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www.straightalkonline.com Issue Number 4 
2013 ITSMA Marketing Excellence Awards 
DIAMOND 
AWARD 
WINNER 
Thought Leadership 
Read CIO Straight Talk on your 
mobile device — for free! 
magazine.straighttalkonline.com/issue4 
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Apple Newsstand Magzter - Magazine Store Nxtbook Nxtstand 
Join our group
Cover Article 
7 Things CIOs Are Doing to Get Ahead in the 
DIGITAL ECONOMY 
• Experience Talks 
• The End of IT Innovation 
• The CIO’s Choice 
• Other Voices 
Straight Talking 
06 
Content 
14 
Crossing the Finish 
Line Together 
Patricia K. Poppe, VP, Customer Experience and Operations, and 
Mamatha Chamarthi, VP and CIO, Consumers Energy 
24 
34 
Innovation by Amateurs 
Scott Blanchette, SVP and CIO, 
Vanguard Health Systems, and 
MIT Sloan CIO Award Winner, 2013 
20 
28 
SAP Runs SAP: 
How Technology Made It Happen 
Michael Golz, SVP and CIO, 
SAP Americas 
Business-Driven IT 
and IT-Driven Business 
William E. Klitgaard, Corporate SVP 
and CIO, Covance 
When Efficiency and 
Flexibility Trump All 
Mathew Jackson, Services Director, 
UK Asset Resolution 
Plus:
Spotlight 
39 
44 
Subject: IT-Marketing Collaboration 
From: Chief Information Officer 
To: Chief Marketing Officer 
Cc: Head of Sales 
Being a CIO: It’s Not a Job, 
It’s a Lifestyle 
John Halamka, CIO, Beth Israel Deaconess Medical 
Center, and author of Life as a Healthcare CIO blog 
Points of View 
Always On, Always in Context 
Robert Scoble, Startup Liaison Officer, 
Rackspace, and author of the blog Scobleizer 
The CIO-CMO 
Dream Team 
The Rise of the Chief 
Marketing Technologist 
Scott Brinker, author of the “Chief 
Marketing Technologist” blog 
Double Duty: Living the 
CIO–CMO Convergence 
Rom Hendler, former CMO and 
Interim CIO, Las Vegas Sands 
New-Age Outsourcing 
Five outsourcing advisors describe 
emerging models 
View from the 
Technology Blogosphere 
54 58 
Issue Number 4 
I wanted to share with you some thoughts that I believe are relevant as our company transforms itself – or is trans-formed, 
like it or not, by the business environment – into a digital enterprise. 
First, a few observations about your customer – our customer – in this context. 
I’m not telling you anything new when I say that customers have changed, as has their purchase process. It’s no longer 
enough to create a great television spot or print ad, then sit back as the customer walks into the store or calls a toll free 
number. For that matter, it’s no longer enough for us to hire a top-notch sales force as a means of generating revenue 
growth from our business customers. The leverage that you – or Sales – once had over the customer in terms of control-ling 
the interaction is quickly becoming irrelevant. 
Today’s buyer is smart, resourceful, and connected through social media, someone who does his or her own research 
before entering the formal marketing and selling channels. What Google breathlessly calls the “zero moment of truth” 
– when a buyer goes online to learn about a product or service, usually before any interaction with the company that 
offers it – is reversing traditional information asymmetry, in favor of the buyer. Whatever you think of the term, a 
marketer that is able to positively interact with or influence a potential buyer at this moment will regain some of the 
power that has migrated to the customer. 
Next, a few thoughts on technology: 
Influencing a buyer online is a very different undertaking than influencing a buyer in the traditional way. Smart CMOs 
like you – and, if I may, business-savvy CIOs like me – are seeing opportunities to influence customer behavior through 
technology. This is ushering in an era of marketing and technology convergence, as marketers try to grow the top line 
by leveraging customer data – much of it “big data” – and using technology to enhance the customer experience. 
Again, you probably already know most of this. Here’s something you may be less familiar with. Marketing technologies 
are proliferating at a dizzying rate. According to my last count, some 350 different companies are offering marketing 
technology services in five broad areas: digital marketing channels, marketing automation, analytics, data integration, 
and product extension. Some people predict that we’ll soon see a new position – in fact, a new profession – on your 
team: the marketing technologist. 
Hence, the oft-quoted Gartner prediction that, by 2017, the CMO will spend more on information technology than the 
CIO will. Well, I want to be clear about this: I don’t care who spends the money. But I want to be sure it is spent intelli-gently. 
Collaboration between the two of us can help ensure that happens. 
Attached are several interesting articles I’ve collected on this topic. Let’s talk when you’ve had a chance to look at them 
– a conversation that I hope will be the first of many. Working together would benefit both of us – not to mention the 
enterprise! 
I’m happy to swing by to chat about this, if you want to suggest a time. In the words of a famous actor, “I think this could 
be the beginning of a beautiful friendship.” 
Memo to the 
Chief Marketing Officer 
From the CIO
CIO Straight Talk Team 
Ajay Nair, Amit Gandhi, Bharani Iyer, Edward Gardner, 
Elka Ghudial, James Riley, Jayabrata Nag, Joe Hogan, 
Mahesh Bhatt, Mohit Agarwal, Pankaj Kumar, Paresh 
Vankar, Steve Cardell, Vish Muralidharan 
Atul Sharma 
HCL Technologies 
1st Floor, A-2, Sector – 3 
Noida – 201301, Uttar Pradesh 
India 
sharma.atulsh@hcl.com 
CIO Straight Talk is a periodical published by HCL Technolo-gies 
(HCLT) meant for its existing and prospective clients for 
information purposes. The information contained in the 
publication contains general views based on the experiences 
of technology practitioners and subject matter experts within 
and outside of HCLT, expressed by them in their individual 
capacity and in no event shall HCLT (including its affiliates 
and group companies) be liable for any claim, damages or 
any other liability arising out of or resulting from this 
publication. You are advised to seek professional advice 
before making any decision that may affect your business. 
All contents are copyright © 2013 by HCL Technologies Ltd. 
All rights reserved. Excerpts may be reprinted with attribu-tion 
to HCL Technologies. 
Pride and Appreciation 
In early November, CIO Straight Talk received an 
ITSMA Diamond Award recognizing the global IT 
industry’s top thought leadership initiative. CIO 
Straight Talk – the magazine, along with our website, 
LinkedIn community, webcast series, in-person 
events, YouTube channel, and Twitter feed – was 
judged the best program out of 29 submissions in the 
thought leadership category. (ITSMA, originally the IT 
Services Marketing Association, is a research organi-zation 
serving B2B technology, communications, and 
professional services companies.) 
The seal on the cover of this issue is an expression 
of our pride in receiving the award. 
This letter is an expression of our appreciation. 
No sooner had we begun patting ourselves on the 
back than we realized what a debt of gratitude we owe 
to those who have contributed to Straight Talk over 
the past three years – whether as an author or inter-view 
subject for the magazine, a presenter at one of our 
webcasts or events, or a participant in the conversa-tions 
that take place on Straight Talk Interactive, the 
LinkedIn group. 
We are beholden to them because Straight Talk 
was honored for its unusual approach to thought 
leadership marketing, one that essentially turns the 
concept on its head. 
We believe that some of the most valuable thinking 
on information technology resides with IT profession-als. 
Straight Talk features insights that practitioners 
have gained from years of hands-on experience. Our 
aim is to share this often untapped source of industry 
wisdom with our contributors’ peers – to be a publica-tion 
“for CIOs from CIOs.” The ITSMA award was 
further validation of our belief in practitioner thought 
leadership. 
But a concept is one thing; content is another. 
There would be no CIO Straight Talk without the CIOs 
and other IT leaders who have shared their thinking 
via one of Straight Talk’s content platforms. Those 
practitioners deserve most of the credit for CIO 
Straight Talk’s success. 
So please join me in congratulating these 
“co-recipients” of the ITSMA Thought Leadership 
award. 
Or, if you’re one of these winners yourself – well, 
pat yourself on the back. 
Paul Hemp 
Editor, CIO Straight Talk 
Editor Paul Hemp 
Managing Editor Anirban Sanyal 
Contributing Editors Gil Press, Abbie Lundberg, 
Stephanie Overby 
Copy Editor Amy Halliday 
Art Director Neha Sharma 
Designer Harvinder Singh 
Studio Lalit Kumar 
Events, Webcasts, and Leverage 
Mishtun Chatterjee, Atul Sharma 
Editorial Advisory Board Anant Gupta, Krishnan 
Chatterjee, Apurva Chamaria, Abhishek Shankar 
Printing Quality Printing, Pittsfield, MA 
Lustra Print Process Pvt. Ltd., New Delhi 
Digital Amrish Sharma, Aradhana Sharma, Gil Press, 
Shristi Dugar, Suresh L., Shakti Srivastava 
Acknowledgements 
Contact Us 
For information on reprinting articles and all other 
correspondence, please contact:
Highlights 
from 
sIsue Number 3 
Big Data: A Rare Business Leadership 
Opportunity for CIOs 
Plus: 
Pullout poster (“Welcome to the Big Data Zoo”) 
“A Very Short History of Big Data” 
Straight Talking 
Actionable insights from 
the CIOs of Lafarge, Land 
O’ Lakes, EMI Music, and 
other forward-looking 
companies 
Also in the issue: 
Big Thinking 
Bill Inmon, the “father 
of data warehousing,” 
on big data 
Trends 2013 
Seven HCL experts on 
2013’s top IT-related 
developments 
Go to: magazine.straighttalkonline.com/issue3
Cover Article 
7 THINGS CIOs 
DIGITAL ECONOMY 
Are Doing to Get Ahead in the 
08 CIO Straight Talk
We convened a “virtual focus group” of IT leaders 
to find out what kind of moves CIOs are making – 
what steps CIOs should be taking – in order to 
succeed in today’s brave new digital world. Here is 
the group's list of must-do's for their CIO peers. 
What’s a CIO to do? 
A growing chorus is telling IT leaders that they are on the 
verge of extinction. They stand in the way of progress, fail 
to understand the needs of the business, and fall hope-lessly 
behind in meeting the challenges of new and 
exciting digital business opportunities. 
To prevent their role from becoming irrelevant and 
the IT function from disappearing, CIOs are told they 
should “seize the initiative” and “change the conversa-tion”; 
they are admonished to “collaborate” and “stay 
relevant.” Mostly, they are urged to “innovate” and keep 
the IT infrastructure humming — to lead and be creative 
while at the same time managing cost efficiently and 
controlling unobtrusively the information technology 
framework that supports the ever-changing needs of the 
enterprise. (See the sidebar “The CIO’s Choice.”) 
All good suggestions. And certainly all senior execu-tives 
should have mastered multitasking by now. Here, 
however, we would like to offer some more down-to-earth 
advice, the first draft of a must-do list for CIOs in 
the digital economy, drawn from steps IT executives are 
taking today to upgrade their roles and transform the IT 
function into one that has a direct and profitable impact 
on the business. 
To begin compiling our list, we assembled a virtual 
focus group of seasoned IT executives, all of them mem-bers 
of the CIO Straight Talk Interactive group on 
LinkedIn. We talked to Ann Alrich, former CIO of Asia- 
Pacific and various business units at DuPont; Scott 
Blanchette, Senior Vice President and CIO at Vanguard 
Health Systems; Ed Jurica, former Senior Vice President 
and CIO at the fashion clothing company Fossil; Alexan-dre 
Kozlov, CIO of the Extruded Products Division at 
Norsk Hydro, an aluminum and renewable energy 
company; Isaac Sacolick, CIO at McGraw Hill Construc 
tion, the McGraw Hill Financial company that helps 
connect people, projects, and products across the 
construction industry; and Stephen Thurlbeck, Vice 
President of R&D at Complete Innovations, a leading 
global provider of technology solutions for mobile work-force 
management. (Learn more about their 
backgrounds in the sidebar “Experience Talks.”) 
The picture that emerged from our talks with these 
leaders is of an IT function that is both stable and innova-tive, 
fault tolerant and fast learning, reliable and experi-mental. 
It is an environment characterized by paradox: 
safe is risky, stable is dangerous. Conversely, constant 
change ensures resilience, experimentation safeguards 
continuity. These IT leaders work to seamlessly integrate 
IT with the business and find ways to innovate while 
“keeping the lights on.” 
The conversations also revealed that the IT function 
is looking more and more like a web-native company 
such as Google or Amazon — call it the Google-ization of 
IT. Organizations that want to take advantage of the 
opportunities presented by the digitization of everything 
increasingly infuse information technology into every-thing 
they do — their operations, their products and 
services, the way they go to market, their interactions 
with customers and prospects. IT no longer drives the 
business. IT is the business. 
IT is also innovative. Contrary to the widespread 
belief only ten years ago that IT’s innovative days were 
over, new ways to practice enterprise IT and new tools 
and technologies emerge all the time. The greatest and 
most radical changes over the past decade happened in 
web-native companies, where the complete fusion of IT 
and the business has driven IT innovation on an unprec-edented 
scale. (See the sidebar “The End of IT Innova-tion?”) 
09 CIO Straight Talk
The CIOs we talked to highlighted specific actions 
they have taken to bring some of the characteristics of 
web-native companies to their organizations — in some 
cases with a twist or two of their own. 
The list we present here is tentative and 
probably incomplete. We invite you to refine and 
expand it by joining the conversation on the 
CIO Straight Talk Interactive group on LinkedIn. (Visit 
http://partner.linkedin.com/CIOStraightTalk to request 
membership in the group.) 
1. Never “work with the business” 
Web-native companies have built their businesses on IT 
innovation. Engineers and product managers in these 
companies are technologists, many of 
whom are involved in developing and 
maintaining a vast IT infrastructure. 
Outside of the websphere, leading 
companies are moving toward a seam-less 
integration, even a fusion, of 
business and IT. “The paradigm of 
there being a business and there being 
an IT department trying to drive an 
alignment is antiquated,” says Scott 
Blanchette. “You’ve got to do more 
than just ‘work with the business’ — 
really, I’m offended by that term, 
because we’re as much the business as 
anything else around here.” 
Ed Jurica found a creative way to 
drive home that point, one that his 
team members recalled years later. He 
told them, “When you find yourself 
saying ‘the business,’ hold your tongue 
with your fingers and say ‘IT is the 
business.’ It drives home the point that 
we are as important as the business 
and completely integrated with it.” 
At Vanguard Health Systems, 
Scott Blanchette, 
Senior Vice President and CIO, 
Vanguard Health Systems 
“'Work with the 
business' — really, 
I’m offended by that 
term, because we’re 
as much the 
business as anything 
else around here.” 
Blanchette took the idea to its practical 
conclusion, embedding IT in the 
business units. “IT is no different than 
the finance function or the service 
delivery function or the clinical function,” he notes. “I 
come from Northern California, and that is just the way 
companies in Silicon Valley are run.” 
True to his roots, Blanchette believes IT should allow 
for “some level of chaos” but also provide mechanisms 
for supervising it. (See “Innovation by Amateurs,” page 
34.) It’s a cross-enterprise role that has multiple dimen-sions, 
but its essence is the technology expertise and 
experience that resides in IT and is embodied by the CIO. 
These are skills and know-how that are more important 
than ever to the management of any enterprise. 
Being part of the business means taking initiative. 
And if IT is seamlessly integrated with the business, 
there is no reason why a CIO should not help lead 
enterprise-wide change, innovation, and transformation, 
just like other senior business executives. As Alexandre 
Kozlov argues, “CIOs shouldn’t wait to be invited to the 
table; they should make themselves relevant to the 
business and contribute to generating revenues.” Ann 
Alrich agrees: “It’s absolutely imperative that the CIO is a 
member of the senior business team so he or she is 
involved in developing the future plans and the strategy 
for the business.” 
Stephen Thurlbeck has done just that at Complete 
Innovations. “Oddly enough from someone focused on 
technology, I’m pushing the balanced scorecard 
approach throughout the business,” he says. “This is a big 
change: I’m pushing from within IT, but ultimately it’s 
going to benefit the entire company.” 
2. Learn fast, but contain failure 
In a 1982 paper, the late computer scientist Jim Gray 
wrote about “fail-fast” in the context of 
applying hardware fault-tolerant 
principles to software engineering — 
each hardware or software module 
“either does the right thing or stops.” 
By insulating each software module 
from the others, Gray and other 
experts in fault-tolerant systems 
achieved what they called “fault 
containment,” ensuring a quick detec-tion 
of errors without impacting the 
entire system. 
Since then, the Agile Software 
Development movement adopted and 
promoted the concept, which is 
probably how the fail-fast idea perme-ated 
the culture of Silicon Valley and 
became a business philosophy. Now 
it’s one that IT organizations are using 
to become an indispensable part of 
their companies’ product development 
efforts. 
Many IT teams today are using 
Agile practices, including constructing 
experiments to see whether something 
fails or succeeds. Isaac Sacolick points 
out that his team has been doing that 
through “spikes,” projects of short 
duration used to research a concept or 
create a simple prototype. “If I have to integrate with a 
new API and we are not sure how complex it is, we are 
going to try to experiment with that,” he says. And if the 
experiment is a failure? That’s OK. 
Speed, the “fast” element of “fail fast,” also offers 
crucial benefits. As Stephen Thurlbeck points out, 
“Everybody is on the same page at the same time. We are 
making changes when we can and as we should, rather 
than going into the development black box for months 
and months and coming out with something that either 
didn’t have the right specs or was not produced 
correctly.” 
Scott Blanchette cautions that fail-fast is fine as long 
as it doesn’t become “fail fast and often.” Sometimes the 
approach can “morph into a justification for not doing 
sufficient due diligence or sufficient planning,” he notes. 
The key to fast learning is failure containment. If you 
design your experiments carefully, you ensure that 
10 CIO Straight Talk
innovative ideas get a well-defined test and do not affect 
ongoing work, and that lessons are analyzed quickly to 
identify the next step. 
3. Cut time spent "keeping the lights on" 
How do you make time for experimentation? As the 
pointy-haired boss in a Dilbert cartoon tells his team, “If 
you come up with a good idea, I’ll let you take on the 
project in addition to your existing work.” But according 
to the CIOs we talked to, it is possible to find ways to 
channel the energies of IT staff beyond day-to-day work. 
One approach is to take a close look at routine and 
time-consuming tasks. Ed Jurica notes that his organi-zation 
set a goal of reducing by 10% the time and effort it 
would devote to production support, thereby freeing up 
15 FTEs for work that could generate more business 
value. “If it’s a tedious task that has to be done over and 
over again,” he says, “perhaps a small investment in a 
tool or developing a utility in-house could alleviate the 
time spent on it.” 
Issac Sacolick has also found ways to separate ongo-ing 
support from experimental and innovative develop-ment 
work, directing a lot of routine maintenance work 
to outsourcing partners. In addition to using “spikes,” 
discussed above, he dedicates small groups for four to 
eight weeks to larger experimental projects. “I make 
these opportunities very transparent,” he says, “creating 
in the process a culture of innovation. I make it transpar-ent 
because you don’t know who is going to respond to it 
in your group and because you want to use the opportu-nity 
to find business sponsors who want to get involved.” 
