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.

Copyright ©2006 PodTech.net. All rights reserved. Privacy policy

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

Transcript:
Host: Paul Lancour - PodTech
Guest: Frank Buytendijck - Hyperion

Paul Lancour - PodTech
I’m Paul Lancour with PodTech.net and in this series of Podcasts CIO Dilemmas, Frank Buytendijck, Vice-President for Corporate Strategy at Hyperion, says if CIOs are to find real solutions for their organizations; they need to examine the underlying problems more closely. Frank has distilled this idea down to four common dilemmas; each one to be examined in a separate Podcast. In this Podcast, we examine the dilemma of bridging IT Service Delivery and Business Focus. Our conversation starts with Frank looking at how any CIO can cover the broad territory needed being technically proficient, and also able to work on strategic decisions as part of the executive team.

Frank Buytendijck - Hyperion
That is definitely the issue, the problem at hand, the dilemma perhaps not for a CIO itself, but for the executive team, what type of a CIO or what type of an IT functioning you would want. Traditionally, there are two types of CIOs. There are the CIOs that have grown up in IT and indeed are technically very proficient and are very good managers and leaders in the IT world, focussing on improving the service there of IT to the rest of the business and there are the executives that perhaps, they don’t grow up in IT, but have a finance background, or operations background or any other backgrounds and just landed in IT and see themselves much more as a business executive who happen to have IT in their portfolio, trying to figure out what the IT contribution to the business is.

The interesting thing is, that if you look at where business and IT alignment is going, this actually shouldn’t be a choice and what you really have to do both at same time. Let me put this in a very strong bottom line statement, IT, in a very fast space, is becoming the business itself.

Paul Lancour - PodTech
Could you explain that in a little more detail please? In what ways is IT becoming the business?

Frank Buytendijck - Hyperion
Yes, if you look at new business models that we see all over the world, we see that these business models are not only fueled by IT, but they consist mostly of IT itself. If we look at this strength, business comes from over the last 200 years from a lot of fragmentation, everyone doing a little thing there, there’s a shoemaker; there is the bakery around the corner; there is the guy who makes the tables, a shriner et cetera, et cetera. Then in the previous century, we moved to the model of mass production. I think, the best example started with the T-Model Ford that you could get in any color as long as it was black. I think everyone knows this particular story.

So, we’ve exported model well. The business model that we see in the 21st century, where we live now, is the one of mass customization. That means we have standard processes, standard ways of working, we have an operational excellence environment if you will. However, every single transaction or every single product or every single service going over those standard processes can have different characteristics. Think for instance, of a business model such as Nike iD, maybe you know the Website, nikeid.com. You can go there and basically design your own shoe. You look at the possibilities on the screen, the colors, the fabric, the various types of shoe within reason and within the boundaries that are there within the Website, you can put your own shoes together.

In the end you hit okay, you pay for it, and after a few weeks, your personalized shoes that you designed yourself are being delivered by the mail to your house. That’s a perfect example of mass customization and that can only be done by a heavy, heavy, heavy control of IT. In fact the Website, is IT itself and without the Website there wouldn’t a business model.

Paul Lancour - PodTech
As you say this blurs the distinction between the front office and the back office of a lot organizations. This sounds like a lot of the direction that a lot of automobile manufacturers are going in as well.

Frank Buytendijck - Hyperion
Yes, yes, because if you think about the idea where automobile manufacturers go and the example of Nike iD and there’re many more of these examples out there of mass customization. It is interesting that where is the front office, where the customer interactions stop and where does the back office start and vice-versa. In the case of designing your own shoes there is no difference because the customer interface, their Website, immediately triggers a transaction in the back office that gets delivered and that’s a customer facing moment again.

The most important thing is that the arrow is in the reverse direction. The arrow is not going from supplier to customer any more. This is the product that we design, that we will deliver to you. No, the arrow goes outside in. This is what the customer specifies, what he or she requires and this is how it should be translated into production and in service delivery terms and that I think is the core of the method of new IT driven business models.

