In the last years the role of the CIO has changed from an ICT manager who maintains the ICT landscape to a business information manager who must also advise the business on E2E process improvements and business transformation programs.
Many CIO’s are in the squeeze between the urgent need to implement business innovations or new technologies and reducing the cost for maintaining the current complex ICT application landscape (“keep the lights on”).
The largest ICT maintenance related problems faced by CIO’s include;
1 Lack of documentation and associated knowledge of the staff
2 Application instability / maintainability and associated risk for the business
3 Limited data quality, data standards, data integration and data security
4 Extensive maintenance of in-house or vendor managed source code
5 No overview of the aging overlapping application landscape
6 Increased complexity and reduced flexibility with every new application platform
7 Top management pressure to reduce the costs of the ICT maintenance
Outsourcing the application portfolio does not solve these ICT maintenance problems, it reduces the costs per incident but it limits the in-house ability to reduce the complexity of the application landscape.
The top business - ICT alignment problems faced by the CIO’s include;
1 Limited understanding of the detailed E2E processes by ICT departments
2 Limited mutual understanding of required business innovations and ICT limitation
3 The inability to define convincing business cases based on business reports
4 Increasing time to market of new products and services
5 Inflexible platform to integrate new cutting edge technologies
6 Business takes control of the project portfolio, budget and shadow cloud solutions
7 Limited ICT involvement in operational excellence and cost cutting initiatives.
When the business starts extending the application portfolio with new SMAC (Social, Mobile, Analytics, Cloud) technologies, the platform integration and application portfolio becomes more complex and costly with each extension.
The radical change to a cloud enabled application architecture will not resolve the E2E process and data integration problems of the organization. The revival of in-house application development will not solve the problem either because it will introduce new integration problems and companies should focus on their core business activities and not on the replacement of their software vendors.
A more evolutionary approach can be preferred in which the business (model) innovations are integrated into the E2E business process improvements projects in combination with the rationalization of the applications and the migration towards a cloud landscape.
With this approach the flexibility and maintainability of the ICT landscape “keeping the lights on” is improved and at the same time the mutual understanding of the E2E processes and the ICT limitations will be the basis for a mutual agreed business case.
Business (model) innovations:
Business innovations are mostly based on new insights of employees which are triggered by developments within the market place. Business innovations can be categorized in;
- New value proposition to earn money on a different way ( e.g. Nespresso cups)
- New way of E2E logistical execution ( e.g. single entity with central distribution)
- New products or services developed by R&D innovations ( e.g. 3D printing)
- New transformational technologies improving the E2E processes (e.g. SMAC)
Most business model innovations are caused by product innovations, but in the last years more focus is given to understanding what the objectives and value propositions of the organization are, in order to optimize the business models and the E2E processes.
ADM governance team:
To resolve problems of the CIO, a dedicated ADM team is needed because E2E business process improvements projects require knowledge of the E2E processes and enterprise architecture and the political skills to align the objectives of the stakeholders.
The ADM team will be responsible to improve the E2E process metrics and E2E business results together with the business units in order to create a mutual understanding of the E2E process improvement priorities.
The ADM team will also be responsible for the quality assurance of all business (model) innovation projects and the compliancy to the company standards.
The business transformation impact on the organization should also be managed and the on-going benefits tracking is important to make compelling business cases.
ADM integration platform:
E2E processes are the glue that link the business models with the applications and can create a common understanding what is required to rationalize the application portfolio.
All ICT applications, methods and tools (e.g. ERP, BPMS, ALM) of an organisation should be integrated in order to exchange, share and re-use project deliverables.This (ADM) integration platform is different for every organization depending on the current use of the legacy ICT application landscape.
A POC (Proof Of Concept) of the ADM integration platform is required to reduce the complexity and infrastructural layers and to get the support of the organization to rationalize the application portfolio and standardize the methods and tools.