This is a story of successful IT innovation in a large enterprise. If you have time, first read “A Story of Innovation Failure“, which will put this story into better perspective.
The CIO of Clever Corporation was well aware of the newest trend in the IT industry: “panacea computing”. He had read several detailed research reports on how panacea computing was expected to revolutionise how enterprise IT services would be delivered. According to industry analysts, panacea computing would increase agility and substantially lower IT costs in the enterprise. Even Clever’s CEO had remarked that panacea computing might offer significant business benefits and enable Clever Corp to become more competitive. Consequently, the CIO was highly motivated to investigate panacea computing and the ways it might benefit Clever Corp.
The CIO started by organising a number of meetings with large enterprise software vendors that sold panacea computing platforms. He also organised meetings with major international system integrators that claimed to have had success deploying these panacea computing platforms in large enterprises. The proposals he received from these vendors and integrators would require very large investments in extensive programs of work that spanned very long time frames.
The CIO, and his management team, spent a lot of time reviewing the promotional material provided by the software vendors and system integrators. The CIO also attended numerous sales presentations where he met with various national sales managers, regional account managers, business development managers, local sales representatives, and pre-sales engineers. All of the presentation were intended to assure the CIO that the products and services offered by the vendors and integrators, albeit expensive, would “unleash the power” of panacea computing and bestow upon Clever Corp significant business benefits. They said all that the CIO had to do to get started was to secure a very substantial funding commitment from the CFO, and then sign on the dotted line. The CIO could then sit back and watch Clever Corp’s panacea computing dream become a reality.
But the CIO did not sign any of the contracts, nor did he even ask the CFO to commit the massive amount of funds required. The CIO was concerned about the massive financial investment, and the giant “leap of faith” in both the platform vendor, and also the system integrator, that was required. He still wasn’t really clear exactly what panacea computing really was, how the purported benefits would actually be realised at Clever Corp, and over what time frame this would occur. Furthermore, the CIO had heard about the infamous panacea computing program failure at Stale Corporation, one of Clever’s competitors, which he certainly did not want to repeat.
Consequently, the CIO decided that Clever Corp’s investment would be structured in a way to increase the likelihood of success. The program would ensure that the most significant risks to success would first be addressed. Should the Program be able to effectively mitigate these higher risks, subsequent investment would be made to address other, less significant, risks. This process would continue until either program success was achieved, or alternatively, it became clear, hopefully early on, that the initiative was premature, or likely to generate a poor overall ROI.
The CIO identified the strategic risks to success, namely:
1) Clever Corporation might not really understand the actual benefits that panacea computing would provide to the enterprise, and so should they be overestimated, it would result in a very low ROI.
2) Even if the estimate of benefits was accurate, Clever Corporation might fail to successfully deliver a functional panacea computing platform, seamlessly integrated with other ICT systems and processes, at a cost that would ensure that an acceptable ROI would be achieved.
3) If the costs to operate and maintain the panacea platform were allowed to become excessive over time, it would prevent an acceptable ROI from being achieved.
The CIO assembled a small team of his top technical staff, and key business stakeholders, which he named the Panacea Assessment Team (PAT). Their mission of the PAT was to architect a business and technical blueprint for Clever Corp’s panacea computing solution, and also to identify work that could be performed to mitigate the risks to success. The PAT staff were motivated but had little knowledge about panacea computing. To assist the PAT, the CIO engaged a few small local boutique consultancy firms to provide guidance. These firms also had very little experience with “panacea computing”. However they had proven themselves in previous unrelated engagements as having both overall technical competence, and/or as having a deep understanding of Clever Corp’s business environment and processes.
The CIO knew that the PAT blueprints would only constitute a “best guess”, and would certainly be inaccurate and incomplete. However as Clever Corp was not yet entangled in a large vendor contract, the PAT had the flexibility to modified the blueprint as necessary to reflect the changes in direction that would inevitably arise as the PAT’s understanding of panacea computing, and its real benefits, increased. The CIO commissioned some low-cost, exploratory proof-of-concept (PoC) projects to attempt to better understand the technical challenges of implementation. The goal of many of the PoC projects was to construct a very basic prototype of a core panacea computing platform component. Other projects were launched to attempt to integrate platform components with each other, and also with legacy systems.
The CIO kept the scope and cost of each PoC project small. This limited the impact of a project failure, or an unexpected change in direction. It enabled the PAT team to be flexible and pivot as needed. As a side effect, the reduced scope and cost also allowed small, local vendors to compete for the work. The CIO knew that small local vendors would give high priority to a large local customer like Clever Corp plus their staff would be available for consultation after a project ended if necessary. Large international integrators would often fly in staff just for the duration of the project only to see those same staff fly off again to other engagements without adequate knowledge transfer to Clever Corp staff.
To avoid the procurement delays, many of the PoC projects chose to utilise free and open source software (FOSS). With FOSS, the procurement process was as simple as clicking on a “download now” button. An additional benefit of FOSS was no licensing costs and complete deployment flexibility. Staff could even modify the software should it be necessary. Some of the FOSS was supported by local vendors but PAT staff found out that the FOSS user community would adequately respond to many technical questions in a timely manner.
Many of the PoC projects did not deliver what was initially intended – some were simply canceled mid-flight. However, as a result of the projects, Clever Corp staff began to better understand panacea computing and how it would actually be created, deployed, and used. The PoC projects were prioritised to address the most significant risk to Program delivery, and business benefit realisation. Therefore were it to become clear that the overall panacea computing Program would not succeed, this determination would be more likely to occur near the beginning of the program when fewer funds had been expended.
Over time, the CIO, and Clever Corp staff, began to understand the actual practical benefits, and limitations, of panacea computing. The risks to the success of an enterprise deployment were much better understood. Clever Corp staff also understood the functional and non-functional capabilities of a panacea platform that were absolutely critical to deliver true business value. They now knew exactly what technical questions to ask the vendors, and what performance guarantees they would demand. The CIO had a much better understanding of the true technical challenges, and costs, of deployment and integration. As a result, he could now negotiate with the enterprise software vendors, and system integrators, much more effectively. He could also now structure the massive upcoming program of work, and the various contracts, in a way that would be most advantageous to Clever Corp.
However the CIO found himself with another interesting option. Enough PoC projects has successfully completed that a skeleton panacea computing solution, which staff called “LitePan”, had begun to emerge. LitePan would only provide a limited subset of the capabilities purportedly included in the panacea computer platforms offered by the large vendors. However it was clear that with extension and refinement, LitePan could provide many of the most useful, and valuable, capabilities. Plus the cost to complete and deploy LitePan would be very small compared to the costs of the proposals initially put to the CIO by the large vendors and integrators. Upon completion, the CIO could demonstrate early, and respectable, ROI to both the CEO and CFO. The CIO also noticed that PAT staff had developed a strong sense of pride regarding LitePan and were highly motivated to see it succeed, which would help overcome any cultural barriers to uptake.
Perhaps best of all, if the CIO, now much better informed, believed that Clever Corp was simply not ready for any form of panacea computing, or that panacea computing itself was over-hyped or immature, he could stop the entire initiative. Only a very small amount of funds had been expended, relative to what was necessary to proceed with the initial proposals from the large vendors and integrators. The CEO would be pleased that panacea computing had been very carefully considered by Clever Corp, but was simply found not to be compelling for Clever Corporation, at least not at that point in time. She certain did not want Clever Corp to make a significant technology investment merely for technology’s sake. Finally, as a result of the PoCs, the CIO, and his management team, were now much better positioned to determine if, and when, they should revisit panacea computing in the future.
Copyright © 2013 John V. Harrison. All rights reserved.
