Harnessing the IT megatrends that drive business value
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Harnessing the IT megatrends that drive business value

I-CIO editorial team – October 2012

Social, mobile, cloud, big data: the rapid convergence of these megatrends is not only creating new opportunities for business value, but also fundamentally changing end-user behavior. In response, CIOs have made “developing or managing a flexible infrastructure” using cloud technologies a top-three strategic priority (in Gartner’s CIO Survey for 2012) and “implementing mobility solutions” a number 7 priority.

Alongside that, their spending on big data is set to reach $16.9 billion in 2015, and 85% of those who have been implementing enterprise social networking say it is boosting collaboration, saving employees time and helping them to find answers to questions faster. Here, we ask four IT leaders about their own efforts to harness these megatrends to deliver real business value.

Ben Haines
CIO, Pabst Brewing Co
Largest US-owned beer maker

Everyone talks about the consumerization of IT, but the real impact of that for CIOs is that our consumers of IT in the corporate enterprise are now a lot more knowledgeable about technology than they used to be. IT organizations used to be able to say: “We know what we’re doing and this is what you’ll do.” Today, if you try that, end-users will just work around you.

Cloud is an enabler of so many things. From an end-user’s point of view, you just need a credit card and an available cloud app, and you can do what you need. From an IT point of view, you have to embrace cloud, or risk extinction. There’s still a role for IT in the cloud-enabled company, of course. It’s just different. You still need to understand where key information is; you still need to avoid creating information silos in the company; you still have to ensure that the business has the right tools to work as effectively as possible.

In terms of the team that they lead, the modern CIO needs fewer systems admins, but more business analysts and more project managers. Our job now is to integrate applications, to bring on new services quickly and to be as knowledgeable as possible about business processes. The real skill lies in being able to “join the dots” around how the company can best get work done. As service providers become the first level of help, IT people need to understand a lot more about managing service providers. The job is less about managing infrastructure and more about managing relationships.

The beauty for me of cloud and mobile is the speed at which I can implement big changes in my organization that really make a difference to its entire workforce. It is great, as a CIO, to be presented with a business problem and to be able to say, “Yes, I think I can get that solved. Give me 30 or 60 or, at the most, 90 days.” And, having made that commitment, you can move at the speed of light.

But you know what? Once that change is in place, the business is always ready for more.

Update: Ben Haines has since become VP for corporate applications and platforms at Yahoo!.

Benno Zollner
CIO (International Business), Fujitsu
Global ICT giant with revenues of ¥4.8 trillion ($46bn)

Mobility and the cloud are the two major areas that will change the way IT teams operate and how the IT organization is run. In the future, I think we’ll see more technology that combines cloud, web-browser technology, HTML5 and mobile devices, and does it in a compelling way. This will help us reduce the maintenance costs of front-end systems and get to a more standardized, user-driven working space. And it will emerge in the next year or two — we’re already piloting the first production versions in Fujitsu’s labs.

However, some of the business-critical applications required by end-users aren’t yet ready for this kind of infrastructure; the web services of some applications are not as good as many native desktop apps and not as robust, but development efforts in this mobile/cloud direction will continue to narrow that gap, especially for commodity apps. Increasingly, CIOs will see they don’t need the full IT stack any more, but that cloud- based offerings will be accessed via web browsers.

As a result, mobile and cloud will change the role of CIOs and those who don’t anticipate the technological changes may find they are dealing with too much upheaval. You need to see what’s coming, know what your strategy will be and adapt your IT accordingly.

For the CIO, there’s going to be a greater requirement to focus on strategic topics and stay closely aligned to the business, understanding its needs. Strong communication skills will be essential: if you treat the business as a customer, if you work with people in it for direction and then execute in a way that helps transform the business, there’s an opportunity to make a real difference. We’re seeing these changes in IT and the CIO’s role already. Adapting to them is mandatory for survival and essential to being a “strategist CIO.”

Maria Teresa Cruz
CIO, Insular Life
The Philippines’ oldest insurance group

Several years ago, IT could really box in the requirements coming from the rest of the organization. But now new ideas and initiatives coming through from right across the business mean we need to be much more flexible. Given the scope of the things we want to undertake at Insular Life — application transformation, mobile apps, deeper business analytics and cloud, where appropriate — the issue for us is how to prioritize based on business value.

High on our agenda is the need to transform the company’s core policy administration system — a legacy application that we want to bring into line with the browser-based applications and tools that enable our customers and agents to access information on our central systems over the web. That will not only help us cut costs, but will also bring us agility in terms of creating new products and services — not just in life insurance but in investment and health care.

Alongside IT initiatives to grow the customer base, there is always the pressure to bring down costs — software licensing costs and costs associated with upgrades and scaling up hardware are two target areas. That’s where cloud computing could potentially benefit us, but it would also introduce a new set of issues.

Today, our IT infrastructure is largely internal, with connections to our branch offices across the Philippines archipelago [of more than 7,000 islands] provided by a telco. So, for us to adopt cloud, we’d have to have confidence in that comms infrastructure, and today our country still has challenges in that area. Insular Life is nationwide, but there are several islands that do not have robust telco coverage — with some branches, the only option today is to use wireless communications.

However, we’ve done the math and there are real potential savings. For example, we’ve started using SaaS-based conferencing and collaboration, but the adoption is cautious as the service is delivered from outside the Philippines and we want to fully understand any performance issues before taking it further.

Vivek Kundra
EVP of emerging markets, Salesforce.com (former CIO of the US Government)
Pioneer of software-as-a-service cloud model

Since I left the White House, I’ve been traveling a lot. And whether in Japan, Australia, the UK or Canada, there are universal challenges in both the private and public sector. I believe that, even if every single IT project came in on budget and on schedule, the end-users would still be unhappy with many of the outcomes. And the reason is that many of those are being built for the conditions of the past decade or even the 1990s.

“The battle is over. It’s not about whether we should or shouldn’t use cloud, but about which business processes we move there.”

The second truth is that, in an era of austerity, there’s little patience for runaway projects where billions are being spent on, say the National Heath Service in the UK or many US Department of Defense projects, or the broadband initiatives in Australia. The old models of just throwing bodies or high-priced consulting at problems are not going to work.

The impact of cloud in the past two or three years is reflected in the fact that it is, essentially, old news. It reminds me of conversations we used to have in the mid-1990s around whether to launch a website or use enterprise-wide email. We’re getting to a point where, in the US at least, we’ll see government agencies across the board saying we’re using cloud from here on.

The battle is over. Before, you’d have to make a compelling case why you should use cloud. Now we’re having a fundamentally different conversation — it’s not about whether we should or shouldn’t, but about which business processes we move.

Is that having a permanent impact on the role of the CIO and where they sit within the wider organization? Absolutely, because cloud abstracts a level of complexity and empowers business users to ask, “Why does this project have to take two years and why does it cost hundreds of millions? Why don’t we just provision the services from the cloud?” I’m seeing that change in both private and public sector roles.

First published October 2012
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