- Apr 1, 2019,
There’s a good chance you’ve heard the saying, “No one ever got fired for buying IBM.” And the phrase itself is explicitly talking about risk aversion; buying the well-known and well-established brand of IBM is a good way to preserve job security…even if what IBM offers isn’t the best decision for the company. We point this out not to be critical of IBM of course, but rather to shine a light on the first challenge CIOs have when charting their company’s digital transformation journey: removing not just risk but also a flawed perception of security by sticking with the status quo or best known option.
Modern CIOs know that they have to challenge assumptions and think in new ways to meet the dynamic requirements of today’s business climate. But how can they do that when other departments and even their own teams are stuck in a headspace of self-preservation, wanting to go with the safest possible option instead of considering another solution that might be a better fit?
Risk versus Reward in the office of the CIO
Discussing risks and rewards in any business decision is as old as business itself. In fact, risk versus reward discussions guide the decision-making in most every aspect of our lives. Is the value of the potential positive outcome greater than the potential risk? And is the likelihood of that outcome significantly great enough to be “worth” it? That said, in business these discussions often take on a life of their own as a reaction to office politics and job security.
Far be it for us to get deep into the psychology of decision-making (we’re in a different line of work all together), but it feels timely to share what we’ve learned in recent months. Why? Because we’ve seen a change in the market that’s simply too transformative to keep to ourselves. Specifically, we’ve seen a new way IT and technology leaders are weighing the implications and consequences of new software in their businesses. These CIOs and IT team members are blazing new paths for their organizations by challenging the paradigm of “risk versus reward.”
“And” instead of “Versus”
Some of the brightest minds in enterprise IT departments are embracing a strategy more easily described as evaluating risk AND reward instead of risk VERSUS reward. One word change has made all the difference in the world to these organizations. Here’s why: By looking holistically at the costs and benefits under consideration, decisions can be more easily guided by strategy and supported by other team members and departments. Instead of challenging each other and saying “this isn’t worth it to me and/or my department”, different departments can work together to say “how can we all pitch in to mitigate the downside within this decision.”
For example, security is a valid concern when moving to cloud-based technology. Whereas previous lines of thinking might have slammed the door on cloud solutions, this new way of framing decisions gets teams working together to have the best of both worlds. A marketing department might want to use a cloud-based CMS for the company blog and knowledge-base. Instead of being contrarian, the security or IT department becomes part of the solution by working with the vendor to make sure security and compliance policies remain in place and regular audits are performed. The marketing team is able to use the software of their choice with the full backing and confidence of the security department. Everyone wins by acknowledging the benefits and limitations, and then working together to maximize the former and minimize the latter.
Consolidation as a Path to Risk And Reward Management
This line of thinking came to light recently as we worked with a large financial services company to integrate Capriza’s approval solution, ApproveSimple. The new CIO was interested in consolidating the approvals from all of their legacy applications into a single system. One proposed solution was to build their own system from scratch. Another proposed solution was to replace their existing applications with a single full-featured SaaS solution with the hope of future-proofing against new needs. The finance department was weary of spending more money on another expensive solution. The IT department was leery of auditing yet another system for security. And the project managers were fearful of having to redefine their existing processes related to billing and invoicing. At the heart of the challenge was that each stakeholder had a different perception of risk and a different threshold for aggravation while also guarding against being held “at fault” for a bad decision.
Thankfully the new CIO was thinking in a new way. She wondered if it was possible to find an off-the-shelf solution that would leverage the systems they had already invested in while also supporting customizations to cater to their unique implementation. That way finance might not have to change their workflows. The IT department would already have baseline security detail in place and wouldn’t waste dozens of hours evaluating a new system. And perhaps most importantly, vendors and partners could be paid on time and with little friction. By leveraging consolidation in the risk and reward discussion, couldn’t everyone get everything they needed even if they didn’t get everything they wanted?
Bringing it all together
Making the best decisions in business can feel as much like art as science in many cases. We start by educating ourselves, yes, but also guarding against our own risk. However, when we acknowledge and accept challenges we gain great power. By daring to recognize that “things might not be perfect, but at least we’ll be prepared” we can take bold action that leads to tremendous outcomes for our organizations and ourselves. If you’re interested in learning more about how the best and brightest CIOs are approaching digital transformation or care to understand how Capriza ApproveSimple can help leverage consolidation for your organization, contact us here. We’re proud to be on the leading edge of technology, helping CIOs around the world take the lead on strategy and implementation.