CIO Straight Talk Issue 1
Content
CIO CI O
ARE YOU Y OU A “REINCARNATE
CIO”?
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If not, how do you achieve this enlightened state?
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DISPATCHES FROM THE FRONT LINES
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Experience-based insights about current CIO challenges.
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HCL Technologies and Unstructure™ launch Straight launch Straight Talk , a platform for peer-to-peer exchange of practical ideas on a variety of topics and for a variety of audiences — including CIOs. If you’d like to share your thoughts, there are three ways to join the conversation: subsequent issues of Straight Talk publications; publications; a Straight Talk Web Web site and discussion forum; and in-person Straight Talk events in your geography. The online forum will help maintain continuity in conversations across all three mediums. Visit the online forum at www.unstructure.org/straighttalk Write us with questions or suggestions at [email protected] at [email protected]
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WHAT WHA T LIES AH EAD?
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Maryfran Johnson, Jeanne W. Ross and Ellen Kitzis on looming CIO challenges. PAGE 72
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Issue Number 1
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Issue Number 1
CIO CI O
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Contents 6 From the CEO's Desk: Leading Across Boundries Vineet Nayar
Generating Value By Effective Collaboration & Planning 48
Changing Contracts on the Fly Rob Hornby, Chief Information Officer, Wealth Management Group, Old Mutual P.L.C.
8 Editors’ Note: Continuing the Conversation
52
You a “Reincarnate CIO?” 9 Are You
54
Case Study: In Search of Agility and Savings Dixons Retail P.L.C. (previously DSG International)
Evolution of the CIO's Role; “Employees First” and the CIO; Snapshots of Reincarnate CIOs
Getting Ahead by Getting Along Chuck Ciali, C hief Information Officer, Teradyne Teradyne Corp.
58
Creating the IT Blueprint Bruce Carver, Chief Information Officer, Cummins Inc.
23 Straight Talking: Dispatches from the Front Lines
61
CIOs @ HCL: How to Pitch Your Transformation Transformation Plan Kris Hillstrand, Satish C handrasekaran, Greg Black and Raymond Siebert, HCL Technologies Technologies
Generating Value For Internal Business Operations 24
Many Brands, One System Virginia Guthrie, Chief Information Officer, Dr Pepper Snapple Group Inc.
27
Case Studies: Optimizing Business Services KLA-Tencor KLA-Tencor Corp., U TC Fire & Security, and 3M Co.
65 Solution Spotlight 66
Using the iPad to Boost Sales Productivity A sales order tracking tool currently being built on the iPad iPad platform
67 A Systematic Approach to Developing Your Your Cloud Strategy
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CIO
We thank those who agreed to be interviewed and share their insights and experiences, as well as those who allowed us to feature their companies in case studies. Editorial Team Paul Hemp, Anirban Sanyal, Jayabrata Nag, Sameer Chandiramani, Joel Kurtzman (Kurtzman Group), Glenn Rifkin Rifkin (KG), Fred Eliason (KG), (KG), Claire Meirowitz (KG) Design Team Mukund Arora, Amy Detrick (KG) Editorial Advisory Board Shami Khorana, Krishnan Chatterjee, Dharmender Kapoor, Rupak Rathore Circulation/Distribution Laurance Allen
Acknowledgments While it isn’t possible to name everyone who has contributed to CIO Straight Talk, the following are particularly worth mention: All HCL senior sales leaders; the entire Cost-Out Idea Owners team; Abhay Chaturvedi, Amitabh Dasgupta, Ajay Nair, Anand Narayanaswamy, Ankit Kumar
Chris Barendregt
CIO
Fonterra Cooperative Group
Greg Black
Former CIO
American Safety Insurance (currently with HCL Technologies) Technologies)
Ron al ald Blahnik
VP/IT Engineer ing
Lowe's Co.
Scott Bo Bonn ea eau
VP/IT, Se Ser vi vice Management
Dr Pepper Snapple Group
Jeff Carlson
CIO
Sun America Financial Group (AIG) (AIG)
Bruce Carver
CIO
Cummins Inc.
S at at isis h Ch Ch an an dr dr as as ek ek ar ar an an F or or m mee r VP VP /I /I T
Ta rg rg et et C o rp rp or or at at io io n In In di di a (currently with HCL Technologies) Technologies)
Chuck Ciali
CIO
Teradyne Inc.
Dean Del Vecchio
CIO, CAO
Dow Jones & Co.
David Evans
VP/IT
Quest Diagnostics Inc.
Glyn Evans
Corp. Director, Business Change
Birmingham City Council
Pa tr tr ic ic k Gee nt nt y
A ss ss is ta ta nt nt C hi hie f Constable
Wiltshire Police Force Force
Ti m Gr au au ma ma nn nn
V P/ P/ IT IT an an d C IO IO
B ro ro ca cad e C om om mu mun ic ic at at io io ns ns Sy Sy stst em em s In c. c.
Phil Gray
CIO/Australia
Veolia Environnemental S.A.
Mike Gr Green
Operations Ma Manager
3M Co Company
Virginia Guthrie
CIO
Dr Pepper Snapple Group Inc.
Rob Harris
SVP/IS
U.S. Foodservice
Kris Hi Hillstrand
Former CI CIO
Energy Fu Future Ho Holdings (currently with HCL AXON)
Rob Hornby
CIO
Wealth Management Group, Old
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From the CEO's Desk
Leading Across Boundaries
This approach can deliver strong business results as well as solve sweeping global or industry challenges. Over the past five years, HCL’s experiments in this area have contributed to growth that has outpaced others, including 20 percent year-over-year growth during the depths of the economic downturn. The dismantling of the traditional hierarchy leads to strong business results because it frees up possibilities for collaborative thinking, the kind needed to find solutions to problems made increasingly complex by an ever-accelerating explosion of information. Instead of a few individuals with all the answers holding leadership positions,
most of the voices you’ll hear in this issue are not those of “experts” — even our own experts at HCL — but of your peers: CIOs and other IT executives. The publication’s aim is to facilitate a conversation among CIOs about their experiences battling it out in the trenches — a conversation that taps their collective expertise and insights. Think of it as crowdsourcing for IT professionals. We do offer some of our own points of view in CIO Straight Talk (and even, at the end of this issue, the opinions of a few outside experts), but these insights are drawn from our work with clients. The lead article of the issue, “Are You a Reincarnate CIO?,” reflects our belief that CIOs
Vineet Nayar
Stop for a moment and look 10 years into the future. What do you see? Over the next decade, business will face daunting challenges: Emerging markets characterized by rapid growth but products selling at a fraction of their developed-economy prices. Countries with aging workforces trying to leverage the entrepreneurial energy of younger labor
We need organizations in which trust, based on transparency, creates a culture of constant innovation.
many different people — depending on the situation
have a transformational role to play in their
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Editors’ Note: Continuing the Conversation The idea driving CIO Straight Talk is that IT professionals can learn as much, if not more, from their peers than from “full-time experts” – consultants, academics, analysts, management gurus. After all, professionals who face similar challenges in similar situations are likely to have especially relevant and practical insights that others can benefit from – insights that simply wouldn’t occur to outsiders, however smart and however broad their perspective on an industry or profession. And many of the best practitioner insights burst into consciousness during candid and honest conversation. The interplay of ideas and the friction of debate create the spark of a new idea. CIO Straight Talk is an initial and still-evolving effort to begin such a conversation in printed form. We hope you will respond to the ideas of your peers in these pages and that your thoughts will serve as starting points for articles in an upcoming issue. A Movable Forum But that conversation will continue in other forms after you put down this publication. (Some of you may in fact be reading an iPad, Kindle or Nook version of CIO Straight Talk , which will be available at the end of 2010. Others may be reading one of our translated editions, scheduled to appear in January.) Another conversational venue will be an online CIO Straight Talk forum, in which CIOs and other IT executives will be able to raise problems, debate issues, and air their views. The forum will have its home on the website www.unstructure.org , an online platform for contemporary thought leaders, bloggers and professionals. Although the site was developed and is maintained by HCL, it is driven by participants eager to discuss the important management issues of the day – especially those that raise questions about the
Are You a Reincarnate CIO? As the IT land scap e b ecom es tran sfo rmed almo st
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The Various
Incarnations of the CIO
Are You a Reincarnate CIO? A n ew s et of skil ls – and min dset – m ay be need ed t o succeed in the evolving CIO role.
