I’m making my New Year’s resolution early this year.  I resolve to raise the level of conversation as it pertains to the transformation of IT (Information Technology) to BT (Business Technology).  Why, you might ask, am I dedicating my efforts to this?  It needs to be done.  The gap between business and IT is growing not shrinking.  In a July 2008 Forrester survey of 600 business executives the numbers made me say, “what?”  All this talk about bringing IT and Business closer and “aligning” the two is nothing but total bunk.  A lot of talk and no one doing anything about making it real.

I want to share with you some of the numbers that support my case:

1. 82% of respondents agree that technology is core to their business, but only 71% see IT as effective at supporting that requirement.
2. 72% of respondents see technology as central to the goal of competitive differentiation, but only 61% see IT as effective.
3. 77% view IT as mandatory for sales and distribution, but only 67% see IT as effectively supporting them.
4. When asked to assess the importance of business drivers and compare how well IT is supporting them, the gap widens.  The only category where IT support quality approached importance of the business driver was in improving end user workforce productivity – 78% viewed this as a somewhat or critically important business driver, but only 45% viewed IT as supporting this need very well or excellently.  Worse of all, IT’s support for global expansion was viewed by 61% of respondents as important, but only 23% of respondents said IT was doing a good job at it.

See?  So how what is behind these numbers?  An inescapable factor in today’s business environment: the constancy of change. I’ve said it before, enterprises must adapt to the economic imperatives or whither and die; enterprises mastering the art of business agility can gain substantial and sustainable advantage.

The complexity of today’s modern enterprise – its business and IT components, and its linkages with other enterprises – increases the difficulty of implementing changes.  Different elements change at different rates, but the pressure to change is always there.

As you can see by this graphic there are many pressures on the business:

In this type of environment, how can you make your business more agile and capitalize on change?  By having a model/framework that addresses many of the difficult problems associated with change.

The Business Technology approach:

• Targets change as the fundamental architectural problem to address
  • Recognizes that being adaptive requires balancing agility with three other key dimensions: financial returns (especially lower costs), performance, and risk management
• Defines a core set of architectural principles to promote agility, and applies them consistently across people, processes, and technology throughout the extended enterprise:
  • Modularity: to minimize the dependencies between changes
  • Integration: to enable the composition of separate modules into useful systems
  • Standardization: to facilitate integration, maximizing reuse and extraction of value
  • Simplification: to minimize what needs to change and the associated costs

So stay tuned in 2009 as I start to put together the framework and show you ways to transform IT into Business Technology.

I am announcing today that I’ll be contributing to DABCC.com. It was a great run at www.brianmadden.com and you can still see my articles over there, but new content will be over at DABCC.com and this site.

You can check out the new column at www.dabcc.com/michaelkeen

There has been a lot of talk lately about companies needing to revamp or create a existing or new business model.  From the Big 3 automakers need to rearchitect their 50-year old business model to Procter & Gamble.  But this is easier said than done.  Reinventing a business model is a very time-consuming and complex endeavor.  With that said, it can be done and should be done to maintain and/or increase your company’s competitive advantage.

An interesting statistic I read recently was that “fully 11 of the 27 companies born in the last quarter century that grew their way into the Fortune 500 in the past ten years did so through business model innovation.”  That is an impressive fact.  So why aren’t more executives taking a harder look at their companies ability to maintain competitive advantage?  The fact is that most are.  A 2005 survey by the Economist Intelligence Unit found that over 50% of executives believe that “business model innovation will become even more important for success than product or service innovation.”

The big question I’ve been asking myself in the past few months has been “what is GM/Ford/Chrysler doing to rearchitect their antiquated business model?”  The more I think about it, the more I can understand that I think these companies are so big that they will have to be very creative in the way they build this new business model for the 21st century and beyond.  That is a completely different conversation that I’ll work on for a later post.

For everyone else in the world, why is it so difficult to rebuild or create a new business model?  Some of the reasons that it’s often very difficult to pull off a new business model is that there really isn’t a sense of the processes into business model creation.  Nobody has really sat down and done a true study into what it really takes or has defined it.  Secondly, is that most companies don’t have a good understanding of what their existing business model is.