4. Adopt a few digital natives 
Once you make time for experimentation and inno-vation, 
what are some of the sources of new ideas? It 
may be worthwhile to think about this in demo-graphic 
terms. Here are some fairly well known statis-tics: 
The median age at Google is 29; at Facebook, it’s 28. 
These companies are leading indicators for the changing 
face of the global workforce over the next decade. In the 
U.S., where the overall median age of workers is 42.3, 
there are an estimated 80 million young Americans who 
belong to the so-called millennial generation, roughly 
ages 18 to 35. By next year, millennials are expected to 
constitute 36% of the U.S. workforce, and by 2020, they 
will account for nearly half of all workers. 
Scott Blanchette has seen this demographic shift in 
action: “A big percentage of our workforce, especially the 
clinical workforce — nurses and doctors — are very 
young. They are not technologists, but they have a 
tremendous portfolio of technical competencies that we 
want to tap into, because they are always finding new 
ways to solve old problems.” 
Many CIOs are not targeting young professionals who 
were “baptized in technology,” Blanchette notes, in large 
part because of structured R&D approaches, which are 
hierarchical in nature. “But we spend a lot of our time and 
effort tapping into the power of the base of the 
pyramid.”In addition to offering innovative ideas on how 
Experience Talks 
The six senior IT leaders we interviewed for this 
article have among them at least 120 years of 
experience, mostly in managing IT operations and 
innovation in a variety of industries and types of 
businesses. 
Ann Alrich is the former CIO of Asia-Pacific and 
various business units at DuPont, one of the world’s 
largest chemical companies, which is headquartered 
in Wilmington, Delaware. 
Scott Blanchette is Senior Vice President and CIO of 
Vanguard Health Systems, an operator of hospitals 
and other medical facilities in five U.S. states. The 
company, which recently agreed to be acquired by 
Tenet Healthcare, also an operator of hospitals, is 
headquartered in Nashville, Tennessee. 
Ed Jurica is former Senior Vice President and CIO of 
Fossil, a global design, marketing, and distribution 
company that specializes in consumer fashion 
accessories, with more than 400 retail and 4,000 
wholesale locations worldwide. It is headquartered in 
Richardson, Texas. 
Alexandre Kozlov is CIO of the Extruded Products 
Division at Norsk Hydro, a global supplier of 
aluminum with activities throughout the value chain, 
from bauxite extraction to the production of rolled 
and extruded aluminum products and building 
systems. It is headquartered in Oslo, Norway. 
Isaac Sacolick is CIO at McGraw Hill Construction, 
which provides data, news, and intelligence to 
construction professionals. It is based in New York. 
Stephen Thurlbeck is Vice President of R&D at 
Complete Innovations, a leading global provider of 
mission-critical fleet, asset, and mobile workforce 
management solutions. It is based in Markham, 
Canada. 
11 CIO Straight Talk
Alexandre Kozlov, 
CIO, Extruded Products Division, Norsk Hydro 
to use IT to achieve business goals, digital natives also 
help change the way IT does its work, especially in the 
area of training and documentation. Ed Jurica observes 
that digital natives, who grew up immersed in Nintendo 
and PlayStation, approach learning in an entirely new 
way. “There are no instruction manuals, there is no ‘take 
a class,’” he observes. “It’s all emergent: ‘Give me the 
environment and let me play. If I have questions, I will 
open up three different chat tools and I will pull other 
people in to look for FAQs and shortcuts. I will learn by 
doing.’” Consequently, the training materials these 
professionals like to consume are more like games, allow-ing 
users to experiment and play with the technology. 
In addition to doing the obvious to engage digital 
natives — reaching out through social media — you may 
want to appoint a member of your management team to 
be the “digital natives czar,” responsible for soliciting 
innovative ideas from 20-something employees through-out 
the enterprise and addressing their specific IT needs 
and requirements. That czar could also create a “digital 
natives council” with representatives from various 
departments and functions who meet on a regular basis to 
provide input to IT. 
5. Hire some business-savvy seniors 
Young people are not the only source of new ideas and 
fresh perspectives. Experienced professionals can change 
the dynamics of any team, increasing its creativity 
through a diversity of views based on deep knowledge and 
extensive experience and serving as mentors to senior 
executives. As one of Stephen Thurlbeck’s senior people 
told him, “I’m going to hire someone who is better than 
me. I love to mentor my people — but who’s mentoring 
me?” 
“Our senior people are looking for people who have 
different experience,” Thurlbeck says. But “different 
experience” means not just experience with technology. 
“My preferred job description right now is ‘We are 
looking for a .net artisan who will be missed by both their 
technology and business colleagues when they leave their 
current employer,’” he says. 
Business savvy is a top hiring criterion for Ann Alrich. 
“If I could have ten people on my team who know every 
thing there is to know about IT or ten people who under-stand 
various aspects of the business, I would take the 
business people any day,” she says. “You can buy the 
technology and the knowledge of the technology, but the 
ability to connect with the business and have a business-level 
conversation is absolutely crucial. When I interview 
people I always look for the softer skills — I try to find out 
whether they have a customer focus, if they care about the 
fact that this is a business we are running. What we do is 
not just technology for technology’s sake; it is applied 
technology.” 
The business experience does not have to be 
industry-specific. Observes Alrich: “IT skills are transfer-rable 
from one industry to another. I’ve seen people 
tremendously successful in an area where they have never 
worked before, because they were willing to adapt and 
they had a well-rounded skill set, including soft skills.” 
Stephen Thurlbeck agrees. “It doesn’t matter to me if 
you are in our industry,” he says. “A smart person who 
cares and wants to make a difference is worth ten indus-try 
insiders.” Alexandre Kozlov knows this from experi-ence, 
having been hired at Norsk Hydro after a long 
tenure as a CIO in the consumer goods industry. “Fortu-nately, 
the executives who interviewed me saw that my 
lack of immediate hands-on experience in the aluminum 
industry was not a showstopper in my case. There are 
several important leadership skills — for example, how 
you position IT in relation to the business — that can be 
easily ported from one industry to another.” 
6. Understand those business buzzwords 
Learning is a key to innovation. The CIOs we interviewed 
stressed the importance of business learning, in particu-lar, 
for developing the careers and skills of IT employees. 
“IT people need to enmesh themselves in the area of 
the business where they are working and take advan-tage 
of business-related educational opportunities 
inside and outside the company,” Ann Alrich says. 
An IT employee working in supply chain manage-ment, 
for example, could attend a conference on that 
topic, she notes. Alexandre Kozlov is also adamant 
about the value of business education for IT but 
urges people to look outside their own areas: 
“Attending gatherings that are not directly related to 
Ed Jurica, 
Former Senior Vice President and CIO, Fossil 
“We hoped that a couple of lightbulbs would go 
off and that the event would help [business and 
IT] innovate together.” 
“CIOs shouldn’t wait to be invited to the table; 
they should make themselves relevant to the 
business and contribute to generating 
revenues.” 
12 CIO Straight Talk
Stephen Thurlbeck, 
Vice President, R&D, Complete Innovations 
“It doesn’t matter to me if you are in our 
industry. A smart person who cares and wants 
to make a difference is worth ten industry 
insiders.” 
your industry might even spark better ideas because 
you find things that people do in other industries 
and it may force you to think. The wider the 
spectrum, the better.” 
But in an era of tight budgets, it’s important to 
get a return on the investment in outside events and 
training. Stephen Thurlbeck does that by requiring 
people to present what they learned at conferences 
to their teams and to use it to develop a plan for a 
change in the organization. Ed Jurica manages the 
costs of attending conferences by focusing on local 
events, where he sends both an IT manager and his 
or her business partner. “That can be cost-effective, 
and it can cement those relationships,” he notes. 
Learning can happen in a variety of ways, includ-ing 
the do-it-yourself kind. At Fossil, Jurica’s IT 
organization put together a business conference for 
the entire company, in which IT employees gave 
presentations and demonstrations and answered 
questions about new tools and applications. He 
defrayed the cost of the conference by asking IT 
vendors to sponsor it. “The intent was not to use 
three-letter acronyms or talk about feeds and speeds 
but to talk about our company, what we could be 
doing, and to encourage discussion with our 
business partners,” he says. “We hoped that a couple 
of lightbulbs would go off and that the event would 
help us innovate together.” 
7. Raise your visibility outside your organization 
Web-native companies have broken the boundaries 
between the “corporation” and the outside world, allow-ing 
and even encouraging employees to be externally 
visible through blogs, conference presentations, 
interviews, and social media. That visibility goes hand in 
hand with communicating and promoting what the 
company does and what it’s all about. 
This attitude is now more prevalent in traditional 
companies and is even changing what they used to regard 
as one of their most insular positions — that of the CIO. 
“Speaking at conferences may not necessarily be the best 
way to make sure that you are driving every dime you can 
out of your operating budget,” says Scott Blanchette. 
The CIO’s Choice 
These are the best of times and the worst of times for 
CIOs. Information technology is omnipresent, exerting 
a significant and growing influence on the way we live 
and work. What CIOs have been doing for a living for so 
many years — managing digital data and information 
— has become an integral, sometimes crucial, 
component of business success, improved government 
services, disease prevention, and help for the disad-vantaged. 
It has permeated all aspects of our lives, 
including playing a prominent role as a required 
companion for most of our leisure activities. Data is 
now talked about as the “oil” that fuels the digital 
economy. 
Data’s new status means, however, that there are 
many new players interested in owning, excavating, 
and managing it. Chief marketing officers (CMOs) are 
investing heavily in IT tools to collect and mine external 
data, in some cases poised to overtake the CIO in the 
scope and depth of their responsibility for IT resources. 
CEOs who want to make sure their companies thrive in 
the digital economy, or are simply annoyed by their 
competitors’ successful data mining exploits, are 
appointing veterans of the web as Chief Digital Officers 
(CDOs), in charge of all the digital assets of the 
business and responsible for identifying and pursuing 
new data-driven revenue streams. Data scientists and 
data entrepreneurs are distinguishing themselves in 
business, government, and nonprofits as the new go-to 
experts for everything related to data and its analysis. 
IT is everywhere, and “gigabyte” is something most 
people understand and talk about — which means that 
everybody is now a CIO. Says Alexandre Kozlov, CIO at 
Norsk Hydro, a global supplier of aluminum: “It’s very 
difficult to explain to an executive that it takes so many 
days to get a new computer installed when he says, 
‘My nephew, who is ten, configured and installed my 
new iPad in minutes. How come you guys with 
university educations and so many years in the 
industry are telling me that it takes all this time to get 
a standard image for a Dell laptop?’” 
CIOs everywhere face a career-defining choice. 
They can aspire to be indispensable facility managers, 
“keeping the lights on” and making sure the “trains 
run on time,” and let others turn data into an opportu-nity. 
There’s nothing wrong with that approach; in the 
digital economy, maintaining a robust and efficient 
information infrastructure is bound to become 
ever-more important. But CIOs can also leverage their 
expertise in managing and refining the new oil to lead 
their organizations in benefitting from the data deluge. 
13 CIO Straight Talk
Isaac Sacolick, 
CIO, McGraw Hill Construction 
“I’m not sure blogging is for every CIO, but I 
think it’s important to find . . . what you are 
good at and find a way to express that.” 
“But if you’re focused on things like innovation and 
transformation and moving the business in a different 
direction, I think those types of engagements are things 
you have to participate in to be successful.” 
Of course, social media increasingly is the method of 
choice for raising your profile. In addition to performing 
his duties as CIO, Isaac Sacolick is a prolific blogger and 
Twitterer. “I’m not sure blogging is for every CIO,” he 
says, “but I think it’s important to find what’s important 
to you, what you are good at, and find a way to express 
that. In my case I do that through blogging, through the 
articles I tweet, or giving public presentations.” 
Sacolick’s social media prowess increases not only his 
own visibility but also that of his company, McGraw Hill 
Construction. “We are not a technology business,” he 
explains, “but we sell technology and data to contractors 
and manufacturers in the construction industry — they 
need to understand that we develop great technology. I 
blog, I write articles for our magazine for construction 
engineers, I participate in events, I run a council for 
construction industry CIOs. Part of my job is to be 
customer facing, provide thought leadership, be outgoing 
and engaging with our community.” 
Raising your profile outside your organization can 
bolster your position in it. External exposure — through 
an active blog or by attracting hundreds of Twitter 
followers — can give you newfound credibility internally, 
validation in the public forum that will subtly change 
people’s perception of you in your organization. 
Furthermore, it can be easier to gain the support of 
those who are skeptical about IT when you meet them 
“off-site,” on the neutral turf of a social network. “Find 
content that’s relevant and valuable to a business person 
in your company who is negative about IT and share it 
with him,” Ann Alrich suggests. When you make your 
next IT presentation, she notes, that person may be a 
proponent instead of an opponent. As more and more 
companies infuse information technology into their 
product and service offerings, we could expect to see 
more blogging CIOs, more visible CIOs. Social media, 
however, is not only a platform for creating content 
The End of IT Innovation? 
Ten years ago, in the aftermath of the technology bubble of the 1990s, IT didn’t seem ot matter anymore. There was a 
widespread reluctance to fall again for the hype and overselling by IT vendors and a movement to contain and 
control IT, to focus its role on maintaining an efficient infrastructure. According to this view, innovation — and the 
competitive advantage resulting from it — was to be found somewhere else. 
Today we can see how wrong that conventional wisdom was. Server virtualization, just one example of the 
recent impact of IT innovation, not only has made IT infrastructure much more efficient but also has made it 
possible for the IT organization to be flexible and responsive like never before, effectively supporting new strategic 
business initiatives. Without virtualization, there would be no cloud computing, yet another significant develop-ment 
in IT delivery. Instead of spelling the end of the IT organization, as some predicted only a few years ago, cloud 
computing has provided new opportunities for CIOs to manage resources more efficiently and has freed up 
internal IT resources for more strategic work. 
The space where IT innovation has really exploded, however, has been web-native companies, which derive 
their competitive advantage from IT. These companies — the likes of Amazon, Google, and Netflix — have 
demonstrated through their innovative infrastructures and use of IT that IT-spurred disruption and the transfor-mation 
of entire industries are far from over. 
14 CIO Straight Talk
Ann Alrich 
Former CIO, Asia-Pacific, Dupont 
“Find content that’s relevant and valuable to a 
business person in your company who is 
negative about IT and share it with him.” 
but also a tool for filtering it and finding what’s most 
relevant for one’s job. LinkedIn has emerged in 
recent years as an important source of experience-based 
advice and opinions, through the personal 
networking it facilitates as well as content from 
established content producers. 
“There’s so much that you can learn by reading 
the articles on LinkedIn or by searching for people 
who have certain characteristics in their profile,” 
Ann Alrich says. The social network “can add a level 
of enrichment to a person’s professional develop-ment 
that they may not realize.” 
Scott Blanchette also finds his LinkedIn network 
to be a valuable mechanism for filtering informa-tion. 
“It’s not just the interpersonal aspect but also 
the general content that tends to get socialized 
through the network — there are key groups, key 
companies, key people that I follow pretty exten-sively 
and regularly look at their circulation of 
relevant material.” 
So that’s the consolidated view of our virtual 
focus group. Now, what do you think? Have we 
missed any items on our list of CIO must-do’s? Are 
there some clunkers among the items we’ve 
included? 
Tell us. Or, rather, tell your IT peers by joining 
the CIO Straight Talk Interactive group and sharing 
your thinking with group members. Your addition 
to our list — a piece of wisdom hard-earned from 
your own experience — may end up being exactly 
what a fellow group member most needs. 
Other Voices 
The advice in this article comes from members of our virtual 
focus group, drawn from the CIO Straight Talk Interactive group on 
LinkedIn. But in conversations with other IT leaders, we frequently 
ask what sorts of things CIOs should be doing to ensure their 
success in the digital economy. Much, but not all, of their advice 
echoes the prescriptions of the virtual focus group: 
“The investments we made in IT strengthened Covance’s 
technical profile. But they also did more than that — they opened 
up entirely new business opportunities…The technology capabili-ties 
allow us to offer a different set of services than our competi-tors 
and to differentiate our services in a way that becomes 
compelling.” — William E. Klitgaard, Corporate SVP and CIO, 
Covance 
“You can't just look at your own industry to measure yourself. 
You have to look much more broadly to consumer technology. 
Beyond that, more and more technology is being delivered by 
smaller firms. Software delivery approaches are increasingly 
being influenced by technology start-ups. CIOs who want to 
differentiate themselves must look beyond the boundaries of 
corporate technology and embrace the ideas coming out of 
smaller firms.” — Richard Roberts, Head of Client Access and 
Electronic Distribution, Deutsche Bank 
“[Our 12-step recovery from fear of failure program] is about 
small failures early in the development cycle, quickly learning 
from them, and teaching the rest of the organization about these 
failures so that it can learn and not repeat the mistakes and be 
more agile. That same model also fits into an environment where 
you have to have stability. It is the small mistakes that are made, 
that are covered up, that are not brought to light and pile up and 
eventually cause stable environments to crash. This fear hurts not 
only IT but also all facets of the business.” — Mike Benson, EVP 
and CIO, DirecTV 
“It is okay to be making some mistakes, but we want it to be 
more of a fail-fast environment. Do not wait to the end of a very 
long project to find out we made a mistake; find out right away.” 
— Annabelle Bexiga, EVP and CIO, TIAA-CREF 
“If you demonstrate to top management that you can give 
them something that they like to use, that is valuable to them 
personally, it generates a different conversation about what’s 
possible and creates a positive perception of IT‘s role. We’ve done 
this with several mobile analytics apps that we’ve deployed all the 
way up to the board level, and that generates a new conversation 
about a) what’s possible and b) what is IT’s role.” — Michael Golz, 
SVP & CIO, SAP America 
“CIOs have a bad rap. By blogging, you hope that people see 
that you are human and that you suffer the same challenges as 
everybody else.” — Dr. John Halamka, CIO, Beth Israel Deacon-ess 
Medical Center 
“Don’t be afraid to adopt best practices from other industries. 
People always told me that you couldn’t use IT approaches from 
other industries… But you can and you should.” — Simon Hollins, 
CIO, EMI Music 
“How do you institutionalize the IT function’s adoption of a 
more sophisticated business perspective? One way is to create 
career bridges between IT and the rest of the business.” — 
Jean-Marc Chicco, Chief Group ERP Program and Information 
Officer, Lafarge 
15 CIO Straight Talk
Straight Talking 
16 CIO Straight Talk
CROSSING THE FINISH LINE 
TOGETHER 
Several successful initiatives at Consumers Energy vividly 
illustrate the importance of IT-business collaboration in 
driving customer value and corporate performance 
A conversation with 
PATRICIA K. POPPE 
VP, Customer Experience & Operations 
Consumers Energy 
MAMATHA CHAMARTHI 
VP and CIO 
Consumers Energy 
17 CIO Straight Talk
Serving the state of Michigan for more than 125 years, Consumers 
Energy is one of the largest combination utilities in the U.S., provid-ing 
electric and natural gas service to nearly 6.6 million residents. It 
has recently been making significant investments in energy efficiency, 
renewable energy, environmental and customer service enhance-ments, 
and advanced meter infrastructure. 