The Environment
The CIO
Applications Portfolio Transaction processing from order through delivery
Role Operational manager of specialist function
Executive Attitudes IT for cost displacement and automation; from enthusiasm to cost consciouness
Tasks On-time delivery; reliable operations
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Such statements highlight an all-too-real risk facing IT professionals, especially those who see their job as mainly involving technology. Many say privately that, no matter how successful they have have been in the past, they fear becoming stuck in an organizational backwater, marginalized within their own company.
– delivering these will be just table stakes for anyone seeking to build a successful career. “The current economic climate and increased business expectations for technology have certainly added complexity to the CIO’s role,” says Scott Bonneau, VP/IT, Service Management, at beverage company Dr Pepper Snapple Group.
Call this straight talk from CIOs – in this case, about the transformation of their role.
As we make the transition to an era of cloud computing, these operational roles become even less relevant. Increasingly, CIOs will be expected to champion initiatives that spur top-line growth, build market share, generate new products and services, even transform a company’s business model.
*** The idea of expanded CIO responsibilities isn’t new, of course. That the IT leader is well-positioned to help define and develop business strategy, rather than simply enable it, has been discussed for a decade or more.
'80s
Distributed Era
But as we emerge from the downturn facing the prospect of a sustained period of relatively low growth, pressure on the CIO to perform more than the position’s traditional tasks will continue to increase. Keeping the IT systems up and running,
None of this comes as much of a surprise to most CIOs. After all, information technology in many ways drives business strategy today, with countless products and services and nearly every business transformation reliant on IT in some way. In a recent survey of 230 business executives at global organizations in numerous industries, cosponsored by HCL Technologies and Knowledge@ Wharton, two-thirds of the respondents, rep
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a variety of functions, said they view the CIO as a business leader and innovator. Just as many respondents said that their organization sees the IT function as a “strategic driver for transforming the business” as said that IT only plays its traditional role as an “enabler for running the business.” And yet despite all the talk about CIOs getting a seat at the strategy table, most have been offered only the occasional folding chair. So what stands in the way of IT expanding beyond its traditional support function?
And yet despite all the talk about CIOs getting a seat at the stra tegy table, most have been off ered only the occasional folding chair.
What Is a Reincarnate CIO? We use this somewhat unusual term in an effort to capture – and draw attention to – the nature of the professional transformation that CIOs tell us is now required to meet the demands of the future. In numerous Eastern spiritual traditions, reincarnation is a process by which an individual’s identity, capabilities, knowledge, feelings and mind move through time in various forms, all the while enhancing their perceptive and creative powers, their understanding and ability. Whereas spiritual reincarnation involves multiple lives, in today’s world of intense change, a CIO can live the equivalent of multiple lives in a single career in a single lifetime. Still, the transformation involved in becoming a reincarnate CIO doesn’t happen overnight; it’s a journey, both for the CIO and for his or her organization. Although the notion of the reincarnate CIO more reflects a state of mind than a list of defining traits, let us sketch out a profile for this evolved professional. A
and using negotiating skills gained over the years while building numerous outsourcing partner relationships. •
Develops capabilities that open up a career path extending beyond the IT function.
Of course, information technology – and the people who manage it – have always had the potential to redefine or even create businesses. Think of the way that IT shaped the revolutionary business models of companies as different as FedEx, Dell, eBay and Facebook. But over the years, and especially during economic downturns like the one we’re emerging from, circumstances and perceptions generally have boxed in CIOs as cost controllers, first; business enablers, second; and strategic business thinkers, a distant third. In the post-recession world of 2011 – with its slower growth, heightened competition, and the emergence of potentially game-changing technologies like cloud computing – the CIO may find herself
Snapshot of a Reincarnate CIO Dawn Lepore, CEO, Drugstore.com When Dawn Lepore became CIO at Charles Schwab & Co. in 1993 at age 39, she was the rare woman technology leader. In fact, she may well have been the only woman CIO at a major company at the time, and she knew she would be challenged. To make things more difficult, she did not have a computer science degree or an MBA. She was, in fact, a music major, which made her a target for naysayers who didn’t believe she was qualified for such a technology-centric position. But she had some traits that served her well as CIO and eventually helped elevate her to a CEO’s position. She told The New York Times , “The reason I got (the CIO) job was that I took on really tough assignments, things nobody wanted, things that people thought were kind of impossible or thankless tasks. So I proved that I could take on things I didn’t know, and learn ... And I was good at building relationships across the company.” Under Lepore, Charles Schwab began online stock trading in 1996, a pioneering move that changed the industry. Lepore served as Schwab’s vice chairman and CIO for 11 years before joining Drugstore.com as CEO in 2004. Ironically, Lepore
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How Do You Become a Reincarnate CIO? Talk to enlightened CIOs about how they have evolved professionally, in order to keep up with their evolving role, and they’ll point to a number of
business attracts people who are intuitive and impulsive — or simply because technology is all that IT people are typically exposed to in their segregated corner of the corporation. Whatever the reasons, today’s CIOs are increasingly discussing the need to
'90s '00s
The Environment Applications Portfolio
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customers to do business with Lowe’s. Customers will leverage special bar-code tagging to access greater information on products and services, comparison shop and communicate with knowledgeable product specialists.
important enabler of our growth as we seek to further differentiate our brand,” she says. Focus on ROI. Many CIOs point out that one of the surest ways to align IT with business — and to earn the respect of senior business executives — is to
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and enthuse” employees, particularly those who work in a company’s “value zone” – that is, the place where value is truly created, the locus of interaction between customers and front-line employees. The aim was to inspire employees to come up with innovative solutions that would create value for both customers and HCL.
Even the business dashboards that some companies have developed to interpret the significance of captured data and thus create a window onto business operations have mostly been inadequate, serving up abstract summaries of monthly or regional financial reports.
Snapshot of a Reincarnate CIO Philip Clarke, CEO-Designate, Tesco Philip Clarke first worked at supermarket giant Tesco as
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familiar responsibilities, to assert themselves in the senior executive suite by taking the lead on a corporate transformational initiative. In fact, a lack of “The driver today is the total cost of operations, confidence may be the biggest barrier to becoming a which includes driving up service levels,” says Racioppi. Reincarnate CIO. “But relationships with partners should also be about to deliver high-impact solutions to business in the accelerated time frame that business demands.”
