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Saturday, April 08, 2006

IT As A Powerful Agent Of Change : CIO Panel

Erik Keller moderated the CIO panel discussion with Toby Redshaw from Motorola & Con Goedman from Shell at Software 2006. I got the opportunity to discuss with all the three of them in the three days on numerous occasions on a variety of topics – CIO dialogue sessions, other sessions, dinner meets, coffee breaks & get togethers. I spent lot of time with Erik Keller as well – he has some insightful ideas on the future business model of enterprise software companies – hopefully he would be publishing those views in the near future. Now from the CIO panel discussions:
Toby Redshaw has some well thought out views on the IT industry, particularly on vendor management. I sort of liked his take that the sales guys of the software companies are not to be confused with the relationship guys of such companies and how he manages to leverage the relationship centric folks to get things done. His record speaks out – he has brought down the IT spend from 1.4 Billion USD to under 1 Billion USD mark in less than four years. Heavily banking on building web services discipline to build necessary frameworks, he says that he is able to bring down the deployment time period and the total resource spend on new initiatives. To a pointed query from Erik Keller, Toby said he deployed solutions from newer companies like Bill Coleman’s Cassat & Pramod Haque promoted Cast Iron to lower infrastructure burden on the IT budget. Toby brought out the IT value add need not be just measured in quantitative numbers but being able to deploy collaborative using social network software like wiki’s & blogs gives tremendous good will towards IT. His operating philosophy as he explained is to cut through the managerial layer and empower and create opportunities for operational people. He pointed to the pull power of such collaborative mediums – he said without any formal announcement of blogs/wikis launched within his company, he says several hundreds began to use those – based on just word-of-mouth references. He also mentioned that the knowledge management system built inside Motorola are very widely used. Showing an heavy action bias – he repeatedly used the term- "I just don’t care" during the panel meet, he said that in the near future he is looking towards deploying new versions of Microsoft products - Vista and Office 2007 and hoped that it would help things further inside Motorola to improve effective IT usage and bring down costs further. Con Goedman from Shell supports IT functions that are used by more than 100000 users and he believes that usage of IT is the best criterion for its successful deployment. While Toby showed a preference for working on smaller projects, fast deployments and working with a variety of vendors in pursuit of it, Con says he takes a very different approach towards vendor management and solution deployment. He believes in building relationship with a few vendors – established large vendors so that he need not be worrying about their viability or future. Toby said that the product engineering cycles and cultural alignments between bought out companies could be on a perpetual conflict mode – that can be frustrating to buyers of such products. I was also hoping to hear from Ashwin Rangan from Walmart – he was supposed to join the panel but did not( may be he returned back little early) – I did speak to him the previous day in the meet on a few issues.. I was curious to listen to his perspective as well, because unlike Motorola or Shell, Walmart thinks it would be nuts to outsource.
As I see it, Toby & Con are very powerful initiators of change - Con in fact questioned Shai Agassi in an early session about how much it would take for organizations like Shell to embrace SAP’s enterprise 3.0 architecture after spending hundreds of million dollars towards deploying SAP. Con told me later that Shell has no idea to move out of SAP and in fact all their efforts are to work more and more closely with SAP to deliver better value. We have earlier covered Toby Redshaw’s very insightful approaches towards deploying solutions. Toby in a different forum raised questions like "What happens if you are 25% less efficient in IT than your direct competitor?" Don’t know? Then ask your self the question: "What happens if you are 25% less efficient in customer acquisition and retention or supply chain?" Those questions are related and as he sees it will be more so in the future. He prefers adopting an intervention model towards making change inside enterprises. As he sees it there are only a limited number of ways to make change happen in a company, the two main approaches being the selling or persuasive model and the edict or the intervention model. While persuasion is the most common within the enterprise, Redshaw claimed studies show that the intervention model is nine times more successful than the persuasion model. What came out clearly was the fixation of the CIO’s to increase the influence of IT and its value add to business and towards this pursuit different CIO's are taking multiple approaches. Also more and more value would get driven from the "edge technolgies" rather than just fron the "core platform technologies". To me what stood out was the fact that CIO’s are embracing new age technologies like blogs/wiki’s faster but there was no established preference for opensource at the application layer or SaaS centric solutions - after all these people control the budgets and set the tone for the industry adoption of newer technologies. Clearly the trend of increasing IT spend across the industry shall see more and more CIO's pursuing more efficient, value adding and innovative strategies -other members of the ecosystem - software companies, system integrators and business need to leverage the expertise lot better to realise the vision of delivering better value.

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