Posts Tagged ‘dot.com’

Can’t We All Just Get Along (In IT)?

Monday, January 26th, 2009
IT Departments Need To Work With Colleagues In Other Firms To Understand Technology

IT Departments Need To Work With Colleagues In Other Firms To Understand Technology

So there you are, manning the laptop, doing your utmost best to guide your IT department and, of course, your company on to greater glories. Do you really need to network with your colleagues at other firms? For that matter, do they really have anything to teach you?

Peter Whatnell over at Sunoco has some thoughts on this subject. Whatnell is a bright guy: he’ s been in charge of Sunoco’s IT operations since 2001 (remember the dot.com crash?) and he is now the president of the Society for Information Management. Ben Worthen over at the Wall Street Journal recently had a chance to sit down with Peter and have a chat about the importance of remembering to look outside the company for ideas.

Whatnell makes the good point that the colleagues that you network with don’t even have to be in the same industry as yourself. As an example, if you talk with someone who is working in IT for the construction industry and they start to mention how they are starting to use mobile devices to quickly distribute design changes, then you may have found an idea that you can use in your neck of the woods.

One of the big questions that we all deal with is “am I giving away competitive information if I talk shop with a colleague from another firm?” Whatnell makes the point that by now we should all be able to realize that what makes our firms competitive is not the underlying technology that we use. Talking about technology is not going to reveal any big company secrets.

What makes our firms competitive is how we go about using these pieces of technology in order to solve the problems that our firm is facing. This means that even if you and your competitor have access to the same technology, you’ll end up putting it together much differently.

Whatnell believes that the true source of a competitive advantage is knowing exactly how you can use IT to help make your business more successful. One interesting way to do this is to ask key executives how the firm makes money. If they don’t know, then this is an area that IT can help simplify.

In these tough times, it’s interesting to hear what Whatnell has to say about what his biggest challenge is. Sunoco is an oil company – it’s a commodity business that’s competing in a mature market. In order for Sunoco to be successful, the firm is going to have to find a way to become THE low cost provider.

What this means for IT is that we need to find ways to help the business side of the house cut expenses, reduce cycle times, and improve their overall agility. The goal should be to avoid having IT being told to just “cut your budget to help our bottom line.”

In the end, Whatnell says that an IT department needs to have earned its credibility within the company in order to be able to be able to contribute to helping the company reduce costs. The key here is that you need to have already earned this credibility.

Do you routinely meet and talk with colleagues that work outside of your firm? Do some of these colleagues work in different industries? Does your IT department have the ability to work with the rest of the business to trim costs? Do you feel that your IT department has the credibility that it will need to have these discussions with the rest of the business? Leave me a comment and let me know what you are thinking.

3 Secrets That Oil Companies Use To Run A Great IT Department

Thursday, January 15th, 2009
Peter Whatnell, CIO of Sunoco, Has Some Interesting Thoughts On How To Run A Successful IT Department

Peter Whatnell, CIO of Sunoco, Has Some Interesting Thoughts On How To Run A Successful IT Department

If you had to guess as to what the secret of running a great IT department is, what would you say? Peter Whatnell over at Sunoco has some thoughts on this subject. Peter breaks it down to three key items: knowing how your company makes money, choosing to not run against the company’s culture, and remembering to never fall in love with technology. How hard can that be?

Whatnell is a bright guy: he’ s been in charge of Sunoco’s IT operations since 2001 (remember the dot.com crash?) and he is now the president of the Society for Information Management. Ben Worthen over at the Wall Street Journal recently had a chance to sit down with Peter and have a chat about the role that an IT department plays in a company’s success.

Whatnell pointed out that the arrival of a global recession has caused all IT departments to take any plans that they had created prior to the end of August and basically throw them away. The big hit is going to be especially felt in new projects.

The difference between current events and the dot.com crash that happened back in 2001 is that that crash really only impacted the IT community. This time around, it’s really a global meltdown and it’s impacting the whole business.

