73 years old and still creating Vision and Change in the Healthcare Communities he serves

Jim Hauenstein, MBA BA, Interim Executive Director

Jim’s career spans over 49 + years in the Manufacturing and Healthcare Information Systems/Technology Industries.  Jim’s career started in Manufacturing Information Technology, where he spent 18 years in Manufacturing.  Jim was given an opportunity to change his career in 1983 to Healthcare information Technology and for the last 31 years, Healthcare Information Technology has been his focus.   Jim believes his success over the years has been due to his focus of the merge between the human aspectwith the development of technology solutions for the organizations he has worked for.  In addition to building trusted relationships, Jim has always considers himself a visionary and over the last 31 years his focus has been creating a bridge between Care Providers throughout Healthcare.  He is focussed on marrying both the Financial and Clinical Applications with technology solutions that enhance the quality of patient care; designed around the Health Information Exchange.  The key to Jim’s success is building trusted relationship at all levels of the organization not just the C-suite.  Jim believes that today is the most exciting time to be in healthcare because real change is occurring and it is driven by enhancing the quality of care being delivered to the patient.  Quoting him: “Remember we all will be a patient someday and we will want quality care delivered to us and that means our latest patient record being shared with the care provider that is delivering the care.”

Jim’s latest undertaking was in 2012 – when Jim was asked by the Hospital Council of Northern and Central California to assemble the CIOs in the region to start a rural Health Information Organization (HIO).  Jim was elected chairperson of the SacValley MedShare Executive Work Group consisting of 20 stakeholders meeting every other week for 2 hours to create the plan for a sustainable rural HIE.  In October SacValley MedShare, with the assistance of the Hospital Council Foundation of Northern and Central Californian, he signed a contract with ICA to be their HIE vendor.  In January 2014 SacValley MedShare sent their Participation Agreement to the stakeholders; it was the first time that SacValley MedShare asked their stakeholders contribute money.  In February 2014 SacValley Med Share had their first Board of Directors meeting, demonstrated ICA Direct Secure Email to their stakeholders and it was approved.  SVMS went live with Direct Secure Email the following day.  In February 2014 Jim was selected interim Executive Director of SACVALLEY MEDSHARE HIO, which includes 5 counties in Northern California.

Role of Analytics in HR

HR Analytics blog summarizes the need for analytics in HR. “With data becoming widely available and more easily accessible, industries are quick to realize the value of insights that analytics can uncover. Analytics has helped police departments reduce crime, credit card companies detect fraud, companies reduce customer churn rates, and baseball teams win World Series. In Human Resources, with the automation of many HR transactions, from recruitment to retirement along with the need to perform strategically, analytics of the workforce is more important than ever. HR analytics is a lot more than head-counting-it’s about the total amount and the quality of talent, knowledge, and expertise to move your organization forward and stay ahead of competition. It’s about measuring the return on human capital investment and measuring the impact and how HR is driving performance, productivity, and profitability. In many different studies, HR seems to be lagging in this era of analytics and big data. But analytics of the workforce, a company’s most important asset, should be an opportunity for businesses, particularly for HR, to transform itself and align with the business strategy.”  

While some of the analytics may be common across all enterprises, in general, the analytics that are easy to develop and provide value will depend on 1) the maturity of the organization; 2) the size of the organization; and 3) the organization domain (the markets they serve).  There are other factors of course, but the aforesaid three categories provide the basis for a taxonomy of analytics for HR.

As an illustration, let us see why the maturity of the organization impacts the type of analytics that are relevant.  For entrepreneurial organizations that have a high velocity of growth the analytics will be quite different than a mature organization.  Entrepreneurial organizations may prefer the speed of hiring and rapid assimilation of the hired resource as key metrics, whereas a mature organization may be looking at employee growth and attrition rates as key metrics.  The size of the organization also impacts the type of analytics that are relevant.  Larger organizations may prefer multiple set of metrics and rely on statistical evaluation of historical data to provide trends, whereas smaller organizations may prefer simpler metrics and look at historical data as anecdotes to guide the human resources.  The organizational domain is also a significant factor in deciding which analytics are relevant.  In markets where resources required are scarce, then the HR analytics may need to include recruitment channels as part of their analytics, where as in very stable markets where resources are in plenty, then HR analytics may place a higher emphasis on fit to the enterprise culture.  Clearly, the metrics identified above apply to organizations of all sizes, in all domains, and in all stages of the enterprise evolution, however, the  relative importance of the metrics will be different.

