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2015

[Note: This article was originally posted to Mental Effort on January 19, 2015.]

Gustave Flaubert was a nineteenth century French author who is considered by many to have created the style of the modern novel. As the New York Times literary critic, James Woods, put it, "Novelists should thank Flaubert the way poets thank spring; it all begins again with him." Flaubert painstakingly depicts his characters with precise and lean descriptions. His works, like Madame Bovary, are highly referenced examples of Realism. Maybe you've never heard of him, however I bet you know one of his famous quotes:

"There is no truth. There is only perception."

Of course we all create and have a library of perceptions, mental images based on our senses, about the world around us.  Sensory information, in a sense (pun intended), are simply data. Data which doesn't have a natural right or wrong associated with it. We form perceptions by combining both our sensory data and the experiences and knowledge we have about a particular subject.

 

Harvest Moon by Brett Davis - https://flic.kr/p/5mNyLx

HARVEST MOON BY BRETT DAVIS – HTTPS://FLIC.KR/P/5MNYLX

 

For example, you've likely seen, on occasion, a moon that looks big and orange just above the horizon. Now, we know that the moon didn't actually grow, and that this largeness is an optical illusion. The red & orange color is due to the filtering of blue light from the thicker parts of the atmosphere which are located closer to the horizon.

But what if we didn't have today's modern science and understanding of atmospheres, orbits, and different wavelengths of light? We might think that the moon suddenly grew and turned a frightening shade of blood orange. Our observations would be the only data we have about the moon and our perceptions would be set. If this were the case, we would have created a misconception about the moon, a view that is incorrect because it is based on a faulty understanding.

Misconceptions are the subject of today's third part of my series on IT business transformation. We'll explore this question:

What perceptions of technology do business leaders make that lead to misconceptions of IT services and staff?


As a technologist you have experience and knowledge that business leaders in other areas won't. What you perceive when merging your observations with this knowledge may be vastly different than the perceptions that others form about your work. You have to translate your experience into language that the uninitiated will understand and care about. Others have not chosen your specialty, so they may not be naturally inclined to be curious about technology, to want to know the why, or to even "hear" what it is your saying unless you speak in their terms.

Stated simply, you have to stop talking about technology. Instead speak in terms that matter to your audience, to truly change perceptions.

 

Here I want to make an important and maybe obvious point. On occasion I've found that the misconception lies with me, and not the other way around.  If my team is hard to work with, or has a habit of saying "no", the lens of "misconception" just might be reversed and introspection would be in order. You shouldn't expect other leaders to take the lead to point this out to you, after all they have been by giving you feedback all along, haven't they?

By way of example, let's take a look at two common areas of misconception: cost and transparency. I'll offer a scenario, talk about the likely misconceptions, and offer ideas on how to turn the conversation toward IT Value.

IT Costs

Scenario

Your IT costs are allocated back to a business unit, showing up on a P&L as single lump sum.

 

Misconceptions

IT is seen as expensive, uncontrollable, and adding little value.

IT is a tax on the business.

 

The message you should receive

Business leaders don't know what specific value you bring, they don't understand their consumption of your services, and they often see marketing from external companies with little on this front from you.

 

Solutions

Dig into the details of what is truly represented in this allocation. Do you understand it, does it make sense to you? Take financial accountability of your costs and how they are reflected to the business units.

 

Reaffirm and validate the rules that govern allocation. Are they arbitrary or based on data?

 

Consider grouping the allocations into more specific categories from the services you provide (servers, storage, customer support, etc…) versus a single number.

 

Provide operational and consumption based metrics in addition to the financials.

 

Sit down with each product GM and have them describe their business to you and how they think IT supports their cause.

 

Arm yourself with the risks, road map, and upside of the business meeting their goals.

 

Use all of this data to establish monthly business problem solving sessions where IT is a partner and part of the culture.

 

Lack of Transparency

Scenario

IT is late to learn of new product and service offerings. Much IT work feels reactionary versus planned. Little to no strategic planning is done with the IT department.

 

Misconception

IT is a supplier, providing only tactical services. IT is a black box, what do they even do all day long?

