Docio's Top Takeaways from TBM Conference 2017: 9 Executive Summaries
It has been a week since we’ve gotten back from the Technology Business Management Council’s TBM Conference 2017 in Las Vegas. Overall, attending the TBM Conference was an amazing experience, and we can see why so many CIOs, IT Finance, and Technology professionals return year after year. It is truly a place to learn, make new friends, and share best practices with successful IT and financial experts. Technology Business Management (TBM) is truly a movement. Hats off to the TBM Council on blazing the trail developing this new IT management discipline over the last decade.
After some time to reflect, here are Docio®’s top takeaways:
1) IT’s Digital Role Is Quickly Evolving
Mike Brown (VP of IT at ExxonMobile & Chairman of the TBM Council CIO Board) gave confidence to the audience that there is never a perfect time to start your IT Transformation — you must lead change, engage employees, and deal with challenges as they come. Making your internal business partners happy before focusing on bleeding edge digital technologies is just part of the journey. The CIO’s priority is to equip their organizations with the data, tools, and capabilities to do their jobs well and solve the biggest problems. Mike brought awareness to the TBM audience about the current digital (i.e., software) reality with his statement: “The pace of change is the slowest it will ever be in our careers right now.”
The Current State of IT Has Reached An Inflection Point
In Peter Drucker’s “Theory of the Business,” he demonstrates at the first signs of becoming obsolete, is when it is time to start thinking again. The same is true for CIOs and IT leaders. It is time to ask which assumptions about the environment reflects reality most accurately—society and its structure, the market, the customer, our mission, our technologies, and our core competencies.
Digital (i.e., software) just happens to be the medium driving the current evolution of business needs, forcing the IT function to move beyond traditional support and take a more strategic role in embracing IT's new, digital value proposition.
Just like ExxonMobile, more companies are investing heavily in maturing their software development operations — the DevOps journey, Agile project methodologies adoption, investing in standard architectures, QA & testing, IoT, and other digitalization conversations.
How will the role of traditional IT — as it exists today — change to support Digital?
2) Getting Your IT House In Order Sets Up A Solid Foundation For Digital
Julia Davis (CIO at Aflac) and Wes Eugene (Sr Manager, TBM Service & Delivery at Aflac) spoke about getting your IT finance and operational house in order (i.e., ‘running IT like a business’) so you can provide information and analytics to improve performance, then focus on growth and digital innovation.
The IT Transformation journey begins as CIOs and IT leaders discover self-awareness, taking an assessment of their current state to prioritize responsibilities, avoid distractions, and achieve desired results. Julia and Wes set up their IT Financial Management (ITFM), TBM, and Service Delivery structure to support the delivery of more digital products (i.e., software) faster, increasing the satisfaction of both internal and external customers.
Often, CIOs and IT departments who are not meeting basic expectations for financial accountability, efficiency, and demonstrating value have difficulty pursuing funding for other initiatives. Julia reinforced that getting your IT house in order also leads to creating a high-performance culture which is imperative to attracting top talent, allowing CIOs to focus on leadership rather than management.
If TBM Enables IT Transformation — What Enables Digital?
Aflac's business innovation and improved customer experiences through their new digital products is all software. What's not so obvious is the management, processes, tools, talent, and cultural changes occurring within organizations as they invest deeper into maturing their software development practices. To make matters worse, once funded, CIOs realize their software and digital product portfolios are a "black box" just like their IT investments once were.
Just as ITFM and TBM was the transparency and management solution for the IT Transformation (overhaul of IT to support digital; i.e., infrastructure) necessary to support the journey to Digital Transformation (processes and tools supporting business transformation; i.e., software), now measurable practices are required to secure a business understanding of digital and how to create an enabling software development organization around it.
ITFM and TBM are just Phase 1 of getting your whole IT Operating house in order as IT supports what is necessary to be digital. But, as Aflac demonstrated, software development is how organizations are becoming digital.
If TBM enables IT Transformation, empowering organizations to 'run IT like a business,' how does IT plan to meet the business demands of Digital Transformation and 'run software like a business?'
3) Industrial Age IT Metrics vs. Digital Product Economics
Howard Rubin (CEO at RubinWorldwide, Professor Emeritus Hunter College of CUNY, MIT CISR Research Associate, and Gartner Senior Advisor) discussed that for Infrastructure, Moore’s Law is table stakes now that Digital (i.e. software) is impacting everything. Howard went into detail about how the current focus on IT’s ‘Run, Grow, Transform’ and what he describes as 'Industrial Age IT Metrics' is no longer sufficient for management of the technology investment portfolio. He proposed (and we agree) Economics as the framework of the future making the new CIO role as a “Technology Economist.” He confirmed what he referred to as the “Digital Disparity” perspective, whereas, it is not only IT’s Economics, but also Digital Product Economics (i.e. software) that will drive companies to be top performers.