There are three tenets that, I think, must be followed to create a new business model:

1. Your customer value proposition.  Every successful company creates value for customers.  They provide a way for their customers to get a “job” done.
2. Your profit formula:  the core of why people are in business.  This formula is how the company creates value for itself, while creating value for the customer.  The formula consists of models like, the revenue model, cost structures, margin models, and resource velocity.
3. Your key resources and key processes.  Key resources would be your people, technology, products, etc.  The key resources are the ones that would create value for the customer, not the generic resources.  Key processes are those managerial and operational processes that allow you to deliver value in ways that are repeatable and scalable, like training, planning, sales, etc.

With these elements you have the building blocks for any business.  Your customer value proposition and the profit formula will define the value for your customer and the company.  Key resources and key processess will describe how that value will be delivered to both the customer and the company.

This is a simple framework, but the real power lies in its complex interdependencies of all the parts.  Any successful business will devise a more or less stable system in which these elements bond to one another in consistent and complementary ways.

well it was a great run over on www.brianmadden.com but the core strategy of the site after the TechTarget acquisition didn’t fit with the business side of things that I was writing about.

So, this site is back and I’ll be posting content regularly up here as well on another very popular site that I’ll be announcing very soon.

I was reading the Wall Street Journal this morning and came across an interesting half-page ad in the Personal Journal section.  It stated simply, “Accelerating the business of innovation.”  They had a big head shot of John Hill CTO of Siemens IT Solutions and Services where he provided the quote around better return on capital investments, faster responsiveness to their customers, etc etc.  The one statement that Mr Hill made that resonated with me was, “freedom to focus on business innovation, not rudimentary IT plumbing.”  Perfectly stated Mr. Hill and I couldn’t agree more.

We have all seen, for many years now, that IT is working hard enough to just keep the lights on and not enough time on helping the business innovate, increase competitive advantage, etc.  The business depends on IT more than ever before and business executives do see the strategic importance of technology as core to their product and service strategy and central to their differentiation and competitive advantage.  But the rub here is that executives I’ve talked to are concerned about the ability of their IT organizations to support it.  Now that isn’t to say that some IT executives aren’t working hard to fulfill the business’ needs using all the tools and processes at their disposal, but……..

Here is where the ad got me to thinking.  This is where IT can get out of the vicious cycle that it finds itself in when it comes to the old standard, design-build-operate model that has plagued IT for years.  By using virtualization technologies like VMware and XenServer along with a solid application and desktop delivery infrastructure, and combine that with a new strategy of business technology, IT can make the transfomation to business enabler.

The technology of virtualization and application delivery speak for themselves and I’m not going to do a deep dive here, but these technologies need to be a key component of an IT Portfolio and IT needs to take steps to transform itself from Information Technology to Business Technology.  I’ll address how in another article.  Suffice it to say that IT executives cannot afford to maintain status quo.  They must replace standalone, product-oriented support functions through business-oriented services and focus the remaining IT organization on a proactive governance model of the company’s ecosystem.  Business-Technology-as-as-Service (BTaaS) is what needs to happen.  With the virtualization and application delivery infrastructures as the base of the BTaaS formula, IT can be that enabler.

What is happening with VMware?  Time will tell as this shakes out.  Stay tuned everyone!!!!

http://www.insidebayarea.com/business/ci_9816961

http://www.eweek.com/c/a/Infrastructure/VMware-Diane-Green-Ousted-2008-Revenue-Outlook-Trimmed/

One of the best papers that I have read on the strategy and vision behind the Citrix Delivery Center.  I suggest everyone involved with the Citrix technology read this.

You can check it out on Thomas Koetzing’s web site.  This paper was written by Nico Luedemann.

I just wanted to share this great video of Gus being introduced at Citrix Synergy.  I love his energy and passion for this technology….if you see him at Synergy stop by and say hello to him.

Catch the video here

Do you remember the end of the last post in this series?  I stated that “even chairmen have to seduce, cajole, and convince to get things done”?  It is so true if you want to accomplish your goal of getting application delivery and/or virtualization discussions to the highest levels of your company.  What I’m going to talk about and what you need to do is build a coalition.

