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Q&A: New Book Maps Out Strategies for Leaders Facing an Evolving IT (Part 2 of 2)

Jill Dyché discusses topics from her newest book. As boundaries between business and IT change, how successful executives are driving transformation within their companies.

In her new book, The New IT: How Technology Leaders are Enabling Business Strategy in the Digital Age, well-known BI and analytics expert Jill Dyché paints an entertaining picture of the evolution taking place in the classic business-IT relationship. Her interviews with business leaders -- some at large and highly visible companies -- deliver a useful, engaging map of the challenges facing organizations as IT evolves.

Dyché cofounded Baseline Consulting and is now VP of best practices for SAS. She speaks and writes widely, including as a faculty member with TDWI. She has been thinking, writing, and speaking about business-IT alignment for over two decades in her career as a consultant and advisor to executives across many industries.

Dyché is the author of e-Data (Addison Wesley, 2000), The CRM Handbook (Addison Wesley, 2002), and, with co-author Evan Levy, Customer Data Integration (Wiley, 2007). Her work has been featured in Computerworld, Forbes, Harvard Business Review, and Newsweek media channels.

With the digital revolution well underway, questions about ownership boundaries between business and IT arise more than ever, according to Dyché. In Part 1 of this series, she addressed that issue and talked about how some of the classic problems faced by IT leaders are changing. In this part of the interview, she talks about what change agents are doing to affect transformation within their organizations, and the impact on corporate BI and data management efforts.

BI This Week: In the last part of our interview, we discussed why leaders are working to transform IT. What did you learn from the executives profiled in your book about the changes they’re making?

Jill Dyché: Leaders who are really driving changes that stick have abandoned all sacred cows. Many of them used the term “creative destruction.” They’re seeking input from new places; they’re open to anything.

Can you give an example of that?

I love H. James Dallas, the former CIO of Medtronic. Dallas had divisional CIOs reporting to him, and had struggled to maintain a level of continuity across the world’s largest medical technology company, with 50,000 employees. Ultimately he understood that his role wouldn’t be to run the business for these divisional CIOs.

“These guys were closer to the business than I was,” he told me. “The closer things got to the customer, the more flexibility I gave people, and the further away things got from the customer, the more we needed to establish common standards.” Dallas ultimately saved Medtronic $1.5 billion through this standardization. He had credibility with his fellow executives on the senior leadership team -- he earned it.

Your book talks a lot about innovation and the rise of digital. Do those two go hand-in-hand?

No, they don’t. I’d argue that crafting a digital business can be innovative, but it’s not inherently innovative. When I started writing about digital transformation and how it’s changing companies’ marketing and operational processes, I realized how critical an innovation mindset is.

When people think about innovation, they may think of companies such as Apple or Google, but innovation isn’t exclusive to those well-known examples, right?

Right. Clearly companies that were “born digital” have an advantage, because their nascent cultures were so innovative to begin with. Not every company can be Google Labs and invest so heavily in experimental projects, many of which won’t see the light of day. Every company can become more open about accepting and trying out new ideas. There’s a new culture of discovery happening, and business leaders have a new tolerance, a new appetite for it.

Speaking of Google Labs for a minute, Google discontinued Google Labs a few years ago, but not because it was a failure by any means. It’s just that for innovation to succeed, it can’t be isolated from the rest of the business. It needs to be baked in. In Chapter 7 I write about how companies that have succeeded in institutionalizing innovation -- companies as different as JPL, Nordstrom, and Lego -- have built innovation into their day-to-day.

What are the executives you talked to doing to foster innovation?

Ron Guerrier, the CIO of Toyota Financial Services, introduced an innovation lab -- they call it “iLab” -- that invites business people to come in and tire-kick (pardon the pun) new technologies. It gives the business a say in what’s adopted, while at the same time positioning IT as a thought leader and trusted advisor, not just an order-taker.

Interestingly, Guerrier hired a chief digital officer to work on his team, so the digital vision at Toyota Financial Services is being driven from within IT. If that’s not valuable to the business, what is?

Let’s go back to our discussion of the impact of innovation on BI and data management programs. What’s the role of analytics in the new IT?

IT leaders are in the process of shedding the commodity stuff and embracing what’s strategic. That doesn’t mean we won’t continue to run our servers and deploy e-mail, it just means that we can find partners to perform the more commoditized tasks on our behalf. That’s where the cloud has already had a tremendous impact.

In fact, more than ever you’ll find that CIOs are focused on what’s known as “SMAC” -- social, mobile, analytics, and cloud. The new acronym is SMAC-IT: social, mobile, analytics, cloud, and the Internet of things. IT leaders are realizing that the SMAC stack can help a company achieve its strategic objectives, those goals we list on our “Strategy on a Page” worksheets. Anything that’s not on that page goes to the cloud or our network of outsourcers.

The “A” in SMAC is where we’ve played for so many years, but it’s newly hot. In Chapter 10, I tell the story of a European executive who realized that his company’s analytics program was his gateway to a vision for delivering a digital business. In fact, I’d argue that analytics is foundational for a lot of the new IT.

You mention changing the rules of engagement between business and IT. What does that look like?

In a lot of ways, it means loosening the controls. Leaders who provide overall guidance and clearly lay out desired outcomes are those who not only see results but earn the loyalty of their staff.

One of the topics I devoted an entire chapter to in the book is talent management. Organizations are becoming more diverse -- studies have shown a correlation between diversity and productivity -- and organizations are getting flatter. The concept of “holocracy” that was popularized by Tony Hsieh at Zappos is taking hold in more traditional companies. It’s a flatter organizational structure, less reliant on formal job titles and dependent on the understanding of a unified mission that everyone is responsible for executing against. It’s self-governing, and the top performers are determined based on their successful delivery.

What advice would you give to members of the BI community interested in working in the new IT?

I’d tell them to read Chapters 5 and 6! Seriously, BI and data are moving out of the competency center and becoming their own formal organizations, and that’s an important distinction. Competency centers have the aura of being fly-by-night in many companies -- not formal enough to be taken seriously, and often reliant on cross-charging or other creative funding techniques.

Formalizing an analytics department or data management organization as “service lines” means these efforts will be taken more seriously. They’ll get their own budgets, specialized skills, and measurements. They’ll have a seat at the table, and -- by extension -- so will the practitioners and leaders who have seen their value all along.

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