Paul Lancour - PodTech
How do these ideas we’re talking about here relate to information democracy?

Frank Buytendijck - Hyperion
Information democracy is a term that we use to describe how we can service multiple stake-holders in and outside our organization with information. The examples of the automobile industry and Nike iD have to do with goods, cars and shoes in this particular case, but we see the same thing with information. There’s lot of examples where BI, Business Intelligence becomes the business, becomes the service itself. Let me give you an example, in many countries, particularly still in Europe, it is very normal for professional staff who have a company car and a company car really is a commodity for a car leasing company, as it is no one really cares in the end about which leasing company you were with, you care about the car that you get to drive.

The prices are largely the same. It is a really a highly competitive market. The only difference, competitive difference, that there is between one car leasing company and another car leasing company, to win a contract from the large employers that would supply company cars to their staff, is the quality of the management information that they supply to the car fleet managers within their customer base. Without the right information, there is no competitive differentiation.

Let me give you another example. Employee benefit programs within insurance companies that try to sell all kinds of fringe benefits, employee benefits through the employers to the employees. In effect, the HR department would outsource somewhat of the compensation package to an insurance companies think of, a health care plans, pension plans, all kinds of other insurances, all kinds of other financial services that you would get. So, you can outsource the work, but you can’t outsource the responsibility. As an HR department, you are responsible for the compensation package of your employees.

So what would be an interesting comparative differentiate them for something so broadly available as all kinds of financial services. The quality of a management information, that the insurance company would supply to the HR department, to make sure that the HR department can confidently outsource the work to the insurance company. That’s another example. I have seen tons of examples in all kinds of industries. BI in the end really is not management information for the pop management alone. BI is an asset that needs to be exploited like all other assets in our organization, like labour, like capital, like materials and like facilities and that is what we refer to as information democracy, where BI becomes an asset like all other assets that we have.

Paul Lancour - PodTech
This is the last of five Podcasts about CIO Dilemmas and it’s a wealth of information that you have imparted on our listeners and I’m wondering if there is the way we can incapsulate this here at the brief time we have left and just say what this means moving forward, what this means for the future of Information Technology in the organization and the way we view Information Technologies interaction with workers, customers, executive teams, kind of a capsule look into the future.

Frank Buytendijck - Hyperion
What I have tried to do in this Podcast, in just a few minutes each, is to convey a little bit of enthusiasm that I have for the idea of dilemma based thinking. It is really important not to jump to solutions immediately, but to look a little bit beyond the borders of the problem at hand and see which basic dilemma is at the bottom of it. I hope I have achieved this in all the examples that I’ve tried to give. I do realize that this is not easy stuff.

After all, it’s a dilemma and I hope my enthusiasm does lead to you downloading the papers that are there on the Website on CIO Dilemmas. In the meantime, I’ll also be discussing these a little bit more in the Web Blog that I have at blogs.hyperion.com/frankb and I would love to hear your reactions and contributions. Thank you very much.

Paul Lancour - PodTech
Thank you Frank for all of your information and your enthusiasm; I think our listeners really appreciate it. Frank Buytendijck is the Vice-President of Corporate Strategy for Hyperion, thank you Frank.

Frank Buytendijck - Hyperion
Okay, thank you very much.

Speaker
There is one more bonus Podcast in the series. Join us next time as Frank directly addresses the comments of business leaders about dilemmas faced by CIOs and check out smartbi.hyperion.com. Of course, you can always go to the Hyperion Website at hyperion.com as well. Thanks for listening.

