Chevron's CIO talks about strategic planning, virtual training and dealing with 4TB of new data per day
Last year, you became CIO at Chevron and president of its Information Technology unit. How did you handle the transition? I spent a lot of time listening. Chevron has a management committee of the top 60 executives. I literally went out and spoke to the 60 and I asked them three basic questions: What was important to you in your business, what’s working well with IT at Chevron and what’s not? I could assume I knew a lot about the business, being here for 28 years, but getting a fresh perspective from that many people across the full breadth of the business was enlightening.
I also have been doing town halls with employees. I do something called “Lunch With Louie.” I get a cross-section of about 10 to 12 employees every two weeks, [and] I ask similar questions: “What’s working? What’s not? Coach me as I come into this job.”
Dossier
Name: Louie Ehrlich
Title: CIO at Chevron Corp. and president of the Information Technology Co. unit
Location:San Ramon, Calif.
Most interesting thing people don’t know about him: “My life’s an open book. I’m a singer-songwriter.”
Favorite technology: His BlackBerry
Ambition: “That my family is healthy, my children are successful and that they look at me the way I look at my father: as a pillar of strength, a great example.”
Favorite vice: “A good bottle of wine.”
Ask him to do anything but: “Paint your house or mow your yard.”
How did that affect how you do your job? Based on that, we brought in help from a third party and did an assessment of the current state of IT. We just completed a refresh of Chevron’s IT strategy, and we laid out a 10-year vision and a three-year road map. It’s a good chance to take a deep breath, help the organization reflect on what’s going well [and] what’s not, and set a fresh direction.
What does that three-year road map look like? There are three strategic intents: prioritization, simplification and integration. Chevron does a great job of aligning information technology investments to the segments of the business. We’ve done quite a bit over the past five years to put in place a strategy alignment process that ultimately results in a road map for each of those segments.
That’s necessary but not sufficient. So we are moving from segmented prioritization to enterprisewide portfolio management. Now we’re going to take a more holistic view. If we do that, we can get more return on investment by putting the focus on things that add the most value to Chevron.
We have some measures associated with that. One is to have 20% fewer concurrent projects going on than we have today. And we want to ensure that our investments are focused in three fundamental areas: accelerating business insight; automating, optimizing and integrating Chevron’s business operations; and connecting people, processes and businesses. What we want to do enterprisewide is put the most money into things that are going to make the most money for Chevron, guided by those three strategic areas.
The many mergers we have gone through have created a fairly complex IT environment. We’re going to reduce our application portfolio by 20% and cut our vendors and suppliers by half over the next three years.
Data is just hugely important to us, and we’re going to put energy toward getting clear from an enterprise perspective what are the top 10 data types that make the most money for Chevron, and then understand the quality of those and relentlessly pursue improving the quality of those to something that’s world-class over the next three years.
You started as a programmer-analyst at Chevron in 1981 and rose through the ranks. Is that still a viable way to advance in IT? I know there are CIOs that move around a lot, but you also have to look at the size of the companies they move around to. Not all CIO jobs are the same. This company is huge, and in 28 years I’ve had 17 jobs, and they’ve been across the value chain.
Is that a viable way to attain the CIO position? I think it’s one way. I still think it’s a viable one. But if you’re going to do it the way I did it, you’ve got to be flexible. You need to move around a bit, because it’s important — particularly if you’ve got a technical background — to understand the business. And to get that understanding, you’re going to have to either be involved in the enablement of different pieces of the business or take on different roles, as I have.
What IT investments will Chevron make this year, and how has the recession affected those choices? We’re right in the middle of a major refresh of our desktop infrastructure. That’s 100,000 desktops around the world. We’re about 5,000 to 10,000 into that. We’re deploying Vista worldwide.
Why upgrade to Vista now, when Windows 7 is so close? We have to. We’re at the end of life cycle of that asset base. The things we’ve had to do with application integration are the same things you have to do with Windows 7. I view Windows 7 as an upgrade from Vista. We’re talking 100,000 machines. It’s an 18-month deployment. So when we get there, we’ll take a look [at Windows 7]. But there’s no guarantee when Windows 7 will be ready.
What unique challenges does IT face in meeting the needs of your industry? We’re trying to make sense out of things you can’t see, so understanding the subsurface is critical. It’s also just the amount of data that we have. We have this seismic information that we use to make a lot of decisions and to understand the subsurface. We’ve managed 50-plus 3-D seismic projects. If you put them on CDs and stacked them flat, they would be 652 miles high. That gives you a sense of how dense the data is.
At refineries, there’s this data being created constantly by our control systems — 4TB of new data per day. Every second, 60,000 valves are controlled by IT, and information is created about that. The trick is, how do you make sense out of that data in a way that’s going to add value to the company?
What technology are you most excited about? It’s virtual worlds. We have a pilot going on in our Salt Lake City refinery around a Second Life [type of virtual world]. We’re using it to help train employees in our refineries. You’re using simulation models so that they’re not out in the refinery, having to learn that way. It’s a much safer way of training people, but it’s also a way in which you can repeat the training in a consistent way and even save the experience.
I see it going beyond just training. This is a pretty dangerous business. Imagine you’re sitting around a table in a virtual world with experts from all around the world, and you’re working on some sort of problem in a refinery with some equipment. Suddenly, the equipment shows up on the table and you’re able to see it, discuss it, try to fix it and run a simulation to see what it does. You’re doing things you just can’t do in the real world. It’s a way to bring in expertise from all around the world tied with real-time models.
