Over the past year, a clear set of themes has dominated the agendas of global CIOs. We asked Rod Vawdrey, president of the Global Business Group at ICT leader Fujitsu, how some of these major challenges are being addressed…

THE CIO’S PIVOTAL ROLE

Many CIOs are on a mission to align IT much more closely with the business’s priorities. Are you seeing the disappearance of the standalone IT function?
Rod Vawdrey: In the past, the IT department was just that: a department, separate from the rest of the business. But in many industries that we work with now, IT is becoming the business’s integrated network; the business can’t operate without the connections [IT enables] between individuals, horizontally and vertically. So, the IT function has to become pervasive and help to link the organization to all its stakeholders, whether those are customers, shareholders, suppliers or whatever.

To a large extent, IT is now starting to drive many changes to business processes within organizations. It’s not only an enabler of change, it can also be the precursor to necessary change. Organizations are having to respond to competitive, economic and regulatory pressures, and they’re using IT as a way to respond, making information more accessible and getting it to stakeholders faster.

Is it typically the business or the IT organization that sees the potential for IT-enabled process enhancement and pushes for that improvement?
It’s coming from both. Businesses are calling out for ways in which technology can help them to get the job done better. IT is aware that it’s no good putting in a system without attacking processes so it can be more efficient and deliver the outcomes that the business wants.

There is also a wider issue here: the Internet, the web and mobile technologies mean employees are much more exposed to IT in their everyday lives. So it’s no longer the IT department and the users of IT in different boxes ― it’s everybody in the business using IT and everybody in the business understanding the potential of IT.

PARTNERING FOR SUCCESS

Are there aspects in Fujitsu’s Japanese heritage that particularly support that closer engagement?
Yes, there are several attributes. Firstly, as a Japanese company, Fujitsu has an innate focus on continuous improvement: it’s in the DNA of the company. The second thing is that Japanese companies are very much concerned with building long-term, enduring relationships with clients. That manifests itself in how Japanese businesses are growing out from Japan into the global market.

And the third thing is innovation: inherent design and comprehensive end-to-end portfolios. Why do we have such a broad portfolio ― network devices, network equipment, mobile phones, tablets, desktops, notebooks, servers, high-performance computing systems, almost every core area of IT you can think of? By having a broad portfolio we can support our customers wherever they want to engage with us. And whatever the area, you can be sure that you’ll get the same quality wrapped up in a set of services. So it’s very much in the Japanese company’s DNA to be able to solve as much of the problem as possible.

Is it necessary for CIOs to be at the management board level to be truly effective?
CIOs today, first and foremost, need to have a deep understanding of the business. They need to have access to and talk to the people who are setting the strategic direction in the company. Now that may mean sitting at the main table, the CXO table, or it may mean regular representation on the board.

I think more and more you’re going to see two types of CIOs: those who have come more from the traditional MIS computing background and who may continue to report to the COO and CFO. And then you’re going to find the major corporations that are really on the cutting edge of changing and growing their businesses. Those CIOs are more likely to be hybrid business guys who also have a literacy of and understanding of IT.

I think there will be a gradual shift but there’ll still be a place for those who’ve come from the engineering and technical background, especially in some of the more technology-intensive industries like telecoms. But looking at banking and some of the government areas, it’s more about customer service, channels to market and how you can take a technology and fundamentally redesign the whole basis of how we do business. And that’s going to take a great deal of business understanding as much as deep technology expertise.

Does the advent of cloud computing reinforce that separation of technology and business skills, where the primary skillset might be making sure you create and manage the optimal matrix of partners?
That sort of holds true for any type of outsourcing model. But when you’re doing that with your IT infrastructure and talking about where you put your data and your corporate information systems, you need to have a partner that can help you to build confidence within the organization and with the executive board. You’ve got to have huge confidence because it’s not as easy to bring outsourced IT back. You’re fundamentally changing the delivery model. So you’re looking for a partner that can manage the risk profile as well as the technology.

Fujitsu’s in a unique position. We have some 100 Tier 3 data centers around the world and we’re now rolling out a global wide area network so that every one of those data centers will be networked together. So you can put your data in any one of them and know that it will be protected in a consistent way, in any country in the world.

GLOBAL REACH

If you’re a global CIO, size is obviously important when partnering on cloud.
As a supplier, you need global reach; you need stability. Global customers are looking for an organization they know is going to be around for the long haul ― they’re looking at financial stability, they’re looking at a company that works at the cutting edge of technology. When we talk about an outsourcing relationship of any sort, it’s not just a service relationship: we also want to future-proof that relationship with the company, which means we link our R&D investment to the services equation, so we can say to customers: “If you’re thinking of going in a certain direction, this is where the technology’s going, this is what will be in the devices tomorrow, this is how the network will perform, this is how we’re dealing with digital security.” We’re not just a pure service provider: our services are underpinned by our technology as well.

How will cloud change the dynamics of the industry?
Software is one area where we’ve done a lot of partnering, but we’re also building our own capability. A major strategy going forward is to have more of the software stack as an option for Fujitsu, especially now that we can build very powerful software portfolios using open source technology, while also partnering with other industry leaders.

Cloud presents a very interesting opportunity because some of the major software companies are dealing with a very big challenge because their main revenue streams come from on-site licenses with large maintenance fees. With software-as-a-service, we don’t have to cannibalize existing revenue streams to bring cloud to the customer and that puts us ahead of the competition because we’re providing customers with a consumption-based model.

What’s holding back the software industry at the moment is moving from traditional on-site licensing to true subscription-based, pay-as-you-go, consumption-based models. So it’s giving us an opportunity to make investments with the clear understanding that the way they’ll be delivered will be self-service, pay‑as‑you‑use.

Another key attribute of cloud is that it gives us access to new markets. This is the first time that small and medium enterprises have been able to get enterprise-grade IT without having to spend hundreds of thousands of dollars building an IT department. With a monthly subscription, they can get the same price performance as a major enterprise.

So it opens up a whole new opportunity for our customers and partners to be able to compete. For example, there are thousands of independent software vendors out there with very good applications but they are restricted in their ability to reach the market. So if we can help them to enable their software for cloud, we open up a huge, expanded market for them and for us. And because we have this shared infrastructure in place now, we can respond to local markets and regional markets as well as to those global customers that want that global footprint.

Rod Vawdrey was appointed corporate SVP and president of the Global Business Group of Fujitsu Ltd in April 2011. He applies more than 25 years of experience in the ICT industry to operational responsibilities that extend to all Fujitsu regions outside the company’s native Japan. Vawdrey was previously CEO and executive director of Fujitsu Australia and New Zealand.

Photography: Bernhard Huber