The True Cost of IT

Costs are generally factored into decision making either in the form of financial metrics such as “Return On Investment” or “Time To Break Even”, or into analytic frameworks such as value per dollar expended. If you take a myopic view of costs, then it will simply be the “hard dollars” that are actually expended.  Generally, to account for total costs, many prefer to use life cycle costs.  These are also “hard dollars”, but they are added up over the life cycle of interest.

Of interest are the soft costs.  The soft costs are very rarely taken into account for many reasons:  1) They are difficult to quantify; 2) They are generally subjective and vary with the individuals making the estimates; and 3) They generally tend to tilt the decision in directions that do not appear to be popular.  Take for example, cloud computing.  It is clearly valuable to leverage the cloud technology as it generally entails minimal up-front costs and has built-in on-demand scalability, flexibility, and lower operating expenditures.  In itself, the cost savings may be very attractive. Organizations take for granted that cloud computing is cheaper than building an infrastructure.  But organizations fail to take into account soft costs.   If the organization is not careful, they may end up with multiple incompatible clouds. Disaster recovery, data warehouses all become concerns of enterprises about the resiliency of cloud computing, since data may be commingled and scattered around multiple servers and geographical areas.  It may be possible that the data for a specific point of time cannot be identified.  Cloud computing is still a viable and attractive solution, however, these additional costs tend to blur the cost advantages.  Staff morale and the loss of technical expertise are also other soft costs not taken into account. The message is simple – account for all costs in making a decision.

The Role of IT Analytics: Learning from Mark Twain

As I was starting to put my thoughts on the next blog on IT Analytics, I thought of Mark Twain. When asked to speak, he inquired as to how long he should speak. A bit bewildered, the requestor asked why it was relevant. Mark Twain quickly replied, “If you want me to give you a two-hour presentation, I am ready today. If you want only a five-minute speech, it will take me two weeks to prepare.” The same holds true for metrics, if a firm needs everything, it is easy do. But if the firm asks for just a few key metrics, then it is a bit harder. Please note that the growth of analytics is strongest in financial management and budgeting followed by operations and production, strategy and business development.  Sales and Marketing and Customer Services are target areas of growth.

The role of IT Analytics can be better understood by making the distinction between micro-analytics (individual Key Performance Indicators) and macro-analytics (combination of multiple metrics).  Individual functions such as sales, operations, finance create a set of domain metrics which are very specific and cover a few specific measurements. These analytics fall under micro-analytics. A Balanced Scorecard view provides macro analytics. Macro analytics is analogous to macroeconomics – dealing with the whole whereas microeconomics deals with a specific domain or area.

However, IT Analytics does require interpreting the data and data trends.  We should be very, very careful in creating analytics from facts/raw-data. It took us a long time to understand and refine the credit score, and to this date, the credit rating system has not reached maturity.  IT Analytics using the balanced scorecard approach seems to be sound, but it will take us a while to get analytics that are mature and have gained wide acceptance.   We started with Mark Twain, so let us end this discussion with him. He also quoted: “Get your facts first, then you can distort them as you please.”

