CIOs have critical role in guiding business out of recession, says SAP

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.

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.

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