A Marketing Lesson For IT

In an earlier post of mine, "An Image Makeover for IT" I shared about a surprising meeting I'd had with our IT department -- where they were looking to learn how to better market their services within the company. I felt that this was a harbinger for the "New IT", and I think I was right...

Then last week I was given a draft Data Sheet by EMC's IT department.Whoa, you say. A Data Sheet? Isn't IT supposed to operate down there in the bowels of the data center keeping the "lights on"?

As you know, EMC's IT group has been progressive, from their virtualization initiative to building an internal Private Cloud for the company, to organizing for success, to marketing themselves as if they were a competitive service provider. Which is just the way more IT groups will have to think.

Why would IT Want To Market Themselves?
If IT is to think more "competitively" then they need to organize and act competitively, including driving demand/consumption for their services. This isn't about internal politics (validating their annual budget) but rather about driving awareness, demand, and preference for their services. Because IT's new competition is "shadow IT", the advancing commercialization of IT. More simple-to-use, aggressively priced external services are being offered to users who are accustomed to the convenience.  So IT finds itself having to do the same.

And there is the education component too... because while the enterprise consumer might want to compare internal vs. external services purely based on price (think: AWS, DropBox, MobileMe), IT has to show that there are hidden costs to these: Risk exposure, inability to prove compliance, cost of securing data, etc. etc. So IT turning to traditional marketing devices isn't all that odd in the final analysis.

A Data Sheet for IT...
Back to the Data Sheet I received. The IT dept did their homework - Like all good product marketing summaries, it included components to project leadership and to drive demand:

• Service components: In this case, it is an IaaS style service, replete with the value proposition. It defined the service, the pain-points it alleviates, and why internal EMC engineers should consider using it.
• Overall Value: IT also did a great job of illustrating the *total value* of the service - not just economic value, but the value of agility (time-to-provision) and convenience.
• Value of Risk Avoidance: Some marketers like to market to the paranoid... in this case, IT illustrated the risks of not using an IT-sourced service.Security, compliance, SLAs, etc.
• Competitive comparison: In particular, I like the fact that the internal private-cloud based service full-up cost was compared to that of popular public cloud providers. It illustrated that the actual cost of external services isn't always just the bare-bones hourly cost on your credit card...
• Availability roadmap: I also like the fact that IT set expectations with its customers. What's available now, and what new services/features will be available when.
• And a little bit of Esprit de Corps:Yep, good old pride in what the company is doing, and how the IT department is helping drive the top-line business. 

...And Enabled By New Roles, New Skills
If IT is to succeed as a "competitive" provider to the enterprise, simply publishing a Data Sheet is just one deliverable in a larger story. The organization needs to think, act, and hire like an internal service provider - and ask itself "How do successful SP's drive business demand?"

The process begins with a cultural and leadership shift to a desire to act not as an internal (monopolistic) cost center, and more like a competitive business catering to the varying demands of its internal customers. This is a CIO-level decision, often done in partnership with LoB's and even with the CMO.

And who executes on this new approach? What new functions need to sediment into IT? Well, it's not about technology skills anymore. Rather, IT will need to acquire traditional business and marketing skills. A few suggestions:

• Develop In-bound and out-bound Marketing: This refers to classical Inbound product management (listens externally to customer needs, and helps determine product features, plans, pricing - and classical product marketing, helping drive external awareness, preference and demand. In both cases here, Inbound/outbound functions work as closely with internal lines-of-business to understand their needs, roadmaps and futures.
• Initiate client "relationship management": Somewhat akin to a "sales" function, these individuals are assigned to sit closely-aligned with business users of IT, and work closely with in-bound product management. These folks detect leading indicators  of how IT can better serve the business, and look for ways to add value either with competitive technology, services or analysis.
• Include Pricing and Financial Management: Pricing and costing of services is a shift away from tallying-up gross capital and operational expenses, with a move instead towards activity-based costing. The ability to discern the true usage-based cost of an IT service means that the organization can better align supply with demand, and make better buy-vs-build decisions. This "financial transparency" allows the CIO, CFO, and Lines-of-Business to make better overall decisions regarding using IT to support the enterprise.

