In today's economic scenario, how can CIOs get the best value out of shrinking IT budgets?
Although it may sound harsh, I would say that the CIO should stop spending. He should evaluate his existing assets, and then decide what he can deliver using those assets. For example, assume that you have 20 servers, 25 databases, 30 applications and a staff of 25 programmers. Can you deliver the value that business requires with this staff without hardware investments?
Yes. This can be achieved with reengineering, re-staffing and staff rotation.
A CIO should also resist the tendency of unnecessary upgrades or migrations. Don't get carried away by what vendors suggest. For example, suppose I have a budget of Rs 5 crore. That budget should be used for extracting new value out of existing software. Instead, for most CIOs who have an ERP implemented, the effort is to go to the next version just for a couple of new features. In my opinion, you can implement add-ons which extract those values from the old system. If you have good programmers, this can be achieved. If business requirements absolutely demand a new version, definitely go in for it. Otherwise, the old system can be tweaked to get incremental functionality.
Be a bit more conservative on infrastructure investments, and try to use outsourcing as much as possible. If everything is in-house, you are not able to make 100% use of this investment. For example, most hardware runs on 25-30% of capacity, whereas 70-75% capacity goes waste. With outsourcing in place, you pay as per your usage. So you save on capital investments and running costs.
Can you give us some examples of the aspects that can be looked at for outsourcing?
Common concern here is of security going out of your control. Always understand that it's a matter of governance. If proper governance is not in place for your IT setup, this can happen even in a new organization. So outsourcing is not necessarily the culprit.
Should you renegotiate existing contracts?
How do you handle re-staffing and re-skilling?
Second is that I always create new challenges for my staff by putting them in charge of a new technology every year. So they gain new skill sets. Always ensure that they have an enjoyable experience. You have to see that they should find a career in the technology.
With IT budgets coming down, staff training has also come down. How do you cope with that?
For example, we had undertaken migration from Microsoft SharePoint Portal 2003 to Microsoft SharePoint Server 2007. The challenge was to migrate Hummingbird IDMS to SharePoint Server 2007. Now the staff member was not conversant with SharePoint Server 2007, but she mastered it and completed the migration in three months.
Now, I had the budgets for outsourcing, but the objective was to create a challenging opportunity for a team member. Today we are able to roll out the technology in other parts of our business. We'll also be saving at least Rs 50 lakh.
What about using cloud computing's touted benefits?
So our sister concerns use part of my ERP -- the catalog management system. We've asked them not to buy any software and hardware. Our manpower manages their system, and we charge them a very nominal fee. Such efforts substantially reduce hardware and software costs.
How can a CIO deal with reduced IT budgets? M D Agrawal, the deputy general manager of IS (refinery) at Bharat Petroleum Corporation Ltd., shares tips.
What is the biggest challenge in getting a job as a first-time CIO? Is it out-competing others who look similar on paper?
I think there is a tremendous amount of competition. Most of the CIO positions out there are usually going through some type of an executive recruiting network. The recruiters I talked to don't usually pull up a set of criteria in a database online. One recruiter I talked to doesn't even recommend candidates putting information into an executive recruiting online database, because most executive recruiters aren't going to use it. They're going to look to the contacts and network of sitting CIOs or deputy CIOs to ask if there is someone on their staff or someone they know.
You became CIO of the World Wildlife Fund at age 37. What helped you most to get that job?
I was recruited for it. I did not approach an executive recruiter for that position; they approached me, at the recommendation of another sitting CIO. I had established my credentials in the private and for-profit sector. I had gotten experience with a variety of technologies at some pretty tier-one organizations: it was Sallie Mae on the financial services side, and PricewaterhouseCoopers on the consulting side. I had gotten all my tickets punched. I got my technical MBA at Johns Hopkins University. I actually took it a step farther. A year after I obtained by graduate degree I started teaching as an adjunct faculty at Johns Hopkins -- intentionally.
