I attended the 2012 launch event for the Harvey Nash Annual CIO Survey last night in London. It was a very interesting and thought provoking evening which prompted some good discussion in the main room, at the reception afterwards and on Twitter. You can get more information on the results of the survey here.
One of the more interesting discussions of the evening was prompted by Darrell Stein, IT Director at Marks & Spencer and a fellow member of the CIO100. Darrell was a member of the Panel for the Q&A session and in his opening remarks about the current priorities and challenges at M&S he revealed that the company is in the process of bringing a number of activities back in-house from outsourced providers. Probably the biggest surprise was the decision to move M&S’s e-commerce platform out of the cloud, which is certainly bucking one of the biggest trends in IT at the moment.
Stein explained that the e-commerce platform, which is worth £600m to M&S, was currently hosted by Amazon who M&S view as a competitor. So concerns about a competitor having access to commercial data were a key consideration in the decision. But that wouldn’t necessarily rule out moving to another provider, one that wasn’t a competitor. Stein also explained that time to market and ability to innovate were behind the decision to bring software development, which is currently done offshore, back in-house. Presumably this was also part of the rationale for bringing the e-commerce platform in-house rather than moving to another outsourced provider.
The IT industry seems awash with trends at the moment; cloud, BYOD, consumerisation, mobile, social media and big data are all hot topics. So much so that it would be easy for a CIO to get caught up in the hype and excitement and assume that they need to be doing something with all of them. Indeed it is likely that most CIOs will be asked by their C-Level colleagues about their plans in these areas, increasing the feeling that they should be incorporating each of them into their plans. And they may be right to be using all of them.
But the key message for CIOs, and even more importantly for their C-Suite colleagues, is that just because something is trending and there is a lot of coverage about it in the media, it doesn’t make it the right solution for your business. Your platform architecture, the technologies you use and your sourcing strategy must be driven by your business strategy, goals and priorities. This has driven M&S’s decision to move its e-commerce platform out of the cloud.
This is one of the key responsibilities of the CIO; to identify the right combination of technologies and sourcing models that will enable the business to achieve its goals. And this is not a one-off exercise either, the CIO has to monitor the performance and when necessary make adjustments to the strategy to ensure that IT continues to perform. Even if that means going against a trend.
With technology playing an ever increasing role in business the CIO role is increasing in importance and not diminishing as some commentators would have you believe. Adopting the right technologies and identifying and managing the correct sourcing strategy are fundamental to a successful business. This can only be done by someone who has that unique combination of understanding business and technology: the CIO.
And one final point: the M&S decision to move away a number of outsourced providers emphasises the need for CIOs to have an exit strategy for all outsourcing arrangements. This needs to be thought of as part of the business case for entering into a new outsourcing arrangement and before any agreement is signed. You need to know how you are going to get out of the arrangement and how much that is going to cost. It may never happen but you’ll be glad you thought it through if it does.