Straight
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// Generating Value For Internal Business Operations
Don’t get me wrong. I love this job because it’s one of the jobs in the company where you really see what is going on end to end. That is truer now than ever. We’ve had to understand the entire business, in order to make the systems work and that has helped us positively impact the business process. The pace
Connecting to the Business I knew as soon as I became a CIO that running help desks and data centers was not where DPS needed to “own” expertise. It is important that I have a very strong business
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Case Study
has been very tough. And, yes, it’s tough on the business to spend years on foundational work. For example, we rolled out our handheld sales system and implemented SAP in the same year. That was a challenge. We impacted a lot of route drivers, warehousemen, district managers — people who
across three buckets. The first layer of programs is foundational programs for the organization. These are the transactional projects like ERP and handheld selling systems, which feed a lot of our systems. The second layer is what we call information, which is where all our business warehouse, master data
KLA-Tencor, UTC Fire & Security, 3M Optimizing Business Services High-technology and manufacturing companies are increasingly looking toward streamlining their
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collection process have to be organized, but it had to result in timely reporting, it had to avoid duplicating data and it had to minimize changes in data. The effort encompassed 200,000 supplier records across 40,000 vendors, and it resulted in process standardization across various business units, continuous analysis and reporting of
had its share of challenges and roadblocks. Not only were there minor quality issues to start with, there was resistance toward implementing best practices. For instance, the immediate fallout of improved quality was increased turnaround time (TAT). 3M was faced with the difficult task of improving TAT without compromising on quality of order processing.
// Generating Value For Internal Business Operations
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innovative changes in our business processes in order to provide superior service to our citizens, save money and be in line with the national government’s strategic directives of the time. To achieve these three goals, we set in motion a business transformation project that was the largest of its kind in the British public
Finding the Right Methodology I’ve read that, irrespective of sector, more than 50 percent of business transformation projects fail to deliver the expected benefits. This would be a problem in any organization, but in the public sector,
improvement to be made, and in each case it would need to be measurable. An example would be a benefit card aimed at improvement in service, taken from our Customer First program, which is establishing a consistent
But that’s not enough. $600 million in signed benefits would make most SAP customers proud. But BCC expects even more business benefits as we continue to refine and implement the system. We’ve received positive feedback from BCC suppliers, and it is clear that efficient new processes were long overdue.
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Fonterra Cooperative Group Being in the public sector creates an added dimension to the successful completion of such initiatives. If you don’t have political ownership, as soon as there’s a bit of a rough ride — and you can’t install these change programs without some problems — there is a danger that there will not be the support
Sound project management is a must. But sound change management is also required, including a robust approach to business case development and approval. I’m always amazed at how many projects begin without defining the outcomes, including ROI, in measurable terms. Unless we put these in
Case Study
Achieving Sweeping Business Transformation The Company: Fonterra Cooperative Group, New Zealand Fonterra Cooperative Group is the world's largest exporter of dairy products, a leader in dairy science and innovation, owner
product with the product made in the factory, helped Fonterra bring integrity into the way it managed product classification and thus sped up processing. The Business Benefits: The Wonders of Automation
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// Generating Value For Customers
do so, she wants to connect directly with us. Though we understand this desire, it puts IT in a difficult position due to the great dependency we’ve always had on our intermediaries. New Competition: AEGON’s most challenging
centralized service desk and multichannel access for AEGON customers, regardless of the communication and distribution channels through which they bought products. Agents would also be able to access customer information for AEGON products through a single “agent desktop” portal. The portal is intended
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15 Questions A checklist of things to consider as you begin your annual IT planning Every CIO knows the challenge of trying to meet three different goals when considering investments and initiatives for the coming year: 1) reduce IT costs, 2) improve operational efficiencies and, most ambitiously, 3) leverage IT to create new business capabilities — capabilities that may ultimately transform the entire business. (See "How To Pitch Your Transformation Plan," p.61.)
Appendix: 15 Questions A checklist of things to consider as you begin your
But before you think transformation, be sure you have extracted the most from your existing IT systems. After all, the monetary benefits of reducing costs and improving IT efficiency can help you fund your big transformation initiatives. So it makes sense to begin the annual planning and budgeting process by asking yourself these 15 questions. They will help you identify relatively modest initiatives that will not only reduce your costs but have a positive impact on the business.
while at the same time reducing costs — benefits such as improved efficiency and productivity, lower risk, better operational visibility and enhanced customer satisfaction. The cost savings achievable through such initiatives can be estimated in advance, by breaking down IT costs into six buckets and determining the percentage of overall IT costs that each of these buckets represents. Although the percentages will vary from industry to industry and company to company, a typical breakdown might be: Constructi on & Testing –
23%
Architecture & Design –
3%
Applications & Infrastructure Provisioning – 13% Outsourcing –
10%
Application Operations & Support –
35%
Infrastru cture Operations –
16%
Total – (Source: HCL research wing)
100%
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1. Can I make my production support more business-aligned? Initiative
Optimize Your Production Support by Target
2. How can I improve IT response time for critical business transactions? Initiative
Operating Model Cost Bucket
Application Operations & Support
Applicability
If your firm has decentralized application development teams or seeks a ser vice line-based,
Involves
Benefits
Infra-Operations; Application Operations & If your firm has disaggregated IT support teams
Simultaneous improvement of IT response time
This is done by adopting industry best practices
Involves
by monitoring response time of a critical business
and a framework for delivering high quality IT
transaction and drilling down to the application
services that are measurable, proactive, predictable,
and its infrastructure components. Forming a
repeatable and cost effective.
common team for the first level of support for the application and its infrastructure.
Reduced mean time-to-repair/resolution
•
•
Applicability
If your firm contracts ser vices through higher on-site, higher-cost location teams, and if your firm has had low job rotation or has not mapped
Initiative
Optimize Performance of Legacy Mainframe Applications
Cost Bucket
Applications & Infra-Provisioning; Applications Operations & Support; Infra-Operations
Applicability
If your firm has core legacy applications
services with roles and experience, resulting in increased cost per service over time.
running on IBM mainframes with MVS, OS390 and z/OS operating systems and is incurring
What It
Reorganizing your onsite-offshore mix and
workload licensing charges (WLC) for IBM mainframe hardware and software. Also, if
Involves
resource skill set across outsourced services
your firm faces challenges with user experience,
requires a scientific assessment of your complete service portfolio to identify services that are
maintainability, batch windows, response time or
inconsistent IT support processes and tools. What It
•
Outsourcing
in multiple service centers across applications and infrastructure, geographies. Also, if your firm has
service line-based, business-driven approach for customer management in a shared services model.
Improved first call resolution
Optimize Your Outsourcing Mix
Cost Bucket
Support Applicability
Transforming your production support to a
•
Initiative
5. Can I optimize performance of legacy systems to lower total cost of operations (TCO)?
Operations and Management Center) Cost Bucket
business-driven approach to production support. What It
Consolidate your IT Operations (Integrated
4. Should I rethink my outsourcing strategy?
technologyobsolescence.
deployed from onsite, higher-cost locations with
Lessened downtime for operations; increased
a suboptimal resource mix. After identifying
What It
Legacy system runtime parameters, job
speed of resolution
potential areas of improvement, define a roadmap
Involves
parameters, scheduling, the nature of various
Reduced risk; increased real-time monitoring
interfaces and jobs, file parameters and access,
capability
to leverage low-cost sourcing locations and a role-deskilling technique to arrive at an optimized
Cost savings: an estimated 15 percent of
resource mix that will deliver the same level and
— all warrant significant optimization. These and
in the near-term and up to 40 percent over
cost savings over the original expense base
quality of service as had been available before.
other runtime characteristics that determine the
a period of time with the maturity of the operating model.
is achievable in the near term and up to 30
Increased resolution within service levels and reduced recurring incidents
Benefits
•
•
Cost benefits: an estimated 20 percent of cost savings over the original expense is achievable
•
percent over a period of time with the maturity
storage access and database queries/access paths
cost/performance drivers such as CPU utilization, Benefits
•
Increased budget predictability as you
I/O delays, high elapsed time 1 and more also
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6. How can I bring predictability into my operations both in terms of cost and service quality? Initiative Cost Bucket
Deploy Managed Application Services Construction & Testing; Outsourcing;
7. How can I make my application development process more efficient? Initiative
Initiative
Rationalize an Application Portfolio
Cost Bucket
Application Operations and Support
Applicability
If your organization has large and opaque
9. How can I better govern my IT projects? Initiative
Prioritize using Project Portfolio Management (PPM)
Cost Bucket
Construction and Testing; Applications and
Assemble an Application Development Factory
Cost Bucket
Architecture & Design; Construction & Testing
Applicability
If your IT organization has one or more of
If your firm has low application development productivity, with major spending on software
application portfolios; also, if you believe you can decommission at least 20 percent of your
the following:
development projects; also, if application
applications and yet support business effectively,
development projects suffer from cost and schedule overruns by 50 percent or more.
or if you have acquired duplicate systems as a
delays, budget overruns and resource crunches.
result of mergers and acquisitions (M&As).
