..and then the CIO said to the CMO, 'Are you threatened by me?'

We spend 47 minutes with Dell chief information officer Andi Karaboutis, who gave us the lowdown on running technology for a company that stakes its name on it.
Written by Andrew Nusca, Contributor
Photo courtesy Dell

It's an interesting position to be in: what do you do when your job success is based on making the best technology decisions, but your company's success is based on selling that technology?

That's the challenge that Dell chief information officer Andi Karaboutis signed up for when she took the company's top tech job in January 2012.

The former Ford and General Motors executive sat down with us at our New York headquarters to talk shop and touch on how some of the industry's biggest issues—from BYOD to big data—affect her organization.

It's a fascinating look at how someone balances talking the talk and walking the walk.

ZDNet: Tech spending is moving away from IT and into line of business, and the CMO is sort of considered the belle of the tech spending ball. How does that impact you?

AK: It's a great question. It's prompted Karen [Quintos, Dell's CMO] and I to sit together and ask, "Are you threatened by me?" We had that discussion and laughed about it. The days of chasing shadow IT and all that, that's not what my concern is. Mine is, how do I enable this $62 billion enterprise so they have what they need and are not using shadow IT? I'm not going to go harness it, I'm going to go secure it—then find out where we missed the ball.

IT is ubiquitous now. It's everywhere. For us to think that IT owns it is a pretty narrow thought process in my mind. The CIO grows and starts to be a business person and partners with others to transform and work on company goals together.

Things for which I work together with Karen? Analytics, big data. Do I really care whose budget it comes out of? IT is everywhere. It's more about, what are we doing for the company around technology?

I think there's this transformation of, "Let's look at the total cost of what we're trying to do here." There are some operational things to keep an eye on, because obviously you want to drive that cost down.

We're working with our services organization to revamp our support environment. Contact centers. How do we switch calls? Chats? Voice recognition? Bring it to the next level. Part of that is networks- and infrastructure-based components and part of that is capabilities from Genesis and Avaya.

Everything comes back to an R.O.I. People need to not worry about what buckets it comes out of.

ZDNet: How do you work internally with Dell's marketing, procurement, supply chain, and so forth?

AK: We work with marketing, procurement, supply chain, product development, manufacturing...all the groups in pretty much the same way.

Everybody on my team is charged with understanding the business. Understanding the technology is the price of admission. I've got a key representative that faces off to each team. And it dovetails from there—it's not just one person.

ZDNet: What are the pros and cons of dogfooding—that is, using Dell equipment to run your technology organization? Could you buy an IBM server if you wanted to?

AK: I always say that we drink our own champagne, not eat our own dog food. (laughs) We've got a midpoint base—we scale to consumer, we scale to large enterprise. I'm in a great position to test our products and help them scale to large enterprise, which may not be what they were originally designed for.

Take SonicWALL VPN—we acquired them and replaced Microsoft. Two months later, it's now in our case of champagne. We don't just say we do it, we've done it.

The downside? Most people can do proof-of-concept across the whole space. But I think the benefit outweighs the con. That allows IT at Dell to be a showcase, but be a part of the product development team in testing things.

Our PD group is so responsive. I may need to have my rollout plan be more conservative. But given a choice, I would take this hands down.

I worked in the auto industry, and I didn't get to play in the design. Here, I get to be forthcoming. I can say, "I need mobile device management for Windows 8 tablets."

ZDNet: What has software-as-a-service done for you?

AK: Provided an opportunity. That's what it's done for most companies. To actually reduce our run-of-business cost while simultaneously keep us current. You've got to pick and choose, though. If you've just done a major upgrade of your office suite, jumping into an as-of-service...I go back to R.O.I. But it allows IT to actually focus more on building the capabilities that the business needs, and less on support and maintenance—what I call the "heavy" stuff.

We're evaluating Office 365, but don't know. And Oracle Eloqua. I'm heavy e-business suite, but carefully looking at Fusion. It allows commodity stuff to be taken elsewhere.

Do I feel the pressure [from hype], especially as a technology company? I sure do. There are times and places for SaaS, and there are not. There are times for cloud and there are not. It's no different for me than any tech provider or CIO.

ZDNet: Are your architecture choices internally aligned with strategy by the company overall?

AK: I feel comfortable that we get a good vote at the table in terms of how much to drive. I will proactively raise where we have gaps. I sit on the mergers and acquisitions council, for two reasons: the cost of integration, but also opinion for if it's a sorely needed product. You could talk to 300 CIOs, but you've got one right here. And they do listen.

ZDNet: How are you managing BYOD?

AK: I've 13,000 units—smartphones. It's actually working out really well. We started out using a good container. We've now gotten closer to a native client experience. We've rolled out ActiveSync with AirWatch. Corporate phones have choice of Nokia or Samsung. We will support anybody who doesn't get a phone to bring their own: iOS, Android, all of it. For e-mail.

