“If you are right in the middle of setting the business agenda you are in a much better position than reacting to it,” says Daniel Benton, Accenture’s managing director for IT strategy.
Daniel Benton is managing director for IT strategy within Accenture Strategy. His role focuses on helping clients from global organisations shape and deliver their technology agendas, and to improve the performance of their IT functions.
Prior to his current role, Benton led the technology business within Accenture Financial Services across Europe, Africa, and Latin America. He has architected and driven transformation programmes for the IT functions of several major organisations in Europe and the US.
Benton has twice been seconded into external organisations to act as CIO during periods of transformational change. He has acted as group CIO for the Bank of Ireland and CIO for Prudential in the UK. He has also held leading roles in the delivery of large IT-enabled business transformation programmes in the UK and South Africa.
In terms of managing IT budgets, what are your key thoughts on how CIOs/heads of technology should achieve their goals?
We do some research every couple of years, which we very grandly call High Performance IT. For the last couple of years, the thing we’ve noticed is the thing that good CIOs tend to be good at broadly fall into three categories.
Clearly there is execution – if you don’t deliver reliable IT at a good cost that works and you can’t deliver projects on time, then you don’t keep your jobs.
The other two areas are even more important now. Firstly around innovation, and you see lots of people talking about digital and you see the rise of the chief digital officer, etc – what that is all about is the convergence of business and digital strategy and increasingly business opportunity is being driven by technology.
The CIO, regardless of whether he ends up as the CDO, needs to be the person driving the innovation into the business. Innovation has always been important but I think it is a critical part of the CIO’s job now. It’s not about understanding what the business wants to do and how to enable it; it is proactively taking ideas to the business and how technology can help them create value.
The third one is all around this concept of agility. Every CIO is hampered by their legacy, that’s architecture, processes and behaviours. The pace of change in business, the pace of reaction to customers is faster than ever before and CIOs and technology get in the way, and that’s where you see this emergence of two-speed IT where they’ve got smart digital technologies and smarter ways of doing things.
The question for the CIO is, how do I manage the new world and the old world together? Agility is critically important.
For me, the mindset CIOs need to have is to be taking ideas to the business about how technology creates value because that’s what customers expect.
CIOs that don’t get that are going to be responsible for service delivery along the lines of an agenda that someone else has defined.
IT infrastructure is becoming more complex, how can CIOs take steps to simplify it?
I think people in the past have thought about their enterprise architecture from a business process point of view and from an application point of view and therefore they are thinking about big blocks of business functionality, which are external or internal, and you start to think about moving this to the cloud.
Actually you need to start thinking about it from an information perspective and what information does the business need to create value and which set of cloud services provides that information.
Some of those will be in legacy, some in private cloud and if I think about it that way it becomes much easier to solve the problem about what my needs in the cloud are and make decisions about security versus what I’m prepared to source from outside.
The whole process of architecture, you can’t just think of it from an infrastructure layer. Clearly managing that entire complex infrastructure is difficult and there are lots of solutions to do deal with it.
Is it better to have a large in-house IT team or should CIOs look to strategically outsource where possible?
It depends on your philosophy and what your in-house team is like. I think, though, the idea of agility is really important here. So if you have got a large in-house IT organisation, generally speaking, it will deliver to the business what it can do, in terms of its capacity and capability. This would need more agility than that but also innovation. You need to start plugging into a world outside your IT organisation.
Outsourcing can really help with that but it can also make it worse. If you plug into a fixed monolithic outsourcer, you’ll probably find you’ve got the same capacity and capability constraints that you had before.
But if you can use your supplier network smartly and if you can use cloud services and if you can rely on innovation, if you can be careful about what you source from where and if you can prove your agility and your ability to innovate, then I think you are better off doing that with external services than trying to build internally.
I would strongly recommend not outsourcing per se, but using a broader network than the one you could ever have internally – but only if you can do that in a way that preserves agility and harnesses innovation.
What are some of the main responsibilities of your own role, and how much of it is spent on deep technical issues compared to the management and business side?
It used to be a simple world. We had a bunch of people in Accenture who worked with the business and worked out what it wanted to do and then I would work with the CIO and say that’s what the business wants to do. What do we need to have in place to make it happen? What does your investment road map look like? What do you intend to build?
I think increasingly – partially because of the uncertainty in the business environment and partially because of the rise of the digital consumer and partially because every businessperson is a technology expert, as well, the business strategy today is the IT strategy.
It’s about the senior businessperson understanding the implications of technology and the possibilities and secondly, CIOs are not in receiving mode, they are in innovation and drive mode in all of that. My job is helping CIOs to get right in the middle around business strategy, how the businesses can create value out of technology and that’s what CIOs are getting good at.
You’ve got to understand technology, got to understand the latest advances in terms of not just digital stuff but what can the cloud deliver, you’ve got to take proactive ideas that say here’s something you can do, this is how I create value and get into a clear debate with the business about that. That’s critically important if you are going to succeed as a CIO today.
We’ve seen the rise of this creature called the chief digital officer – it means lots of different things to different people, but fundamentally it is the person that joins the business and the technology agenda together and my line to every CIO I talk to is if that’s not you, then you don’t know what your job is. You’re just an IT delivery guy and that’s it.
I would urge CIOs to work very closely with the business on helping to explore new opportunities presented by technology. If that’s what people mean by chief digital officer, then great. Depending on the organisations you talk to, CDO can mean a completely different thing. In some cases, it’s a digital marketing expert, in others it is someone who takes a broad view or in others it is digital innovation. But in my view it is about driving business and technology together and that needs to be the CIO’s job.
What are the big trends and challenges in your sector, and how can IT address them?
Digital is inevitable, mobile is inevitable and cloud is inevitable. The big question is around security and risk. Yes, that includes BYOD. We used to have a firewall, then we started to virtualise it and it became harder to secure something that doesn’t have a certain boundary.
But then if you look at things like social – what’s increasingly happening is that people are talking about my products and reputation in a completely different environment that I can’t control at all.
How do you react to that, a social media conversation you can’t control?
Increasingly, information security is turning into business risk management and it is understanding how you protect your IP, your reputation and, assuming that the worst is going to happen, how do I react to it rather than putting 73 locks on front door and hoping the worst isn’t going to happen?
What metrics or measurement tools do you use to gauge how well IT is performing?
Everyone will always use benchmarks. Gartner will always say I should be spending 14pc of my cost base on IT and I’m spending 12pc then therefore I’m very efficient. I don’t agree with any of this.
What’s the right amount? I was talking the global CIO of one of the big global banks recently and he said he is on the journey to world-class IT.
But what is world class for that bank is having the right IT for the business, not having better IT than anybody else or cost justified.
The problem many CIOs have is that the business strategy process isn’t adequate to actually work out what they need. So IT spend becomes something that is set by finance and it is the CIO’s job to try and spend it wisely.
We’d strongly recommend the right approach is a strong business IT strategy process and that determines what is the right amount to spend.
There is no point in saying you are world class at something if it is not cost justified.
I’ve never heard the business say technology is too good and too cheap. Let’s assume they’ll always whinge about it.
If you are right in the middle of setting that business agenda you are in a much better position than reacting to it.