While most organizations have cut their IT budgets to the bone, IT Modernization is been suggested as a way to optimize value while reducing risk and cost. How exactly do we define “IT modernization”? What factors make it a compelling strategy? If we are lucky enough to get stakeholders to buy in, how do we go about planning and executing this? While IT modernization sounds great, it may be “”too good to be true””. Why should we try this just now, when we are trying to hold onto every penny?
Contributors

• • Gopal Khanna, Chief Information Officer, State of Minnesota
  • Peter Gapp, Vice President and Chief Information Officer, Siemens Canada Limited

Transcript

Sanjog Aul [00:00:00]:
Good morning and welcome to CIO Talk Radio. To learn more about the show, please visit www.ciotalkradio.com. Today’s topic is IT Modernization: Why Now and How? Our guests for today’s show are Gopal Khanna, who is a CIO with State of Minnesota and is also the President of National Association of State CIO’s. Morning, Gopal.

Gopal Khanna [00:00:22]:
Good morning, Sanjog.

Sanjog Aul [00:00:23]:
How are you, sir?

Gopal Khanna [00:00:24]:
Very well and thank you for having me on the show.

Sanjog Aul [00:00:27]:
Great. And we also have Peter Gap, who’s the Vice president and CIO with Siemens Canada. Morning, Peter.

Peter Gap [00:00:33]:
Morning, Sanjog. How are you, sir?

Sanjog Aul [00:00:35]:
How are you, sir?

Peter Gap [00:00:35]:
I’m doing great .Yourself?

Sanjog Aul [00:00:35]:
Very good. Good. I’m loving the Chicago weather. I’m sure you are there in Canadian. Which region are you in?

Peter Gap [00:00:42]:
I’m in Toronto, so pretty much the same Great Lake area as Chicago. So the weather patterns are very similar.

Sanjog Aul [00:00:48]:
Great. Now, while we have seen weather being similar, but across the world we also see this whole wave about IT modernization and of course we have different waves. We see in IT many people have IT modernization being defined in one way, whereas others have their own definitions. So exactly, if I were to look at IT modernization, is that getting rid of mainframes or making the whole IT more agile and rich in functionality, or it is basically, what is it? I mean, if you were to really define it. So Gopal, let’s start with you.

Gopal Khanna [00:01:25]:
Well, the way I see IT, modernization, especially in government and right now I’m working in government and even though in the past I’ve worked as a CIO in the private sector, the truth of the matter is that the current platform, the government services are delivered, are not really ready to serve the citizens in the 21st century, where the citizens are looking for not inline service, but really being served on online. And all our operational platforms for the delivery of our programs were really built in the 50s, 60s and 70s, more fashioned around the brick and mortar infrastructure of corporate America. Having said that, we have a shift in the way in which the citizens would like to be served. One, number two, we’ve got major cyber security threat that you’re facing as an economy, as a world where here in America at least our $14 trillion is supported in all our industry segments by the digital infrastructure, which makes it operational. And finally, the third piece is that we have a huge shift, particularly in government where the baby boomers are retiring. So having said that, on the supply side you’ve got a diminishing workforce.

Gopal Khanna [00:02:43]:
On the demand side, you’ve got a totally different buying pattern of the Citizens and in the middle you’ve got all your IT assets at risk. So for me, the way I define IT modernization is a whole transition that will take us to the desired to be stage where the operational structure government is totally different. And the best way I can explain that is if you look at Google, Amazon or ebay, their operational structure in their own entities is very different from a typical quanticentral company that has evolved and grown from the 50s and the 60s and the 70s. They had the advantage, they have a clean sheet. We don’t in bulk of our organizations have a clean sheet advantage. And therefore the challenge is to take it from as is operating environment to the desire to be staged. And for me, the way I would define it is that whole transition component is the IT modernization component.

Sanjog Aul [00:03:43]:
When you say the word clean sheet, could you ever imagine us the way the speed at which we move, the complexity which get introduced, we can ever reach that nirvana, if you will.

Gopal Khanna [00:03:54]:
No, we will not. And that’s the both the challenge and the opportunity. The challenge is that there are too many barriers and too many issues and which we can talk about at length but to talk about the opportunity component of it is to @ least define the end state where we would like to take our operating environment. So by design we can move from the ARIP to the to be state. It may take 10 years. And that’s why the whole journey of IT modernization, particularly in government, is not really a year or two year phenomena. It will really probably take 10, maybe 15 years to do

Gopal Khanna [00:04:27]:
but it can be achieved by design.

