Business Transformation Requires Transformational Leaders

The idea of managing demand has gained much traction in recent years, especially with demand for resources outstripping the available budgets. Increasingly this squeeze is now affecting the relationship between IT and the business. Any successful business model must be built on effective management of demand as well as supply. Yet demand management seems to be deficient or absent in many organizations.

A New York Times op-ed column by Thomas Friedman told of risk managers using a model to assess financial companies' net positions under different assumptions about mortgage interest rates and housing market factors.1 One of the parameters the managers were allowed to enter was year-over-year percentage growth in single-family home value.

At the end of Part I ("The BP Oil Spill: Could ERM Have Helped Avoid It?" 15 July 2010), I asked whether BP PLC Chief Executive Officer Tony Hayward -- or at least BP's risk management committee -- should have been made aware of the significant operational risk incurred on the company's behalf by his operational managers

Things are changing -- again. But this time the changes are more profound and definitely more permanent. We're entering a new era of partnership between technology and business. These two camps are inseparable now, and business models and processes cannot be implemented without operational and strategic technology.

Two decades ago, I moderated a panel discussion of CIOs interested in better understanding the challenges IT faces and initiatives they might take to successfully address them. During the panel discussion we agreed on six basic themes as being critical to successful IT management. The question is: have things changed much since?

There are many opinions about what constitutes an IT strategy. In my view, the IT strategy has to start from a deep understanding of the short-, mid-, and long-term goals of the company. In the absence of clearly stated corporate goals, the CIO does not get a pass; he or she must make some assumptions based on observation. Assuming there are stated corporate goals, the CIO must have some specific artifacts to create a grounded, purposeful strategy that aligns IT actions to company needs and whose value is clear. One of these artifacts is the company culture.

The Indian IT industry has long been associated with outsourcing. This in turn is frequently referenced in a half-derogatory tone of implying work on the low-end of the value chain, often eating into engineering jobs from client countries. As the Indian IT services industry has grown, especially in the last decade, such characterizations are no longer just offensive, but they are entirely detached from reality.