Peter Whatnell, the the CIO at Sunoco Inc and the president of the Society for Information Management., a CIO-level IT organization, explains how CIOs view IT infrastructure issues and the changing role of IT leaders.
What are the topics on the mind of today's CIO?
Peter Whatnell: In my opinion, what you're seeing is a shift in how IT leaders perceive their role: what they need to be good at and what the business needs to manage and deliver. Up until now, you could easily describe the role of IT as "construct and operate." As you look to the future, there will be a shift to "acquire and deploy".
IT leadership has historically said, "We need to build something and run something." Instead, today we're saying, "I need to find a service-based way to deliver these things, using a mixture of partners and outsourcers and in-house activities. I need to acquire the services, ensure that I pay attention to security, interoperability, agility, and deploy services as quickly as I can."Based on a 2009 SIM survey, data center operations issues seem to be low on the CIO's priority list. That said only 11% of a CIO's time is spent on IT operations and only 7% on architecture.
Whatnell: For many years, people have been describing the data center as a utility. What are the characteristics of a utility? There is little differentiation between the products. And consumers are looking at availability and unit cost. When you go switch on your TV, you don't think about if the power came from a diesel generator or a wind farm. All you know is it was there, it worked, and it cost you 30 cents a kWh.
From an IT leader's perspective, that's how we look at infrastructure.
That presents a challenge for the functional managers that run data centers. But IT managers need to think in the same manner. Where do I get my hardware support from? Can I predict demand? Can I scale up or scale down in a very short time? For the people on the infrastructure side, there is an opportunity to start thinking about providing services as a package and ensuring the best reliability and unit cost.How has the economic downturn affected this trend?
Whatnell: A year or two ago, CIOs were looking at the service-based model. Then the economic problems raised the sense of urgency by orders of magnitude. If you're an organization looking to reduce cost by 35%, you can't make that by incremental improvements. You have to make fundamental changes.
Why do we believe we need our own employees on our own facilities? Why can't we buy it at a cheaper rate? If you're willing to accept some constraints -- for example, if you're running 99.59% availability in-house, but you can buy 99.29% outside at 30% of the cost, you go that route. The challenge becomes, how quickly can I bring cost reduction to my organization?
There are exceptions: If you're Citibank, or if online activity is the heart and soul of your business or if your security compliance can't be adequately met by third party or if you have issues with other countries laws on data privacy and protection. But if you're one of the millions of other organizations, you're going to consider services of that ilk.
There are wrinkles to this. It doesn't apply to everyone. But driving forward, the use of IT in your company, you create more value by focusing on what you deliver to the business. IT becomes increasingly unseen. It's not top of mind for business leaders or users.
The SIM survey mentioned two areas of CIO budget and attention: business intelligence and virtualization. Why are these areas on CIOs' minds?
Whatnell: I think business intelligence reflects another part of the leadership agenda we haven't addressed. Cost reduction is half of it, but the other side is we still need to pay attention to what's the best way we can provide businesses with an edge over competitors. One way is to provide information to businesses so they can understand what's happening to customers, pricing, markets, etc. Can we get more granular data? Collect data more frequently? Can IT put tools in the business leaders' hands to make analysis and decisions? Widening and deepening the understanding our business operators have allows companies to make business decision more quickly, get a product to market faster, and to take a margin.
Server virtualization is an obvious target on the cost reduction side. The whole concept of server virtualization is no longer a debate -- most IT managers believe that's the way to go. If you look at the reported numbers about the utilization of servers, it's low. With server virtualization you're able to reduce investment, reduce servers, raise utilization. If you're already outsourced, like Sunoco is, your contract is built around cost per server per month. By our ability to reduce physical servers, we can reduce costs quickly from our partner. If you're seeing growth, you can defer investment.
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