are you going to make money this year?
LOB:  yes.
EMT:  how much money are you going to make this year?
LOB:  1...billlion...dollars!

From the perspective of the EMT, they don't care how the LOB accomplishes its goal. As such, if the LOB chooses to use a room full of monkeys with typewriters (and can convince them to do data entry rather than write the works of Shakespseare) then the EMT doesn't care as long as that goal is met.  This does require, however, that the LOB have a 100% success rate, which never happens in the real world.  As such, the EMT is required to know the details to understand the risk of failure for its own financial forecasting.

Understanding the risk of failure is the only reason why IT has any value in a company.  As long as IT is able to provide value in the sense that they reduce risk for the LOBs then they stay ahead of the wave of irrelevance.  But the moment that the Chief Innovation Officer reverts back to the Chief Information Officer role of yesteryear then the wave engulfs them and the search for a new CIO begins.  (Cue the surfing theme and Wipe Out on the iPod.)

"Wait!  Did you just contradict yourself?"  In a word, "maybe."  I would argue that I've simply shifted the question from "does IT matter?" to "to whom does IT matter?"  At the end of the day the only people whose opinion really matters is the EMT.  But since they are putting the onus on the LOBs to generate the revenue that determines the viability of the company going forward and the LOBs have a symbiotic relationship with IT - IT helps the LOBs make money and the LOBs continue to justify IT's existence to the EMT - then IT does matter but only indirectly.

Do you disagree?  Leave a comment!

Wednesday, May 23, 2012

Personality Resonance

My grooming preferences are standard fare:  I shave my head; my facial hair is typically in a crescent moon shape (half goatee); my clothes are business casual leaning toward the "I look like I make more money than I do" look; etc.  Occasionally, I'll change the shape of my facial hair, but the rest typically does not vary much.

"Where are you going with this," you ask.

Last week, I had a meeting with the Global PMO group of a large medical device company.  On the morning of the meeting I explicitly decided to not shave my head.  In fact, I hadn't shaved it in a week and there was already close to 1/8" of an inch of growth.

The questions that I am sure are burning in your minds are, "Why would I go against my normal preparation routine? And why are we still talking about grooming?"

Although I run the risk of stereotyping, I knew that the group of people I would be meeting with were conservative in their demeanor.  This is partially due to the fact that the company is a multi-national with its headquarters in Japan.  These roots permeated the entire corporation, so I knew the culture would be conservative in general.  Additionally, the average age of the staff member in this group was mid-40's and they are a highly analytical bunch, meaning that they were less inclined to favor a personal presentation style (read: more grooming) that was, relative to them, more aggressive.

In 2005 when I switched careers from an IT Geek (said most lovingly in case any of my readers currently fall into this category) to Sales, my manager took me under his wing.  Ken Wilson knew that I would have trouble not only communicating the value of my message but also getting the audience to be willing to receive it.  I've talked about the importance of good communication several times in this blog in the past, but I've never mentioned the concept of personality resonance.

The concept is simple:  the greater the number of personal characteristics that you can match up to the decision maker with whom you are communicating, the more effective you'll be in your communication regardless of how eloquent you are.  This is more than just matching speaking cadence and volume - it extends to manner of dress and other non-verbal mannerisms.

Why does this work?  The concept is simple.  By matching your style and mannerisms to that of the intended recipient, you are putting them at ease.  This is accomplished for two reasons:  firstly, they are comforted by a familiar way of interacting with you since it is the same way that they would respond if someone engaged them in a similar manner; secondly, by removing the unexpected you are significantly reducing the number of distractions they experience, which allows them to focus on the message and not the surroundings.

(Of course, I need to add that I do not have a background in psychology so the previous paragraph is simply my own observations, and it has no empirical data to back up its assertions.)

Returning to the original example, by being more conservative in my appearance (and subsequently in my demeanor during the meeting) I hoped to have them more engaged and willing to listen to what I had to say to them.  As a result, I now have a commitment from the executive that was present in the meeting to go beyond the tactical discussion we had and to venture into a longer, more strategic view of their IT division and how I can help them succeed in specific initiatives they had hoped to undertake.  In my book, that makes the meeting a success.

And the next morning I shaved my head.

Wednesday, May 16, 2012

The CIO - Technology-oriented Businessman or Business-oriented Technologist?

Recently, a question was asked:  should a CIO have a technology background?