Micro Analytics

In the first blog on Analytics Based IT Governance (ABIT 1), we discussed that ITIL offers over 100 KPIs for assessing the value of IT delivered. They classify the KPIs into several areas:

1. Service Portfolio Management
2. Financial Management
3. Service Level Management
4. Capacity Management
5. Availability Management
6. IT Service Continuity Management
7. IT Security Management
8. Supplier Management
9. Change Management
10. Project Management (Transition Planning and Support)
11. Release and Deployment Management
12. Service Validation and Testing
13. Service Asset and Configuration Management
14. Incident Management
15. Problem Management
16. Service Evaluation
17. Process Evaluation
18. Definition of CSI Initiatives

The secret sauce is not to choose all 100 or so micro-analytics, but pick the ones that are most applicable to the Enterprise.   Examples of KPIs include the following:

•  Number of Releases: Number of releases rolled out into the productive environment, grouped into major and minor releases.
•  Adherence to Project Budget: Actual versus planned consumption of financial and personnel resources.
•  Gaps in Disaster Preparation: Number of identified gaps in the preparation for disaster events (major threats without any defined counter measures).
• Number of Planned New Services: Percentage of new services, which are developed, being triggered by Service Portfolio Management.
• Duration of Service Interruptions: Average duration of service interruptions.

IT Alignment to Business: Over-spoken but Under-achieved

Enterprises seek more from technology than just simple efficient operations, They expect technology to provide value, and perhaps, a competitive edge. Aligning technology to business requires transparent IT planning and budgeting processes to ensure that all stakeholders contribute to the IT strategy.  The walk-talk ratio for “aligning IT to business” is not good – usually over discussed and under-achieved.  The reason why aligning IT is so difficult has to do with the old-school IT culture that still prevails.  Transparency is not regarded as critical to achieving alignment. Managing resources and budgets judiciously and prioritizing technology investments to ensure that the triaging process is best for the Enterprise and the customers they serve. Past history and performance metrics facilitate judicious resource allocation and project control, but innovation helps the Enterprise move forward.  This process helps nurture the IT organization to seek and deliver technology effectively.

I had a chance to briefly chat with Joel Golub, Deputy Commissioner and CIO for the Fire Department of the City of New York. Joel was previously a CIO for 28 years at NY Transit, he was also CIO in my neighborhood, San Bernardino County.  He was talking about how he is leveraging technology and implementing systems that can  save lives.  Alignment of IT to business is natural for Joel.  He has been a fireman for 42 years!

CIO Summit on IT Governance

Is the role of the CIO over as we know it? This was the topic of discussion at the First CIO Summit on IT Governance held at the Cerritos Sheraton on March 7th, 2014. With over 55 IT executives at the conference with three panels provided guidance on how the Mid Market, Fortune 500 and Service Providers leverage IT Governance to forge ahead.

John Dohm chaired the panel on IT Governance for Mid-Market companies with four leading CIOs on the panel: Jon Grunzweig, Vasu Kadambi, Keith Golden and Tak Fujji.  One of the key points John identified was that if the CIO is talking technology issues/decisions at the Executive level, there is something fundamentally wrong.

Becky Wanta chaired the panel on IT Governance at Fortune 500 companies with four IT Leaders on the panel: Jim Sutter, Joel Manfredo, Maria Fitzpatrick and Jim Thomas. Becky brought out the key point that CIOs must focus on innovation.

Dave Phillips chaired the panel on IT Governance with four cutting edge CEOs: Kevin Parikh, Ravi Chatwani, Jim Savitz and Jason Rosenfeld. Dave’s point was that CEOs of IT companies will bring a very unique perspective on IT Governance that will be beneficial to CIOs.

In summary, if CIOs are talking technology to the leadership team, they will not be able to retain their seat at the executive table.  In the past CIOs were brought in to be the bridge between technology and business. Now leadership looks to how CIOs can bring innovation and revenues to the Enterprise. The best way for a CIO to forge ahead is to ensure that IT Governance is nimble and simple, yet robust to provide sensible direction to run the business of IT that is aligned to the Enterprise.  A good Governance process will leverage tools to guide the stewardship of the IT department, leaving more time to focus on innovation.

Overview of IT Analytics

The growth of analytics is strongest in financial management and budgeting followed by operations and production, strategy and business development.  Sales and Marketing and Customer Services  are target areas of growth.   IT Analytics is the use of analytics to manage and deliver value-centric technology.   Significant is the lack of use of IT Analytics in workforce planning and allocation.   There are many reasons for this discrepancy, not the least of which being the perceived importance of IT in the organizations.  IT is by and large treated as an expense and not an investment. The role of IT Analytics can be better understood by making the distinction between micro-analytics (individual Key Performance Indicators) and macro-analytics (combination of multiple metrics).