IT is facing a significant challenge in that there is now a lot of easy-to-use IT technology that is available to consumers. Examples include the iPhone (of course!) and free on-line email accounts with virtually unlimited storage. What this means is that corporate users are now expecting to see similar products available to them while they are at work.

IT departments have some valid security and support issues for not diving headlong into offering such services internally. However, they do need to seriously consider how to offer their customers such services.

Whatnell stresses that we need to make sure that we don’t “…waste a good crisis.” What he means by this is that 2009 is going to be tough and it’s going to force every IT department to investigate nontraditional ways of delivering IT services.

Whatnell is somewhat famous for saying that he’d consider moving to a cheaper alternative, such as Google’s email system, if he could get 90% of the functionality for 10% of the cost. One of the reasons that he’s taken this stance is because he realizes that most users only scratch the surface of the functionality of the applications that they have available to them. Give the power users access to the fancy, expensive version of the apps and give everyone else the basic version.

Whatnell has some very specific thoughts when it comes to evaluating potential IT projects. He says that he evaluates projects based on what they do to support the company’s strategy, what the business case is, and finally, what the business risk is.

He points out that the more change that an IT project would cause to how business is conducted, the bigger the risk is. This does not mean that you don’t do the IT project, but that you need to be very careful and make sure that you give your full attention to all of the change management activities that would be required.

What do you think about what Peter has to say? Do you think that his view from inside an oil company is relevant to the rest of the IT industry? Which of his suggestions do you think is the most important? Leave me a comment and let me know what you are thinking.

We’re In A Recession, What’s An IT Department To Do?

Thursday, January 1st, 2009
It's Not A Depression (yet), But IT Departments Need To Make Changes To Deal With The Recession

It's Not A Depression (yet), But IT Departments Need To Make Changes To Deal With The Recession

Remember what happened to the IT industry back in 2001? When the dot.com bubble burst, pretty much the sky started falling and IT spending hit the proverbial brick wall. If you’ve been reading the newspapers or watching TV lately, then you’ve probably noticed that the global economic downturn sure looks like what we saw back in 2001. Should an IT department be worried?

The good folks over at Forester Research have just released a forecast for 2009. When they looked into their crystal balls, they saw that in 2009 IT spending will grow at its lowest rate in the past six years.

IT spending will actually still increase just a wee bit – it will grow to be 1.6% more than they spent in 2008. This will be a change from the past two years because IT budgets had grown by 4.1% and 7% in 2007 and 2008.

The reason that IT budgets will still grow just a bit in 2009 even though the rest of the world is shrinking is because the world has changed – businesses have grown so dependent on IT that they can’t help but spend as much or more than they did the year before.

For those of us who remember the dot.com crash (myself included), we shouldn’t be too worried about IT spending taking the long lasting nose dive that it did back in 2001.

The reason that things are different this time is because back in the dot.com days firms had overinvested in IT systems and staff. The thinking is that this time around IT departments have been running a much leaner shop for the past few years and so they won’t have to cut as deep as other departments may have to.

So what’s an IT department to do in this down cycle? Focusing on helping the firm to cut costs is one way that IT can help now and build good will for use later on.

A relatively simple project to consider is switching your corporate email system from an in-house system to an external on-line provider. Yes, email is a critical business application; however, it’s not unique to your business. Having your expensive IT teams spending time on keeping the email system up and running is taking away from other business specific work that they could be doing.

If your business is the creation and selling of software products, then you should be cautious going forward. Forrester’s study found that software revenue is predicted to grow at only 3.4% in 2009. Additionally, most of this growth will be coming not from new product sales but rather from support fees from previous purchases of software.

What everyone needs to realize is that right now nobody is spending any time planning for the future. This is a luxury that IT departments cannot aford to take. When the global economy snaps back, IT is once again going to be expected to start driving company profits!

What steps are you taking to prepare your IT department for the recession? Have you identified any cost cutting changes that you could make that would yield big savings? Have you considered having an external firm handle your email? Leave me a comment and let me know what you are thinking.