Also, if you are looking for processes to
Applications Operations & Support Applicability
8. Do I need to rethink my application portfolio?
•
•
•
Significant portion of application services outsourced in staff augmentation mode Inadequate formal SLAs and key performance indicators (KPIs) and/or SLA
What It
The development factory divides the software
What It
compliance process
Involves
development cycle into a requirements
Involves
Infrastructure Provisioning Applicability
If your organization has invested in multiple, large and complex projects and you are experiencing
synchronize demand with capacity to make the
The wish to move from a “capacity-based”
department, design department, construction
sourcing model to an “outcome-based”
department and testing department at an organizational level. The concept implies that a
A structured enterprise application management methodology, Application Portfolio Optimization (APO) does away with a piecemeal approach toward application maintenance by providing
best possible use of budget and resources. What It Involves
A tools-enabled IT governance mechanism that gives business and IT decision makers the
a comprehensive assessment of the health and
ability to align their resource investments and
piece of development work passes through the
utility of all applications. The recommendations
initiatives with business goals by doing an in-
outsourced engagement journey
assembly line from one department to another.
and decisions might vary: technology migration,
depth assessment of projects and products based
•
High costs for quality
The work in these departments is managed by
applicationconsolidation,retirement,
on factors such as business utility, return on
•
Budget overruns; not getting enough “bang for
the individual department managers, and the employees in each are skilled at performing the
enhancement, modernization or outsourcing.
investment (ROI), business impact, costs, etc. Key
sourcing model •
A need for continuous improvement during an
the buck”
techniques include: Benefits
What It
“Managed services” can be defined generically
The entry and exit criteria are well defined for
Better visibility and application quality as a result of continuous application
Involves
as a vendor’s running one or more services for
every piece of work to be serviced by
health assessment
tasks required by their respective departments.
•
•
Setting up a knowledge repository of demand evaluation and project execution methods
•
Assessing change requests to minimize ad
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10. How can I improve the scalability of testing platforms?
11. Do I need to review my approach to data management?
12. What opportunities are there for process improvement?
Initiative
Set Up a Test Factory
Initiative
Reduce Enterprise Data Management Cost
Initiative
Deploy "Pathfinder" Business Process Maps
Cost Bucket
Construction and Testing; Application Operations
Cost Bucket
Application & Infra-Provisioning; Application
Applicability
If your firm is implementing business process
& Support; Architecture and Design Applicability
Operations & Support; Infra-Operations; Architecture & Design
re-engineering, seeking business-IT alignment or undergoing M&A’s or restructurings.
13. How can I better manage content across the enterprise? Initiative
Consolidate Enterprise Content Management (ECM)
Applicability
If your organization incurs licensing costs on different ECM product suites across the
If your IT organization has cost of quality (cost of review, inspection, testing and any rework) in
organization; if your business is driven by a unified Applicability
If your firm has large, diverse and disparate IT
What It
excess of 11 percent of your total IT spending; if your organization lacks visibility into testing tools
landscapes, or if you are seeking to optimize your systems to attain a holistic view of the data. Also if
Involves
and licenses usage that runs in zero-error-tolerance mode because the operations are critical.
your firm has grown inorganically through mergers and acquisitions (M&A's).
What It
A scalable, on-demand service platform that
What It
Assesses enterprisewide data management costs
Involves
provides a one-stop shop for testing services. The services are launched using a target operating
Involves
across the various components of the data life cycle — acquisition, data storage, data management
Pathfinder is a cross-referenced catalog of industryspecific business processes, including associated
content view from various content sources, or guided by adherence to regulatory compliance and
measurement parameters, best practices, industry
document standards (such as pharmaceutical, for example).
trends and operational benchmarks. Built from our experience of working with Fortune 500 clients, it is deployed to provide holistic visibility
What It
The Enterprise Content Consolidation (ECC)
and remedial recommendations to the CIO /
Involves
framework with well-defined processes and tools
COO on information workflows of the enterprise.
patterns, data delivery and archiving. The
on service initiation, transition, onboarding and
key techniques to drive cost savings consist of
helps expedite deployment of a business
implementation. The services are also tracked and
implementing or adopting:
process reengineering initiative and improves
monitored through a program dashboard. Some of
•
the techniques deployed are:
•
Data as a service (DaaS) by means of serviceoriented architecture (SOA), data virtualization
HCL Idea
•
Best-in-class master data management solutions
Owners
•
Storage management practices based on
•
Analyzing root cause and incidence mapped to the test life cycle
•
Maximizing automation of regression and
helps consolidate unstructured content into a single enterprisewide repository. Some of the key
model and are governed by detailed workflows
Benefits
An enterprise view of the data
•
An understanding of business processes
documentation of business processes Jayashree Govindarajan ([email protected]); Deepti Mittal ([email protected])
techniques are: •
Identify and analyze content touch points within the enterprise
•
•
Design a unified content architecture with optimized platform license usage Content platform rationalization – MS SharePoint, open source, if applicable
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14. How do I keep tabs on my procurement spending? Initiative
Applicability
Outsource the Indirect Material Spending ManagementProcess
15. Is there room for improvement in my printing infrastructure? Initiative
Use Managed Print Services
Applicability
If your organization is a medium to large
If your organization has a global presence and decentralized sourcing functions; also, if you need
organization with heterogeneous printing infrastructure and output environment; also, if
visibility into spending for strategic initiatives or
you have an aging fleet of printing devices with
want to deliver value through strategic sourcing.
little visibility into the cost of hardware, software and supplies.
What It
An extract, transform and load (ETL) tool enables
Involves
extraction of all spending data from internal and external business functions. The data items
What It Involves
HCL Xerox Managed Print Services (MPS) provides a fully integrated enterprise print
are then automatically cleansed, classified and
strategy with managed services consistent with the
deduplicated through a Web-enabled spending
customer’s desktop environment. MPS captures
analysis tool and also classified according to
user requirements and reconfigures the client’s
globally accepted standards such as the United
printer, copier, fax and scanning infrastructure to
Nations Standard Products and Services Code
be more efficient and cost effective. The output
(UNSPSC) and Standard Industrial Classifications
environment is optimized for accelerated problem
(SIC). Based on queries, reports are generated
resolution and measurable service improvements.
at the end-user level and shipped to vendors,
Generally, the hardware is either owned by
preferred suppliers and procurement divisions to
the external service providers or leased from a
gain visibility into their spending.
financing company in the name of the customer. The customer usually pays a monthly or quarterly
Benefits
•
7 percent assured savings on the indirect
fee, based on a cost per page or cost per seat,
ARE YOU Y OU A “REINCARNATE
CIO”?
