A Blueprint for a Post-Pandemic CIO Playbook

Dion Hinchcliffe

Vice President and Principal Analyst
Constellation Research

Title: About Dion Hinchcliffe Dion Hinchcliffe is an internationally recognized business strategist, bestselling author, enterprise architect, industry analyst, and noted keynote speaker. He is widely regarded as one of the most influential figures in digital strategy, the future of work, and enterprise IT. He works with the leadership teams of large enterprises as well as software vendors to raise the bar for the art-of-the-possible in their digital capabilities. He is currently Vice President and Principal Analyst at Constellation Research. Dion is also currently an executive fellow at the Tuck School of Business Center for Digital Strategies. He is a globally recognized industry expert on the topics of digital transformation, digital workplace, enterprise collaboration, API…...

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Anticipating a Post-Pandemic World

In the last week, we've seen the first glimmer of light of what will eventually become the full arrival of a post-pandemic operating environment. It will be a brave-new reopening world -- and a notably different and rapidly changing one -- that the CIOs of most organizations will have to quickly and effectively adapt to in order to ensure the survival, renewal, and regrowth of their organizations. Not the least because CIOs are now required to help lead business strategy today.

For the moment, most of our organizations are very different than they were just eight weeks ago: They are now virtual and almost entirely digital. The oft-neglected digital workplace is now our primary employee experience, with its historically low IT investment priority and associated long-standing challenges clearly evident in many cases. Remote work is currently very much the norm around the world, but -- and at least in its present form -- is also creating varying degrees of worker fatigue, disengagement, and impediments to function that must be overcome. For a good many of us, our supply chains are in disarray and our operations aren't far behind, with limited ability to recoup until global trade and travel have resumed. Our strategic trajectories have been sharply altered too: 2019's digital transformation plans for 2020 have largely been overcome by events and now require thorough review and rethinking.

A new financial reality has arrived along with the plague, with greatly raised IT requirements for robust and ongoing business continuity capabilities, skyrocketing new cybersecurity threats, a suddenly very different service delivery posture, and an urgent need for outside-the-box problem solving, all while facing demands for headcount reductions and budget cuts in most cases as the CFO and the entire executive team struggles to keep the organization stable and afloat. While a few sectors are actually seeing increased IT investment, most are seeing IT budgets changes in the range of +13% to -27% (see graph below.) As a result, most CIOs I've talked with recently are planning to or have started full portfolio contract renegotiations with their SaaS and cloud vendors.

Collectively, all of this can be challenging to take in and respond to, given that what Bill Gates has famously called "the first modern pandemic" is remaking our institutions, our organizations, and our IT departments. However, COVID-19 has also proven to be a particularly potent teacher to IT leaders and staff as well, and from which we can already learn a great deal, as we will see.

The Hard-Won IT Lessons of the Pandemic

Currently, we observe a number of stark yet useful lessons learned that have spawned directly from the global crisis and which are now presenting themselves as key clues to the future of IT after the pandemic wanes:

• Fast digital change is much more possible than most of us thought. When there is no choice to change rapidly, it appears there's not nearly the dilemma or actual barriers we had previously encountered. Extremely rapid transformation is much more achievable than we gave ourselves credit for. While some IT departments struggled in the early weeks of the virus, today we can see that IT did help most organizations become remote working ones in a dramatically short time, typically in just two to three weeks. Corrollary: Times of large scale change are fertile ground to make hard and/or difficult shifts within an organization. Recommendation: Use the "bully pulpit" of ongoing interrelated strategic changes in play to make the necessary bold shifts in the IT organization, from restructuring to a fundamental reimagining of the function.
• Resiliency is inherent in the culture, structure, and processes of an organization, not in pre-laid crisis plans. While strategic planning certainly helps, you simply cannot adequately prepare upfront for unanticipated events. Many CIOs had insufficient crisis plans for a pandemic, a rapid shift to remote work, a disaster recovery, or all three. What matters more is having organizations that are inherently resilient and can respond appropriately with all of its available resources as needed. Recommendation: Begin plans to build resiliency more deeply and intrinsically into the organization. This includes education and investment in staff resilience, as well as new dynamic capabilities, such as more distributed functions, more systemic capture of knowledge, as well as regular modeling and simulation of crises and their response. Oh, and don't forget to design for loss of control.
• The old ways of operating are often badly outmoded in this new era. Organizations that have shifted broadly to agile methods, DevOps, and especially DevSecOps, are in a much better position to pivot and change course with the prevailing winds and fresh disruptions, as growing data shows suddenly increased investments as nearly two-thirds of IT leaders say they plan to increase spending in these areas as an immediate result of the pandemic. Even more significantly, we're now seeing that a straightforward physically copying of the ways of working in the physical workplace into the virtual one is a rather inadequate adaptation. Managers, team leads, and other roles that require frequent meetings have often resorted to replicating them by holding endless video conferences and conference calls, and thus Zoom fatigue has set in. While we've long known that there are much more effective ways of working digitally and that are more asynchronous and scalable, and therefore more productive, they are not nearly as widely known as they should be. Recommendation: CIOs should review, pilot, and activate as appropriate as many new digital native equivalents as possible for employee experience, workforce collaboration, management capabilities (especially talent analytics), and operations as possible while vast change is still the norm.
• Pandemic induced resource reductions are spurring a mass redoubling of automation efforts. Three challenges are making IT response to the pandemic harder: The sheer scale of digital issues, which often involve the entire organization, or most key IT systems, or affect the whole customer base. Second, the timeframes are so short to address critical goals like transitioning to remote work, or moving sales and customer service entirely into new operating environments in just a few days or a few weeks. Finally, cost reductions are already a priority and are already impacting service delivery and employee/customer satisfaction. This is leading to a large emerging new push into robotic process automation (RPA), artificial intelligence (AI), and even a resurgence in old fashioned business process automation/management (BPA/BPM) to get ahead of the curve. The goal is to automate rote IT and business tasks to cover for downstaffing, productivity hits, and enable major new processes related to managing pandemic response.
• Strategic use of the cloud is the primary key for rapid response to operational changes and disruptions. This should come as little surprise to most IT leaders, but there's certainly a large cohort that has nevertheless been lagging in cloud adoption. I've heard major stories of impact due to the shift to remote work for those with little cloud presence. For most purposes, the cloud is far more nimbler and elastic during large operational changes. One trend is clear: The coronavirus pandemic is spurring cloud adoption like few other events, though multicloud data management is going to be the next emerging issue as cloud complexity swiftly grows.
• Data supremacy is the ultimate tool for mitigating and managing fast change. Understanding what is going on in IT, in the business, and beyond into the customer base has been of huge interest during the outbreak. I've seen a dramatic uptick in everything from surveying to usage analytics and other data gathering to actually measure everything from usability of remote work solutions to assessing the stress levels of workers during the large changes they've faced. As never before, we have profound powers for capturing, integrating, and synthesizing amazing views of reality that we can use to guide strategic decision making in near real-time.