Tablets? We support client environments. BYOD for me is "Bring Your Own Dell." (smiles)

There's a lot of hype on BYOD; a lot of people think it's already rolled out. There's so much around that. We're treading cautiously but aggressively.

ZDNet: Who's driving it?

AK: Well, we're a tech company and want to showcase. And we've got Gen Ys who want to bring their device and own it and put stuff on it.

We do reverse mentoring in IT—each of my reports has intern mentors. They do want to bring their own device but they don't want to work remotely. But they want [the company] to pay for it.

ZDNet: What legacy systems would you nuke tomorrow if you had a magic wand and could guarantee no business disruption?

AK: I'm not sure there's much I would nuke, honestly. You've got your heavy transactional systems...I think of it like an iceberg. You need to be mobile app-enabled, tie it all together for customer-facing things, but...would I modernize our inventory management systems, our financial systems? Probably. But you need that heavy stuff for transactional processes.

A lot of people mix up heavy infrastructure with legacy systems. I focus more on how to get to the things above the water line.

ZDNet: Where do you fit in the budgeting process?

We have a business architecture team. I'm on it, our vice-chair has a representative, our consumer business, with representatives from enterprise, client, software, services, marketing, sales, finance, legal, HR—probably a dozen or so of us. We take as input the strategy document of our company. Our five-year strategy. That team determines the blueprint from a people, policies, process and technology perspective that needs to put put in place to achieve that.

From that falls out organization, processes, tools and capabilities. And I bring that to the table with a price tag, as do the other teams, and then we decide on prioritization. It's very civil, logical and methodical.

I keep a base amount of money for incubation and innovation. My happy mad scientists! They've done cool things. Salesforce does not have an app for tablets or smartphones for Windows. Our account execs use Salesforce. So we developed one. Blew their minds. They've now certified us. They're the ones on which I pushed ActiveSync.

But people in the rest of the group go, "Oh, you don't think I can innovate?" So I've got an innovation contest. Take trouble tickets, for example. We're social; we use Chatter. So they just throw it out there [on Chatter, instead of filing a queued ticket]. And you now have six solutions. One is probably right. So you can reduce your trouble tickets.

Some people say, "This is not our process." Well, this is our new process. But three of you keep running trouble tickets. Let's get people fixing and doing and instant gratification.

ZDNet: Who do you report to?

Brian Gladden, CFO, and Jeff Clarke [Vice Chairman and President of Global Operations & End User Computing Solutions].

Is the guy I report to getting in my way? The meetings I have with Brian are, "Have you seen this latest greatest phone?" His latest question is, "Why do I have cables? Everything should be wireless and have an IP address."

ZDNet: Let's talk about talent. Do you have enough of it? Where are the shortages and why? How will you retain developers if Dell shares can't be used as a recruiting tool?

AK: We're very geographically dispersed. We go after, what are the right locations that provide the best talent for the competency we want to address? Austin [Texas] has become a great center for us. [The University of Texas at Austin] helps, obviously.

But the 5,500 people we have—1,000 contractors—the footprint is the best talent. Development is strong in India, it really is. We do follow-the-sun sort of support. We're looking at Panama—good university presence, good talent. We're assessing it. That's the kind of up and out we're looking at. Good talent in Porto Alegre, Brazil. We're on the same campus as the university there.

The one I'm finding the hardest to build in is enterprise architecture. People are now realizing that you need to have good reference architecture, good definition of capabilities—there's a shortage. People are clamoring for enterprise architects.

Talent and availability—a big talent pool—is at the top [of the priority list]. I don't mind that other companies are in Austin; competition is good. Cost absolutely plays into it. And universities. I look for computer scientists, IS degrees, I look for anthropology—the user experience is critical.

ZDNet: What's your take on user experience? UX is an oft-ignored aspect of enterprise software.

AK: It is the complete difference between success and failure. Having someone [to write code at a deep level] means jack to me. We try to tell them, "Guys, start with what they need." So I ask our sales IT team: how do your customers work? Not what they need. When they answer that their customers want to do X, Y and Z and they need to have it on a tablet or phone? That translates to Salesforce and Eloqua on a non-PC form factor and it needs to be real-time. And then you work backwards.

Too often we start with, "OK, we have Oracle ERP" and it starts with the IT person and you work your way out. It's hugely different.

Dell customers are unforgiving. We're a tech company. They're on the leading edge. And it's not even just Dell—consumerization is driving it. We're all consumers.

It's still a journey; it has been hard. It's taken a certain mindset to get it there. Some people have been moved out; I've brought in some outside hires. You need people who are not talking about social as a topic, but who are actually doing social. Not talking about mobile, but using the app and getting lost.

Editorial standards