10
1
1010
If not, how do you achieve this enlightened state?
101
01001
1000
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DISPATCHES FROM THE FRONT LINES
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Experience-based insights about current CIO challenges.
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HCL Technologies and Unstructure™ launch Straight launch Straight Talk , a platform for peer-to-peer exchange of practical ideas on a variety of topics and for a variety of audiences — including CIOs. If you’d like to share your thoughts, there are three ways to join the conversation: subsequent issues of Straight Talk publications; publications; a Straight Talk Web Web site and discussion forum; and in-person Straight Talk events in your geography. The online forum will help maintain continuity in conversations across all three mediums. Visit the online forum at www.unstructure.org/straighttalk Write us with questions or suggestions at [email protected] at [email protected]
0101001 0010111 0010011 11101011 01100011 010110101
WHAT WHA T LIES AH EAD?
00011010 10101010
Maryfran Johnson, Jeanne W. Ross and Ellen Kitzis on looming CIO challenges. PAGE 72
101001011 101001001 010111010
Issue Number 1
010011000 10101101
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Issue Number 1
CIO CI O
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Contents 6 From the CEO's Desk: Leading Across Boundries Vineet Nayar
Generating Value By Effective Collaboration & Planning 48
Changing Contracts on the Fly Rob Hornby, Chief Information Officer, Wealth Management Group, Old Mutual P.L.C.
8 Editors’ Note: Continuing the Conversation
52
You a “Reincarnate CIO?” 9 Are You
54
Case Study: In Search of Agility and Savings Dixons Retail P.L.C. (previously DSG International)
Evolution of the CIO's Role; “Employees First” and the CIO; Snapshots of Reincarnate CIOs
Getting Ahead by Getting Along Chuck Ciali, C hief Information Officer, Teradyne Teradyne Corp.
58
Creating the IT Blueprint Bruce Carver, Chief Information Officer, Cummins Inc.
23 Straight Talking: Dispatches from the Front Lines
61
CIOs @ HCL: How to Pitch Your Transformation Transformation Plan Kris Hillstrand, Satish C handrasekaran, Greg Black and Raymond Siebert, HCL Technologies Technologies
Generating Value For Internal Business Operations 24
Many Brands, One System Virginia Guthrie, Chief Information Officer, Dr Pepper Snapple Group Inc.
27
Case Studies: Optimizing Business Services KLA-Tencor KLA-Tencor Corp., U TC Fire & Security, and 3M Co.
65 Solution Spotlight 66
Using the iPad to Boost Sales Productivity A sales order tracking tool currently being built on the iPad iPad platform
67 A Systematic Approach to Developing Your Your Cloud Strategy
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CIO
We thank those who agreed to be interviewed and share their insights and experiences, as well as those who allowed us to feature their companies in case studies. Editorial Team Paul Hemp, Anirban Sanyal, Jayabrata Nag, Sameer Chandiramani, Joel Kurtzman (Kurtzman Group), Glenn Rifkin Rifkin (KG), Fred Eliason (KG), (KG), Claire Meirowitz (KG) Design Team Mukund Arora, Amy Detrick (KG) Editorial Advisory Board Shami Khorana, Krishnan Chatterjee, Dharmender Kapoor, Rupak Rathore Circulation/Distribution Laurance Allen
Acknowledgments While it isn’t possible to name everyone who has contributed to CIO Straight Talk, the following are particularly worth mention: All HCL senior sales leaders; the entire Cost-Out Idea Owners team; Abhay Chaturvedi, Amitabh Dasgupta, Ajay Nair, Anand Narayanaswamy, Ankit Kumar
Chris Barendregt
CIO
Fonterra Cooperative Group
Greg Black
Former CIO
American Safety Insurance (currently with HCL Technologies) Technologies)
Ron al ald Blahnik
VP/IT Engineer ing
Lowe's Co.
Scott Bo Bonn ea eau
VP/IT, Se Ser vi vice Management
Dr Pepper Snapple Group
Jeff Carlson
CIO
Sun America Financial Group (AIG) (AIG)
Bruce Carver
CIO
Cummins Inc.
S at at isis h Ch Ch an an dr dr as as ek ek ar ar an an F or or m mee r VP VP /I /I T
Ta rg rg et et C o rp rp or or at at io io n In In di di a (currently with HCL Technologies) Technologies)
Chuck Ciali
CIO
Teradyne Inc.
Dean Del Vecchio
CIO, CAO
Dow Jones & Co.
David Evans
VP/IT
Quest Diagnostics Inc.
Glyn Evans
Corp. Director, Business Change
Birmingham City Council
Pa tr tr ic ic k Gee nt nt y
A ss ss is ta ta nt nt C hi hie f Constable
Wiltshire Police Force Force
Ti m Gr au au ma ma nn nn
V P/ P/ IT IT an an d C IO IO
B ro ro ca cad e C om om mu mun ic ic at at io io ns ns Sy Sy stst em em s In c. c.
Phil Gray
CIO/Australia
Veolia Environnemental S.A.
Mike Gr Green
Operations Ma Manager
3M Co Company
Virginia Guthrie
CIO
Dr Pepper Snapple Group Inc.
Rob Harris
SVP/IS
U.S. Foodservice
Kris Hi Hillstrand
Former CI CIO
Energy Fu Future Ho Holdings (currently with HCL AXON)
Rob Hornby
CIO
Wealth Management Group, Old
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From the CEO's Desk
Leading Across Boundaries
This approach can deliver strong business results as well as solve sweeping global or industry challenges. Over the past five years, HCL’s experiments in this area have contributed to growth that has outpaced others, including 20 percent year-over-year growth during the depths of the economic downturn. The dismantling of the traditional hierarchy leads to strong business results because it frees up possibilities for collaborative thinking, the kind needed to find solutions to problems made increasingly complex by an ever-accelerating explosion of information. Instead of a few individuals with all the answers holding leadership positions,
most of the voices you’ll hear in this issue are not those of “experts” — even our own experts at HCL — but of your peers: CIOs and other IT executives. The publication’s aim is to facilitate a conversation among CIOs about their experiences battling it out in the trenches — a conversation that taps their collective expertise and insights. Think of it as crowdsourcing for IT professionals. We do offer some of our own points of view in CIO Straight Talk (and even, at the end of this issue, the opinions of a few outside experts), but these insights are drawn from our work with clients. The lead article of the issue, “Are You a Reincarnate CIO?,” reflects our belief that CIOs
Vineet Nayar
Stop for a moment and look 10 years into the future. What do you see? Over the next decade, business will face daunting challenges: Emerging markets characterized by rapid growth but products selling at a fraction of their developed-economy prices. Countries with aging workforces trying to leverage the entrepreneurial energy of younger labor
We need organizations in which trust, based on transparency, creates a culture of constant innovation.
many different people — depending on the situation
have a transformational role to play in their
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Editors’ Note: Continuing the Conversation The idea driving CIO Straight Talk is that IT professionals can learn as much, if not more, from their peers than from “full-time experts” – consultants, academics, analysts, management gurus. After all, professionals who face similar challenges in similar situations are likely to have especially relevant and practical insights that others can benefit from – insights that simply wouldn’t occur to outsiders, however smart and however broad their perspective on an industry or profession. And many of the best practitioner insights burst into consciousness during candid and honest conversation. The interplay of ideas and the friction of debate create the spark of a new idea. CIO Straight Talk is an initial and still-evolving effort to begin such a conversation in printed form. We hope you will respond to the ideas of your peers in these pages and that your thoughts will serve as starting points for articles in an upcoming issue. A Movable Forum But that conversation will continue in other forms after you put down this publication. (Some of you may in fact be reading an iPad, Kindle or Nook version of CIO Straight Talk , which will be available at the end of 2010. Others may be reading one of our translated editions, scheduled to appear in January.) Another conversational venue will be an online CIO Straight Talk forum, in which CIOs and other IT executives will be able to raise problems, debate issues, and air their views. The forum will have its home on the website www.unstructure.org , an online platform for contemporary thought leaders, bloggers and professionals. Although the site was developed and is maintained by HCL, it is driven by participants eager to discuss the important management issues of the day – especially those that raise questions about the
Are You a Reincarnate CIO? As the IT land scap e b ecom es tran sfo rmed almo st
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The Various
Incarnations of the CIO
Are You a Reincarnate CIO? A n ew s et of skil ls – and min dset – m ay be need ed t o succeed in the evolving CIO role.