IT is a bottleneck, not flexible enough, and slowing my business down.

 

The message you should receive

Business leaders see you as ticket takers, waiting for direction from them. They see you as a vendor, not a partner. Vendors are there to brow beat, partners play on the same team.

Business leaders don't understand the technical risks of their decisions.

 

Solution

Define a service catalog, market the value you bring. Rinse and repeat the marketing.

 

Talk about risk prevention and the insurance policy of an on-call team, Network Operations Center, or penetration testing of your services.

 

While supplying compute, storage, and network is essential, turn the dialog to the higher order services you do as part of solving a business problem. Don't lead with hardware configuration and speeds and feeds.

 

Likely flexibility comments are really about not having visibility into the workload of the IT department. Determine how to make this visible, catalog all tickets in a queue, categorize them, ask for help setting priorities with your peer business leads. Oh, and market that you have this visible display, often.

 

Create a forum (newsletter, blog post, lunch and learn sessions) to talk about the big things you are doing that will improve efficiencies, limit risk, save money, and enable better products and services.

 

Remember, IT is a strategic weapon and creates value for the company.

These tactics are examples of the types of actions you should have in your IT roadmap to create positive perceptions of your organization. You want to turn emotion led decisions into data-driven decisions. The next time you hear feedback from your peers in the company, try to empathize and figure out why they feel that way. Only one of two outcomes is possible:

  1. They've got it right and you have work to do to address the feedback,
  2. They've got it wrong, and you have work to do to address the misconception.

Ignoring the feedback will further strengthen the observations and lead to more heavily entrenched feelings toward IT, more pressure on IT budgets, and over time erode the support you need to be transformational.

Next, in part 4 in this series, I’ll explain why building a complete IT financial model is the right first step in beginning this transformational journey.


James LaPlaine is the CIO & SVP, Technology Operations at AOL. You can follow James on his blog Mental Effort and on twitter @JamesLaPlaine.

In a twelve part series about IT business transformation, James explores the need for the modern technology leader to be a catalyst for change, leverage IT value as a corporate strategic weapon, and lead the way for complete financial transparency. Utilizing this approach, today's technology leader can provide the foundation for the company to build better products and services and gain approval for technology led initiatives that often struggle for executive support and funding.

By Michelle Speirs

Momentum is building for the 3rd annual TBM Conference taking place in Chicago, October 26-29.

Register to experience an inspiring examination of what’s possible with Technology Business Management (TBM) and tap into the collective IT knowledge, wisdom and best practices of 1,000 IT leaders just like you. Join CIOs and other visionary IT leaders like these speakers:

  • Aaron Levie, CEO, Cofounder, & Chairman, Box
  • Tamara Alaiys, Principal, Ernst & Young
  • Anil Cheriyan, CIO, SunTrust Bank
  • Marc Raman, CIO, Merck & Co.
  • Ed Smith, CTO, Cox Automotive

We’re making regular updates to the agenda – check it out for more speakers and sessions. Plus, there’s time for fun and connecting with other IT leaders. Check out these engaging events to enhance your conference experience:

Welcome Reception: “Taste of Chicago”

Monday, October 26, 7:30 – 9:30 p.m.
Kick off the conference at the American Craft Kitchen and Bar, located within the Hyatt Regency, for a chance to mingle with other conference attendees during a true Chicago-style event. Sponsored by
ISG.

TBM Council Awards Gala: “Night at the Museum”

Tuesday, October 27, 7:00 – 10:00 p.m.
Experience an unforgettable night at the Field Museum of Natural History to honor IT and finance leaders for their ingenuity, creativity, and contribution to TBM. Sponsored by
Planviewand Cherwell Software.

Evening Social “1920s: Mobsters and Dolls”

Wednesday, October 28, 7:00 p.m. – Late
Go back in time to the Roaring Twenties and experience the city as it once was, filled with mobsters and dolls. Dress to impress in your finest, show-stopping 1920s attire and enjoy a night of bourbon-filled cocktails, dancing, and Chicago jazz in a glamorous speakeasy setting. Sponsored by Apptio.

Click here to register now!