By building a coalition you take your individual authority and you transform it into a collective authority.  The people in your company that will try to knock you down and dismiss you will have a tougher time doing so if you have that collective authority.  My initiatives within HP, I took the time to build the right coalition of management outside my normal “chain of command”.  The few dozen folks that I had put together changed a corporate direction.  The fact that we were organized and we were speaking from conviction was a powerful message to the upper layers of managment and the C-level folks.

Another reason to build a coalition was that my endeavor, like most, didn’t fit neatly into any of the existing organizational “boxes”.  The Citrix environments that were inside the company crossed many business unit boundaries and I need a broad cross-section to make sure that I got my Point of View and “Manifesto/proposal” into the right folks.  I think the folks that I had brought into my little revolution shared the same revolutionary tendencies that I did no matter wherever their current organizational home was.  My mentor took a look at the group that I had put together and he told me that it looked like an ink blot that had bled all over the formal org chart.  He was right.

Another thing that my mentor told me was that I wasn’t the only frustrated, visionary in the company.  This was so true.  I was quickly finding that I wasn’t the only that “got it”.  So how did I find these other revolutionaries?  I asked myself, “who was in my immediate vicinity that I had already been talking to about my ideas?”  Here is what else I looked at:

• were there any staff groups or teams in the company that might be inclined toward my point of view?
• were there any cross-company initiatives that I wasn’t aware of that I could tap into?
• who (across the company) might have a stake in the success of my endeavor?
• were there any internal newsgroups or e-mail distribution lists I could hijack?

Here are some other things that I did. 

• Since Sharepoint sites were easy to put up, I started a Sharepoint site where I could post my “manifesto/proposal”. 
• I started to build an email list of some of the people that I thought would share my views. 
• I created an online forum to where others could share their perspectives and help me to fine-tune my “manifesto/proposal”. 
• I identified some outside experts at our partner, Citrix, that could lend the cause credibility. 
• I created opportunities to work together with the people of my network on some ad hoc projects that I would pull in.

Let me tell you this fact, coalitions get stronger when they focus on a common task.  I looked for other involvement opportunities.  I went to the yearly partner-only conference for Citrix partners, Citrix Summit, and spent quality time with my HP colleagues.

Take this one piece of advice.  Stay underground for a while, at least initially.  Use your network of people to build and strengthen your business case and identify opportunities for early wins.  I saw first hand that as people within my network started to talk to others in their immediate vicinity, the “virus” of my point of view started to spread.  Remember to not get impatient.  If I were to map the curve of my endeavor, it was flat at first and then as the network of people I started to spread the virus we soared.  By that time we started to get the attention of top managment.  With that, don’t be too quick to present your top management with a “go/no go” decision.  I remember this thing my grandfather used to tell me when I was younger and we would go hunting on his farm; “it’s easy to shoot one pheasant out of the sky, but it’s harder to bring down a flock”.  I took that statement to heart, I kept on building my “flock” of people that were thinking the way I was.

As I close this section of the series, let me share with you this little tidbit of information that I learned.  You, like I, have an advantage that top management often doesn’t.  Most of the people that report to them are forced to think like them and don’t think about anything else then what they are told to think about.  These type of people fight to stay alive in corporate life.  People that I put together and you put together fight to win.  Continue to build your coalition and inspire the other revolutionaries in the company.  If you build strength from below, top management will ultimately come to you.  I guarantee that.

In the next part in this series, I’m going to talk about finding the right person in your organization that can say yes and make it stick.

Alessandro Perilli over at virtualization.info posts that the rumor that has been floating around for a while now might be gaining momentum.  What is it?  that EMC may spin off VMware.  This has been floating around the street for a while now, but hasn’t really gotten legs.  I called some old friends from my days in NYC and talked a little bit about this.  They confirm what Alessandro mentions that any kind of spin off would be not likely until after Jan 09.  They mentioned that they were hearing rumors of some consolidation in the storage industry, so we’ll have to wait and see what happens. 

You can read Alessandro’s post here.  You can read the Bloomberg article about EMC here.

Cheers