The Environment
The CIO
Applications Portfolio Transaction processing from order through delivery
Role Operational manager of specialist function
Executive Attitudes IT for cost displacement and automation; from enthusiasm to cost consciouness
Tasks On-time delivery; reliable operations
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Such statements highlight an all-too-real risk facing IT professionals, especially those who see their job as mainly involving technology. Many say privately that, no matter how successful they have have been in the past, they fear becoming stuck in an organizational backwater, marginalized within their own company.
– delivering these will be just table stakes for anyone seeking to build a successful career. “The current economic climate and increased business expectations for technology have certainly added complexity to the CIO’s role,” says Scott Bonneau, VP/IT, Service Management, at beverage company Dr Pepper Snapple Group.
Call this straight talk from CIOs – in this case, about the transformation of their role.
As we make the transition to an era of cloud computing, these operational roles become even less relevant. Increasingly, CIOs will be expected to champion initiatives that spur top-line growth, build market share, generate new products and services, even transform a company’s business model.
*** The idea of expanded CIO responsibilities isn’t new, of course. That the IT leader is well-positioned to help define and develop business strategy, rather than simply enable it, has been discussed for a decade or more.
'80s
Distributed Era
But as we emerge from the downturn facing the prospect of a sustained period of relatively low growth, pressure on the CIO to perform more than the position’s traditional tasks will continue to increase. Keeping the IT systems up and running,
None of this comes as much of a surprise to most CIOs. After all, information technology in many ways drives business strategy today, with countless products and services and nearly every business transformation reliant on IT in some way. In a recent survey of 230 business executives at global organizations in numerous industries, cosponsored by HCL Technologies and Knowledge@ Wharton, two-thirds of the respondents, rep
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a variety of functions, said they view the CIO as a business leader and innovator. Just as many respondents said that their organization sees the IT function as a “strategic driver for transforming the business” as said that IT only plays its traditional role as an “enabler for running the business.” And yet despite all the talk about CIOs getting a seat at the strategy table, most have been offered only the occasional folding chair. So what stands in the way of IT expanding beyond its traditional support function?
And yet despite all the talk about CIOs getting a seat at the stra tegy table, most have been off ered only the occasional folding chair.
What Is a Reincarnate CIO? We use this somewhat unusual term in an effort to capture – and draw attention to – the nature of the professional transformation that CIOs tell us is now required to meet the demands of the future. In numerous Eastern spiritual traditions, reincarnation is a process by which an individual’s identity, capabilities, knowledge, feelings and mind move through time in various forms, all the while enhancing their perceptive and creative powers, their understanding and ability. Whereas spiritual reincarnation involves multiple lives, in today’s world of intense change, a CIO can live the equivalent of multiple lives in a single career in a single lifetime. Still, the transformation involved in becoming a reincarnate CIO doesn’t happen overnight; it’s a journey, both for the CIO and for his or her organization. Although the notion of the reincarnate CIO more reflects a state of mind than a list of defining traits, let us sketch out a profile for this evolved professional. A
and using negotiating skills gained over the years while building numerous outsourcing partner relationships. •
Develops capabilities that open up a career path extending beyond the IT function.
Of course, information technology – and the people who manage it – have always had the potential to redefine or even create businesses. Think of the way that IT shaped the revolutionary business models of companies as different as FedEx, Dell, eBay and Facebook. But over the years, and especially during economic downturns like the one we’re emerging from, circumstances and perceptions generally have boxed in CIOs as cost controllers, first; business enablers, second; and strategic business thinkers, a distant third. In the post-recession world of 2011 – with its slower growth, heightened competition, and the emergence of potentially game-changing technologies like cloud computing – the CIO may find herself
Snapshot of a Reincarnate CIO Dawn Lepore, CEO, Drugstore.com When Dawn Lepore became CIO at Charles Schwab & Co. in 1993 at age 39, she was the rare woman technology leader. In fact, she may well have been the only woman CIO at a major company at the time, and she knew she would be challenged. To make things more difficult, she did not have a computer science degree or an MBA. She was, in fact, a music major, which made her a target for naysayers who didn’t believe she was qualified for such a technology-centric position. But she had some traits that served her well as CIO and eventually helped elevate her to a CEO’s position. She told The New York Times , “The reason I got (the CIO) job was that I took on really tough assignments, things nobody wanted, things that people thought were kind of impossible or thankless tasks. So I proved that I could take on things I didn’t know, and learn ... And I was good at building relationships across the company.” Under Lepore, Charles Schwab began online stock trading in 1996, a pioneering move that changed the industry. Lepore served as Schwab’s vice chairman and CIO for 11 years before joining Drugstore.com as CEO in 2004. Ironically, Lepore
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How Do You Become a Reincarnate CIO? Talk to enlightened CIOs about how they have evolved professionally, in order to keep up with their evolving role, and they’ll point to a number of
business attracts people who are intuitive and impulsive — or simply because technology is all that IT people are typically exposed to in their segregated corner of the corporation. Whatever the reasons, today’s CIOs are increasingly discussing the need to
'90s '00s
The Environment Applications Portfolio
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customers to do business with Lowe’s. Customers will leverage special bar-code tagging to access greater information on products and services, comparison shop and communicate with knowledgeable product specialists.
important enabler of our growth as we seek to further differentiate our brand,” she says. Focus on ROI. Many CIOs point out that one of the surest ways to align IT with business — and to earn the respect of senior business executives — is to
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and enthuse” employees, particularly those who work in a company’s “value zone” – that is, the place where value is truly created, the locus of interaction between customers and front-line employees. The aim was to inspire employees to come up with innovative solutions that would create value for both customers and HCL.
Even the business dashboards that some companies have developed to interpret the significance of captured data and thus create a window onto business operations have mostly been inadequate, serving up abstract summaries of monthly or regional financial reports.
Snapshot of a Reincarnate CIO Philip Clarke, CEO-Designate, Tesco Philip Clarke first worked at supermarket giant Tesco as
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familiar responsibilities, to assert themselves in the senior executive suite by taking the lead on a corporate transformational initiative. In fact, a lack of “The driver today is the total cost of operations, confidence may be the biggest barrier to becoming a which includes driving up service levels,” says Racioppi. Reincarnate CIO. “But relationships with partners should also be about to deliver high-impact solutions to business in the accelerated time frame that business demands.”