Sanjog Aul [00:04:30]:
Peter, we have been doing all this for the most part what Gopal mentioned in piecemeal maybe or in some cases as an initiative in a structured manner. What’s so special about this IT modernization wave? What is that bringing to us?

Peter Gap [00:04:44]:
I don’t think it’s really that special. I mean it’s more like finally attention to a more holistic approach because Gopal said it’s not saying isolation, looking at the visual systems and outsourcing pieces, or modernizing certain servers or technology, really more an approach you have to take to focus on the changes in culture, in the business, changing of processes, changing of the demand that a business have an IT, but also the change in technology and also changing our IP skill set. You mentioned earlier, the generation X as well as the baby vulnerability and the, the impact of that on technology is significant. So I think the special thing is here really more focusing on how to integrate now the IT modernization in like a long term plan to integrate into your strategy So you’re not in a reactive mode but really start to plan out several years out what eventually the 2B state is and how are you going to get there. But it’s really more a holistic approach looking at various different assets to define an IT landscape, including supporting applications and processes to be more agile for the other business needs and respond to the business demand and hopefully also in a more cost effective manner. So we have to try to take more the complexity out of the systems and really build something that’s easier to maintain, more flexible and scalable and also responds quicker than to the demands on the.

Sanjog Aul [00:06:11]:
Yeah, go ahead Peter.

Peter Gap [00:06:11]:
Yeah, I think it’s really a question of immaturity of the organization I’m speaking right now more from the private sector side. I’m sure there’s organizations out there, they’re more like in a reactive mode. They’re currently cutting costs, they’re looking at keeping the light fun and keeping the necessary system running. I think what you have to look at is, is innovation is going to cost more money in the long run and we have to take a look at a more holistic approach and see how all the systems are interconnected and not just then do firefighting and replace the system when it’s necessary. So it’s really more strategic foundation I think for this approach and not just reacted for initiative.

Sanjog Aul [00:06:49]:
Now you use the word holistic multiple times and I’ve seen people also interpreting and or misinterpreting as boiling the oceans. When was the last time we were actually successful in any of these holistic initiatives?

Peter Gap [00:07:00]:
Well, it’s not just avoiding the ocean. I think holistic approach is one thing, but you have a very clear focus. So you need to go through your portfolio of your assets, your portfolio of your applications and processes and really focus on the things that are the biggest impact for them.

Sanjog Aul [00:07:14]:
You’re fading out, Peter.

Peter Gap [00:07:16]:
Yeah, you need to, you need to focus on primarily on the, on the practices, on initiatives and the business that create the most value. So you cannot fix everything at once. You really have to focus on. And when you say a holistic approach here I’m always talking about a more interconnected approach and looking at domino effect of replacing certain. The effect they have on applications, on various different interfaces, on the data flows and also on the processes directly. That my view of holistic, some of the things we can replace everything at once and looking at a different system, different stage of life cycle, some of them might not require an immediate replacement. But we have to take a look at the impacts on the systems and others because they’re all interconnected and that creates the complexity.

Sanjog Aul [00:07:59]:
With respect to complexity. Gopal deep think if the silver bullet that we are calling as IT modernization could help us eat the cake and have it too where we can reduce complexity and still have an agile system where everything is integrated.

Gopal Khanna [00:08:15]:
Well again that has to be one of the objectives of this whole lightning modernization initiative portfolio program that we manage over the next few years. It really is not the silver bullet, I must say. What it does is because we still are in the in the early stages of innovation in the information technology sector. If you look at IT over the last 50, 55 years, complexity factor has grown because the IT stack that we as the IRS have to manage have evolved and grown really large and vast and even broad and wide. Let me explain to you what I mean by that. The early up until the 70s or mid-70s, it was pretty much a mainframe entered operating environment. You mostly had homegrown or specialized applications. So you had a very simple environment to maintain and run your computer centers and manage them.

Gopal Khanna [00:09:09]:
But then suddenly there was the explosive innovation in various kind of tools. Technologies that were available, resulted in us buying commercial off the shelf applications, got solutions, then came the distributed computing environment. So it was not just mainframe, it became fan, server environment, desktop, etcetera. Over the next 20 years we also had evolution of various kind of databases that came about, then tools and technologies that supported them and analytics, etcetera. And then came in the 90s where there was another spurt of explosion in terms of innovation and in particular we centered around the deployment of all commercialization of the Internet where now we started going online. So all the applications had to be moved and be prepared to serve in a web enabled environment and that took another few years for to make sure.