This, of course, sparked an intense yet cordial and respectful debate on what type of CIO is the most effective.   Some argued that having a technology background was essential because - "duh!" - the CIO is managing technology.  Others argued that technology means nothing without it being surgically delivered to meet one or more business initiatives.  Therefore, they continued, the technology knowledge by itself isn't as useful as an in-depth understanding of how the business operates so that it can most effectively make use of technology to further its goals.

Let me ask this question of you:  does the paintbrush or the painter wielding the paintbrush actually paint a room?

I'm being disingenuous of course because the question belies my bias toward the latter, but I cannot deny that the second argument above resonates more greatly with me than the first.  I am reminded, in fact, of a discussion that I had recently on career movement with a very well respected professional acquaintance of mine, Ron Collier.  The discussion hinged on whether it made more sense to get a wide variety of experience in sales, marketing, R&D, etc. before venturing into management or not.

Ron's argument was that while this was a sensible approach, implementing it in reality would take far longer than was reasonably possible.  Instead, he countered, it made more sense to get into management first and hire people to work for you who were subject matter experts in the area you worked in (e.g. sales, marketing, R&D, etc.).  You'd learn from them the ins-and-outs of the business unit while continuing to build credibility as a manager who adds value to the business.

This hearkens to a statement I postulated in my previous series:

The purpose of each line of business is to design and implement a set of initiatives that do one thing:  make the company money.

Having said that, being a subject matter expert in anything that does not directly relate to making money isn't as useful as someone who is a subject matter expert in nothing but does know how to impact the business' ability to make money.  This brings us back to the initial question:  should a CIO be an expert in the business while knowing something about technology (and, arguably, more than his peers on the Executive Management Team)?  Or should a CIO be an expert in technology while knowing something about the business?

I think the answer is obvious.

A few weeks ago, I had a meeting with a CIO of a healthcare provider who was recently promoted into that position from his previous responsibility as the manager of the Infrastructure Operations group.  I came prepared to learn about his 12-18 month going forward strategy, only to find that he wanted to discuss specific features and functionality in two solutions that he was considering.

How would you have approached this meeting?  My personal opinion (and the way I executed) is to establish credibility in order to earn the right to speak later on higher level topics (read: IT strategy).  This meant addressing his questions even though I did not have the answers on hand by finding out the correct answers and conveying them to him in a timely fashion.  And although I haven't yet had the follow-up meeting with him, I certainly intend on helping him come to the conclusion (all by himself, of course) that developing a viable long term strategy will yield greater benefits to his division and him personally than any single solution could.

Do you agree or disagree?  Leave a comment to discuss.

Tuesday, April 10, 2012

The Executive Relationship (Part 3 of 3)

Recap

In the last part of this topic, we discussed business strategy and how budgets are tied directly to total revenues.  Finally, we started to see why Operational Strategy is crucial to the overall success of the business.  In this final part, we will define exactly what Operational Strategy is, why it exists in the first place, look at the four types of activities that are important to the CIO as part of this.  Finally, we will wrap everything up with four words that describe how a CIO approaches their responsibilities from a macro level.

Revenues vs. Budgets

Remember the graph from part 2 that illustrated the relationship between revenues and budgets?  When I discussed the business budget, I wrapped up the subtopic by saying that the business essentially walks away after their initiatives have been implemented and the underlying technology has been rolled out into production.  The question is then raised:  who pays for the staff to manage that infrastructure and other, similar costs?

This is where the Operational budget comes into play.  It is responsible for funding the KTLO ("Keep the Lights On") role that IT plays in the business.  And because IT is still generally viewed as a cost center instead of a revenue source due to the lack of a well-defined and implemented chargeback policy, this budget is limited.  After all, why would the business dedicate large amounts of money to a portion of the business that does not contribute to the bottom line of the Income Statement?

Operational Strategy

Since this budget comes with limitations, it is crucial that the successful CIO make every dollar count.  The Operational Strategy, therefore, has the four types of activities listed below associated with it.  Note that each of these types has a hard dollar cost savings associated with it.

Consolidate technology.  As time elapses, more and more technology is proposed, justified and purchased when, in reality, it is frequently possible to either accomplish the same goals using existing footprint or retire older technology after the new purchase is completed and implemented.

As a result, companies end up paying far more for licenses (as capacity needs are met), maintenance (which is a percentage of total licenses), services (to integrate with newer solutions that are purchased), and education (for new functionality rolled out in subsequent versions and to train new staff due to attrition).  A substantial percentage of these costs can be eliminated through an assessment of the solutions in use and the goals to which they are associated.  Overlap is identified and older or less capable solutions are eventually phased out.

