Cohere Consulting - Perspectives #CIOCohere Consulting - Perspectives #CIOhttps://www.cohereconsulting.com/blogs/tag/cioTue, 24 Feb 2026 06:03:16 -0800http://zoho.com/sites/<![CDATA[Rethinking the Run, Grow and Transform Model of IT Management for Digital]]>https://www.cohereconsulting.com/blogs/post/Rethinking-the-Run-Grow-and-Transform-Model-of-IT-Management-for-DigitalBusinesses may need to rethink on the suitability of Run, Grow and Transform approach to IT management in the digital era. Run, Grow, Transform (RGT) ]]>

Businesses may need to rethink on the suitability of Run, Grow and Transform approach to IT management in the digital era.


Run, Grow, Transform (RGT) is a classic model of managing IT in an enterprise.  This approach would align with the way businesses have been traditionally managed and guide IT investments accordingly.


Gartner offers the following definitions of the three categories:


  • Run-the-business and hence Run-the-IT is about cutting costs, improving price-performance ration and lessening the risk.  IT Initiatives are aimed at essential business processes and more importantly ‘to keep the lights on’.
  • Grow is about improvements in operations largely within current business models. IT initiatives are looked at in the areas of sales improvements, customer service and product development.
  • Transform refers to reaching new horizons for the company that may include new markets, products and business models.  These are large bets in business terms and IT initiatives will strongly align with the strategic direction of the company and transcend multiple areas of operations.


Businesses attempting to move up the digital value may have to rethink the suitability of this model, more specifically the IT management and cost allocation. IT organizations’ effort and budgets are typically split across these three categories.  A classic problem of this model has been the disproportionate focus on Run as  CIOs spend more time in running the legacy systems and tend to allocate upto 60% (if not more) of the annual budget on maintenance due to business demands and other legacy reasons.   ‘Grow’ and ‘Transform’ are treated casually thus constraining the ability organisation to be ‘future-ready’ and competitive.


Digital requires businesses to constantly innovate on their business models, make real-time changes to products and processes and place bets that are risk prone. In this refresh, technology becomes the driver to bring in new capabilities into the business operations. The continuous tweaking when pursued relentlessly can result in transformative outcomes and even being disruptive.  The risk of failure is equally high and in such cases the companies would need to quickly pick themselves up, dust off the setbacks and continue the quest. 


When companies acquire digital capabilities pursuing a larger goal to become customer-centric and achieve revenue enhancement, no longer will they be able to clearly distinguish the changes as Run or Grow or Transform as their attempts could straddle these three areas. This has implications for business functions and IT and more specifically, CIOs need to identify themselves with such pursuits and bring appropriate changes to their working methods, team structure and more importantly not constrained by pre-determined cost allocations. Companies need to allocate their budgets that should result in acquiring or enhancing capabilities for the organization.

An Alternate Model


Various models such as two-speed or multi-speed have been propagated by industry experts to manage IT for digital. They all have their pros and cons. As an alternate method, they can look at 3 key areas where IT spending can be channelized – Automation, Analytics and Artificial-Intelligence (AI) or 3A Model of IT Management. 


Automation – Automation involves digitization of processes that are largely manual. Legacy enterprise systems such as ERP are tailored to typically cover the repeatable processes across functions thus leaving gaps in addressing less frequent situations. When these processes hit the business, organizations resort to ad-hoc or untested methods that may potentially affect customer experience and destroy the carefully cultivated image. Such occurrences will only increase due to ever changing customer expectations and increasing competitive conditions.  Organizations can prepare themselves to tackle such situations by continuously identifying gaps and improving the levels of automation, the implementation of which may require some form of combination of extending enterprise applications, developing new applications and brining in technologies such as Internet of Things (IoT) to plug the gaps. Higher level of automation results in higher productivity and timely and error-free processes. 


Analytics – With the  volume of available data growing exponentially,  organizations hitherto relying on mostly structured data coming out of their enterprise systems for decision making, can now build sophisticated analytics that can help them take more impactful and real-time decisions using technologies such as big data. To build traction, organizations have to acquire data management skills, enhance existing data marts, build prototypes and continuously look for potential data sources. These require launching and managing multiple initiatives across functions and level s and integrating them for management dashboards.