By Maria Galindo

Each year, the State of Washington spends nearly $1 billion on IT spanning staff, infrastructure, applications, maintenance, and operations. Yet, prior to 2012, there was little visibility into the IT spend or the value it provided to the state.

A Lack of Transparency Eroding Confidence

Pressure was mounting. Adding to a longstanding concern by technology, legislative, and policy executives that the state lacked sufficient and credible data on technology investments, the Governor and Legislature increasingly demanded more detailed information on IT spend and performance to facilitate better decision-making.

At the same time, public confidence and trust in governmental efficiency and effectiveness was eroding. High-profile IT projects had gone off the rails, raising citizen awareness of IT spend. Cost analysis and benchmarking studies were mandated; results yielded little insight. Something had to give.

With a new Office of the Chief Information Officer, and a new CIO leading the agency, the state embarked on a journey to transparency that earned them a TBM Champion Award from the TBM Council.

Learn more about their success story, and full details on how they achieved these impressive results here.

Aggressive and Persistent Transparency

“We were so aggressive and persistent in really understanding the transparency of IT costs that it became law,” said Michael DeAngelo, Deputy CIO of the State of Washington.

Legislation was enacted mandating the use of Technology Business Management, which ultimately impacted 44 agencies in the state. Each agency began leveraging Apptio’s Cost Transparency and cost modeling capabilities. Not only did the agency achieve the transparency it was so desperately seeking, it also extended that transparency to the public by educating and informing citizens about its program.

An Ongoing Journey

In addition to ongoing efforts to inform participating state agencies, the Legislature and general public, the state plans to:

  • Review and refine taxonomy to improve data quality
  • Continue to discover, cleanse, and utilize data
  • Create a policy that will identify required minimum data reporting
  • Socialize outcomes with legislators and stakeholders

Congratulations to the State of Washington for using TBM to transform their organization in such an impressive and effective manner. You can check out all the details of their success story here.

By Maria Galindo

The TV business has been a tough game in recent years. Intense competition and evolving customer viewing habits have placed new demands on cable and satellite providers, requiring them to be both adaptive and nimble. El Segundo, Calif.-based satellite service provider DIRECTV knew it wasn’t going to remain competitive by maintaining status-quo within the IT department. Simply cutting costs and showing incremental improvement was no longer enough.

The changing market required a deeper cultural change, and DIRECTV was up to the challenge. Their approach was not only a win for the business and DIRECTV's 38 million subscribers, it also secured them a “Digital Innovator Award” from the TBM Council this fall.

Getting a Clear Picture of IT Spend

To begin, CIO Mike Benson went straight to the root of the issue. He quickly set about learning how and where the company was investing in technology and what value was being derived from those investments. Using data from Apptio’s TBM suite of applications, DIRECTV's IT department was able to get a clear picture of the IT spend, slice and dice that information into meaningful segments, and have informed conversations with business leaders about budget allocation.

“TBM helps us analyze our opportunities quickly, so we can make the best and most informed decisions on which activities we should pursue to delight our customers,” said Chris Beaudin, Senior Director of IT Services for DIRECTV. “Without the trust that we’ve been able to garner using the TBM framework, innovation would still exist, but I don’t know if we would be doing the right things at the right time.”

TBM Drives Financial Transparency

You can get the full scoop in a new case study that details DIRECTV’s journey to financial transparency. This new case study explores how cost transparency powered an innovation engine that transformed and grew the business at DIRECTV. But the real gem in their story is how information inspired an enterprise-wide culture shift.

Benson understood that a critically important component of success is failure. So when he was tasked with spurring innovation, he challenged the business to embrace failure by removing the stigma of failure. By encouraging the “fail fast” spirit and celebrating the lessons learned from failure the team was able to ensure success.

Strategies like hosting a “Shark Tank”-inspired competition to building an NFL Sunday Ticket app that has helped deliver DIRECTV’s competitive edge, the company has landed some big wins. Benson says the business continues to identify opportunities for innovation so DIRECTV can continue to deliver for its customers.