As a way to increase your network?
Increase my network, increase my exposure. As an adjunct faculty I was giving back to the IT community and the educational community, but at the same time I was greasing the skids for easier access to publications. When someone was looking at my bio and saw I was a director of this, a tech MBA and teach at a graduate level, when I submitted articles I believe they had a little more merit behind them.
What's the biggest mistake you made in plotting your career?
I'm not sure that I made any.
I really don't think that I have. I've gotten consulting experience, I've gotten for-profit experience, I've gotten Big Five experience, I got my tech MBA, I've got publishing experience, I've got my graduate adjunct faculty. The only thing that I would -- I don't know if this is really a mistake. I was about to say, started my graduate work earlier. But Hopkins wouldn't really let me enroll in the program until I had a specific number of years of business experience.
Fifty percent of your experience is in consulting, and you strongly recommend that aspiring CIOs work as consultants. Why?
You've got to get both sides of the fence if you want to be a viable CIO. You have to understand the consulting proposition. You have to know also how to manage consultants and vendors.
Being a consultant makes you a little bit humble. There are many instances where you have to sidestep and put the brakes on what you may know technically or business wise. You may have to deal with a client or a customer that is not that smart or that doesn't know as much as you do, and you've got to figure out creative and diplomatic ways to get that customer on board or eliminate any roadblocks that the customer may be putting up. In the organizations that use consultants regularly, some of the internal employees are a little bit jaded. They're thinking, 'Why did we have to go to the outside, when we could have probably done this on the inside.' Serving in a consulting role gives you far more experience than flat-out IT experience.
I have a simple phrase: IT drives technology decisions. The business units drive application business technology.
Then, halfway through Chapter 8 is when I start talking about integrating sports to build your relationships and to grow your network and build stronger relationships with your vendors.
It doesn't have to be about who pays for what, as I clarified in my book. My guidance to people is, check what your policies are. If there is a no-pay policy, fine, pay for yourself. There are some clear benefits of getting out of the office and spending some time with people, getting to know them. And at the end of the day, because I have a better relationship both professionally and through sports, I have several vendors who I can pick up the phone and say, 'Listen Tom, I need this done, you need to help me out with this.' Now granted, they should be able to do that regardless, as a vendor. But it doesn't work that way. And if you look at the quotes from the vendors in the book, people tend to reciprocate, form partnerships and get more stuff done, cut through the [bull], when they have a better relationship. And I have found that a 30-minute meeting in my office doesn't get me a better relationship with a strategic vendor.
Let us know what you think about the story; email: Linda Tucci, Senior News Writer
Gregory Smith, author of "Straight to the Top: Becoming a World-Class CIO" and CIO of the World Wildlife Fund, talks about his carefully plotted route to the executive ranks and offers some tips for aspiring CIOs.
Did you have a backup data center outside the city? How did that work?
We were running out of California on the back-office system. On the first day of the hurricane, we were able to migrate all the Web site functions to Dallas.
Was that a prearranged plan?
I'd love to tell you 'Yes' -- that I had that foresight. But honestly between you, me and the grand piano, I was trying to migrate away from California and get back in house. And I was very thankful that was one of my timelines that slipped. I (would have been) flipping on the New Orleans migration that week. So I learned a very valuable lesson there.
And that is?
And that is... there is no one hardened environment that is anywhere near as powerful in a disaster as a distributed one. Period.
In other words, I would not say, 'OK, if New Orleans goes away I still got Houston.' It still wouldn't work for me. What happens if Houston's not there when this happens? You're still putting yourself at a single point of failure, is my point. So what you do is think in terms in of pure workflow. What are my critical things? Dispatch. What does that really involve? Well, it might include home data to CAD (Computer Aided Design) data to federal data. And you build a system and a workflow around that. And you can do that via relational databases. You have to have your process flow across those things, various supporting infrastructure, if that makes any sense. It's kind of out there.
