Today’s CIOs are challenged with innovating at a breakneck pace as they drive the digital agenda for their enterprise. While digital transformation gets the spotlight, maintaining costs, running legacy systems, managing security and audit risks, and generally keeping the lights on still absorbs a significant amount of a CIO’s time. IT leaders need to operate on both strategic and tactical plans, which requires real-time data and insights to support decision-making. Making decisions without data is like betting on a horse simply because you like the name.
Here are the five most pressing tests for IT leaders who need to place only the winningest of bets:
- The unknown future in an M&A and divesture world. Amid mergers, acquisitions and divestitures, it can be a guessing game to know exactly what a future IT budget might look like. In reality, to make accurate forecasts on synergies gained in IT, decision-makers need to model not only the current IT spend for the existing organizations but determine where the efficiencies and effectiveness in the new organizational model can be scaled up or down without sacrificing quality. Modeling the new organization without data to understand, where economies of scale can be put into play, how to combine or spin off teams, and what the best sourcing model is for the new entities is risky. In essence, to make these kinds of decisions, you need to be able to model multiple “what if” scenarios and make decisions with real facts.
- The unknown present. The truth is, as much as we like to talk about how difficult it is to pin down an uncertain future, most organizations don’t have a good grasp on their current IT spend. Many IT leaders – and this is especially true of new CIOs – may have a high-level view of overall IT spending but no idea what the IT spend is for their organization’s key cost pools or services or if it’s in line with their peers or the provider market. Perhaps you have invested heavily in new customer-facing platforms and know your IT spend is higher today but will drive higher margins, increased revenue and client loyalty with a longer-term payoff. Are you competitors doing the same? Are they further ahead or behind you in their strategic thinking? Without market comparison and a way to tie back to business value and outcomes, decision-makers don’t know if their strategic bets have paid off or if they are just playing catch up.
- The innovation mandate. It’s a familiar scenario. You’re told you need to innovate, digitize the front end, transform the way the business operates, create IT products to generate new revenue streams and disrupt the market. But, of course, you must keep the lights on, and – oh, by the way, you are getting no new resources to do it. This is what IT leaders have increasingly faced over the past three to five years: running the business while transforming the business – and figuring out how to fund it all. This means looking for ways to make efficiency gains, looking for places to make the right changes and cuts to fund the new initiatives without increasing overall spend. Having the right information to make the best choices is critical to creating budgetary space for innovation.
- The pressure for progress. It’s one thing to figure out what you want to do and begin it, it’s another to track and measure the value of those initiatives. Leveraging a common data taxonomy to communicate IT value is the key to developing and reporting progress over time. A snapshot of a moment in time tells you only so much about spending as it relates to today’s performance. What’s potentially more interesting is being able to compare how you’re doing now to how you’re doing in three months, and then again in another three months – and making course corrections when required. This requires timely data gathering about spending, frequent comparisons to other options, regular modeling of alternatives and the ability to come back again and again to see trend lines. Only then will you know if you accomplished what you set out to – and make the case for continued support going forward.
- The agile question. Moving to an agile development model is not a simple task, and knowing if the change has paid off is hard to measure. Development teams typically deliver enhancements or epics to applications by portfolio – legal, HR, supply chain, marketing – and gaining transparency into the effectiveness of these teams is hard without a measurement structure. Perhaps one team has high delivery velocity (and therefore productivity), but there are grumblings about quality. Another team might struggle to deliver on requirements, but it’s not clear if it’s related to the amount of time in requirements gathering or a skills issue. Perhaps the onshore / offshore mix is out of whack. Only a framework for comparison can provide the insight you need to make decisions about whether to keep doing what you’re doing, stop doing something in particular or shake up the teams altogether.
ISG Inform™ is the CIO’s racing form – giving you the data models and tools you need to place the best bets. Whether it’s IT as a percent of revenue or application release rates, ISG Inform™ contextualizes your data to identify performance gaps and what is driving them. And it calculates how your digital spend is having an impact on your organization. No online source of data can give you all that. Contact us to find out how ISG Inform™ can help you overcome the challenges to your work and get ahead.
About the author
Kathy works with enterprises across ISG’s client base to address unique business challenges leveraging our Data & Analytics methodologies and tools. Whether she is developing and deploying delivery methodologies or serving as the go-between for global teams to ensure end-to-end service delivery, she earns rave reviews from her clients. Throughout her more than 20-year career in information technology management and business operations, Kathy has linked IT to business value and assessed the performance of internal operations and outsourcing relationships. Her industry expertise includes oil and gas, aerospace and defense, retail, finance and local government.