If IT is to be competitive, it has to act competitive. Marketing of IT is far from the only shift that needs to be done - and arguably, it probably follows shifts in IT technology and IT operations. But marketing IT is nonetheless an illustrative example of what is to come with a larger IT transformation initiative.

Act Now! Top Opportunities for IT Transformation Services...

It's become obvious of late that cloud computing is not a technology end-in-itself, but rather an enabler of broader IT  transformation. I've heard it from CIOs, CTOs, and even EMC's own IT department. All said, it's clear that IT transformation affects the entire organization - its consumption model, operations, organization, finance and more.It's not just about products anymore.

IMO there is a massive opportunity for leading change-management organizations to work with IT organizations to help them assess and execute this transition. Technology alone will not make IT more competitive.

So I'm a bit shocked that this era isn't a windfall for services providers who will help shepherd IT organizations through the change management process. It should be. To me this seems like thre's a huge investment opportunity to develop service practices. And, it's a huge opportunity for IT organizations to take pause and assess what their structure, operational model and business model will be a few short years from now. And how they plan to get there.

Follows are a few observations - and opportunities - I've made in the hope that a rising tide lifts all ships:

No Show Offs?

Where are the services providers, consultants and change-management professionals at trade events?

Given the tons of IT, cloud, and tech related trade shows, I'm continually amazed at how 99% of floor exhibitors are hardware or software firms. The show managers occasionally include special floor sections for "cloud" or "security" and such, but never for services providers or consultants who would assist the attendees in implementing the technology and change management needed to leverage technology.

I'd like to see an "IT Transformation Services" section in the large shows (i.e. VMworld, Cloud**, etc.) including consultants, organizational design firms, HR firms, IT training and talent management organizations, certification boards. etc. This would be where firms could hawk their services and compete for the non-product enablers for the CIO. Show producers ought to offer incentives to capture these firms and the value they provide.

I'd also like to see more intentionally-produced tracks at the shows that talk about real-world IT transformation successes... without inclusion of product or technology. Topics?  Financial transparency. Organizational design. Service-oriented design. Line-of-business customer focus.

Where Are the Big Guys?

Next, why aren't Accenture, Deloitte, CSC, Cap Gemini, Accenture etc blazing the IT change management trails? Perhaps they have IT change management practices. But I read next-to-nothing from these folks regarding philosophy, approach or successes. I'd like to know more about what they're doing and/or planning.

From where I sit, most System Integrators and management consultants either have 'low-level' practices where they thrown technologists at a problem, or high-level management consultants who produce reports and strategies. I'd like to see the middle-ground, with practices that work with the CIO and their lieutenants, to assess what type of transformation(s) would make the IT organization most valuable to the lines of business.

Where are the books, keynotes, articles and methodologies developed to show-off the IP I *hope* these folks are developing? 

And What of Professional Certifications?

No, not technology certifications; I mean IT Skill certs. Cloud Architect. Cloud Engineer. IT Services/Product Management. IT Marketing (inbound, outbound). IT Business Liaison. IT Financial Services Management. Not all of these are traditional IT roles, but they will be in demand shortly as IT re-tools itself to act and operate as the equivalent of an internal Service Provider.

And while we're at it, I'd *love* to see more business and MBA programs offer technology leadership and change management for CIO's style coursework.  Technology leaders will no longer need to be technologists themselves.


And in closing...

At EMC's recent IT Leadership council, it was clear to attendees that Transformation of the IT org was not about the technology anymore. It was about skills, roles, organizations, culture.

I am continually impressed by what EMC's IT department has done in most if not all of these domains. And I know that our own EMC Consulting arm has deep bench strength in this area. And as a company, we're going so far as to offer professional certifications in these emerging domains.

But as I said above, a rising tide lifts all ships.... I'd like to see broader activity in all of these areas from partners and competitors alike. The best way to make the new cloud computing paradigm successful is to make the IT departments successful in their transition. So, where is the help?

