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Elevating the CIO: How analytics will boost enterprise IT

It's no secret that most CIOs have a tough job these days. With the proliferation of big data, analytics, and mobile solutions, there is a growing universe of sophisticated technologies which have the potential to propel companies forward by driving previously unimaginable business growth. Yet, CIOs at most organisations today are unable to implement these game-changing technologies because their organisations spend more than 80 per cent of their time "just keeping the lights on," maintaining the incredibly complex systems that are already in place. A Deloitte study (opens in new tab) shows that CIOs are able carve out a mere 14 per cent of their time to focus on real innovation. More than ever, CIOs are struggling to get outside of this 'perpetual maintenance mode' and secure both the time and resources required to invest in the most strategic IT initiatives which can truly add new value across their companies. These senior leaders are challenged to find a way to identify the necessary time to allow their teams to focus on game-changing, strategic IT initiatives.

When I talk with CIOs at Global 1000 organisations, many tell me they feel under siege because they run a cost centre in a profit-centred world. While most of the other business groups in their organisation – sales, marketing, professional services, etc. - are focused on selling more widgets or services and increasing profits, IT is mandated with keeping costs down. As a result, it's difficult for CIOs to have a boardroom conversation which is aligned with the rest of the more empowered executives at their organisation who are focused on growth or establishing a competitive advantage, for example.

They also tell me there is a growing sense of malaise in the boardroom in relation to the role of traditional IT, as fellow executives become increasingly skeptical about the relevance of IT in the new, more volatile economy. This sentiment translates into reduced likelihood of securing a more robust budget or increased headcount to tackle the most important projects that can drive innovation. More than any other executive, CIOs are challenged to do more with less – constantly shuffling and reallocating their scarce resources to drive as much efficiency as possible. Many CIOs also realise they are being conservative in their IT policies. They cannot afford to introduce any potential problems that could break the existing infrastructure, since they don't have any bandwidth (opens in new tab) to solve a new problem.

Meanwhile, IT departments are getting an undeserved reputation for being unresponsive to the needs of their organisation. They are a shared service department faced with juggling many disparate and competing demands. Today's CIO (opens in new tab) is required to deploy resources across multiple geographies and an increasingly matrixed set of internal business units. With so many stakeholders and limited resources, it is unlikely every group is going to be satisfied with their level of service. In essence, IT faces a diplomacy challenge as they aim to focus their finite resources on the most productive and influential departments at the organisation and avoid distractions from the less important – but sometimes more vocal – groups. Given these factors, and without data to provide specifics, it becomes very difficult for CIOs to have meaningful conversations with stakeholder groups that are uninterested in hearing why their requests are not as important as other business groups within the company.

In addition, many organisations have a decreased reliance on the IT department, as more cloud and SaaS technologies become readily available. Every line of business now has a choice: Should I pay an external vendor to offer a solution as a service or should I work with our internal IT group to build a custom application? At many organisations, business groups are engaging with external SaaS vendors where they can have a direct relationship because they view their internal IT department as unresponsive. The proliferation of new enterprise-grade SaaS applications has resulted in the most innovative technologies at some companies coming from outside the organisation, not the IT department.

Identifying new guideposts in today's economy

Increasingly, CIOs are seeking new approaches to cultivate a stronger voice in the C-suite and become part of key strategic decisions at the organisation. With the current state of overextended IT teams and shrinking IT budgets, CIOs are looking for ways to identify capacity across their existing IT teams and enable them to focus more time on strategic IT projects. This is not an easy task, but if they can solve these problems, CIOs will re-establish their seat at the boardroom table.

One area of increasing strategic priority for forward-thinking businesses is finding new ways to harness the power of data. Most CIOs do not capture and analyse data to reflect how their service business is allocating time within the organisation, and many feel as though they're making decisions blind. In other corporate divisions and departments, leaders have transparency around costs or revenue structures. For example, the vice president of sales will know which products generate the most revenue and the director of product development will manage the cost of materials, adjusting various components to minimise manufacturing costs.

