CIO of Carestream, Bruce Leidal, was asked to cut IT cost relative to revenue in half over five years. He explains how he addressed the challenge.
03-11-2013
by Peter High, published on Forbes.com
Since the beginning of the economic malaise in 2007 and increasingly in 2008, IT department have been asked to slash their budgets, as other departments have been asked to do the same. For many companies where IT is a relative black-box to those outside of the department, these cuts were made with machetes rather than with scalpels all too often, and as a result, fat and muscle were cut away from the department. This has led to a difficulty among these same departments to switch gears toward growth opportunities, as some of the most innovative (and expensive) resources are no longer a part of IT.
I have been pleased to find a growing number of CIOs who are able to balance cost cutting and innovative thinking in their minds, and use reductions in costs as the justifications for increases in funding geared toward innovation.
Bruce Leidal is the CIO of Carestream, a $2.4 billion company that develops , sells and services imaging products and software for the dental, medical and non-destructive testing global marketplace. When Leidal joined the company in 2008, spending on IT was 3.0% of revenues. An external benchmark study suggested targets for each of the functions in the company, for IT this was 1.5% of revenue. To ensure competitiveness in the throes of the downturn, he, like other execs at Carestream was asked to reduce costs to the benchmarks. Bruce was asked to achieve this target within five years. He developed a five year plan to get there, realizing it was quite a short time horizon. Within a year, with some demonstrated progress, the company asked him to shorten the time horizon to accomplish this in four years rather than five. Unfortunately, demand for IT services were not decreasing at that pace. He realized that something had to be done. As he put it, “We had to shift gears and tell the story of IT to our colleagues outside of IT.” He followed a multi-step process in order to accomplish this.
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A growing number of CIOs are working closely with external strategic partners to gain mutual benefits for their company and their partners.
by Peter High, published by CIO Insight
11-30-12
Most IT departments of a certain size engage external strategic partners or vendors for a variety of tasks. Too often, however, CIOs view external partners as fulfillers of work instead of as sources of innovation and strategic advantage. Worse still, these CIOs do not share their plans with the external strategic partners upon whom they rely most heavily. The CIOs tend to think that if too much information is offered, it may fall into the wrong hands. A growing number of CIOs, however, have begun to recognize that creatively segmenting vendors and sharing a deeper level of insight with them not only proves to them the high regard the company holds them in, but puts the onus on the external strategic partners to deliver better products and services for the company. One of the key methods to gain from these executives is setting up “vendor days” with external strategic partners. Other similar best practices include:
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It was hard not to sense the presence, and importance, of technology in this year’s 2012 London Olympic Games. In the second article of his “Technovation” column for Forbes, Peter High captures five lessons from the leader that helped make it all happen.
10-09-2012
The London 2012 Olympics were generally thought to be extremely well executed. As a casual or even an obsessive observer of the Games, it is easy to overlook how much technology has changed the Games, largely for the better. Among other things, Gerry Pennell, the CIO of London 2012, was responsible for ensuring that the core mission of measuring athletic performance and providing data to the media and ultimately to spectators around the world was achieved.
At first glance, running IT for the Olympics would seem very different from doing so at a typical company, but I recently spoke with Pennell, and he brought up a variety of lessons that are universally applicable.
Lesson 1: People – Hire Technologists who can run at sprint and marathon speeds
Pennell had an advantage in that eight years earlier, prior to beginning preparation for the London Games, there was an Olympics in an English speaking country (Australia) with people who have some cultural similarities to the Brits, and he was able to recruit some of them to join his efforts. That said, prior experience only goes so far. “New blood is essential so that people are not tempted to simply replay what was done in the past,” says Pennell. It is important to have fresh thinking for each Olympics, but it is also important that there be a preponderance of people from the host country in IT so that the IT plan reflect the unique aspects of the technology landscape in that country.
In terms of characteristics to look for, finding people who are comfortable operating with a high degree of uncertainty, and who will not be frustrated by changes, even at the last minute, is essential. At the beginning of Pennell’s journey with his colleagues, it was important to think of their jobs as a marathoner might, but at the end, there were a series of sprints. Balancing the strategy of the marathon (a topic covered below) with the tactics of the sprints is essential.
Increasingly, this is a lesson that CIOs in most companies must contemplate. The pace of change in IT is growing, and there are no signs of slowing down. Hiring people who are comfortable with change, and bring an R&D mentality to new technology is essential. As in many conventional business situations, it is also the case that projects move swiftly through different phases; its important to find people who are versatile enough to deal with strategy at one end of the process, and deployment or operations at the other. The more versatile the team the easier it is to respond correctly to changing situations.
Lesson 2: Strategy – In the absence of solid plans from others, understand where the finish line is, and work backwards
Lesson 3: Infrastructure – in four years, speed records are substantially different
Lesson 4: Governance – Develop detailed plans as to how much gold and silver will be necessary
Lesson 5: External Partnerships – Choose your relay partners wisely
To read the entire article, please visit Forbes.com.
Peter High
2-14-2011
Excerpt from the Article:
In his role as SVP/CIO at Flextronics, David Smoley has had to work within the constraints of a business that is a leader in the application of Lean manufacturing techniques. Rather than view that as a problem for IT, however, Smoley has embraced Lean practices in his own department. Flextronics is a provider of vertically integrated advanced design and electronics manufacturing services (EMS) to original equipment manufacturers (OEMs). When Smoley took over his current post in 2006, the company, and the economy, were doing well. Rather than use this as justification to invest in a wide array of new technologies — as many IT executives do in good times — he instilled a disciplined team culture around the theme “just enough.” There are several areas that Smoley recommends his fellow IT leaders focus on in preparation for the next inevitable economic downturn:
To read the full article, please visit CIO Insight
