Tuesday, May 12, 2015

Technology Management and the Art of Mastering Change

By Feroz Merchhiya
Chief Technology Officer
Director of Technology

California Insurance Guarantee Association

Technology is at the heart of every business, large or small, nowadays. Technology is what drives profitability in a company. In fact, embracing current technologies has the potential to mean the difference between the success and failure of a company. Many companies, some of the largest out there, have lost a substantial amount of growth over the years simply because they have not adapted as quickly as they should have done to technological changes. As an IT Leader, one of your main roles will be to steer the technological innovation of a company in the right direction.

From Social, Mobile and Cloud to Converged and Hyper-converged infrastructure, technology over the last few years has changed at a rapid pace. Technology which may have been ‘all of the rage’ a year ago is most likely going to be ‘old hat’ now. One of your aims as an IT Leader, and probably where you will spend the bulk of your time, will be keeping an eye on the technological landscape. You will want to see which technologies may benefit your business and look to implement them as quickly as possible.

The heavy reliance on technology for a company has made it difficult to plan. In the past, you were praised if you came up with a robust annual plan. This is not possible nowadays. Some industries are looking at huge changes every couple of months, sometimes even less, and the last thing a company wants to do is have an annual plan in place which simply can’t be changed. As mentioned previously, plenty of companies out there have lost huge amounts of profit because they did not adapt quickly enough. This is, mostly at least, due to the fact that they did not allow themselves to do so. Their processes were too set in stone. They were not willing to adapt to change and their company fell by the wayside. As an IT Leader, you have a responsibility to ensure that this does not happen to your company.

An IT leader, nowadays, needs to take a ‘hands on’ approach when it comes to technology. They need to implement processes which will enable them to analyze how the business is performing on a technological front and whether there is any possibility for change. If there is, the IT leader needs to determine whether that change is the right one to make, and if it is, how to implement that change in the quickest and least-disruptive manner possible. It is difficult. An IT leader, no matter how good they are at their job, who fails on change management front, will be letting down the business that they work for.

It can’t be stressed enough just how important the analysis of technology is. Some companies in the past, FoxMeyer Drug being one of the first that springs to mind, jumped on the ‘change bandwagon’ a little bit too hastily. They invested $100 million into an IT project. While this is a huge amount by today’s standards, it was an even heftier amount back in 1997. They thought that it would help them take their company forward. Guess what? They went bankrupt shortly afterwards. Now, the project they tried to implement was terrible because of various reasons which included  a lack of upfront analysis, project execution and change management. 

However, 1997 saw the start of an age where companies began to shift towards an increased use in technology and FoxMeyer Drug wanted to be the first one there. It didn’t work.
Careful analysis does work. The implantation of new IT systems can have a positive impact on business. RFID technology has become huge over the past few years. Companies which have embraced it in the correct manner have earned the expected value. Companies which invested in RFID just for the sake of investing have lost money. 

A good demonstration of the reasoned approach is Disney Resorts, part of the Disney corporation. They have spent close to a billion dollars on the implementation of RFID technology in their parks, which was rolled out in 2008. They have not implemented RFID technology for the sake of it. They have implemented it because it will deliver the value to both Disney and their guests. The point I am trying to get across here is that you need to implement change because it can make a difference, not implement it because you want to keep up with trends. If a technology will not have a positive impact on a business, there is no sense implementing it. 

A more recent example of careful analysis and the implementation of change, more specifically within IT, is PayPal’s adoption of OpenStack Cloud. PayPal has completed a three-year migration and complete revamp of their data center infrastructure including multiple upgrade of OpenStack while going through this change.  Sri Shivananda, VP for Global Platform and infrastructure was quoted in InformationWeek saying, “the OpenStack transition wasn't only a move to a more automated infrastructure. It was an internal cultural change as well, the change undertaken by the IT staff goes well beyond server provisioning,” It was a change in  thoperating paradigm from a traditional manual-build-on-demand model to a multi-tenant private cloud infrastructure with end-to-end automation.

Recent studies and a study back in 2005 revealed that IT Leaders seemed to not be doing enough on analysis and change management. This study carried out by CSC, an IT Consultancy, interviewed 782 IT Leaders. More than half of them felt that it was difficult implementing technology. The most startling figure however was that only 10% believed that the IT project that they were responsible for was actually a success. Again, this could potentially, demonstrate that some companies are a little bit too hasty when it comes to implementing change.

As mentioned previously, change can be a good thing. Innovation and disruption are recurring themes in technology related conversations. Right change is what drives the profitability of a company. A company which is hesitant to change is a company which won’t be in existence for all that long. However, an IT leader needs to strike a careful balance. They need to adapt by all means. This is essential. However, they should not adapt without taking a disciplined approach to the impact on the business. They need to see if the change will be cost-effective and whether it will drive up profitability or drive down cost. It is not just profits that they need to look at either. The IT leader needs to analyze whether the employees can deal with the change. Remember, if you are changing processes on an almost continual basis, staff will become stressed, they won’t know how things work, they will be in a perpetual state of change, and business will suffer. Too little change is bad. Too much change is bad. It is quite a balancing act. 

As I mentioned right at the start, IT is at the center of most businesses nowadays. Almost everything a company does will rely on IT to some extent. This means that the IT department and IT leader can’t just sit back, generate ideas, and tell the rest of the business to just implement them. Or receive requests and execute blindly both approaches will lead to undesirable outcomes. The IT Leader should be the catalyst for change and active partner. They need to be demonstrating how to make and embrace change.  I will close by quoting the Editor’s Note from John P. Kotter‘s article in The Harvard Business Review: “Guiding change may be the ultimate test of a leader—no business survives over the long term if it can’t reinvent itself. But, human nature being what it is, fundamental change is often resisted mightily by the people it most affects: those in the trenches of the business. Thus, leading change is both absolutely essential and incredibly difficult.”

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