Why smart companies are embracing shadow IT — Jeanne Ross

Jeanne Ross, Director & Principal Research Scientist at the MIT Sloan School's CISR

Jeanne Ross, Director & Principal Research Scientist at the MIT Sloan School’s CISR

From Hewlett Packard Enterprise

Companies have no end of opportunities when it comes to spending their technology dollars. And over the years, individual business units have become adept at making their cases for the IT projects they want funded.

But according to our research at MIT Sloan School, top-performing companies are bypassing nice-to-have projects in favor of absolutely must-do ones by focusing on their most strategic opportunities for business transformation.

Practically speaking, this means narrowing down the programs that get funded to just a handful—and rejecting proposals for any IT projects that don’t advance one or more of those programs.

We call this “demand shaping.” Demand shaping is the process of negotiating and learning that goes on within a company as it identifies its most valuable and achievable business-change opportunities, and decides which IT programs will best support those opportunities. (Read my HPE Business Insights article “Don’t satisfy demand for IT services—shape it instead” for more on this process.)

But what about the projects that don’t get funded? Isn’t there a risk that they will just be driven underground, contributing to the ever-growing shadow IT challenge companies face today? Shadow IT, of course, is what happens when technology is brought into an organization without IT’s permission or knowledge. Some estimates put shadow IT expenditures as high as 30% of official IT budgets.

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Umbrage against the machine — The return of humans — Paul English

MIT Sloan Senior Lecturer Paul English

MIT Sloan Senior Lecturer Paul English

From Re/code

As humans, we crave contact with one another. From tiny newborn babies who need their mothers, to the elderly who long for their children, throughout all stages of our lives, we reach for each other. It’s always been this way. Technology can’t replace the very thing that makes us human.

Many years ago, I was left to care for my dad, who had early-stage Alzheimer’s. One of the first things I had to do was take away his car, as his driving had become dangerous. This was difficult. My Dad was a “car guy,” and he had taught me everything I know about cars — it was a love we shared together. Taking away his car left him incredibly isolated; he would try to call his friends during the day, only to be confused by answering machines that sounded like humans. Sometimes, Dad would even call companies who sent him bills, claiming he had questions, but really, I think he just wanted to reach out to another person. Again, he was foiled by the machines who told him to press 1 for this, and press 2 for that, always finding ways to keep him from connecting with an actual human.

As a response to this, I started GetHuman, a website that allows customers to call real people at big companies without having to wait on the line or go through a million robots. Today, GetHuman.com receives millions of visitors a month, helping people with customer service issues at places like Verizon and Comcast.

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Why the future of digital security is open — Lou Shipley

MIT Sloan Lecturer Lou Shipley

MIT Sloan Lecturer Lou Shipley

From TechCrunch

The topic of digital security often brings to mind the image of bleak and dark future, where computers, mobile devices and other systems are riddled with malware and cyber criminals lurk, ready to steal our data and crash our systems. We have good reason to be nervous. We’ve seen plenty of cyber-security breaches in the past few years, like credit card thefts at Target and password issues at sites like LinkedIn.

Digital security is a major concern. Few other issues affect everyone, from individuals to companies to entire nations. So what is the future of digital security?

One discussion thread centers on email encryption, prompted by Yahoo joining forces with Google and Microsoft to develop an encrypted email system. While encryption is a step in the right direction, it’s probably not sufficient by itself. In addition to usability issues — like compatibility of platforms and the human tendency to reuse the same basic passwords — email only covers a portion of the digital world. It’s a partial “attack surface.”

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New MIT Sloan Management Review study: An advanced analytics culture outweighs all other factors — David Kiron

The Need for Culture

The Need for Culture

What distinguishes the winners from the losers among companies converting data and analytics into a positive force in their strategies and operations? And what practices are keeping the winners ahead?

The Analytics Mandate, a new research report from MIT Sloan Management Review and SAS Institute, takes several steps toward answering these questions.

Our most significant finding? Our study shows that an advanced analytics culture outweighs other analytics-related factors -including data management technologies and skills-among companies that strongly agree they are gaining a competitive advantage from analytics. Essentially, a strong analytics culture is the lynchpin in moving from competitive parity to competitive advantage.

The need for change within a corporation’s culture, and the best way to achieve it, are both nicely illustrated in a case study included in our report.  WellPoint, the largest for-profit managed care organization within the Blue Cross Blue Shield umbrella, knew that sharing insurance data with physicians would provide doctors with a 360-degree medical view of every patient. This in turn, would better enable them to spot patients more likely to go to the emergency room or be readmitted to a hospital, contributing to expenses that drive up the high cost of health care delivery.

Within WellPoint, creating the data reports for physicians initially became a classic showdown between IT and interests from the business side.

The initial reports, prepared by the IT team, were late and lacked fundamental functionality.  For instance, different units within the company reported an emergency room visit in different ways.  The IT team’s explanation: no one told them the definitions had to be the same. This much was true — the business side didn’t think it needed to specify that emergency room visits be consistent across reports. They had assumed this was a given.

The high-profile project was subsequently placed in Red status. At this point, senior management got involved. Problems were brought to executives who, in turn, ensured resources were allocated. Outside consultants and experts were hired. More resources were diverted to the project.

Finally, after many challenging discussions, IT and the business side began working together using an iterative development approach called “Agile”, which focuses on “user stories.”. This meant understanding the perspective of the end user—the provider—and the context in which he or she would be using the data, as opposed to just developing according to a static set of  requirements.

Early reaction to the data system from doctors has been highly positive.  Over time, WellPoint believes that the proactive, coordinated-care model made possible when providers have actionable insights at their fingertips can cut health care costs by as much as 20%. That could work out to billions of dollars, given that WellPoint reimbursed more than $99 billion in health benefits for commercial and individual members in 2013.

In short, to create strategic benefits with analytics WellPoint had to change its organizational behavior. Without an effective collaboration between the business side and IT, the program would have remained in jeopardy. Without leadership’s involvement, the program would have remained in jeopardy. Preparing data for a strategic role often means changing business conduct and that, more often than not, requires a top down process to create the necessary alignment of incentives and goals.

To read the full report, please visit “The Analytics Mandate.”

David Kiron is Executive Editor, Big Ideas initiatives, for MIT Sloan Management Review.

5 commandments of cloud preparation — John Mooney and Jeanne Ross

Jeanne Ross, Dir. & Principal Research Scientist at MIT Sloan's CISR

Jeanne Ross, Dir. & Princ. Res. Scientist at CISR

John Mooney, Researcher at the MIT Sloan's CISR

John Mooney, Researcher at CISR

From Computerworld

Talk of the cloud has stirred up a lot of excitement. A 2011 mandate from the government CIO to move toward a cloud-first strategy has managers hoping that public cloud solutions will provide a quick fix to sticky technology challenges and messy business processes.

To some extent the hype is real. The cloud is transforming how organizations use and manage technology. As cloud adoption becomes more prevalent, government organizations that resist its charms risk missing opportunities to enhance the services they deliver.

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