As with other utilities today, a large part of this investment is in 
new technologies, including upgrades to the IT infrastructure. At 
Consumers Energy, IT-based improvements and new services have 
been driven by a customer-focused strategy. The hallmark of its 
implementation has been an exemplary collaboration between the 
Vice President and CIO, Mamatha Chamarthi, and the Vice President 
of Customer Experience, Rates and Regulatory Affairs, Patricia 
Poppe. (For a variety of perspectives on the potential for collaboration 
between CIOs and Chief Marketing Officers, see “The CIO-CMO 
Dream Team,” page 44.) 
The following is an edited transcript of Chamarthi’s and Poppe’s 
conversation with CIO Straight Talk Editor Paul Hemp. 
How has the new customer-focused strategy evolved? 
Patrica Poppe: I would suggest that Consumers Energy has always 
been customer-focused but has not had a distinct strategy for trans-lating 
that aspiration into the delivery of safe and excellent operations 
to the customer. Our CEO, John Russell — who comes out of the 
customer side of the business, including distribution and call centers 
— is a true champion of the customer, and our senior leadership team 
would like to make Consumers Energy a very customer-centric utility. 
Our brand tag line is “Count on Us,” and Mamatha and I were hired 
specifically to make that vision a reality and improve overall customer 
satisfaction. 
Mamatha Chamarthi: I was hired as the first CIO in the history of 
Consumers Energy — we had an IT Director before — and I thought 
that it would take me years to get the senior leadership team to under-stand 
how technology can help Consumers Energy serve customers 
better. To accelerate this learning process, I decided to immerse them 
in the technology Mecca: Silicon Valley. My objective was for them to 
observe firsthand how technology is driving value to the bottom line 
of companies there. 
Poppe: Three years later, they still reference that visit. 
Chamarthi: About ten of us went for a weeklong visit to Apple, Google, 
HP, Cisco, and SAP. We did a debrief at the end of the trip, and many 
on the senior leadership team, including our CEO, made the point 
that our customers are being served by the likes of Apple and Google. 
Would they expect anything less from us in the quality of the services 
we provide? 
Poppe: I think this is especially important for a utility, where technol-ogy 
applications have tended to be more for generating plant 
emissions controls, gas infrastructure inspection, or distribution 
equipment — not for customer-facing experiences. It was important 
to open the eyes of our senior leadership team to what was happening 
in technology-driven innovation outside the utility space, a great 
platform to gain support from the senior management team for 
technology-driven innovation. 
Mamatha Chamarthi 
POSITION: Vice President and Chief 
Information Officer 
COMPANY: Consumers Energy 
WORKS FROM: Jackson, Michigan 
PROFESSIONAL BACKGROUND: As 
Vice President and CIO for CMS 
Energy and its principal subsidiary, 
Consumers Energy, Chamarthi 
oversees the company's information 
technology systems and is responsible 
for engaging with other CMS Energy 
executives to promote innovative 
technology practices. Her career 
spans more than 16 years, and she is 
viewed as a thought leader in the 
implementation of new technologies, 
systems, and processes. Besides her 
MBA from the Kellogg School of 
Management, Chamarthi holds 
master's degrees in computer science, 
software engineering, and English 
literature. She serves on the boards 
of the Michigan Council of Women in 
Technology (MCWT) and Midwest 
Technology Leaders. She is a member 
of the Wall Street Journal Executive 
Task Force for Women in the 
Economy and serves as an Elevate 
Mentor for the “We Build Character” 
Mentoring Program. In 2005, 
Chamarthi was recognized as a 
“Technology All Star” by the Women 
of Color in Technology Institute. In 
2012, she was selected as one of 
Computerworld’s 2012 Premier 100 
IT leaders and was appointed to serve 
on the Michigan Asian Pacific 
American Affairs Commission by 
Governor Rick Snyder. 
EDUCATION: MBA, Kellogg School 
of Business, Northwestern University 
18 CIO Straight Talk
Patti, what were you asked to do when you were hired? 
Poppe: Like Mamatha, I had a newly created position. In many 
companies you’d call it Chief Marketing Officer. Chief Customer 
Officer might be more appropriate. I oversee customer-facing opera-tions 
such as call centers, billing services, business customer 
accounts, market research. But I’m not a marketer; I’m an operator by 
training. I ran power plants for DTE Energy for five years, and before 
that I ran assembly plants for General Motors for 15 years. I am an 
industrial engineer by training. 
So why were you hired to do this job? 
Poppe: Before I joined Consumers Energy, the leadership team had 
combined many of the customer-facing organizations within the 
utility under one umbrella, whereas before they were distributed 
throughout the company. I came in January 2011, and in August of 
that year I presented to the board of directors our new Customer 
Value Initiative. 
I think another reason I was hired was because they liked the 
operator’s mind-set and a data-driven, rather than opinion-driven, 
approach to customer value. Because of my experience, that’s what I 
brought to the table. 
Was it obvious that you were going to need to work 
with the IT team? 
Poppe: Without a doubt. Early on I could see that we were behind the 
curve in implementing customer-facing technology solutions. It was 
clear that we were going to have to partner very closely to change that. 
The Smart Energy program, for example, became a major focus of 
collaboration between Mamatha’s team and my team. Smart Energy 
transforms the customer experience. We think of it as the 
re-introduction of Consumers Energy to our customers, with a new 
level of service that they can now expect from us. 
As part of this program, we will install 1.8 million new electric 
meters and 600,000 gas meters with existing customers. When their 
power is out, we will know. Today, we don’t know — they have to call 
us. Customers will also have a 98% accurate meter reading. Today, it 
is totally dependent on weather and the availability of our personnel 
to read meters manually. 
All these things that customers naturally expect are technology 
enabled. We could not do it without Mamatha and her team. They are 
the backbone of our Smart Energy program. What used to be purely a 
meter exchange program is now a technology-based project. 
Chamarthi: Together, we made a joint commitment to implement the 
Smart Energy program. It was not Patti saying, “Well, here is my 
commitment,” and then me saying, “Here is mine in support of Patti.” 
It was a joint commitment to the company about what we were going 
to work on together. 
Poppe: We sit side by side on all decision making and all program 
commitments. Neither one of us can sign without the other signing. 
It’s a mutual ownership. 
Patricia K. Poppe 
POSITION: Vice President, Customer 
Experience, Rates and 
Regulatory Affairs 
COMPANY: Consumers Energy 
WORKS FROM: Jackson, Michigan 
PROFESSIONAL BACKGROUND: In 
her role as Vice President, Patricia 
Poppe oversees customer service, 
marketing, Consumers Energy’s Smart 
Energy program, quality, and rates 
and regulatory affairs. Before joining 
the company, in 2011, she worked as 
director of DTE Energy’s North Region 
power plants, overseeing 3,000 MW at 
five generating facilities. 
EDUCATION: MBA, Kellogg School of 
Business, Northwestern University 
19 CIO Straight Talk
Smart Energy appears to be a success, and the credit 
goes to both of you. But what happens when things 
don’t go that well? 
Chamarthi: With our new CRM project, we both put our 
necks on the line. The project had been initiated by IT 
before we both joined, and the business case for it wasn’t 
clear. So we put the project on hold and said, “Let’s 
understand why it is we’re doing this. Let’s understand 
the business value of this and decide if it’s the right thing 
to do.” 
And then you decided to proceed? 
Chamarthi: Yes, and that was a significant step in our 
partnership. 
Poppe: It was an agreement that we are going to do this 
together. That little phrase sounds small, but it was 
significant. It wasn’t that IT is going to do this, and we 
will then make it work. 
Chamarthi: I would say the 
partnership only became stron-ger 
because of the hardship we 
went through. 
Poppe: That project actually 
didn’t go very well. 
Chamarthi: And when the 
project did not go as expected, 
we never once pointed fingers at 
each other. Instead, we said, 
“Let’s come together and lead 
the team.” 
Together, we made a joint 
commitment to the company 
of what we would do for the 
Smart Energy program. It was 
not Patti saying, “Well, here is 
my commitment.” And then I 
saying, “Here is mine in 
support of Patti.” It was a joint 
commitment, about what we 
Poppe: I think there’s a lesson 
here that can be applied to any 
business in any industry. You 
can be great partners when 
things are going well, but when 
trouble happens, does that 
partnership stand the test? 
There was no benefit in us not 
supporting one another. I was 
heavily reliant on Mamatha and 
her technological expertise. She 
was very much reliant on my ability to motivate and align 
my organization around changes in business practices. I 
think we both learned that no technology project can be 
implemented without people, process, and technology. I 
own the people and a big chunk of the process, and all 
three of those things have to come across the finish line 
together. If they don’t, the technology solutions don’t 
succeed. The CRM project was not our favorite imple-mentation, 
but we learned a lot. 
were going to work on 
together. 
Chamarthi: We learned so much about the teams and 
their expertise. There were vendors that tried to play 
Patti and me against each other, but no one could touch 
our partnership. 
Poppe: And this attitude then trickles down into the 
organization. We didn’t have people feeling like they had 
to fight with one another. We were very publicly and 
privately in support of one another, and we wanted to 
cross the finish line together. That was the goal. There 
was no advantage to one of us crossing without the other. 
The only victory was if we could cross that finish line 
together, and I think that was a strong theme that perme-ated 
the organization and set the stage for the next 
several technology projects. 
Give us an example of another successful 
collaboration between the two teams. 
Poppe: Well, here is a story with some real takeaways for 
any kind of technology implementation. A critical touch 
point for our customers is how we communicate with 
them during power outages. We had on the books a plan 
to launch an outage map, but 
when we started looking at the 
plan, we realized that the 
outage map is only an online 
representation of estimates 
from the field. It is only as 
effective as the reliability and 
accuracy of the estimated time 
of restoration, as delivered by 
our field organization. 
Chamarthi: We actually had 
two distinct projects. One was a 
technology project to develop 
and launch the outage map, 
and the other one was a process 
project to correct the estimated 
time to restore. 
Poppe: But they were initially 
decoupled from each other. Our 
VP of energy delivery had a 
project on his radar to improve 
our estimates, but this was 
unrelated to the project to 
implement an outage map. We 
had formed what we call the 
Customer Council, a group of officers responsible for all 
the key customer satisfaction drivers. In a meeting of the 
council, we discovered the two previously decoupled but 
very much related projects. 
While the input from our customers was very clear — 
they would cut us some slack on getting the power back 
on after a major storm, but they wanted to know when 
the power would be restored — it turned out this was 
never communicated to the field organization. So the line 
crews did not think it was worth their while, when they 
were busy trying to fix the problem causing the outage, to 
take a few minutes to input their estimates for the time of 
20 CIO Straight Talk
power restoration. When they found out how important 
these estimates were to our customers, the line workers 
changed their behavior. You know, “I’m up on the pole, 
I’m the only person in the world who can estimate when 
this power will be back, and I guess it’s worth it for me to 
take three minutes to call dispatch or enter it in my 
on-truck device.” Previously, they put in their estimates 
in only 20% to 30% of cases, but now that happens 80% 
to 95% of the time. We now have accurate estimates, and 
we can communicate to the customer a one-hour window 
for when the power will be restored. 
Chamarthi: And the outage map is now available on 
smartphones. Computers don’t work in a power outage, 
and customers have to rely on their smartphones. They 
can also access our social media, where we show 
estimated power restoration times for their region. If we 
had gone just with the outage map project, and imple-mented 
only the technology, customers would be looking 
at bad information, the wrong estimated time to restore. 
They would be even more unhappy with us. I think it was 
Bill Gates who said that when technology is not imple-mented 
with the corresponding process changes, it only 
highlights all the flaws in your process. 
What is the key lesson you learned from your 
collaboration? 
Chamarthi: We have seen huge success when we empow-ered 
people and told them they are accountable, but also 
insisted on collective responsibility and not letting them 
deliver just in their own silos. All our projects have been 
measured by how collaborative we are, how well we bring 
together technology, process, and people. 
Poppe: We have created a technology road map for all 
customer-facing projects for the next three years and 
have included in that road map the people and process 
changes that will enable those technology solutions to 
work. That is a huge change for us. This is why it’s not a 
stretch to say that the business and the technology team 
are completely integrated. We now know how to do this. 
We have learned how to combine people, process, and 
technology to deliver a solution that creates a new 
standard of excellence for our customers. 
I think that is a lesson here that 
can be applied to any business in 
any industry. You can be great 
partners when things are going 
well, but when trouble happens, 
how well does that partnership 
stand the test? 
The Takeaways 
• A successful IT-business partner-ship 
requires shared commitment 
and accountability – and a refusal to 
point fingers when things go wrong. 
• For a technology implementation to 
succeed, you need to bring together 
technology, process, and people. For 
example, when technology is not 
implemented with the correspond-ing 
process changes, it can actually 
highlight all of the flaws that exist in 
the process. 
• Two projects launched in different 
organizational silos can undermine 
one another – or, if integrated, 
reinforce one another. 
21 CIO Straight Talk
Straight Talking 
UKAR is the holding company for the mortgage lending units of two midsize UK banks — Northern Rock Asset 
Management and Bradford & Bingley — that were forced into nationalized ownership during the credit crunch of 
2007-2008, creating the sixth-largest lender in the UK. 
22 CIO Straight Talk
WHEN EFFICIENCY AND 
FLEXIBILITY TRUMP ALL 
Transforming IT for an organization whose mission is to 
run down the balance sheet requires strong change 
leadership, a great partner, and a lot of nerve. 
Mathew Jackson 
mathew.jackson@ukar.co.uk 
POSITION: Services Director 
COMPANY: UK Asset Resolution 
WORKS FROM: Bingley, Bradford, United 
Kingdom 
PROFESSIONAL BACKGROUND: Mathew 
Jackson is a member of the UKAR 
Executive Committee and is responsible 
for IT, change, property services, and 
procurement. From 2010 to 2012, he 
served as Head of Transformation, leading 
the integration of Northern Rock Asset 
Management and Bradford & Bingley, 
where he had worked for 20 years, holding 
senior positions in operations, retail, 
strategy, lending, and change. 
EDUCATION: MS, University of 
Huddersfield 
PERSONAL PASSIONS: Now that the IT 
transformation at UKAR is nearly 
complete: spending time with his wife and 
ten-year-old daughter, walking, 
undertaking DIY projects, and reading the 
occasional book 
23 CIO Straight Talk
UK Asset Resolution was formed in October 2010 with a 
unique mission: to wind down the £110 billion of assets 
on the balance sheets of two previously independent 
midsize UK banks — Northern Rock Asset Management 
and Bradford & Bingley — that had been forced into 
nationalized ownership during the economic downturn. 
Our primary objective is to repay the UK taxpayer the 
money we owe. At the time it was £49 billion; that’s down 
to £43 billion today. Because of our nationalized status, 
we’re not able to lend money, and we’re not trying to 
grow. 
Once we’ve paid the taxpayer back, probably in 2023, 
we’ll have around £20 billion in assets under manage-ment 
in terms of mortgages. We’ll still be nationalized, so 
we’ll continue the journey to run it off. But it’s possible 
that something will change to enable UKAR to generate 
growth opportunities. We recognize that we will likely 
have to create opportunities for employees, possibly 
through a separate operating company, while continuing 
to run down the balance sheet. 
That is the business and financial context for what 
has been a two-stage transformation, nearly complete, of 
UKAR’s IT capabilities. 
Stage 1: Data Rationalization and Migration 
A key condition of state aid was to separate Northern 
Rock Asset Management from 
the new Northern Rock, which 
was subsequently sold to Virgin 
Money. The most effective 
approach was to combine North-ern 
Rock Asset Management 
and Bradford & Bingley. This 
removed the asset management 
business from the Northern 
Rock infrastructure and maxi-mized 
economies of scale from 
the new organization. 
Our first task was to migrate 
data and people away from 
Northern Rock into a scaled-up 
Bradford & Bingley infrastruc-ture. 
There were £50-plus 
Not many UK financial 
services organizations have 
moved to a completely 
outsourced model, so we’re a 
great showcase account for 
an outsourcing partner that 
gets it right. 
billion of assets — or around 
700,000 mortgages — held in Northern Rock’s legacy 
infrastructure, along with all the archive data, the 
general ledger, treasury management systems, and so on. 
Bradford & Bingley previously had been right-sized and 
reshaped from a trading, savings, and mortgage bank 
into a mortgage lender and servicer in run-off mode. So 
we had to scale that infrastructure up and undertake the 
process of transforming, rationalizing, and migrating the 
Northern Rock data. 
Northern Rock had 33,500 mortgage products; we 
reduced that to 3,500. We did the same across all key 
areas: general ledger, treasury management, and histori-cal 
data. There were over 80 million historical images 
that we brought across — probably about ten terabytes of 
data. 
We were facing an EU deadline to migrate the data as 
part of Northern Rock’s original loan agreement — we 
had just over 12 months to do what was probably one of 
the most complex mortgage book migrations in the UK. 
There’s nothing better than having a fixed date to focus 
the mind. The executive team had to be recruited and 
appointed into roles in the newly formed UKAR organi-zation, 
from the CEO on down. We had an open recruit-ment 
and selection process across the two heritage 
businesses. Once we had a single management team with 
a single focus, we made a big effort in the first three 
months to ensure that everyone, top to bottom, was 
aligned with the mission, the strategic objectives, and the 
values of the new business. As a result, we were able to 
make decisions quickly. 
We retrained our 1,700 colleagues from Northern 
Rock on new systems and processes. Everything changed 
in terms of the systems and the telephony infrastructure, 
so it was a people as well as a technology transformation. 
We also consolidated sites, migrating 700 people’s work 
from Northern Rock in Newcastle to UKAR in Bingley 
and Sunderland. 
The heritage Bradford & Bingley IT function was 
largely outsourced, with our core retained IT organiza-tion 
focusing primarily on architecture and governance. 
We didn’t have people experienced enough to manage 
what amounted to a £95 million IT program, so we had 
to go out and build a team to do 
program management. Overall, 
Stage 1 was very successful, 
taking around 15 months, with 
only a two-month delay to the 
mortgage book migration to 
avoid the year-end reporting 
period. 
Stage 2: IT Transformation 
and the Move to a New 
Partner 
Given UKAR’s mission, our 
primary operational focus is 
cost efficiency and effective-ness. 
IT was a substantial part 
of our fixed cost base. We 
needed our costs to be as variable as possible, but we 
knew we had to invest in our technology infrastructure, 
which was somewhat aged and starting to create service 
issues, particularly as we doubled the number of custom-ers 
and colleagues. 
We reviewed our operating model and reaffirmed 
that a primarily outsourced model was right for our 
organization. Our first-generation, ten-year outsourcing 
contracts — one for servers, application development, 
and maintenance services, the other for telephony and 
networking — were coming to an end. We went to a 
whole market tender and selected HCL as our new 
partner. 
