IT Value Stack

Ron Dimon's Review of The IT Value Stack

I excitedly clicked on the link to a review of my IT Value Stack book on the 'Did Somebody say Strategy?' blog.

Ron Dimon was the reviewer and he has clearly devoted considerable time to reviewing the book for which I am very grateful.

Ron warms me up for some bad news by expressing his disappointment from the outset and kindly attributes this to his expectations being too high.

Nobody likes to be told that their 'baby is ugly', but I take the view that if that is the case the sooner I know about it the sooner I can get back to reality. With this mindset I am responding to the review:

Ron mentions that the book opens up with sweeping generalisations. This is true as are the generalisations in the main. I am not alone in thinking,  for example, that there is tension between IT and business people; the fact that the IT industry is unable to demonstrate business value; the industry has a poor delivery record. Of course there are exceptions, but my generalisations cover the majority of situations. They are intended as the rationale for the book.

Admittedly I have taken perhaps too unequivocal a line in my comments. I put that down to having been 25 years in the IT industry working from bits to boardroom. I hope that it raises the energy of the book for the reader. I am nonetheless open to counterviews in order to refine my own thinking. So I welcome Ron's comments.

Ron points out that his experience in engaging with CIOs is different to mine in that he has found them to be quite business-savvy and sometimes COO like in their approach. I have met similar CIOs. They are smart enough to seek out companies that 'get IT'. But I still hold the view that the majority of CIOs are technology rather than business focused. The last significant surveys I could get my hands on were from Gartner and Burson-Marsteller (a contributor to my book). They put CIO representation at board level within the Fortune 500 companies at circa 5%. So my view is there is work to be done. I can understand Ron's perspective, his working sphere and the blog itself is likely to attract the attention of the enlightened few CIOs. But they are not representative of the overall population.

Ron picks up on my saying that CFOs are unlikely to provide any operational or even strategic input into the IT department and then cites that most of the CFOs he has worked with are very involved. I will need to reread my book but the message I was hoping to convey is that CFOs can be too hands on, taking an alpha male (usually) approach to managing the CIO. But I admit there are some renaissance CFOs who look at IT from a strategic perspective. Their challenge is how do they measure this in financial terms, which is a key (but perhaps unclear) message in my book.

My use of entwinement is questioned as Ron points out that all I am getting at is bi-directional alignment. Possibly I am, but I think entwinement reads better. This is semantics and Ron is as right as I am depending on how we define these terms. My key message here is that we need to move the relationship from supplier (alignment) to partner (entwinement). My concern with bi-directional alignment as an alternative term is that it could be construed as  IT and the users are both suppliers to each other. That is not the point I am trying to make.

My coverage of Process entwinement was seen as a little light for Ron. He was hoping for some new thinking on management processes. My thrust was to provide new thinking in terms of IT's role in business processes and how the role of IT needs to extend from beyond the IT function and into the business (processes). I would agree that I have brought nothing new to the table in terms of business process engineering. Though such emphasis would in my opinion have skewed my model and is thus best left to process experts.

Ron congratulates me on getting external perspectives but suggests that by bundling them together at the end of each chapter undermines my message. This is a fair point.

Paragraph duplication - Hats off to Ron. I didn't spot that! This is a mistake. It also highlights that fine tooth nature of Ron's reviews.

There is mention of me implying that board members take a tactical approach to IT. My view is the opposite. They don't take enough interest in IT, even from a strategic IT or even business perspective. Again I must reread to check that I have articulated this point clearly.

An interesting point was made regarding the interconnectivity between the layers of my model. I need to give this more thought as there may be something in that point. My initial thought is that the model was designed so that the layers are uncoupled. But again Ron's comment has triggered a potential improvement opportunity.

Ron recommends Enterprise Architecture as Strategy  by Ross Weill and Robertson as a better read on IT value and leadership. I will take a look myself as my initial scan on Amazon reveals what could be a good read. However the recommendation suggests that Ron is still somewhat technology-management centric in his thinking on IT leadership and possibly misses my points on the IT leadership implications beyond the technology/ information architecture  piece. Most notably strategic, people, service and value implications. My key point is that the IT industry needs to 'grow up' if it is to deliver real business value. A radical change in thinking is required in terms of responsibilities in respect of reaping value from the IT investment and how this is addressed. Any book that challenges the status quo in these respects gets my vote.

In any case I have found Ron's comments stimulating. And look forward to continuing the discussion. I also look forward to following up on Ron's reading recommendation!

Martin Koser's Review of The IT Value Stack

Martin Koser has written a review of The IT Value Stack on his frogpond blog. Martin is an engineer and business administration professional from Stuttgart, Germany.

CEO READ excerpt of The IT Value Stack

The good people over at 800-CEO-READ have posted an excerpt of The IT Value Stack on their excerpt blog.

Some of their other recent excerpts that look interesting include Brain Rules and The Back of the Napkin. Take a look. Their main blog is an easy way to find out what's new in the world of business books.

James Taylor's review of The IT Value Stack

James Taylor of Smart (enough) Systems reviewed The IT Value Stack. You can read his blog post on the review, or read and edit the full review on his wiki entry for it.

EDS Review of The IT Value Stack - Part 3

Here's the last of three posts that respond to The IT Value Stack review that Charlie Bess of EDS wrote on their blog, The Next Big Thing.

Charlie said:

3. One other area that wasn't brought out in the book that I'd like to hear Ade's perspective on is: Cloud Computing. Most of the folks who are working in cloud computing can spell "cost" fairly well, but don't understand "value" and what the organizations will require to use it as an integral part of their business. We'll see how many lessons are going to be learned in that space before there are some changes in the market.