Gopal Khanna [00:10:01]:
And now suddenly when we put everything out there, we started getting hit by by hackers who don’t mean as well. So we have to add one more silver to the whole pie and that’s the cyber security. But if you look at the IT stack, it has a really evolved form mainframe centered stack and to such a diverse stack of IT assets, verticals within vertical that are huge in this 4 or 5 trillion dollar sector globally and there’s no silver bullet. So as a CIO we have to manage this. Today’s IT asset base of an enterprise, which is the height.

Sanjog Aul [00:10:39]:
Okay.

Gopal Khanna [00:10:41]:
Yeah. In the industry is still in its early stages of innovation I would say because that mobile technologies evolve, the applications will change and new assets would have to be managed. So in no way would I suggest that this journey is going to be easy because we still have to manage address environment. We cannot shut our organizations down. So while we have to envision the clean sheet which has to evolve also by the way, as new technologies get deployed, nobody has a clue as to what is going to be in the environment two or five years from today. So when we have this conversation about IT modernization, it is more of a journey, but a very it has to be a well strategized and well thought out journey with major components identified. So we as an industry together manager as opposed to suggest being driven by a CIO, I think all the partners and stakeholders, including business leaders because at the end of the day IT is trying to enable and make the delivery of insane government programs more effective and in the private sector we make the business more effective and successful and profitable. So having said that, the IT sector and industry has to come together as well because the provider of hardware may see and have one vision of making and deploying their solutions in a robust manner over the 10-15 years.

Gopal Khanna [00:12:04]:
So would the software folks and the database companies but they have to start looking at things horizontally, not just vertically in their own segment and that’s where the complexity sector comes in on IT modernization innovation. So what we have to feed is a uniformity in our thought process. A little bit more of a standardized approach going forward.

Sanjog Aul [00:12:29]:
Let’s take a quick break listeners. We’ll be right back after these messages. And kind of put in simple terms what IT modernization is it’s mainly reducing risk and reducing complexity and increasing the overall value that IT delivers. In simple terms, that’s what we could define. Or there’s something else that we would start with Peter and see we can at least define IT and then move forward.

Sanjog Aul [00:15:26]:
Welcome back. So Peter, starting with you, can we safely say that IT modernization is basically about reducing complexity, reducing risk and bringing all the benefits that we always dreamt of?

Peter Gap [00:15:38]:
I don’t think so. That’s a simple question. But I want to give you the view from the business side because they don’t really care necessarily about the tools and the technology that’s running in background. What they want is they have a pressure right now in this economic environment, they want to perform to the facilities with their resources available, maximum growth and they need the tools and the infrastructure to support it. Well, it’s really chopped in from the CIO to take these changing business requirements and it’s really high pressure on the business today making sure that all the tools and applications and infrastructure is available for that. So that’s really the driver primarily because if the systems are not agile anymore and cannot respond to the business need a problem to provide the right capacity, the right performance, any flexibility to support the business process that not really drives then the change in technology and that’s really driving also change in the systems, processes as well as your behavior. So it’s really more connecting all the stuff from having the right tools available to support decisions in the end of the day. So that is not reactive one time, one off kind of scenario we’re talking about here, really a close alignment between the IT, the CIO strategy with the business strategy

Peter Gap [00:16:48]:
behind the eight ball all the time. So really prepare for it in future and integrate it in a long term strategy and that’s really what is the key is here. And if you look at organizations and they have a long term planning on that is in focus. ERP modernization should not be a really big deal, at least not in the short and midterm. All part of the regular day to day business looking ahead and impact with five years out, seven years out, when we can never predict exactly what’s going to come and also go I don’t think you know what five years from now going to bring us. But at least you know, dealing with the technology today you’re prepared with today’s technology and hopefully in next year’s technology already now we can plan for some of those changes more effectively and that’s really what the business requires is to have to do because we have limited funds available and we don’t want to throw bad money at good money and vice versa.

Peter Gap [00:17:40]:
So we have to spend some money now to really be more effective going forward.

Sanjog Aul [00:17:45]:
When you did take this particular business case back to the IT, the executive management and also the business unit leaders to get buy in and to get the funding, what were the challenges that were thrown out? What those questions were which you had to field and convince them that this is something to be done now or at least be started now, even though we are in a keeping the lights on mode and what answers convince them?