"The companies that can understand and manage their technology economics to continually and currently optimize business performance and create business value will have an extreme competitive advantage in the near future. Those that have effective software processes will have the best positioning." — Howard Rubin
Cost Transparency is Only The Foundation to Understanding IT Economics & Digital Product Economics
Effective software process is proven to enable organizations to “add more $$ for less,” and in the case of product economics and TCO, what are the influencing factors and metrics impacting TCO now and in the future? How do we proactively and deliberately manage, plan, and optimize those levers for current state and future state?
While IT analytics tools with 'Industrial Age' IT drivers try really hard to incorporate Digital Product Economics, managing 'the business of IT' is not synonymous with managing digital business (i.e., 'running the business of software') — IT metrics and value do not equal software metrics and value. Introducing the IT Economics vs. Product Economics understanding gap. This subtle, but notable difference is what makes IT-centric applications ineffective in driving efficacy with the use of Digital Product Economic KPIs to maximize results, accelerate time-to-value, and keep digital programs on track.
We call it Software Business Management (SBM).
What is necessary to understand the digital product economic levers of software, so modern CIOs can lead transformational change and digital impact at scale.
4) Speed Is The New Business Currency
Trevor Schulze (CIO at Micron Technologies) discussed his IT philosophy in one sentence that has proven to rally his company around innovation and to align IT to business value — “Fresh work that emerges from radically new answers to the basic questions of our craft.” Schulze uses this sentence to break down the 'Who, When, Where, How, What, How Much, and Why' questions. He also used it to sell the idea of ITFM and TBM early adoption to his board, executives, and his team. Trevor believes that speed is the new currency which comes with the challenges of making timely management decisions at the current pace of digital technology: “Unless you are speeding up your management processes, you aren’t really speeding up.”
Digital Business Means Managing ‘The Business of Software’
We agree with Trevor. Speed and execution are all that matter – if you fail at either – you are done. We also found Trevor’s focus on evolving IT management processes with current digital reality reminiscent of Drum-Buffer-Rope from the Theory of Constraints — what determines the strength of the chain? It's weakest link.
Continuing the theme of self-awareness, Drum-Buffer-Rope, and the current reality of Digital Transformation — what is the next weakest link in management processes after ITFM and TBM have been implemented? Managing the business of software.
The CIO’s new responsibilities of digital leadership take a renewed commitment to not only the existing mission (i.e., IT Transformation), but it demands new core principles and extraordinary competence in essential software development capabilities — not just IT. In the context of the current state of IT's management processes, executive understanding, and employee buy-in, ITFM and TBM deliver an incomplete solution to encapsulate this digital reality.
ITFM and TBM is just the first step in achieving critical Digital superpowers. CIOs are now challenged to manage the cost, quality, risk, and value of software with the same discipline as ITFM and TBM to transform how the business works to align software development with business goals, objectives, or outcomes.
Docio® Software Business Management™ (SBM) is the first in the industry to bring together real-time visibility, continuous intelligence, automation, and collaboration in a central, unified view to proactively improve SDLC operations and enable Digital by 'managing the business of software.' Docio® SBM is your "Phase 2" solution and new management processes. Let us help you keep your edge!
5) Start Thinking Like A Software Company
Alex Hopwood (CFO, Global Technology at American Express) is NOT an executive who is unaware of the importance of software. He spoke extensively about how American Express has prioritized investing in Software Development as the critical enabler to growth in the digital economy, opening new possibilities for sensing and responding to the market. Then, Alex discussed the most challenging part of delivering software — practices, people, and process — focused on outcomes in the face of cost reductions.
Alex described how his software development teams were assembled and their processes, adopting the most modern tooling methodologies and analytics to monitor their activity and outputs. With American Express' transition to software thinking, the organizational structures are evolving to match the new values.
Acting Like A Software Company Enables Digital Transformation
We had the opportunity to briefly discuss with Alex on a personal level about how difficult aligning people on products, goals, strategy, etc. at every level of the organization to drive digital innovation was. We spoke about the demands of a new leadership structure and new management approaches necessary for such change while securing a business understanding on how software development really works.