HCL was our choice for a number of reasons. The 
24 CIO Straight Talk
work. What was most impressive about HCL was that it 
embraced the revised program and didn’t insist on 
renegotiating the contract before responding to the 
challenge. HCL’s professionals have continued to exhibit 
that kind of willingness to work through problems — for 
example, compromising on the governance and structure 
of the program. This flexibility, unlike anything I’ve seen 
with previous suppliers, along with great technical 
capabilities, has made HCL an excellent partner. 
Although the entire journey has had its twists and 
turns, we’ve recently completed the migration with no 
significant issues. It takes a lot of nerve to effect this kind 
of transformation, from the chairman, the board, and the 
chief executive on down. If you don’t have that universal 
sponsorship, you will never be able to do something like 
this. That’s been one of the overriding messages of the 
past couple of years, from the integration to the migra-tion. 
The program team had that unflagging support. 
The benefits have been enormous. We’re now one 
organization — in terms of systems, processes, and 
culture — coming from two different heritages. We’ve 
reduced our cost base by £50 million. And we’ve got a 
platform that offers flexibility to allow for continued 
contraction — or growth if we find the right 
opportunities. 
We had just over 12 months to do 
what was probably one of the most 
complex mortgage book migrations 
in the UK. There’s nothing better 
than having a fixed date to focus the 
mind. 
The Takeaways 
• When choosing an outsourcing 
partner, don’t underestimate the 
importance of the partner’s willing-ness 
to be flexible when conditions 
change unexpectedly. 
• You may be able to position yourself 
so that you are an attractive 
customer to a service provider for 
reasons other than the financial 
terms of the contract. 
• Undertaking a particularly challeng-ing 
transformation requires the 
steadfast backing of senior manage-ment. 
company’s proposal was much better from a pricing point 
of view, and it gave us a great opportunity to variablize 
our cost base because of the way the infrastructure was to 
be architected. It also included some innovative 
approaches and embodied a lot of flexibility in both the 
commercial model and a service-level arrangement based 
on business outcomes, as opposed to a typical 
availability-level model. 
Of course, the attractiveness of the offer reflected the 
attractiveness of us as a customer. Unlike our incumbent 
partners — who I think miscalculated our potential as a 
holding company for two failed financial institutions — 
HCL saw us as an opportunity. Being wholly owned by 
Her Majesty’s government made us an attractive client in 
terms of future potential. Moreover, not many UK finan-cial 
services organizations have moved to a completely 
outsourced model, so we’re a great showcase account for 
an outsourcing partner that gets it right. 
Benefits and Challenges 
HCL built two new UK data centers. We’ve gone from 
being about 30% virtualized to about 85%, and we’re 
already starting to enjoy the benefits of that in terms of 
agility and the ability to scale up and repurpose different 
parts of the infrastructure. 
The key challenge involved our move to a new service 
provider. The original hypothesis was that we would build 
the new data centers, clone the existing application 
infrastructure, reinstall that, and then undertake the data 
migration. But we weren’t able to do that because one of 
our former service providers claimed ownership of the IP 
around the configuration of the system installation and 
wouldn’t give us the access needed to carry out the migra-tion. 
So we had to effectively start from scratch, 
documenting all the applications in terms of the design 
architectures and the installation process, and bring in 
third-party vendors to help us through that. 
It’s taken probably a year longer than we had antici-pated. 
The benefit to me, though, is that I now have a fully 
documented infrastructure, and HCL has had to learn the 
hard way how those applications are knitted together and 
25 CIO Straight Talk
Straight Talking 
Covance Inc., based in Princeton, New Jersey, is a contract research organization providing drug 
development and animal testing services. Spun off from Corning Inc. in 1996 as a public company, it today 
has annual revenues of more than $2 billion and 11,000 employees in more than 60 countries. Its central 
laboratory network is one of the world‘s largest. 
26 CIO Straight Talk
BUSINESS-DRIVEN IT 
AND IT-DRIVEN 
BUSINESS 
We know that IT needs to be tightly aligned with the 
business. But in a world where IT can drive valuable 
new revenue-generating opportunities, the business 
may sometimes find itself falling in line behind IT. 
POSITION: Corporate Senior Vice President 
and Chief Information Officer 
COMPANY: Covance 
WORKS FROM: Princeton, New Jersey 
PROFESSIONAL BACKGROUND: As Senior 
Vice President and CIO of Covance, a 
provider of drug development services to 
pharmaceutical companies worldwide, Bill 
Klitgaard leads the Covance Global IT 
organization, serves as a member of the 
Executive Committee, and chairs both the 
IT Investment and the Executive IT steering 
committees. Although he has spent the 
majority of his career in finance — he 
served for almost 12 years as Covance’s 
CFO before becoming CIO, in May 2012 — 
he has always had a passion for 
technology. 
EDUCATION: MS, MIT Sloan School of 
Management; BA, University of California, 
Berkeley 
PERSONAL PASSIONS : Bicycling, hiking, 
backpacking, any quiet and beautiful 
location 
William E. Klitgaard 
William.klitgaard@covance.com 
27 CIO Straight Talk
IT is becoming increasingly important to the success of 
our business of providing drug development services to 
pharmaceutical companies. So let’s first look at some 
significant investments we’ve made in IT over the past 
few years. 
Building the IT Foundation 
Our big investments have been in three areas: 
modernization and consolidation of our data center; 
modernization of our business platforms — the systems 
that run our central labs and that we use in our clinical 
business; and modernization of our end-user platforms. 
We are moving our applications to modern, 
state-of-the art, highly secure, always available data 
centers running a virtual environment. As a result, we 
expect to lower our risk and have fewer performance 
issues due to power or hardware failures, or having 
different things on different pieces of technology. We’re 
able to reuse or recommission capacity and to blend 
workloads. 
We’re using architectural designs that are consistent 
with the cloud, so we can explore a hybrid environment 
as we mature. We expect to be 
able to compare our activities 
and costs to outside resources, 
and to communicate more 
clearly with our business 
partners about what they’re 
consuming. For the first time we 
will have transparency. Our 
business partners can choose — 
and pay for — the level of service 
they need. 
We’ve built on a reference 
We should be able to 
compare what we're 
doing with what's 
available externally — 
that's healthy for IT and 
it's healthy for the 
architecture employed around 
the globe. We use data 
de-duplicate technology to 
reduce our storage footprint. 
We’ve increased our speed of 
provisioning — for example, 
recently we were able to stand 
up a server, storage, and 
network solution for an internal customer in 15 minutes; 
it used to take a month. This speed will increase 
reliability and lower incremental costs, and it will allow 
us to exploit the cloud over time. 
Similarly, we’ve modernized the systems in our 
central labs and clinical trial management businesses, 
which will improve collaboration, processing, and 
efficiency. We are establishing a master file for managing 
trial data centrally, with a controlled workflow and only 
one file to audit, rather than having it all over the 
company; this alone has provided huge efficiencies in 
clinical development activities. 
Analytics: The Art of Data Science 
Informatics, an increasingly important part of our 
business, sits on top of this new infrastructure. We made 
a strategic decision to hire people exceptionally talented 
in informatics and analytics, assembling a team of data 
scientists. We’ve built a number of tools that help clients 
choose sites for their clinical trials and do trials faster 
and more efficiently, among other things. We can look at 
the performance characteristics and track records of all 
the clinical sites we’ve worked with and then overlay 
information about projects in the pipeline to predict 
workload and what sites will likely perform best on the 
next trial. As a result, we’ve gotten better at site selection 
and have outperformed our competitors in the execution 
of trials. 
Business-Driven IT: Focus on Business Outcomes 
All of these investments have been made with the 
strategic needs of the business in mind. The idea that IT 
has a monopoly on technology is passé. Business leaders 
can go out and get services and IT systems on their own. 
The CIO who says no is going to get run over. 
As a former CFO, my advice to CIOs who want to 
elevate the role of IT is this: Show the CFO and other 
company leaders the business impact of new technolo-gies 
and get them excited about the possibilities. These 
technologies have the power to 
transform what we do. Start 
with the business outcomes 
and let the technology be 
secondary. Once that connec-tion 
is made, the discussion 
becomes easier: What do we 
want to do and what can we 
afford? 
Don’t get caught up on cost, 
because that’s a losing battle. If 
you think about IT as a cost, 
you’ve lost. At the same time, 
it’s important to have financial 
transparency so end users 
know what they’re being 
charged for and why. We 
should be able to compare what 
we’re doing with what’s 
available externally — that’s healthy for IT and it’s 
healthy for the business. 
Companies will suffer if CIOs don’t get out in front of 
this. What’s alarming is when people act on a rogue basis 
and just go around IT. Pretty soon there are scores of 
people using some new database or software. Over time 
those “uncontrolled” investments can become critical to 
operations, but they’ve never gone through a system 
development process. They’re full of bugs that IT is left to 
fix. 
To avoid that, we need to engage much more with the 
business about its needs and get out of the role of just 
taking orders to install a particular piece of software. We 
have to approach things from the perspective of, “Let me 
understand what you’re trying to do here — let’s try this.” 
Ultimately it’s about transparency, stakeholder engage-ment, 
being open to externalizing some parts of IT and 
business 
28 CIO Straight Talk
being able to integrate that into the rest of what the company 
is doing. 
IT-Driven Business: Create New Revenue Streams 
The investments we made in IT strengthened Covance’s 
technical profile. But they also did more than that — they 
opened up entirely new business opportunities. 
A lot of companies haven’t made the kind of investments 
we have and may not want or be in a position to do so 
themselves. Now we’re considering whether we can offer what 
we’ve got to others doing clinical work in a software-as-a-service 
or platform-as-a-service model in a private cloud 
environment. 
If everything comes together, a year or two from now we’ll 
also be selling IT services to enable clinical trials. We’re 
already selling the provision of those services — clinical trial 
processes, central lab work, and preclinical work. And we’re 
selling the analytics capabilities to help with decision making 
and portfolio optimization. The technology capabilities allow 
us to offer a different set of services than our competitors and 
to differentiate our services in a way that becomes compelling. 
We become a one-stop shop. If you can get from Covance 
something that allows you to perform better on your clinical 
trials and do the trials faster and more efficiently, and we can 
get the capacity to do the work — that’s powerful. The 
customer gets high-quality work and the analytics to do the 
work more intelligently. 
IT is often process-intensive and subject to a lot of 
structure — systems development life cycles, releases, testing. 
But as we’ve seen, there’s a time and a place to be more nimble 
and innovative. We started the informatics group as part of 
Resource Management when I was CFO, and we began to look 
at predictive models to balance supply and demand. We’ve 
approached some of this like it’s a sandbox where we can try 
different things and explore what’s possible. It’s about how we 
come up with new tools and ideas to better manage our 
company. 
At the time, I was accused of running shadow IT; 
fortunately for us, it’s now all part of the same group. But this 
is a cautionary tale for CIOs who aren’t taking the initiative on 
innovation. 
The Takeaways 
• Now that business leaders can 
procure technology on their own, 
from multiple sources, companies 
can end up saddled with ineffective 
and incompatible products. CIOs can 
head off that scenario by engaging 
business stakeholders in transparent 
discussions about their needs and 
what IT can offer. 
• Substantial investments in IT don't 
just strengthen a company's technical 
capabilities — they can also open up 
new revenue streams and 
opportunities for differentiation. 
• IT is a process-driven, structured 
endeavor, but it needs to be an 
integral part of initiatives aimed at 
innovation and experimentation. 
The idea that you have some 
space to play…is very healthy, 
and that’s something I want to 
keep within IT. 
Now that Informatics is part of IT, we’re strengthening 
that capability and exposing the innovation lab aspect to our 
operational people and our IT people. It’s starting to generate 
a little bit of a buzz internally. The idea that you have some 
space to play — some air to go try things out just for fun and 
see how they work — is very healthy, and that’s something I 
want to keep within IT. 
29 CIO Straight Talk
Straight Talking 
SAP Americas is a subsidiary of SAP AG, a global enterprise software and services company with 
operations in more than 130 countries. SAP Americas oversees the company’s business operations in the 
U.S., Canada, Latin America, and the Caribbean. 
30 CIO Straight Talk
SAP RUNS SAP: 
HOW TECHNOLOGY 
MADE IT HAPPEN 
When the IT function at SAP began rolling out pre-beta 
versions of the company’s latest enterprise products for use 
across the organization, it moved from a support role to an 
integral part of the business. 
Michael Golz 
michael.golz@sap.com 
POSITION: Senior Vice President and Chief 
Information Officer 
COMPANY: SAP Americas 
WORKS FROM: Newtown Square, Pennsylvania 
PROFESSIONAL BACKGROUND: As SVP and CIO, 
Michael Golz is responsible for aligning IT 
strategy with SAP’s business strategy, directing 
IT investment, and providing best-in-class 
processes and operations for all SAP lines of 
business in the Americas. He leads the unique 
global SAP Runs SAP program, which highlights 
the role of SAP’s own IT function in using and 
helping to develop SAP products in areas such as 
enterprise mobility, in-memory and database 
technology, green IT, and cloud computing. As a 
result, SAP Global IT has become the company’s 
best customer reference, and Golz frequently 
speaks to customers about IT’s firsthand 
experiences with SAP software. 
EDUCATION: BS, European Business School, 
Oestrich­Winkel 
PERSONAL PASSIONS : Tennis (“Especially with 
my twin boys — though we have passed the point 
where I can still win”), scuba diving, family travel 
31 CIO Straight Talk
I came to the U.S. in 2002 for a two-year assignment — 
and never left. It was a total change in culture, in terms of 
both the differences between Germany and the U.S. and 
the difference between being at headquarters, where the 
concerns are more around corporate functions, and 
being out in the field, where there is a direct connection 
between IT and the business — in particular sales, 
marketing, and field operations. 
I learned that you have to bridge the gap between 
what you can do from a global perspective and what’s 
possible on the ground. We’ve now made that capability 
part of the DNA of the entire IT organization, and as a 
result we’re able to deliver business results very quickly 
with a shorter planning cycle. 
Driving Product Development 
Three years ago we reviewed what strategic contribution 
IT could make within SAP and decided that we could be 
at the forefront of using SAP’s own technology and 
solutions. So we brought our entire system landscape to 
the latest release levels and strategically chose areas such 
as mobile and in-memory technology/HANA (for 
“high-performance analytic appliance”) to implement 
SAP solutions even before they were in beta status. We 
now provide feedback to the product teams, and our 
feedback makes it into the product release that gets 
shipped to the customer. 
We’ve learned a lot through this process; 
development, global support, and the business have 
learned a lot, as well. For example, we were one of the 
first companies to do a mass deployment of iPads, very 
shortly after they became available. Using the SAP 
mobile platform, we proved we could deploy thousands 
of mobile devices in a large enterprise — we are now at 
more than 50,000 iOS devices — with full connectivity to 
corporate systems in a way that is secure and allows you 
to provide apps in an enterprise app store. More 
generally, our BYOD (bring-your-own-device) program 
has made it possible for employees to use a variety of 
their own devices in the workplace instead of having to 
use a single company-issued device at work. 
The iPad program is an example where we started 
early, generating traction by sharing our experiences 
internally and externally to demonstrate what is possible 
with the consumerization of IT and, more important, 
how it can provide business value by allowing employees 
to become more mobile and efficient. This is a new 
business role for us: to make available to the business 
side the information we get from those deployments, 
including success stories that we can use with customers. 
It gives us the ability to talk to the CIOs of our customers 
and prospects about how you implement a new 
technology or solution, the business case behind it, the 
benefits and pitfalls, and what combination of solutions 
was an immediate hit with the sales organization, for 
example, or what has really proven valuable for finance. 
That always sparks a lot of good conversations with our 
customers. 
Fostering Innovation 
We’ve also reserved 5% of our build budget for 
innovation that is driven by IT. If we do ten prototypes, 
and only three or four get real adoption, and we just learn 
something from the rest, that’s fine. You have to be 
willing to try a lot of things and accept that not 
everything is going to get traction. Normally in an IT 
THE THREE PILLARS OF IT VALUE 
When we defined our IT strategy, we thought about the things we really need to do well to deliver the most 
value to SAP. They fall into three categories. 
The first pillar is the 
The second pillar is the 
The third pillar is the strategic — in 
transactional, regular IT 
transformational, helping 
our case, how do we introduce 
business. It’s important to 
different units from across 
innovation, how do we adopt our 
make sure you get the 
the company become more 
solutions as early as possible, 
basics right: doing things 
efficient by transforming the 
how do we ourselves implement 
on a global level, finding 
way they operate. Our role is 
SAP solutions in order to give 
the right standards, 
to understand the business 
feedback to the development 
keeping costs down, 
requirements, bring in our 
organization and bring these 
handling security and 
expertise and new ideas from 
experiences into conversations with 
compliance. If you don’t 
a process perspective, and 
customers. In some cases, Global 
have those under control, 
help implement the 
IT has been able to contribute ideas 
all the rest becomes 
right solutions. 
to products in development. 
almost irrelevant. 
32 CIO Straight Talk
Where does SAP go from here? 
SAP, one of the largest providers of enterprise appli-cation 
software, is at a turning point. Although the 
company’s enterprise software and software-related 
services continue to be critical to the business opera-tions 
of thousands of organizations across the globe, 
the market for those services is mature, raising ques-tions 
about SAP’s future. 
A global survey by HCL Technologies of 220 CIOs at 
companies with revenues in excess of $1 billion 
across industries indicated that the very proliferation 
of SAP systems suggests an answer to the question of 
where SAP, and its customers, are headed: the 
consolidation of the numerous systems found at most 
large companies. In many cases, this will involve not 
only the integration of existing systems but the trans-formation 
of the IT infrastructure through the adop-tion 
of a single enterprise platform. 
The survey, commissioned by HCL and conducted 
by independent research company Vanson Bourne, 
found that, on average, large enterprises are running 
more than five separate instances of SAP, with nearly 
39% of respondents reporting that they were running 
more than six. The data showed that the average cost 
per user (more than $1,500) for enterprises running 
multiple SAP instances is 25% higher than for those 
running a single instance. So consolidation could 
create huge savings. In fact, across SAP’s more than 
22,000 large ERP customers, the potential annual IT 
cost savings amount to more than $30 billion globally. 
More detailed research of enterprises that had 
made the move to a single instance found that for 
every $1 saved in IT, the business expects to find $3.4 
of leveraged savings. This raises the total global 
benefits opportunity to more than $130 billion, on an 
annual basis. 
While these findings present a clear business case 
for consolidating SAP instances, many companies 
may run into substantial political and operational 
hurdles, preventing them from achieving that Holy 
Grail: the single SAP instance. One hurdle is the 
seeming cost-effectiveness of integrating existing 
SAP, as opposed to investing in a single consolidated 
system. 
But such a move is unlikely to represent a savings 
in the long run. That’s because disruptive trends such 
as cloud, in-memory, and mobile computing will 
require the transformative creation of a single enter-prise 
system. 
Some 75% of respondents reported both that they 
had implemented cloud services in some form and 
that SAP technology played a significant role in their 
cloud plans. 