However, IT is a cost-driven business that offers very little visibility for its business leaders. Rather than using specific metrics, managers in IT tend to do what's been done before and what 'seems' to work to keep costs down. Increasingly, progressive CIOs want to know where their teams are allocating their time. Until this question is answered with substantiated, real-time information, CIOs are not empowered to have insightful conversations with each business group about their service levels. A data-driven dialogue would allow CIOs to push back when a manager claims his team is not being supported, since he could reference the amount of time IT has actually spent working with that team. The CIO can also consider allocating IT's time according to the profitability of each division or department. For example, if they realise a division which only represents 15 per cent of the company revenue is utilising 40 per cent of the company's IT resources, they may assess the potential to spend less time with that group and more time with the profitable teams. In this way, data-driven insights would be the basis for aligning IT resources with budgets and optimising the value of IT across the most important groups at the organisation.

While there has been a lot of discussion about predictive analytics (opens in new tab) in the media, the reality is most internal departments - including IT - don't have real data to predict the actual performance of their most important business groups today. Across corporate functions, managers primarily use lagging metrics of performance which are "outcome-based," such as revenues for the past quarter, engineering milestones reached, or service requests that were open and closed. This allows CIOs and other managers to change course after the fact, but data is not available to facilitate changes in real time. New sophisticated analytics can provide this rich data to foster course correction in the early stages of IT engagement, in contrast to the current approach of crossing fingers and hoping it all turns out okay.

The good news is that the data to address this problem already exists in every organisation; CIOs just need the right tools to harness it. Corporate collaboration platforms including email, calendar, instant messaging and social network applications contain a rich treasure trove of information that reflects how teams are focused in their daily work. If CIOs can unlock and analyse this information, they can them make more informed decisions about resource allocation. CIOs and other senior managers will benefit from insights that allow them to quickly diagnose which distractions are pulling their teams away from strategic projects and which internal teams are taking up more time and attention than they should. CIOs can also identify best practices demonstrated by high performing teams which they want to replicate elsewhere. This type of analysis can ultimately identify where the misalignment exists between relative organisational impact and IT service spend, providing CIOs with critical data that can be presented back to various internal business groups to improve focus for the entire business.

Delivering new insights for the CIO

The confluence of three major technology trends is creating the ideal environment for discovering insights from this new collaboration data. The stars have aligned for organisations wanting to gain a competitive edge by aligning their IT investments with the most strategic initiatives.

Here are the three industry trends:

Big data

Over the past decade, the industry has made huge technological advancements to effectively handle massive sets of business data in real-time. The digital universe (which includes data created, replicated, consumed in one year) is expected to soar to 6.6 zetabytes (opens in new tab) in the US alone by 2020. Previously, there wasn't adequate power or disk space to handle this amount of information, especially with changing data sets, but today a myriad of new solutions allow companies to extract data from numerous sources, providing brand new business insights. For example, collaboration data that was previously dormant is now dynamic and can show – in a quantitative fashion – the relationship of IT with other stakeholder groups, both inside and outside the organisation. When consultants tried to gather this data through surveys, it was a cumbersome, time-consuming process that was done only once. With big data (opens in new tab), CIOs can review this data on an ongoing basis and in real-time, creating the ability to monitor and make adjustments to resource allocation at any time to better address the most important projects at that moment.

Cloud technologies

The explosion of SaaS and cloud-based business application services has resulted a big impact on the CIOs. Cloud technologies (opens in new tab) enable organisations to scale rapidly and implement solutions quickly. They also allow for dramatic costs savings. In fact, 84 per cent of CIOs reported cutting costs by moving to the cloud (opens in new tab), which means more can be done with the constrained resources CIOs are facing.

