A couple of weeks ago I participated in an IBM sponsored Chief Information Officer (CIO) conference in New York. At the conference, IBM announced the results of a recently concluded survey with more than 175 CIOs from leading companies around the world. "CIOs see themselves at the nexus of a radically reshaping business landscape and believe their unique end-to-end view of business allows them to see first-hand the role of technology as an enabler and source of competitive advantage, and they want a greater voice in capitalizing on that opportunity." They see their role evolving beyond just technology to strategy creation and business transformation.
Apparently their CEOs agree. The survey reveals that the CIO is increasingly a valued member of the senior leadership team and is significantly involved in strategic decision-making. To help address this changing role of the CIO, IBM also announced the creation of a new Center for CIO Leadership. This Center will serve as a kind of global learning community of business leaders, academics and other experts from around the world, focusing on the practical research and executive development needed to advance the CIO profession so they can have more influence and impact on the overall business.
I am really happy to see IBM take these steps, given my personal interest in the matter, including the graduate seminar I am currently teaching at MIT on Technology-based Business Transformation. And as I was preparing the presentation I gave at the CIO conference, I could not help but think how far we have come in the last five years in appreciating the increasing integration of IT into all aspects of business.
Just about five years ago, Sam Palmisano announced IBM's On Demand initiative. At the time, the overall economy was not in good shape. The dot-com bubble had burst, economies around the world were in a slump, and the IT industry was actually shrinking. Moreover, with 9/11, the world was feeling much more vulnerable. And corporate scandals were shaking people's faith in business and the financial markets.
At the same time, technology innovation was actually flourishing. In spite of the burst bubble, the Internet continued to advance by leaps and bounds. Open standards and open source were now firmly planted on the scene, especially given the success that Linux was enjoying - despite ferocious attacks against it by a few companies. Grid Computing and Service Oriented Architectures were beginning to take off. Most important, you could sense how all these technologies were coming together to transform all aspects of business and societal institutions in areas from government, to health care, to education.
So, partly to help ourselves better organize the various related initiatives underway in IBM, and partly to help alleviate the prevailing feelings of doom and gloom in the IT industry, Sam launched the On Demand initiative at a customer event in New York's Museum of Natural History on October 30, 2002. During his presentation, Sam also announced that Linda Sanford and I would co-lead the On Demand initiative, with Linda focusing on IBM's own internal transformation to become a premier On Demand business, and I would focus on the client-oriented market strategy.
Leading On Demand for its first year turned out to be one of the most frustrating jobs I had in IBM. With other initiatives like parallel supercomputing, the Internet and Linux, there was a concrete silver bullet that everyone could understand and that you could build your strategy around and explain to clients, reporters, IT and financial analysts, and our own IBM employees.
But On Demand was different, both more subtle - and arguably, - more profound. Our key message was that as a result of the accelerated rate and pace of changes all around us, businesses needed to become much more responsive, flexible, resilient and focused in order to adapt to these changes. We were saying that The Next Big Thing was no longer any one technology invention, but the fact that technology was becoming integrated into, and transforming all aspects of, business and society. There was a lot that businesses needed to do to move forward – not any one thing.
But with businesses around the world in a funk in 2002, and with the Internet seemingly having lost its magical aura with the bursting of the bubble, this was not the message that many wanted to hear. Some in the IT industry continued to look for the one silver bullet in On Demand, and not finding it, became dismissive of the strategy. I had some very tough meetings with cynical reporters and IT analysts, who felt that On Demand was just a marketing campaign with little technical substance.
Fortunately, two key constituencies embraced the strategy. One was IBM's technical community. On Demand started to bring together many of our technical experts from the IT side of the house - working in our research and development laboratories - with our technical experts in the market facing side of IBM, in business and IT services and sales support. These two groups had heretofore rarely worked with each other. But if On Demand was all about bringing IT deeper into business solutions, as we were saying, then we had to start integrating technologies of all kinds into those business solutions, as well as developing new tools and engineering methods to help us deal with the growing complexity of the solutions we were now developing. These efforts subsequently led to the creation of important new efforts in IBM, such as the Services Sciences initiative within IBM and across the academic and research communities, as well as a number of related activities at the intersection of technology and business.
The second key constituency that supported On Demand was our clients - perhaps the most important constituency of all. Our market research showed that our key messages - that businesses needed to start seriously embracing IT and innovating, so they could better cope with all the changes around them - resonated well with our clients. They knew that there was no one silver bullet that could transform their business, but that it took lots and lots of hard work across the organization. In fact, I am sure that if we had showed up with one Next Big Thing as some were urging us to do, our clients would have thrown us out. So, for the next few years, we focused our efforts in developing new technologies, architectures and tools with our technical communities, and in working with our clients across numerous industries to demonstrate the value of these new ideas.
Over time, the On Demand strategy became accepted in the marketplace. I think that in a subtle and indirect way, the one key event that helped propel On Demand forward was the huge success of Tom Friedman's The World is Flat in 2005. Tom's excellent book captured the huge impact that technology innovations were having all around the world in a particularly direct and understandable way. The World is Flat very effectively communicated the messages of technology-based business and societal transformations that we had been trying to communicate for the last three years – not nearly as effectively as Tom. His book changed the dialogue - and I believe that we greatly benefited from the increased acceptance of the need for change and innovation in a flat world.
Other factors helped us a lot as well. Fundamentally, On Demand was the evolution of our Internet and e-business strategies, and in fact at first we called it e-business on Demand. After a short pause to catch its breath, the Internet took off with a vengeance in multiple directions: wireless, mobile devices, Web 2.0, search, semantics and virtual worlds. Having continued to link our fortunes to the Internet and the Web, On Demand has benefited from their continuing success.
Ultimately, businesses around the world have accepted the notion that they need to embrace the many IT innovations around them and translate those into business innovations, so they can better compete in the fierce global marketplace around them - or else. That was the overriding message in our CIO conference two weeks ago. Unlike the frothy expectations of the bubble days, we now know that this is by no means easy. There is a lot of great, innovative stuff we can do, but it will take lots of research, education and hard work to get it done.
It is worth noting that Tom Friedman has since updated The World is Flat,and that the revised paperback is available for less than $11 (US), publication date July 2007. Hard to find a better book to summarize the recent, current and likely future effects of technology available to businesses of all sizes, as well as individuals.
Posted by: Anne Johnson | October 22, 2007 at 02:49 PM
Hello Irving,
I keep remembering and coming back to your comment at the IBM AoT Conference where you described the on-demand transformation to be 'on an opposite side of being easy' ...can you, please, comment on relationship and alignment between on-demand and SOA?
Thank you,
Regards,
Boris.
Posted by: BorisV | November 03, 2007 at 01:49 PM