Similarly, more than three-quarters of those 
surveyed said they planned to deploy in-memory 
computing, with its tremendous potential to speed up 
existing applications and enable previously unthink-able 
applications through the mixing of transactional 
and analytical functions within a single application. 
Some 80% of respondents said that SAP HANA would 
play a major role in their in-memory initiatives. 
SAP technology on-premise, on-demand, and 
on-device. Certainly, having fewer instances of SAP 
will make this journey a lot smoother for many organi-zations. 
With Business Suite now available on HANA, 
the adoption rate is likely to be even higher. 
In the case of mobile computing, more than 90% 
said they were planning or already had a mobility 
strategy, while more than half of those said that SAP 
technology would be the cornerstone of that strategy. 
Of course, the challenge for CIOs is how to pay for 
these disruptive technologies. The study found that 
the savings generated by the consolidation of SAP 
instances could be applied to the adoption of such 
technologies, which would likely create competitive 
advantage for the future. 
For details and the entire report of the survey, visit www.futureofsap.com. 
33 CIO Straight Talk
project you plan it out, you have a deployment schedule, 
and you manage risk. These initiatives are different in 
that failure is OK. 
The biggest challenge at the beginning was to carve 
out the budget, time, and resources to get started. Once 
we had the process for IT-driven innovation up and 
running and could show it was 
beneficial, it became almost a 
self-funding exercise, because 
people liked what they got out of 
it. 
However, this is one area 
Normally in an IT project you 
plan it out, you have a 
deployment schedule, and 
you manage risk. These 
initiatives are different in that 
that you don’t want to turn over 
to the business to prioritize, 
because then budgets might be 
used to fund the regular 
implementation of certain 
business priorities. This is a big 
challenge for a lot of CIOs: 
When demand is much greater 
than capacity, it’s not easy to go 
back to the business and say, 
“Not only do we have budget and 
resource constraints for what 
you’re asking, but I’m also 
withholding some of the capacity that I have in order to 
do innovation.” At the same time, we bring the latest 
solutions and technologies into our regular 
implementation projects wherever possible. Innovation 
has become pervasive in our IT portfolio. 
Serving as Innovation Broker 
failure is OK. 
That’s not to say there isn’t a role for the business in IT 
innovation — quite the contrary. The CIO has to be in 
charge of the big picture and the overall technology road 
map — enterprise architecture and implementing and 
running the backbone of the company. But the CIO is 
also becoming more of a broker for the rest of the 
business. In our case, we opened our mobile platform to 
the entire company so that employees could develop 
mobile apps. IT checks each app for security and then 
makes it available to the rest of the company for 
download. Basically, our community members “vote” on 
the value of the app with their downloads. If enough 
people download it, we’ll take it into the IT catalog and 
support it. 
The traditional way would have been to build out a 
mobile road map and not develop anything until a final 
framework was defined and we had UI standards and 
had made sure it would work with everything else. It 
would have been a very lengthy process, and it would 
have been 100% driven by IT. But there’s a lot of 
creativity out there, and a lot of people now have the 
ability to develop solutions. It’s our job to make sure the 
best ideas find their way into the official set of IT 
solutions that we roll out and support. 
This is a different way to think about innovation — 
but it shouldn’t be confused with having no controls at 
all. With cloud computing, some business users are in a 
position to implement something without going through 
IT. This is rarely a good idea. IT should be the broker, 
making sure the right solution is selected and that it is 
configured in the right way for security and reliability. 
Many solutions these days are 
hybrid, and IT has a key role in 
their implementation and 
integration. 
Consulting with Customers 
The last area in which IT has 
become part of the business is 
in rolling out our new HANA 
Enterprise Cloud offering to 
the market. Our infrastructure 
colleagues have implemented 
HANA-based business systems 
internally: Our CRM system 
runs on HANA, our ERP 
system runs on HANA, our BW 
(business information 
warehouse) system runs on HANA, and many other 
systems have been put onto the HANA platform. So it 
was a logical move to say that the unit that has been 
deploying it for SAP as a large enterprise customer 
should be a key part in forming the new offering. This 
team merged with other resources throughout the 
business to form the HANA Enterprise Cloud unit, which 
provides services to external customers in addition to 
running and operating all of SAP’s internal systems. I 
think it’s a great statement that IT was a key partner in 
launching this offering. 
The Takeaways 
SAP’s IT function has become an early adopter of 
the company’s own technology, deploying SAP 
solutions, sometimes even before they are in beta 
status, and providing valuable feedback to product 
developers. 
In this new strategic role, IT is able to talk more 
effectively to customers and prospects about how 
to implement SAP solutions and the business 
case for doing so. 
The CIO can be an innovation broker, ensuring the 
security and reliability of new solutions — no 
matter where in the company they are developed. 
• 
• 
• 
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CIO Straight Talk Issue 4

  • 1. www.straightalkonline.com Issue Number 4 2013 ITSMA Marketing Excellence Awards DIAMOND AWARD WINNER Thought Leadership Read CIO Straight Talk on your mobile device — for free! magazine.straighttalkonline.com/issue4 Soon to be available on: Apple Newsstand Magzter - Magazine Store Nxtbook Nxtstand Join our group
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  • 4. Cover Article 7 Things CIOs Are Doing to Get Ahead in the DIGITAL ECONOMY • Experience Talks • The End of IT Innovation • The CIO’s Choice • Other Voices Straight Talking 06 Content 14 Crossing the Finish Line Together Patricia K. Poppe, VP, Customer Experience and Operations, and Mamatha Chamarthi, VP and CIO, Consumers Energy 24 34 Innovation by Amateurs Scott Blanchette, SVP and CIO, Vanguard Health Systems, and MIT Sloan CIO Award Winner, 2013 20 28 SAP Runs SAP: How Technology Made It Happen Michael Golz, SVP and CIO, SAP Americas Business-Driven IT and IT-Driven Business William E. Klitgaard, Corporate SVP and CIO, Covance When Efficiency and Flexibility Trump All Mathew Jackson, Services Director, UK Asset Resolution Plus:
  • 5. Spotlight 39 44 Subject: IT-Marketing Collaboration From: Chief Information Officer To: Chief Marketing Officer Cc: Head of Sales Being a CIO: It’s Not a Job, It’s a Lifestyle John Halamka, CIO, Beth Israel Deaconess Medical Center, and author of Life as a Healthcare CIO blog Points of View Always On, Always in Context Robert Scoble, Startup Liaison Officer, Rackspace, and author of the blog Scobleizer The CIO-CMO Dream Team The Rise of the Chief Marketing Technologist Scott Brinker, author of the “Chief Marketing Technologist” blog Double Duty: Living the CIO–CMO Convergence Rom Hendler, former CMO and Interim CIO, Las Vegas Sands New-Age Outsourcing Five outsourcing advisors describe emerging models View from the Technology Blogosphere 54 58 Issue Number 4 I wanted to share with you some thoughts that I believe are relevant as our company transforms itself – or is trans-formed, like it or not, by the business environment – into a digital enterprise. First, a few observations about your customer – our customer – in this context. I’m not telling you anything new when I say that customers have changed, as has their purchase process. It’s no longer enough to create a great television spot or print ad, then sit back as the customer walks into the store or calls a toll free number. For that matter, it’s no longer enough for us to hire a top-notch sales force as a means of generating revenue growth from our business customers. The leverage that you – or Sales – once had over the customer in terms of control-ling the interaction is quickly becoming irrelevant. Today’s buyer is smart, resourceful, and connected through social media, someone who does his or her own research before entering the formal marketing and selling channels. What Google breathlessly calls the “zero moment of truth” – when a buyer goes online to learn about a product or service, usually before any interaction with the company that offers it – is reversing traditional information asymmetry, in favor of the buyer. Whatever you think of the term, a marketer that is able to positively interact with or influence a potential buyer at this moment will regain some of the power that has migrated to the customer. Next, a few thoughts on technology: Influencing a buyer online is a very different undertaking than influencing a buyer in the traditional way. Smart CMOs like you – and, if I may, business-savvy CIOs like me – are seeing opportunities to influence customer behavior through technology. This is ushering in an era of marketing and technology convergence, as marketers try to grow the top line by leveraging customer data – much of it “big data” – and using technology to enhance the customer experience. Again, you probably already know most of this. Here’s something you may be less familiar with. Marketing technologies are proliferating at a dizzying rate. According to my last count, some 350 different companies are offering marketing technology services in five broad areas: digital marketing channels, marketing automation, analytics, data integration, and product extension. Some people predict that we’ll soon see a new position – in fact, a new profession – on your team: the marketing technologist. Hence, the oft-quoted Gartner prediction that, by 2017, the CMO will spend more on information technology than the CIO will. Well, I want to be clear about this: I don’t care who spends the money. But I want to be sure it is spent intelli-gently. Collaboration between the two of us can help ensure that happens. Attached are several interesting articles I’ve collected on this topic. Let’s talk when you’ve had a chance to look at them – a conversation that I hope will be the first of many. Working together would benefit both of us – not to mention the enterprise! I’m happy to swing by to chat about this, if you want to suggest a time. In the words of a famous actor, “I think this could be the beginning of a beautiful friendship.” Memo to the Chief Marketing Officer From the CIO
  • 6. CIO Straight Talk Team Ajay Nair, Amit Gandhi, Bharani Iyer, Edward Gardner, Elka Ghudial, James Riley, Jayabrata Nag, Joe Hogan, Mahesh Bhatt, Mohit Agarwal, Pankaj Kumar, Paresh Vankar, Steve Cardell, Vish Muralidharan Atul Sharma HCL Technologies 1st Floor, A-2, Sector – 3 Noida – 201301, Uttar Pradesh India sharma.atulsh@hcl.com CIO Straight Talk is a periodical published by HCL Technolo-gies (HCLT) meant for its existing and prospective clients for information purposes. The information contained in the publication contains general views based on the experiences of technology practitioners and subject matter experts within and outside of HCLT, expressed by them in their individual capacity and in no event shall HCLT (including its affiliates and group companies) be liable for any claim, damages or any other liability arising out of or resulting from this publication. You are advised to seek professional advice before making any decision that may affect your business. All contents are copyright © 2013 by HCL Technologies Ltd. All rights reserved. Excerpts may be reprinted with attribu-tion to HCL Technologies. Pride and Appreciation In early November, CIO Straight Talk received an ITSMA Diamond Award recognizing the global IT industry’s top thought leadership initiative. CIO Straight Talk – the magazine, along with our website, LinkedIn community, webcast series, in-person events, YouTube channel, and Twitter feed – was judged the best program out of 29 submissions in the thought leadership category. (ITSMA, originally the IT Services Marketing Association, is a research organi-zation serving B2B technology, communications, and professional services companies.) The seal on the cover of this issue is an expression of our pride in receiving the award. This letter is an expression of our appreciation. No sooner had we begun patting ourselves on the back than we realized what a debt of gratitude we owe to those who have contributed to Straight Talk over the past three years – whether as an author or inter-view subject for the magazine, a presenter at one of our webcasts or events, or a participant in the conversa-tions that take place on Straight Talk Interactive, the LinkedIn group. We are beholden to them because Straight Talk was honored for its unusual approach to thought leadership marketing, one that essentially turns the concept on its head. We believe that some of the most valuable thinking on information technology resides with IT profession-als. Straight Talk features insights that practitioners have gained from years of hands-on experience. Our aim is to share this often untapped source of industry wisdom with our contributors’ peers – to be a publica-tion “for CIOs from CIOs.” The ITSMA award was further validation of our belief in practitioner thought leadership. But a concept is one thing; content is another. There would be no CIO Straight Talk without the CIOs and other IT leaders who have shared their thinking via one of Straight Talk’s content platforms. Those practitioners deserve most of the credit for CIO Straight Talk’s success. So please join me in congratulating these “co-recipients” of the ITSMA Thought Leadership award. Or, if you’re one of these winners yourself – well, pat yourself on the back. Paul Hemp Editor, CIO Straight Talk Editor Paul Hemp Managing Editor Anirban Sanyal Contributing Editors Gil Press, Abbie Lundberg, Stephanie Overby Copy Editor Amy Halliday Art Director Neha Sharma Designer Harvinder Singh Studio Lalit Kumar Events, Webcasts, and Leverage Mishtun Chatterjee, Atul Sharma Editorial Advisory Board Anant Gupta, Krishnan Chatterjee, Apurva Chamaria, Abhishek Shankar Printing Quality Printing, Pittsfield, MA Lustra Print Process Pvt. Ltd., New Delhi Digital Amrish Sharma, Aradhana Sharma, Gil Press, Shristi Dugar, Suresh L., Shakti Srivastava Acknowledgements Contact Us For information on reprinting articles and all other correspondence, please contact:
  • 7. Highlights from sIsue Number 3 Big Data: A Rare Business Leadership Opportunity for CIOs Plus: Pullout poster (“Welcome to the Big Data Zoo”) “A Very Short History of Big Data” Straight Talking Actionable insights from the CIOs of Lafarge, Land O’ Lakes, EMI Music, and other forward-looking companies Also in the issue: Big Thinking Bill Inmon, the “father of data warehousing,” on big data Trends 2013 Seven HCL experts on 2013’s top IT-related developments Go to: magazine.straighttalkonline.com/issue3
  • 8. Cover Article 7 THINGS CIOs DIGITAL ECONOMY Are Doing to Get Ahead in the 08 CIO Straight Talk
  • 9. We convened a “virtual focus group” of IT leaders to find out what kind of moves CIOs are making – what steps CIOs should be taking – in order to succeed in today’s brave new digital world. Here is the group's list of must-do's for their CIO peers. What’s a CIO to do? A growing chorus is telling IT leaders that they are on the verge of extinction. They stand in the way of progress, fail to understand the needs of the business, and fall hope-lessly behind in meeting the challenges of new and exciting digital business opportunities. To prevent their role from becoming irrelevant and the IT function from disappearing, CIOs are told they should “seize the initiative” and “change the conversa-tion”; they are admonished to “collaborate” and “stay relevant.” Mostly, they are urged to “innovate” and keep the IT infrastructure humming — to lead and be creative while at the same time managing cost efficiently and controlling unobtrusively the information technology framework that supports the ever-changing needs of the enterprise. (See the sidebar “The CIO’s Choice.”) All good suggestions. And certainly all senior execu-tives should have mastered multitasking by now. Here, however, we would like to offer some more down-to-earth advice, the first draft of a must-do list for CIOs in the digital economy, drawn from steps IT executives are taking today to upgrade their roles and transform the IT function into one that has a direct and profitable impact on the business. To begin compiling our list, we assembled a virtual focus group of seasoned IT executives, all of them mem-bers of the CIO Straight Talk Interactive group on LinkedIn. We talked to Ann Alrich, former CIO of Asia- Pacific and various business units at DuPont; Scott Blanchette, Senior Vice President and CIO at Vanguard Health Systems; Ed Jurica, former Senior Vice President and CIO at the fashion clothing company Fossil; Alexan-dre Kozlov, CIO of the Extruded Products Division at Norsk Hydro, an aluminum and renewable energy company; Isaac Sacolick, CIO at McGraw Hill Construc tion, the McGraw Hill Financial company that helps connect people, projects, and products across the construction industry; and Stephen Thurlbeck, Vice President of R&D at Complete Innovations, a leading global provider of technology solutions for mobile work-force management. (Learn more about their backgrounds in the sidebar “Experience Talks.”) The picture that emerged from our talks with these leaders is of an IT function that is both stable and innova-tive, fault tolerant and fast learning, reliable and experi-mental. It is an environment characterized by paradox: safe is risky, stable is dangerous. Conversely, constant change ensures resilience, experimentation safeguards continuity. These IT leaders work to seamlessly integrate IT with the business and find ways to innovate while “keeping the lights on.” The conversations also revealed that the IT function is looking more and more like a web-native company such as Google or Amazon — call it the Google-ization of IT. Organizations that want to take advantage of the opportunities presented by the digitization of everything increasingly infuse information technology into every-thing they do — their operations, their products and services, the way they go to market, their interactions with customers and prospects. IT no longer drives the business. IT is the business. IT is also innovative. Contrary to the widespread belief only ten years ago that IT’s innovative days were over, new ways to practice enterprise IT and new tools and technologies emerge all the time. The greatest and most radical changes over the past decade happened in web-native companies, where the complete fusion of IT and the business has driven IT innovation on an unprec-edented scale. (See the sidebar “The End of IT Innova-tion?”) 09 CIO Straight Talk
  • 10. The CIOs we talked to highlighted specific actions they have taken to bring some of the characteristics of web-native companies to their organizations — in some cases with a twist or two of their own. The list we present here is tentative and probably incomplete. We invite you to refine and expand it by joining the conversation on the CIO Straight Talk Interactive group on LinkedIn. (Visit http://partner.linkedin.com/CIOStraightTalk to request membership in the group.) 1. Never “work with the business” Web-native companies have built their businesses on IT innovation. Engineers and product managers in these companies are technologists, many of whom are involved in developing and maintaining a vast IT infrastructure. Outside of the websphere, leading companies are moving toward a seam-less integration, even a fusion, of business and IT. “The paradigm of there being a business and there being an IT department trying to drive an alignment is antiquated,” says Scott Blanchette. “You’ve got to do more than just ‘work with the business’ — really, I’m offended by that term, because we’re as much the business as anything else around here.” Ed Jurica found a creative way to drive home that point, one that his team members recalled years later. He told them, “When you find yourself saying ‘the business,’ hold your tongue with your fingers and say ‘IT is the business.’ It drives home the point that we are as important as the business and completely integrated with it.” At Vanguard Health Systems, Scott Blanchette, Senior Vice President and CIO, Vanguard Health Systems “'Work with the business' — really, I’m offended by that term, because we’re as much the business as anything else around here.” Blanchette took the idea to its practical conclusion, embedding IT in the business units. “IT is no different than the finance function or the service delivery function or the clinical function,” he notes. “I come from Northern California, and that is just the way companies in Silicon Valley are run.” True to his roots, Blanchette believes IT should allow for “some level of chaos” but also provide mechanisms for supervising it. (See “Innovation by Amateurs,” page 34.) It’s a cross-enterprise role that has multiple dimen-sions, but its essence is the technology expertise and experience that resides in IT and is embodied by the CIO. These are skills and know-how that are more important than ever to the management of any enterprise. Being part of the business means taking initiative. And if IT is seamlessly integrated with the business, there is no reason why a CIO should not help lead enterprise-wide change, innovation, and transformation, just like other senior business executives. As Alexandre Kozlov argues, “CIOs shouldn’t wait to be invited to the table; they should make themselves relevant to the business and contribute to generating revenues.” Ann Alrich agrees: “It’s absolutely imperative that the CIO is a member of the senior business team so he or she is involved in developing the future plans and the strategy for the business.” Stephen Thurlbeck has done just that at Complete Innovations. “Oddly enough from someone focused on technology, I’m pushing the balanced scorecard approach throughout the business,” he says. “This is a big change: I’m pushing from within IT, but ultimately it’s going to benefit the entire company.” 2. Learn fast, but contain failure In a 1982 paper, the late computer scientist Jim Gray wrote about “fail-fast” in the context of applying hardware fault-tolerant principles to software engineering — each hardware or software module “either does the right thing or stops.” By insulating each software module from the others, Gray and other experts in fault-tolerant systems achieved what they called “fault containment,” ensuring a quick detec-tion of errors without impacting the entire system. Since then, the Agile Software Development movement adopted and promoted the concept, which is probably how the fail-fast idea perme-ated the culture of Silicon Valley and became a business philosophy. Now it’s one that IT organizations are using to become an indispensable part of their companies’ product development efforts. Many IT teams today are using Agile practices, including constructing experiments to see whether something fails or succeeds. Isaac Sacolick points out that his team has been doing that through “spikes,” projects of short duration used to research a concept or create a simple prototype. “If I have to integrate with a new API and we are not sure how complex it is, we are going to try to experiment with that,” he says. And if the experiment is a failure? That’s OK. Speed, the “fast” element of “fail fast,” also offers crucial benefits. As Stephen Thurlbeck points out, “Everybody is on the same page at the same time. We are making changes when we can and as we should, rather than going into the development black box for months and months and coming out with something that either didn’t have the right specs or was not produced correctly.” Scott Blanchette cautions that fail-fast is fine as long as it doesn’t become “fail fast and often.” Sometimes the approach can “morph into a justification for not doing sufficient due diligence or sufficient planning,” he notes. The key to fast learning is failure containment. If you design your experiments carefully, you ensure that 10 CIO Straight Talk
