Mistake: Struggling to get off legacy systems
A surprisingly large number of CIOs described how hard it has been to get off a legacy system. Some problems involved moving to cloud software, including integrating systems from different vendors to replace a single legacy system. Some described employees who relied on specific features or databases tied to the old system, requiring process and cultural changes to switch software and get off those functions.
One IT team, asking that its company not be identified, described its change management challenge:
"We began a legacy system replacement early last year. Going into one of our larger locations, we thought we were cruising. But we had failed to truly understand the complexity of management reporting they had developed internally over the years. So when we swapped the system, all their custom reporting broke. It was big-time scramble mode to review, design, and build the reporting they were expecting. In all, a six-month project delay due to insufficient discovery. Big lesson learned for our project management team. And we left with a better design headed to the next location."
IT will rarely be hailed as the hero at first for moving the company off a legacy software system. Such moves force employees to change, so they resist. As this example shows, processes and functions can break during the process.
But for every problem we heard about moving off legacy systems, we heard another say their biggest mistake was not moving off legacy systems fast enough as they brought on new systems, sapping the new project's return on investment.
Mistake: Taking on too much
In a healthy business, there's always some tension caused by business units asking for more than IT can deliver. IT is a constrained resource. But many IT leaders cite mistakes in managing the demand pipeline, either by not communicating and setting priorities well with the business units, or just taking on too much and crushing their teams.
One CIO, who asked that his company not be identified, says a lot of projects were pushed to the back burner during a three-year ERP project, which the company finished in 2010. So 2011 "was a year where pent-up demand for systems reached a peak," he says. The company launched a website, a customer loyalty program, and more in the first quarter of 2011. The logjam became clear in the following months, and IT met with each main business unit in the third quarter to better set priorities and expectations.
Mismanaging IT demand badly can lead to poor-quality software and systems. But even when IT does deliver strong results, leaders must recognize the very real human toll. Cincinnati Children's Hospital Medical Center recognized that risk as it raced to innovate:
"In 2011 our organization took on a number of high-profile and strategic projects that required significant time and dedication from our staff," the hospital says. "Although we successfully completed all of these projects, we risked staff burnout in asking our staff to go above and beyond on multiple occasions throughout the year."
Mistake: Getting into a virtualization rut
Server virtualization has been the golden goose of technology ROI. By getting higher utilization from servers, IT shops have been able to consistently lower data center costs and in some cases avoid the multimillion-dollar capital expense of building a new data center. But even this money machine has its limits.
HCA Information Technology & Services found that limit. The group provides IT services to the 150 HCA hospitals, hundreds of physician offices, and non-HCA healthcare groups as a revenue center for the company. Here is its experience:
"We began server virtualization in 2009, and as our successes increased we began to see virtualization as a hammer searching for a nail. In 2011, we discovered several scenarios where we had chosen virtualization hastily, or we combined environments that did not match logically. All of this required us to take a step backward and to develop a more defined methodology and framework to decide which applications were right candidates for virtualization. We believe our move into internal cloud services will require us to learn from our virtualization days and ensure we have a highly defined selection process."
Plenty of companies have broken applications as they virtualized servers. As companies get more aggressive by building private cloud environments that virtualize computing, storage, and even networks, the transition will get more difficult. FedEx, for example, has created an entire private cloud data center and will only move applications into it once the company has rewritten these apps so that they're optimized for that highly virtualized environment.
IT organizations tend to think of a private cloud as the safe choice--all of the flexibility and security of a public cloud such as Amazon's EC2, but without the security worries. But plenty of gotchas await.
Mistake: Underestimating mobile demand
IT didn't see the iPhone revolution coming. It wasn't until top execs and salespeople started bringing them in and demanding to get corporate email on them that IT took on the security problems iPhones created. So lesson learned, right? IT would be all over the iPad?
Not really. IT did start experimenting with tablets right away, but many teams thought it would be at best a niche device, maybe something that would start slowly with executives. IT organizations weren't ready for how soon and how many employees would crave iPads--and who could make a credible case for why tablets make sense for work.
A number of healthcare companies, in particular, were caught flat-footed by how many doctors insisted on using personal tablets. They've told us of extraordinary steps that "maverick docs" took to use iPads, like using apps of questionable security or installing desktop access software on a tablet to view records from the doctor's PC.
Salespeople instantly saw the iPad's appeal as a better device to use while chatting one-on-one with a prospect. One financial company described its iPad experience this way:
"Mobile computing has been a key component of our IT strategy for several years. We've delivered on initial focus areas, building mobile applications for customers and enabling employee personal mobile device access to company email. Our mistake was in not anticipating the dramatic surge in popularity of the iPad commensurate with the release of the iPad 2. Sales force demand to leverage company-liable tablets rose suddenly, requiring us to be uncustomarily reactive. IT quickly bridged the gap, setting policy and implementing mobile device management, which enabled the company to mitigate financial impacts. However, we're still working to regain the full confidence of our sales executives."
Sales executives are going to need IT's help to get the most out of tablets. Companies that roll out tablets quickly learn that they need content and applications fine-tuned to their specific needs, such as for accessing inventory available for sale and providing tablet-friendly presentations.
But this company's reaction is a pretty good guide to bouncing back from any of these mistakes. Fix the technology, build a platform for future innovation--and spend time strengthening IT's relationships so that mistakes are much less likely to happen in the future.