Artificial Intelligence – It may be early stages for AI to be an integral part of the digital agenda of the organizations. However, the advancements in the machine learning and robotics provide benefits that can result in a disproportionately higher level of overall organization performance by improving process efficiencies, becoming agile and enhancing the capabilities of the workforce. Though a general perception is AI / machine learning will eliminate jobs performed by humans, organizations can realize the true value by ensuring that AI co-exist with humans to achieve the desired business benefits.


Characteristics and Benefits of 3A Model


  • The operating model of the 3A approach would encourage innovation and collaboration as it necessarily brings the business and IT together as decisions have to be made jointly on how technology solves specific business problems. In the RGT model, the IT would tend to operate largely in isolation as the main focus would be ‘to keep the lights on’.
  •  The CIO, thus need to become more visible in the organisation as he/she has to involve the leadership and the lines of business in decision making on business direction and overall performance.
  • A major intent of following the 3A would to considerably shift the cost control focus to a revenue enhancement one.
  • Automation, Analytics and AI investments span the RGT categories. The difference is in expected returns - investments in 3A result in improving the digitization levels and it would have to be tied to specific outcomes.
  • While it is recognized that companies would still have expense heads such as AMCs and staff salaries that typically form part of the ‘Run’ budget, CIO’s should be conscious of incurring such costs that do not add appreciable value, a bugbear of ‘Run’ spendings, and attempt to relook and assess if such costs can be restructured to align with 3A model.


 ------------------------------------------------------------------

The RGT model restricts the ability of the organization to pursue a purposeful digital transformation as most of the costs invariably get allocated to bottomless pit of  ‘Run’ that do not provide appreciable returns. Moving to 3A model dispenses with such a maintenance focus and shifts the decisions to technology investments that can add value to the business. More importantly, the model brings a collaborative approach between business and IT that is crucial in digital pursuits.

-------------------------------------------------------------------

]]>Thu, 21 Sep 2017 10:23:44 +0000<![CDATA[A Case for a Position of Information Technology Operating Officer (IT-OO)]]>https://www.cohereconsulting.com/blogs/post/A-Case-for-a-Position-of-Information-Technology-Operating-Officer-IT-OO


An IT-OO can help a CIO take up a more strategic role in the company by taking over and running the IT operations much as the same way a COO would run the operations at a company level. 

The need to go Digital is one of the top agenda items for the forward looking companies now. There is a strong belief in these companies that IT is crucial to become digital and achieve growth at a faster pace. The business divisions that would treat IT at arm’s-length and look at them on need basis now see them as an able partner who can stand with them to realise their departmental goals. 

A major consequence of the digitization journey is the changing role of a CIO – a subject that is often discussed among the CIO fraternity, in the management forums and even in the Board rooms. A variety of perspectives can be seen in thought leadership articles and debates.  If we have to summarise the substance of such discussions it could run as follows: CEOs expect CIOs to play a more strategic role and contribute towards setting the direction for the company, a CIO has to step up as an advisor to the business and even seek a position in the Board and he/she should get away from operations mindset and devote more time towards enabling new business propositions.

One of the approaches suggested as part the IT re-organization and the role of CIO is for companies to implement a two-speed IT architecture that brings in the capability to develop customer facing processes rapidly and at the same time follow the regular possibly slower speed for the back-end systems management.  As we see the focus shifting to futuristic IT structure and CIO and recommendations on achieving them, a key aspect that is not deliberated much in this debate is continuity that is required for core back-end systems that support the existing operations of the companies. Several companies have implemented ERP solutions or equivalent investing heavily in software, infrastructure and training with the expectation that they will serve the company for several more years. Moreover, such investments require adequate maintenance so as to get the best out of them.  Hence, this article is not about the changing role of CIO, instead is on creating a leadership role for managing the back-end core systems. The role can be compared to that of a Chief Operating Officer (COO) that oversees the operations of the company and hence can be called as IT Operating Officer (IT-OO).