By Maria Galindo

CME Group is the world’s leading and most diverse derivatives marketplace, handling three billion contracts worth approximately $1 quadrillion annually. The company provides a marketplace for buyers and sellers, bringing together individuals, companies, and institutions that want to manage risk or that want to profit by accepting risk.

Yet the company struggled to get a handle on one of its own key operational risks – peaks in customer demand that were unexpected and instantaneous. To address these demand peaks effectively, CME Group had committed to having at least two times the capacity of every peak available. This was inefficient and expensive.

Understanding Peak Demand and Costs

The company began to examine the situation by shifting the conversation from just managing the peaks to understanding the customer transaction profiles that fueled the underlying demand. They figured out that if they could find a way to optimize the inefficient customer profiles, they could significantly reduce the need to purchase gear for the next peak.

There was however one key hurdle in this this initiative. CME Group was stifled by a lack of transparency around customer behavior as it was relying on ineffective spreadsheets to measure cost -- a key data point for understanding demand. 


The Road to Technology Business Management

Spreadsheets, static reports, and rigid business intelligence tools weren’t helping CME Group marry disparate data to derive meaning from it. After all, you can ask the right questions and even know how to attack a problem, but without the right tools, even a smart company can be fighting a losing game.

CME Group adopted Technology Business Management (TBM) to reimplement cost modeling. TBM helped CME determine the net impact of the organization's actions on profitability. It also helped them leverage relevant costing data and insights to influence internal and external customer behavior and executive decision-making.

With data-driven insights into customer behavior, CME Group did more than bring operational stability to peak events, it transformed the business – from customer satisfaction to market efficiency, all the way to executive decision-making.

TBM Council Recognition

CME Group were awarded the prestigious IT Financial Pioneer Award winner at this year’s Technology Business Management Conference. This award recognizes CFOs of IT or IT Controllers that help shape and transform the business -- through cost transparency that drives fact-based decisions, through shifting spending from run-the-business to innovation, and through shaping business demand.

You can read the full CME story here. For CME Group, gaining a better understanding of customer behavior driving demand so that behavior could be better managed and minimize peaks wasn’t possible prior to applying TBM.

Next steps? The IT Finance group is partnering with CME architects to implement a spatial computing language, with metrics enabled by TBM, to change the way that complex, real-time, high volume computations are distributed across a global infrastructure.

By Ali Kramer

The TBM Council has expanded its board of directors and appointed a new general manager, marking a point of significant momentum for the Council, which was founded three years ago to establish and promote Technology Business Management standards and practices.

The Council today announced that Todd Tucker joins as General Manager, and four industry leaders join as board members: Michael Brown, VP of global information services at ExxonMobil; Jim DuBois, CIO of Microsoft; Michael Neff, CIO of RWE; and Brian Adams, CIO of WorleyParsons to its board.

These board members significantly expand the Council’s reach into new verticals and new geographies, while also adding fresh perspectives to advance the TBM discipline as it becomes the standard operating model for IT.

"These giants in their field represent the future of the TBM Council. Now with a membership of over 1,600 visionary technology professionals, the TBM Council has already made a significant impact on the way IT investments are strategically made and communicated within enterprise organizations," said Chris Pick, President of the TBM Council.

Todd Tucker brings a deep understanding of TBM to the Council, having previously served as the Director of Research for the organization. During that time, he organized and led all of the Council's Workgroups, was responsible for writing the TBM Book, and developed the TBM Framework. As General Manager, Tucker will now be responsible for fulfilling the Council's mandates of education, standardization, and collaboration while growing its current member base.

Today's new TBM Council board members will be joining their peers from organizations like Goldman Sachs, Cisco Systems, Apptio, DIRECTV, Time Warner, and many more as they collectively advance business management practices for technology leaders.

Michael Brown, VP Global Information Services at ExxonMobil

Appointed to VP of Global Information Services in July 2011, Brown is responsible for ExxonMobil Information Technology. Brown initially joined ExxonMobil in 1980 as a process engineer and has held a variety of executive positions prior to his current role in IT. As a result, Brown brings an innovative perspective to the TBM Council, specifically around how IT leaders can more productively partner with their counterparts in the business.