Peter Gap [00:18:10]:
Well, I think there’s, there’s multiple facets to this and one is you can look at it very simply. You analyze your current cog, the current environment and if you look at some of the older systems, the legacy system very clear that the maintenance cost and total cost of ownership is high, is actually increasing. So it’s very simple to analyze what migration the move to new technology will bring you. In the long run it’s going to reduce your costs because you have older systems you have been running for a long time. You have a dependency on certain providers and suppliers. The cost of maintenance goes, you have any time you have a new requirement from the business to change going to be more costly to adopt to these change because you don’t have the flexibility. We can take an approach from the cost side. This is one piece

Peter Gap [00:18:55]:
and that’s pretty simple because one time investments today is something that will pay off over multiple years. You don’t expect to have a business case that pays off immediately as long as we can take some of those costs out of the equation that you’re currently paying for some of the older outcomes. But the second more critical piece is I think that we can actually demonstrate to the business that a new platform, the new architecture be more beneficial to the business and actually create either saving in the business itself or provide additional value. So having just an IP business case by itself and looking at a cost before and cost thereafter is a little bit difficult. It’s more showing the new capabilities. And that’s why you need to have a full buyer from the business. You need like a sponsor, an advocate in the business that actually drives it. So it’s not purely just an IT project.

Peter Gap [00:19:44]:
It’s a joint project with a business and you need to have the sponsorship and premiere on design for that. Otherwise they’re just talking about changing some boxes in the background. You will never get the attention from the CEOs and CFOs and VPs of sales a lot and ask because they don’t care about the detail. Just want to make sure we have tools in place to support it better than before and they can automate some processes. You can have a higher throughput for the organization. That’s really where the basic case is actually lies.

Sanjog Aul [00:20:11]:
Are you saying that if we go to the business executive management and say I’ll bring you top line growth through this initiative versus bottom line savings that has a better chance of success?

Peter Gap [00:20:22]:
For sure. You get attention from a completely different audience. I mean cart saving for me this is more like something we have to do anyway. This is something that happened in the back office but if you have more compelling tools and applications available that actually supports the business in the front end, then you get a lot more attention.

Sanjog Aul [00:20:40]:
Gopal, what do you think about this? When was the last time you had to go to executive management and make a step?

Gopal Khanna [00:20:47]:
Well again in government to the making of the pitch is quite different because we are the ultimate public entity. There is from a management perspective and from a quintessential model perspective IT has been and should be subservient to the program where program delivery is ultimately the most important from our customers citizens perspective. So it’s always about delivery of the program. IT makes it efficient, effective and more citizen centered. Having said that, the when we talk about IT modernization we are really talking about a totally different paradigm. I will give you about half a dozen. Number one, the modernization is to end to achieve the end goal of changing the operational model of the enterprise, one.

Gopal Khanna [00:21:36]:
Number two, that all the rules and structures that were that defined the construct of the Azure environment are really obsolete. They cannot be valid going forward. To give you an example, we cannot make decisions based upon the old model of ROI return on investment because IT is no more a cost center, it’s a resource center. What that means is the CEOs and the stakeholders is to say if I invest five more million dollars, what else can I get out of it and as Peter was saying, how does it enhance the effectiveness the top line of the business in the private sector and conversely in the public sector? How does it make the data secure? How does it, how does the service, how can service be made available in real time to the citizens wherever and they live at their discretion and at their pleasure rather than urging our customers to come to us to be served? And that’s a very different paradigm. The third component is the governance speed. We have governed IT assets and managed them very differently. I think going forward the portfolio management will change very significantly to achieve the end desired outcome. The fourth component is a vertical versus a horizontal look

Gopal Khanna [00:22:55]:
even within corporations and certainly within government, IT is embedded all over and is not seen as a program really a horizontal program and it’s really difficult to come to terms with that that view of IT assets because they are right. They started by being just a dignified computer 30, 40 years ago. So they are still. They proliferate the entire organization’s operating environment and are seen really as a cost entity that I have to buy a computer to become more effective as opposed to I’m investing in my systems and therefore the business practices which is the next gum fall. It really is about re engineering the business processes because at the end of the day, to be effective globally, whether we are in the private sector or locally, to serve the citizens, we have to have continually improving business processes so that we make our workforce more productive, especially in government as more and more people retire and one of the ways to do that is to leverage the IT solution tax horizontally

Gopal Khanna [00:24:06]:
and that’s a very different paradigm of managing the IT assets as well. So to answer your question, the challenge before us as IT leaders and IT industry players is look at this changing context and be part of changing that conversation because the game is changing beneath our feet and either we’re going to be doing it by default.

Sanjog Aul [00:24:29]:
When you are looking from a government sector, don’t you think that as a prerequisite, first you have to change the mindset of the folks who are consuming it for them to not look at it as just a bunch of computers doing something that we wanted to do versus something which is more ingrained into how we do things and how pervasive and how important an impact can IT can have on the way we run our government and other operations.