We were able to introduce the concept of how Software and IT were very different practices and how just like there is a need for Technology Business Management (TBM) for IT, there is also a need for Software Business Management™ (SBM) for software development. We agreed it is a very important distinction to determine whether you have the right organization and capabilities to compete in a digital environment where software continues to change the game.
As organizations invest deeper into "the business of software," the gaps in measurable software management processes, Software Governance models, and Digital Product Economics will become evident and painful. Docio® Software Business Management™ (SBM) was purpose-built to help CIOs embrace IT’s digital value proposition to ensure organizations start thinking and behaving like a software company.
6) Product Management NOT Projects
Ralph Loura (Global CTO at Rodan + Fields) discussed how he has helped IT shift the conversation from cost to value by assisting the organization in adopting a more modern mindset — Products vs. Projects — which reinforces people’s thinking in alignment with investing in assets, as opposed to unnecessary costs. CIOs must consider both the current state of IT and the future needs of business — thus, overcoming the traditional IT Mindset and achieving the Product Mindset.
Digital Product Management Is Step #1 In Thinking & Acting Like A Software Company
First, to consciously engage digital era thinking, let’s be honest — smart people, creating disruptive software and digital products is what’s really driving competitive advantage. Software development is now king, taking IT and the evolving demands on CIOs along for a wild ride, thanks to Digital Transformation.
Rodan + Fields' new Product Mindset was a common theme among all the most successful stories at the TBM Conference. The Digital Product Management approach was brought to light by modern software development — not IT. In software, changing to the Product Mindset has proven to transform behavior from “everyone is working but no one is accountable” to “product ownership and accountability.”
Achieving Digital Product Management is Step #1, but just as getting your IT house in order with ITFM and TBM wasn't easy — software development also isn't as simple as implementing new buzzwords — DevOps, Agile, or two-speed architectures (“Bimodal IT”). It won't be as easy as integrating tools like JIRA and VSTS into an IT platform just to see activity or output data on a screen.
This problematic assumption driven by the traditional IT Mindset vs. Product Management Mindset must be highlighted to increase self-awareness in recognizing the structures, behaviors, and differences between IT and Software Development that characterize and explain IT’s current situation and the potential threats to the CIO.
Overcoming the traditional IT Mindset will be a challenge if there is not self-awareness that IT operations and effective software development operations live separate lives. Currently, they are functional silos that breed key people dependencies, tribal knowledge, miscommunication, and slowness. Product Experts and Software Development consists of entirely different people, expertise, skills, experiences, and passion. Most importantly, different measurable practices, management metrics, and economic levers. The integration of software development with IT can only truly happen when organizations create a digital culture empowering product development and software engineers, redefining IT and R&D for the digital economy.
7) Intentional Outcomes, Not Activities or Outputs
Chrissy Bramble (AVP, TBM Office at Federal Home Loan Bank) on a panel led by Eveline Oehrlich (VP, Research Director at Forrester) discussed how organizations get too focused on output, and instead, need to ask the more important questions: What’s our desired outcome? What’s the impact and how will we know we are successful? Chrissy goes on to speak about how designing IT governance models that incorporate IT data stewardship, IT business alignment and accountability, and planned IT outcomes with the appropriate tools, processes, and analytics helps improve overall effectiveness. This approach further raises IT’s influence to enable and support the business as a partner through IT Transformation. She referred to this as achieving the TBM Operating Rhythm.
Digital Outcomes Drives Need for Software Operational Intelligence & Product Economics Understanding
The words used most often by business and IT leaders to describe software is; “engineering capacity” or "productivity." By that very position, IT leaders and executives are (still) focused on trying to understand the activities and outputs of software development, not the outcomes. The reason? Software remains a "black box."
We agree with Chrissy but overcoming the traditional IT “outputs” focus of software development and achieving intentional outcomes is still widely misunderstood, no matter how mature the engineer's toolkit is. The data that could be used for proactive strategy and management is locked in software developer-centric tools in the language only deeply technical people understand. That's not valuable when appropriately positioning IT at the heart of the digital business strategy.
The challenge? At present, “IT” is an inaccurate catch-all for anything technology related, disrupting the language that has led to a disconnected IT/digital/business relationship and understanding. This confusion may be why people continue to reference the very different but dependent practices of IT and software development under the umbrella of IT interchangeably. This results in IT thinking digital product insights are covered with the existing IT strategy and toolset. We call this whole problem “IT Mindset.” An oversight to the true value of what it means and what it takes to achieve “Being Digital” (i.e., thinking AND acting like a software company).
