I have spent most of career as a CIO. I have actually bought and deployed RightNow. I have bought and deployed Salesforce. I have bought and deployed Oracle On Demand. So I am pretty familiar with how to do that. So that is usually what I end up taking to them about.
It probably has more to do with understanding what is required to be successful. And every solution has its own unique requirements. One of the things we talk about is you do have to make sure you are thinking about what you do in terms of the services you provide to your customer – the business unit, and less about the infrastructure management piece. You need to broaden your horizon. And maybe be a little more value add to the business. I started using this term a couple of years ago – ‘virtual CIO’ – and it is just a recognition that if you are going to give me some of the responsibilities that you have traditionally done in-house, then I have to be thinking in the same way you’re thinking in terms of how I run my operation. So making sure you have got visibility in my change windows when I do changes in the environment. How I handle incidents if there are issues. How I do problem management like a route cause analysis. And the investigation of that and how it gets documented, and when you can get access to that information. This is all stuff CIOs do internally. I just realise I have to do it on their behalf. I have to do it professionally. Usually it is a combination of talking to them about virtual CIO and that program we are running, what it provides them. And also talking to them about ‘well if you are going to run Software-as-a-Service, the benefit to you is to do more work at what I call the ‘business partnership’ -- the strategy, the configuration, the deployment and maybe some of the analytics work; a lot of the stuff where you are working very closely with the business on analysis work, architecture and solutions development, and not worry so much about keeping the lights on in the data centre. So it is hopefully an opportunity for a CIO to ship some of their resources to areas that they are probably already doing but would probably do more if they are not having to run everything on the back-end as well.
You have talked about how a recession is a good time to be thinking about Software-as-a-Service. Why?
I don’t just talk the talk, I walk the walk. So we use Software-as-a-Service to provide our Human Resources management system; we use a company called Workday. I use Taleo to do recruiting management. I use Concur to do my expense management. I use Orbitz for business to do my travel. So all of this stuff is somewhere other than from within my datacentres. At the end of the day, for me and probably most other companies in a tight economy, being able to provision capital and make strategic capital investments into the business sometimes can be something difficult to be achieved. You have to prove ROI that comes back at you within a 12 month cycle so you can see the impact within the current calendar year. When you are buying Software-as-a-Service a lot of times those time lines are extended. So you are really getting five years potentially worth of software benefits for the price you paid at any one point of time because of that the cost of entry is low.
The other thing we are able to do is provide a pilot because we can provision the software so easily out of one of our existing datacenters. We can stand up a pilot potentially in the e-services space, email management and actually demonstrate the ROI and say ‘see you are getting 10,000 emails a day and now 40 per cent of them are being self serviced in the knowledge base and because of that you are going to be able to slow the growth of your customer care organisation’ or something along those lines; we are able to do that with customers. So within 30-60 days we can really prove out the ROI which makes it easy for the CIO to go to there board and say ‘I want to make this investment because it helps me take care of customers’ which you want to do in a down economy ‘and it also helps us save money because I don’t have to go out and provision this large team and hire staff’ and do all those things which create permanent costs structures in your orgnsiation. That potentially makes you less nimble to manage your expenses.
The cost-cutting benefits of SaaS are what vendors talk about to lure clients. Is that too narrow a focus on the benefits of SaaS?
I am a pretty pragmatic guy. A CIO wears many hats. One of them is to deliver functionality to the business. Using technology in as much as it is critical to the business. If you don’t do that CIO means ‘career is over’. The second hat is efficiency. A lot of CIOs sign up for expense reduction year over year. One of the things I do in [RightNow’s] IT services [department] is we say every year we will take five per cent of the costs out of the IT services organisation. But efficiency, given the costs reductions associated with IT a lot of the times, is pretty important.
If the CIO says, ‘I want to deploy Software-as-a-Service and the primary reason I am doing it is because I want to take costs out of my business,’ I think it is legitimate. It probably doesn’t capture the full capability of it but I think the deployment mechanism and the choice that companies now have to use Software-as-a-Service vs on-demand is to a large extent about economics. We [RightNow] compete in the market on the best of breed service delivery like contact centre, marketing and sales force automation. And I think that is where people normally start. They are looking at ‘what tools do I need to solve problems at my business?’ But if they want to brings us on board because we are a lower cost alternative for them – that’s fair. I think that is a reasonable thing to do.
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