CIO Dilemmas: A Conversation

11:57 | Paul Lancour | Feb 12th, 2007 11:47am |

This is the last in the series of podcasts with Frank Buytendijk, vice president for corporate strategy at Hyperion. The series emphasizes the need to address more directly the specific problems any CIO might face in order to arrive at meaningful solutions. In this final, “bonus” podcast, Frank hears from leaders in business intelligence, and directly addresses their comments about real-world issues faced by top-level CIOs.

Transcript:

Host: Paul Lancour – PodTech
Guest: Frank Buytendijk – Hyperion
Guest: Martin Vonk - ING Direct
Guest: Rennae Rupert (ph) - University Of Lausanne
Guest: Ulrich Coenen – E-Plus

Paul Lancour – PodTech
Frank Buytendijk of Hyperion has developed his series of articles and podcasts. CIO Dilemmas, examining the role of the CIO and distilling it down to four common Dilemmas that must be addressed in order to formulate working solutions.

In this final Podcast in this series, Frank tackles the comments of several thought Leaders in the area of Business Intelligence in the context of his work. We started with Martin Vonk, COO and CIO of the ING Direct. He began by assessing the IT landscape today.

Martin Vonk – ING Direct
The main dilemma is the way and I perceive them nowadays is a lack of alignment between business and IT, IT and Aux (ph) together, I must say, which presumably from my perception relates to governance issues and the way the organization is basically put together, so it’s strongly related in my opinion to governance. So, I would like to ask him what would be his idea about bridging that gap because still when you see that operations, IT and all these areas of expertise are really treated to these cost centers by senior management and CEOs instead of (Inaudible) for a profit center and so, that is the main challenge I’m facing. So, I would like to ask now, “How will you would basically address this challenge?”

Paul Lancour – PodTech
Frank, go ahead

Frank Buytendijk – Hyperion
That’s indeed a very important question that Martin is putting on the table here and I must say I’m really honored by Martin Vonk’s question because I have to say I know ING Direct just a little bit and Martin is actually too modest to ask this question. ING Direct — their business model itself shows that there’s not really an IT and business device necessary and in their case they’ve made the business and IT alignment actually a comparative advantage. At ING Direct, IT is at the core of the business model itself, it shows how you can defeat the either-or choices of strategy.

Many people know that three key strategies that there are, those would be Operational Excellence versus Product Innovation versus Customer Intimacy, at least that’s what we’ve learned, you have to make a choice for your Core Strategy but ING Direct chose which that you don’t have to choose. What they have done, they have innovated their Operational Excellence model to create Customer Intimacy in their interactions through the Web and through the call centers that they have.

Now, there’s also something else that is quite interesting about ING Direct in the very visionary work that Martin Vonk has done there. ING Direct also defeats the central — decentral discussion and that is typically how the pendulum swings in most companies. We decentralize, come across the negative consequences of that, then we centralize, come across the negative consequences of that, we decentralize and that’s how it goes. What ING Direct has done that I think is brilliant in its simplicity is that they have a very centralized business model but all kinds of innovations that come from a certain country are immediately implemented in a decentral way first, but after it has shown to be a success for instance as a pilot or it comes through specific implementation, those innovations as new best practices are immediately picked up and become the standard for other countries. There’s no such thing as a top-down or bottom-up business model. Innovations come from all over the business.

There’s not one country that is in the lead or there’s also not corporate that is in the lead. I think and that is my opinion that this all comes from understanding that the statement, “IT follows the business” or vice versa for that matter is nonsense. In many cases, IT equals the business and I think in IT, we shouldn’t think in terms of users or internal customers, we should be colleagues with the same objectives and the moment we go back to actually a logical way of thinking, many of the dilemmas in business and IT alignments will not even appear.

Paul Lancour – PodTech
Great! We’ll next return to Rennae Rupert (ph), Rennae is Lecturer at the University of Lausanne in Switzerland. We asked him “What question he would like to direct to Frank?”

Rennae Rupert (ph) – University of Lausanne
Well, I think Frank’s approach does not excludes the emotional aspect of a dilemma. He only and simply presents a dilemma as most people tends to discover them. Obviously, it’s very embarrassing because a dilemma is a problem which two or more monolithic solutions, and monolithic means that it can’t be broken down into something simple that could be discussed individually, it’s monolithic, so it’s that or nothing and usually they’re not acceptable. So, it’s a tough situation, but what I am saying is as soon as you look into the emotional aspect you discover ways out and ways to treat and address this problem.

Paul Lancour – PodTech
Frank.

