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By Tom Groenfeldt
How did CIOs let their application portfolios get so out of control?
At the recent Fusion 2010 CEO-CIO symposium in Madison, Wis., Stephen Savage, CIO for software vendor CA, said that when he took over five years ago the company had hundreds of applications. "They weren't governed the way they should be," he said. "They were not set up to align with business. It was a founder-based company. Information went up, over and down, but it didn't work across the company."
How had it gotten that way? "Good revenue hides a lot of sins," he explained. "There was no reason to focus on standardization or good methodology."
When he took the CIO job in 2007, Savage, who is a long-time CA employee, found 143 projects on the planning boards, with a proposed budget of $124 million. He used the Information Technology Infrastructure Library, or ITIL, approach to identify gaps in the organization and the company's processes.
"My enemy is time and the entrenched infrastructure," he said. CA, known as Computer Associates until 2006, ran the 143 proposed projects through a governance process and cut them down to 70, with a projected budget of $60 million.
According to Mark McDonald, group VP at Gartner, who also spoke at the conference, CIOs who move into their roles from outside IT positions usually slash project lists by up to 80 percent.
Savage cut the IT budget by $30 million, from 9 percent of revenue to about half. His goal is to reduce IT spending to 3.7 percent of revenue. The company operates a worldwide data center with just three people, down from 30 a few years ago, he added.
Cutting out IT projects isn't easy, said Garter's McDonald, because CIOs have to force the business to set priorities. CA is creating the position of business information officer to help the business articulate its needs. Savage said they will start in market, sales and customer support to try out the concept.
Sometimes complexity is the result of business user demands that can be met through smarter use of software.
Greg Pfluger, AVP of business transformation for American Family Insurance, said his company had 40,000 reports -- generated by 5 of the 7 top business analytic systems -- when he got there. His goal is to reduce the number of reports to a couple hundred. The plan is to build operational data stores that provide a layer of insulation between the policy and claims systems and everything downstream of them. The company can then feed legacy systems and new systems and products through that layer.
To sell the business people on reducing the number of reports he used a company leadership training forum that brought all the directors into one room.
"We asked them ahead of time to bring critical reports and lists of reports and asked them to identify their most important metrics to run the business and what metrics they don't have or are difficult to get," said Pfluger. "That is the basis of what we are going to use. I think we will start turning off the other reports in waves after we have the new datamarts with key reports."
A key to simplification is education. And discipline. Users will keep asking for custom reports if they can get them, and CIOs who accede have only themselves to blame if the number of reports spins out of control.
Brent Leland, CIO at Trek Bicycles, said his company has 800 reports tied to the general ledger. "At the end of the day we should have 50 or less," he said. Leland's challenge is to educate the business on how to use OLAP cubes.
"You don't need 800 reports; you need a cube and everything is at your fingertips," he said. "Business intelligence analysts have to go out and educate people on how to use these tools."
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