Radical Change in Corporate IT

Chris Potts

March 31, 2022 R.M. Season 1 Episode 8
Radical Change in Corporate IT
Chris Potts
Show Notes Transcript

If you had a magic wand and you could radically modify the way corporate IT engages itself in organizations, what would you change?
That's the question we asked Chris Potts, an enterprise architect and designer, who provides work and career mentoring, online, for people all around the world.  Chris is also the author of a series of great books on enterprise architecture.

Chris provides great answers, based on decades of field work, about how IT should be viewed, and what organizations need to do to improve value.  His insights cover many topics such as:

  • The four core capabilities of corporate IT;
  • How to find out why you really need your IT department;
  • How communities of interest across the organization can make a huge difference;
  • Why monitoring and managing the value of technology investments shouldn't be left to those that implement;
  • Change requires that some people let go of some of their beliefs;
R.M.:

Welcome to another episode of the podcast, Radical Change in Corporate IT. Today, great interview. We have Chris Potts who is an enterprise architect and designer who provides , work and career mentoring online for people all around the world. That includes fellow architects and designers, of course, but also CIOs portfolio managers, strategists, planners, innovation leaders, and business analysts. Our conversation today is going to focus on one of the many areas Chris has specialized in over the years , which is where an IT department fits in the architecture of any enterprise, how we need to value differently the various IT related capabilities, and the kinds of real world and radical innovations that Chris has worked on with people. I just wanna mention that Chris also wrote a trilogy of business novels, Fruition, Recreation, and Defriction, and recently a fourth one a shorter encore to the trilogy called locomotion . Now I love these books. Chris has succeeded into explaining very, very complex enterprise architecture concepts in a way that anyone can understand. But today though, we're not here to talk about books and we're going to explore some of the ideas that IT departments have been implementing. Some of which I think might surprise you and how they are positioning themselves to be of the highest possible value to their enterprise both now and into the future. Chris has also developed a framework called IDA, the architecture for investing in change. And I'm going to start Chris with a first question. What is the meaning of these three words: investing in change?

Chris:

Thank you, Marc for that introduction. Hello everybody. Yeah . What does investing in change mean? Well, the first thing to do is, is separate it because people need to, from being good at implementing change. And , and if you look at an organization today, they may be really good at implementing change -or not. What I help people with is, is making the decisions in the first place. Which changes are worth investing in? Why are we investing in them? What risks are we prepared to take? And eventually what outcomes are we actually getting? So there's a whole sort of, there's a process. There's a culture, there's a strategy. There's a portfolio all to do with investing in change. And , and it really is an emerging field. For me, I've been working on it for 25 years with all sorts of people, but mainstream, I still notice it's an emerging field. So it's, it's no surprise that you have to ask me what it means. And that short introduction may or may not do it for you. Perhaps as we go through the interview, we may find a bit more tangible than that , as to what this means in practice with people.

R.M.:

Oh , thank you, Chris. Chris , if I can rephrase that, does it mean that investing in change is all what happens upstream before implementing change occurs?

Chris:

Okay. Upstream before, during and after. If you, yeah. If you look at, actually, if you look at the way people currently do change in organizations , a lot of the best practices around , for example, having a business case of some kind before you start doing a change and perhaps doing some benefits realization afterwards. Now all of that , are a bit of fragments of what it takes to be excellent at investing in change. The bit that matters most is managing the investment between what people called a business case and the benefits realization while implementation is happening. So it's before, during and after. The bit people, most miss is the bit that's during. So you've got your implementation teams, your product delivery teams and so on, but who separately from them is managing the investment that's going on because some of those changes will work out better than others. And some will turn out not to work at all. And , and the art of investment is to manage the probabilities as you go along. And , and as you discover, which changes are working better than others, or which ones are not gonna work, you have to act on that. And that would be a conflict of interest if it's the implementation team doing that. So before, during and after.

R.M.:

Thank you. I like that. And the question I ask you today is the sameI asked to all my interviewed people and experts, is the following. If you had a magic wand and you could change , organizations, enterprises, or institutions, if you could change the way they interact and they engage with IT, you would get to the end result right away without , you know, all the journey and all the steps and all the time it takes to get there, what would the, the engagement or the way it engages itself in the organization or how the organization , invests or engages with IT? How do you think it should look like to maximize the value that is provided by IT to that organization?

Chris:

Sure. Okay .

R.M.:

Do you have any question on the question?