ITIL provided a set of metrics which are very specific and cover a few specific measurements.  These analytics fall under micro-analytics. A Balanced Scorecard view provides macro analytics.  Macro analytics is analogous to macroeconomics – dealing with the whole whereas microeconomics deals with a specific domain or area. Macro IT Analytics can be classified into four groups:

• Managing the Services Delivered (user perspective)
• Managing the Resources (staff perspective)
• Managing Value Delivered to the Enterprise (financial perspective)
• Managing External Factors

User centered IT analytics includes customer happiness, response time, ability to triage and prioritize requests, and managing defects. Staff centered IT analytics include staff morale, resource utilization, transparency, productivity and turnover. Financial IT analytics includes number of capital projects, return on investments (ROI), variance and percentage of IT expenditures on new projects. External IT analytics includes outside threats, Disaster Recovery (DR) incidents, technology adoption velocity and percentage of budget allocated to contingency.

These four groups can be combined to provide a benchmark of IT itself.

How far is Google taking us?

Literally.  We all heard about the dozen cars in Northern California that can drive for us.   The one I thought was very cute was something much more mundane.  I was writing an email (using gmail) in which I used the phrase “as per the attachment”.  Needless to say I had not attached anything.  When I attempted to send the email, Google politely pointed out that I had the used the phrase “per attachment”, but there was no attachment.  Clearly, a “wow” moment.  Imagine I had sent an email to my wife telling her I love her but forgot to attach a picture of a dozen roses!  Where is Google taking us?

Google already has language translators eliminating that profession.  They have analytics eliminating many a bright analyst.  Imagine now that Google wants to replace managers with automated tools.  Let us take this further, they want to replace CIOs with tools.  This topic hits home.  After all I run a business providing on-demand CIO services and tools to help CIOs manage the IT department.   I am panic-stricken actually.  If they really do replace us CIOs with tools, then I will lose my business which helps CIOs run the business of IT.   Is it time to work on my resume?

A Lesson From Not-For-Profit Organizations

Till recently I was a Consultant CIO at a renowned Not-For-Profit  (NFP) organization serving the visually impaired, I feel that there are a few key lessons that can carry over to the commercial world. One of the key tenets, NFPs discuss today is to shift the focus from outputs to outcome.  As I turn my attention to the For-Profit world, it is a lesson we can implement as well.  Outputs are necessary but not  necessarily sufficient to create the proper outcomes.

We achieve outputs by keeping our attention on process efficiency and staff productivity. To develop better outcomes, we must focus on the effect we have on our customers, our staff, our environment and the society we operate in.  To understand the impact on the customers, we must understand their eco system.  Crafting our vision must draw the balance on how our organizations eco-system interacts with the customers eco-system.  The simplest way to achieve symbiosis in the two eco-systems is to run the enterprise on a strict code of ethics that is built into the vision of the organization.  Proper ethics is the only objective way to ensure that the outputs our organizations produce is leading to better outcomes.

Technology can be an enabler by providing transparency and a shared information system that can help understand the impact organizations have on the customers eco system.   Not surprisingly, transparent Governance has been proven to be great motivators for staff as well.

Forrester’s Top Ten IT Priorities for 2014 – A Quick Review

What a disappointment!  Not that I am fan of IT predictions, nor am I a big fan of analysts in this space, even given that, I expected more of firms like Forrester.  Their top ten predictions were:

1. Digital convergence erodes boundaries
2. Digital experience delivery makes (or breaks) firms
3. APIs become digital glue
4. The business takes ownership of process and intelligence
5. Firms shed yesterday’s data limitations
6. Sensors and devices draw ecosystems together
7. “Trust” and “identity” get a rethink
8. Infrastructure takes on engagement
9. Firms learn from the cloud and mobile
10. IT becomes an agile service broker (or fades away)

The top ten predictions (save for the last one) were something that could have been written in 2001! The last one is quite interesting.  Service oriented architecture that originated in IT to manage services is now spreading to other areas of the enterprise.  IT needs to encourage and facilitate these services.  Fortunately a number of tools are coming together in the market place to leverage this trend.  This will not only foster efficiencies in the organization but bridge the gap between users and IT.