Taking these lessons as a whole, we can begin to understand some of the key aspects of the IT and business changes in front of us.

Key Reading: Insufficiently Bold Thinking and Action Post-Pandemic Risks Limiting the Needed Digital Transformation of Work

Preparing IT for Post-Pandemic Success

Our very own R "Ray" Wang has separately laid out an overall post-pandemic framework for organizations, which the analysis herein complements and extends for the CIO and other IT leaders. Such a playbook, whether you call it that or not, is an absolute necessity to maintain focus while appropriately allocating time between urgent IT priorities. Day-to-day operations are currently getting the lion's share of attention in most organizations, against the growing need for longer-term strategic planning and action, which must begin right around now in order for the overall organization to be situated well as the pandemic fades.

Using Ray's overall framework, there are four supporting pillars to a CIO's post-pandemic playbook, with my specific adaptations of it for the CIO function:

People and Process

• Expanded Remote Work and Reskilling Programs for the Long Term. What most of us have in place for remote work is simply inadequate for a sustained and fruitful program, in that we're often using the wrong tools and channels at the moment, and our workers largely don't have necessary strategic skills. I've previously explored in considerable detail what we should do to improve the current remote work situation, from a move to modern mass collaboration tools that scale better with improved non-blocking simultaneity (i.e. more people working at once, without interfering with each other) to vital digital skills like Working Out Loud and network leadership.
• Upleveled New Hybrid Digital Employee Experience. Current survey data show that we're not going all the way back to the previous status quo in our organizations when it comes to the physical workplace. But some will return, and some businesses are just much more physically oriented than others. Our digital employee experiences must mature so that physical and remote workers are on an equal plane as much as possible, from remote workers having increasing visibility and engagement to physical workers have better ways of working to connect across the entire organization, remote or otherwise. Here's my exploration of how to get started in up-leveling employee experience around actual employee needs. Digital adoption support and training will considerable accelerate a newer, better experience. As the newly released Slack Remote Work Survey found, worker education and experience matters when it comes to being effective in a remote employee experience.
• New Lean, Automated Operations. I've long been on record that IT has to have 90% of what they do today become automated by 2025, just to tread water on current staff given the growing responsibilities and involvement in technology and IT in virtually everything in an era of exponential digital progress. In the short term, increasingly automation will be driven by the need to survive and thrive during and after pandemic-era budget and staff cuts, but it's just a more effective and necessary way to help organizations become more strategic and move "up the stack" in general, as tactical and rote work gets carried out by the machines. CIOs will need to proactively invest in talent and tools that can realize RPA, AI, BPA/BPM across the organization, and especially in low-code and no-code solutions that can be used by the entire business, instead of just IT staff, as part of the IT is more distributed trend, and to curtail the impact of IT staff reductions.
• Business Continuity Reinforcement. As shocks continue to arrive via the economy, new cybersecurity exploits, from major phases of the pandemic, such as the (eventual) coming return to the office, the CIO will need to closely manage, update, and reinforce their business continuity plans (BCP.) BCPs will need a dedicated operations and crisis management presence in medium to large-sized organizations for at least until several months after the pandemic ends. When it is mothballed, it should be done with care, so it can be revived quickly if needed.
• A Strategic Plan to Return to the Office. How this will happen will be unique to each organization, its industry, their modes of product and service delivery, local/regional/national regulations and orders, customer needs, and business requirements. Businesses themselves are forecasting everywhere from May to sometime in 2021. But the CIO and the employee experience team, along with HR, legal, compliance, and other functions need to come together in short order to begin planning this inevitable eventuality, though certainly, for some organizations, the possibility of remaining mostly or entirely remote is certainly a real option, given the lack of current clarity on the cyclical nature of the SARS-CoV-2 virus itself, and whether it will come back yearly like the flu.
• Move to More Modern Staffing Model, Especially Gig Economy. With so much uncertainty remaining, staffing is a challenge, especially for organizations that seek to be preferred employers and want to avoid laying off staff in most cases, yet wish to avoid the vast financial impacts of keeping unproductive workers on payroll. Over the last two years, there has been a sea change to IT employment to a more gig economy model that is much more professional and white collar than say, Uber drivers. IT workers, application developers, and even capable product managers can now be engaged on-demand through services like Gigster and a growing cadre of gig firms for IT and professional services. IT organizations should create a healthy more of full-time, contract, and gig economy workers to manage swings in demand, capacity, delivery projects, and service requests.
• New C-Suite leadership. Supporting IT employees right now is perhaps the most important job of all. Getting them the help, personal and professional, that they need to work through these times is paramount. Learn to become a new digital leader that is a profound enabler, champion, and mentor to the organization both in the current times of acute crisis as well as the steady leading light through recovery and growth. Leadership matters the most in a time of crisis, and CIOs must find their best selves, both for themselves as well as their full talent stack, however it is structured.