Copyright ©2006 PodTech.net. All rights reserved. Privacy policy

Tags: CIO, Frank Buytendijk, corporate strategy, Hyperion, IT

Transcript:
Host: Paul Lancour - PodTech
Guest: Frank Buytendijk - Hyperion

Paul Lancour - PodTech
I’m Paul Lancour with PodTech.net. In this series of Podcasts, CIO Dilemmas, Frank Buytendijk, Vice President for Corporate Strategy at Hyperion says if CIOs are going to find real solutions for their organizations, they need to examine the underlying problems more closely. Frank has distilled this down to four common dilemmas, each one to be examined in a separate Podcast. In this Podcast, we examine the dilemma of bridging IT stability and business agility. In speaking with Frank, I said an organization needs to be organized and infrastructure needs to have some structure, so how can any organization remain agile and flexible?

Frank Buytendijk - Hyperion
You can invest in building like an enterprise wide architecture, infrastructure that in the end should leverage the investments by making sure of all the changes that you need to do to follow the business, you only would have to do once, so in the end it will create a very agile situation, because you have an infrastructure that you can use and reuse all over. You don’t have to reinvent the wheel anymore, but working in that direction gives you the disadvantage that you have to wait up to three years before you have any results, and the business can’t wait that long.

So, the opposite thing is that you just go for servicing the business with all kinds of agile and small little solutions. One of the project, which each will have a Return On Investment within six months, and you’re going to be the total hero for the business users and the best CIO they’ve ever had, until you hit that point after two years where it’s just patch work that you created, and patch work was nice in the 70s as a blanket on your bed, but please, not in my systems architecture.

The Return On Investments that you created in every small little project is completely countered by this huge total cost of ownership of the patch work, results after a year or two. So, both options by themselves are just not good, and that’s the dilemma, what are you going to do? So in the end, that dilemma needs to be solved, and this is one of those cases where you can even argue, is this a dilemma, is there a difficult choice of some sort, I don’t think in the end it’s a dilemma, you just need to do both at the same time, there is no choice, you have to do both. The question is how of course.

Paul Lancour - PodTech
Well, then let me ask you, how do you do it?

Frank Buytendijk - Hyperion
Well, I think the key is doing things actually at the same time. So, you need to have a long term view and a short term view. I would like to compare this to ice skating, if you will, and as you hear from my accent and perhaps I’m a Dutchman, ice skating is a really important sport in my country, there’s even huge tours in the winters that are over 200 kilometers long. If you win one of those tours, the children will learn about you in the history books, that’s how important ice skating is in this country. Ice skating is a really funny weird sport. Think of it, you make a stroke with your left leg, you make a stroke with your right leg, and the result of that, you go forward very fast, isn’t that funny, and that’s exactly how we should create a long term solution and a short term solution in our organization as well.

On the short term side, let’s say, on the “This is intelligent” side, we make a stroke to the left, we create a scorecard with a number of strategic performance indicators that will give us a little bit of focus, what we should aim for in terms of objectives, and in terms of how to create the processes to reach those objectives. Then we do a stroke to the right, we implement some parts of the architecture, content that will create the basis for the focus that we had to the stroke to the left, that will teach us what is difficult and what is easy to achieve, so that can help us re-prioritize a short term project, let’s say again on the BI side, and put in something else, that will give us more of an expanded base and real life user feedback that will tell you of the infrastructure that you’re implementing.

At the same time, it’s going to be scalable or manageable and functional enough, so you can expand on that, and then you go to the left, you go the right, you go to the left, you go to the right. As a result you basically create a situation where you do both in a manageable way. You don’t have to wait for two or three years and just hope you did the right thing, and nothing changes in the beginning, right, and it’s not about hoping that your patch work somehow will form an architecture in the end, so that’s how you solve it.

Paul Lancour - PodTech
Is this what you’d refer to as a portfolio strategy?

Frank Buytendijk - Hyperion
Yes, because in most cases there’s not a single solution that can do everything for all. You can’t have a huge ERP system that at the same time is going to be incredibly flexible to meet all the special needs of the user, that’s the more infrastructural approach. You can’t have short term projects, you can’t have, let’s say ABI system that also takes care of your transactional environment, because that’s simply not what it does. The idea is to create the portfolio in what is called an ecosystem. An ecosystem — in the world of business software there are four ecosystems, they’re called MISO. In this case that doesn’t refer to soup, it refers to Microsoft, IBM, SAP and Oracle, and those are the four big ecosystems in the world of business software.