As the size of the company increases, the resulting savings increases exponentially.  For example, a large financial institution underwent this "software rationalization" exercise and, after an assessment of the IT portfolio concluded, we realized they had over 140 solutions strictly for monitoring the infrastructure.  For the sake of comparison, let's consider a more realistic number:  3 types of infrastructure (servers, networks and applications) multiplied by 5 operating environments (2 Windows, 2 Unix, and 1 mainframe LPAR) multiplied by 3 sets of solutions to ensure 100% coverage due to gaps results in a total of 45 solutions needed.  Even if you add another 1 or 2 operating environments you end up with a maximum of 63 solutions, which is less than half of the 140+ that this company owned and actively maintained.

Consolidate vendors.  Similarly, additional technology purchases are not done with the same vendor that a company bought its first solution from.  Instead, new additions to the "preferred vendor list" occur on a semi-regular basis as niche solutions are identified and acquired.

While limiting the list of vendors seems counter-intuitive consider the following:  if a CIO is spending $100mm on IT solutions per calendar year, they can divide that by 5 vendors or 50 vendors but it will not impact the underlying need to address the business requirements behind the purchases.  However, if they conduct business primarily with a smaller number of larger vendors, they will be spending more with each vendor giving the CIO leverage in negotiating larger discounts on an Enterprise-wide Licensing Agreement (ELA).  This either gives them money back that can be spent in other areas or frees up some of the CapEx budget to spend on additional technology that may not have been considered a top priority due to budgeting constraints.

The first two items were CapEx related.  Now let's look at OpEx related items.

Streamline existing processes.  We've all heard the horror stories like the following:  "it takes us 10 times longer to remediate production outages because we have several poorly integrated solutions for our Help Desk.  This requires a lot of manual effort to circumvent the limitations of our process to execute efficiently."  Ensuring that existing processes are operating as efficiently as possible allows IT to realize several benefits:  underlying staffing requirements are reduced; the need for specialized staff to deal with archaic systems that don't play well with the rest of  your infrastructure is reduced; and the "time to value" for new staff as a natural result of attrition is also reduced, which reduces total operational staff requirements.

Process streamlining can be effected through the use of solutions that integrate with each other (resulting in features / functionality that would not have otherwise been available), automation where possible (especially Run Book Automation), and Service Request Management (the "Help Yourself Desk").

Deliver new services.  When I first got involved with application development, it was common for major releases to take 18 months.  This was shortened to 12 months, 6 months and now - due to Agile development methodologies - we see major releases sometimes coming out as frequently as once every  month.  As timelines are shortened we've all noticed an increase in DPMO (Defects Per Million Opportunities, a Six Sigma term that describes the quality of process output).  This causes contention because companies want to release things faster but with a high degree of quality and that's not always successfully done.

Examining current processes for delivering new services and implementing new processes to do so more effectively allows a company to remain nimble without impacting the ability to conduct normal business due to quality issues.  And while this is not as easily quantifiable as the previous three points in a general sense, the resulting increase in productivity does have a measurable impact on revenue either by increasing the capacity of existing streams or adding new streams more quickly.

Putting it All Together

Now that we've discussed Business and Operational Strategy, let's see how they impact the approach that the successful CIO takes when developing their 18-24 month plan.  This approach can be distilled to four words:  decide, prioritize, assess and execute.  Let's define what each of these action verbs means in the context of strategy development.

Decide. Understanding what is required (infrastructure- and staff-related) to successful develop and implement every initiative (business or operational) allows the CIO to make informed decisions later.

Prioritize.  "What's the impact on the business if I do X?"  The answer to this question (asked of each initiative) forms the basis of a cost benefit analysis that ultimately results in a red light or green light.  Remember:  for every initiative that is implemented there is an associated hit to the operational budget after the initial rollout occurs, which is the motivation behind this activity.

Assess. By definition, the sole purpose of Keep the Lights On is to...well...keep the lights on.  Effective operational groups in IT have well defined processes for the triage and remediation of production events that occur.  New initiatives that are implemented represent a change to the operational environments under their care and, as such, there is a risk to the operational capacity of the business if those changes are not fully understood so that IT can continue keeping the lights on with minimal disruption.

