Posted by: Rachael King on September 28Guest blogging today is George Colony, CEO of Forrester Research, who for 30 years has been advising CEOs on the impact of technology on business. He also blogs at The Counterintuitive CEO:
For the past four years, I have been preaching the gospel of converting information technologists into businesspeople. I call this concept “moving from information technology to business technology — or IT to BT.”
At its core, I define BT as measuring your usage of technology with business metrics instead of technology metrics. The message is for IT to measure itself using business metrics that matter to the COO, CEO, and board of directors, instead of assessing its success with a technology yardstick, such as network availability or server uptime.
It’s not the mean time between failure or server response times that matter. If you change that one word from information technology to business technology, you begin to change the way IT people work and the way they think about their jobs.
Although this mental shift is happening slower than I figured, a generational change in IT and business leadership is beginning to force the issue. Now we’re seeing the older baby boomer generation beginning to retire, and for the first time, we’re getting CEOs of Fortune 500 companies who had an Apple II when they were 12. So now you have CEOs and presidents who are far more technology-focused. We’re no longer seeing so many people who are getting emails printed out — instead, these top execs actually read them. You know, business leaders actually use these IT devices today — maybe an iPhone or BlackBerry or Kindle —and now you have technologists who had an Apple II as a kid. Both groups of execs understand the evolution of technology out to people — technology populism, if you will — that we all have high-tech devices, and there’s now this new way of thinking and working.
Since the last technology recession from 2001 to 2003, CFOs have been looking more closely at IT spending, which accelerates the shift to BT. The overspend on technology in 2000 was so large — it was about $60 billion in the US — and that was the death knell of runaway technology expenditures. At that moment, CFOs and CEOs said, “We’re never doing that again. We’re going to have tight linkage here, higher return there.”
We’ll look back at this decade as a series of learning moments, and the real turning point from IT to BT is the two recessions, the customer moving clearly to the center stage because of the Internet, and the generational change in senior execs.
I’ll talk more about this at Forrester’s Business Technology Forum in a couple of weeks, but there are three questions companies should ask themselves before transitioning from IT to BT. First, you need to ask, “do we have the right CIO?” The CEO has to look in the eyes of the CIO and make the judgment “Is this person good enough to understand the business?”
Second, you should ask, “do we govern in the right way?” If the decision-making goes from the CEO to the CFO, or maybe to the COO and then to the CIO, I don’t think you’re ever going to get this IT-to-BT change to happen because the CIO is too far removed.
Third, you need to ask, “do we have the right business executives?” The onus is not just on the CIO; we need higher IQ in technology across all of the business executive levels.
If you answer “yes” to those three questions, then you have to ask, “how do we get there?” There’s no technology god that says you’ve got to be BT. The CEO and CIO have to go have a drink someplace, and they’ve got to say, “We’re not doing this right; let’s change our focus and make IT about the business.”
For the past four years, I have been preaching the gospel of converting information technologists into businesspeople. I call this concept “moving from information technology to business technology — or IT to BT.”
At its core, I define BT as measuring your usage of technology with business metrics instead of technology metrics. The message is for IT to measure itself using business metrics that matter to the COO, CEO, and board of directors, instead of assessing its success with a technology yardstick, such as network availability or server uptime.
It’s not the mean time between failure or server response times that matter. If you change that one word from information technology to business technology, you begin to change the way IT people work and the way they think about their jobs.
Although this mental shift is happening slower than I figured, a generational change in IT and business leadership is beginning to force the issue. Now we’re seeing the older baby boomer generation beginning to retire, and for the first time, we’re getting CEOs of Fortune 500 companies who had an Apple II when they were 12. So now you have CEOs and presidents who are far more technology-focused. We’re no longer seeing so many people who are getting emails printed out — instead, these top execs actually read them. You know, business leaders actually use these IT devices today — maybe an iPhone or BlackBerry or Kindle —and now you have technologists who had an Apple II as a kid. Both groups of execs understand the evolution of technology out to people — technology populism, if you will — that we all have high-tech devices, and there’s now this new way of thinking and working.
Since the last technology recession from 2001 to 2003, CFOs have been looking more closely at IT spending, which accelerates the shift to BT. The overspend on technology in 2000 was so large — it was about $60 billion in the US — and that was the death knell of runaway technology expenditures. At that moment, CFOs and CEOs said, “We’re never doing that again. We’re going to have tight linkage here, higher return there.”
We’ll look back at this decade as a series of learning moments, and the real turning point from IT to BT is the two recessions, the customer moving clearly to the center stage because of the Internet, and the generational change in senior execs.
I’ll talk more about this at Forrester’s Business Technology Forum in a couple of weeks, but there are three questions companies should ask themselves before transitioning from IT to BT. First, you need to ask, “do we have the right CIO?” The CEO has to look in the eyes of the CIO and make the judgment “Is this person good enough to understand the business?”
Second, you should ask, “do we govern in the right way?” If the decision-making goes from the CEO to the CFO, or maybe to the COO and then to the CIO, I don’t think you’re ever going to get this IT-to-BT change to happen because the CIO is too far removed.
Third, you need to ask, “do we have the right business executives?” The onus is not just on the CIO; we need higher IQ in technology across all of the business executive levels.
If you answer “yes” to those three questions, then you have to ask, “how do we get there?” There’s no technology god that says you’ve got to be BT. The CEO and CIO have to go have a drink someplace, and they’ve got to say, “We’re not doing this right; let’s change our focus and make IT about the business.”
Your Changing Customer
Posted by: Rachael King on September 09
Guest blogging today is George Colony, CEO of Forrester Research, who for 30 years has been advising CEOs on the impact of technology on business. He also blogs at The Counterintuitive CEO:
Is there anything more boring than raw data? Yes, a blog that spews forth raw data. So I'll keep this short and sweet.
When CEOs doubt the importance of technology in the economy, I pull out a home grown aphorism: Technology is changing your customer, and your customer will change your company. In other words, whether you like it or not, demand will ultimately morph supply. And it's the job of the CEO to have a firm grasp of that dynamic.
1) The 2009 customer is unrecognizable from the 1999 customer. What it means (WIM) to you: If your business looks the same now as it did in 1999, you are risking irrelevancy.
2) Consumers in every age group are quickly moving from offline channels to online. WIM: If your marketing department is filled with people that still over-emphasize TV or magazine advertising rather than a more balanced approach to the customer, you're wasting your money.
3) Americans spend 8 hours per week with old media (TV, newspapers) and 8 hours per week with new media (Internet). WIM: spending on your Web site and new media advertising should be comparable to your old media spend.
4) 25% of households have digital video recorders -- devices like Tivo that let TV watchers record shows and fast forward over ads. WIM: you're probably over-paying for TV ads.
5) 88% of people under the age of 40 are regular Internet users -- at home and at work. WIM: while all of your customers are changing, your future customers (young people) are changing even faster. Moving slowly now will inhibit market share and new customer acquisition over the next ten years.
6) Half of all Americans research products online before buying. WIM: your customers are ever smarter about what they purchase. All the more reason to treat them like partners and enlist them to help you design your next product.
7) Half of all U.S. adults play computer games. WIM: begin to use this medium, as IBM has done, as a training medium for your workforce.
Over the next ten years the move to digital will not abate -- it will intensify. As CEO, you must stay current with those outside revolutions and translate them into meaningful change within your company.
What do you think will be the most amazing change in the way that people use technology over the next 10 years? I'd love to get your thoughts.