Technology

• New Digital Playbook and Digital Transformation Plan. If we look back at typical 2019 plans for digital transformation, there has been a significant disruption in most organizations' objectives, at the very least due to budget changes. The effect has been split, however. Some organizations will have to shelve or postpone their plans for now, or greatly scale them back. Others are looking at accelerating their plans due to large changes in the markets and operating conditions that can't be ignored. What's for sure is that the CIO now needs to sit with the C-Suite and stakeholders and rethink priorities, plans, and resources. It's also safe to say, that as digital transformation often appears like the easiest activity to delay for now, it's also one of the most strategic for the future. CIOs will need to carefully balance the needs of today with the imperative for the overall future of the organization, which is digital.
• Reinforced Cybersecurity. The shift of work and IT to workers' homes is a cybersecurity challenge of a high order. CIOs will be driven by the need to harden and secure the explosion of new endpoints they are acquiring through the shift away from the physical office. The CIO will have to underscore to the CFO that cybersecurity is one budget area that cannot be cut.
• New Digital Workplace and Collaboration Tools. Enterprise social networks, online forums, virtual communities, visual collaboration tools, status gathering apps, workplace analytics platforms, and much more will be needed to create more humane and effective digital remote work environments and employee experiences.

Business Models and Economy

• Recovery and Growth Plans. While most organizations are still focused on survival, a growing amount of attention must now go into the revitalization and growth efforts of the near future, especially in identifying long lead time issues and challenges. Recommendation: Create a matrixed, integrated "Post-Pandemic StrategyOps team" that can quickly determine a roadmap forward and make it executable in real-time. Put all hands on deck to collect and evaluate innovative ideas to recover and grow. Instrument all recovery work with real-time analytics and give out dashboards to key management and stakeholders, as well as for IT to use to rapidly iterate and course correct the effort.
• Rebuild the Supply Chain. Most organizations have to take the pieces of their supply chain combine them with the latest digital marketplaces and procurement capabilities to begin the hard work of finding a high growth way of finding to a sustainable return path to operational health.
• Financial restructuring of IT and a new uncertainty set aside. There is likely going to be a difficult discussion with the board on a new model for IT that is much more cost effective in the near-term. The CIO must prepare for the eventuality of very challenging discussions about going near 100% cloud, managed services, and outsourcing. Having a strategic IT and digital function is actually more critical than ever, however, though there will be need to move much of the rest to more dynamic sourcing. The cost savings will be small in either regard for most, and the key is not to give up agility or innovation capabilities in any resulting effort. The CIO, contrary to budget cutting discussions, must also now maintain a larger set aside for crises for the foreseeable future.
• Mergers and acquisitions. I am already speaking to private equity firms that would like help understanding who they should buy up in terms of likely financially distressed firms, to recombine them into new conglomerates and portfolios designed for a post-pandemic era. Be prepared to help the CFO fend these off if needed, but if they occur to help with and preferably lead the IT integration process.

Politics and Legislation

• Dealing with New Geopolitical Constraints and Challenges. It's likely that the pandemic ends with a fairly different political landscape than it started. This will affect supply lines, cloud data residency, and sources of talent. Study and be prepared for the long term effect on IT strategy.
• Emerging Pandemic Rules and Regulations. It's likely that laws and other government orders around the world with regards to employment, sourcing, and data sharing/access will be passed that will greatly impact IT.  Field an ongoing study group to understand these as they emerge and risk manage their implementation as appropriate.
• Financial Aid and Bailout Access and Protections. IT will be both a data source and potential recipient of the complex network of aid and bailout packages that have emerged and will likely continue to emerge from governments around the globe. Getting a fair share of these may be vital for survival and certainly for helping staff be successful in navigating the pandemic from their perspective.

To Survive and Thrive: We Must Now Invest Time in Both

If you've explored my frameworks for digital transformation, you know I believe in generative processes for them. Meaning that you must plug in the unique aspects of your business, culture, and processes before you can use them well. The first one in the list, the adaptable framework, is the one most organizations can take advantage of most. Yes, I'm saying that the best post-pandemic response is a digital transformation of the organization, both IT and business (which is truly becoming one and largely the same after many, many decades.)

I believe the elements above represent the most important and urgent areas of focus, but they won't be every major item a CIO has to worry about. That means the exploration above is a vital cross check, but not the post-pandemic playbook itself. That is up to you. We at Constellation Research wish you luck in your urgent and vital endeavor.

Summary

Please be sure to contact me with your stories of pandemic successes, challenges, and insights. Also, if you need assistance in externally reviewing and strengthening the post-pandemic playbook that you are developing. We'll be covering more on preparing for post-pandemic in coming days, weeks, and months. 

Additional Reading

Managing Beyond the Crisis: On the Minds of CXOs

News Analysis: Tech Vendors Takes On #Coronavirus

Lead with Visibility and Agility During and Beyond the Pandemic

I've decided to use the contact tracing app

Steve Wilson

Former Vice President and Principal Analyst
Constellation Research

Steve Wilson is former VP and Principal Analyst at Constellation Research, leading the business theme Digital Safety and Privacy. His coverage includes digital identity, data protection, data privacy, cryptography, and trust. His advisory services to CIOs, CISOs, CPOs and IT architects include identity product strategy, security practice benchmarking, Privacy by Design (PbD), privacy engineering and Privacy [or Data Protection] Impact Assessments (PIA, DPIA). Coverage Areas: -  Identity management, frameworks & governance-  Digital identity technologies-  Privacy by Design -  Big Data; “Big Privacy”-  Identity & privacy innovation Previous experience: Wilson has worked in ICT innovation, research, development and analysis for over 25 years. With double…...

