12 Mar Transforming IT from cost center to business driver
Editor’s note: Ajei Gopal, executive vice president for the Products and Technology Group, CA, Inc., delivered a speech on “Innovating in Tough Times” during the recent Fusion 2009 CEO-CIO Symposium in Madison. He sat down with WTN for an interview prior to the event. Several excerpts from his presentation are also included.
WTN: Some companies like CUNA Mutual in Madison are being very aggressive in IT, in that they are updating their IT architecture and data management systems. Many others are pulling back and laying people off. How might companies look at their strategic plan from a standpoint of cash flow and credit lines? How might CIOs play a strategic role?
Ajei Gopal: When you look back at a similar downturn, the burst of the dotcom bubble in 2000, there was a lot of cutback in IT spending. Many organizations had invested in IT in anticipation of future growth and success. These investments were made without input from the business. I see the situation as different today. Now, IT is working hand-in-hand with executive management – the organization’s IT leaders are an integral part of the business. The decision-making that is taking place today at the top levels of the company is taking place in cooperation with the lines of business and the IT organization.
You invest now in the transformation you need to get ahead of the curve, so that the organization will be leaner, faster and more efficient. You’ve got to do more with less.
Since IT has become a key driver of growth, it’s a matter of bringing technology into the day-to-day operation of the business. You’ve got to find a way to cut costs, use IT to further business goals, and to do so in a cost-effective manner. Make the transition from IT being a cost center, to a business driver. Use IT as a way to spur business growth.
WTN: At the Gartner conference back in October they said that business IT alignment was dead. What they were referring to is that business is all about IT. Blockbuster is making massive IT investments, they have got to redo their data management systems in order to compete with Netflix and other competitors. Do you think we have moved to a point where IT is seen as a business driver?
Ajei Gopal: Today, in many instances, IT is the business. Alignment is a weak word in that the coordination between the CIO and the others is a very strong chord. The stuff of IT is the stuff of business. This is certainly the case in the financial services industry. So you look at Google or Amazon – they went from being an online store to an online shopping mall, to an online company for cloud computing technology. That is, it’s all about IT and business being locked together.
WTN: We are going through staff reductions and a lot of alignment. What do you see in the future, from a company workforce perspective, and the direction of knowledge management?
Ajei Gopal: Think about manufacturing. It went from a model where people were vertically integrated, to one where they are much more horizontal with sub-companies and subcontractors coming together in a final location, combining inventory management with a very dynamically built supply chain. There is no reason why IT can’t get to that point. There may be more areas of IT that will become specialized, such as standardized IP networks. While an individual organization may not have the skills to manage that worldwide IP network, there are a number of providers out there who are competing to provide that capability.
Businesses have to be taking a look at their core competencies. You might have other providers who are in a position to provide an area of core competence, which you can work with them and contract with them. We see this happening all the time with companies when it comes to managing their infrastructure. We outsource building maintenance to an outside partner. I think increasingly, invest in your areas of core competence, and the areas that are not core to the business, figure out a way you can partner to good effect.
WTN: E-mail is causing problems in terms of storage and archiving. How do you see e-mail evolving? Are we becoming slaves to e-mail?
Ajei Gopal: I think e-mail is here to stay, we are all dependent on electronic communications, whether it’s texting, instant messaging, or e-mailing. And yes, it does cost to be able to manage resources. From a corporate perspective, you have to make sure that you are able to archive your emails by picking a solution to manage your e-mail that it is discoverable. Establish a key policy for document retention and destruction. Have records management and discovery engines in place. You couple that with data leakage prevention technologies in order to get a better handle on information that may be leaking out of your organization.
WTN: Where do you see us headed for developing standards to fend off scams?
Ajei Gopal: I think there is a fundamental usability issue, developing white lists vs. blacklists. It’s not just a technology issue, but a societal, social networking issue. To what length are you willing to go to prevent getting a piece of spam?
One of the things I try to do in my meetings is to prevent people from sneaking peaks at their Blackberrys or their laptops. As long as you have a discipline that says, no distractions during meetings. It can be very distracting when someone is speaking, and people are sitting there going through their emails. We try to keep them focused. It’s a hard problem, but, you’ve got to know when to respond and when not to respond.
WTN: What do you see as the future of applications development? Where is it going?
Ajei Gopal: When we talk about cloud computing, there is an opportunity for business to create applications that are much more dynamic in nature. You can have an individual pulling together their own mashup applications. It’s about having that ability to create those dynamic mashups. Over time, we see some opportunities in the enterprise business. All of the things that the CIO cares about, they have to worry about the minute the applications go out there. From a CIO perspective, the challenge becomes astronomically more difficult. For companies like us, what we do is help the CIOs run their business. We do that in their enterprise, but, also in the cloud.
What’s new about the cloud is the economic benefit – you don’t have to pay up front, but pay as you go. The cloud could provide a cost-effective way to connect and provide educational opportunities. But, the cloud has a number of challenges – it has to be managed effectively. We have moved from one box to multiple boxes. So the mainframe and PCs will continue to exist, but complexity is increasing.
The moment you go outside the four walls of your enterprise and you get into the cloud of service providers, trust becomes an issue. With each new stage of technology, the key is to build trust, build stability. At CA, we’ve been doing this for a number of years, taking our technologies and applying them in to the cloud. For CA, we think of our customer as the CIO. We help them manage their environment, and help make the cloud a little less cloudy.
How do you take all of these innovations, and bring them together at an affordable and reasonable cost? It’s taming these complexities across all of the different silos that we are dealing with.