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HP Software's community for IT leaders // January 2014

A veteran CIO on 2014’s challenges

Longtime CIO and business executive Steve Bandrowczak sees opportunities for IT leaders to bring “radical change” to their companies and industries—but first they need to undergo a radical shift in thinking.

Steve Bandrowczak
In his more than 20 years as an IT and business leader, Steve Bandrowczak has seen his fair share of technological change. And he’s driven teams at companies like DHL, Lenovo, and Avaya to not only embrace those changes, but to create real business value.

Bandrowczak, who recently transitioned from CIO of HP’s Enterprise Services unit to senior vice president of global business service and business process outsourcing, has racked up accomplishments that landed him as one of nine elite IT leaders featured in the upcoming book, Confessions of a Successful CIO: How the Best IT Leaders Tackle Their Toughest Business Challenges (Wiley, March 2014). He spoke recently about these trends with the book’s co-author, Brian P. Watson, the former editor in chief of CIO Insight.

Q: What are the key trends you’re seeing that are going to make an impact on CIOs in 2014?

Steve Bandrowczak: On the technology front, obviously what we’re seeing in cloud computing and analytics—and really, business intelligence and data scientists as strategic weapons—are going to continue to be extremely important.

But cloud computing is not about just taking physical assets and moving them into the cloud for someone else to run—it’s faster speed to value for our business units. We used to be able to drive standard, out-of-the-box SAP or Oracle implementations. By default, cloud solutions allow you to have a standard offering on a global basis. And by default, you can’t modify it. So it clearly drives business value through faster implementations, and as you see cloud applications get upgraded and updated, your whole business gets it. So cloud is extremely important.

The second key trend is around analytics and business intelligence. We have gotten to a whole new level of analytics—not just from the perspective of business-owned data, but looking at other data outside of the business that can give us intelligence about what customers want, and intelligence into what’s happening with industries and different trends. Therefore, you can shape your offerings, go-to-market strategies, and support services all around it. Look at Netflix. They understand your social profile. They drive you toward movies based on your previous movies, geographic locations, even your political associations. The information age around individuals and the halo of information around people are driving new paradigms that we’ve absolutely never seen before.

The last one is mobility. We’re hung up around mobility, but it really has nothing to do with mobility—it has to do with changing the user experience. New business paradigms are being developed every day because of the new user experiences that we can drive. It’s a combination of consumer applications, mobility, network intelligence, software-defined networks—all these things coming together that are giving you information about individual locations, individual scenarios in what they’re doing, etc. You can drive them to the nearest restaurant. Inside an airport, you can drive them to the closest frequent-flyer clubs. We’re driving new paradigms—new business value—through technology.

Q: But CIOs have struggled and/or hesitated with these big-ticket IT issues. That’s shifting—is that because of the CIO? Or other functional leaders like CMOs, or even the newer fad of Chief Digital Officers?

SB: There’s no need for those digital officers or chief marketing officers leading technology where there’s a CIO that has true business acumen and understands how you can use technology, process, and data to drive change. All of that can happen inside the CIO community. When the CIO doesn’t leverage the capabilities within their four walls and doesn’t change business paradigms, that’s when you’ll see these other functions popping up.

Q: And with this rapid rate of change in technology and all the ramifications on CIOs, IT organizations themselves need to transform. How do you see IT organizations adapting to all this change?

SB: From a couple of different perspectives, we’re not ready. Everything we have in our DNA—from how we do software development lifecycles to how we do CMMI certification to how we do change management and change control—are not driving quick business value. The reality is, we’ve got to do that, plus drive business value. We’ve got to do all of that, plus start with the user experience. We’ve got to do all of that, plus drive new business paradigms.

Historically, the only way we got velocity on these new challenges was by creating new groups that had the freedom to drive these changes, do it quickly, and demonstrate to the rest of the organization. But you’re not going to get it by doing things the way we have done them historically and believing that just because a technology has hit, the organization is going to change their way of thinking.