So, what you need to do in a portfolio is figure out in which of these worlds you belong, it can be one or it can be two of the worlds or maybe three or maybe you have all, and see how you can create the short term or the more flexible or the more business oriented solutions within those infrastructures, or even spanning those infrastructures. People think that they are an IBM shop or that they are an Oracle shop or they are an SAP shop, but did you know that more than 66% of cases of large enterprises, they have two or three or more of these ecosystems in house or they need to be bridged, and that’s the idea of a portfolio. How do you create a small set of strategic standards that you work with, that fit in that ecosystem or bridge the ecosystems that you have.

Paul Lancour - PodTech
So, you have multiple ecosystems, as you say, but you also need to have an overall strategy, how does that solve the dilemma we’re talking about?

Frank Buytendijk - Hyperion
What I tried to point out is that it’s not easy doing both at the same time, because there’s no such thing in many cases as a single ecosystem, and a single system in which you can do things. You need to look how to connect these various vendors and technologies that you’re using, your portfolio. Another thing that we discussed earlier in the Podcast is that by definition solving one dilemma actually immediately leads to a new dilemma. In terms of the first Podcast, the synthesis that you try to create between the thesis and the antithesis becomes the new thesis, immediately leading to a new antithesis that will be the theoretic process; try to make that a little bit more flexible in this case.

So, you figured out a way how to do both at the same time, how do you create that infrastructure that spans the heterogeneity of your system’s landscape, while at the same time creating (Inaudible), and we pointed out the need to do both at the same time. So, if you find a way how to do both at the same time, the new dilemma immediately is, how do we manage that, because doing two things at the same time of course is harder to manage and it’s harder to align, than doing one thing at the same time.

I tried to point out also how you solve that particular dilemma that brings me again to the ice skating metaphor, it is almost like that old riddle, how do you eat an elephant one spoonful at a time?

Paul Lancour - PodTech
If it wasn’t difficult of course, it wouldn’t be a dilemma and we wouldn’t be talking about it.

Frank Buytendijk - Hyperion
We would all be out of job, wouldn’t that be a horrible thing.

Paul Lancour - PodTech
Well, thanks very much for sharing some of you insights once again with us.

Frank Buytendijk - Hyperion
Thank you very much, and we’re going to continue our discussion in a new dilemma, next week, same time, same place, same channel, see you there.

Paul Lancour - PodTech
Our next Podcast in the series deals with the dilemma, bridging IT service delivery and business focus. Get in on the conversation, check out Frank’s blog at www.blogs.hyperion.com/frankb. You can also see more at www.smartbi.hyperion.com. Thanks for listening.

Copyright ©2006 PodTech.net. All rights reserved. Privacy policy

Tags: CIO, Frank Buytendijk, corporate strategy, Hyperion

Transcript:
Host: Paul Lancour - PodTech
Guest: Frank Buytendijk - Hyperion

Paul Lancour - PodTech
I’m Paul Lancour with PodTech.net. In this series of Podcast, CIO Dilemmas, Frank Buytendijk, Vice President for Corporate Strategy at Hyperion says if CIOs are to find real answers for their organization, they need to examine the underlying problems more closely. Frank has distilled this down to four common dilemmas, each one to be examined in a separate Podcast. In this Podcast, we examine the dilemma of bridging IT governance and business governance. To start off, I asked Frank if it’s fair to say that this boils down to the CIO versus the CFO?

