IT executives weather downturn

IT staff need to communicate better. Infrastructure expenditures are really tough to justify. The recession has changed IT priorities. These are sentiments that three senior IT executives agreed on at a roundtable that Forrester Research hosted earlier this month. One thing they didn’t agree on is the importance of Web services.

BOSTON – IT staff need to communicate better. Infrastructure expenditures are really tough to justify. The recession has changed IT priorities.

These are sentiments that three senior IT executives agreed on at a roundtable that Forrester Research hosted earlier this month. One thing they didn’t agree on is the importance of Web services .

Robert Carter, executive vice president and CIO at FedEx in Memphis, Tenn., said Web services already play an important role at the package delivery company. Almost all transactions that customers conduct with FedEx are electronic, and a team of people are working on Web services projects at the delivery company, Carter told the audience of about 600 attendees.

Meanwhile, Robert McCormack, senior vice president and CIO at Aramark Uniform and Career Apparel Group in Burbank, Calif., said Web services some day will be important, but now it’s not a big issue. Aramark is working with XML  using BEA Systems products, and McCormack finds that challenging enough. Just trying to get two vendors to agree on what XML is can be a big chore: “It’s tough and ugly,” he said. “I tell you, it’s two people reading out of different books.”

General Motors falls somewhere in between the two companies. Tony Scott, CTO at the Detroit automaker, said Web services technology already is important to some divisions, such as GM’s financial services businesses. “But it will probably be a long time before it gets into the factory environment” where electronic data interchange services are entrenched, Scott said.

All three participants agreed the recession has caused their companies to alter their IT priorities.

At GM, Scott has focused on consolidating systems to remove excess costs. “We had way too much diversity in terms of the systems that we were running,” he said. GM went from supporting four database vendors to one. All together, GM has cut in half the thousands of systems it operates, Scott said.

“Starting in ’96, when we really started tracking it, we had 7,000 business-critical systems that we monitored and managed at a corporate level. We’re at 3,500 or so today. That’s really helped us take a lot of cost out,” Scott said.

At Aramark, the IT group has learned to put more emphasis on business analysis than on technology, McCormack said. The company has recast the IT group in more of a services role. There must be a sound business case with hard-dollar cost justifications – and a business sponsor – for each project, he said.

“If there is no business sponsor, we’re not doing it,” McCormack said. This cultural shift has paid huge dividends “because it has allowed us, during a very tough time, to find those areas where we can make a difference in the organization,” he said.

Things are a bit different at FedEx, which is willing to take more risks with technology. “Overfocus on [return on investment] is a little overhyped. I don’t think true innovation happens unless you’re occasionally looking to break out of a pure ROI model,” Carter said.

Infrastructure roadblock

Carter, McCormack and Scott agreed that infrastructure purchases are essential – but tough to justify to non-IT executives.

“Educating the business on infrastructure has been the hardest part,” Scott said. His tactic is to correlate infrastructure investments to key business objectives, to illustrate that delivering new services requires keeping the infrastructure healthy.

“You’ve got to convince the business that it’s important to invest, even though they don’t really understand it and even though it’s quite expensive,” Carter added.

The panelists also were in agreement that IT people need better communication skills.

Program-management and project-management skills in particular need attention at GM, Scott said. GM holds a “corrective action” meeting every two weeks to discuss projects that are in trouble – either not on time, not on budget or not delivering the expected capabilities. Bad program or project management is consistently a cause, Scott said. “People just didn’t have the skills to manage something at the breadth of a GM,” he said.

For its part, FedEx has a “trusted partners” program to train IT staff to better communicate with business partners, Carter said.

At Aramark, the shift to a services-based model for IT has led McCormack to be proactive about finding departments that are under pressure to perform and could use some IT assistance.

“What I find myself doing a lot is going around and sniffing underneath senior management’s doors, smelling for fear. Because every time I smell that, there’s an opportunity for the IT group to come in and play a role and help,” McCormack said.

Looking to the future, Aramark’s McCormack said one of the most important projects for next year is rolling out wireless handheld devices to its 3,500 route drivers to improve customer service.

At FedEx, many of next year’s projects are focused on making the company’s Web site more useful to customers, Carter said. FedEx will unveil an inbound-package tracking service that lets customers enter their address to see if any packages are en route to them. “Things like that are continuing to stay at the top of our list,” he said.

GM will shift its focus from systems to people, Scott said. The company has done a lot of work over the last couple of years to speed up its systems and connect all its business processes digitally. Now the goal will be to help people be more efficient, he said. GM will invest in collaboration software to improve communication. “Our greatest opportunity now is in assisting the human beings in our organization to collaborate and make decisions faster,” Scott said.