The CIO’s opportunity to transform transformation

Image: The CIO’s opportunity to transform transformationBecause much of the methodology for examing business modeling fits under the technology umbrella, the CIO is well positioned to build a better framework for the business’s decision-making process and IT’s transformation-driven change-management process.
 

Download Technology Forecast 2010, Issue 1 for the complete article

Enterprise transformation can be a CIO’s downfall. No matter what business reason—an acquisition, partnership, or new market entry—drives a transformation effort, the hammer drops on the CIO if something goes wrong. Although not responsible for the strategy behind the transformation, the CIO ends up responsible for most, if not all, of the implementation of key processes, since they are all technology-enabled and tied to existing data, applications, and infrastructure. It doesn’t matter if the expectations were unrealistic; the implementation result is what gets judged.

Typically, any transformation is based on financial assumptions and is essentially a return on investment (ROI) bet. That bet is based on spreadsheet modeling by the CEO, CFO, and other business leaders. If the CIO’s organization is world class, it has frameworks, such as the IT Infrastructure Library (ITIL), to identify the affected systems and track the state of implementation of the transformation. However, the key decisions— especially regarding business strategy and execution— usually are based on the intuition, experience, and assumptions of key leaders, not on any modeling efforts.

“When I help enterprises with transformation decisions, I rarely see IT people supported by modeling,” says Dr. William Rouse, executive director of the Georgia Institute of Technology’s Tennenbaum Institute, which researches and advises on strategic transformations.


Enterprise transformation can be a CIO’s downfall.

The article, “Embracing unpredictability,” on page 04 describes an approach that includes operations research, agent-based modeling, and value network analysis. These once-separate disciplines are converging, making effective modeling more accessible to the many different departments involved in transformation efforts.

These three approaches give the CIO the necessary frameworks to construct meaningful models of business and technology processes—models that include market and human factors. The overall methodology can simulate a transformation’s impact before it’s launched and help to create a better road map to implement the transformations worth betting on.


CIOs need to challenge the status quo by spelling out the shortfalls of the simplistic and untested enterprise models associated with most transformations.

The CIO often takes the fall when a transformation fails, so it behooves the CIO to take the lead in exploring this methodology. Because much of this methodology fits under the technology umbrella, the CIO is well positioned to build a better framework for the business’s decision-making process and IT’s transformation-driven change-management process. These models and tools are young, but they’re mature enough that you can start to understand, test, and deploy them—at least in parts of your work.

Download Technology Forecast 2010, Issue 1 for the complete article