Again, self-awareness. Software practices are measurable and need management processes by reorienting IT operations to a more "digital core" around integrated software development and continuous delivery — redefining purpose, leadership, roles, culture, talent, processes, and governance — driving the future product capability of organizations.
So, “engineering capacity” or "productivity" isn't what you are looking for — it's removing the productivity impediments, increasing progress, and improving process effectiveness to deliver intentional software and digital technology outcomes.
What can you tell your CEO and Board about the software running your organization — at this very moment?
8) Software is not IT
For an entire week at the TBM Conference, we immersed ourselves with some of the most intelligent IT Executives and IT Professionals, asking questions for understanding. We went deep on IT topics and Software Development topics. We received questions on how to evaluate Cloud TCO and ROI, Quality, Productivity, Agile, DevOps, Technical Debt, security and the Equifax details. How to make these things more contextual, and so much more. Admittedly, we weren't surprised by the interest, but also, by the misconceptions around 'the business of software.'
When discussed with attendees, we were able to gain consensus that digitization presents new sources of value, but requires IT to rethink the way it operates. Currently, software development is being "managed" by developer tools, observed team dynamics, process (Agile, SCRUM, Waterfall, etc.), and spreadsheets with data gathered and manually analyzed by top talent – that’s table stakes.
Welcome to The Business of Software
McKinsey published the article, "An Executive's Guide to Software Development" early in 2017. After attending several technology conferences and experimenting with the topic for almost 12 months, we can say McKinsey's position holds true - software is (still) a blind spot.
You may be thinking: my company isn’t a software company. But, as clearly demonstrated at the TBM Conference, every organization is, willingly or unwillingly (self-aware or unaware), adopting software development (i.e., digital) thinking, no matter what industry.
The core disconnect: acknowledging the future is really about adopting the Software Mindset and enabling the organization around software development.
Organizations must actively reinvent themselves — adopt the Software Mindset as the core digital strategy — and set direction to become both a platform company and an applications company. According to McKinsey’s software maturity diagnostic framework from the article mentioned above, 15 practices across five stages defines the software development lifecycle.
9) Leadership and Management Strategy Builds Executive Alliances
Amy Absher (General Manager of Technology at Chevron) discussed how transparency, joint accountability, and highlighting value with the business was the way to change the perception of IT while earning credibility and influence within the organization. Instead of fixating on professional survival and relevance — CIOs need to take charge of their business relationships and implement meaningful partnerships, contributing to better collaboration in growth, digital innovation, and quality. TBM was the management system that helped Chevron improve IT leadership and prove business results to help IT become strategic partners to the business. Amy’s magic question: “How can we get our peers in the business to help us?”
The Evolved CIO Role: Digital Product Manager & Docio® Software Business Management™ (SBM)
Since 2007, CIOs have been managing ‘the business of IT’ and providing transparency into the cost, performance, supply, and demand for IT services through Technology Business Management (TBM).
However, in a digital world, where everything is software-defined, IT-centric applications are incomplete when forced to go beyond the realm of IT. The result? Software is shrouded in mystery, fraught with confusion, and punished with inadequate funding. We think that is a solid plan for failure.
Modern CIOs are now faced with making a choice between two different leadership paths: Path 1) leading the internal IT digital capability as an evangelist (i.e., won't be around very long); Path 2) evolving into a Digital Product Manager in charge of the digital business, ensuring a seat at the strategy table (i.e., Software Mindset — meeting the future needs of the business).
Moving to Digital Product Management will reshape IT staff roles. Traditional strategy, governance, and management activities will change. But, in the absence of a coordinated, enterprise-wide Digital Product Management Mindset with new management processes driven by IT leadership, executives and boards will look for other executives, strategies, and tools to help the business lead Digital Transformations.
You are a technology professional and know technology better than anyone in the organization. To give you the confidence you need to evolve in the direction of the Digital Product Manager, we created Docio® Software Business Management™ (SBM) — step up, take charge, and lead the way.
As demonstrated by the top CIOs, CTOs, and IT leaders at the TBM Conference, top-performing organizations are beginning to think AND act like software companies. Software will be the challenge keeping you up at night and the next puzzle to solve.
Docio® Software Business Management™ (SBM) is imperative for IT's role in Digital Business. Once your ITFM & TBM is in order, implementing measurable SBM will be the next largest concern in your organization.
The Docio® Software Business Management™ (SBM) Enterprise Platform will be available in early 2018 just in time for next year's TBM Conference 2018. We hope to see you there!