Frank Buytendijk - Hyperion
That’s absolutely correct, because the CIO and the CFO tend to have different requirements. The CIO is aiming for IT governance indeed, which means a high level of standardization which we discussed already in the previous Podcast. Going for high level of manageability, trying to preserve a certain situation, trying to create stability, where if you look at business governance, what the CFO and the other business executives are faced with, it’s about flexibility, governance there is meeting the continuously changing requirements of the markets. Now, it’s a dilemma because of software, and actually software in today’s world makes people choose.

So, sometimes the CIO wins, and that means that these huge ERP, CRM, SEM, add your own acronym here, system is wield in and three years later, and more millions of dollars than you care to think about are being pumped in, is then the standard photocopied organization taking care of perfect IT governance. Unfortunately, user friendliness consists of thank you, when you hand in your change request that was just being put at the bottom of the stack, and flexibility means that you can choose in which stack you want to be at the bottom off, and sometimes the CFO wins. That means that a small niche application is being reopened, the fix on the PCs or the local server of the finance organization, and then finance creates a solution for themselves that helps finance, but is completely out of sight of what the rest of the organization does, and also it’s out of sight of the IT department.

That’s a bad thing as well in these days of compliance, where you simply need to have a certain amount of trustworthiness and confidence in the numbers, making sure that everything adds up. So indeed, this is about the conflict between the CIO and the CFO that is actually triggered by technology.

Paul Lancour - PodTech
Is it fair to say also that given that the technology, the software is made by software engineers, it’s generally more IT governance friendly than business governance friendly?

Frank Buytendijk - Hyperion
I wouldn’t really say so actually, the markets traditionally has been divided in two. There are the big systems from the big vendors, and these tend to be very, very IT focused, leading lot of people, leading lot of consultants, creating very centralized and controlled environments, and there has been, over the past, and also today, lots of specialized, in other words, best-of-breed vendors, that have focused on one particular task, and one task only, and service a very particular need with it. So, your first conclusion was, is this dilemma about the CIO versus the CFO? Definitely true. Another way of describing the dilemma would be in terms of technology, the one stop shop versus the best-of-breed.

Paul Lancour - PodTech
Okay. So, we have enlightened CIOs and CFOs at their organizations, they read your Blog at Hyperion.com, and they understand your thinking about dilemmas and how to look at dilemmas, and they want to find an answer. How do they find an answer to this problem of governance?

Frank Buytendijk - Hyperion
Well, this is one of those rare cases where technology actually solves a problem. Usually with technology advancements, many that we have seen, they basically shift a problem from left to right, but I truly believe that the emergence of the service oriented business applications means that this is the synthesis that we discussed in our first Podcast about how do dilemmas work. So, SOBAs, Service Oriented Business Applications provide that synthesis. In the end what it does is it bridges the dilemma between the one stop shop and the best-of-breed. It is a framework, another term for SOBA would be Composite Application Framework. In this framework, they have everything that the CIO needs in order to have a centralized, controlled environment providing IT governance.

So, from a compliance point of view and from a CIO (Inaudible) point of view, that is a good solution. Yet, composing the applications, creating the applications, the screens, the work flows, the interactions, doesn’t have to be driven by IT within that framework, that is why you have the components. The components are being glued together and taken apart and re-glued together by the power users within the organization, and they take care of the business governance.

In the end, you could say that the Composite Application Framework or a Service Oriented Business Application is almost the one stop shop for best-of-breed, and that is what in jargon is called the ecosystem. Ecosystem is an environment in which these components list that service a particular greater need. In that sense, Hyperion System 9 is the Service Oriented Business Application environment ecosystem for what we like to call the management system.

Paul Lancour - PodTech
In this sort of an environment, I understand that best practice has actually emerged in a viral sense from the way that users employ SOBAs in an organization, is that true?

Frank Buytendijk - Hyperion
Yes. Well, first of all, we have to look at it like this. A Service Oriented Business Application is the next step after the Service Oriented Architecture, SOA, I think that’s the term that we’ve all been exposed to. Service Oriented Architectures don’t read — do a lot other than enable creating what we discussed as being the Service Oriented Business Applications. If you have implemented that, it starts to have a spin off to even higher levels in our stack of what we’re trying to achieve, because if we have an infrastructure or an architecture, we have the applications on top of it, it’s going to impact the way how we organize.