Mobile computing is a perfect example of that. If you take a look at the applications developed today, 99 percent do not start with the user experience. They start with business functionality—and that’s absolutely wrong. You’ve got to start with the user experience first, then back into functionality, then back into the traditional way in which you develop it. Agile gets us a little bit closer, but you still need to start with the user experience and the productivity gain you’re going to get from those changes.

Q: From a CIO perspective, what are the most important attributes they need to have to drive this change? You said we’re not ready—what should the CIO do to drive that readiness?

SB: I created a business technology development group. It’s a separate group that is designed to do nothing but look at trends and drive internal change to HP. They are the anti-everything that IT stood for, period.

We also brought in very young tech-savvy people who understand the new age and how to use the technology in their daily lives. We’ve allowed them to lead and drive user experience. Traditionally, CIOs would bring in college grads and the younger generation and start them at the bottom and walk them all the way up—but these people are leading projects. You have got to have that comfort that they understand what “good” looks like in the new world of IT, and then allow them to shape the end result. Then you use your traditional IT organization to build, scale, and secure all the things we need to do and keep the assets of the company safe. But you’ve got to allow those people to drive and lead these programs.

The third thing we need to do is keep hammering that it’s all about a user of one. We are so conditioned to build a single system for the masses, as opposed to a massive system for the masses. It’s developing a user experience for one—that’s a radical shift of what we’ve always talked about in terms of driving unit cost, driving efficiencies, and getting everyone on a single platform. Now we’re talking about every user having their own experience with their own set of capabilities based on how and when and where they want to work. That’s a big, radical shift.

Q: Thinking about those big radical shifts, they obviously present challenges for today’s IT leaders. You talk a lot about the “art of the possible,” and turning challenges into opportunities. How can CIOs harness that idea?

SB: When we talk about the art of the possible, we start to measure what best in class looks like. We start to measure what the best capabilities could look like in pure business value, whether it is revenue or operating profit—whatever it may be. Then you can back into, “How the hell do I get there, and how do I drive the organization to get there?”

We tend to look at these things in terms of incremental improvement as opposed to radical improvement. Radical improvement is not a 2 percent or 3 percent improvement—it is getting to best in class in my industry, in this particular business function, in this particular cycle time.

You then back into, “How do I do that?” Then it’s a combination of technologies, whether it be mobile, analytics, cloud, etc.—I have a true best-of-class end-state I need to drive to. Then you have the art of the possible, which then allows me to go design and drive for that end solution.

But creating that vision is what most CIOs don’t get—they don’t paint what that “best” looks like, what “great” looks like. They tend to drive incremental improvements, as opposed to saying, “If I’m going to put all this effort in, and I’m going to drive and use all this new technology, but at the end of the day I just have mediocre improvement, why did I bother?” If you’re going to do it, you’d better shoot for what is best in the industry, what’s radical in the industry—doing something that’s never been done before in the industry—and then focus all your energies to drive there. That’s radical change.

Q: Thinking about the pendulum swing of what makes the right CIO at different stages in history, with all this change, do you see any radical shifts in the kinds of CIOs companies will be looking for?

SB: I do. Because you’re seeing these startups and challengers come from nowhere in the industries. Even today, the biggest challenge HP has is not the traditional IBM or Accenture—we know what they can do, and they know what we can do—it’s the people and the companies with application stacks that are doing things radically different. Look at what are the fastest-growing companies. Look at Salesforce. Look at Workday. How could they exist in the duopoly world of SAP and Oracle, and even Microsoft? They came out of nowhere.

My point is that CIOs will have to drive these radical transformations through technology and process. We used to run IT shops by getting measured in operational efficiencies. Then it was how well we could roll off projects. Then it was on our business acumen. Then it was how much we were driving value. Now, can you actually create value? Can you actually create new paradigm shifts, new business models, new competitive offerings? The CIO role is absolutely in the driver’s seat of doing that in the future at most companies, especially as the digital and business analytics becomes more and more a part of a strategic weapon.

Steve Bandrowczak is among the high-stakes CIOs profiled in Confessions of a Successful CIO, which will be published in March 2014. Brian P. Watson and co-author Dan Roberts of Ouellette & Associates Consulting will discuss the key qualities of top CIOs in our next issue—if you’re not already a subscriber, sign up here.


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