Alan Hansell

Alan Hansell

Alan Hansell is an IBRS advisor who focuses on IT and business management. Alan is able to critique and comment on IT and business management trends, ways to justify and maximise the benefits from IT-related investment, IS management development and the role of the CIO. Alan has extensive experience in IT management, consulting and advising senior managers in matters related to IT investment. He was a Director in Gartner's Executive program and adviser to over 50 CIOs and business managers and before joining Gartner a consultant with DMR Group. He also worked as an IS professional, manager and industry consultant for IBM for nearly 30 years. Alan is a CPA and Associate of Governance Institute of Australia.

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Conclusion: Assuming surveys indicating global IT spending is declining hold true in Australian and New Zealand, CIOs are in for a tough time in the next budget cycle. To arrest the decline CIOs have to go on the front foot and highlight the business benefits IT has helped secure and explain why each one is at risk if the IT budget is reduced.


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I was surprised when a CIO that had engaged an external services provider told me the firm was not delivering the project management services it had contracted to provide. I had earlier conducted due diligence on the provider and been impressed with its track record. The CIO stated the provider had not assigned an activist project manager and problems were not identified in advance and solved. The client subsequently terminated the contract.


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Conclusion: Whilst SaaS (Software as a Service) using Cloud computing has helped commoditise IT, it is not always the ideal replacement for in-house application development. Instead the axiom ‘look before you leap’ applies, and SaaS assessed on a case-by-case basis (including not only potential benefits but also the hidden costs, such as contract breakage should the SaaS solution be unable to meet changing business requirements).


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With financial and economic commentators warning of difficulttimes ahead, CIOs must be prepared and have arguments at their fingertips to justify continued IT investment in corridor conversations or at the Executive (or Board) when all operating budgets arelikely to be under the microscope.

It might be argued that business managers should present the casefor increased IT investment in their business systems, that is as owners or sponsors. However the reality is an increasing numberof information systems cross organisational boundaries and the CIO is often the only manager able to grasp the ramifications of and need for enterprise-wide investment in IT.


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Conclusion: Organisations which reach outside to acquire application systems solutions need to manage their risks well and be commercially astute while selecting the right vendor. To select the right vendor the tender document needs to be complete, reviewed thoroughly to avoid mistakes and based on an awareness of what the market will offer. Premature release could lead to the wrong vendor being selected.


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Conclusion: It is tempting for the Executive when the IT Department’s processes are failing or systems are not being implemented on time to direct the CIO to engage an external provider. Whilst the need to act might be urgent CIOs must avoid making hasty decisions which could lead to the types of mistakes, set out below, occurring.


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Conclusion: One of the functions of a board1 is to minimise business risks to the shareholders. As signing a major contract with a managed services provider involves significant risks such as the failure to deliver critical IT services, boards need to be convinced the risks2 are known and can be minimised by vigilant management.


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Conclusion: CIOs need a politically sensitive antenna to pick up items of interest or performance metrics that need to be included in their Monthly Operational and Strategic Update reports to the Executive or Board. Their antennas must pick up and focus on matters likely to be on the ‘radar screen’ of the Executive such as responses to a competitive initiative or the status of a critical business system's implementation, which may take priority on the agenda over 'business as usual' matters, such as IT service delivery performance.

Additionally, if a major online systems outage has occurred in the month, they will want to know its impact and steps being taken to ensure it does not happen again.

Strategic Update reports, which are usually required on a regular basis, typically focus on major achievements and initiatives planned for the next reporting period. These reports are aimed at keeping the Executive informed on how IT investment is contributing to meeting business objectives.


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Conclusion: One of the hardest tasks for CIOs and line management, unless there is a Board directive, is to convince the Executive to divert scarce resources from enhancing business-critical systems and update their plans on what they might do if a major systems outage or disaster occurred. Paradoxically, it is an easier sell when a preventable outage has occurred recently and the slow recovery has put the organisation’s reputation and their careers at risk.


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Conclusion: The drop in enrolments in IT related courses at academic and vocational institutions in the last 10 years and estimates of job vacancies in 2012 and 2014 are alarming.1 Whilst online job advertisements have declined in the last year, and pending public sector budget job cuts may free up some IT professionals, these are temporary blips and pale alongside long term vacancy projections.

To avoid being caught short in 2014, when unmet job vacancies will peak, hire the best graduates, improve productivity and retain proficient staff. Doing nothing is not an option.


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Conclusion: One of the challenges faced by senior IT and non IT managers is how to encourage right use of IT resources by their staff? One option, favoured by many organisations, is to charge business units for the cost of IT services and make line management accountable for outcomes and astute use of IT resources. Whilst the option is fine in theory, it comes with a price. The effort needed to collect and allocate IT usage costs is not trivial and often leads management to ask whether it is worthwhile.


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Conclusion: When assessing the options at outsourcing contract renewal time, ensure insourcing is included in the evaluation as, despite the changeover cost and risks, it may be the best strategy to pursue.


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Conclusion: Faced with the tough question, ‘How can the organisation reduce its IT costs without compromising client services?’ astute CIOs highlight the impact of the potential reductions by business unit and assist line managers to argue the case for retaining the status quo, to the Executive.

Conversely CIOs who notice the firm’s market share is dropping due to clumsy online ordering systems or excessive customer complaints about online IT services must take the initiative and, with line management, propose an immediate course of action to the Executive to fix the situation, even if it means increasing IT spending. Waiting for line management to act is not an option.


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Conclusion: One of the most challenging tasks for a CIO is to implement cultural change, or transformation, so it energises people and cements the business relationship with clients and suppliers. Instant success is unlikely. This is because implementing cultural change takes time as relationships have to be nurtured, trust engendered and staff empowered.


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