Frank Buytendijk – Hyperion
What Renay Rupert is bringing up is quite interesting, that’s the emotional side of dilemmas, being embarrassed about them and not really knowing what to do with them and how would emotional approach would help in solving a dilemma. In fact, there’s a technique in counseling that has been used a lot for this when two parties are quarreling and one of the way that you can solve the dilemma that two parties in business or in the private sense are dealing with, would be to ask each of the two parties to defend the other party’s position to totally lift the situation of the other side, and the moment you crawl into the skin of the other person, you defend their position, you’re one step closer to the solution of the dilemma as well and that is a very simple, let’s say, a smaller way of solving a dilemma.

I think there’s a misconception that dilemmas and dealing with dilemmas has to be big, that if it is about heroic decisions, that’s or nothing, Rennae (ph) already said. It is about drastic measures or brilliant insights to defeat a certain dilemma, but in most cases it is actually rather simple. What I would like to suggest as well is to look at dilemmas in the — well, let me say, not that monolithic, try to break down the dilemma, the two opposite opinions or the two opposite situations, try to break them down in smaller components and you’ll see that of every small component the advantage that you would gain by implementing that small component would be small, but also the disadvantage would be small, and if you wisely choose components of one side of the dilemma and to the other side of the dilemma and you create a portfolio of small, incremental, straight forward solutions.

Again you’ll see that most probably the negative side effects of choosing between the two bad things of the dilemma won’t even appear, you have synthesized it.

Paul Lancour – PodTech
Great and finally we turn to Ulrich Coenen, he is the director of business intelligence at E-Plus which is a large mobile phone company in Germany, we asked him what he would like to talk to Frank about?

Ulrich Coenen – E-Plus
The speed of development, what we face in telecom industry is still a very high speed of change that I have never encountered in any other industry before and to cope with those issues from business intelligence or business performance management side, still it’s an unsolved issue and I know that Frank is very busy at this technical question, I think it’s the most important question, it’s not about how to outsource operations, how to streamline the IT with respect to standardization and things like that. It’s about how can you keep pace with the changes that still happen, especially in fast moving industries like the telecom business.

The idea of a competence center is key for answering this question so that actually what I took away from his thoughts about, how to structure everything around business performance management.

Paul Lancour – PodTech
So, Frank the speed of business today is Ulrich Coenen’s concern.

Frank Buytendijk – Hyperion
Yes, how can you keep pace with all the change in the telecom market that’s what Ulrich is talking about, which is interesting. In fact, it is — the one of the dilemmas that I did described in one of the papers on the CIO Dilemmas and it can be solved with an infrastructural approach. It’s the infrastructure versus business agility dilemma, and infrastructural approach means that you try to create a generic way to solve many different problems at the same time. It’s a highly-standardized way of working, so the moment you have implemented such an infrastructure, every change only has to be completed once throughout the systems and not in multiple places and it has an effect in the complete organization as you can imagine there’s a huge advantage in creating such a way of working.

Unfortunately, implementing such an infrastructure takes a lot of time and given the speeds of change in the Telco Industry and mainly other industries for that matter, you don’t have that time, you don’t have, let’s say, a year or one-and-a-half year to build a complete generic data warehouse infrastructure. So, how we describe this in one of the CIO dilemma pieces if you need to do both at the same time, you need to have your short-term solutions and you need to be working on this infrastructural approach at the same time.

Now, when I mentioned infrastructural approach, I don’t want to necessarily restrict myself to technology infrastructure. If you listened to what (Inaudible) what I’m trying to say, he did mention a business intelligence competency center and I know that E-Plus is a very successful competency center. In essence you could call this competency center an organizational infrastructure, it is a generic group of people that know how to tackle difficult business intelligence problems and apply those solutions throughout the organization in a standardized way.

So, the results can be leveraged throughout the complete business and the different people in the business intelligence competency center can work for the various kinds of business as there’s also not only a standardized technology set but also a standardized way of working, and in that sense, this is how you would solve the dilemma between the speed of making changes versus taking a long time to think and doing things right.

Paul Lancour – PodTech
Well, Frank, thank you very much for taking the time to take some of the ideas we’ve discussed in earlier podcasts and directing them towards some real life situations with some thought leaders in the area of Business Intelligence and thank you for sharing your insights throughout the entire series on CIO Dilemmas.

Frank Buytendijk – Hyperion
Thank you very much, it was a pleasure.

Paul Lancour – PodTech
Get in on the conversation by going to Frank’s Blog at blogs.hyperion.com/frankb. And of course, for more information go to Hyperion.com.

Thanks for listening.

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Tags: Frank Buytendijk, corporate strategy, Hyperion, CIO, business intelligence

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