Businesses want the best, most powerful, but easiest-to-use software for every job but don’t want to juggle a thousand vendors. They want the lowest cost but the best service. With no downtime. Welcome to the world of a modern-day chief information officer.
Amongst their top pain points is transforming the information technology function into a strategic asset and erase the perception that IT is the “the department of no.”
Here’s how a handful of IT leaders described their to-do list based on several conversations with Fortune over the last two months.
1. Do more with less
Okay. You knew this one was coming, but just because it’s a cliché doesn’t make it less true.
When David Smoley joined pharmaceutical giant AstraZenica (AZN), two years ago, the imperative, pulled out of Toyota’s Kaizen continuous-improvement playbook, was pretty straightforward. “Being two times as good for half the cost was the aspirational goal,” Smoley told Fortune.
That meant cutting back, way back, on third-party IT outsourcing companies and bringing more technology function back in house. AstraZenica set up global technology centers in Chennai, India, and Silicon Valley, with another to come in Mexico.
On the other hand, it also meant increased reliance on software-as-a-service—applications delivered online via subscription. By using software that runs on another company’s infrastructure, the company delegated software and hardware upgradess.
Not every server room or data center was outsourced but those that remain have been heavily virtualized to cram more capability into less space.
The California Natural Resources Agency—which supports 33 organizations including the California departments of Water Resources, Parks and Recreation, Forestry and Fire Protection, and Fish and Wildlife—is a poster child of the virtualize-and-consolidate mode.
By virtualizing its in-house servers and technology (CNRA is a huge VMware shop) IT director Tim Garza said it’s boosted overall data center capacity by 300% while cutting physical real estate needed to run it by more than 60%. And, it says it’s shaved 40% off its capital expenditures and 30% off operating expenses in the process.
2. Launch new businesses and transform the old
Setting aside the a defensive aspect of doing-more-with-less, there is huge demand, bordering on the paranoid, to transform existing businesses to digitize what hasn’t already been digitized and use the resulting data for new opportunities. This would be the “business transformation” imperative we hear so much about.
This is all about making sure your established company isn’t T-boned by some venture-funded upstart. Decades-old taxi companies are being Uber’d, Borders Books was Amazon’d (AMZN). Now 170-year-old insurance companies worry about being upended not by other insurance companies, but by Google (GOOG), which has a whole lot of data about all of us and, by the way, is dipping its toes in the property and casualty life insurance business.
Companies need to find ways to take existing data that’s already in-house and repurpose it to new applications. Turning that digital exhaust into gold is probably the top priority going forward.
A manufacturer of industrial equipment, for example, can take the data flowing in from sensored machines in the field to sell predictive maintenance and diagnostics services to customers. So a buyer that used to purchase an engine, a rotor, or a pump now still buys that gadget, but also a subscription service that remotely watches that device’s performance and makes sure it can be maintained and fixed before it fails.
3. Keep it simple, stupid.
Gone are the days when line-of-business employees would put up with arcane, non-intuitive applications. In-house software applications, whether they are new-employee set-up screens or expense account forms, need to be as easy to use as the iPhone or Android apps employees use on their personal smartphones.
The downside is that making things simple is hard. The upside is if the application truly is intuitive and lets the employee do her job, then training and downstream support costs are minimized.
Tim Weaver, chief information officer of Del Monte Foods, is sold on that consumerization of IT approach even (or especially) for tasks that are traditionally non-user friendly. Del Monte, which uses SAP (SAP) business applications also brought in software from startup Capriza to make those business processes simple enough for mere mortals.
“Users no longer have to formally train as deeply as, say, a full SAP client application would require,” Weaver told Fortune.
CNRA’s Garza agreed: “We have a ‘three C’ strategy: We want to build capacity and capabilities and then drive and promote consumerization of those capabilities so they can be self-managed and self-service,” Garza told Fortune.
The reason shadow IT exists is because traditional IT doesn’t deliver, he said. “In government we are not in the software or hardware business, so we have to do consumerization. We’ve been able to boost flexibility and reduce provisioning time to market by becoming a service broker or service provider to our employees.”
4. Keep an eye on what’s new
These IT vendors need to follow their current tech suppliers but also keep an eye on potentially game-changing new technologies that typically come from startups, not the IT giants. Chris Curran, principal and chief technologist for PWC’s advisory practice, said many of the IT execs he speaks to site their need to track emerging technology innovations and then figure out how to prioritize what they see.
“They want to know how to experiment and not break the bank,” he noted.
Most of the chief information officers referenced in this story were brought to Fortune‘s attention as reference accounts for one vendor or another. Smoley, for example, is a big proponent of ServiceNow, which AstraZenica has used to consolidate some 70 separate service desks into one system across the company.
As noted above, DelMonte’s Weaver is a big fan of Capriza. Other newer applications mentioned repeatedly by the CIOs include Box (BOX), for accessing key documents from mobile devices, and DocuSign. CRNA uses Imperva(IMPV)Skyfence to see what software services are being used, with or without sanction, and from there decides whether IT should provide that capability in-house or go outside.
5. Manage your vendors, not vice versa
Chief information officers, who typically sign off on any big technology acquisition, like the idea of managing as few vendors as possible to minimize paperwork and finger-pointing when something goes sideways. But they also fear over-reliance on one vendor.
Vendor lock-in remains a worry. Off the record, most of these execs will talk about how they seek to minimize mission creep by big legacy vendors—the names Oracle (ORCL), SAP, IBM (IBM), Microsoft (MSFT) and VMware (VMW) continually crop up—because over reliance on one vendor means lost leverage when it comes to price and license negotiations.
This concern does not evaporate in the cloud computing era. Most of the IT execs who talked with Fortune said their companies are at least experimenting with public cloud provider Amazon (AMZN) Web Services, the leader by far in that category, but they do not want to repeat mistakes of the past by putting too many eggs in any one basket.
Speaking broadly on this topic, AstraZeneca’s Smoley said: “Vendor lock-in is a concern, it aways is. Today’s leading-edge cloud companies are tomorrow’s dinosaurs.”
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