Explaining IT-OO

The need for an IT-OO can looked at from the following lines of argument:

a.  to give due importance to existing operations of the company

b.  to avoid possible dilution of the emerging role of a CIO

c.  to align the IT operations and changes to the strategy of the company

The mandate for the IT-OO could be:

  • Provide necessary support to running the business on a day-to-day basis
  • Keep the costs as low as possible
  • Assemble and manage a team with the requisite expertise and provide the ample opportunities for career growth
  • Adopt leading practices in the areas of governance, risk management and security

IT-OO will work under the overall direction of the CIO but will be empowered in matters related to legacy systems.  We propose three major work areas of an IT-OO.  There could be areas bordering existing and emerging businesses which need not be construed as conflicts but balanced as deemed right by the CIO.

Business Partnership

The business partnership requires an ‘external’ focus. Key responsibilities will include effectively engaging with businesses (internal customers and through them possibly external customers) on one side and vendors / service providers on the other side.  IT-OO would work closely with the business to understand and fulfill on-going requirements, provide the required support and bring about improvements where necessary. On the other side, he/she would work with the vendors supporting the legacy systems to get the best value from them.

A key aspect of the business partnership is to manage the expectation of the customers and to moderate their demands that require investments beyond the plan. This may be crucial when improvements that are brought in at the customer facing front-end processes that are work-in-process conflict with the back-end demands. To achieve this, an IT-OO will have adopt a more pro-active approach to engaging with the business and learn the art of stakeholder management.

IT Operations

IT Operations demand an ‘internal’ focus. The operations cover primarily application and data centre maintenance, data management, governance and team management. In addition to regular maintenance tasks, IT-OO should be in a position to take up projects that bring about improvements towards on-going maintenance. The governance may include adopting industry leading practices for systems maintenance and upgrades that cover areas like security, risk mitigation, regulatory compliance management and quality audits.

A key aspect of IT operations will be budgeting and control. Studies show that in most of the companies more than 70% IT costs is incurred towards upkeep of the legacy systems leaving very little share for investing in emerging areas.  IT OO would be tasked with preparing and controlling a budget that could be clearly distinguished from the budget for emerging areas. Deviations, if any could be allowed only with a support of a strong business case.

Another key aspect of IT-OO’s responsibilities will be to direct and oversee the performance of the team associated with the legacy systems. This assumes greater significance if there is a parallel team working on emerging areas leading comparisons such as new Vs old.  IT-OO could work out methods like job rotation that would give the team chances to work on new technologies and experience new ways of solving company’s problems.  

Alignment to two-speed architecture

The alignment decisions will cover transitioning new technologies that are rolled-out into maintenance portfolio after a settling time, sun setting legacy applications and adopting a continuous process to re-organize the legacy portfolio for better upkeep.

A key aspect of the alignment is to synchronise the legacy back-end with the emerging front-end and take care of the integration demands. This assumes greater significance when the alignment has to consider a number smaller scope services being rolled out in the front-end sometimes may be quickly discarded or revamped based on customer feedback. Overall, IT-OO has to ensure the ‘business-as-usual’ is not disturbed and at the same time ensure the two-speed approach works efficiently. 

A Comparison with the Role of COO

Why do we have to call this position IT-OO? There are a lot of similarities between what the Chief Operating Officer (COO) does for a company to what IT OO would do to IT.  Here are a few points:

 

COO

IT-OO

Overseas day-to-day operations of the company under the direction of the CEO

Overseas day-to-day operations of IT under the direction of the CIO

A “head-down” approach to business compared to “head-up” approach of CEO (to look into the future)

A “head-down” approach to IT compared to “head-up” approach of CEO (to look at fulfilling emerging business requirements)

Creates operating policies

Responsible for IT policies and governance

Works with departments to coordinate tasks and resolve conflicts

Works with departments to fulfil on-going requirements for IT and prioritize tasks. Resolves conflicts of back-end and front-end synchronisation

Helps synchronise the existing resources to new investments

Helps synchronise legacy back-end to emerging front-end

 

----------------

As Companies are testing out two-speed IT, a CIO may have to spread his/ her efforts really thin if he/she has to manage the two-speed structure. By bringing in an IT-OO, CIO can focus more on strategic aspects leaving the running of the operations to IT-OO. The success of this position would depend on the autonomy provided to the role and not a subservient one to the CIO.

-------------------

]]>Tue, 02 Aug 2016 11:31:29 +0000