Who We Are

Why We Are Needed

Very few companies can afford to have all of the technical expertise and experience on staff to address the breadth and depth of information technology that they face on a daily basis.

Over the past 20 years the rate of change of computer and communication technology has accelerated dramatically. When Gene Amdahl introduced the 470 in 1976 he stated that one of the critical advantages Amdahl had was its time to market capability versus IBM. He observed from his experience that IBM’s time to market products from laboratory idea to product was 10 years, while Amdahl’s was only five. The comparative time to market for technology today is less than 18 months and more commonly 9 months.

At the same time, a relative explosion of technologies in other areas, such as storage, CDROM, multimedia, communications, laptop computers, Web, PDAs, etc. have burst onto the market and are becoming an integral component of an organizations potential information technology capability. This requires organizations to revisit the traditional mechanisms and strategies which served well for years in making decisions on technology selection and implementation. Systems and applications were ‘built to last’ since the rate of change was relatively slow and competitors were bound by similar constraints. Residual values were an integral component of the decision making process since the cost of individual components was significant and their useful life was important when evaluating future replacement.

Although these rules are no longer ‘true’ in the traditional sense they are still valuable as guidelines for making decisions in the current environment. Applications and systems do not necessarily have the life expectancy of previous generations but quality and longevity are still fundamental to business objectives. Two other characteristics that are becoming prominent in the current environment are rapid evolution (change) and time to market. Our software and hardware systems need to be more flexible and adaptable to meet today’s rapidly changing environment. Individual components and groups of functions need to be readily replaceable to leverage new technologies to assist in gaining competitive advantage and differentiation in the marketplace.

‘Conventional wisdom’ from previous generations of technology investment does not work in today’s environment. Today’s ‘conventional wisdom’ says that in order to effectively make and implement decisions regarding IT, an organization should do the following:

• Align IT with the business strategies and develop a ‘Roadmap’ to transition the organization, services and technologies to support this effort.
• Develop an Enterprise Architecture (EA), which encompasses a Business Architecture, Application Architecture, Data Architecture, and Infrastructure Architecture.
• Develop a Technical Reference Model (TRM) as well as a set of Strategies and Standards that further refine/define the Infrastructure Architecture, that are broadly applied throughout the organization.

There are two fundamental difficulties in implementing these recommendations. The first is that although each of these efforts has value by itself, achieving the company’s objective and providing a framework for effective IT investment requires the combination of efforts to be completed to accomplish that goal. The second is that these efforts are very complex requiring business skills and experience as well as significant breadth and depth in technology. Senior business management commonly does not have the time to undertake this effort, since they are involved directly with day to day operations. Since there is such a significant breadth and depth of technical skills required companies frequently just do not have the money to invest in the personnel necessary to undertake the effort.

Many organizations have an individual that serves as the Chief Technology Officer, however, with rare exceptions a single individual does not have sufficient capacity to cover all of the potential technology areas and disciplines. Larger organizations have a CTO and a supporting staff of architects and designers to facilitate the effort. Frequently the architects are specialized to the extent that the interdisciplinary issues are not addressed and the business issues are wholly ignored. The result can be a perfectly good set of architectures, standards and policies that are unusable since they cannot be justified or implemented in the existing organization.

A second major area where The CTO Group adds value is in valuing the IT contribution to the business. The Cost of Information Technology (CoIT) is an important and relatively unknown component of ongoing business expense. Companies regularly collect and maintain financial information on the direct costs of IT. The collection and evaluation of a company’s indirect IT costs and Total Cost of Ownership is not a common practice. Even more rare is the ability to construct a durable cost model for the burden and contribution of IT to a company’s products. What is Information Technology as a component of cost for an individual product? How much IT cost was in the new car you purchased, and how did it contribute to the overall costs? Of equal importance is the issue of how IT should contribute. Is an organization spending $10,000,000 on a $2,000,000 problem? How does an organization make a strategic decision regarding how IT can and should contribute to the pursuit of the company’s business strategies. The CTO Group brings focus and capability to identifying and answering these questions.

The CTO Group is not intended to be a replacement for the services of the traditional analyst organizations. Each of these organizations has a specific set of product and service offerings. These are primarily focused on providing analysis and information about various disciplines and technologies. Although this information is valuable, it is not tailored to the specific organization’s situation since they lack the ‘intimate’ knowledge which The CTO Group establishes with its clients.