Two CIOs with $1 billion yearly budgets shared their thoughts on their brand of IT with moderator Erik Keller of Wapiti during a panel at Software 2006 this week.
Toby Redshaw, corporate vice president, Corporate IT Strategy, eBusiness & Business Development at Motorola, said he brought down his IT spend from $1.4 billion four years ago to $960 to $980 million this year. Some of the savings have come from building Web services infrastructure to speed development. “Instead of six to eight months and an army, it’s now a day or two with a few people to develop or modify applications,” Redshaw said. He also pointed to business activity monitoring (BAM) and “taking a dumb network, bring it up a layer and monitoring in an intelligent proactive way.”
“Some areas are still feudal," he continued. "Any growth through acquisition has big pools of IT waste when you look at it from an enterprise perspective."
Redshaw also said that the "white space between silos" offers a lot of opportunity for creating value, interfacing the silos. Redshaw is investing in newer companies, such as Data Domain, Cassat, Cast Iron and Netezza, to lower infrastructure costs. He is also an advocate of the viral adoption of software within Motorola, especially in knowledge management. “It takes users to new level of internal clock speed,” he said. Redshaw's group quietly launched wikis and blogs about a year ago. "Now we have 2,000 live wikis inside the company and 1,900 blogs....It just happened by itself. We don’t even monitor it, and I'm sure some awful stuff is embedded there." He is hoping not have blog police inserting themselves into the system to clean it up.
"The real work gets done by people down in the ranks working together," Redshaw said. "Management is just overhead and most of it is net negative." He wants to remove management people from process and let people build products to own the knowledge bases and institutionalize the accrued knowledge. "There are 68,000 people in Motorola, and every day 60,000 log onto knowledge management system and do something. I believe that has to be an advantage."
Redshaw also believes that the next wave of Microsoft upgrades—Office 2007 and Vista—will have an impact.
Con Goedman, head of business information at Shell International, supports 120,000 users focused on finding oil and bringing it to the surface. He was asked about measuring IT value and responded, “The ultimate check of whether you delivered value [with IT] is to see a year later if it’s being used,” Goedman said. He is an advocate of metered usage. "You have a risk/reward contracts. If the stuff works, users jump on the bandwagon and licenses increase."
Redshaw said he doesn't care about how software is sold. "The real trick is having a hard core deal team that understands the IT environment, but is a genetic cross of pit bulls and piranhas and is better at sales than the people [vendors] who show up. We don’t want to look at deals that are 6 to 8 months to a year to implement--we want a short burst of 40 to 50 days. We are also moving to the 'best value,' as opposed to the nutty thing we used to do, 'best of breed.' If the vendor who comes is second in a bake-off is 30 percent cheaper than the one who came in first, we'll take the second one."
Motorola also have a small set of strategic partners that it has more cozy arrangements with, and helps those partners with their PR efforts, such as Redshaw mentioning company names (see above) in public presentations.
Goedman countered that you can have pitbulls for commodity products, but not for area is which the technology isn't widely available. "It pays to build a relationship with vendor," he said. Redshaw noted that the people who cut the deal don't manage the relationship. "In any you can find at least two vendors you can put against each other," he said. "I'm amazed at how bad deal people are in IT. They don't have any notions of 'deal choreography.'" Redshaw boasted how Motorola once got 2.5 percent of company with its IT deal-making pitbulls.
Goedman prefers to work with established, larger vendors. "If you spend money and effort and small guy goes under, it's not good, so a larger company taking over a smaller company can be good," he said. Redshaw mostly agreed but pointed out that the "engineering cycles and DNA" in a larger company can cripple an acquired company. "That’s bad, and it turns from only thing company thinks about to 'this is priority number 48' at the big company up the street that begins with O." I guess he isn't a big fan of Oracle.