What we see in most organizations that are very successful with business intelligence and business performance management is that they have some kind of a BI/BPM Competency Center. If you think in terms of a Competency Center, which is neither a project nor a line organization with a department, it is a small group of resources being there on a continuous basis for the rest of the organization. That is in a sense the organizational forum of a Service Oriented Architecture, you could call it the Service Oriented Organization.

Now, organizations that have learned to think that way perhaps are also to create the Service Oriented Business Model, and that is what is in the manufacturing industry is also referred to as mass customization. So, the components of a products are the same, but it is possible to make endless combinations in particular outcomes of the product. Think of the car that you drive. How many different configurations of the car are there? Think in financial services of the number of — types of mortgages that you can choose. Mortgages these days consist of a number of components that you can glue together to a very unique mortgage, that is perfectly aimed at servicing your particular needs. Does that mean that it is incredibly unmanageable for the particular bank? No, because every particular mortgage consists of those standard components.

You see, these thoughts are all variations on the same thing. There’s a framework in which you can glue components together on the architecture level, on the applications level, on the organizational level and on the business model level, and that is for me true service orientation, solving the CIO, CFO dilemma.

Paul Lancour - PodTech
Great, thank you very much for taking the time to talk about bridging IT Governance and Business Governance, and we look forward to our future Podcast with you, Frank. Get in on the conversation. Check out Frank’s blog at blogs.hyperion.com/frankb. You can also see more at smartbi.hyperion.com. In our next Podcast, the next dilemma in the series, Bridging IT Stability and Business Agility. Subscribe now and thanks for listening.

Copyright ©2006 PodTech.net. All rights reserved. Privacy policy

Tags: Frank Buytendijk, corporate strategy, Hyperion, IT

Transcript:
Host: Paul Lancour - PodTech
Guest: Frank Buytendijk - Hyperion

Paul Lancour - PodTech
The CIO of an organization straddles two worlds, the technical world and the business world, that CIO looks over a sea of problems in an environment focused on solutions, with the pace of business ever increasing. How can these competing needs ever be reconciled? I am Paul Lancour with Podtech.net and in this series of Podcast CIO Dilemmas, Frank Buytendijk Vice President for corporate strategy for Hyperion says, “If we are to find answers, we need to examine the problems more closely.” He’s distilled this down to four common dilemmas, each to be examined in a separate Podcast.

Our first discussion was an overview of Frank’s thinking on the matter ‘Defining Terms and Outlining Strategies.’ In this second Podcast we focus on the first of the four common dilemmas, ‘Bridging Cost Control and Growth.’

Frank Buytendijk - Hyperion
Well I am happy, we are starting with this particular level, Bridging Cost Control and Growth because this shows exactly what I tried to point out in the introductory Podcast, the first Podcast already, that if you didn’t listen to it by now, I would encourage you to listen first because this is a dilemma that we all know and we have solved in most or are solving in most of our businesses. Today it shows the dilemma based thinking, is not that hard or as scary as you would think because the key to this is, standardization. I haven’t come across a CIO in the last 18 months that doesn’t have significant standardization projects going on. Standardization in hardware, standardization in parties that you work with, such as software vendors and consulting firms and also standardization in business applications and particularly in our markets, and the market of business intelligence and business performance management, standardization is the hot issue that many CIOs are working on, and sometimes also struggling with.

Paul Lancour – PodTech
Standardization is a very difficult thing, I mean if you look at a lot of organizations they have fragmentation in their hardware, infrastructure, databases, applications, they have a portfolio of vendors with which they work. How did organizations become such a fragmented mess in first place, they need so much more standardization.