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One hears that the COVID tracing app won’t necessarily save your life, and that evidence of contact tracing efficacy is still incomplete. All true.  Bluetooth proximity logging is just a tool, and there is a legitimate question around its necessity when we have been doing so well in Australia to contain the spread of the virus with non-technological measures.

By the same token, for the vast majority of Australian citizens, no privacy beach is ever going to kill them.*  So in the interests of proportionality ? one of the chief concerns of privacy advocates ? I’m going to explain why I will use the Australian government’s controversial COVIDSafe app, warts and all.

I am not an epidemiologist but I trust the advice of healthcare professionals that a contact tracing app will be a useful adjunct as they seek to control community transmission in coming months.**  

Privacy matters a great deal to me, as should be obvious from my body of work.  I believe a COVID contact tracing app must be optional; its design must be restrained and its data collection proportionate; it must be subjected to a Privacy Impact Assessment; and the software must be independently scrutinised for bugs and data leakage.

Do I wish that the COVIDSafe tracing app had been commissioned in a better way? Of course I do.  I wish the Department of Home Affairs had not been involved in the tender process, and I wish that a certified Australian MSSP had been selected to run the database instead of an offshore American business. It's a crying shame that we are being asked to trust this technology initiative on the back of the #CensusFail debacle and MyHR privacy backflip. 

But I am willing to come down from the moral high ground this time, because we’re in an emergency. For the most part, COVIDSafe meets my privacy standards as noted above.

I don’t want perfect to be the enemy of the good.  Apart from that generalisation, two things weigh particularly high on my mind.

Firstly, even if COVID tracing technology turns out to be a privacy disaster ? and it’s hard to see how pseudonymous Bluetooth proximity logs can seriously threaten most people ? my privacy is simply not as important as the health & welfare of me and the community (most privacy law expressly enshrines that sort of priority).  If I catch COVID-19 then I would like to help minimise the impact on others, by making it easier to trace the people I have been in contact with.  In the event I ever test positive, I would not hesitate to help the Public Health Unit trace my contacts by way of telephone interviews to explore all my movements.  The app is not much different and probably exposes a lot less of my personal details.

We need some proportionality in privacy philosophy as well as in system design. For most of us, privacy is near the top of Maslow’s Hierarchy of Needs, right up there with esteem and self-actualisation.  That means we naturally cede privacy when more fundamental needs like personal safety are at stake.  In Australia, few people’s safety is actually at risk in the event their personal data is breached. 

My second consideration is political. On this occasion I am willing to meet the government part-way across the ideological divide. 

I was hugely impressed by the way our conservative government so willingly gave up their fiscal ideology and did what needed to be done to safeguard the Australian community, with a support package worth around 10 percent of GDP.  The COVID response has received broad bipartisan support, from left and right, from businesses and trade unions.  Australia is one of the world’s leaders in managing this epidemic; we have saved hundreds or maybe thousands of lives so far.

If the government can be pragmatic on spending, then I can be pragmatic on privacy.

Their fiscal actions speak louder than words, so I am prepared to believe them that COVIDSafe will remain optional, it will be shut down when the crisis passes, that there will not be function creep, and that the app does not track us.  I know enough about Bluetooth proximity logging to be confident that the system is inherently minimalist, and the risks to most of us ? even in a worst case system failure ? will be small.

So I have installed COVIDSafe.

Afterword.

For reference, readers might like to know my personal privacy policy:

• I opted out of My Health Record, as soon as I possibly could.
• I filled out the 2016 census on paper, not online.
• I have never used Facebook and I never will.
• I never let pubs and clubs scan my driving licence.
• I use a different ‘burner’ email address for my fitness tracker and similar devices.

Footnotes

* I'm thinking here of the majority of people, leading regular lives, mixing with large numbers of people in public. The likelihood of Bluetooth proximity tracing exposing your whereabouts is low, and the motivation for an attacker to try and extract this data and use it to find you is remote. But there are important edge cases in our community where the risk profile is different. Persons with a special need for secrecy -- domestic violence victims, whistleblowers, undercover officers and so on -- should get advice before using an app like this. 

** To put the privacy risk in further context, remember that COVID-19 is officially a notifiable disease in Australia. If you test positive, then public health officials will call you and insist on interviewing you (as per the provisions of public health laws) to establish your recent movements, to try and find out where you caught the disease, and identity those who you might have infected.  So your privacy is going to be invaded regardless of the app.  COVIDSafe might actually be privacy enhancing, for it could mean that strangers you have been in close contact with can be notified without anyone finding out where you were along the way. 

The MarTech 5000...I mean 8000... is Updated and I Have Thoughts.

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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I'm just gonna say it...

Is it just me or is this thing getting ridiculous?

I mean seriously…the 2020 update to the Marketing Technology Landscape looks more like a map in Clash of Clans than a segmented visualization of a technology category. It now tips the scales at over 8,000 solutions and I am really fighting the urge to use quotations around the word solutions.

Scott Brinker is as patient as he is brilliant to continue this supergraphic. He notes that this year’s update grew by 13.6 percent…AFTER losing 615 entries to consolidation or going belly up. That’s right… churn of 8.7% offset by 24.5% leap in new entrants. As Scott notes, “1 in 5 of the solutions on this year’s martech landscape weren’t there last year.”

Scott is also exceedingly kind and has always sought to frame the shifts and moves across this landscape as a celebration, looking for the best way to visualize the chaos. Case in point: Reworking the actual layout of the landscape to reflect a more organic clustering of solutions that often shift and flow across categories through application or acquisition.

I’m just not as kind or as patient as Scott. I look at this and see battle lines today’s CMO must navigate around, across and through. To be clear, in the early days of the landscape, every new category and segment felt like a blend of innovation and exploration as Marketers sought out new tools and solutions to advance the digital agenda while meeting the connectedness of their customer. It was, and for many still is, an obstacle course that requires CMOs and CIOs to drag the business to catch up to the needs and expectations of the customer.

