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The fundamentals of tech investments today

Alexander Bloch | Jan. 7, 2003
Trends in IT deployment and where your technology budget should go

What SOA does is it provides an approach for you to break down the complexity. Yes, you recognise all the internal properties and all the channels. You have the standard portfolio services you have to recognise in order to accommodate. The major source of your self-funding abilities is not going be your IT cost. You have to be creative in how you can tap the standstill cost of running the status quo, whether through shared services, outsourcing or leasing.

At IBM, we look at portfolio rationalisation as a way of tapping that source. Twenty percent of our applications drive 80 percent of our IT functionality. We looked at those applications, then we broke them down in terms of their hygiene value. We checked to see if they were maintainable and align-able. And then we created a disposition chart, showing which ones we were going to retain, and which ones to throw away. At the end of that exercise we were left with two sets of applications: those we needed to retain and those we need to place into the low value quadrant. It was all on a chart showing simple 2 by 2 metrics. We had a strategic and business critical quadrant, the golden quadrant, where we put the applications that would sustain our enterprise. We had those that were less critical but still strategic to our organisation, in the lower quadrant. And we moved forward based on our appreciation of those applications based on their places in those quadrants.

Summation

How does a technology leader progress today? In my view as a CIO, it is to deepen our understanding of the business. ITs continual alignment with the business is the only way for the CIO to retain a seat at the table and continue enjoying a healthy relationship with his/her business colleagues. In saying this, I must add that the CIO needs to be closely allied with his business not only in terms of formal networks, but also informal ones. The CIO today needs to be proactive in engaging with every single party he/she deals with. I see all types of CIOs. Invariably, those who are successful are those who go out of their way to schedule time for their partners and such.

The CIO today needs to be proactive in exploring innovative technologies. This does not have to be back-breaking work. The work can be distributed through collaboration. It is much better to establish a mechanism by which one can source all those research and innovative ideas from suppliers, customers or employees, and of course enable it all to be filtered upwards. And the CIO today needs to find his/her way to self-funding, unlocking the additional sources of funding to invest in technology to deliver services that his/her CEO dont even know about, but only he/she as a technology leader can recognise.

 

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