Many C-Level executives are now facing a situation where the ‘traditional’ aspects of their role are being reshaped, or in some cases undergoing wholesale changes. From a CIO perspective, one of the fundamental challenges being faced is that the business is going direct to vendors to procure technology solutions for their business. A Logicalis survey reported recently that 31% of CIOs were bypassed on numerous occasions in technology purchases and over 90% were bypassed at least some of the time(1). So how can a CIO maintain their influence in today’s businesses?
I recently read a great article by Daniel Lambert on LinkedIn(2) which talked about this exact issue (this is where the surprising statistics from the Logicalis survey came from). Daniel cites a couple of interesting points that draw on the potential advantages for a CIO (and his/her team) to draw from by utilising business architecture approaches in their function:
Ensuring Business Architecture gets as much attention as the other Enterprise Architecture domains – by dedicating as much time and effort to the Business Architecture as many organisations do on Applications, Integration, Data and Infrastructure, you can minimise risk, do better scenario planning and ultimately ensure you are on a path where your initiatives and projects are aligned to executing on strategy.
Many IT functions are moving towards the management of service portfolios. To do this effectively the IT team needs to be able to quickly react to service the demands of the business. Business Architecture and Capability-based planning is a great way to keep across what this demand looks like and where the business is looking to transition to (target state).
Building and managing your business around a defined value chain and associated capabilities (as opposed to technologies) can be an effective way to ensure you grow (or maintain) competitive advantage and effectively execute on all your business strategies.
Naturally this will work differently in businesses of different size, scale and age. Older businesses with a large estate of legacy systems face different challenges to newer businesses that can build their IT systems and processes from green field. A look at two recent examples from CIO.com publications however looks at the benefits of using capability-based planning in both new and established businesses to drive business and IT decision-making and efforts.
Dollar Shave Club(3) – Founded in 2012, the Dollar Shave Club provides a direct-to-consumer business that gives its customers direct access and delivery of shaving razors. The company has grown rapidly to a subscriber base of over 3 million and they were recently acquired by Unilever for a reported fee of $1bn USD. They use 22 custom applications to manage the core of their business, selecting the components of available technologies that provide them with strategic differentiators. Categorised under 4 core capabilities, they have a customer-first mindset that drives all technology and process decisions:
Voice – all outbound communications to customers including email and push notifications
Brain – CRM for member details, package tracking, activity logs, etc.
Arm – order fulfilment
Ear – telephony system for all incoming call handling.
Workday(4) – A global ERP provider with over 1100 customers, competing with the likes of SAP and Oracle for large scale enterprise accounts. CIO, Diana McKenzie joined Workday last February and is keen to use Business Architecture as the foundation for more effective delivery of business outcomes for IT and more informed decision making from business leaders. With such a huge range of customer data in their ecosystem, using business architecture to understand their core capabilities and to drive the right sort of change is a natural path to take in the opinion of the CIO.
The shifting roles within the C-suite, and indeed the creation of new ones, is likely to continue to evolve, but for those looking to drive and have an impact on change agendas, adopting a capability-based approach to your organisation will help you both understand where your business is at today, and also where it needs to get to. Change cannot be stopped, but understanding its impact and being able to depict this impact in business terms, is a skill that is likely to maintain its relevance in years to come in order to enable effective and successful decision making.