Learning from VCs

With his article “Learning from VCs: One CIO’s Strategy for Investing in IT”, Charles is right on the money.  The role of a CIO is very similar to that of a CEO of a professional services firms.  CIOs will face situations where they have to take risk to maintain a competitive edge for the Enterprise.  The company culture, competitive landscape, industry domain and past performance all influence the degree of risk that the Enterprise can tolerate.  Charles correctly identifies that risks entail failure, but failing fast helps facilitate exploring alternatives.

Charles identifies that CIOs are called upon to place bets—much like VCs do—that a given product or service is going to hit the market at the right time and can fill a niche that others don’t.  IT Assessments are a great way to develop a framework for the opportunities that fit the makeup of the the Enterprise.  While the CIO cannot be expected to have the crystal ball, the onus of innovation is clearly on the CIO, and innovation always entails risks.  IT Assessments not only help identify the challenges and opportunities for the enterprise, they also serve as the risk gauge that can help the CIO develop both a short term and a long term IT strategy that is symbiotic with the enterprise strategic plan.

An example of prudent risk taking comes from my friend Rich Hoffman.  At a Los Angeles CIO Summit where over 200 CIOs attended, I had the good fortune to hear my friend for a decade and a half, Rich Hoffman, talk about the importance of collaboration.  He is the CIO at Avery Dennison and the collaboration platform he has built in partnership with Google is a role model for us.  It was launched with great success in just nine months covering 20,000 users in 50 countries.

CIO as a Change Agent

I had the pleasure of meeting Keith Ferrazzi earlier this year. Keith was talking to us at the SCSIM on becoming an agent of change. According to SCSIM, Keith Ferrazzi is one of the rare individuals to discover the essential formula for reaching the top – a powerful combination of marketing acumen and a remarkable ability to connect with others. Both Forbes and Inc. have designated him one of the world’s most “connected” individuals.

Hearing him today confirmed SCSIM’s assertion. Keith spoke of four mind-sets needed to become a successful change agent: Generosity (helping others unconditionally), Vulnerability (sharing weaknesses to help foster intimacy), Candor (being transparent and upfront), and Accountability (walking the talk on the promises made).

In a sense, Keith reflects uGovernIT’s philosophy. With respect to Generosity, the services architecture enables IT to deliver services that drive efficiency in the enterprise. Taking the initiative to provide these services builds credibility with the users. With respect to Vulnerability, uGovernIT provides a user mandated Governance process that essentially transfers IT ownership back to the users. With respect to Candor, uGovernIT provides complete transparency to all stake holders on how IT is performing using Key Performance Indicators (KPIs) derived from the user-IT transactions. Finally, with respect to Accountability, uGovernIT helps IT publish SLAs (Service Level Agreements) and how well IT is performing with respect to SLAs. uGovernIT also publishes all the raw facts so that users see IT as their partner and not as a black box.

Example of Two CIOs who broke the mould

Many, including yours truly, have written about the importance of the role of CIO and the transition to other CXO roles. Some have gone on to become CEOs, entrepreneurs, financial advisors, angel investors and even VCs. When you look at DuWayne Peterson, you see that he was the Chairman at Pasadena Angel Investors and now the Vice President at Colorado Angel Investors. But you forget that for the past four decades he has been one of the most respected IT executives around. From 1977 to 1986 he was Executive Vice President at Security Pacific Bank, and the next five years he was at Merrill Lynch. I cannot even state all the places he has helped – I will need a book for it, but to the best of my knowledge, he was one of the first million dollar a year CIO in this country. I have known him and been his admirer for several years, and besides all the accolades he deserves for his expertise, he is simply a modest and wonderful human being. Thank you DuWayne for the all help and advice you have shared with me. I miss those morning breakfast meetings in San Marino.