Post-Blog Updates

• Recent announcement from Deloitte for Cloud Service Providers 

IT Leadership: Two Days with Leading CIOs

I'm writing this at Logan airport as I fly home after two full days in Boston, attending EMC’s IT Leadership Council. At it, senior EMC staff were able to spend nearly two full days with a room full of IT leaders from some of the world’s largest and most respected companies.

What made the time unique was the quality of interactions as well as heady topics. EMC’s own leaders and practitioners interacted with our leading customers about  IT Transformation, IT as a Service, managing IT change, and cloud computing futures.  But the conversations were rarely about technology, and did not touch on product at all. Rather, they focused on challenges facing IT today and on IT’s renewed role to support the business.

This was the first time EMC has attempted something so ambitious with such a senior audience. And the results were fantastic -

• For our customers: EMC was able to share our experience in transforming our own IT, helping to validate many of their approaches. Our customers got to interact directly with our internal consultants and practitioners, and exchange views on best practices, pitfalls and works-in-progress.  And I believe we also transformed our customer’s view of EMC's knowledge and capabilities as an enterprise vendor/partner.
• For EMC: We had a unique chance to get out of the “weeds” of technical details, and to focus on the high-level business drivers that are really facing (and affecting) our customers. This was a chance to hear the unfiltered voices of the customers first-hand, for two days. Our thanks to them cannot be overstated.

It’s hard to summarize all of the themes from all of the sessions – including dozens of breakouts on various topics – but follows are my personal takeaways and “high points” from many individual and group conversations:

IT transformation isn’t about technology: Almost everyone was in agreement on this. The technology problems can be solved for. But the real barriers to IT reinventing itself lie in the area of new operational and organizational models, evolving roles and skills, and new financial models. Often-heard was “My technology is ready. My people are not”.

IT leader’s focus: To support business agility: Yes, IT agility and infrastructure agility were still points of conversation. But more important was providing business agility – the ability to help lines-of-business be more productive, more profitable and more competitive. Linking the business case between cloud, IT investment and LoB top-line is becoming an increasingly important strategic conversation for the enterprise.

IT will compete for business: This theme was becoming more prevalent. Users are turning to external service and cloud providers because of pricing and/or convenience. Sometimes termed “shadow IT”, internal IT now has to think of itself as having to “win the business” from lines-of-business. It has to reinvent itself as a competitive internal Service Provider (and/or service broker) to the business. IT is now rarely the only game in town.

Public Cloud isn’t (always) the panacea: There were more than a few customers – mainly banks, government contractors and the like – for whom the public cloud is simply a non-starter, usually due to regulations and compliance needs. But private cloud remained appealing. They were eager to learn more about private clouds and the IT transformation needed to make them productive.

IT must move away from a “hero” culture: IT heroes used to embody all of the organization’s tribal knowledge, and could parachute into a problem and solve it at any time of the day or night. But this SWAT culture has to make way for the “new guard”, consisting of IT staffs trained as generalists, who can work with increasing levels standardization, automation and shared infrastructure. Many practitioners agreed that entirely new staff rewards systems needed to replace those that awarded those with superhero powers.

Marketing? In IT? As IT shifts to becoming an internal service provider that competes for business, it’s also faced with acting like a business unit – replete with marketing functions. And these are skills that are somewhat alien to the organization. They include outbound marketing: publicizing and actively marketing their services to business units to drive demand, and inbound marketing: working alongside customers to identify needs and requirements for future product/service development.

Financial transparency more important than ever: To compete, to forecast, and to model, IT has to know its per-unit costs, whether or not chargeback/showback is implemented.  Knowing capital, operational and incremental costs helps the organization make better buy-versus-build decisions, and allows the rest of the enterprise to make similar decisions about how/where to apply infrastructure. And most important, if/when IT chooses to price services, they do so with detailed information. 
 
Overall, IT is having “new and unfamiliar” conversations: IT is talking with lines-of business regarding business agility. They are learning about inbound and outbound marketing skills. They are discussing competing against consumer service - and/or brokering them. They are being asked to support any and all employee-provided devices. They’re entertaining buy vs. build for application services.  They are being asked to meet or exceed demand for services… rather than to limit them. And they’re shifting from structured data and heavyweight GUIs to unstructured data using throw-away apps.

