Modify the organizational approach to enable IT innovation

As CIO, you have often thought that given a chance, you could with a magic wand make your company’s Information Technology environment what you want it to be.  All of the compromises would be washed away in a moment.  All of the incremental plans that seem to take eternity to get to the desire end-point would be thrown-out as your new shiny IT world unfolded.

To make a major change your first thought may be to fire your IT staff, but certainly that is going to throw the baby out with the bathwater.  After a moment of consideration, you change your mind.  However, you still need an alternative approach.

The common wisdom is that there are two major choices:

• Develop a “skunk works” organization
• Call your “moon shot” to the existing organization

The skunk works approach has some significant appeal.  You segregate off a portion of the IT organization or create a new “double secret” organization and task them with creating a new, and by definition, separate environment.  They are free of most of the processes, and cultural and organizational limitations that has frustrated change.  They work feverishly, creating the dream, and then in a flash the dream hits reality.  The product of the skunk works, although exactly what you want becomes a stranded system.  To put the system into production and move the workload from existing systems, you need the support of the primary IT organization.   This is the very same organization and people that you, by your actions, told could not get the job done.  So, your success probability in realizing the skunk works’ system may be a bit of a stretch.

The moon shot approach also has appeal.  You address the existing IT organization and give them your moon shot vision.  The vision includes one or more high-priority project that you believe will put IT capabilities on the right track.  You ask the IT leadership to develop a plan to execute and deliver.  This seems like a good idea, but it has the substantial flaw in that the organization may already believe that it is on the right track (otherwise, they would have changed their approach, right?).  So, the organization massages your moon shot against current priorities and projects and fits it in.  What is the ultimate outcome?  Short-term deliverables, and existing project momentum means that the moon shot stays science fiction.

There is another alternative, one that takes the best from both approaches.  The approach is to define the overall IT organization so that there is a mechanism to enable the freedom to pursue and create the new IT systems needed to attain the IT vision, but balanced to ensure that the effort does not get orphaned.  The recommendation here is straightforward

1. Define an organization that encompasses a set of leads for the vision of the architecture and a small implementation staff.  This Product Vision organization has a dual role.  First, to envision the architecture, define what the skunk works would do or the associated moon shots.  Second, the organization is empowered with an independent budget and the specific direction to create proof-of-concept environments.  This sounds at first like a skunk works that will not be able to transition its work to the production environment.  This is where the second part of the recommendation is critical.
2. The rest of the IT organization is required to supply empowered engineering support directly to the Product Vision organization at the start of any new initiative that is given approval by the CIO.  This support has a singular goal to ensure that the proof-of-concept activities created by the Vision organization (if successful) are transitioned to the mainstream IT group.
3.  To ensure that the above two items are achievable, a program management framework must be in place and more importantly a strong and empowered program manager must be in place to ensure that the activities envisioned and begun in the first step, actually transition into the second.

So, as CIO, don’t get frustrated, change the approach.  But don’t waste money on pet projects that just wither away, find an organizational path that enables technology introduction and innovation and moves it from the proof-of-concept environment to the production world.

The other countdown...the consumer usage bomb

We have all seen the recent countdown to IPv4 address exhaust, but there is another set of events that are looming on the horizon.

With Netflix and other services beating down the High-Definition streaming video door to the houses of America, the usage caps that several consumer Internet Service Providers (ISPs) have established is another threshold that will soon have dramatic impact on broadband supplier economics.

Over the past several years, ISPs have established monthly bandwidth usage caps. As described by my ISP, Comcast (dated 2008), using more than 250 GBytes per month means that Comcast will view you as an "excessive user". Their description of what this means is that more than the cap is more than a "small business" would use with a dedicated T1 (approximately 1.5Mbps) to the Internet.

Unless you know something that I don't know, most small businesses do not (and do not want) their employees streaming hundreds of hours of video while they are supposed to be hard at work.

Comcast claims that 99% of their users do not have "excessive use", at least that is what they claim in their Frequently Asked Questions document about Internet usage. Above is a chart of my usage, as reported by Comcast over the past five months. The line represents a linear trend line over that period. As you can see, the usage has more than doubled over the period, and using the trend-line, I will reach the 250 GByte cap in December of this year. Once you hit the cap, you can be termed an excessive user and Comcast reserves the right to limit or even discontinue service.

My household should be a representation of the larger home use population. We have a Netflix account, and I, my wife, and my boys enjoy watching movies and other videos on our laptops. I suspect that many others, perhaps hundreds of thousands of other consumers are on the path of being tagged by Comcast (and other ISPs with similar policies) as excessive users sometime in the next year or two.

So, what happens next? Clearly, the demand model for the Internet continues to change, and how it gets paid for will also likely to change. The struggle has already started with some Tier 1 providers arguing over settlement-free peering. Someone has to pay for the infrastructure build-out required to meet booming demand. So, soon we may have millions of consumers confronted with nasty notes from their ISP about excessive usage which will eventually translate into increased ISP consumer costs or increased cost for Internet-delivered services such as Netflix.

We are running out of IPv4 addresses, and we may also be running out of the current Internet business model. The trillion dollar question is whether the industry and the market determines the course, or will the government intervene and institute a new regulatory regime?