Straight
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// Generating Value For Internal Business Operations
Don’t get me wrong. I love this job because it’s one of the jobs in the company where you really see what is going on end to end. That is truer now than ever. We’ve had to understand the entire business, in order to make the systems work and that has helped us positively impact the business process. The pace
Connecting to the Business I knew as soon as I became a CIO that running help desks and data centers was not where DPS needed to “own” expertise. It is important that I have a very strong business
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Case Study
has been very tough. And, yes, it’s tough on the business to spend years on foundational work. For example, we rolled out our handheld sales system and implemented SAP in the same year. That was a challenge. We impacted a lot of route drivers, warehousemen, district managers — people who
across three buckets. The first layer of programs is foundational programs for the organization. These are the transactional projects like ERP and handheld selling systems, which feed a lot of our systems. The second layer is what we call information, which is where all our business warehouse, master data
KLA-Tencor, UTC Fire & Security, 3M Optimizing Business Services High-technology and manufacturing companies are increasingly looking toward streamlining their
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collection process have to be organized, but it had to result in timely reporting, it had to avoid duplicating data and it had to minimize changes in data. The effort encompassed 200,000 supplier records across 40,000 vendors, and it resulted in process standardization across various business units, continuous analysis and reporting of
had its share of challenges and roadblocks. Not only were there minor quality issues to start with, there was resistance toward implementing best practices. For instance, the immediate fallout of improved quality was increased turnaround time (TAT). 3M was faced with the difficult task of improving TAT without compromising on quality of order processing.
// Generating Value For Internal Business Operations
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innovative changes in our business processes in order to provide superior service to our citizens, save money and be in line with the national government’s strategic directives of the time. To achieve these three goals, we set in motion a business transformation project that was the largest of its kind in the British public
Finding the Right Methodology I’ve read that, irrespective of sector, more than 50 percent of business transformation projects fail to deliver the expected benefits. This would be a problem in any organization, but in the public sector,
improvement to be made, and in each case it would need to be measurable. An example would be a benefit card aimed at improvement in service, taken from our Customer First program, which is establishing a consistent
But that’s not enough. $600 million in signed benefits would make most SAP customers proud. But BCC expects even more business benefits as we continue to refine and implement the system. We’ve received positive feedback from BCC suppliers, and it is clear that efficient new processes were long overdue.
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Fonterra Cooperative Group Being in the public sector creates an added dimension to the successful completion of such initiatives. If you don’t have political ownership, as soon as there’s a bit of a rough ride — and you can’t install these change programs without some problems — there is a danger that there will not be the support
Sound project management is a must. But sound change management is also required, including a robust approach to business case development and approval. I’m always amazed at how many projects begin without defining the outcomes, including ROI, in measurable terms. Unless we put these in
Case Study
Achieving Sweeping Business Transformation The Company: Fonterra Cooperative Group, New Zealand Fonterra Cooperative Group is the world's largest exporter of dairy products, a leader in dairy science and innovation, owner
product with the product made in the factory, helped Fonterra bring integrity into the way it managed product classification and thus sped up processing. The Business Benefits: The Wonders of Automation
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// Generating Value For Customers
do so, she wants to connect directly with us. Though we understand this desire, it puts IT in a difficult position due to the great dependency we’ve always had on our intermediaries. New Competition: AEGON’s most challenging
centralized service desk and multichannel access for AEGON customers, regardless of the communication and distribution channels through which they bought products. Agents would also be able to access customer information for AEGON products through a single “agent desktop” portal. The portal is intended
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15 Questions A checklist of things to consider as you begin your annual IT planning Every CIO knows the challenge of trying to meet three different goals when considering investments and initiatives for the coming year: 1) reduce IT costs, 2) improve operational efficiencies and, most ambitiously, 3) leverage IT to create new business capabilities — capabilities that may ultimately transform the entire business. (See "How To Pitch Your Transformation Plan," p.61.)
Appendix: 15 Questions A checklist of things to consider as you begin your
But before you think transformation, be sure you have extracted the most from your existing IT systems. After all, the monetary benefits of reducing costs and improving IT efficiency can help you fund your big transformation initiatives. So it makes sense to begin the annual planning and budgeting process by asking yourself these 15 questions. They will help you identify relatively modest initiatives that will not only reduce your costs but have a positive impact on the business.
while at the same time reducing costs — benefits such as improved efficiency and productivity, lower risk, better operational visibility and enhanced customer satisfaction. The cost savings achievable through such initiatives can be estimated in advance, by breaking down IT costs into six buckets and determining the percentage of overall IT costs that each of these buckets represents. Although the percentages will vary from industry to industry and company to company, a typical breakdown might be: Constructi on & Testing –
23%
Architecture & Design –
3%
Applications & Infrastructure Provisioning – 13% Outsourcing –
10%
Application Operations & Support –
35%
Infrastru cture Operations –
16%
Total – (Source: HCL research wing)
100%
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1. Can I make my production support more business-aligned? Initiative
Optimize Your Production Support by Target
2. How can I improve IT response time for critical business transactions? Initiative
Operating Model Cost Bucket
Application Operations & Support
Applicability
If your firm has decentralized application development teams or seeks a ser vice line-based,
Involves
Benefits
Infra-Operations; Application Operations & If your firm has disaggregated IT support teams
Simultaneous improvement of IT response time
This is done by adopting industry best practices
Involves
by monitoring response time of a critical business
and a framework for delivering high quality IT
transaction and drilling down to the application
services that are measurable, proactive, predictable,
and its infrastructure components. Forming a
repeatable and cost effective.
common team for the first level of support for the application and its infrastructure.
Reduced mean time-to-repair/resolution
•
•
Applicability
If your firm contracts ser vices through higher on-site, higher-cost location teams, and if your firm has had low job rotation or has not mapped
Initiative
Optimize Performance of Legacy Mainframe Applications
Cost Bucket
Applications & Infra-Provisioning; Applications Operations & Support; Infra-Operations
Applicability
If your firm has core legacy applications
services with roles and experience, resulting in increased cost per service over time.
running on IBM mainframes with MVS, OS390 and z/OS operating systems and is incurring
What It
Reorganizing your onsite-offshore mix and
workload licensing charges (WLC) for IBM mainframe hardware and software. Also, if
Involves
resource skill set across outsourced services
your firm faces challenges with user experience,
requires a scientific assessment of your complete service portfolio to identify services that are
maintainability, batch windows, response time or
inconsistent IT support processes and tools. What It
•
Outsourcing
in multiple service centers across applications and infrastructure, geographies. Also, if your firm has
service line-based, business-driven approach for customer management in a shared services model.
Improved first call resolution
Optimize Your Outsourcing Mix
Cost Bucket
Support Applicability
Transforming your production support to a
•
Initiative
5. Can I optimize performance of legacy systems to lower total cost of operations (TCO)?
Operations and Management Center) Cost Bucket
business-driven approach to production support. What It
Consolidate your IT Operations (Integrated
4. Should I rethink my outsourcing strategy?
technologyobsolescence.
deployed from onsite, higher-cost locations with
Lessened downtime for operations; increased
a suboptimal resource mix. After identifying
What It
Legacy system runtime parameters, job
speed of resolution
potential areas of improvement, define a roadmap
Involves
parameters, scheduling, the nature of various
Reduced risk; increased real-time monitoring
interfaces and jobs, file parameters and access,
capability
to leverage low-cost sourcing locations and a role-deskilling technique to arrive at an optimized
Cost savings: an estimated 15 percent of
resource mix that will deliver the same level and
— all warrant significant optimization. These and
in the near-term and up to 40 percent over
cost savings over the original expense base
quality of service as had been available before.
other runtime characteristics that determine the
a period of time with the maturity of the operating model.
is achievable in the near term and up to 30
Increased resolution within service levels and reduced recurring incidents
Benefits
•
•
Cost benefits: an estimated 20 percent of cost savings over the original expense is achievable
•
percent over a period of time with the maturity
storage access and database queries/access paths
cost/performance drivers such as CPU utilization, Benefits
•
Increased budget predictability as you
I/O delays, high elapsed time 1 and more also
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6. How can I bring predictability into my operations both in terms of cost and service quality? Initiative Cost Bucket
Deploy Managed Application Services Construction & Testing; Outsourcing;
7. How can I make my application development process more efficient? Initiative
Initiative
Rationalize an Application Portfolio
Cost Bucket
Application Operations and Support
Applicability
If your organization has large and opaque
9. How can I better govern my IT projects? Initiative
Prioritize using Project Portfolio Management (PPM)
Cost Bucket
Construction and Testing; Applications and
Assemble an Application Development Factory
Cost Bucket
Architecture & Design; Construction & Testing
Applicability
If your IT organization has one or more of
If your firm has low application development productivity, with major spending on software
application portfolios; also, if you believe you can decommission at least 20 percent of your
the following:
development projects; also, if application
applications and yet support business effectively,
development projects suffer from cost and schedule overruns by 50 percent or more.
or if you have acquired duplicate systems as a
delays, budget overruns and resource crunches.
result of mergers and acquisitions (M&As).
