October 23, 2013
Author: 
Tomás O'Leary

Can you ever get fired for buying IBM®? This article seems to suggest that you just might. With Origina you can keep IBM® but get the support/maintenance you really need! So if you have IBM® software maybe you mightn’t get fired after all! Link to blog.

Is IBM®still the safest career decision for a CIO?

Paul Liesching, April 7th 2015

The expression “nobody ever got fired for buying IBM®” has been around since the 70s. This was never an official strap line of IBM®. However the unattributable nature of the expression amplified its power, and in so doing has become ingrained within the psyche of many CIOs for the past 40 years.

Of course it really means nobody ever got fired for buying the Incumbent MegaBrand. Please feel free to replace IBM® with the “safe” brand of your choice – Microsoft, Cisco, Oracle, Vodafone etc etc etc.

In the 80s this mantra was expertly exploited by the sales ethos known as FUD. Fear, Uncertainty and Doubt has been the most lethal tool in the MegaBrand’s sales and marketing arsenal, and it is still very much part of the armoury today.

So why have the Incumbent Megabrands been so successful? Why have organisations consistently bought the more expensive, less functional technology?

The biggest goal of a CIO in a large organisation is “Do Not Fail”, or if they do, make sure it wasn’t their fault. Buying the safe Incumbent MegaBrand has perfectly supported this goal until now.

The Incumbent MegaBrand probably broadly met the functional requirements, and if it didn’t it wasn’t the CIO’s fault. Typically it was usually the technology bought by their organisation’s competitors, and as a result delivered the same benefits and issues to the competitors. This made competitive technology differentiation impossible.

The job-defending “safe” strategy of buying the Incumbent Megabrand is no longer a career-preserving option. The world is changing, and the evidence is everywhere. CIOs now need to be the champions of innovation.

One of the greatest challenges (and opportunities) is disintermediation, defined asthe reduction in the use of intermediaries between producers and consumers.

Established market-leading businesses are being disintermediated by disruptive new entrants to their market, and if you look inside these established market leaders their IT departments are being disintermediated by their own staff. I believe there is a direct correlation between these two dynamics.

If an organisation can’t innovate internally how can they ever innovate externally? If they can’t engage with their internal customers how are they ever going to keep their external ones?

I met a trusted adviser to the CIO of a global Tier 1 bank. I asked him what was the greatest technology challenge facing his organisation, he thought for a short while and responded – Consumerisation.

He went on to say his problem is the pace of change – that his bank had a six-year plan for upgrading the desktop and a four-year plan for a new multiplatform video conferencing environment – the problem was that both of these initiatives would be outdated long before they were ever completed.

His point was that the Consumerisation of technology is an unstoppable tsunami. Consumer technology is innovating at the speed of thought. Applications such as Skype, Huddle, Yammer, Facebook, WhatsApp, Slack and Google are investing phenomenal amounts in R&D and as a result are creating very compelling ubiquitous products.

IT departments are being disintermediated by their internal customers – who were simply responding to their customers’ demands. In fact, they were just being human. These organisations’ external customers are also just being human.

The alternative finance industry is mounting a massive challenge to the “bricks and mortar” retail banking industry. Now it’s still very early days. But how can these massive banks with their Incumbent MegaBrand systems and platforms ever compete?

The short answer is they can’t, it’s just a matter of time. There will be a tipping point and if the massive banks don’t respond ahead of this, they will fail.

Daily news is another interesting example. Does the daily paper-based distribution of news that has been collected, aggregated and disseminated by huge bricks and mortar media organisations really have a future? It’s very unlikely.

My final, and potentially most profound, example is the advent of the digital watch. The digital watch destroyed the Swiss watch industry. Switzerland’s market-leading position was reduced by 85% and 62,000 watchmakers lost their jobs.

The incredible irony is that the Swiss invented the digital watch. They didn’t patent or develop it because it didn’t use traditional technology – it wasn’t a watch.

There are many historic and contemporary examples of rapid disintermediation through disruptive innovation. These are occurring in just about every industry we care to look at today.

So the message to CIOs in large and many medium-sized organisations is Innovate or Die. Your companies are being disintermediated by smaller, more agile disruptive competitors. Your IT departments are being disintermediated by your internal customers.

Is buying the Incumbent MegaBrand still the safe career decision? Can your organisation both strategically and financially afford not to innovate? Look at what your employees are using, look at how your smaller, agile disruptive competitors are innovating and consider your options.

In the end it is about managing risk. Can you as CIO prove to yourself and your board that the utility and benefit of innovation far outweighs the potential risk of working with an emerging technology or organisation? And then ask yourself: can you afford not to?

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