  • 11. innovative ideas get a well-defined test and do not affect ongoing work, and that lessons are analyzed quickly to identify the next step. 3. Cut time spent "keeping the lights on" How do you make time for experimentation? As the pointy-haired boss in a Dilbert cartoon tells his team, “If you come up with a good idea, I’ll let you take on the project in addition to your existing work.” But according to the CIOs we talked to, it is possible to find ways to channel the energies of IT staff beyond day-to-day work. One approach is to take a close look at routine and time-consuming tasks. Ed Jurica notes that his organi-zation set a goal of reducing by 10% the time and effort it would devote to production support, thereby freeing up 15 FTEs for work that could generate more business value. “If it’s a tedious task that has to be done over and over again,” he says, “perhaps a small investment in a tool or developing a utility in-house could alleviate the time spent on it.” Issac Sacolick has also found ways to separate ongo-ing support from experimental and innovative develop-ment work, directing a lot of routine maintenance work to outsourcing partners. In addition to using “spikes,” discussed above, he dedicates small groups for four to eight weeks to larger experimental projects. “I make these opportunities very transparent,” he says, “creating in the process a culture of innovation. I make it transpar-ent because you don’t know who is going to respond to it in your group and because you want to use the opportu-nity to find business sponsors who want to get involved.” 4. Adopt a few digital natives Once you make time for experimentation and inno-vation, what are some of the sources of new ideas? It may be worthwhile to think about this in demo-graphic terms. Here are some fairly well known statis-tics: The median age at Google is 29; at Facebook, it’s 28. These companies are leading indicators for the changing face of the global workforce over the next decade. In the U.S., where the overall median age of workers is 42.3, there are an estimated 80 million young Americans who belong to the so-called millennial generation, roughly ages 18 to 35. By next year, millennials are expected to constitute 36% of the U.S. workforce, and by 2020, they will account for nearly half of all workers. Scott Blanchette has seen this demographic shift in action: “A big percentage of our workforce, especially the clinical workforce — nurses and doctors — are very young. They are not technologists, but they have a tremendous portfolio of technical competencies that we want to tap into, because they are always finding new ways to solve old problems.” Many CIOs are not targeting young professionals who were “baptized in technology,” Blanchette notes, in large part because of structured R&D approaches, which are hierarchical in nature. “But we spend a lot of our time and effort tapping into the power of the base of the pyramid.”In addition to offering innovative ideas on how Experience Talks The six senior IT leaders we interviewed for this article have among them at least 120 years of experience, mostly in managing IT operations and innovation in a variety of industries and types of businesses. Ann Alrich is the former CIO of Asia-Pacific and various business units at DuPont, one of the world’s largest chemical companies, which is headquartered in Wilmington, Delaware. Scott Blanchette is Senior Vice President and CIO of Vanguard Health Systems, an operator of hospitals and other medical facilities in five U.S. states. The company, which recently agreed to be acquired by Tenet Healthcare, also an operator of hospitals, is headquartered in Nashville, Tennessee. Ed Jurica is former Senior Vice President and CIO of Fossil, a global design, marketing, and distribution company that specializes in consumer fashion accessories, with more than 400 retail and 4,000 wholesale locations worldwide. It is headquartered in Richardson, Texas. Alexandre Kozlov is CIO of the Extruded Products Division at Norsk Hydro, a global supplier of aluminum with activities throughout the value chain, from bauxite extraction to the production of rolled and extruded aluminum products and building systems. It is headquartered in Oslo, Norway. Isaac Sacolick is CIO at McGraw Hill Construction, which provides data, news, and intelligence to construction professionals. It is based in New York. Stephen Thurlbeck is Vice President of R&D at Complete Innovations, a leading global provider of mission-critical fleet, asset, and mobile workforce management solutions. It is based in Markham, Canada. 11 CIO Straight Talk
  • 12. Alexandre Kozlov, CIO, Extruded Products Division, Norsk Hydro to use IT to achieve business goals, digital natives also help change the way IT does its work, especially in the area of training and documentation. Ed Jurica observes that digital natives, who grew up immersed in Nintendo and PlayStation, approach learning in an entirely new way. “There are no instruction manuals, there is no ‘take a class,’” he observes. “It’s all emergent: ‘Give me the environment and let me play. If I have questions, I will open up three different chat tools and I will pull other people in to look for FAQs and shortcuts. I will learn by doing.’” Consequently, the training materials these professionals like to consume are more like games, allow-ing users to experiment and play with the technology. In addition to doing the obvious to engage digital natives — reaching out through social media — you may want to appoint a member of your management team to be the “digital natives czar,” responsible for soliciting innovative ideas from 20-something employees through-out the enterprise and addressing their specific IT needs and requirements. That czar could also create a “digital natives council” with representatives from various departments and functions who meet on a regular basis to provide input to IT. 5. Hire some business-savvy seniors Young people are not the only source of new ideas and fresh perspectives. Experienced professionals can change the dynamics of any team, increasing its creativity through a diversity of views based on deep knowledge and extensive experience and serving as mentors to senior executives. As one of Stephen Thurlbeck’s senior people told him, “I’m going to hire someone who is better than me. I love to mentor my people — but who’s mentoring me?” “Our senior people are looking for people who have different experience,” Thurlbeck says. But “different experience” means not just experience with technology. “My preferred job description right now is ‘We are looking for a .net artisan who will be missed by both their technology and business colleagues when they leave their current employer,’” he says. Business savvy is a top hiring criterion for Ann Alrich. “If I could have ten people on my team who know every thing there is to know about IT or ten people who under-stand various aspects of the business, I would take the business people any day,” she says. “You can buy the technology and the knowledge of the technology, but the ability to connect with the business and have a business-level conversation is absolutely crucial. When I interview people I always look for the softer skills — I try to find out whether they have a customer focus, if they care about the fact that this is a business we are running. What we do is not just technology for technology’s sake; it is applied technology.” The business experience does not have to be industry-specific. Observes Alrich: “IT skills are transfer-rable from one industry to another. I’ve seen people tremendously successful in an area where they have never worked before, because they were willing to adapt and they had a well-rounded skill set, including soft skills.” Stephen Thurlbeck agrees. “It doesn’t matter to me if you are in our industry,” he says. “A smart person who cares and wants to make a difference is worth ten indus-try insiders.” Alexandre Kozlov knows this from experi-ence, having been hired at Norsk Hydro after a long tenure as a CIO in the consumer goods industry. “Fortu-nately, the executives who interviewed me saw that my lack of immediate hands-on experience in the aluminum industry was not a showstopper in my case. There are several important leadership skills — for example, how you position IT in relation to the business — that can be easily ported from one industry to another.” 6. Understand those business buzzwords Learning is a key to innovation. The CIOs we interviewed stressed the importance of business learning, in particu-lar, for developing the careers and skills of IT employees. “IT people need to enmesh themselves in the area of the business where they are working and take advan-tage of business-related educational opportunities inside and outside the company,” Ann Alrich says. An IT employee working in supply chain manage-ment, for example, could attend a conference on that topic, she notes. Alexandre Kozlov is also adamant about the value of business education for IT but urges people to look outside their own areas: “Attending gatherings that are not directly related to Ed Jurica, Former Senior Vice President and CIO, Fossil “We hoped that a couple of lightbulbs would go off and that the event would help [business and IT] innovate together.” “CIOs shouldn’t wait to be invited to the table; they should make themselves relevant to the business and contribute to generating revenues.” 12 CIO Straight Talk
  • 13. Stephen Thurlbeck, Vice President, R&D, Complete Innovations “It doesn’t matter to me if you are in our industry. A smart person who cares and wants to make a difference is worth ten industry insiders.” your industry might even spark better ideas because you find things that people do in other industries and it may force you to think. The wider the spectrum, the better.” But in an era of tight budgets, it’s important to get a return on the investment in outside events and training. Stephen Thurlbeck does that by requiring people to present what they learned at conferences to their teams and to use it to develop a plan for a change in the organization. Ed Jurica manages the costs of attending conferences by focusing on local events, where he sends both an IT manager and his or her business partner. “That can be cost-effective, and it can cement those relationships,” he notes. Learning can happen in a variety of ways, includ-ing the do-it-yourself kind. At Fossil, Jurica’s IT organization put together a business conference for the entire company, in which IT employees gave presentations and demonstrations and answered questions about new tools and applications. He defrayed the cost of the conference by asking IT vendors to sponsor it. “The intent was not to use three-letter acronyms or talk about feeds and speeds but to talk about our company, what we could be doing, and to encourage discussion with our business partners,” he says. “We hoped that a couple of lightbulbs would go off and that the event would help us innovate together.” 7. Raise your visibility outside your organization Web-native companies have broken the boundaries between the “corporation” and the outside world, allow-ing and even encouraging employees to be externally visible through blogs, conference presentations, interviews, and social media. That visibility goes hand in hand with communicating and promoting what the company does and what it’s all about. This attitude is now more prevalent in traditional companies and is even changing what they used to regard as one of their most insular positions — that of the CIO. “Speaking at conferences may not necessarily be the best way to make sure that you are driving every dime you can out of your operating budget,” says Scott Blanchette. The CIO’s Choice These are the best of times and the worst of times for CIOs. Information technology is omnipresent, exerting a significant and growing influence on the way we live and work. What CIOs have been doing for a living for so many years — managing digital data and information — has become an integral, sometimes crucial, component of business success, improved government services, disease prevention, and help for the disad-vantaged. It has permeated all aspects of our lives, including playing a prominent role as a required companion for most of our leisure activities. Data is now talked about as the “oil” that fuels the digital economy. Data’s new status means, however, that there are many new players interested in owning, excavating, and managing it. Chief marketing officers (CMOs) are investing heavily in IT tools to collect and mine external data, in some cases poised to overtake the CIO in the scope and depth of their responsibility for IT resources. CEOs who want to make sure their companies thrive in the digital economy, or are simply annoyed by their competitors’ successful data mining exploits, are appointing veterans of the web as Chief Digital Officers (CDOs), in charge of all the digital assets of the business and responsible for identifying and pursuing new data-driven revenue streams. Data scientists and data entrepreneurs are distinguishing themselves in business, government, and nonprofits as the new go-to experts for everything related to data and its analysis. IT is everywhere, and “gigabyte” is something most people understand and talk about — which means that everybody is now a CIO. Says Alexandre Kozlov, CIO at Norsk Hydro, a global supplier of aluminum: “It’s very difficult to explain to an executive that it takes so many days to get a new computer installed when he says, ‘My nephew, who is ten, configured and installed my new iPad in minutes. How come you guys with university educations and so many years in the industry are telling me that it takes all this time to get a standard image for a Dell laptop?’” CIOs everywhere face a career-defining choice. They can aspire to be indispensable facility managers, “keeping the lights on” and making sure the “trains run on time,” and let others turn data into an opportu-nity. There’s nothing wrong with that approach; in the digital economy, maintaining a robust and efficient information infrastructure is bound to become ever-more important. But CIOs can also leverage their expertise in managing and refining the new oil to lead their organizations in benefitting from the data deluge. 13 CIO Straight Talk
  • 14. Isaac Sacolick, CIO, McGraw Hill Construction “I’m not sure blogging is for every CIO, but I think it’s important to find . . . what you are good at and find a way to express that.” “But if you’re focused on things like innovation and transformation and moving the business in a different direction, I think those types of engagements are things you have to participate in to be successful.” Of course, social media increasingly is the method of choice for raising your profile. In addition to performing his duties as CIO, Isaac Sacolick is a prolific blogger and Twitterer. “I’m not sure blogging is for every CIO,” he says, “but I think it’s important to find what’s important to you, what you are good at, and find a way to express that. In my case I do that through blogging, through the articles I tweet, or giving public presentations.” Sacolick’s social media prowess increases not only his own visibility but also that of his company, McGraw Hill Construction. “We are not a technology business,” he explains, “but we sell technology and data to contractors and manufacturers in the construction industry — they need to understand that we develop great technology. I blog, I write articles for our magazine for construction engineers, I participate in events, I run a council for construction industry CIOs. Part of my job is to be customer facing, provide thought leadership, be outgoing and engaging with our community.” Raising your profile outside your organization can bolster your position in it. External exposure — through an active blog or by attracting hundreds of Twitter followers — can give you newfound credibility internally, validation in the public forum that will subtly change people’s perception of you in your organization. Furthermore, it can be easier to gain the support of those who are skeptical about IT when you meet them “off-site,” on the neutral turf of a social network. “Find content that’s relevant and valuable to a business person in your company who is negative about IT and share it with him,” Ann Alrich suggests. When you make your next IT presentation, she notes, that person may be a proponent instead of an opponent. As more and more companies infuse information technology into their product and service offerings, we could expect to see more blogging CIOs, more visible CIOs. Social media, however, is not only a platform for creating content The End of IT Innovation? Ten years ago, in the aftermath of the technology bubble of the 1990s, IT didn’t seem ot matter anymore. There was a widespread reluctance to fall again for the hype and overselling by IT vendors and a movement to contain and control IT, to focus its role on maintaining an efficient infrastructure. According to this view, innovation — and the competitive advantage resulting from it — was to be found somewhere else. Today we can see how wrong that conventional wisdom was. Server virtualization, just one example of the recent impact of IT innovation, not only has made IT infrastructure much more efficient but also has made it possible for the IT organization to be flexible and responsive like never before, effectively supporting new strategic business initiatives. Without virtualization, there would be no cloud computing, yet another significant develop-ment in IT delivery. Instead of spelling the end of the IT organization, as some predicted only a few years ago, cloud computing has provided new opportunities for CIOs to manage resources more efficiently and has freed up internal IT resources for more strategic work. The space where IT innovation has really exploded, however, has been web-native companies, which derive their competitive advantage from IT. These companies — the likes of Amazon, Google, and Netflix — have demonstrated through their innovative infrastructures and use of IT that IT-spurred disruption and the transfor-mation of entire industries are far from over. 14 CIO Straight Talk
  • 15. Ann Alrich Former CIO, Asia-Pacific, Dupont “Find content that’s relevant and valuable to a business person in your company who is negative about IT and share it with him.” but also a tool for filtering it and finding what’s most relevant for one’s job. LinkedIn has emerged in recent years as an important source of experience-based advice and opinions, through the personal networking it facilitates as well as content from established content producers. “There’s so much that you can learn by reading the articles on LinkedIn or by searching for people who have certain characteristics in their profile,” Ann Alrich says. The social network “can add a level of enrichment to a person’s professional develop-ment that they may not realize.” Scott Blanchette also finds his LinkedIn network to be a valuable mechanism for filtering informa-tion. “It’s not just the interpersonal aspect but also the general content that tends to get socialized through the network — there are key groups, key companies, key people that I follow pretty exten-sively and regularly look at their circulation of relevant material.” So that’s the consolidated view of our virtual focus group. Now, what do you think? Have we missed any items on our list of CIO must-do’s? Are there some clunkers among the items we’ve included? Tell us. Or, rather, tell your IT peers by joining the CIO Straight Talk Interactive group and sharing your thinking with group members. Your addition to our list — a piece of wisdom hard-earned from your own experience — may end up being exactly what a fellow group member most needs. Other Voices The advice in this article comes from members of our virtual focus group, drawn from the CIO Straight Talk Interactive group on LinkedIn. But in conversations with other IT leaders, we frequently ask what sorts of things CIOs should be doing to ensure their success in the digital economy. Much, but not all, of their advice echoes the prescriptions of the virtual focus group: “The investments we made in IT strengthened Covance’s technical profile. But they also did more than that — they opened up entirely new business opportunities…The technology capabili-ties allow us to offer a different set of services than our competi-tors and to differentiate our services in a way that becomes compelling.” — William E. Klitgaard, Corporate SVP and CIO, Covance “You can't just look at your own industry to measure yourself. You have to look much more broadly to consumer technology. Beyond that, more and more technology is being delivered by smaller firms. Software delivery approaches are increasingly being influenced by technology start-ups. CIOs who want to differentiate themselves must look beyond the boundaries of corporate technology and embrace the ideas coming out of smaller firms.” — Richard Roberts, Head of Client Access and Electronic Distribution, Deutsche Bank “[Our 12-step recovery from fear of failure program] is about small failures early in the development cycle, quickly learning from them, and teaching the rest of the organization about these failures so that it can learn and not repeat the mistakes and be more agile. That same model also fits into an environment where you have to have stability. It is the small mistakes that are made, that are covered up, that are not brought to light and pile up and eventually cause stable environments to crash. This fear hurts not only IT but also all facets of the business.” — Mike Benson, EVP and CIO, DirecTV “It is okay to be making some mistakes, but we want it to be more of a fail-fast environment. Do not wait to the end of a very long project to find out we made a mistake; find out right away.” — Annabelle Bexiga, EVP and CIO, TIAA-CREF “If you demonstrate to top management that you can give them something that they like to use, that is valuable to them personally, it generates a different conversation about what’s possible and creates a positive perception of IT‘s role. We’ve done this with several mobile analytics apps that we’ve deployed all the way up to the board level, and that generates a new conversation about a) what’s possible and b) what is IT’s role.” — Michael Golz, SVP & CIO, SAP America “CIOs have a bad rap. By blogging, you hope that people see that you are human and that you suffer the same challenges as everybody else.” — Dr. John Halamka, CIO, Beth Israel Deacon-ess Medical Center “Don’t be afraid to adopt best practices from other industries. People always told me that you couldn’t use IT approaches from other industries… But you can and you should.” — Simon Hollins, CIO, EMI Music “How do you institutionalize the IT function’s adoption of a more sophisticated business perspective? One way is to create career bridges between IT and the rest of the business.” — Jean-Marc Chicco, Chief Group ERP Program and Information Officer, Lafarge 15 CIO Straight Talk
  • 16. Straight Talking 16 CIO Straight Talk
  • 17. CROSSING THE FINISH LINE TOGETHER Several successful initiatives at Consumers Energy vividly illustrate the importance of IT-business collaboration in driving customer value and corporate performance A conversation with PATRICIA K. POPPE VP, Customer Experience & Operations Consumers Energy MAMATHA CHAMARTHI VP and CIO Consumers Energy 17 CIO Straight Talk