Chris:

Hahaha! Not a t a ll. I I'll g o w ith t he m agic wand. I know how difficult this journey is, because I've been on it with people for many, many years. So I'll go with a magic wand where we, w e go with what could happen immediately if o nly we could do it. And I'm gonna rely on what people have already done. So, u m, I hope that works in terms of what you're asking me. So if you look at your IT organization, what you're probably looking at is four quite different groups of capabilities. So there's (1) strategic capabilities, there's (2) investment capabilities, there's capabilities in (3) sourcing and there's capabilities in (4) supply. That's just four sort of large pockets of capability. So you're not really looking at one homogenous group of people called IT . You a re looking at groups of people around those four capabilities. Now, if you a re outside of IT, you might be tempted presumed that if you o pened the box and looked inside, everybody in there a re technologists, just like if you o pen up Marketing they're marketers, if you o pen up Finance, they're financiers. And so on. Now in no part of the organization, is that true. There's probably people in marketing are not that marketers. But particularly in IT organizations, well, once upon a time, if you opened up and looked inside, you'd see a whole load of technologists and a few other roles. If anything is now completely the opposite. There may well be in your IT organization very few technologists. Most people in there are , have a , a capability around something else, rather being technologists. So I come back to my magic wand. If you said , well, if we've got strategy people in IT, perhaps they , if they're not already, need to join in with the rest of the strategy community in our organization. So we have a community of strategists. So you have marketing strategists, finance, strategists, IT strategists, and so on. If you've got some investment specialists, for example , senior portfolio managers looking after business cases, benefits realization, and so on. What we need then perhaps is them to come work with other investment specialists, other portfolio managers, a part of a portfolio management community. I think you can see where this is going. If we have, for example, some people in IT who are interested in architectures, how is the organization structured to succeed? Where is that structure going? Well , we've probably got some other people around the organization who are interested in that. So we build a community there. Same with sourcing. The only funny one, I , if funny on , on odd one out, if you like , so is supply. So you've got people in IT. Like you've got people in financial marketing, supplying services to the organization that you could, if you wanted to get an external supply to supply instead. So that's a little bit different from strategists and investment specialists and sourcing specialists , where you could , you've got a community of those in your organization. IT supply is a quite different thing.

R.M.:

Uh, Chris, so , just a quick question. What's the difference in your view between supply and sourcing? Because when you talked about sourcing, I thought, oh that's supply , but then you talked about supply . So I guess these are two different things?

Chris:

Okay. So , sourcing is a core competency and capability in any organization. It's making sure we get whatever we want from whoever supplies it. And we have to decide who's gonna supply. We decide what we want from them . We may negotiate with them . We get it delivered to us. Suppliers facing the other way. It's facing towards our organization. Easy to conceive of when you're talking external suppliers. But of course you've got internal suppliers too. They're essentially facing the other way. So they're the people we have chosen to supply to us, whatever we want to from somebody. So if you say we need a software change, we're talking about IT. So we need a software change. So sourcing is what software change do we need? When do we need it by how much should it cost? And so on now we're gonna choose a supplier to do that software change , software change for us. And therefore if you're in supplier, you'd get to do this software change if we choose you. If you, choose a different supplier, you wouldn't get through the software change. The sourcing decision is around that. Who should we get to do what we need delivered to us ? I hope that makes sense.

R.M.:

It does. It does. I guess sourcing is close to some what some organizations called procurement, isn't it?

Chris:

Procurement is a, part of sourcing. It depends how people interpret the , the expression, but often procurement people tend to be around contract negotiations and supplier selection. Sourcing is actually making sure whatever we want is delivered on time as we wanted it on at the cost we of onto it, in which procurement plays a part.

R.M.:

That's great. Thanks Chris . That, that helps a lot. I'm I'm listening to you and I say, oh, that's great. I think we're moving away from the single counter IT and trying to put these competencies or, or skills more embedded into the enterprise. Does it mean that the IT, as we know it today, you'd like to see it vanishing, not exist anymore as we see it today?

Chris:

No, it doesn't mean that at all. There's a group of people who are together for some reason called IT. Before we whoosh them away, we need to make sure we know why they are together because there might be a very valuable reason for them to stay together. While depending on their individual capabilities, they are part of a community of strategists, portfolio managers, architects, sourcing specialists, or whatever. And no, no, no, absolutely not. We must, we must have this entity for a reason. And before we throw it away in our minds, we better check why we've got an it department. It's probably a good reason.

R.M.:

Yes, indeed. Okay. So these communities are transversal communities as you see them throughout the enterprise.