Also, if you are looking for processes to
Applications Operations & Support Applicability
8. Do I need to rethink my application portfolio?
•
•
•
Significant portion of application services outsourced in staff augmentation mode Inadequate formal SLAs and key performance indicators (KPIs) and/or SLA
What It
The development factory divides the software
What It
compliance process
Involves
development cycle into a requirements
Involves
Infrastructure Provisioning Applicability
If your organization has invested in multiple, large and complex projects and you are experiencing
synchronize demand with capacity to make the
The wish to move from a “capacity-based”
department, design department, construction
sourcing model to an “outcome-based”
department and testing department at an organizational level. The concept implies that a
A structured enterprise application management methodology, Application Portfolio Optimization (APO) does away with a piecemeal approach toward application maintenance by providing
best possible use of budget and resources. What It Involves
A tools-enabled IT governance mechanism that gives business and IT decision makers the
a comprehensive assessment of the health and
ability to align their resource investments and
piece of development work passes through the
utility of all applications. The recommendations
initiatives with business goals by doing an in-
outsourced engagement journey
assembly line from one department to another.
and decisions might vary: technology migration,
depth assessment of projects and products based
•
High costs for quality
The work in these departments is managed by
applicationconsolidation,retirement,
on factors such as business utility, return on
•
Budget overruns; not getting enough “bang for
the individual department managers, and the employees in each are skilled at performing the
enhancement, modernization or outsourcing.
investment (ROI), business impact, costs, etc. Key
sourcing model •
A need for continuous improvement during an
the buck”
techniques include: Benefits
What It
“Managed services” can be defined generically
The entry and exit criteria are well defined for
Better visibility and application quality as a result of continuous application
Involves
as a vendor’s running one or more services for
every piece of work to be serviced by
health assessment
tasks required by their respective departments.
•
•
Setting up a knowledge repository of demand evaluation and project execution methods
•
Assessing change requests to minimize ad
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10. How can I improve the scalability of testing platforms?
11. Do I need to review my approach to data management?
12. What opportunities are there for process improvement?
Initiative
Set Up a Test Factory
Initiative
Reduce Enterprise Data Management Cost
Initiative
Deploy "Pathfinder" Business Process Maps
Cost Bucket
Construction and Testing; Application Operations
Cost Bucket
Application & Infra-Provisioning; Application
Applicability
If your firm is implementing business process
& Support; Architecture and Design Applicability
Operations & Support; Infra-Operations; Architecture & Design
re-engineering, seeking business-IT alignment or undergoing M&A’s or restructurings.
13. How can I better manage content across the enterprise? Initiative
Consolidate Enterprise Content Management (ECM)
Applicability
If your organization incurs licensing costs on different ECM product suites across the
If your IT organization has cost of quality (cost of review, inspection, testing and any rework) in
organization; if your business is driven by a unified Applicability
If your firm has large, diverse and disparate IT
What It
excess of 11 percent of your total IT spending; if your organization lacks visibility into testing tools
landscapes, or if you are seeking to optimize your systems to attain a holistic view of the data. Also if
Involves
and licenses usage that runs in zero-error-tolerance mode because the operations are critical.
your firm has grown inorganically through mergers and acquisitions (M&A's).
What It
A scalable, on-demand service platform that
What It
Assesses enterprisewide data management costs
Involves
provides a one-stop shop for testing services. The services are launched using a target operating
Involves
across the various components of the data life cycle — acquisition, data storage, data management
Pathfinder is a cross-referenced catalog of industryspecific business processes, including associated
content view from various content sources, or guided by adherence to regulatory compliance and
measurement parameters, best practices, industry
document standards (such as pharmaceutical, for example).
trends and operational benchmarks. Built from our experience of working with Fortune 500 clients, it is deployed to provide holistic visibility
What It
The Enterprise Content Consolidation (ECC)
and remedial recommendations to the CIO /
Involves
framework with well-defined processes and tools
COO on information workflows of the enterprise.
patterns, data delivery and archiving. The
on service initiation, transition, onboarding and
key techniques to drive cost savings consist of
helps expedite deployment of a business
implementation. The services are also tracked and
implementing or adopting:
process reengineering initiative and improves
monitored through a program dashboard. Some of
•
the techniques deployed are:
•
Data as a service (DaaS) by means of serviceoriented architecture (SOA), data virtualization
HCL Idea
•
Best-in-class master data management solutions
Owners
•
Storage management practices based on
•
Analyzing root cause and incidence mapped to the test life cycle
•
Maximizing automation of regression and
helps consolidate unstructured content into a single enterprisewide repository. Some of the key
model and are governed by detailed workflows
Benefits
An enterprise view of the data
•
An understanding of business processes
documentation of business processes Jayashree Govindarajan ([email protected]); Deepti Mittal ([email protected])
techniques are: •
Identify and analyze content touch points within the enterprise
•
•
Design a unified content architecture with optimized platform license usage Content platform rationalization – MS SharePoint, open source, if applicable
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14. How do I keep tabs on my procurement spending? Initiative
Applicability
Outsource the Indirect Material Spending ManagementProcess
15. Is there room for improvement in my printing infrastructure? Initiative
Use Managed Print Services
Applicability
If your organization is a medium to large
If your organization has a global presence and decentralized sourcing functions; also, if you need
organization with heterogeneous printing infrastructure and output environment; also, if
visibility into spending for strategic initiatives or
you have an aging fleet of printing devices with
want to deliver value through strategic sourcing.
little visibility into the cost of hardware, software and supplies.
What It
An extract, transform and load (ETL) tool enables
Involves
extraction of all spending data from internal and external business functions. The data items
What It Involves
HCL Xerox Managed Print Services (MPS) provides a fully integrated enterprise print
are then automatically cleansed, classified and
strategy with managed services consistent with the
deduplicated through a Web-enabled spending
customer’s desktop environment. MPS captures
analysis tool and also classified according to
user requirements and reconfigures the client’s
globally accepted standards such as the United
printer, copier, fax and scanning infrastructure to
Nations Standard Products and Services Code
be more efficient and cost effective. The output
(UNSPSC) and Standard Industrial Classifications
environment is optimized for accelerated problem
(SIC). Based on queries, reports are generated
resolution and measurable service improvements.
at the end-user level and shipped to vendors,
Generally, the hardware is either owned by
preferred suppliers and procurement divisions to
the external service providers or leased from a
gain visibility into their spending.
financing company in the name of the customer. The customer usually pays a monthly or quarterly
Benefits
•
7 percent assured savings on the indirect
fee, based on a cost per page or cost per seat,