Social analytics

While social network data is the underlying information source for consumer-oriented social network analysis, collaboration data is the information that underlies enterprise-focused social network analysis. Many organisations are beginning to realise the benefits of analysing social analytics to better understand their customers, but few have extended that focus to improving their own organisations, resulting in a missed opportunity. "Internal" enterprise social networks are usually very deliberately designed to achieve a specific set of objectives, unlike consumer social networks which aren't typically focused on a specific goal. Rather, they tend to evolve organically and usually aren't focused on coordinating the efforts of the participants around an objective. Because of the unique nature of enterprise social networks, the analysis of collaboration data can provide profound insights into how people and teams are coordinated, which issues and opportunities are trending in any moment, and where the silos and hotspots are within the organisation. VoloMetrix addresses the social analytics gap in the enterprise and provides metrics and insights into collaboration, thereby also resulting in improved ROI on collaboration applications.

As a result, this new visibility into collaboration data and next generation analytics can provide insights that will transform IT from a tactical cost centre to a strategic lynchpin for the organisation. The insights ensure CIOs are no longer operating in the dark by providing new data to help them more effectively manage their teams. Here are just a few examples of ways this new information and analysis can improve IT organisations:

  • Collaboration data can identify when IT teams are distracted from the most important projects and are diverting energy to less import initiatives. For example, IT teams may be spending too much time fixing bugs on an existing application, rather than building a new one that is critical to the organisation. Alternatively, too many developers may be unnecessarily attending a weekly status meeting or strategic planning meeting, consuming 10-20 per cent of their work hours per week across the group. These are the types of distractions that can be diagnosed with new collaboration insights. In addition, the data can identify key attributes of the highest performing teams - such as those that complete projects on time – and create 'best practices' which can then be replicated across other IT teams.
  • Many CIOs underestimate the amount time their organisation spends managing and engaging with external vendors. Analyses and visualisations of collaboration data can reveal interesting and actionable information about the real cost of managing certain technology partners. When vendors approach different line of business managers across various groups in a single company, the organisation is generally unaware of the actual investment of this widespread engagement model. In many cases, the approach of external vendors creates a tremendous amount of redundancy and missed opportunity for volume discounts in the organisation. CIOs are often surprised to learn how much time is consumed managing these vendors when a holistic view is taken across their company. This creates an opportunity to centralise management and dramatically reduce the internal burden.
  • In addition, these new insights allow CIOs to run their organisation like a business, not just a cost centre. Collaboration data can generate new visibility into the core cost structure, creating an opportunity for chargebacks. Now, when a small internal team is demanding a large percentage of IT resources, CIOs have data to establish the cost of the project, creating a new avenue for revenue creation within the IT department.

Creating a more responsive organisation

With these advancements, IT has the potential to drive business growth and innovation, but it is still necessary to make time and allocate resources for strategic initiatives. IT should strive to find non-traditional ways to improve business by reallocating capacity among existing IT resources. Collaboration data holds the key to more effectively prioritising projects and allocating resources. Using analytics to generate insights from data that already exists on the network can shed new light on productivity and efficiency for CIOs.

IT is in a unique position to serve as an ambassador for innovation at any organisation because it has its finger on the pulse of new technology. No other group understands the nuances of collaboration applications better than IT, and IT is uniquely situated to be the initial department where this goldmine of collaboration information is first unlocked and leveraged. IT is often a group of power users that champion new technologies, so they can derive new business insights and then evangelise the value of analysing collaboration data to benefit other stakeholder groups across the organisation.

Business interactions, engagement, and collaboration have been occurring in business for a very long time. For many years, groups of employees have been collaborating and organisations have been looking for ways to increase productivity of their teams. New technologies are always changing the game and - in this case - collaboration data can make today's organisations more responsive by adjusting operations to increase the effectiveness of their teams in real-time. Some companies will embrace these new technologies in a quest to diagnose or eliminate distractions from their organisations and empower their employees with transparency that clarifies and focuses. Ultimately, these are the companies which will most effectively compete and succeed in the new economy.

Ryan Fuller is the CEO of VoloMetrix (opens in new tab).