Execute.  After all of the planning is finished the actual work commences.  And with it comes the need to monitor, automate, manage and secure the next set of initiatives being implemented.  This is the activity that most people are very familiar with.

In Summary

Everything that has been discussed has led up to the previous section.  Understanding those four action verbs and why they are part of a CIO's vocabulary are crucial for you to develop strategic partnerships at the executive level.  More importantly, understanding this will also allow you to understand where the real value is in the solutions you propose should be taken under consideration and ultimately will make you more successful.

Friday, March 23, 2012

The Executive Relationship (Part 2 of 3)

Recap

In the first part of this topic, I described my views on the impact you can have on your ability to successfully communicate value to a CIO if you approach it from an IT strategy perspective rather than a feature / functionality perspective.  This is the way a CIO thinks (and has staff that is responsible for making their vision become reality) so matching this modus operandi allows you to get past the barriers that they naturally have because they feel you cannot empathize with what they feel is important to their success.

Before we can begin to understand IT strategy, however, a few concepts need to be defined.  Most of this is common sense, but you'll see how we build upon these later.

The Real Purpose of IT

A common, humorous statement goes something like this:  if you ask 10 [insert profession] the same question you'll get 10 different answers. This is especially true if you ask them what the role of IT is in the business - some will say "keep the lights on" while others will say "ensure that the company stays ahead of its competition through the use of technology."  In reality, few people truly understand that the purpose of IT is singular:

The purpose of IT is to design and implement a technology strategy that allows the lines of business to meet their goals.

That's it.  Nothing more, and nothing less.  And the reason for this is simple:  IT is still viewed as a cost center rather than a revenue generating center because companies are reluctant to implement chargeback policies.  The means by which it accomplishes this purpose include many of the answers you'll hear:  keep the lights on; provide technology that prevents a company from lagging behind its competitors; etc. but this is the driving force behind it all.

Similar to this is the purpose of each line of business.

The purpose of each line of business is to design and implement a set of initiatives that do one thing:  make the company money.

Given both of these purposes, IT strategy can then be subdivided into two halves:  business strategy and operational strategy.

Business Strategy

Over the decades the role of the CIO has evolved:  "in the beginning" CIO meant Chief Information Officer. In those days they had to justify their existence by clinging onto any business matter that had an iota of relevance to technology.  (I'm exaggerating for the sake of illustration, but I'm sure you get the point.)

Revenue vs. Budget
Now, the (successful) CIO is the Chief Innovation Officer, and they are business partners that have the same goal as each of the lines of business - make money - using technology as an enabler, a means to an end.

From where does the money come for the technology?  Look at the graph on the left, which conceptually illustrates the relationship between revenues and budget.  Total budget has always been a function of total revenues.  Subtract "typical" business costs like building maintenance / upkeep, etc. and you derive the (lines of) business budget. (We'll discuss Operational budget in part 3.)

You'll see that, in spite of the global financial crash in 2007, business budgets resumed their upward climb when total revenues did as well.  Why shouldn't they?  If the head of business tells the board that it needs $1mm to make $10mm with a high degree of certainty of success, who wouldn't approve the investment of funds?  This is emphasized even more when you recall that the sole purpose of the lines of business is to make money.

The catch here is that, after business initiatives A, B and C are implemented and the technology has been rolled out into the production environment the business is able to essentially walk away.  At this point, the infrastructure needed to support those initiatives becomes the responsibility of the KTLO - Keep the Lights On - role, and it is here that Operational Strategy becomes so important.

The final part of this blog entry will conclude this topic by examining what Operational Strategy is, why it is important, and then summarize in a very high level fashion how the CIO takes both types of business activity into consideration when developing their 18-24 month plan.

Friday, March 16, 2012

The Executive Relationship (Part 1 of 3)

Introduction

When I made the transition to a sales role in 2005 after 18 years of sitting on "the other side of the table," I was part of a team that sold a single, highly technical product.  After some time had elapsed, I had a lot of trouble comprehending how a product that had immediately recognized value by the target user community also had such a high degree of difficulty getting a check to be signed.

What I discovered started me on the journey from technologist looking at the business and trying to attach myself to anything that would allow me to demonstrate value to a businessman looking at technology as a means to accomplish one or more strategic goals.  Along the way, I began to understand that if you want to catch the ear of the person signing the check, you have to be able to demonstrate financial relevance.  After all, if they are going to spend $500,000 on your solution they are going to need to believe that they will get an equal or greater amount of quantifiable value in a one year period.