Much debate was had over whether IT is going through a Transformation or an Evolution. My answer? Evolution takes an awfully long time.

Event Agenda

Practitioner’s View: IT Transformation and GreenPages’ Solutions Architect

Last week I had the chance to speak with EMC Velocity Partner GreenPages – specifically with Trevor Williamson, their director of Solutions Architecture. Trevor regularly speaks with CIO’s from Enterprises and SMBs about cloud computing and IT transformation. He has a refreshingly balanced perspective on technology… and on its impact on business. Follows are some paraphrases from our conversation late last week.

Lots of Talk About Cloud But…

Not surprisingly, Trevor noted that 80% of his customers are talking about cloud computing (who isn’t?) but only really 20% are doing something about it. 

Why: He’s noticed lots of reasons – having to do with resistance to change, the demographics of IT leadership, and more.  Trevor’s analogy was to that of an automobile:  Traditional IT looks like a basic car with a basic engine and basic drive train. Yeah, it basically keeps running for ever. But if you wanted to change something, good luck.  There wasn’t much room for upgrading without changing the whole thing.   Next, enter virtualization… akin to a car with Fuel Injection. It’s an upgrade – and the engine will run more efficiently. But in the very grand scheme of things, it’s still a point-solution (although quite valuable). Now finally, enter the concepts of automation and Cloud Computing: where the car’s components become completely different and independent – no piston engine, an electric drive train, etc.  So it’s much easier to upgrade components without needing to alter others.  Simply increasing the battery gives better range. Changing the electric motors gives better performance. Changing the engine might speed battery recharge.  But components now operate more distinctly and can be optimized independently.

On IT Finance, and Why It Might Be the Key to Change

Trevor also had a terribly pragmatic perspective on a simple but ingrained factor holding-back IT’s efficiency.   In the traditional (read: old) IT financial model, the IT Project Number was the key to all implementations.  Any change to a specific system got charged to that number. And the dollar size of that number got watched under a microscope.  However, bounding the infrastructure’s financial model with a single project number reinforced the technological stove-pipe-ness of the assets themselves. The financial model did not allow for any sharing of assets between systems – because each new asset of course had to be assigned to a single project number. So, one result was the wasteful sizing of each silo - and resulting horrific utilization of each silo.  Ergo, Capital inefficiency became a necessary result of a limited financial model.

Enter: Shared infrastructure that can meter incremental IT usage, and cost-accounting that can keep track of (and assign) incremental costs.  With these two tools, IT could now implement a shared (and, needless to say, virtualized) infrastructure. The improvement in utilization, and resulting improvement in capital efficiency, was and is a boon to IT.

So, Who Calls the Play?

When an IT department decides to go down the path of a private cloud, who makes the call?

Well, there are usually two models Trevor and GreenPages frequently see – either top-down (by decree), or organic (bottoms-up). More often-than-not, Trevor believes most initial deployments are bottoms-up. The typically the initial application is internal to IT, such as QA/Dev/Test – also because these use case customer needs are very dynamic and fast-moving.  Giving the engineers a self-service portal and ability to spin-up tons of cookie-cutter environments is a great fit and a great win.  And doing so internal to IT (in contrast to line-of-business apps) minimizes the number of approvers… also speeding along the project.

Most initial bottoms-up automation and cloud initiatives are relatively new implementations, *not* system refreshes – which surprised me. But for good reason: Refreshes usually involve a cross-application and cross-domain initiative. Which means more approvers and multiple teams.

Now, there are times of course when IT leadership “decrees” building a private cloud – and mostly the impetus is either to reduce costs, or to cater to the LoBs who are looking for agility that will result in making more money.  But when these initiatives are by leadership decree, they’re usually bigger (and slower) than their internal organic cousins.  In fact, the top-down initiatives are usually corporate-scale, even to the point where they’re ‘branded’ and ‘marketed’ cross-org.  But reading between the lines, all of the hoopla doesn’t make the top-down initiatives any faster than the internal approach.

Is building an Internal Cloud Bad (for IT Jobs)?