Chris:

Yeah, Absolutely. So I mean, I g o back to what I do with people. If, I'm working on people's investment goals a nd their investment plans, I may be working with the portfolio managers in IT, but the first thing we're gonna do is go and find some people in finance who are interested in investment a nd investment plans. Find some people in strategy o r investment or i nterested i n investment goals a nd investment plans and, a nd f orm a very rapidly, y ou k now, in t he space of t ime that I have to work with people very, very rapidly, a matter of hours, if we can, form a community, if it doesn't really exist, around strategy and investment goals and change from multiple disciplines, multiple areas of the company.

R.M.:

That's great! When you started answering the question, you had these couple of words there that I, I thought were relating to the fact that there are organizations that are already doing this. Are they doing this the way you would like them to do it with your magic wand? Or are, are these portions of it already implemented? Could you talk (without naming anyone) could you talk about these cases?

Chris:

Sure . The magic wand is the tricky, because nobody has the magic wand that you are asking us to, to use it . It's a painful process quite often. For all of us involved, we're probably all gonna have to learn something and you would give up something we believed in if we're gonna make the change. So the magic wand gets in the way a little bit Marc if we're not careful. Much as I understand why you're asking. So what actually, what triggers the change when I'm involved? The ones I know about. It's some challenge we're facing that seems to need a different approach, some innovative approach to how we're doing things. It may start within IT, or it might start somewhere else in the company. But in the end, it ends up with having to innovate in the relationship between some people in IT and some people somewhere else, but around a specific, tangible, concrete challenge. I've never seen anybody succeed at doing it for its own sake , uh , because it seemed like the right model to pursue. It will always be because it solves a challenge we can't solve otherwise. Try to think quickly. Oh yeah. Okay. So , an example I can, I can tell you, and this is some of these are from a long time ago. I promise you this one is near 20 years ago. I'm working with an enterprise architect in an IT department of a financial services company who was disconnected. He was connected into the architectural community, but disconnected from anyone else in the company that he needed to be working with, if he's going to succeed. So we rapidly found out what was going on in the strategy department of the company and did what we needed to do him and I, to provide them with some insights as to why they needed him in their group, not in their team, in their group. And so what happened then is he got invited to participate in the strategy scenario work that was taking place. Still reporting to the IT director, the CIO. Didn't have to move o ut o f IT to do that. That's not the point. But as an enterprise architect, we just found what h e needed to do today that would enhance what was going on in strategy. To solve a challenge they hadn't thought of, which i s about architecture. And i n, h e w ent part of the community. And that's more like i t. I , I think, you know, I doubt anyone is likely to transform t heir IT department overnight or even over t ime completely and make it stick. If, it's done too quickly, it may just reverse itself over time. So i t's t hese specific concrete, what can people benefit from what people know in the IT department that innovates in the way they're doing something. That is how we get these communities of practice going.

R.M.:

Thanks. Good example. So what you're suggesting though, is these four areas of competencies they should be clearly understood by organization and they should create these communities within the large organization, including IT, and that by understanding these four areas, what they do and what they bring to the, to the organization, they should bring more value. Could you talk a little bit more about the value you are envisioning or, or the , maybe the value you have witnessed? Maybe also,

Chris:

Certainly of course I will . So the , the first thing to say and a bold statement, you'd find in the first book that I, I wrote this conversation that keeps going on over decades about the value of it is that it on its own delivers no value, not technology on its own. And it delivers any value. The value comes from whatever we do with it. So, so the reason for saying all that is, if you say what's the value of IT?, Firstly, there isn't any it own. And secondly, what I've been talking about in our interview today is it depends which aspect of it you're talking about. So if you're talking about the value of strategy in the world of IT, that will be in its contribution to the strategy of the organization. And , and you'll be in no doubt, if you are a strategist at IT, how other people who are strategist view your value. Either they don't know what it is because you aren't working with them at all. Or you're getting feedback from other strategists in the company about how valuable your work is to them. And that's completely different, for example, from the value of the people who supply your IT to you. Completely different, of course, because that's supply! And, that's again different from the value of whatever sourcing you're doing within IT as part of the wider sourcing strategy. So those four things that I've mentioned each have their own value. And one we can't really do is take it all down into one statement of value. Strategy has its own value. Investment has its own value. Sourcing has its own value and suppliers , its own value. And that perhaps is where people have often be mystified by this question about the value of it because A you can't do it on its own, and B it's not one thing.

R.M.:

I agree with you, this, this, all this conversation about the value of IT... Anyway, at least the way it's been articulated in the past 15, 20 years has always left me kind of wondering what is this question about!

