 Steven Bandrowczak, CIO, Nortel |
Being the CIO for a tech vendor can often be something of a double-edged sword.
Sure, you get access to cutting-edge tech and some of the smartest engineers around but the nature of the business means you're often a beta guinea pig for all those new products and, of course, everyone in the company is an IT expert and thinks they can do your job better than you.
On the other hand these vendor CIOs face many of the same challenges of their CIO peers working for non-tech companies.
Steven Bandrowczak has spent time in both camps and is now CIO at global networking supplier Nortel.
It's a big job--the company has a tech budget of around US$300 million and 900 full-time IT staff supporting 35,000 employees worldwide. That includes two major data centers and 12 satellite centers, along with 1,500 servers and 40,000 desktops running Windows XP, and SAP for business applications.
Bandrowczak joined Nortel in the summer of 2007 and, not surprisingly given the above figures, one of his main priorities is consolidating and simplifying infrastructure as part of a major IT transformation programme.
Nortel currently has around 1,100 applications and Bandrowczak wants to cut that down to 100 over the next 18 months.
"Today the portfolio is too large. Consolidation of IT applications helps with IT operating expenses, global business processes and helps improve cycle times," he says.
The second plank of the IT transformation strategy is portfolio management, which involves more rigorous scrutiny of the business case for projects and adopting best practice.
"When I came we had a lot of projects not necessarily 100 per cent aligned to key initiatives. We are investing in projects that have the highest payback and are driving transformation and we are adopting and implementing best practice around project management, such as Prince2," he said.
Each IT project goes through a "project opportunity assessment" and must tick three boxes: alignment to business strategy, alignment to IT strategy and less than 18 months payback.
Bandrowczak says this approach is not only about operational efficiencies but also making the right tech investments in the first place.
All of this feeds back into the goal to reduce the operational expenditure to capital expenditure ratio of the IT budget from 80:20 down to 70:30 over the next 18 months.
One of the biggest IT projects on Bandrowczak's plate is a global implementation of SAP for HR and finance. But not surprisingly, given the products and services Nortel sells, all things networking and mobile are also high on Bandrowczak's list of priorities.
Top of this list is the "e-enablement of the enterprise".
"How do we make sure each and every aspect of the enterprise is easier to do business with Nortel--customers, partners? Everything we do needs to be e-enabled," he said.
Two of the buzzwords in this area are "unified communications" and "hyper connectivity".
"We talk about hyper connectivity--when you look at how many things will be connecting to the enterprise tomorrow, cars, houses. How do we as an enterprise take advantage of that," he asked.
Bandrowczak's experience stands him in good stead for the task ahead. With an educational background in computer science he went on to become global CIO for logistics company DHL and then CIO for Lenovo Group where he helped lead the initial stages of the US$11 billion spin-off from IBM in 2005.
"My whole life I have grown up in IT," Bandrowczak said.
Looking forward, he sees the role of the CIO and IT department changing radically: "It's not just delivering a desktop any more. That's what IT departments of businesses need to be--agile of device and transparent."
One of the trends that interests him is on-demand software--or software as a service as it is more commonly known in the industry.
"I don't need to have my own e-mail system. I have no problem outsourcing that. Today we will continue to head in that direction. Those core services are not core competencies in CIO," he said.
One of the real challenges in all this increased mobility is security and, specifically, striking the right balance between securing data and usability. Bandrowczak said it is all too easy for IT departments to just ban things such as IM, Facebook and blogs.
"We have a variety of different users and you need to be able to enable that and not stop that. Not be a barrier to that. Do we secure every single data set or do we enable business? We enable business. It starts with a mindset."
As the CIO of a tech vendor Bandrowczak spends a lot of time with Nortel's customers, feeding back his experience of using the company's products and also bringing back feedback from those customer CIOs into Nortel.
This is part of the ongoing evolution of the CIO role, according to Bandrowczak.
"If you look at my role 10 years ago versus today it's dramatically changed. You have to drive customer value and shareholder value. There are skills around communication, driving change--CIOs are being asked to do a lot more than keep data centers running.
"It's a key role. You have got to have credibility in the organisation. I sit down with the CEO and talk about transforming the business."
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CIOs Need to Adjust Their Technology Portfolio Management Perspectives
I don't think it's any secret that the core responsibilities of a CIO have been gradually changing over the past decade. Business tech life has evolved since the 80's and 90's (big surprise, right?). The days of barely-monitored tech spending are over and intelligent C-suite executives are now (or they better be) looking for the genuine life cycle business value in all tech investments—including project management.
CIOs can no longer survive solely on their tech backgrounds. Instead, we need to begin building our credibility as business process experts while downplaying those “techie” roots. The traditional tech operations group is still far behind most business units when it comes to synchronizing our efforts with the strategic (cost/benefit) side of the enterprise. Statistically, fewer than 2% of companies have demonstrated a solid functional relationship between their tech sides and their business sides. Guess why we over-spend on tech projects...
When it comes to improving the technology portfolio management initiative, virtually ANY company can achieve significant cost and risk reductions with very little up front investment. Savings of as much as 30% of the IT software budget are well in line with this concept. Additional savings in tech support and maintenance are also just shy of no-brainer process improvements to those companies that are seriously interested in a more effective ROIC.
Finally, a well-thought-out tech portfolio management initiative can bring enormous savings in a matter of weeks—not years. A substantial key to potential success is that your initiative should be based on value, NOT based on some costly silver bullet proprietary vendor solution. The vast majority of benefit from ITPM initiatives in nearly every enterprise can be found in simply re-envisioning life cycle management. In this case; in this time; plugging a good measure of common sense into the initiative can go a very long way toward converting tech costs and risks into improved bottom line tech value.
Posted by Alan L. Plastow, MAT, PMP on Monday, April 21 2008 12:06 AM