CIO Summit 2009 Roundtable: The global financial crisis and IT transformation projects
- 11 August, 2009 05:27
Below is the full transcript of the CIO Executive Council panel discussion from the CIO Summit 2009.
The panellists taking part were :
- Caroline Bucknell, General Manager, CIO Executive Council
- Carsten Larsen, Executive Manager, Information Services, Australian Communications and Media Authority (ACMA)
- Chris Clark, CIO, Brookfeld Multiplex Limited
- Garry Whatley, CIO, Corporate Express Australia
The topic for this year’s panel discussion was “2009: The Year of Opportunity, Not Survival":
CIO: Many organisations are in the middle of transformation projects at the moment. What are each of you doing at your organisation?
Gary Whatley, CIO, Corporate Express: From our perspective we have looked at the financial crisis as an opportunity -- but we are still looking for every chance to take cost out of the business. From an IT perspective, we looked to take costs out of the run component to provide dollars for new opportunities. But my budgets year on year continue to increase.
The best thing to come out of the current environment is that the business has focused on reducing the number of projects. We went in with 30 or 40 projects at the start of the financial crisis, but now have five we are really focused on and execute well on, which is real good news. We are re-engineering the front end of the business and the way we interact with customers. We are looking at our supply chain and re-engineering our processes, looking at how we can standardise and optimise them and reusing them using SMP.
The best thing to come out the current environment is that the business has focused on reducing the number of projects
As a business, we are investing heavily and getting into a better position for the upturn. We started some of this journey before the financial crisis, but since then we have really accelerated it and focused on strategic projects .
We had 30 projects, and it is easy to craft a good ROI, but we identified five projects that align with our strategy and really executed well on those.
Carsten Larsen, CIO, Australian Communications and Media Authority (ACMA): As a government department we don’t face a question of survival in the downturn. However, we live in a world where the Federal Government wants to see continual new efficiencies, so every year our budget for operational costs goes down. We have also just had the Gershon Review, which recommends a reduction in costs in Federal IT departments.
All of that brings opportunities, because it focuses the rest of the agency or department on IT and how it can help bring about those efficiencies. I always tell my staff: ‘If people come to IT and ask for us to be part of the solution then we need to empower those people; provide tools to help them do their job better’. When IT is added to a business problem we also have to make sure that problem is resolved faster. We act like a catalyst.
ACMA has been put together from many different departments and over the years has accumulated a number of varied systems. And it has now decided that it wants to be the world’s leading converged regulator. We have set off on a transformation program as a business and one of the most important parts is the IT shift.
Before the financial crisis we would have five people apply for a position at ACMA -- now we have 150. There is an opportunity to get better staff at a reasonable cost, and you can reduce the cost IT spends on outsourcing because you can begin to look at in-sourcing.
Chris Clark, CIO, Brookfield-Multiplex: Brookfield purchased us more than 12 months ago. Brookfield in Canada rang the bell for us last September on the financial crisis -- this is coming, be ready for it. Hence, we have a lot of pressure to consolidate. They took 30 percent out of the IT budget alone. If you take that much out of the business what is going to be the side effect? What are you going to tell the business what you will to be able to perform and not perform for the business?
If have numbers I can talk to the business about what it takes to support and maintain the IT environment
The outcome was that we went right back to the start and looked at everyone’s job description and what they were there to perform. We also built new roadmaps for the team itself, not just the project.
When you get down to working out the hours you get into the area of guesswork. How do you capture what staff actually do?
So we decided to implement a time management system for our staff. I thought I would have been killed -- have 30 knives in my back -- but since implementing it, I’ve turned the team around. I now have results which I can show to the team [so they can see] what we are putting into support and what we are putting into innovation. If have numbers I can talk to the business about what it takes to support and maintain the IT environment.
It turned into an opportunity for the business because it wanted to cut costs. I could show the business that it was the way it was using IT that was causing my costs: let’s sit down and start talking about what the business is doing with the applications, infrastructure, or multiple sites across Australia and the region, and how are they being used. We got to a point where the business was prepared to change the way it used IT to then cut costs.
One example is a report on mobile expenditure, which is mailed out to every user. That saw a 30 percent reduction on expenditure, through transparency of usage. Seeing the cost changed their usage.
CIO: What techniques are you developing for collaboration with the business? How are you building trust between IT and the business?
Gary: The trust came through when we pulled apart how we were spending on IT. The transparency brought the trust.
Carsten: Trust is the most important thing you can have as an IT department. If the business doesn’t have trust in you then you can’t be part of the solution to the businesses’ problems.
Trust starts at the PC. When people walk into the office fist thing in the morning and they switch it on, it works. E-mail and other systems are working. Make sure things work first because if the business doesn’t trust you to do simple tasks -- the fundamentals -- then it won’t trust you with larger business issues.
