It isn't often that you see CIOs get up to admit their major IT strategy mistakes, but that is exactly what happened when Derald Sue, the CIO at InsideTrack.com, came to give a talk at Gartner Catalyst this week. He described the evolution of his IT organization from a failed traditional "command and control" in-house development shop to a place that became more service-oriented, where his organization now has more of a business focus. In the process, he increased his headcount, helped deliver more cloud-based services, and cut his response time.
Oh, and he become a hero in the eyes of his end users, too. Here is how he did it.
InsideTrack does executive-style coaching, but to college students, over the phone. The company has a very distributed organization.
Over the years the business has evolved into a traditional IT operation, including writing their own code to meet particular requirements. "Apps would take anywhere from 30 days to 30 years to build," he said somewhat tongue-in-cheek at a presentation at the conference. To try to ease the application development backlog, their business units began selecting technology on their own. The result was chaotic. "We thought we were allowing departmental solutions that didn't involve any enterprise data, but we soon found out that wasn't the case," he said.
Last year, Sue had a problem on his hands. "As cloud solutions became more popular and their deployment was so much easier, it highlighted how our corporate IT function wasn't able to meet our customer needs,” he said. “We weren't service oriented, and we lacked the right people and skill sets too.”
Sue realized he had to bring in new staff and leverage other resources to align his IT operation with his business. His staff had to stop being "order takers." He also said that IT "lacked credibility. We were seen as a cost center and we didn't empower any of our users."
At the center of his woes was a homegrown CRM app that his IT department built.
"We found that 60-70% of the features we were building in our homegrown CRM were already in SalesForce,” Sue said. “It didn't make sense to continue to support our own app or have a large development team behind it.” Plus, no one was happy using their app. “Just because we built it from scratch doesn't mean it has any value to the business," he said.
That was a bitter pill to swallow for a CIO, but it motivated him to get started with transforming his IT department.
InsideTrack had begun tentative departmental experiments with SalesForce.com, but there was no enterprise-wide coordination or understanding how to set up the right kinds of applications that could be shared across departments. "I had to convince our shareholders and leadership that this was a smart way to go and benefited the business," he said. "Moving to the closed ecosystem of SalesForce we are able to leverage a lot more of its capabilities than we could ever do on our own."
But it was more than just changing their CRM app. Sue needed to transform his IT operations and make his company more agile too. It wasn't easy. Here are some of the things he did:
- Bring in business analysts from the end-user departments that understood the actual business needs of tech. "It is all about creating relationships with our end users," Sue said.
- Find staffers with better customer-service skills. Sue replaced some programmers and hired new staffers who could collaborate with end-users to jointly build solutions and rebuild trust.
- Change his objectives from SLAs and uptimes to business outcomes. "It isn't just providing five nines anymore," he said.
- Become more responsive in app delivery. "In the past, we were developing features independent of how much time it took us to build an app. Sometimes we would wait long enough in the hope that the feature wasn't needed any longer. That had to stop. Now we have new builds several times a year, and patches happen more frequently than that."
- Look for other SaaS-based solutions when possible. The firm hasn't stopped at SalesForce, but is using other cloud services, including Okta for identity management and Informatica for backups.
- Get top-level support and build from the ground up. Sue needed his management team to buy into his vision, and got it. But he then started to rebuild his IT department from the ground up, one analyst at a time.
As a result of these changes, Sue's IT department can now deliver outcomes rather than orders. He has transformed his department from a cost-center to one that is contributing to the firm's profitability, and become more of a partner with the business units to focus on jointly solving their problems. And he can continue to leverage lower-cost and more agile cloud-based services, too. "Any CIO that is still running a command-and-control strategy is obsolete," he says.