Keeping Up With the Pace of Technological Change

Niel Nickolaisen has seen his share of overly complicated and inefficient IT systems. He’s made a career out of addressing these tech shortcomings and putting organizations on the path to a more agile and efficient IT infrastructure. Nickolaisen shares his perspective with CIO Insight on how an outdated technology stack drains resources and morale, how to address shadow IT, what makes for a great day at work and more.

CIO Insight: You’re the CTO of OC Tanner, which makes employee recognition awards, such as trophies. Are you of the school of thought that everyone deserves a trophy?

Niel Nickolaisen: OC Tanner does make employee recognition awards but our mission is more broad than that. We believe (and research seems to confirm) that meaningful recognition drives employee engagement and that employee engagement improves organizational and personal performance. If we can help our client organizations deliver meaningful employee recognition–recognition that is timely and appropriate–then everyone wins. That said, only those that earn recognition deserve recognition so, no, not everyone deserves a trophy.

CIO Insight: Describe a great day at work.

Nickolaisen: A great day at work covers a few areas:

*We deliver a new set of product features that gets rave reviews.

*A member of my staff successfully coaches a member of her team to improved performance.

*Nothing breaks.

*I have a great interaction with the senior vice president of Marketing in which we decide to change one aspect of how we do our digital marketing.

*I am interviewed by CIO Insight.

*I learn that we have successfully recruited an in-demand software engineer. His reason for accepting the position is that he heard that our work culture is amazing and wants to be part of it.

CIO Insight: Most surveys reveal U.S. workers don’t like their jobs. On the opposite end of that, IT leaders generally seem like a happy lot. What’s the secret? And any chance handing out trophies will sway those surveys?

Nickolaisen: Hmmm. If the research is correct, recognizing great work does improve engagement and satisfaction so more trophies is worth a try. Perhaps we IT leaders are a happy lot because we are blissfully ignorant of how our roles are changing and that we need to not only deliver in our traditional role (business systems, networks, telecommunications, operating efficiencies, service levels, etc.) but also drive organizational innovation. Or, we could be happy because we do understand that our roles have changed and we are ready and prepared to lead this transformation.

CIO Insight: I understand you’ve simplified IT systems throughout your career. What’s the tipping point like in an organization that finally realizes its IT systems are outdated and must be upgraded?

Nickolaisen: Today (and likely going forward) technology drives the agenda. No matter what product or service an organization provides its customers and markets, it now uses technology to market, sell, innovate, retain, etc. In this environment, everything moves at the pace of technological change and that pace is fast and getting faster. For me, one piece of tipping point evidence is when the pace of the organization is limited by IT agility (or the lack of agility). And, complexity is the enemy of agility. If our systems are complex or complicated or built around exception-handling, it is likely that we are slow, cumbersome and in the way. If our processes are complex, complicated or built around exception-handling, it is likely that we are slow, cumbersome and in the way. And, if they are in our way today, they will be more in our way tomorrow when the pace is even faster.

CIO Insight: Just how bad is a bad technology stack when it comes to work efficiency, costliness and even worker morale?

Nickolaisen: Let me give you an example. I once inherited a highly customized–pretty much home-grown order management system. It lacked relevant address fields for international shipments. It lacked the ability to provide shipping confirmation. I had software engineers who spent their day babysitting the system. I had software engineers who spent their day writing and testing enhancements. We did a quick analysis and identified that 15-20% of the company employees spent their day compensating for the shortcomings of this system (manually tracking shipments, manually entering international orders, making manual pricing adjustments, communicating with customers about their orders, etc.). We replaced that system with a standard, out-of-the-box e-commerce system and unleashed 15-20% of the workforce to do higher value work.

So how bad is a bad stack? It can be pretty bad but it can also be that the organization has sort of adjusted to it and conformed its practices to it and so might not know the full impact of the bad stack. I believe that part of our transformation as IT leaders is to be the business leaders who can lead the organization in understanding and making rational decisions about where to modernize and where to leave things alone. My personal take on this is to divide my world into two general categories: One, those things we do that create competitive advantage and that we use to win in the marketplace. We should focus on innovation and creativity on just these few things. Two, those things we do that are mission critical but that will never create competitive advantage. None of these deserve innovation or creativity. Instead we deliver these by adopting best practices, standardization and simplification. As an example, I don’t think many (or any?) of us win in the marketplace because of our amazing accounts payable process and business rules. Yet, how many of us are doing something unique and interesting with accounts payable? This is a complexity and overinvestment we should simply stop.

CIO Insight: From the perspective of an IT leader or manager, has it been helpful or a hindrance as end users, for the most part, have become more tech-savvy over the last 10 or so years?

Nickolaisen: Overall, it has been a good thing as it should have caused us to up our game. With more tech-savvy users, our products and services are now being compared to the best technologies (and technology companies) on the face of the earth. Thus, we need to deliver higher service levels, better service, better design, more simple solutions, reduced cycle times and a much better technology experience. In doing this, we have prepared ourselves to transform our approach, our leadership and our services.

CIO Insight: Is shadow IT a danger to an enterprise or simply a way for certain departments to take a more assertive role in getting things done?

Nickolaisen: I am highly biased when it comes to shadow IT–if it exists, shadow IT is an indictment of me and my services. A few years ago, I came into a situation where IT had, deservedly, no credibility and there was about as much shadow IT as formal IT. I did not set a goal to crush the shadow IT. Instead, my goal was to so improve IT’s delivery, service levels, services and customer service that formal would be the preferred provider of all things technology. We started by improving our delivery (by using agile methods) followed quickly by developing some innovative analytics that provided everyone with insight that had been missing. As we got our act together, we became the preferred provider and IT was the place to get the services. Even if someone wanted a service we did not provide, everyone trusted us to be the ones to select and manage the provider.

CIO Insight: Some draw a distinction between CIOs who focus on an organization’s IT utility and CIOs who assist with business innovations. Is it becoming passe’ to be included only in the former camp?

Nickolaisen: I believe that in the old days (about 9 months or so ago) an IT leader could be successful through the quality delivery of IT utility services. This worked well since many of us came up through the utility services ranks–we were amazing at delivering these services.

Now, since every aspect of the organization utilizes technology for everything (social, mobile, analytics, cloud, marketing and lead generation, collaboration, fulfillment, etc.) successful IT leaders need to also lead in the use of technology to drive all types of innovation and change. At the same time, we cannot forget or not pay attention to the utility services as they are mission critical–no matter how cool or compelling our analytics, no one can use them if the servers or network are down. And, much of our credibility comes from our ability to reliably deliver those utility services–if we are the gang that cannot shoot straight operationally, why would anyone trust us with the organization’s strategy and innovation?

Patrick K. Burke is senior editor of CIO Insight.

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