Today, it looks more like a battle map for a war that can’t be won. Customer Experience, Service and Success appears to be plotting with Advocacy, Loyalty & Referrals to conquer Affiliate Marketing & Management even if that means destroying Channel, Partner and Local Marketing in its path to glory. Don’t even get me started about the fact that the DMP blob actually looks like it is trying to run away from the CDP blob, hoping that Compliance and Privacy will provide safe haven.

What terrifies me most about this landscape is something that Scott also points out in his blog: This is not a segment where innovations are emerging based on marketers chasing new solutions. This entire beast is chasing marketers. It is getting to the point where teams need a dedicated resource to just manage martech sales pitches let alone a team to manage the Frankenstack.

Here is what I DO see coming through all of this:

• This landscape will start to implode and eat itself. Category cannibalization is the only next natural phase of evolution. My hope is that the customer is actually the last category standing.
• The number of new entrants will slow…albeit slowly.
• The allure of launching the next great social advertising platform that can also serve as an influencer and community manager mixed with a CDP that has a plug in for ABM will start to wear thin on investor’s ears.
• While we will certainly see the power players continue to pick up the innovators, we will also see smaller players start to merge to become the equivalent to the indi-cool counter-culture option to the big traditional enterprise platform plays.
• Platforms that promised to be part of the power player set will start to fade into obscurity as platforms fail to come together or corporate politics get the better of best intentions.
• Don't count out those familiar legacy names just yet as new life gets introduced with new teams, strategies and leaders. 
• Best of breed will take on a feeling of "best of what we already bred" as war-weary marketers tired of being asked to rip and replace every season will look for connectors and APIs over overhauls and retooling.
• That blue land of data will start to need more space as BI for marketers starts to accelerate. Just go ahead and start penciling in a whole category around "decisions" now.
• We will likely see a surge of new entries into areas of governance, identity, access, permissions, security and privacy as marketers get more involved in those conversation...and investors continue to pour money into the security space.

What stands out most to me after looking at this amazing feat of design is this: it is time for a new strategy in marketing technology. A strategy that is a bit bolder and more disruptive. More intentional. More authentic. More focused on the 3R’s of marketing – Revenue, Relationships and Reputation – instead of a narrow adherence to the tradition of the 4Ps. At some point, martech became more about managing technology than empowering or transforming marketing. Time to hit the brakes and get back to disruption for business sake and not for technology's sake. If we let this monster continue to expand unchecked and untended, the white spaces you see in between each segment will more closely represent immovable silo walls accelerating, trapping and empowering bad behavior across marketing that will only spell disaster for customer engagements and relationships.

News Analysis - SAP Co-Chief Executive Officer Christian Klein Continues as CEO, Jennifer Morgan Departs

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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In the night before its earnings call for Q1 2020, SAP surprised (probably) all of us with another change in its executive team, ending the dual CEO structure with Christian Klein and Jennifer Morgan. 

Before we jump into analysis – let's dissect the call in our customary style (the press release can be found here):

WALLDORF — SAP SE (NYSE: SAP) today announced that Christian Klein (39), Co-Chief Executive Officer and member of the Executive Board, will continue as sole Chief Executive Officer. Jennifer Morgan (48), Co-Chief Executive Officer and member of the Executive Board mutually agreed with the Supervisory Board of SAP SE that she will depart the company, effective April 30, 2020.

MyPOV – Short and sweet. All said in one paragraph. That was (unfortunately) a very short tenure of the first woman leading a DAX company, little more than half a year. Last time SAP got rid of the co-CEO structure, it was Bill McDermott taking over… but it was 9 months heads up and Jim Hagemann Snabe went to the SAP board then (see the great piece of former colleague Chris Kanaracus here).

More than ever, the current environment requires companies to take swift, determined action which is best supported by a very clear leadership structure. Therefore, the decision to transfer from Co-CEO to sole CEO model was taken earlier than planned to ensure strong, unambiguous steering in times of an unprecedented crisis.

MyPOV – This is little bit of an odd justification – as SAP has successfully managed though tough economic times with dual CEOs (the dot com bust with Plattner / Kagermann and the 2008 downturn with Kagermann / Apoteker – handing things over again to dual CEOs in 2010 with McDermott / Hagemann Snabe). The co-CEO model certainly takes time to coordinate, but typically leads to better decision management.

"I am grateful to Jennifer for her leadership of SAP, including all she has done for the company, our people, and our customers," said Professor Hasso Plattner, chairman of the Supervisory Board of SAP SE. "This transition comes at a time of great uncertainty in the world, but I have full faith in Christian's vision and capabilities in leading SAP forward toward continued profitable growth, innovation, and customer success."

MyPOV – Good quote from Plattner, note he thanks Morgan first for company, then people, then customers. No mention of product or innovation. Innovation and customer success come out when he (as all board chairman do) praises the new sole CEO. Let's follow that aspect… as it will matter in the overall MyPOV later.

"I'd like to thank Jennifer for her partnership over many years," said Christian Klein, CEO of SAP SE and member of the Executive Board. "Throughout SAP's transformation, Jennifer has always been laser-focused on customers, partners, shareholders and employees. It's thanks to her that we have established a strong position in experience management solutions. I know she will always be a champion of SAP."

MyPOV – Good quote from Klein. He adds partners and shareholders to the employee and customer mix. Both Klein and Morgan became SAP board members in close proximity, Morgan in 2017 and Klein on January 1st, 2018. While that maybe 'many years' for a few companies, it certainly is not for SAP, where that usually is a term you pack out for a decade plus of working together. Interesting Klein also mentioned experience management, which is the Qualtrics acquisition. But its this area where SAP has done little progress, as we are coming to the one-year anniversary of Sapphire where Qualtrics and the merge of O and X data was all the headlines.