I do believe there was a great deal of useful material in the book and it should make the reader sit back and contemplate their ability to adapt and adopt the concepts, since in any shift like this the leader must ensure that there are followers.

My response:

I have only recently come across the term Cloud computing. It looks like an attempt to bundle grid, virtualisation and utility computing into business/media friendly concept.

That said, extracting better value from one's IT assets is to be applauded. Three years ago grid computing in particular was marketed by IBM but was still really a subject for comp sci academics. In the last year I have seen it turn into commercial reality, particularly amongst investment banks. But true grid computing whereby the user devices contribute to load sharing as well as the servers is some way off as the security implications and underlying architectural requirements are horrendous. But this may move forward faster than I expect because the concept at least is boardroom-friendly. I am sure the out sourcing community will put their shoulder behind it as it strengthens further their value proposition.

I have enjoyed responding to your thought provoking comments and would be happy to take the discussion forward. I have worked with EDS in the UK in respect of helping the IT recruitment function in respect of talent management.

These are interesting times!

EDS Review of The IT Value Stack - Part 2

Here's the second of three responses to the book review written by Charlie Bess, who writes for the EDS Next Big Thing Blog. (See his complete review here.)

Charlie raises this point:

2. Even though Ade talks about the business value being based on the use of IT, he keeps pounding away that IT is separate and must be "entwined". I'd have bought that argument in the mid 90s when most middle management had little understanding of computers, but that does not hold up today. When he and I exchanged a note about how the "typing pool" has disappeared, I suggest the same thing is happening with "long tail" application development, through the use of mashups and other similar techniques. He does talk about the CIO being the evangelist or enabler, but it was a bit weak for me. IT's days as a separate entity inside the corp. are numbered. Everyone needs to take a hard look at the territory they want to claim for their corporation and prepare the IT organization to make it happen. In Ade's book there is a good tactical framework to do this, and it appears to be a valid means to an end. It's just the end state that I'm afraid could have been more thoroughly explained.

My response:

I work with some of the biggest companies in the world and most middle and senior managers are clueless about what IT can do in respect of cost management, innovation and governance. So I am comfortable with the notion of a business-IT divide.

The fact that we have business/systems analysts patrolling the DMZ between the two parties attests to a serious rift. I agree that the IT department's days are numbered, I am pushing for it. In much the same way as the typing pool used to be a function now everyone does their own typing. So it will be with IT. Thus the IT department's days are numbered, but it’s a relatively big number, in my view.

My perspective on outsourcing is that many providers can do IT better than many end user IT functions. An alert-IT department has the advantage that they know their business processes much better than any outsourcer. As time marches on the technology piece will be trivial, the value will be in the business knowledge. But I accept that where an outsourcer acquires the business expertise then that is a heady combination. Some of the outsourcers have already got this message and have moved their proposition up the 'value chain' by presenting themselves as business outsourcers.

On reflection the book would appear a little harsh on outsourcers. I have no fundamental issue with it. I simply want the IT function to put up a better fight, for everyone's benefit. Your comments will certainly influence my presentations/writing and consulting activities to be more balanced on this.

EDS Review of The IT Value Stack - Part 1

Charlie Bess, who writes for the EDS Next Big Thing Blog, reviewed The IT Value Stack. Charlie raised some good points, which I'll address here and in the next three posts.

First, Charlie writes:

I was reviewing The IT Value Stack the other day and in the process exchanged a few emails with Ade McCormack the author.

Although he does a great job describing the issues of value generation within IT the way it is structured today. There were some differences of perspective that I have to bring out:

1. Ade's discussion of outsourcing appears to be fairly harsh. He does not understand the real value of outsourcing. It is not about replacing workers, but about diversifying risk and contracting for efficiency. His whole premise seems to be that an in house team is always the right answer. I'd say that is a high risk proposition. As the industry moves into a more assembly based value creation approach rather than a hand crafted one, the need to have experts (for a short duration) in high value segments should increase. Outsourcers had better be able to apply those resources seamlessly and more effectively than any in house team could ever do. The changes in the IT industry will demand this ability to tap into a more diversified resource pool.

My response to this:

I take the point about risk diversification, and agree, particularly where the in-house function has become lethargic and fails to operate as a keen supplier. The other extreme of course is that outsourcing all your IT to one organisation is perhaps the biggest risk. Again in-house is not the right answer where the IT department is beyond salvaging. My message is that they need to buck up if they are to compete with more commercially oriented suppliers like EDS, which is my view, an perhaps not good reading from an outsourcing perspective.

In my experience outsourcing as a model has gone in and out of fashion as it will continue to do so. I quite like the utility model some players are adopting, particularly for hygiene services. But in my opinion most buyers of outsourced services are looking at cost first. For many they see IT in much the same way as stationery, "where can I get it cheapest', hence India coming strongly into the frame, and hence the western outsourcers getting into India.

The big question for users of IT services, is whether IT is their core business or not. I would argue that core business for Citigroup and American Airlines IS and brand management. And if that is the case should they be handling that to a third party? Maybe yes is the answer. I agree however that slowly but surely IT is moving from craft to assembly. As that happens the likes of EDS can offer a number of things, not least economies of scale. But the slowness of the evolution of IT is making assembly line something of a romantic notion but for the most basic of applications. If that were not true then every IT project would be a success, which is far from the case.

Only Strong Survive in IT/Business Jungle - IT Business Edge Interview

Ann All of IT Business Edge recently interviewed me about The IT Value Stack. You can find the interview at the following link:
Only Strong Survive in IT/Business Jungle.