Jim DuBois, Corporate VP & CIO of Microsoft Corporation

Appointed to CIO in January 2014, DuBois is responsible for Microsoft's global security, infrastructure, IT messaging, and business applications. In this position, DuBois has acquired a keen level of understanding of how IT works within a broader technology organization. Additionally, his expertise in the public cloud market will serve as an asset to the TBM Council as IT leaders are increasingly called to demonstrate the value of cloud technology.

"I have dedicated my career to ensuring that one of the world's leading software, services and devices organizations is optimizing its own technology investments. This is no easy task. As a result, I know just how important the mission of the TBM Council is to my counterparts," said DuBois. "The TBM Council's approach to measuring and communicating the value of IT investments to the business is the key to the success of CIOs today."

Michael Neff, Managing Director of IT GmbH at RWE & CIO of RWE

Appointed to CIO in July 2010, Neff is responsible for IT at RWE. With a background in information systems, project management, and business process engineering, Neff has a true technical understanding of how to maximize IT's investment in technology while rendering business results. As the TBM Council's first board member in Europe, Neff will be working directly with the existing network Council members throughout the United Kingdom and Germany.

Brian Adams, CIO and Director of Procurement at WorleyParsons

Appointed to CIO in 2011 and Director of Corporate Procurement in 2014, Adams is responsible for all IT services and corporate procurement across WorleyParsons. Adams has spent the past four years transforming the IT function within the company, aligning it closely to the TBM philosophy. Before being appointed to his current position, Adams served as the CFO of WorleyParsons for Australia/New Zealand. As a board member, Adams will bring his unique business perspective to the Council in addition to assisting his peers understand the TBM discipline as it expands throughout its newest markets in Australia and New Zealand.

TBM Council membership is open to any qualified IT, finance or business leader and TBM practitioners who meet the applicable membership standards. For more information or to join the TBM Council, please visit www.TBMCouncil.org

By Sarah Vreugdenhil

The Technology Business Management (TBM) Council is honored to announce the establishment of the Commission on IT Cost Opportunity, Strategy, and Transparency (IT COST). This Commission will define a set of recommendations and best practices for federal departments and agencies to transparently measure and communicate their IT costs to better-equip CIOs to govern their IT spending and support agency missions with limited resources.

The federal government spends more than $78 billion each year on technology. Today, each agency uses its own standards to measure, benchmark, and communicate the value of its technology investments to its respective stakeholders. This lack of standardization creates numerous challenges including complexities in budgeting, an inability to benchmark costs against other agencies or the private sector, and difficulties in identifying duplicated resources or underutilized assets.

Leveraging Private-Sector Best Practices

The IT COST Commission was designed by the TBM Council, a global nonprofit organization comprised of more than 1,600 IT professionals, and federal agency CIOs, to leverage private-sector best practices by connecting commercial CIOs with federal counterparts.

The Commission is comprised of three core groups of technology leaders working together towards the common goal of IT cost transparency. Participating commissioners include:

  • Federal CIOs: Frank Baitman, CIO of the Department of Health and Human Services; Richard McKinney, CIO of the Department of Transportation; Sylvia Burns, CIO of the Department of Interior; Steve Cooper, CIO of the Department of Commerce; and Joyce Hunter, Acting CIO of the Department of Agriculture.
  • TBM Council Board of Directors: Larry Godec, CIO at First American; Rebecca Jacoby, CIO at Cisco; Tom Murphy, CIO at the University of Pennsylvania; Ralph Loura, CIO at the Enterprise Group at Hewlett Packard; Phuong Tram, CIO at DuPont; Mike Benson, CIO at DIRECTV; Don Duet, Co-Head of Technology at Goldman Sachs; and George Westerman, Research Scientist at MIT.
  • Private Sector Partners: Sunny Gupta, CEO at Apptio; Doug Lane, CEO at Capgemini Government Solutions; Todd Lavieri, President of Americas at Information Services Group; and Ralph Kahn, Vice President of Federal at Tanium.