"It has been a great privilege to drive SAP's growth and innovation in so many areas and most recently as Co-CEO," said Jennifer Morgan. "With unprecedented change within the world, it has become clear that now is the right time for the company to transition to a single CEO leading the business. I would like to thank Hasso Plattner for the opportunity to co-lead this great company, and I wish Christian, the Executive Board, and SAP's talented team much success as they drive the company forward."

MyPOV – Good quote from Morgan, fair and positive. She adds innovation to SAP growth… innovation at software companies means products, but Morgan only had direct product responsibility since taking over the Cloud Business Group (aka the six sisters of Ariba, Concur. Fieldglass, hybris, Qualtrics, SuccessFactors). And there the agenda was set – bring the products to SAP HANA and SAP BTP (the former SAP Cloud Platform). To be fair, under her leadership SuccessFactors championed HXM, the merger of Qualtrics capabilities to measure employee engagement.

Morgan joined SAP in 2004 and was appointed co-chief executive officer, together with Klein, in October 2019. Previously, she served as president of the Cloud Business Group, overseeing Qualtrics, SAP SuccessFactors, SAP Ariba, SAP Fieldglass, SAP Customer Experience and SAP Concur. She was named an Executive Board member in 2017.

MyPOV – A remarkable career, that previously started at Andersen Consulting, she spent four years at Siebel, before joining SAP in 2004 in public sector (and a tidbid - Adair Fox-Martin joined in ... public sector as well). At 48 Morgan has a lot of CEO and other executive options ahead of her, she can basically choose. Better chances for a long tenure than say in 5-6 years two board contracts down the road. Might have been a factor.]
 

The SAP co-CEOs Christian Klein an Jennifer Morgan in Walldorf in January 2020

 

Overall MyPOV

At the end of the day SAP is a software company and software companies thrive with successful products. The irony is that SAP over time has thinned its product development leadership over a decade now. Agassi left in 2007, Sikka left in 2014, Leukert and Goerke left in 2019. The longest fix point on product is Plattner. Product leadership is now in the hands of Thomas Saueressig, the former CIO. Saueressig reports to Klein, when Klein was CEO and Klein brought him 'over' to lead products. And Saueressig is doing a good job at getting the priorities of S/4HANA right. Certainly, a better one than the heads of product over at the six sisters… who all were busy to move their products to the SAP platforms. Nothing to excel and inspire a board to hand over the reins to them.

The immediate question Klein needs to answer what is going to happen with the product development areas that had not yet reported directly or dotted line to Saueressig. That's Qualtrics and whatever SAP calls its CRM ambitions under seasoned CRM product leader Stutz. I would not be surprised if all goes to Saueressig. SAP needs good, better great CRM to be a competitive ERP player. Too much depends on customer processes. SAP was most successful because it built on a single platform. Bringing together the O and X data on the SAP BTP (aka Cloud platform) is a key differentiator. It's also a key test for the agility of the SAP BTP to support standalone third-party deployments that Qualtrics certainly needs to keep supporting.

As a father of three daughters I was excited to see (finally) a woman lead a DAX company. Europe tends to be behind when it comes to diversity at the top. Unfortunately, Morgan's tenure was way too short. I am also a fan of the dual leadership model, as it leads to better decisions. The problem at SAP is, that the decisions are made – S/4HANA is becoming the R/3 successor – with all its ERP automation in a single product (single schema we will see) and on a single platform. Fox-Martin can and will deliver the sales numbers, services is rolling. So, there was no room to play and add for Morgan. I wish her well and I am sure she will show up in a leadership role. Though: Due to SARS-COV-2 - sales and services models need to move digital and right now that is not happening with the large traditional SAP implementations on the old continent. This maybe a formidable challenge ahead, if the pandemic ripple effects last longer.

For Klein and Saueressig it is all about getting the S/4HANA value proposition right. Augment it with the capabilities of the '6 sisters'. Deliver the integration plans. Have it all ready a few years before the now extended support and maintenance timelines expire. Oh – and in the meantime, keep SAP numbers up and keep the R&D team protected. It's hard to build new product, its even harder to build new product with less product developers. Writing this on the day before, actually less than 7 hours before the earnings call (April 20th 2020), for which SAP already had to warn as traditional on-premise revenues were not coming in as planned.

Right when you though things would calm down and become a little dull at SAP, here comes another change. Never a dull moment.


Some recent SAP blogs:

• News Analysis - SAP keeps - re-organizing - Fox-Martin in charge of world-wide sales, Enslin out, replaced by Morgan - read here
• Musings - SAP democratizes Product Development - what does it mean for Customers? read here
• News Analysis - SAP intends to buy Qualtrics - Pairing operational and experience data – And it's 6 sisters - read here
• News Analysis - Adobe, Microsoft and SAP announce the Open Data Initiative to empower a new generation of customer experiences - Good idea, good start...  - read here
• Event Report - SAP Ariba Live 2018 - Las Vegas - Sustainability and UX - read here
• Event Takeaways - SAP at MWC 2018 - read here
• Market Move - SAP acquires Callidus - More Sales Effectiveness in the Back Office of the Front Office - read here
• News Analysis - SAP HCM On-Premise Option for SAP S/4HANA - or is this S/4HCM? - read here
• News Analysis - Microsoft and SAP join forces to give customers a trusted path to digital transformation in the cloud - read here
• Event Report - SAP Hybris Live 2017 Barcelona - YaaS morphs and more agility ahead - read here
• News Analyses Roundup - SAP's September Tech Announcements - SAP doubles down on technology - read here
• Event Report - SAP SuccessFactors SuccessConnect - New Leadership - Old Challenges - read here

And some Constellation Research reports on SAP:

• SAP SuccessFactors Leads with HR Core, Payroll and Global Capabilities, by Holger Mueller, January 10 2020 - see here
• Constellation ShortList™ PaaS Suites for Next Gen Apps, By Holger Mueller, February 27th 2019 - see here
• Constellation ShortList™ Global HCM Suites, By Holger Mueller, February 20th 2019 - see here
• Experience Management Drives SAP's Acquisition of Qualtrics, by Nicole France, Holger Mueller, R "Ray" Wang, November 28th 2018 - see here
• SAP Hybris advances its Platform, By Holger Mueller, November 20th 2017, see here
• SAP Cloud Platform: A New Standard for a SaaS Vendor's PaaS, by Holger Mueller, June 13th 2017, see here
• SAP HANA 2 Ushers in the Next Era of Pure In-Memory Applications, by Holger Mueller, December 27th 2016 - see here
• SAP UXaaS Democratizes Usability, Starts Next Wave of User Experience, by Holger Mueller and R 'Ray" Wang, April 7th 2016 - see here

 

Some Musings blog posts:

• Musings - IBM's 10th CEO takes the reins - Krishna has his work cut out for him - read here
• Musings - Why Open Source has won and will keep... winning - read here
• Musings - Enterprise Acceleration - and what every HR Leader should know about it - read here
• Musings - SAP democratizes Product Development - what does it mean for Customers? Read here
• Musings - Why splitting Windows is Nadella's first major mistake - read here
• Musings - Time to bring back the software user conference - read here
• Musings - Does Oracle and Accenture make sense - or never ever! - read here
• Musings -  Happy 10th Brthday iPhone - afraid the next 10 years will be harder - read here
• Musings - The Privacy Shield is real - what are the CxO repercussions? Read here
• Musings - The Bots are coming to your conversation - what are the implications? - read here
• Musings - We are entering the age of the Über Super Computer - read here
• Musings - Retail is the breeding ground for NextGen Apps - read here
• Musings - Time to re-invent email – for real! Read here
• Musings - The Dilemma with Cloud Infrastructure updates - read here
• Musings - Are we witnessing the Rise of the Enterprise Cloud? Read here
• Musings - What are true Analytics - a Manifesto. Read here
• Musings - Microsoft does not need one CEO - but six - read here

 

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

Hard Shift from We to You Before Brand Distancing Sets In

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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I have a confession to make: I have multiple email accounts...to collect spam. 

It is a dirty secret confession of a marketer. I’ve got Yahoo, Gmail, and there “may” even be an AOL account in the collection. I knowingly hand these out to brands. I have a system for email prioritization with the top spot in the collection going to brands I want to hear from. If you got an AOL email and the name doesn’t have any initials from my name…sorry.

In this time of shelter at home, I’ve had a chance to review the contents of all strata of spamcounts. It has NOT been pretty. The emails fall into some curious categories:

• Desperate remembrance – “Hey, we are still here waiting for you to buy from us!” to “Without YOUR support, we won’t be here for much longer.”
• Gross outs – “Out of an overabundance of caution, we have finally started cleaning things!” 
• Bottom feeders – “This is the perfect time to buy sweatpants in bulk…AND…with every purchase, we will send you toilet paper and a picture of a nurse holding a puppy!”

I think it is clear most consumers would like to permanently banish the phrases “Out of an overabundance of caution” from branded email. This overabundance of caution isn’t really that…now is it? It is an overabundance of Stan from Legal and Debbie from Risk telling you an email had to include the robotic linguistics known as an overabundance of nobody talks like that.

The longer the world shelters and economies grind to a crawl, the reaction of some is apparently to ramp UP emails in an attempt to continue relationships. Even worse are the brands who failed to check their workflows and content, keeping customers in automated drip campaigns that fail to take our global condition into context. I especially love the ones encouraging me to bring the email IN-STORE by a certain date.

What got really depressing was when I started to look for emails that used the word “you” more than the word “we.” Outside of the self-serving celebrations of “we are still up and running so that you can keep working/buying,” the “you” emails were few and far between.

In this age of customer-centric-lip-service and “embracing” the customer-first attitude, isn’t it time to make a hard shift from talking about “we” -- we are with you, we are in this together, we are still here ready to do business, we still want your money – and start talking about “you”?

Shifting conversations from WE to YOU can be hard…it demands that for every question we ask, we are ready to respond quickly with action that directly reflects the answers received. It also demands that we ask internally before we ask externally. Once again, asking our people what they need and what they know our customers need will also demand we be ready to respond. We can’t keep asking and not answering.

Perhaps the biggest thing to remember is that if we continue delivering messages of fake empathy and false community, the outcome will be brand distancing. Consumers are not likely to forget the opportunistic, the false or the downright creepy interactions during a time when nerves are frayed.

There is a difference between HAVING empathy and just sounding empathetic. It is not our customer’s job to have empathy for what our brand is facing. It is our job to remind them why our mission, values and vision align with their own, today and well into our mutual tomorrow. It is our job to ask how are YOU? What do YOU need or want? And if the answer is they just want to be left alone for a bit…to not be sold something…not be reminded a bill is heading their way…not be reminded they can’t go to the store with a coupon…we need to respect the answer and respond in kind and with kindness.

The social currency accumulated now will last well into the recovery. The brand distancing could last a lifetime.

Managing Beyond the Crisis: On the Minds of CXOs

Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

Doug Henschen is former Vice President and Principal Analyst where he focused on data-driven decision making. Henschen’s Data-to-Decisions research examines how organizations employ data analysis to reimagine their business models and gain a deeper understanding of their customers. Henschen's research acknowledges the fact that innovative applications of data analysis requires a multi-disciplinary approach starting with information and orchestration technologies, continuing through business intelligence, data-visualization, and analytics, and moving into NoSQL and big-data analysis, third-party data enrichment, and decision-management technologies. Insight-driven business models are of interest to the entire C-suite, but most particularly chief executive officers, chief digital officers,…...