Chris:

Yeah, let me go back to the example that I , I started with about the architect who needed to be part of the strategy conversations in the company. The work he did helped, I helped him, got him into the strategy conversations and then he starts to get some feedback. Good feedback I'm pleased to say, on the value of the work he did in the context of the organization strategy. He soon found himself contributing different architectural scenarios , which he wasn't used to doing, to different scenarios for where the business may be going. And eventually he had to put a costing on the various scenarios 'cause architects have to do that. And, and so on it went. And , actually he found that the role of being an enterprise architect was valued quite differently when seen from the context of a business strategy than he'd learned , it was valued from listening to the enterprise architecture community at the time. So, it gives us an interesting challenge. If the communities o f practice around particular roles, u h, are trying to say it has a certain value, but then when the people in those roles go and work with similar people around the organization, they discover that that's not the value they were at all. It's something else. So t his i s v ery, I mean, t he you're into a very, very interesting part of our conversation. I t i s a dangerous sounding, a b it hypothetical as I think about it, h onestly o n the ground. U h, I get feedback as to my value. It's not always what I think it i s. It's not a lways what I want it to be. And the same goes for anybody working in IT if beyond t he, IT department itself out there in the other parts of the organization where people are doing similar things, it can be quite a surprise, a shock sometimes, u m, to find out what people value about what we do. And i t nothing like we thought they did.

R.M.:

Yeah , thanks Chris. I sensed in the what , no , the value of IT, that it was coming at a certain point in time, at least from people that weren't in it, executives that were, that felt that they didn't really understand what was going on in it because of, of an knowledge or skills gap , which is absolutely normal and that they wanted to get some dollar figures on the returns from whatever IT does. In your view, what would need to change or, or maybe you could say that the question itself is, is useless.

Chris:

okay. I'll tell you t hat I used to do for many years public and in-house workshops around corporate strategies for IT, in which we u sed a value question to kind of prompt much of what we did in the workshop. So supposing that I d on't k now a C EO or a CFO i s, i s asking that classical question o r we c an see the c osts of IT, but what's the value. What we w orked through in the workshops. And w hat I was working through w ithin practice i s prov... If we explore the answer to that in a transparent way with people, they will usually conclude t hat was the wrong question to be asking because ultimately it has no answer. It wouldn't be enough for you or me to turn around and say to a CFO o r CEO, that question has no answer because that doesn't help them. But by helping them through the thought p rocess using the numbers available. And so there's the costs. What , what do you call value in your organization? What's the connection between the two, they find the missing link, which is what the IT department are looking after costs something. But in terms of what they value as an organization, you can't directly put a value on it. So what they look for when we , we do this, it is is they , what they look for and find, is what joins the two together. If, for example, we've got these goals as an organization about revenues and costs and compliance and brand and so on. And here we've got our costs of IT, what links the two together. And the, the whole point of all of that is by exploring the answer to that question. People who might be otherwise saying "What's the value of IT?" Will realize that they're asking the wrong question. In fact, is "What are people do with IT today who creates value for our organization?" is a better question to be asking. And it takes you completely new direction in terms of understanding today, what you need an IT department for. As long as people get , can work through and get away from the "What's the value of IT?" question, you end up in a much better space in understanding what you , need an IT department for.

R.M.:

Totally agree with that. Chris. I think that the question is that where is the value in my business, and how does it contributes to that rather than what's the value of IT?

Chris:

Mm yeah. So if we , you know, in the world, we live in today, I'm sitting here using my own technology. I expect you are too. Most customers of businesses , are probably sitting somewhere or standing somewhere using their own technologies to create value for that business. If you are a bank I'm using my phone. If you are a cinema I'm using my phone or some of i t goes. These days, the technology that people are using that creates value of y our business, belongs to the people themselves and i s usually outside the control of your business. T his i s a long way from the mainframe days w here we had a cold room somewhere with some people in white coats, u m, that was IT. This is the world of today in which IT's consumerized, IT's cloud b ased. And most of the technology that people use to create value for our business is beyond our control and they pay for it.

R.M.:

That's a very good point, Chris. So what you're saying is that it's , it's not just my IT departments , uh , what are they doing in terms of technology for my business, but what is technology doing for my business? Even the one or mostly the one that I don't even own or manage, is that, is that what you're saying?

Chris:

Uh , exactly. And again, what's the connection between the two? If, if you are a, we're a bank or a bank, and you know that you've got clients all around the world now with what your bank is an app on their phone, what's the connection between what they're doing with their technology, what you, the bank are doing with your technology and what your technology people are doing today. It's that is the , the connection we , we want to make.