Jim Sutter, formerly CIO at Rockwell International is another very respected CIO who made the transition to CXO roles, coaching peers, Board positions and advisor to a multitude of start-ups including my own firm UGovernIT, Inc. Jim’s current role is as a Management Consultant specializing in technology investments related to information systems. He also facilitates one of the most respected CIO Roundtables in Orange County. I have known him for a decade and a half, and learnt so much as both a CIO and entrepreneur.

Does the CTO report to the CIO?

Most CIOs will jump at this and say “but of course”, except if you are a CIO in a technology centric company.  Let us turn to a trusted source – Wikipedia. They actually compare the roles of the CTO and the CIO:  

“The focus of a CTO may be contrasted with that of a Chief Information Officer (CIO). A CIO is likely to solve organizational problems through acquiring and adapting existing technologies (especially those of an IT nature), whereas a CTO principally oversees development of new technologies (of various types). Many large companies have both positions. Another major distinction is between technologies that a firm seeks to actually develop to commercialize itself vs. technologies that support or enable a firm to carry out its ongoing operations. A CTO is focused on technology integral to products being sold to customers or clients, while a CIO is a more internally oriented position focused on technology needed for running the company (and in IT fields, for maintaining foundational software platforms for any new applications). Accordingly, a CTO is more likely to be integrally involved with formulating intellectual property (IP) strategies and exploiting proprietary technologies. In an enterprise whose primary technology matters are addressable by ready-made technologies (which, by definition, is not the case for any companies whose very purpose is to develop new technologies), a CIO might be the primary officer overseeing technology issues at the executive level. In an enterprise whose primary technology concerns do involve developing (or marketing) new technologies, a CTO is more likely to be the primary representative of these concerns at the executive level.”  

In a company that I was advising, the CTO ran all of IT (performed the role of CTO plus CIO).  I emphasized the need for managing the business needs and implementing an IT Governance process.  He was blase about it – no surprise he reports to the CIO now.

So who reports to whom? My answer: Neither.  If the organization feels that it needs both a CIO and the CTO, then they should both report to the CEO.  I feel that both roles are only needed in technology centric organizations.  For example in our own firm, UGovernIT, we have the CTO responsible for the product line and the CIO for ensuring that the product use and that the features are consistent with Enterprise needs.  Both report to the CEO.  

The New Age CIO

I send a Newsletter to over 4000 CIOs, and the response I got on this was incredible. So I took the liberty of sharing this on my blog site as well.

 A LinkedIn connection shared this cartoon which reminded me how difficult it is for CIOs to change old habits. The famous cliche “You cannot get fired for choosing IBM” still holds true. However, it is unfair to blame it on only job preservation. CIOs tend to be risk averse as they see failure as a threat to their seat at the Executive Table. Vendors need to take some blame as well for bringing relatively immature products to the market adding to the risk of breaking the mould. How does the old-school CIO break the mould?

Curiously some of it happens just by chance. For example, many CIOs are asked to take on roles that they have never done before. I know several who are CIO/COO, CIO/CFO and even CIO/CMO. These lucky CIOs are forced to break the mould. If you were not amongst the fortunate to get such roles, you can still break away from the mould by fearlessly following your instincts and focusing on how to deliver value to the Enterprise.

If you want to break the mould but still feel your job as a CIO is not done, you can follow Steve Gallagher’s “The First 90 Days in a New CIO Position” posted in the Harvard Business Review Blog. In addition to getting the house in order and managing the culture shift towards innovation, Steve talks about building a technology enabled Strategic Vision.  

A footnote to the blog:  In the newsletter, I shared information on two CIOs who have broken the mould:Becky Wanta and Maria Fitzpatrick.  Both been outstanding CIOs and both have been exemplary for women to break the glass ceiling, both have a very illustrious consulting practice now, and most relevant to me, both have been a source of encouragement and support for me and my product uGovernIT.  Since it is impossible to summarize their achievements in this short Editorial section, I have provided links to their LinkedIn Profiles.