Frank Buytendijk - Hyperion
Well as always with most things in life, there’s always a multitude of reason why things happen, things coming together. Most our organizations today are trying to centralize a little bit as well as they come from a phase where many of the business processes and strategy implementation were decentralized and if you decentralized IT for instance, that needs to decentralized budgets, decentralized spending and decentralized tool choices, that in combination with, for instance, politics it is not always in the best interest of the people on the middle management to standardize, certainly not when it is about management information because that will bring the one version of the truth that you’ll say we want, but in our hearts fear because, we can’t choose the version anymore that fits our particular situation best.

By blaming “The tools that we have,” the fragmented tools that we have, we can led the advantages of such a fragmented situation. So, it is something that with a political sense, we have grown into as well.

Then there’s other reasons, for instance, emergence and acquisitions, where we need to live with a fragmented portfolio of tools as one part, the often newly merged company have to ‘A’ and the other side have to ‘B’. So, as you can see there’s lots of different reasons, why in many large organizations, there is simply, is a lot of IT fragmentation.

Paul Lancour – PodTech
I think it’s relatively apparent how standardization can save money for an organization but it doesn’t seem as clear how it can also lead the growth of an organization? So, how can end you both?

Frank Buytendijk – Hyperion
Well, indeed it is clear how it saves costs, but indeed leading to growth, perhaps is even more important and the answer to that is, in strategic alignments. If you look at modern management literature and the key to success in today’s world, it is by focusing the resources that we have and distinguish from the competition, one of the key ways of winning in the competitive world is by distinguishing yourself and that’s can only be done by a strong focus and aligning the resources and the people that we have with alignment. In this case I mean that we all understand our objectives, that we understand what is important, our priorities and that we truly understand what our contribution is, to those over all goals?

Now, not only do we need to understand what our contribution is to the over all goal, but also what our contribution is to our peers in the organization. That’s also need to contribute to the same goal because that is when we create synergetic effects. And that is why it is so important that we talk about the same data, the same performance indicators that we used to same definitions, that we used to seeing reference data or in other words master data and that shows why it is so important to use the same business intelligence. If we don’t speak the same language, we won’t be able to focus into align.

Paul Lancour – PodTech
Now Frank do you work for an organization called Hyperion Solutions and we’re spending a lot of time here talking about Dilemmas, but now that you’ve laid out the Dilemma of Bridging Cost Control and Growth, pretty clearly for us. I’m wondering if you can explain to us what solution for business intelligence to this problem might look like. If you don’t mind talking about solutions a little bit.

Frank Buytendijk – Hyperion
That is really funny indeed. We’re talking about Dilemmas and that we shouldn’t immediately jump on the solution, but we should understand the problem at hand first and that comes indeed from a guy working for Hyperion Solutions, but rest assured, we do understand the problems that our customers are facing. The solution over all is indeed standardization, but of course you need to have a standard that is able to cover the requirements of most constituents.

Now, of course everyone always claims to do everything for everyone, but we all know that is sometimes a little bit too much of marketing. In reality, there is no such thing as “the best tool” for everything. So, we need to have a little bit of a portfolio. This portfolio needs to consist of a number of things. First of all, in BI that needs to be strong, information consumption layer. We need to have different ways of disseminating the information to our audience, to users and different ways of consuming it sometimes that requires a dashboard. If you need to have an overview and a glance of the strategic performance indicators in the organization, sometimes if there is a highly analytical environment, where you can slice and dice through more (Inaudible) of the information figuring out, “Why stuff is happening?” In many cases it is a simple, and systemic static report, with everyone gets down little bit of information, then there’s only one particular way of interpreting incident.

The different ways of disseminating and consuming the information, there’s many different ways. However, it is equally important to have a strong information production layer. BI is not about the front end alone, it’s not about the report but what’s in it. If we want to have better alignment and better focus in our organization, we need to be smarter than the competition; we need to have more insights.

