As a part of the Sapphire conference got to spend sometime with the CIO of Oliver Bussmann , it was a very interesting conversation. Below are some excerpts from the same.
Oliver joined SAP around the 2009 time frame and in the first 100 days defined the following key strategic objectives for the IT organization that was in alignment with the overall organization's goals of being 20 Billion Euro in revenue by 2015 & having a profitability of 35%. Which was a significant in revenue per employee for the organization. The strategic objectives for the IT Organization were:
- Define a new governance model – Business information officer model (Works with each COO & CEO) – And fundamentally rethinking from Corporate / line of business strategy
- Improve running cost, particularly on the infrastructure side - Demand for development projects was going to explode keeping in track the growth planned – And it was going to need a global delivery model – Also key decisions on what to keep in house , what you want to do outside. Increase by 80% capacity and increase cost by only by 30% – Manage Curriculums / Job training etc
- Define an Enterprise Architecture model – Mid term plan was to map business road map to it.
He also seems to have done a serious benchmarking effort. Gartner / Mckinsey did the benchmarking, they compared his business with other Hi-Tech enterprises and some companies in other industries as well.
Mckinsey reviewed it again in 2010 one of the key points identified was that they were about 10-15% better in cost. They had a few items to work on like storage outsourcing, network consolidation etc.
His role As CIO drastically changed after August last year. His role evolved to being a Strategic CIO, one who is helping the organization on the front office/selling/positioning & not just as an enabler. The “In memory” topic was where they brought him out of the closet. From October of last year his direct customer engagements have increased significantly.
But as the CIO the critical measure that he is constantly monitoring is their Unit cost and weather they are staying competitive or not. He is constantly trying to cut down his “run cost” as much possible.
Other takeaways from the session:
- On where his employees are spending time? Top Apps from an internal perspective are:
- T&E management
- HR Self service – Time sheet
- For T&E they implemented the latest version of the software – ERP – Got mixed reaction. Usability was indicated as they challenge – but as they dug deeper they started different perspectives - Did we provide enough documentation / training – Are processes consistent from all regions'. Usability was only a small %.
- The CIO Isn't responsible for the tools for development that is taken care build organization
- Focused on IT contingent labor initiative – Vendor management systems. SRM implemented. Supplier visualization automated.
- Looking at new strategy to support the Education business line.
- Leverage Third party – Vertex – Tax / Credit card management / Jive for communities.
- Pushing hard on virtualization – Already 50% virtualized.
- Moving to cloud with apps like carbon impact etc.
- BI On demand is being used.
- Streamworks is also used on-demand – more integration with CRM / PLM / BI .
- Going to Sales on Demand for certain lines of business.
- BYD for Joint ventures
- Global support – Their Custom Code 10% is only – 2.5% is actively used. The rest can be deactivated. This they found out when they upgraded.
- This customization is being looked at very critically. Board level approval is required for customization. Who sponsors the project. They talk to the product teams also – Product team individual's are part of each of the projects done internally.
- Closely monitors - What amount of CPU/Memory is being used by Custom Functionality
- Part of the hi-tech industry executive council.
He is focused on running IT like a business.