Trevor gets this question a lot. He’s not yet seen an instance where virtualizing and automating infrastructure has meant a reduction in jobs. Instead, he’s found more the case that it’s good for the *existing* jobs.  Building a private cloud helps IT personnel climb out of day-to-day fray, and frees-up their time for more interesting, higher-value work for the company.   We both noted that IT should be focused on extracting value from company data and partnering with the lines-of-business…. Rather than “keeping the lights on” laboring as a monotonous workhorse.

And Finally…. On Keeping IT Competitive

“Why does business go around IT?” I asked. Trevor was pretty firm on this one: Only when IT can get out of its own way and move at “market speed” will internal customers will choose them. He sees lots of use of external services by lines-of-business, and lots of IT organizations racing to keep up with them.

How to achieve market speed? Part of the answer is re-engineering IT as an internal service provider / service broker. IT must think of itself as a service bureau, right down to marketing its services to users in the enterprise. From an infrastructure perspective, IT also has to become more agile. It has to “stop plugging holes with humans” and start by leveraging automation as part of its DNA. Lots of point systems can be automated, e.g. provisioning OS, virtualization platforms, I/O, networking. And only then can Orchestration be layered across those automated systems to attain the speed and agility needed. Take it a step at a time, with the goal being competitive and customer-focused.

A Leading Indicator of "Consumerized IT"?

Let me start with a game: Try to guess the type of customer I met with last week...

• Roughly 5,000 users with ~ 25% annual turnover
• Pressured to support multiple user-provided devices (Smart phones, iPads, etc.)
• Significant "Shadow IT" (e.g. users turning to external web services w/out IT's knowledge)
• Inquiring into a VDI environment to increase manageability, reduce costs
• Increasingly huge storage needs, esp. for video (on-demand media, surveillance, etc.) 

Give up?  Well, this customer was a High School district, with thousands of students and hundreds of faculty. And they shocked me with their challenges, ones which I assumed only large enterprises had.  I have to admit I was pretty surprised at their level of sophistication - and their vision.

And then it dawned on me: These guys actually more of a "leading indicator" than most their commercial enterprise cousins.  Their internal customers are nearly all Millennials, arguably leading users of consumer technology, and sometimes the most demanding. The student base requires support for "any device, any time", and doesn't hesitate to use external commercial services rather than IT (think: kids using DropBox, Evernote, Mobile Me, etc.). Also, users (students) without their own personal "smart" devices will typically log into multiple alternative devices a number of times each day, requiring virtual display and authentication technologies.

So, think about it: These students - and their appetite for "consumerized" technologies, will be your workforce of tomorrow.

What that high school IT department is facing is what most IT will be facing during the next few years. So consider carefully who (and what) you'll need to support in the coming years. And consider the organizational, technological, and governance transitions you'll need to implement as well.

In a recent Forrester Research report, "Shifting from Rules to Guardrails" there are some good observations of how IT (and the CIO) have to transform from being technologists to becoming brokers, vendor managers, and providers of technology governance:

"We see a blurring boundary between business and IT. The rise of self-service technologies, driven by empowered employees, provides new opportunities for IT to improve business responsiveness by enabling greater autonomy... To do this successfully, IT must evolve new governance approaches that empower the business with guardrails and education, reserving strict technology control for only the most critical technology assets. For many, this will be a radical change.

So, my lesson was that the places to look for Leading Indicators of IT transformation aren't necessarily the analysts and brainiac IT leaders... Instead, perhaps I should focus more on the needs of the 9th grade entering class.

I hope to stay in touch with the IT staff at the school district, and see what priorities (and solutions) they see emerging in the coming months.  As I exited the meeting, one of the IT leaders took me aside and also mentioned that IT has also experienced - not surprisingly - hacker break-ins as well.  As I said, perhaps the youngsters are where to look...