Gopal Khanna [00:24:53]:
Absolutely, yes. And my colleagues in all these states have the same challenge because it’s not just changing the mind of our customer, because our ultimate customer is the citizens. At the same time, we serve our agencies, our program leaders so great we have to face this asset of this resource differently. We also have our customers, our lawmakers, the legislators who ultimately approve the budget and their governance structure would have to change significantly to oversee the IT assets of government horizontally rather than vertically in the current siloed decision making environment, which is very jurisdictional, which is very programmed centric, which is very committee centered and that’s a huge shift in the whole establishment. The governors and most of my colleagues are blessed to have them and I’m blessed to have to be working for a government Governor Tim Penelopenti, who understands technology and understands the value of it and so I have tremendous support. So having the support of the CEOs is exceedingly important, certainly in government, but also that of and that needs to be by part of the public splash because ultimately when investments are made in IT assets, we are fighting and competing against some very compelling demands in other areas where citizens may want better services delivered

Gopal Khanna [00:26:21]:
and IT the easiest one to explain.

Sanjog Aul [00:26:26]:
Please stay tune and we’ll be right back after these messages and discuss the topic further by looking at the challenges that we might face because of some of our IT crew may have the retirement plan tied in with the IT modernization initiative and which could play more as a stumbling block than as a catalytic. Why is that? Please stay tuned and let’s discuss more when we come back.

Sanjog Aul [00:28:57]:
Welcome back. So Peter, what do you think the connection between your IT crew’s retirement plan and some potential risk that IT may bring to the IT modernization initiative?

Peter Gap [00:29:08]:
That’s a very interesting situation. I would, I would almost call it with a field crisis because what’s happening is we are, we are running systems for years and the folks are now approaching is retirement age. Specifically baby boomers and even like earlier Gen X the other ones they actually develop with this instead of want to design them. It’s like they are babies. If you will undermine any of the system and there’s a huge concentration of risks knowledge and skill set is contained within this generation and if you look at consider 20 years ago when you go through IT education see it’s fundamentally different and I bet you there’s still some COBOL and what trend programs out there running doing the same thing for 10 or 20 years now and if those programs and those tools and applications are really big as critical gotta have a problem and that’s, what we’ll call it. Almost like a crisis eventually going to lose this knowledge. Those folks who retain this knowledge and skill sets today will eventually retire.

Peter Gap [00:30:12]:
And you don’t have the newer generation X or Y coming and have any interest in the skill set because it’s just not the reality anymore then you will have a gap field gap. Well that’s one point. Second point is if you look at the IT monetization plan in order to move forward in smooth technologies you still require the legacy knowledge point because one of the biggest challenges of a micro info technologies is obviously the knowledge of the legacy, the knowledge of the data, the knowledge of the information, the knowledge of the different processes and interfaces are running. If you don’t have that, if you lose some of this knowledge early enough, your immortization plan is also in jeopardy. You do need to have that continuity and really absorb the transition from the old to the new.

Peter Gap [00:30:57]:
So therefore there’s a lot of dependencies there. So one of the ways to get around this is certainly try to eliminate the dependencies from the goal systems and also the knowledge associated with that. You can also offer career pathing as well as some other opportunities for some of those folks that are critical. You need to identify them and when I said earlier you need to identify your asset of your current environment that also include people. That includes knowledge and skill and anytime you look at the application server or a hardware whatever it is you need to have how does this certain knowledge is behind it that’s that allow to maintain it and all current futures transition it to the but there’s ways around it I think besides offering career pathing with NASA transition. So you want to make it very attractive for them early enough in praise of new technologies. You have a certain continuity there and it’s a routine of resources long as you need because otherwise you have to go out to the market and repeat some really high prices for some of those to this point probably unique and if not up to leads and knowledge and skill.

Peter Gap [00:31:58]:
So I think it is certainly one of the factors you have to put in consideration for your overall demonetization initiative but that’s more to it as well. I mean you have to look into restructuring the organization because the older focus on more box driven data center driven kind of application you could build more the knowledge around it’s a properties are very strong profit management, a very strong demand management with a business and ease of case business to have a continuity your current technology and going forward. Sure it is a risk I think it can mitigate it and it also depends on the lifecycle for the systems you currently have. Some of them are more critical than others. If you have some core systems trying to edge you’ve set up a plan very soon.

Sanjog Aul [00:32:42]:
Gopal, I’m sure you’d have been experiencing this a little more or I would say equal amount of conflict between the retirement plan and how you could run an IT modernization initiative. Did you ever have a heart to heart talk with the person who is representing that community and say that what is your fear? Explain to them and then what has worked in terms of allying their fears and have them come back and try supporting it?