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Employees, customers, and a path to “the new normal” top the list of C-suite executive concerns. Here are a few pointers from Constellation’s Post-Pandemic Playbook.

First, let’s acknowledge some realities here in the early weeks of the COVID-19 crisis in North America. Personal and family safety are obviously at the forefront of everyone’s mind. Some heroes, like our healthcare and public safety workers, selflessly put even these concerns aside in order to do their jobs. Also deserving of acknowledgment are those working in pharmacies, grocery stores, warehouses and other places where people interact and where there’s no option to work from home.

Second, let’s admit that it’s hard to generalize about what some now euphemistically call “the new normal” for business. The airline and hospitality industries and businesses deemed to be “non-essential” are in near or total shutdown mode. Those in health and public safety, the food supply chain and anything tech related to supporting remote workers are scrambling to keep up with demand.

In an open virtual discussion with more than 40 CXOs last week, Constellation Research heard a broad range of short-term and long-term concerns and opinions. Chatham House rules applied to the meeting prevent us from sharing the identities or affiliations of the speakers, but here’s a sampling of what these CXO had to say.

Learn from Work-from-Home Successes

Several executives agreed that work-from-home (WFH) productivity is going surprisingly well, so much so that some speculated that many companies may reassess their WFH policies and real estate commitments once the crisis is over. Benefits mentioned included the ability to hire prized talent and workers from outside of Silicon Valley, New York and other competitive job markets.

One exec noted that his firm had previously learned the hard way that mixing remote and local workers on a team does not work well when most of the team members were in one physical location. The remote minority inevitably feel like outsiders and cannot participate as equals. His firm solved this problem by having all  team members join meetings virtually, even if half or more of those team members are in a single location. This levels the playing field and ensures equal access to information and ability to participate. This is a policy that businesses should consider as the crisis wanes and the mix of remote and office workers starts to get back to normal. Some employees will feel comfortable returning to offices sooner than others.

Note: Still struggling to support work-from-home requirements? Check out this Webinar by Dion Hinchcliffe on productivity, collaboration and remote work technologies and best practices.

Set Short-Term Plans & Keep Monitoring

Whether your business is struggling to keep up with new demands or struggling to survive, you can throw out the budgets and business plans originally developed for 2020. Historical data and existing models may have little predictive value for the time being. Agile analysis and planning based on the very latest data is the name of the game.

Even supermarkets and hardware stores, which have remained open nationwide throughout the crisis, are seeing dramatically different customer behavior and buying patterns. One CPG executive we spoke to shared that his company has narrowed its product assortment to best sellers, and it can’t make enough of some of these products.

Other businesses are not so fortunate and have been completely shut down. Experts expect an eight-week crisis cycle to roll across North America as population centers go from the first 1,000 confirmed cases of COVID-19 to a tapering of new cases and an easing of the danger of local healthcare systems operating over capacity. The easing of shelter-in-place directives and business closures will depend on case numbers, availability of testing and other, yet-to-be-determined criteria.

To support an agile, data-driven approach, take these steps:

• Know your data sources, particularly those providing leading indicators of demand
• Ensure timely access to the latest information and monitor actual data-access and usage patterns rather than relying on old assumptions about the data that the business relies upon.
• Break down departmental silos. Information found to be useful to one group may have equal or greater value in another context. Recognize interconnected requirements and outcomes.
• Embrace continuous planning. Keep monitoring customer interactions and digital behaviors, sales, procurement, inventories, accounts receivables, cash flow. Patterns are likely to change from week to week.

Yes, historical patterns, such as seasonality, will continue to shape behavior, but the new normal has yet to emerge and customer behavior will take time to stabilize and become more predictable. 

Prepare for Longer-Term Opportunities

One CIO said he’s seeing “crash” teams established within companies focused on  three questions: How do we survive (addressed above), do we need a strategic reset, and how to we get back to growth once the crisis eases?

On the strategic reset question, Constellation expects that many companies will reassess secondary business models and commitments to non-core product lines and markets. Constellation expects to see a wave of asset sales, mergers, and acquisitions. Companies that are saddled with debt and those in bankruptcy will lead the asset sales and become takeover targets. Today’s Fortune 500 maybe thinned to a Fortune 350.

Companies that are flush with cash will be in a good position to pursue acquisitions, but if they don’t act quickly, they themselves will become acquisition targets. Fast financial analyses and accurate assessments of market prospects will be crucial. M&A is often a secretive endeavor, carried out by bankers, lawyers and top-level executives. Do not enter deal rooms with piecemeal data or half-baked assumptions about your own firm’s performance, its ability to effectively acquire or the prospects of an acquisition target.

As for that third question on how we get back to growth, “that's kind of the Golden piece of information that every business is looking for,” said the CIO. “A few of the CEOs that I’ve talked to are saying, ‘it’s not like we’re just going to turn the switch back on and , boom, everybody’s going to come back to work and customers are going to show up again.’ They’re saying it’s going to be more of a gradual, testing process."

Constellation founder R “Ray” Wang advised that “it’s very hard to put a timeline together without understanding when the crisis is going to end. We are looking at four factors: time, industry, geography, and the spread of the virus. We think it starts to get to recovery when you have seven days of no new cases [in a particular geography] and you know you’re on the other side of the exponential growth curves we’ve all been staring at.”

Related Reading:
Why Every Organization Must Build A Post Pandemic Playbook
Lead with Visibility and Agility During and Beyond the Pandemic
The CIO Must Lead Business Strategy Now

Musings - IBM's 10th CEO takes the rains - Krishna has his work cut out for him

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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Today it became official, Arvin Krishna succeeds Ginny Rometty as CEO at IBM. A technology company that has only had 10 CEOs since 1911, starting as Computing Tabulating Recording Company (CTR) in Endicott, NY. 

Arvind Krishna in an interview with CNBC on April 6th 2020

Krishna has his work cut out