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CIOs take new look at sharing IT infrastructure, apps

Thomas Hoffman | Aug. 28, 2009
The idea of IT services shared among industry rivals isn't new, but attempts to establish them have a spotty track record.

From 2001 to 2007, John was the CIO at Agriliance, a former joint venture between Land O'Lakes and CHS, which was the largest distributor of pesticides and fertilizers in North America. As one of the parent companies of Agriliance, Land O'Lakes ran the IT infrastructure for the joint venture. Eventually, the two firms shared some software licenses. Both companies were happy with the relationship (it dissolved in 2007 when the partners decided they could make more money on their own).

"I think it worked because it involved a parent company and a child company," with clear lines of authority and accountability, says John.

There are barriers inherent in corporate culture, as well. For about a year, officials at Franklin W. Olin College of Engineering in Needham, Mass., and nearby Wellesley and Babson colleges have been exploring different ways to share their existing IT resources under a possible barter-type arrangement where no cash changes hands. The discussions have covered a range of options, including the possibility of extending to Wellesley the fiber-optic connection that already links the Olin and Babson campuses so that the three schools could share storage and other systems. It would also improve the experience of students who cross-register across the three campuses. Workgroups studying the viability of sharing business continuity platforms, archiving and storage plan to present their findings to a group comprised of VPs for academic affairs, administration and finance by October. "Everything is on the table" if there are cost-savings or other efficiencies that can be achieved, says Joanne Kossuth, vice president of operations and CIO at Olin.

Yet institutional challenges may arise when it comes to prioritizing and implementing the recommendations of the workgroups. On one hand, says Kossuth, "there's a built-in need that people have to own everything related to their organization. It's hard for people to [share services] because they're vested in their job functions and they're vested in their organization's ownership of that function."

IT leaders also worry about creating additional work for staffers who would have to run any shared environments. "We have to try to figure out ways to do this without making it overly burdensome for staff at the respective schools," Kossuth notes. Then there's the popular conviction that you can't (or shouldn't) trust anyone who isn't on your payroll.

Among executives in the utilities sector, there's an embedded belief "that they need to control their own destiny," says Michael J. Carlson, former vice president and CIO at Xcel Energy, who recently left to lead smart grid operations for GridPoint.

Any attempt to share IT resources among utilities would also likely be heavily scrutinized by state regulators, thus adding costs and effort that may make shared services not worth pursuing, Carlson adds.


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