Fast Forward

Some time after that initial epiphany occurred I completed the circle by amplifying what I had learned during the previous years in sales with what I knew as a technologist.  This marriage of concepts helped me to understand why so many technology sales professionals struggle to articulate the value of their offerings without the resorting to a feature / functionality "fire hose" of information (with the assistance of a pre-sales engineer).  The reason is this: while technology pitched in this fashion can gain you the agreement that your solution adds value, without the ability to tie the technology into the overall IT strategy you will face an uphill battle every time.

Let me reiterate by rephrasing: I am not saying that it is impossible to sell based on feature / functionality.  What I am saying is that, when I was in my first sales position, we were constantly chasing budget to make a purchase.  We did close deals, small and big, but the amount of effort that we expended was exorbitant.  This was due to the fact that feature / functionality sales is an uphill battle save for the most highly commoditized solutions (e.g. email) simply due to the fact that the people responsible for signing the purchase order are going to keep their defenses up longer than they should.

IT Strategy

Why is that?  The problem, essentially, is that sales people are notorious for trying to close the deal.  After all, their ability to pay their bills is dependent on them reaching their quota.  But instead of trying to understand how the executives at their accounts approach their jobs, they instead go for this feature / functionality sales play under the incorrect assumption that it is the easiest route to closing a deal.

The faster route to value happens when the salesperson starts to think like the CIO rather than expect the CIO to think like they do.  And this begins by understanding how IT strategy is devised - this helps the salesperson understand and appreciate what the CIO considers to be important and more rapidly establishes credibility in the relationship.  When this occurs, the defensive barriers that were previously raised get lowered more quickly allowing a true partnership to be formed.

It should be noted that the ability to close the deal still depends on the ability to demonstrate a quantifiable return on investment with a payback period of less than 12 months.  Additionally, financial metrics such as Net Present Value (NPV) and/or Internal Rate of Return (IRR) may be required.  But without the establishing of the senior level relationship, you will never be invited to the table to pitch these figures in the first place.

Part 2 of this blog entry will continue this topic by examining how IT strategy is devised and implemented.

Wednesday, February 22, 2012

Long time no chat!

Ash Wednesday
Today marks the beginning of the season of Lent for 2012 and, in the spirit of giving up something, I've decided to give up my apathy regarding this blog.  

What happened to bring that about in the first place?  To be honest, I set unsustainable expectations for myself with respect to what I wrote here.  My original intention was for this place to be a commentary on one's approach to their business and career; after I ran out of ideas for that I pivoted on the concept and instead reported on what I thought were relevant business topics; finally, the amount of effort required to dig up interesting subject matter on a regular publishing schedule became more than I was able to dedicate.  So I shut down the blog.

Why Now?
My intention this time is to not have a purpose necessarily.  Instead, I will write about topics that I find interesting and trust that you will find them similarly interesting.  If my trust is well placed then you will continue to feel that this is a blog worth reading, and you will return here regularly to be enlightened or entertained at the very least.

I will not attempt to stick to a strict publishing schedule as I once did.  That, I believe, added to the pressure that led to the discouragement that ultimately led to the previous death of this blog.  If I allow publication to occur when I instead have something interesting to say then that should also help ensure relevance to what you are experiencing in your professional life.

Future Topics
In the time that has elapsed since I was actively maintaining this blog, certain business topics have found their way onto my radar.  I will apologize now if some of these seem like advertisements for my employer, but I have never shied away from my belief that the portfolio of solutions offered by CA Technologies is one of the strongest available in several areas.  Fortunately, I am not alone in this thinking - Gartner has awarded CA Technologies as the leader in its magic quadrant in several areas including identity and access governance; user administration and provisioning; and content aware data loss prevention

The part about that last statement that scares me is that I have been told on more than one occasion by CxOs that they were unaware that CA had a security portfolio at all, much less one that had solutions that led in several areas of IT security.

Therefore, some of the topics will discuss particular IT initiatives and how gaps that typically exist can be addressed by specific solutions.  Other topics will discuss general trends in IT, e.g. cloud (the 800 pound gorilla in everyone's room), software development, the "new normal" (you'll have to wait to find out what my application of this cliché means), etc.  And, finally, some topics will be general commentary on observations I have made both at work and in the offices of the senior IT executives that I interact with on a regular basis.  

I hope that you'll continue to return and not only read these upcoming entries but also contribute via comments (to foster community discussion) or directly via email.

Until next time,
Larry