The Modern Challenge to Run, Grow and Transform Business
As the role relates to business, the Chief Information Officer (CIO) is a fairly modern position—adding to the growing stable of C-level executive job titles—that has been created through necessity as IT operations continue to permeate every aspect of business.
And this new millennium title comes with a highly complex job description to back it up. The CIO’s new mission and mantra—“Run, Grow and Transform the Business”—is a task that sits squarely on the shoulders of an individual who must connect everything from IT, to Finance, to Marketing and Sales, Operations, and beyond.
As it applies to modernity, the Run > Grow > Transform concept is an approach that is literally only a few years old. Originating from Gartner in 2008, it has subsequently become just one of the latest business buzz terms and ideology.
The question remains, however, “Is Run, Grow and Transform” still relevant as business continues to evolve at a never before seen rate? The answer is simply, “Yes.”
That said, the concept of Run, Grow and Transform isn’t necessarily a new one, even if Gartner claims the buzz word for itself. Over the past 15 years, many CIOs historically split their operating and capital budgets into Run, Grow and Transform categories, with a lion’s share of the operating budget reflecting the Run, and a significant portion of the capital budget reflecting the Grow and the Transform.
Hence, many executives remain consistent when viewing their spending within those categories: a way that easily and simplistically illustrates how much budget is associated with keeping the lights on, versus actually moving the business forward.
But, like any evolution, there is a transformation happening within the Run, Grow and Transform ideology. As both the complexity and reliance on data continues to steer business, the concept of specifically asking how much time and effort is being spent on analytics is becoming paramount. It is the investment that now must be associated with analyzing Big Data activities—the mandate to create a direct correlation of business units to the driving of customer improvement, customer experience, pricing anomalies in the market, and market share acquisition.
It is this change that now places the demand on CIOs to deliver more than simple budgetary silos—it now demands that CIOs account for spending as it relates to Big Data, Business Intelligence, and driving the business forward.
The new world and its orders
The quest for analytics and business intelligence truly has evolved in the past decade. As stated earlier, all business units have begun a mass convergence, no longer sheltered by historical silos within the business arena. Through data connectivity and relevance, it truly has become a paradigm by which the rule “For every action an equal and opposite reaction” occurs. Whether in finance, marketing, or human resources—everything is equally connected, accountable and runs, grows, or drives business.
So, as it concerns running the business, the question will be posed as to what percentage of the IT budget is spent— being anywhere from as low as 60% to as high as 75% or 80%. But what is the appropriate number for running a business?
In all honesty, it differs by everything from industry type, to business culture, and beyond. It also differs by the maturity of the business and where it is in its life cycle. If it is referring to an early stage company on the cusp of launching a new product or service—perhaps a SAS-based platform seeking market acquisition—the percentage of budget spent on running the business is going to be very small. Why? Because the operational infrastructure to support hundreds of clients or millions or billions of clients is an entirely different kettle of fish.
Additionally, when larger enterprise organizations are spending money—and are large enough to have an actual Project Management Office (PMO)—the company will often look at the portfolio of projects that are currently in motion, and what percentage of those projects are categorized by Run, Grow and Transform. Thus, if the company is embarking on project maps that encompass all three categories of Run, Grow and Transform, there are various mechanisms with which they can monitor and subsequently balance appropriate spending.
So when we speak of enterprise-sized companies, we now must also consider that business-critical infrastructure runs on mainframe systems. And as we all know, the mainframe is a big player, and probably one of the biggest cost line items in running the business.
That said, the mainframe plays a significant part as a major contributor to running the business. In this day and age, we see many seeking ways to optimize and leverage it to accelerate growth and transformation.
So what does this mean? It means that the mainframe will play a critical part in the growth and transformation phases within enterprise companies. With the influx and need for Big Data, the lion’s share of data still resides near or on DASD that are connected to mainframes. It also means that we will continue to see a shift where computing comes to the mainframe, where the data resides, as opposed to trying continually to shift the data to where the computing is, which is a high-performing computing platform, like AWS or Azure.
Businesses continue to create larger connectors and bandwidth between AWS and where their storage environments are located; furthermore, they are creating a private cloud of compute-on-demand, connecting that to the mainframe in a more seamless way, as opposed to doing the traditional ETL and getting that off into the distributed world.
This, of course, also adds to the mix for CIOs and their highly complex lives. Businesses will continue to face challenges as they relate to reducing revenue, mature products, delayed development, and so on. It then begs the question, “Should they be backing off the transformation efforts, and going back to focusing on just running the business?”.
The answer? That depends. Product or service always plays a crucial role in business trajectory. Therefore, is the technology an integral part of delivering the product or service, or developing it?
If it comes down to delivering the product or service, businesses may be inclined to double down on the transformation side. Especially if they are going through platform transformation, programming language transformation, or even a data center transformation.
Often if they are in a struggling financial scenario, there may be greater investment going on in the transformation side so they can get through that technology shift and come out the other side more efficient and more cost effective and more agile.
However, unfortunately, the natural tendency is to hunker down and to try and ride through the revenue shortfall by cutting costs.
So, for the newest of CIOs—my condolences in advance (insert maniacal laughter here)—there are a few nuggets of advice that I can impart.
Firstly, seek out and implement a few “quick wins” in terms of run the business. Ones where you can look at some reduction in costs that will help provide additional funds that could be invested in transforming the business.
Secondly, make sure that when you invest in transforming the business, you are really tying that to solid, qualifiable and quantifiable goals of an executive, that is a 12-month to 18-month goal, so you can prove you have self-funded by way of reducing costs in the “run the business.” This surplus can be transformed to fund other projects related to transforming the business that has a win in the near-term goal.
If you can do that in the first 12 months of being a CIO, your life won’t be so complex.
Neale D’Rozario has been an IT professional for more than 33 years, and a CIO for the past 21 years. He has been the CIO for RTI International, Genworth Financial (MI), Sensus USA, Misys Healthcare Systems, Channel Master LLC, Cogent Communications, SunTrust Capital Markets and Barclays Debt Capital. He is also the founder and president of D’Rozario Consulting Services.