What we did was focus not on gee-whiz stuff, but bang-for-buck stuff, to get the cash. It's like those IBM commercials about things that don't really happen in the real world. I didn't have the luxury of only flipping a switch for this department or that department because I knew I would have to do the back-end integration, and there goes all my savings. So if I flip it all at once, and get voice and data at the same time then I really do only buy one switch. And I really do save the cost of it.
People say, 'Man, you did the largest VoIP in one year. You did 2,500 phones. No city has ever done that. Man, you must really love VoIP.' I say I couldn't care less about VoIP.' So why did I do it? The features? Or the Web browser? Nope, I'll tell you one reason I did it. The same reason we did everything: saving money. Because in the end, we had a $3.2 million budget for phones. And $1.1 million of that was getting the Bell South guys to keep moving the same damn lines back and forth.
They charged me $100 per hour to do that. With VoIP, I plug it in -- and the number follows me. I think I can save $1 million per year doing that. Then we said, 'Well how do we do that? What we can do is get the VoIP. We flip it all at the same time; we count the dead lines. So we turned off 25% of the lines, right there.
You have to keep the bandwidth down through a series of frame-grabbing things, but also keep your chain of custody clear so the lawyers can't it throw it out. So we had to go through a lot of rigmarole and ACLU guidelines. And then on top of that we … didn't have this huge network to handle that bandwidth. So we had to make them completely mobile and peer to peer, it was really a gumbo of a lot of stuff.
Air Force One calls and you have to call a number back for security reasons. I said, 'Mr. Mayor I've got Air Force One on the phone that I just stole from Office Depot yesterday.' Stole is probably not the right word -- commandeered -- but that defines it.
The tragedy of it, for me, was that we went through six days of hell and then the guy I was bunking with killed himself. It was both of those things. It sounds cliché but it was really, really a one-of-a- kind triumph and one-of-a-kind tragedy. Actually, there were a lot of moments that I won't forget. There was also, frankly, pulling people from the water. I hate the way this sounds, but I've got two Mercedes and a 60-foot yacht and I've traveled the world, and all that stuff. But there's something about pulling somebody out of the water that is just a wonderful feeling. She had broken ankles. The fact that I could carry a lady with broken ankles and put her in the back of a Humvee... It's that feeling. I won't forget that. I won't forget the bad part. But I won't forget the look when somebody's there and you're pulling them out. You just never get a chance to actually save a life. That's better pay than anything. I've lost a lot of money from lost opportunities -- and just money -- by being a civil servant. But that kind of pay you just can't get anywhere else.
What that allowed us to do, and it's so much easier even than FrontPage, because you literally are able to add functions for credit card costs that really work and take into account all the government factors of doing that. We built a product on that. Before we were low tech; New Orleans had no reputation for tech. Then Steve Ballmer was bringing New Orleans up once a month I heard, talking about Great Plains and our help -- and we were just a stupid little city doing that.
But the Web site doesn't go down and it doesn't crash and we're able to add really complex services back in and out -- because of this content management system we run it on. So we moved that to Dallas (due to Katrina). I've got a handful of Web guys here and they just log in and move objects around. You're going to continue to see that Web site morph from rescue and recovery to now, restoration and things like that. And we're able to do it in the middle of our trimmed-down, army-fatigue-type setting we have here. And just move the objects around.
For instance, we turned on a donation type Web site. People said 'You've got to do one for New Orleans.' And literally 36 hours total, from start to finish, from the mayor saying 'I want to do that,' to us making it live and taking credit cards, we have a Web site up. That takes credit cards. That runs to the government account. That has all these government-oriented ways of doing things. Bureaucracy is kind of built into the product. We're very seamless here. We don't have a rigid customer-vendor thing. It's much more accurate to view the city of New Orleans and our relationship with our contractors as though we were business partners.
weigh use of social media against security concerns
[Linda Tucci, Senior News Writer]
CIOs are trying to balance the business use of social media with their...