Gopal Khanna [00:33:12]:
Well, in Minnesota, the executive branch government and I know from talking to my colleagues all across the country, approximately 50% are workforce in IT and actually non IT as well would retire over the next or would be eligible to retire over the next 10 years and then that because of the aging of the baby boomers who were really integral part of the growing government in the 50s and the 60s and then all coming of age. So enable retire and then move on and I think that’s where the opportunity comes because the convergence of all the technology solutions that are available, and that’s something I’ve been talking about a lot, is that it’s not really an issue about IT modernization. It’s really about the organizational modernization or the entities modernization on a continual basis. Because the underlying component that made an organization, an architecture, company or a government efficient 20, 30 years ago, because we had it introduced in it is become an integral part of the workforce, has become integral part of the input process and output. So if you look at a bank, it is part of the demand chain because you have a plastic card that you can use in the ATM machine. It is part of the end product, it is part of the demand chain.

Gopal Khanna [00:34:37]:
If you look on the input side in bank, they have data and information coming because no bank is now isolated to one unique existence. It is interrelated to the federal government, to the global markets and in the process in the middle no banking process is now possible without using information technology solutions and accompanying business activists. Similarly, in government, technology now become part of what I call the supply chain process and the demand change. Today, when we deliver educational material in the classrooms, it is part of the demand change. We have a much stronger learning experience when our teachers have those tools available in the classroom. Our police officers are far more effective when they have appropriate tools available in their police cars.

Gopal Khanna [00:35:30]:
So should there be a person they need to apprehend, they can do the right apprehension rather than wrong. Judicial system is serves the citizens better in the courtroom. When the judges and the judicial system have available information in the in the courtroom, that part of the demand chain but that didn’t happen without the processes in our various agencies that supported the delivery of those services at the end point. So I think we as an industry need to change the context because it is about we cannot do, we can modernize IT and yet fail because the business has to be part of it. It’s one to get that one package. It cannot be seen separately and has been seen separately too long. It is one entity. So when we talk about an enterprise or an organization, it is one ultimate entity

Gopal Khanna [00:36:22]:
and whatever the end objective might be, if it’s an NGO, the objective is to serve. If it’s a government, it is to serve the citizens services, if it’s a private sector company, to have better market penetration and time to market and global strategies and of course profitability but what has to change is also the expectation the industry has to move away when they provide solution. Providers have to think in a longer term because while we are able to save money by modernizing certain components of say, IT stack, we have to reinvest the money to modernize on a control basis. So when the message is conflicting, we as IT leaders are saying, reinvest the money so that we can make the organization continually better and effective and the vendor community may say, hey, if you buy my solution, you can save money. So the stakeholders, the decision makers see, well, let’s shave the money and let’s move money off the people

Gopal Khanna [00:37:19]:
and we as IT leaders are saying, no, you save the money, but you’ve got to reinvest it in your organizational readiness for the future. So Peter is right when he’s talking about that there are many pieces to edge. So we have got to raise the bar on the conversation and talk more about organizational modernization, because that’s what it’s all about because if we do not continually do that in the private sector, we’ll face huge competition from the emerging big nations, Brazil, Russia, China, India, and other economies that are flourishing, that are penetrating our own marketplace and that’s fine, that good and because we have an opportunity to penetrate the global marketplace, likewise locally, government units have to work cross jurisdictionally. So those barriers have to be demolished and likewise, sometimes we inflict pain upon ourselves by limiting our own definition too much.

Sanjog Aul [00:38:17]:
Peter, what Gopal said, in a way, and Gopal, if I’m wrong, please correct me that we should not only be looking for just plain support from executive management and business users and overall end users, we should them to take ownership of this project because it’s going to come and benefit them and only then we can get the most benefit out of this initiative.

Peter Gap [00:38:37]:
You know what? I think this applies to most of IT projects because I don’t think there are IT projects anymore. There should be all different projects and I mean Google is saying that it shouldn’t be standalone as a silo, but not a fully agree with this. It’s part of the business. I think it takes the right business leaders, not the that and what it’s all about technology and scaring the business of like too complex or complicated but the bottom line is they understand what technology does for the business and it’s part of it and if you take it out, the business will come to the stands bill. So I think by this nature alone this is the business acknowledging the importance and the integration of technology within the business