R.M.:

That's great, Chris, this is a great conversation. I'd like that to last for much longer. I've got so many other questions, but I , I have, this might not be a concluding question, but it , it is the next question is that's where we talked about where you like to be with, you know, the magic wand. Now your answer might be, there's nothing Marc. Uh , I don't don't know exactly. It depends. It depends on the context, but: what would you suggest , as a first step for organizations to get into at least that direction, starting tomorrow or this year?

Chris:

Yeah. Okay. I can answer that. If you today, in your organization, got together, the senior people in it, and maybe some, some key stakeholders and , and explored what of, what we currently call IT in our organization, we would be very unwise to outsource? What would be , very unwise to commit to artificial intelligence. So imagine we did all around everything we could outsource, we outsourced everything we could use AI for, we used AI. In that scenario, what would we be left with? Because that must be the core capabilities of our IT organization. That must be. And if everything else is built around it. Everything that we could outsource or AI today must be built around our core capabilities. So with the experience, what there tends to lead to, if it's not already, there is a sort of aha moment for the IT department leadership, the CIO, and so on, and for the key stakeholders as to what we really value about having an IT department today, that we'll continue to value for forever. We will not ever pass this onto some supplier. We will not ever hand this to artificial intelligence to do this is why we have an IT department now and forever.

R.M.:

What's the reaction? Is there a gut reaction or ...?

Chris:

Yeah, there is. It depends on what ends up on the list. If we , if , if what you do, of course, if what I do ends up with the list of things we could outsource move on to , there's a course of reconciliation there that I thought I was more core than that. Um, if what I did ended up something we could get artificial intelligence to do now, or soon, obviously there's a reaction to that. But all in all, there's a kind of awakening and a , usually a nice awakening for people about why we need people called IT. And for people who are trying to put this value on why they have people called IT to go, that is why we value these people. And that is what we need them to do. And as long as everybody is okay with that, let's get on and do that. And it can be very, very transforming. Yeah .

R.M.:

That's great.

Chris:

Tend to look at an organizational unit like IT and notice what they do and how we might reconfigure what they do, I think the question is: is there anything our IT department isn't doing that in today's world they ought to be doing? Because if we only sort of recup what they currently do, we might be missing something completely.

R.M.:

And what would be the typical things that you would think about the , or that you've witnessed?

Chris:

Okay. There's a bit of self interest here because I have chosen to focus on something in the last 25 years that IT departments, IT departments sort of sort of do -but then they don't - which is why I use the word investment. When you see IT departments, for example, doing portfolio management , which is the nearest you might get, they tend to be implementation portfolios, projects portfolios, with a couple of investment feature attached. I mentioned earlier business cases , benefits realization, right? But that's not the same as being investment leaders in the company. Investment leadership, particularly when we go back to the age- old question, "what's the value of it?", It's actually calling into question: Can we provide investment leadership for people to understand the answer to that question? Is that something which our IT department is actually capable of doing, providing investment leadership to everyone else? That the sort of thing that can be missing. And people don 't no tice it's missing, because they've got a c o uple of investment features bolted ont o an im plementation process. And before we go too far, you re member my four things which have come from way back helping CIOs innovate in their IT department of wh at it's called, is strategy, investment, sourcing, supply. Keep those things separate, keep them linked, understand they 're mea sured differently, they're valued differently. Understand that sup p lier is facing towards this . An d in s tr ategy, investment sourcing is us facing towards supply. And you, yo u thi nk, well, we've got maybe strategic capabilities: possibly. We've got sourcing capabilities. I'm sure we've got supply capabilities. What are these investment capabilities that keep reappearing in the, in the conversation? And are we really doing those or h av e we just bolted a couple of features to sourcing and supply?

R.M.:

Thank you very much Chris for the time you've taken. This is very valuable. I hope that all our listeners who will also find your insights and your recommendation as valuable as I think they are.

Chris:

That's very kind of you mark . Let me add something before we finish. You heard me in the middle of all that say we work on very tangible, concrete, specific challenges. That's what I do with people. The questions around that do of course get quite wide ranging. But if, if anyone looked at my LinkedIn profile or my own website, there are a few examples of the concrete challenges that I work on with people and what results they yield very quickly. Don't want us to end up in some hypothetical debate about the way the world should be. I , work with people on making IT better in short, short bursts. But thank you very much for asking me to contribute, it's been a pleasure ,

R.M.:

Shared pleasure, Chris. Thank you. Thanks for listening and stay tuned or click on the next podcast for more awesome opinions from world experts on radical change in corporate, IT.