Chief information officers have a critical role to play
in the next five years as businesses continue to feel the effects
of the economic recession, says Chakib Bouhdary, chief value
officer at SAP.
Smart CIOs realise that business is unlikely to be the same as
it was before the economic crisis and are planning for the future,
he told the SAP UK and Ireland User Group Conference 2009.
They are engaging with the business, reducing IT cost and
complexity, tapping into business information, and building an IT
infrastructure for new ways of working, he said.
Without understanding where the business is trying to go, CIOs
will be unable to assess whether they have the right infrastructure
to achieve those goals into the future, said Bouhdary.
The biggest enemy of the enterprise is the inefficiency and
complexity created by having too many applications, he said. The
most successful companies have three to five applications per $1bn
revenue, but many businesses typically have 50 applications or
more.
By investing wisely in a few applications, most businesses can
cut cost and improve efficiency, said Bouhdary.
Another way of cutting costs and improving efficiency, he said,
is to supply PCs only to end-users that need them, and put most of
the workforce on terminals that access centrally or cloud-hosted
applications.
There is no loss of functionality, but savings on administration
and support desk costs can be substantial, said Bouhdary.
Delivering business insights, he said, is another important task
for CIOs to ensure the business has the visibility of operations
and other information it needs to make the right decisions.
Building an IT infrastructure for the future is also very
important. It is critical for businesses to have the right platform
in place when the economy picks up again, said Bouhdary.
This may involve outsourcing non-core competencies and
establishing shared services, but by restructuring costs in this
way now, businesses will thrive in the longer term.
The CIO is the best person to manage a shared services project
because they should understand how the business works and the
processes involved, he said.
Apple, for example, was able help turn its business around by
outsourcing all the manufacturing of its devices and concentrating
on innovation around software-driven interaction, said
Boudhary.
Apple's iTunes online music store also eliminated the cost of
making compact discs, packaging and shipping them. The price of the
music stayed the same and Apple got all the value, he said.