Other Resources

•  Fountainhead: New models for Consumption, Operations, and Technology
• Fountainhead: IT-as-a-Service: IT competing for business vs. "Shadow IT"
• Chuck's Blog: Learning to Compete - The real challenge of ITaaS
• Forbes: Consumerization of IT raises new security challenges
• CIO.com: Consumerization of IT taking its Toll on IT managers

Documenting IT Transformation Since 2005

If you haven't looked at how EMC's IT department has transformed itself over the years, you should - it's amazingly illustrative. Our CIO, Sanjay Mirchandani is visible and articulate. Our VP of infrastructure, Jon Peirce, is equally eloquent about how IT is transforming - and was a major force behind EMC's recently dedicated state-of-the-art Datacenter. And of course Chuck Hollis has been doing an amazing job of chronicling the meaning of IT transformation, consumption models and organizational changes.

First, show me the money

But where does that leave us regarding exactly what we achieved? What metrics illustrate the real benefits of all this work? Well, it turns out that EMC IT has been documenting their process since about 2005.  While not all data points are completely audited, they tell a powerful story.

In the conceptual 3-phase "Journey to Your Cloud" we speak about the trend toward increased virtualization - and how it's applied. In Phase I, IT virtualizes "internal" IT-owned apps saving primarily on cost. In Phase II, IT virtualizes production applications, benefiting primarily quality-of-service and availability. And in Phase III, IT is operated as a service, primarily improving overall business agility.

But along a pragmatic journey, the benefits occur gradually, sometimes in parallel.

EMC's IT group has been virtualizing its infrastructure - and documenting the results - since 2005. At right, the chart depicts how virtualization toward a cloud infrastructure undeniably results in improved infrastructure economics AND improved IT agility. And their trend continues.

The other benefit from virtualization is the ability to re-construct an environment should failure occur. This impact on quality of service is available anywhere virtualization is present - so you'd expect the pervasiveness of Highly-Available environments to roughly track the degree to which virtualization is implemented.

Sure enough, as EMC virtualizes its entire infrastructure (and we're not entirely there yet) we're pushing nearly 97% of applications with High Availability.

Finally, as IT infrastructure is virtualized and consolidated, utilization rises, and (presumably) physical data center space required (not to mention power) is reduced.The EMC IT group's statistics clearly show this trend as well.

In fact, EMC's recently-christened data center is not larger than our existing data center (as it was mainly developed to economize on power cost, and to create a physically-distanced site from EMC's HQ) so there is still lots of room to grow.

In the coming months, EMC, our IT department, and our consulting arm, will be continually elaborating on our own journey through transforming our IT... not just the technology, but the organizational models, operational models, consumption models, and more.

I personally have to say that the degree of rigor that Sanjay & team have put into this transformation is impressive. They have a very clear vision of where they want to be with respect to enabling the EMC business, as well as setting a clear example of what is possible for EMC customers.

Other References

• EMC-IT blog
• EMC IT Journey
• Enterprise Strategy Group: EMC IT Audit (PDF)
• Durham Cloud Data Center
  

An Image Makeover for IT

Wow. I just have to share notes about a meeting today - one that might have been unthinkable a year or so ago.

I've been working closely with EMC's CIO and internal IT groups lately, helping understand how they're delivering IT as a Service. EMC's IT is going through a major transformation, where it's becoming more competitive, more business-centric, more like an internal Service Provider.

What blew me away was a conversation I was invited into because I was in marketing. Could I help? IT wanted to begin  investigating how to market its on-demand/ITaaS services internally to EMC lines-of-business. We discussed audience segmentation, how IT would like to be perceived (read: Brand Essence), and the services/value IT provides to assist the business.What should a marketing and roll-out plan look like? Graphic designs? Should IT instead be called BT (Business Technology)? How would the value of Service Manager roles be highlighted?

The discussion - while well from over - I believe is a harbinger for the "new" IT, where IT provides value and competitive advantage to other lines-of-business, where it acts like a strategic partner/vendor, and competes for business. It's so much more than technology.

We agreed that another harbinger of change was when the CIO spends more time with the CMO, rather than with the CFO. And I can attest to being present to one such meeting.

So, in the process of IT elevating its value-add, IT will enhance how it caters to the business. It will actively promote its new service orientation, its new operating model, its new mindset.

And I am more than happy to help.

Related

• EMC's CIO
• EMC's VP of Infrastructure
• EMC's Services Blog