So, we need to have a layer in our BI environment that helps us to come to that smarter insight, by producing smarter numbers. Now, of course, there’s a lot of data in our organizations and a lot of smarter numbers that we need to manage. So, there is an information management layer as well and that is where we make sure that we all the use same definitions and we all use the same reference or in other words, master data.

Lastly, and here it comes, I would like to bring it back to the point, where I started. There maybe multiple tools that you need for this. So, you need to work with an open environment. BI is not a silo by nature; it is an integration technology for management information. So, you need to be able in Hyperion’s environment to also have non-Hyperion elements, for very specific, very particular needs that perhaps other users feel that they’re best served with.

Paul Lancour – PodTech
So, I am in CIO and I acknowledge what you say that my organization is fairly fragmented and needed to move to a more standardized organization. Where do I start to do that? This isn’t going to happen overnight I would imagine?

Frank Buytendijk – Hyperion
That’s true and we need to look at human behavior again, is everything in the end boils down to that. There’s basically two major drivers for change which are, pleasure and pain. So, pain for instance, would be the enormous cost of having multiple solutions and not being able to work with each other or meeting the tight deadlines, by having to move data from one system to another, to make sure that we don’t make mistakes, et cetera.

So, creating a standard would really be helpful and it’s easily accepted, if the pain is really high and the deadlines are just incredibly tight, but there is also the pleasure side. If it allows you to collaborate better with your colleagues, or if you are — for instance as a procurement department responsible for strategic relationship with your supplier, and you need to exchange information then it will help you make your targets and make your objectives, to reach your objectives, by using the same information with the stack holders that you deal with.

So, pleasure and pain helps you identify the first areas where you could standardize. Okay, you migrate, you standardize, but there is always purpose of users that perhaps would like to hold on to their own tools. Sometimes for good reasons, sometimes also for a little bit of hidden agenda the multiple versions of the truth. In those cases, maybe its about education, trying to sketch the bigger picture, a little bit more of persuasion like, having a corporate process that people have to follow, making sure that those processes grow at the expense of the home grown systems. In the end, sometimes you have to take a little bit more of an in-popular decision and simply just switch old systems off. It is really hard to achieve it, but it is necessary in order to create a standard. Standards are for the greater goods, but are not always recognized as the best solution for every one individual and that is by the way in itself a dilemma that you need to face.

Paul Lancour – PodTech
Yeah. That seem to be a part of all of what you are saying here is that the way to empower individuals in small groups within an organization, is to create standardization across the entire organization and that’s kind of counter-intuitive for a lot people and maybe difficult for them to accept.

Frank Buytendijk – Hyperion
Yes, that’s exactly I think is the dilemma based thinking can help us there. Now, if you look into what dilemmas mean, a difficult choice of some sorts, we need to find ways how to bridge that. In standardization is the dilemma here. The interesting about dilemmas, is the moment you have solved a dilemma by a bridge, in this case standardization, immediately a new dilemma unfolds. Particularly in this case that would be — if we have a standard how will we deal with the very specific functionality and very specific technologies, that are not part of the standard? Will they be custom builds within the standards? Will you allow specially its packaged applications? Will it be a combination of both and that’s indeed is the new dilemma that unfolds. And of course, I do not claim to have all the answers, at least not for you today.

Paul Lancour – PodTech
That is a really good overview of this particular dilemma and some of your ideas around it. So, thanks again for joining us today, Frank.

Frank Buytendijk – Hyperion
You’re welcome this is a lot of fun.

Paul Lancour – PodTech
Getting on the conversation, check out Frank’s blog, at blogs.hyperion.com\frankb. In our next Podcast we’ll examine the next dilemma in the series, Bridging IT Governance and Business Governance. Subscribe now, or go to www.hyperion.com for more information. And thanks for listening.

Copyright ©2006 PodTech.net. All rights reserved. Privacy policy

Tags: Frank Buytendijk, Hyperion

Tags: Frank Buytendijk, Hyperion

Tags: CIO Dilemmas, Frank Buytendijk, Hyperion, CIO