Make sure things work first because if the business doesn’t trust you to do simple tasks -- the fundamentals -- then it won’t trust you with larger business issues
I started a transformation project many years ago looking at how we could standardise our processes across the business. As an organisation we grew up being very entrepreneurial, so we had 50 ways of doing each thing. I pushed heavily with the board and exec to go down the process route, but there was a great deal of understanding and support for that -- and they did agree to go down that route. That all came down to trust. What I did was to deliver some quick wins to show that we were adding value as part of the new process we were putting in place.
CIO: Is there a disconnect between IT reality and requests from management for new technologies that they find in in-flight magazines -- cloud computing, for example?
Chris: Brookfield and Brookfield Multiplex are still separate entities that have to learn to grow together. We are looking at ways to solve this issue. People ask: can we put a certain service in the cloud or get it as a software as a service? That will open the discussion, but you still have to sit down and discuss what it is people actually need to do their job -- get away from the application discussion and bring it back to what they need to do, then look at the particular system to do that. The CEO may have seen a new technology, but you have to stop them and ask what it is they want to do.
Carsten: I see myself as a salesmen. I’m a CIO but also the head of a sales organisation that sells to the rest of the business. My aim is to outsell all the other guys so that my solution is front of mind for the CEO or whoever else has ideas about a technology they may have seen in a magazine. Have a rational conversation with management, but remember it’s about selling and having more light and glimmer than the other guys. See if you can keep that light going and make sure that the CEO looks to you rather than someone else.
Gary: I might offend someone, but the biggest issue we face is vendors. At the end of the day there has been too much over-promising and under delivering in most cases. Unfortunately our boards and executives, which have access to vendors, don’t understand the real situation in the organisation.
This is the time for IT to become part of the solution. We can help empower the business to run faster, smarter, better
CIO: Is the global financial crisis a chance to make some key changes? Can you offer any recommendations on how CIOs can use the GFC to their advantage?
Chris: We talked about getting your standard things -- deliverables, infrastructure, foundation -- in place so now my focus is on talking to the business. Being in IT means you can look across the divisions in the business and see problems such as a lot of replication across the business, and other things we can help with.
If you have that trust with the business then the execs will bring back these things that they are talking about and will work with you. We have a lot of people sitting on the bench at the moment, as no-one wants to do big commercial buildings right now, so hence they are all looking at ways to do things and running little projects around how to do things better. If you have that trust relationship, go for it.
Carsten: This is the time for IT to become part of the solution. We can help empower the business to run faster, smarter, better. From a practical viewpoint it is easier to get IT staff than before. You can also get hardware solutions and infrastructure items at cheaper prices if you negotiate well. People are willing to get sell things for next to nothing just so they get rid of their inventory. If you have a need, go out and see if you can get a good price, go back to the business and tell them you have a chance to get a deal and you might end up getting it this year instead of next year.
Gary: This is the time to bring IT closer and much tighter with the business. Talent management will be essential; once we come out of this the fight for talent will be much tougher. We do see all the transformation from a business and IT perspective is there, but talent management is there too.
Audience question: Chris, can you discuss your decision to open up how your IT hours are spent and to share that with the business?
Chris: I didn’t approach the business with it first. It came out of the process of the financial crisis. I had to work out how many hours it took just to keep the lights on. A lot of that I had to do on speculation -- I didn’t have hard fact numbers. At the same time when you’re running a project and you have a lot of consultants in and you’re signing invoices -- have you entered that time into your systems? Because we charge the business for any work done and so need cost validation. I wanted to get a sense of how much time was spent on working on support and how much on innovation and business development.
What I have taken to the business is some very high level reporting that shows some figures around how much is spent on support and innovation against the budgets that are assigned to our roadmaps. I’m also KPI-ed on how much the business spends on innovation, so I can tracks all the hidden funds they have been able to find. So I needed a way that I could show the business I had clear visibility financially and investment in staff.
Staff could also see that they weren’t just keeping the lights on -- they were getting some traction. Three months down the track I could show the staff the report which showed that we had moved from 90 percent support 10 percent innovation to 80 percent support and 20 percent innovation. Because you have so many people on the team who are not sure about what they should really be doing, this really bought clarity. The business can see it is getting value for money and it has helped the staff, too.
Audience question: Gary, how did you bring 30 projects down to five? What was the process?
Gary: We got the executive around the table and decided on projects that were, 1) strategic and 2) delivered the value we wanted. What we found was that we didn’t have the resources do 30 projects at once.
When we decided on the ones that were strategic, we found that there was enough work there for 12 months anyway. There are lots of the areas pushing for projects -- and in some cases they have a great ROI -- but they weren’t strategic. We had limited resources and needed to focus. The ones we focused on were really the game-changing ones.
Audience question: How does IT help the business improve the way it does business?
Carsten: You can achieve savings across the business using IT. We have a $4 million travel budget for example, and we have used video conferencing to pull a significant amount out of that. One thing we have at ACMA is consolidating business processes -- not having the one complaints system, but having the same process for handling complaints. Not having different processes for every single silo.