Tuesday, May 28, 2024

Operational and Strategic Tech: “I Want a Divorce”

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For lots of CIOs, infrastructure is the essence of their existence. Truth be told, they are Chief Infrastructure Officers. They spend their days and nights keeping the lights on and running the engine.

And they do it well. The smart ones exploit commoditization trends, best practices and – especially these days – deep discounts in the provisioning of computing and communications gear. Chief Infrastructure Officers are under pressure today to reduce their budgets even more than they have over the past few years.

Lean-and-mean is taking on a whole new meaning.

But infrastructure is easier to acquire, deploy and support than strategic technology. Does anyone want to argue that it’s easier to upgrade desktops than implement a CRM application? Infrastructure is more predictable and therefore manageable: we understand infrastructure performance metrics much better than strategic technology metrics.

Strategic technology that touches customers and suppliers has always been more challenging than operational technology. Life cycles are longer and project scope creep is bigger with strategic technology projects. Expectations are higher as well.

While everyone thinks that email should be bulletproof, they also believe that CRM or business intelligence (BI) applications should transform business processes and almost instantly spike revenue. The difference is that email can be bulletproof, whereas CRM, BI, and similar applications are far from perfect and, in fact, are often pretty lame.

I have thought about the dichotomy for decades. (I realize that this means that I have a flat learning curve: if I’ve been thinking about it for so long then why haven’t I solved the problem?) Infrastructure is completely different from the technology intended to transform or improve business processes.

Ah, the world of servers, desktops and networks. I can actually touch them, fondle them if I like. But where is my data on that nasty customer and how does it help me turn an adversarial relationship into a productive partnership?

Two different worlds, two different sets of expectations, two different tool sets, two different skill sets. Everything’s different in these two worlds.

So why have they lived together for so long?

One explanation is precedent. Operational and strategic technology have lived together for a long time, from the “beginning” in fact. But that partnership has always been lopsided: the overwhelming percentage of technology has – since the beginning – been operational, not strategic. Sure, companies (and their vendors) talk a good game about strategic value. But the fact is that the action has mostly been about operational cost-effectiveness.

This explains the other reason why operational and strategic technology have lived together for so long: there’s hardly been any real strategic technology out there.

But now it’s the 21st century and strategic technology is very real and robust. Operational technology has actually never been in better shape. Through technologies like virtualization and voice-over-IP, it’s never been easier, faster or cheaper to provision infrastructure services. (Chief Infrastructure Officers – if they are smart and competent – have plenty of time for golf.)

Strategic technology is as different from this experience as possible, suggesting that maybe it’s time for a divorce.

Yes, a real divorce. Operational and strategic technology should file – I guess with the high priests of corporate governance – for a divorce. The call is not for an annulment (they did actually live together and have lots of children), but for an amicable divorce between two parties that no longer have anything in common.

After the divorce is granted they should live in different places, report to different people and be judged for how they achieve a totally different set of accomplishments.

So let’s talk post-divorce.

First, let’s define some terms.

Operational technology includes the computing and communications infrastructure – the devices, networks, storage, applications support, security, back-up and recovery – that keeps the engine running. It’s where the most commoditization has occurred and where best practices, performance metrics and SLAs are well understood.

Strategic technology, on the other hand, is sloppier. The metrics and best practices here are relatively immature. The focus of strategic technology is on business requirements, business processes, analytics, innovation, customers and the applications that differentiate the business in the marketplace. As you can see, one is from deep outer space and one is in close orbit.

Of huge importance are the differences in skills and competencies necessary to optimize each technology. In fact, everything’s different – they don’t even dress alike.

All of that said what should we do with the ex-spouses?

Operational technology should be layered under the COO or CAO. (I am not a fan – even though I’m layering operational technology – of any technology reporting to CFOs – who see the world as just one big luxury spending spree – that they’re wired to stop.) Operational technology is a shared service funded by the enterprise and lines of business taxed to keep the lights on.

Strategic technology should report to the CEO. It should have nothing to do with operational technology. Strategic technology delivers discretionary projects driven by business metrics that should speak directly or indirectly to revenue generation.

So what do you think? Is it time for a divorce?

Well, I think so. Each should go where they should be, and the divorce will end forever all the arguments and religious wars about governance, organizational structure, funding and management that have consumed enough time, effort and money over the years to bail out AIG and Citigroup (or not … it’s tough to compete with that level of greed, corruption and incompetence).

A final note about competencies and leadership. Operational technologists are let’s-get-it-done pocket-protecting professionals who cut their teeth on data center operations and server farming.

Strategic technologists are professionals who know more about business processes than they do network latency, digital security or storage area networks.

Operational and strategic technologists are about as different as Obama is from Bush. I cannot for the life of me understand why they didn’t divorce ten years ago.

Steve Andriole is the Thomas G. Labrecque Professor of Business at Villanova University where he conducts applied research in business fl‡ technology convergence. He is also the co-founder of The Acentio Group, a new economy consortium that focuses on optimizing investments in information technology, executive education, Web 2.0, technology audits and pilot applications. He is formerly the Senior Vice President & Chief Technology Officer of Safeguard Scientifics, Inc. and the Chief Technology Officer and Senior Vice President for Technology Strategy at CIGNA Corporation. His career began at the Defense Advanced Research Projects Agency where he was the Director of Cybernetics Technology. He can be reached at stephen.andriole@villanova.edu.

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