"The TBM Council was founded to provide IT leaders with the standards, education, and collaboration they needed to run IT more like a business,” said Todd Tucker, General Manager of the TBM Council. “It is this mission that continues to drive us today and motivated our decision to establish the IT COST Commission. The Board of Directors and I are united in the belief that it's our duty to support our counterparts in the Federal government. We're privileged to do this work and excited to get started."

A Lasting Impact on the Public Sector

The first meeting of the IT COST Commission will take place in Washington, DC in June 2015. The result of this initiative will be a report planned for distribution in early 2016 outlining a series of recommendations for federal CIOs, which will further efforts to:

  • Aid in the implementation of the new Federal IT Acquisition Reform Act (FITARA) which gives Federal CIOs centralized control over the government's IT spending.
  • Reduce waste and increase efficiency of federal sector IT spend.
  • Empower federal CIOs to demonstrate the cost, quality, and value of their IT spend.

"On the heels of the recently distributed draft recommendations for FITARA implementation, my Federal CIO counterparts and I are eager to support the work being done by the TBM Council," said Richard McKinney, CIO of the Department of Transportation. "We believe that the IT COST Commission can give the taxpayers a better return on their investment while simultaneously providing Congress and the Administration with better insight into the value provided by technology."

"We realize that commercial and Federal CIOs approach technology cost accounting and management very differently," said Doug Lane, CEO of Capgemini Government Solutions. "However, there are key private sector learnings that can be applied to the federal space that we believe will have a substantive, lasting impact on the way public sector CIOs manage and communicate the value of their technology investments."

The IT COST Commission work is privately funded by the TBM Council and participating partner organizations. For more information or to join the IT COST Commission, please visit:  http://tbmcouncil.org/get-involved/it-cost-commission.html

By Vinita Ananth

We frequently hear from Technology Business Management leaders and enthusiasts how beneficial it is to connect with other IT leaders: share success stories, discuss challenges, and figure out new ways to make TBM work even better for their organizations.

So we thought, how much more valuable would these discussions be if they were ongoing? And that thought led to something big for people leading, engaging in, or interested in TBM – establishing a “digital industry network” for IT professionals to discuss and collaborate on TBM topics like transparency, planning, strategy, and cost management.

With that in mind, we’re excited that the TBM Council has announced the launch TBM Connect, a community for leading IT, finance, and business executives who want to collaborate on standards for measuring, improving, and communicating the value of IT.

As technical advisor to the Council, Apptio was selected to pilot its all-new user community within TBM Connect because of our organization's deep domain expertise. This will be a forum for product discussions led by Apptio customers, partners, and employees. Additional TBM Council partner communities will be introduced over time in an effort to expand the global reach of TBM Connect.

TBM Connect will showcase the foundational techniques, proven best practices, and core processes that define and support the TBM discipline, including:

  • Standards development: Join IT leaders from Global 2000 organizations in a discussion on TBM best practices in measuring the cost, quality, and value of technology investments.
  • Role-specific discussions: Focused content surrounding industry verticals and functions help to develop thought leadership, competency models, research, and customized TBM taxonomies in advancement of the IT profession.
  • Apptio product support and discussions: Read the latest product release notes, TBM success best practices, and connect with Apptio support professionals on Apptio's TBM applications.

Learn more about becoming a TBM Council member and accessing TBM Connect onTBMCouncil.org. General membership has no cost, but is restricted to qualified industry professionals.

We look forward to connecting with you!

Best practices are a common topic on our blog. We’ve talked about them for areas like IT Cost Optimization, IT Planning, and Running a Service Desk Like a CEO, to name a few, but sometimes you just want to see how others are doing it, and learn from them.

So check out these quick videos from companies who totally nail Technology Business Management, tackling their toughest IT challenges with great success, and secured a TBM Award in 2014. (Stay tuned for 2015 TBM Award winners to be announced at the TBM Conference in October!)

This winner’s circle includes DIRECTV, Mylan, Nationwide Building Society, CME Group, and the State of Washington. Learn how they overcame common objections to get started, took the plunge and over time, tailored and refined the way they use TBM to work for their organizations.

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The Digital Innovator Award: DIRECTV - YouTube