  • 18. Serving the state of Michigan for more than 125 years, Consumers Energy is one of the largest combination utilities in the U.S., provid-ing electric and natural gas service to nearly 6.6 million residents. It has recently been making significant investments in energy efficiency, renewable energy, environmental and customer service enhance-ments, and advanced meter infrastructure. As with other utilities today, a large part of this investment is in new technologies, including upgrades to the IT infrastructure. At Consumers Energy, IT-based improvements and new services have been driven by a customer-focused strategy. The hallmark of its implementation has been an exemplary collaboration between the Vice President and CIO, Mamatha Chamarthi, and the Vice President of Customer Experience, Rates and Regulatory Affairs, Patricia Poppe. (For a variety of perspectives on the potential for collaboration between CIOs and Chief Marketing Officers, see “The CIO-CMO Dream Team,” page 44.) The following is an edited transcript of Chamarthi’s and Poppe’s conversation with CIO Straight Talk Editor Paul Hemp. How has the new customer-focused strategy evolved? Patrica Poppe: I would suggest that Consumers Energy has always been customer-focused but has not had a distinct strategy for trans-lating that aspiration into the delivery of safe and excellent operations to the customer. Our CEO, John Russell — who comes out of the customer side of the business, including distribution and call centers — is a true champion of the customer, and our senior leadership team would like to make Consumers Energy a very customer-centric utility. Our brand tag line is “Count on Us,” and Mamatha and I were hired specifically to make that vision a reality and improve overall customer satisfaction. Mamatha Chamarthi: I was hired as the first CIO in the history of Consumers Energy — we had an IT Director before — and I thought that it would take me years to get the senior leadership team to under-stand how technology can help Consumers Energy serve customers better. To accelerate this learning process, I decided to immerse them in the technology Mecca: Silicon Valley. My objective was for them to observe firsthand how technology is driving value to the bottom line of companies there. Poppe: Three years later, they still reference that visit. Chamarthi: About ten of us went for a weeklong visit to Apple, Google, HP, Cisco, and SAP. We did a debrief at the end of the trip, and many on the senior leadership team, including our CEO, made the point that our customers are being served by the likes of Apple and Google. Would they expect anything less from us in the quality of the services we provide? Poppe: I think this is especially important for a utility, where technol-ogy applications have tended to be more for generating plant emissions controls, gas infrastructure inspection, or distribution equipment — not for customer-facing experiences. It was important to open the eyes of our senior leadership team to what was happening in technology-driven innovation outside the utility space, a great platform to gain support from the senior management team for technology-driven innovation. Mamatha Chamarthi POSITION: Vice President and Chief Information Officer COMPANY: Consumers Energy WORKS FROM: Jackson, Michigan PROFESSIONAL BACKGROUND: As Vice President and CIO for CMS Energy and its principal subsidiary, Consumers Energy, Chamarthi oversees the company's information technology systems and is responsible for engaging with other CMS Energy executives to promote innovative technology practices. Her career spans more than 16 years, and she is viewed as a thought leader in the implementation of new technologies, systems, and processes. Besides her MBA from the Kellogg School of Management, Chamarthi holds master's degrees in computer science, software engineering, and English literature. She serves on the boards of the Michigan Council of Women in Technology (MCWT) and Midwest Technology Leaders. She is a member of the Wall Street Journal Executive Task Force for Women in the Economy and serves as an Elevate Mentor for the “We Build Character” Mentoring Program. In 2005, Chamarthi was recognized as a “Technology All Star” by the Women of Color in Technology Institute. In 2012, she was selected as one of Computerworld’s 2012 Premier 100 IT leaders and was appointed to serve on the Michigan Asian Pacific American Affairs Commission by Governor Rick Snyder. EDUCATION: MBA, Kellogg School of Business, Northwestern University 18 CIO Straight Talk
  • 19. Patti, what were you asked to do when you were hired? Poppe: Like Mamatha, I had a newly created position. In many companies you’d call it Chief Marketing Officer. Chief Customer Officer might be more appropriate. I oversee customer-facing opera-tions such as call centers, billing services, business customer accounts, market research. But I’m not a marketer; I’m an operator by training. I ran power plants for DTE Energy for five years, and before that I ran assembly plants for General Motors for 15 years. I am an industrial engineer by training. So why were you hired to do this job? Poppe: Before I joined Consumers Energy, the leadership team had combined many of the customer-facing organizations within the utility under one umbrella, whereas before they were distributed throughout the company. I came in January 2011, and in August of that year I presented to the board of directors our new Customer Value Initiative. I think another reason I was hired was because they liked the operator’s mind-set and a data-driven, rather than opinion-driven, approach to customer value. Because of my experience, that’s what I brought to the table. Was it obvious that you were going to need to work with the IT team? Poppe: Without a doubt. Early on I could see that we were behind the curve in implementing customer-facing technology solutions. It was clear that we were going to have to partner very closely to change that. The Smart Energy program, for example, became a major focus of collaboration between Mamatha’s team and my team. Smart Energy transforms the customer experience. We think of it as the re-introduction of Consumers Energy to our customers, with a new level of service that they can now expect from us. As part of this program, we will install 1.8 million new electric meters and 600,000 gas meters with existing customers. When their power is out, we will know. Today, we don’t know — they have to call us. Customers will also have a 98% accurate meter reading. Today, it is totally dependent on weather and the availability of our personnel to read meters manually. All these things that customers naturally expect are technology enabled. We could not do it without Mamatha and her team. They are the backbone of our Smart Energy program. What used to be purely a meter exchange program is now a technology-based project. Chamarthi: Together, we made a joint commitment to implement the Smart Energy program. It was not Patti saying, “Well, here is my commitment,” and then me saying, “Here is mine in support of Patti.” It was a joint commitment to the company about what we were going to work on together. Poppe: We sit side by side on all decision making and all program commitments. Neither one of us can sign without the other signing. It’s a mutual ownership. Patricia K. Poppe POSITION: Vice President, Customer Experience, Rates and Regulatory Affairs COMPANY: Consumers Energy WORKS FROM: Jackson, Michigan PROFESSIONAL BACKGROUND: In her role as Vice President, Patricia Poppe oversees customer service, marketing, Consumers Energy’s Smart Energy program, quality, and rates and regulatory affairs. Before joining the company, in 2011, she worked as director of DTE Energy’s North Region power plants, overseeing 3,000 MW at five generating facilities. EDUCATION: MBA, Kellogg School of Business, Northwestern University 19 CIO Straight Talk
  • 20. Smart Energy appears to be a success, and the credit goes to both of you. But what happens when things don’t go that well? Chamarthi: With our new CRM project, we both put our necks on the line. The project had been initiated by IT before we both joined, and the business case for it wasn’t clear. So we put the project on hold and said, “Let’s understand why it is we’re doing this. Let’s understand the business value of this and decide if it’s the right thing to do.” And then you decided to proceed? Chamarthi: Yes, and that was a significant step in our partnership. Poppe: It was an agreement that we are going to do this together. That little phrase sounds small, but it was significant. It wasn’t that IT is going to do this, and we will then make it work. Chamarthi: I would say the partnership only became stron-ger because of the hardship we went through. Poppe: That project actually didn’t go very well. Chamarthi: And when the project did not go as expected, we never once pointed fingers at each other. Instead, we said, “Let’s come together and lead the team.” Together, we made a joint commitment to the company of what we would do for the Smart Energy program. It was not Patti saying, “Well, here is my commitment.” And then I saying, “Here is mine in support of Patti.” It was a joint commitment, about what we Poppe: I think there’s a lesson here that can be applied to any business in any industry. You can be great partners when things are going well, but when trouble happens, does that partnership stand the test? There was no benefit in us not supporting one another. I was heavily reliant on Mamatha and her technological expertise. She was very much reliant on my ability to motivate and align my organization around changes in business practices. I think we both learned that no technology project can be implemented without people, process, and technology. I own the people and a big chunk of the process, and all three of those things have to come across the finish line together. If they don’t, the technology solutions don’t succeed. The CRM project was not our favorite imple-mentation, but we learned a lot. were going to work on together. Chamarthi: We learned so much about the teams and their expertise. There were vendors that tried to play Patti and me against each other, but no one could touch our partnership. Poppe: And this attitude then trickles down into the organization. We didn’t have people feeling like they had to fight with one another. We were very publicly and privately in support of one another, and we wanted to cross the finish line together. That was the goal. There was no advantage to one of us crossing without the other. The only victory was if we could cross that finish line together, and I think that was a strong theme that perme-ated the organization and set the stage for the next several technology projects. Give us an example of another successful collaboration between the two teams. Poppe: Well, here is a story with some real takeaways for any kind of technology implementation. A critical touch point for our customers is how we communicate with them during power outages. We had on the books a plan to launch an outage map, but when we started looking at the plan, we realized that the outage map is only an online representation of estimates from the field. It is only as effective as the reliability and accuracy of the estimated time of restoration, as delivered by our field organization. Chamarthi: We actually had two distinct projects. One was a technology project to develop and launch the outage map, and the other one was a process project to correct the estimated time to restore. Poppe: But they were initially decoupled from each other. Our VP of energy delivery had a project on his radar to improve our estimates, but this was unrelated to the project to implement an outage map. We had formed what we call the Customer Council, a group of officers responsible for all the key customer satisfaction drivers. In a meeting of the council, we discovered the two previously decoupled but very much related projects. While the input from our customers was very clear — they would cut us some slack on getting the power back on after a major storm, but they wanted to know when the power would be restored — it turned out this was never communicated to the field organization. So the line crews did not think it was worth their while, when they were busy trying to fix the problem causing the outage, to take a few minutes to input their estimates for the time of 20 CIO Straight Talk
  • 21. power restoration. When they found out how important these estimates were to our customers, the line workers changed their behavior. You know, “I’m up on the pole, I’m the only person in the world who can estimate when this power will be back, and I guess it’s worth it for me to take three minutes to call dispatch or enter it in my on-truck device.” Previously, they put in their estimates in only 20% to 30% of cases, but now that happens 80% to 95% of the time. We now have accurate estimates, and we can communicate to the customer a one-hour window for when the power will be restored. Chamarthi: And the outage map is now available on smartphones. Computers don’t work in a power outage, and customers have to rely on their smartphones. They can also access our social media, where we show estimated power restoration times for their region. If we had gone just with the outage map project, and imple-mented only the technology, customers would be looking at bad information, the wrong estimated time to restore. They would be even more unhappy with us. I think it was Bill Gates who said that when technology is not imple-mented with the corresponding process changes, it only highlights all the flaws in your process. What is the key lesson you learned from your collaboration? Chamarthi: We have seen huge success when we empow-ered people and told them they are accountable, but also insisted on collective responsibility and not letting them deliver just in their own silos. All our projects have been measured by how collaborative we are, how well we bring together technology, process, and people. Poppe: We have created a technology road map for all customer-facing projects for the next three years and have included in that road map the people and process changes that will enable those technology solutions to work. That is a huge change for us. This is why it’s not a stretch to say that the business and the technology team are completely integrated. We now know how to do this. We have learned how to combine people, process, and technology to deliver a solution that creates a new standard of excellence for our customers. I think that is a lesson here that can be applied to any business in any industry. You can be great partners when things are going well, but when trouble happens, how well does that partnership stand the test? The Takeaways • A successful IT-business partner-ship requires shared commitment and accountability – and a refusal to point fingers when things go wrong. • For a technology implementation to succeed, you need to bring together technology, process, and people. For example, when technology is not implemented with the correspond-ing process changes, it can actually highlight all of the flaws that exist in the process. • Two projects launched in different organizational silos can undermine one another – or, if integrated, reinforce one another. 21 CIO Straight Talk
  • 22. Straight Talking UKAR is the holding company for the mortgage lending units of two midsize UK banks — Northern Rock Asset Management and Bradford & Bingley — that were forced into nationalized ownership during the credit crunch of 2007-2008, creating the sixth-largest lender in the UK. 22 CIO Straight Talk
  • 23. WHEN EFFICIENCY AND FLEXIBILITY TRUMP ALL Transforming IT for an organization whose mission is to run down the balance sheet requires strong change leadership, a great partner, and a lot of nerve. Mathew Jackson mathew.jackson@ukar.co.uk POSITION: Services Director COMPANY: UK Asset Resolution WORKS FROM: Bingley, Bradford, United Kingdom PROFESSIONAL BACKGROUND: Mathew Jackson is a member of the UKAR Executive Committee and is responsible for IT, change, property services, and procurement. From 2010 to 2012, he served as Head of Transformation, leading the integration of Northern Rock Asset Management and Bradford & Bingley, where he had worked for 20 years, holding senior positions in operations, retail, strategy, lending, and change. EDUCATION: MS, University of Huddersfield PERSONAL PASSIONS: Now that the IT transformation at UKAR is nearly complete: spending time with his wife and ten-year-old daughter, walking, undertaking DIY projects, and reading the occasional book 23 CIO Straight Talk
  • 24. UK Asset Resolution was formed in October 2010 with a unique mission: to wind down the £110 billion of assets on the balance sheets of two previously independent midsize UK banks — Northern Rock Asset Management and Bradford & Bingley — that had been forced into nationalized ownership during the economic downturn. Our primary objective is to repay the UK taxpayer the money we owe. At the time it was £49 billion; that’s down to £43 billion today. Because of our nationalized status, we’re not able to lend money, and we’re not trying to grow. Once we’ve paid the taxpayer back, probably in 2023, we’ll have around £20 billion in assets under manage-ment in terms of mortgages. We’ll still be nationalized, so we’ll continue the journey to run it off. But it’s possible that something will change to enable UKAR to generate growth opportunities. We recognize that we will likely have to create opportunities for employees, possibly through a separate operating company, while continuing to run down the balance sheet. That is the business and financial context for what has been a two-stage transformation, nearly complete, of UKAR’s IT capabilities. Stage 1: Data Rationalization and Migration A key condition of state aid was to separate Northern Rock Asset Management from the new Northern Rock, which was subsequently sold to Virgin Money. The most effective approach was to combine North-ern Rock Asset Management and Bradford & Bingley. This removed the asset management business from the Northern Rock infrastructure and maxi-mized economies of scale from the new organization. Our first task was to migrate data and people away from Northern Rock into a scaled-up Bradford & Bingley infrastruc-ture. There were £50-plus Not many UK financial services organizations have moved to a completely outsourced model, so we’re a great showcase account for an outsourcing partner that gets it right. billion of assets — or around 700,000 mortgages — held in Northern Rock’s legacy infrastructure, along with all the archive data, the general ledger, treasury management systems, and so on. Bradford & Bingley previously had been right-sized and reshaped from a trading, savings, and mortgage bank into a mortgage lender and servicer in run-off mode. So we had to scale that infrastructure up and undertake the process of transforming, rationalizing, and migrating the Northern Rock data. Northern Rock had 33,500 mortgage products; we reduced that to 3,500. We did the same across all key areas: general ledger, treasury management, and histori-cal data. There were over 80 million historical images that we brought across — probably about ten terabytes of data. We were facing an EU deadline to migrate the data as part of Northern Rock’s original loan agreement — we had just over 12 months to do what was probably one of the most complex mortgage book migrations in the UK. There’s nothing better than having a fixed date to focus the mind. The executive team had to be recruited and appointed into roles in the newly formed UKAR organi-zation, from the CEO on down. We had an open recruit-ment and selection process across the two heritage businesses. Once we had a single management team with a single focus, we made a big effort in the first three months to ensure that everyone, top to bottom, was aligned with the mission, the strategic objectives, and the values of the new business. As a result, we were able to make decisions quickly. We retrained our 1,700 colleagues from Northern Rock on new systems and processes. Everything changed in terms of the systems and the telephony infrastructure, so it was a people as well as a technology transformation. We also consolidated sites, migrating 700 people’s work from Northern Rock in Newcastle to UKAR in Bingley and Sunderland. The heritage Bradford & Bingley IT function was largely outsourced, with our core retained IT organiza-tion focusing primarily on architecture and governance. We didn’t have people experienced enough to manage what amounted to a £95 million IT program, so we had to go out and build a team to do program management. Overall, Stage 1 was very successful, taking around 15 months, with only a two-month delay to the mortgage book migration to avoid the year-end reporting period. Stage 2: IT Transformation and the Move to a New Partner Given UKAR’s mission, our primary operational focus is cost efficiency and effective-ness. IT was a substantial part of our fixed cost base. We needed our costs to be as variable as possible, but we knew we had to invest in our technology infrastructure, which was somewhat aged and starting to create service issues, particularly as we doubled the number of custom-ers and colleagues. We reviewed our operating model and reaffirmed that a primarily outsourced model was right for our organization. Our first-generation, ten-year outsourcing contracts — one for servers, application development, and maintenance services, the other for telephony and networking — were coming to an end. We went to a whole market tender and selected HCL as our new partner. HCL was our choice for a number of reasons. The 24 CIO Straight Talk
  • 25. work. What was most impressive about HCL was that it embraced the revised program and didn’t insist on renegotiating the contract before responding to the challenge. HCL’s professionals have continued to exhibit that kind of willingness to work through problems — for example, compromising on the governance and structure of the program. This flexibility, unlike anything I’ve seen with previous suppliers, along with great technical capabilities, has made HCL an excellent partner. Although the entire journey has had its twists and turns, we’ve recently completed the migration with no significant issues. It takes a lot of nerve to effect this kind of transformation, from the chairman, the board, and the chief executive on down. If you don’t have that universal sponsorship, you will never be able to do something like this. That’s been one of the overriding messages of the past couple of years, from the integration to the migra-tion. The program team had that unflagging support. The benefits have been enormous. We’re now one organization — in terms of systems, processes, and culture — coming from two different heritages. We’ve reduced our cost base by £50 million. And we’ve got a platform that offers flexibility to allow for continued contraction — or growth if we find the right opportunities. We had just over 12 months to do what was probably one of the most complex mortgage book migrations in the UK. There’s nothing better than having a fixed date to focus the mind. The Takeaways • When choosing an outsourcing partner, don’t underestimate the importance of the partner’s willing-ness to be flexible when conditions change unexpectedly. • You may be able to position yourself so that you are an attractive customer to a service provider for reasons other than the financial terms of the contract. • Undertaking a particularly challeng-ing transformation requires the steadfast backing of senior manage-ment. company’s proposal was much better from a pricing point of view, and it gave us a great opportunity to variablize our cost base because of the way the infrastructure was to be architected. It also included some innovative approaches and embodied a lot of flexibility in both the commercial model and a service-level arrangement based on business outcomes, as opposed to a typical availability-level model. Of course, the attractiveness of the offer reflected the attractiveness of us as a customer. Unlike our incumbent partners — who I think miscalculated our potential as a holding company for two failed financial institutions — HCL saw us as an opportunity. Being wholly owned by Her Majesty’s government made us an attractive client in terms of future potential. Moreover, not many UK finan-cial services organizations have moved to a completely outsourced model, so we’re a great showcase account for an outsourcing partner that gets it right. Benefits and Challenges HCL built two new UK data centers. We’ve gone from being about 30% virtualized to about 85%, and we’re already starting to enjoy the benefits of that in terms of agility and the ability to scale up and repurpose different parts of the infrastructure. The key challenge involved our move to a new service provider. The original hypothesis was that we would build the new data centers, clone the existing application infrastructure, reinstall that, and then undertake the data migration. But we weren’t able to do that because one of our former service providers claimed ownership of the IP around the configuration of the system installation and wouldn’t give us the access needed to carry out the migra-tion. So we had to effectively start from scratch, documenting all the applications in terms of the design architectures and the installation process, and bring in third-party vendors to help us through that. It’s taken probably a year longer than we had antici-pated. The benefit to me, though, is that I now have a fully documented infrastructure, and HCL has had to learn the hard way how those applications are knitted together and 25 CIO Straight Talk