Peter Gap [00:39:18]:
and apostrophe triggers automatically or should trigger the fact that a business will take the ownership and responsibility. So from my experience when we have a larger project, a team organization or a business integration, whatever it might be, you cannot just drive it from the IT side. It’s the first thing you need to do is you need to identify very clear owners. I give a simple example. If you take in here a piece, you have different components. Pick a simple part of that, pick the cycle part, define different components, holding part. The clear owner of that is not the idiot design of the parts. They ultimately GFO

Peter Gap [00:39:52]:
and he acknowledged that I think it was already settled a long time ago because the first subsystem came out was the port in the final software. Now if we take a CRM system, who owns the CRM system? Not IT It’s really more the fail. It’s the marketing organization and they start to take ownership of that more and more as soon as IT offers a less complex environment. You don’t have to post bits and bytes anymore. You talk about practice, you talk about information management. That’s the time the business also can sit down at the table and have an intelligent discussion with IP folks and you have to speak the same language

Peter Gap [00:40:26]:
and that’s really one of the triggers then that requires required for the business to take the ownership because then the IT modernization that’s the case is not an IT alone project. People see the impact people see the change of the processes which then trigger potentially change notifications change all the way down to a different hopefully modeling of data. You don’t need to know the details but you understand how to see link and then if you can show it all the way from bottom back up and say you know what if I change the technology right now it’s going to impact the business process all the way in front end it will now improve the ability to talk to your customers, go out there and sell more. That’s the time they will understand that this is a connection that you have to do. I think it’s an important role of the CIO now to make it connect. You’re not heads up IT anymore or running a data center operation. It is a business function and I think that’s why those kind of projects are a little bit brushed off the table because it’s focused on IPM knowledge and it’s not the case.

Peter Gap [00:41:24]:
It’s really the change of the overall culture of the business inspiration, new technologies, embedding in it into the business processes and leveraging it to the mostly sense and really getting the most value out of it. I think to answer your question, it’s really not this different from any other T project. Let’s be a real sponsor and an owner. On the business side you’re going to have a problem because it’s going to be looked at an overhead, it’s going to be looked at purely from a money perspective. How much money is spending to do something and it has to be part of the overall business case to really show that this is out in the benefit. Otherwise you’re not going to be careful with it.

Gopal Khanna [00:42:00]:
Well, Peter has said something totally brilliant which is that as the business part recognizes that without that you cannot deliver your service, they will pull the change as well in the enterprise, in the thinking because IT leadership because of its innovation has been at the cutting edge in trying to push the change. It’s also about pulling the change so the leaders have to do that. Three quick examples. Number one, I have an assistant commissioner working for me who whose wife is a medical doctor and she changed employer because she said that where she was working or she would offer two jobs. In one case they were still paper based and the other one was fully, automated medical practice where everything was electronic records. And she chose the second one because she’s of the generation where she says I’m not going to want Google with the paper. When I was at the she score we had much of a conversation about what the future is and at one of our strategy sessions I said well, in five years he’s going to be out of business

Gopal Khanna [00:43:02]:
and they said why? I said because we’re still paper based and my son who’s going to college filled out receipts, paper applications. He’s used to operating online so 10 years from now, by the time he graduates, if he’s going to wait for a paper transaction to happen, he’s going to move on to some other entity and we lose the volunteers. So we went about modernizing our operational model so we could be relevant in the 21st century. Likewise in government today, my colleagues feel our challenge is that the demand pool is not coming fast enough from the business side to take full advantage of the potential of the IT tools that are available to help make government more efficient, effective and citizen centric. So our challenges are dealing on the churn side as Peter said, are just as big as I would say even on the investment side we don’t have mechanisms to provide sustainable funding mechanism in government

Gopal Khanna [00:44:05]:
at least for IT projects which are multi year projects, they need to have good short timeline to give NGOL efficiency and effectiveness gains but in the long haul they cannot be disrupted by the political life cycle. So there has to be a serious conversation about coming up with alternate funding mechanisms that are far more sustainable and in terms of bag solutions, as Peter was saying that it really doesn’t matter how the assets will be deployed. Some would be in source, some would be right source, some would be partnered with another entities and cross boundary collaboration. So the industry has to get engaged in this conversation. Not just, this is not just a CIO conversation. I think this is a conversation where the industry leaders have to think horizontally along with the business side and the IT leadership.

Peter Gap [00:44:59]:
Go about. Absolutely right because I think some suppliers are re engaging in that. I mean they’re take software as a service for example. I mean the at CIO buying of service, we don’t buy server in a data center, we don’t buy a platform. You need a service to support a business process in the business and you’re almost pushing the whole IT modernization piece through your supplier. If you’re buying based on a certain SLA, you’re buying a service with specific functionality, a certain capacity, performance, whatever IT is but how it’s being delivered, if it’s not sitting in a concentrated data center somewhere, if it be it on technology, whatever it might be, it doesn’t really matter.