  • 26. Straight Talking Covance Inc., based in Princeton, New Jersey, is a contract research organization providing drug development and animal testing services. Spun off from Corning Inc. in 1996 as a public company, it today has annual revenues of more than $2 billion and 11,000 employees in more than 60 countries. Its central laboratory network is one of the world‘s largest. 26 CIO Straight Talk
  • 27. BUSINESS-DRIVEN IT AND IT-DRIVEN BUSINESS We know that IT needs to be tightly aligned with the business. But in a world where IT can drive valuable new revenue-generating opportunities, the business may sometimes find itself falling in line behind IT. POSITION: Corporate Senior Vice President and Chief Information Officer COMPANY: Covance WORKS FROM: Princeton, New Jersey PROFESSIONAL BACKGROUND: As Senior Vice President and CIO of Covance, a provider of drug development services to pharmaceutical companies worldwide, Bill Klitgaard leads the Covance Global IT organization, serves as a member of the Executive Committee, and chairs both the IT Investment and the Executive IT steering committees. Although he has spent the majority of his career in finance — he served for almost 12 years as Covance’s CFO before becoming CIO, in May 2012 — he has always had a passion for technology. EDUCATION: MS, MIT Sloan School of Management; BA, University of California, Berkeley PERSONAL PASSIONS : Bicycling, hiking, backpacking, any quiet and beautiful location William E. Klitgaard William.klitgaard@covance.com 27 CIO Straight Talk
  • 28. IT is becoming increasingly important to the success of our business of providing drug development services to pharmaceutical companies. So let’s first look at some significant investments we’ve made in IT over the past few years. Building the IT Foundation Our big investments have been in three areas: modernization and consolidation of our data center; modernization of our business platforms — the systems that run our central labs and that we use in our clinical business; and modernization of our end-user platforms. We are moving our applications to modern, state-of-the art, highly secure, always available data centers running a virtual environment. As a result, we expect to lower our risk and have fewer performance issues due to power or hardware failures, or having different things on different pieces of technology. We’re able to reuse or recommission capacity and to blend workloads. We’re using architectural designs that are consistent with the cloud, so we can explore a hybrid environment as we mature. We expect to be able to compare our activities and costs to outside resources, and to communicate more clearly with our business partners about what they’re consuming. For the first time we will have transparency. Our business partners can choose — and pay for — the level of service they need. We’ve built on a reference We should be able to compare what we're doing with what's available externally — that's healthy for IT and it's healthy for the architecture employed around the globe. We use data de-duplicate technology to reduce our storage footprint. We’ve increased our speed of provisioning — for example, recently we were able to stand up a server, storage, and network solution for an internal customer in 15 minutes; it used to take a month. This speed will increase reliability and lower incremental costs, and it will allow us to exploit the cloud over time. Similarly, we’ve modernized the systems in our central labs and clinical trial management businesses, which will improve collaboration, processing, and efficiency. We are establishing a master file for managing trial data centrally, with a controlled workflow and only one file to audit, rather than having it all over the company; this alone has provided huge efficiencies in clinical development activities. Analytics: The Art of Data Science Informatics, an increasingly important part of our business, sits on top of this new infrastructure. We made a strategic decision to hire people exceptionally talented in informatics and analytics, assembling a team of data scientists. We’ve built a number of tools that help clients choose sites for their clinical trials and do trials faster and more efficiently, among other things. We can look at the performance characteristics and track records of all the clinical sites we’ve worked with and then overlay information about projects in the pipeline to predict workload and what sites will likely perform best on the next trial. As a result, we’ve gotten better at site selection and have outperformed our competitors in the execution of trials. Business-Driven IT: Focus on Business Outcomes All of these investments have been made with the strategic needs of the business in mind. The idea that IT has a monopoly on technology is passé. Business leaders can go out and get services and IT systems on their own. The CIO who says no is going to get run over. As a former CFO, my advice to CIOs who want to elevate the role of IT is this: Show the CFO and other company leaders the business impact of new technolo-gies and get them excited about the possibilities. These technologies have the power to transform what we do. Start with the business outcomes and let the technology be secondary. Once that connec-tion is made, the discussion becomes easier: What do we want to do and what can we afford? Don’t get caught up on cost, because that’s a losing battle. If you think about IT as a cost, you’ve lost. At the same time, it’s important to have financial transparency so end users know what they’re being charged for and why. We should be able to compare what we’re doing with what’s available externally — that’s healthy for IT and it’s healthy for the business. Companies will suffer if CIOs don’t get out in front of this. What’s alarming is when people act on a rogue basis and just go around IT. Pretty soon there are scores of people using some new database or software. Over time those “uncontrolled” investments can become critical to operations, but they’ve never gone through a system development process. They’re full of bugs that IT is left to fix. To avoid that, we need to engage much more with the business about its needs and get out of the role of just taking orders to install a particular piece of software. We have to approach things from the perspective of, “Let me understand what you’re trying to do here — let’s try this.” Ultimately it’s about transparency, stakeholder engage-ment, being open to externalizing some parts of IT and business 28 CIO Straight Talk
  • 29. being able to integrate that into the rest of what the company is doing. IT-Driven Business: Create New Revenue Streams The investments we made in IT strengthened Covance’s technical profile. But they also did more than that — they opened up entirely new business opportunities. A lot of companies haven’t made the kind of investments we have and may not want or be in a position to do so themselves. Now we’re considering whether we can offer what we’ve got to others doing clinical work in a software-as-a-service or platform-as-a-service model in a private cloud environment. If everything comes together, a year or two from now we’ll also be selling IT services to enable clinical trials. We’re already selling the provision of those services — clinical trial processes, central lab work, and preclinical work. And we’re selling the analytics capabilities to help with decision making and portfolio optimization. The technology capabilities allow us to offer a different set of services than our competitors and to differentiate our services in a way that becomes compelling. We become a one-stop shop. If you can get from Covance something that allows you to perform better on your clinical trials and do the trials faster and more efficiently, and we can get the capacity to do the work — that’s powerful. The customer gets high-quality work and the analytics to do the work more intelligently. IT is often process-intensive and subject to a lot of structure — systems development life cycles, releases, testing. But as we’ve seen, there’s a time and a place to be more nimble and innovative. We started the informatics group as part of Resource Management when I was CFO, and we began to look at predictive models to balance supply and demand. We’ve approached some of this like it’s a sandbox where we can try different things and explore what’s possible. It’s about how we come up with new tools and ideas to better manage our company. At the time, I was accused of running shadow IT; fortunately for us, it’s now all part of the same group. But this is a cautionary tale for CIOs who aren’t taking the initiative on innovation. The Takeaways • Now that business leaders can procure technology on their own, from multiple sources, companies can end up saddled with ineffective and incompatible products. CIOs can head off that scenario by engaging business stakeholders in transparent discussions about their needs and what IT can offer. • Substantial investments in IT don't just strengthen a company's technical capabilities — they can also open up new revenue streams and opportunities for differentiation. • IT is a process-driven, structured endeavor, but it needs to be an integral part of initiatives aimed at innovation and experimentation. The idea that you have some space to play…is very healthy, and that’s something I want to keep within IT. Now that Informatics is part of IT, we’re strengthening that capability and exposing the innovation lab aspect to our operational people and our IT people. It’s starting to generate a little bit of a buzz internally. The idea that you have some space to play — some air to go try things out just for fun and see how they work — is very healthy, and that’s something I want to keep within IT. 29 CIO Straight Talk
  • 30. Straight Talking SAP Americas is a subsidiary of SAP AG, a global enterprise software and services company with operations in more than 130 countries. SAP Americas oversees the company’s business operations in the U.S., Canada, Latin America, and the Caribbean. 30 CIO Straight Talk
  • 31. SAP RUNS SAP: HOW TECHNOLOGY MADE IT HAPPEN When the IT function at SAP began rolling out pre-beta versions of the company’s latest enterprise products for use across the organization, it moved from a support role to an integral part of the business. Michael Golz michael.golz@sap.com POSITION: Senior Vice President and Chief Information Officer COMPANY: SAP Americas WORKS FROM: Newtown Square, Pennsylvania PROFESSIONAL BACKGROUND: As SVP and CIO, Michael Golz is responsible for aligning IT strategy with SAP’s business strategy, directing IT investment, and providing best-in-class processes and operations for all SAP lines of business in the Americas. He leads the unique global SAP Runs SAP program, which highlights the role of SAP’s own IT function in using and helping to develop SAP products in areas such as enterprise mobility, in-memory and database technology, green IT, and cloud computing. As a result, SAP Global IT has become the company’s best customer reference, and Golz frequently speaks to customers about IT’s firsthand experiences with SAP software. EDUCATION: BS, European Business School, Oestrich­Winkel PERSONAL PASSIONS : Tennis (“Especially with my twin boys — though we have passed the point where I can still win”), scuba diving, family travel 31 CIO Straight Talk
  • 32. I came to the U.S. in 2002 for a two-year assignment — and never left. It was a total change in culture, in terms of both the differences between Germany and the U.S. and the difference between being at headquarters, where the concerns are more around corporate functions, and being out in the field, where there is a direct connection between IT and the business — in particular sales, marketing, and field operations. I learned that you have to bridge the gap between what you can do from a global perspective and what’s possible on the ground. We’ve now made that capability part of the DNA of the entire IT organization, and as a result we’re able to deliver business results very quickly with a shorter planning cycle. Driving Product Development Three years ago we reviewed what strategic contribution IT could make within SAP and decided that we could be at the forefront of using SAP’s own technology and solutions. So we brought our entire system landscape to the latest release levels and strategically chose areas such as mobile and in-memory technology/HANA (for “high-performance analytic appliance”) to implement SAP solutions even before they were in beta status. We now provide feedback to the product teams, and our feedback makes it into the product release that gets shipped to the customer. We’ve learned a lot through this process; development, global support, and the business have learned a lot, as well. For example, we were one of the first companies to do a mass deployment of iPads, very shortly after they became available. Using the SAP mobile platform, we proved we could deploy thousands of mobile devices in a large enterprise — we are now at more than 50,000 iOS devices — with full connectivity to corporate systems in a way that is secure and allows you to provide apps in an enterprise app store. More generally, our BYOD (bring-your-own-device) program has made it possible for employees to use a variety of their own devices in the workplace instead of having to use a single company-issued device at work. The iPad program is an example where we started early, generating traction by sharing our experiences internally and externally to demonstrate what is possible with the consumerization of IT and, more important, how it can provide business value by allowing employees to become more mobile and efficient. This is a new business role for us: to make available to the business side the information we get from those deployments, including success stories that we can use with customers. It gives us the ability to talk to the CIOs of our customers and prospects about how you implement a new technology or solution, the business case behind it, the benefits and pitfalls, and what combination of solutions was an immediate hit with the sales organization, for example, or what has really proven valuable for finance. That always sparks a lot of good conversations with our customers. Fostering Innovation We’ve also reserved 5% of our build budget for innovation that is driven by IT. If we do ten prototypes, and only three or four get real adoption, and we just learn something from the rest, that’s fine. You have to be willing to try a lot of things and accept that not everything is going to get traction. Normally in an IT THE THREE PILLARS OF IT VALUE When we defined our IT strategy, we thought about the things we really need to do well to deliver the most value to SAP. They fall into three categories. The first pillar is the The second pillar is the The third pillar is the strategic — in transactional, regular IT transformational, helping our case, how do we introduce business. It’s important to different units from across innovation, how do we adopt our make sure you get the the company become more solutions as early as possible, basics right: doing things efficient by transforming the how do we ourselves implement on a global level, finding way they operate. Our role is SAP solutions in order to give the right standards, to understand the business feedback to the development keeping costs down, requirements, bring in our organization and bring these handling security and expertise and new ideas from experiences into conversations with compliance. If you don’t a process perspective, and customers. In some cases, Global have those under control, help implement the IT has been able to contribute ideas all the rest becomes right solutions. to products in development. almost irrelevant. 32 CIO Straight Talk
  • 33. Where does SAP go from here? SAP, one of the largest providers of enterprise appli-cation software, is at a turning point. Although the company’s enterprise software and software-related services continue to be critical to the business opera-tions of thousands of organizations across the globe, the market for those services is mature, raising ques-tions about SAP’s future. A global survey by HCL Technologies of 220 CIOs at companies with revenues in excess of $1 billion across industries indicated that the very proliferation of SAP systems suggests an answer to the question of where SAP, and its customers, are headed: the consolidation of the numerous systems found at most large companies. In many cases, this will involve not only the integration of existing systems but the trans-formation of the IT infrastructure through the adop-tion of a single enterprise platform. The survey, commissioned by HCL and conducted by independent research company Vanson Bourne, found that, on average, large enterprises are running more than five separate instances of SAP, with nearly 39% of respondents reporting that they were running more than six. The data showed that the average cost per user (more than $1,500) for enterprises running multiple SAP instances is 25% higher than for those running a single instance. So consolidation could create huge savings. In fact, across SAP’s more than 22,000 large ERP customers, the potential annual IT cost savings amount to more than $30 billion globally. More detailed research of enterprises that had made the move to a single instance found that for every $1 saved in IT, the business expects to find $3.4 of leveraged savings. This raises the total global benefits opportunity to more than $130 billion, on an annual basis. While these findings present a clear business case for consolidating SAP instances, many companies may run into substantial political and operational hurdles, preventing them from achieving that Holy Grail: the single SAP instance. One hurdle is the seeming cost-effectiveness of integrating existing SAP, as opposed to investing in a single consolidated system. But such a move is unlikely to represent a savings in the long run. That’s because disruptive trends such as cloud, in-memory, and mobile computing will require the transformative creation of a single enter-prise system. Some 75% of respondents reported both that they had implemented cloud services in some form and that SAP technology played a significant role in their cloud plans. Similarly, more than three-quarters of those surveyed said they planned to deploy in-memory computing, with its tremendous potential to speed up existing applications and enable previously unthink-able applications through the mixing of transactional and analytical functions within a single application. Some 80% of respondents said that SAP HANA would play a major role in their in-memory initiatives. SAP technology on-premise, on-demand, and on-device. Certainly, having fewer instances of SAP will make this journey a lot smoother for many organi-zations. With Business Suite now available on HANA, the adoption rate is likely to be even higher. In the case of mobile computing, more than 90% said they were planning or already had a mobility strategy, while more than half of those said that SAP technology would be the cornerstone of that strategy. Of course, the challenge for CIOs is how to pay for these disruptive technologies. The study found that the savings generated by the consolidation of SAP instances could be applied to the adoption of such technologies, which would likely create competitive advantage for the future. For details and the entire report of the survey, visit www.futureofsap.com. 33 CIO Straight Talk
  • 34. project you plan it out, you have a deployment schedule, and you manage risk. These initiatives are different in that failure is OK. The biggest challenge at the beginning was to carve out the budget, time, and resources to get started. Once we had the process for IT-driven innovation up and running and could show it was beneficial, it became almost a self-funding exercise, because people liked what they got out of it. However, this is one area Normally in an IT project you plan it out, you have a deployment schedule, and you manage risk. These initiatives are different in that that you don’t want to turn over to the business to prioritize, because then budgets might be used to fund the regular implementation of certain business priorities. This is a big challenge for a lot of CIOs: When demand is much greater than capacity, it’s not easy to go back to the business and say, “Not only do we have budget and resource constraints for what you’re asking, but I’m also withholding some of the capacity that I have in order to do innovation.” At the same time, we bring the latest solutions and technologies into our regular implementation projects wherever possible. Innovation has become pervasive in our IT portfolio. Serving as Innovation Broker failure is OK. That’s not to say there isn’t a role for the business in IT innovation — quite the contrary. The CIO has to be in charge of the big picture and the overall technology road map — enterprise architecture and implementing and running the backbone of the company. But the CIO is also becoming more of a broker for the rest of the business. In our case, we opened our mobile platform to the entire company so that employees could develop mobile apps. IT checks each app for security and then makes it available to the rest of the company for download. Basically, our community members “vote” on the value of the app with their downloads. If enough people download it, we’ll take it into the IT catalog and support it. The traditional way would have been to build out a mobile road map and not develop anything until a final framework was defined and we had UI standards and had made sure it would work with everything else. It would have been a very lengthy process, and it would have been 100% driven by IT. But there’s a lot of creativity out there, and a lot of people now have the ability to develop solutions. It’s our job to make sure the best ideas find their way into the official set of IT solutions that we roll out and support. This is a different way to think about innovation — but it shouldn’t be confused with having no controls at all. With cloud computing, some business users are in a position to implement something without going through IT. This is rarely a good idea. IT should be the broker, making sure the right solution is selected and that it is configured in the right way for security and reliability. Many solutions these days are hybrid, and IT has a key role in their implementation and integration. Consulting with Customers The last area in which IT has become part of the business is in rolling out our new HANA Enterprise Cloud offering to the market. Our infrastructure colleagues have implemented HANA-based business systems internally: Our CRM system runs on HANA, our ERP system runs on HANA, our BW (business information warehouse) system runs on HANA, and many other systems have been put onto the HANA platform. So it was a logical move to say that the unit that has been deploying it for SAP as a large enterprise customer should be a key part in forming the new offering. This team merged with other resources throughout the business to form the HANA Enterprise Cloud unit, which provides services to external customers in addition to running and operating all of SAP’s internal systems. I think it’s a great statement that IT was a key partner in launching this offering. The Takeaways SAP’s IT function has become an early adopter of the company’s own technology, deploying SAP solutions, sometimes even before they are in beta status, and providing valuable feedback to product developers. In this new strategic role, IT is able to talk more effectively to customers and prospects about how to implement SAP solutions and the business case for doing so. The CIO can be an innovation broker, ensuring the security and reliability of new solutions — no matter where in the company they are developed. • • • 34 CIO Straight Talk