Peter Gap [00:45:37]:
So we almost pushing off this monetization piece from technology specifically and the hardware infrastructure component output provider. With that point you’re really just looking at the service that you require. And I think some of the vendors actually pretty smart that way and they’re already starting doing that. I mean started a few years ago with a service oriented architecture, Solar was like silver bullet for everything. I mean it had matured quite a bit but I think by simplifying this technology and the only if we interconnect them more focused on the service and the dysfunction more so than what actual platform perform, I think that could be critical and that’s what a business understands as well, because they know, oh, I have now this CRM tool as a software, as a service, I know exactly what the thing does for me. You don’t care if the thing you know, running on a certain data center somewhere or in your own shop, you don’t care.

Peter Gap [00:46:26]:
But now they can talk about technology in this time. So I think that’s, that’s one of the changes that you’re seeing happening now.

Sanjog Aul [00:46:33]:
Do you think we are able to sell this big project when we no longer have the patience, especially the executive management because they have been burned by the previously ERP implementations which span multiple years and so IT modernization you cannot do tomorrow and if it’s going to take that long, are you able to convince someone just because of the size and the length it’s going to take?

Gopal Khanna [00:46:57]:
Well, again, yes, projects have failed. And the largest project that failed, I believe was actually packaged $645 million project multi year and they had to finish it. In government we’ve seen many multi million dollar projects fail. The two, three pieces over here. Again, the challenge that we have and we have to roll our clock back 100 years ago when we as a nation in the western world were furiously indenting a lot of technologies at that time, which we now call brick and mortar technologies, the inventions were so furious that things were obsolete by the time the decisions were made. What’s happening today in the workplace is that if we take too long to make decisions the decision and implement it, if the time to action is long, then by the time you implement it’s obsolete and does not meet the expectation because during that time the demand expectation has gone up. Fundamentally, all projects fail.

Gopal Khanna [00:47:58]:
It’s because the demand curve is constantly shifting and on the on the implementation side, if the timeline is slowed for variety of reasons, bad project management, bad leadership, bad control of funds or whatever may be the reasons and as you become more proficient at managing those risks, what you have to be cognizant of is that this is critique in play.

Gopal Khanna [00:48:23]:
It is not versus business or a business versus a governance structure. It is all one and it has to be seen as from a more of an enterprise and horizontal perspective. So will there be field projects in the future? Yes. What we can do is we can minimize the dollar impact of failure because to promote innovation you have to allow that staking if we, but the challenge is that Instead of losing $100 billion, can we lose a million and say us we are better for it and we have learned and we’re going to therefore have our next implementation better. So there has to be tolerance for innovation and reward for that, but at the same time tolerance from the point of view that risks would have to be taken. If we become too risk averse. We as organizations, we fail to fully leverage the competitive advantage our technology sector in North America offers us for gaining market edge globally as well as providing better services locally.

Sanjog Aul [00:49:28]:
Peter 15 seconds. What are your thoughts on how we can convince government oh sorry, your organization to not.

Peter Gap [00:49:39]:
One way you can show is what happened to the stone fluid. You really can also assess the situation right now. If you don’t, if you don’t go for an IT modernization project, what are they actually losing out on? What are the opportunities they’re missing? What are the competitive advantage potential they’re going to have? So these are things that you will also understand to really focus on always at the end, status quo, you can keep on squeezing your infrastructure, you can try to squeeze a lot value out of it, or you can have new opportunities going forward with new applications, new tools, support your business better. So it’s really just one way you can approach it but also before we have to make sure we have more like a integrated approach with IT and integrated business.

Sanjog Aul [00:50:22]:
On behalf of the show and listeners, I’d really like to thank you Gopal and Peter about sharing your thoughts related to IT modernization. How can we do it and why should we do it now? Now there is no doubt that we could minimize, in some cases stop revenue leakage and at the same time significantly improve bottom line through IT modernization. The question is, do we have a magic formula available now? Id modernization to some extent has been an ongoing endeavor already in play. So what’s new? What is so compelling that we should allocate separate budget, build a team and get it done? Do we have any benchmarks or standards that would make this initiative predictable in terms of challenges and benefits that it’s going to bring and we will experience? Please send us your thoughts to viewsiotalkradio.com that is viewsiotalkradio.com thank you again for listening to CIO Talk Radio. This is Sanjog Aul, your talk show host. Till next week take care and god bless.

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