At the Churchill Club CIO Agenda event last Thursday, Peter Solvik (formerly CIO at Cisco) led a discussion among a powerhouse of IT leadership: Matt Carey, CIO of Home Depot (former CTO, eBay and Wal-Mart), Karenann Terrell, CIO of Baxter (formerly CIO at Daimler / Chrysler), and Lars Rabbe, former CIO at Intuit and Yahoo. Topics included SaaS, Clouds, the good an bad of vendor consolidation, and the uptake of Web 2.0 and collaboration technologies.
Here’s a summary of their views and my takeaways on these top-of-mind IT themes:
Q: What are you focusing on over the next year?
All three CIOs are managing costs more actively, but key strategic projects are still very much under way. Baxter is doing a massive new ERP deployment, and Home Depot is continuing its supply chain upgrade. Home Depot’s CFO says that right now, “cash is king,” so the company has stopped construction of multiple new stores (while competitors are continuing to build at a faster rate, and cut costs in IT and operations.
There are two ways to sell in this environment. 1. Show concrete cost savings and a short time to realize them. 2. Find out what your prospects’ one big initiative is, and show how you add value to it.
Q: Consolidation – Good or bad? Giving vendors too much power?
Here the CIOs disagreed. Lars felt consolidation helps ease integration, though of course too much consolidation eliminates alternatives. Overall, he felt he’d benefited from consolidation as a CIO. Matt agreed that better integration was a positive, but is concerned that vendors may gain too much power in negotiating contract renewals and maintenance fees.
Karenann, on the other hand, believes that the benefits of integration are limited, that it moves slowly, and that it “has not unraveled the complexity.” Even worse, while everyone is busy with integration, there is a pause in innovation. Karenann also voiced a concern about unjustified support and maintenance costs: “I’m willing to pay an annuity, but only if I get extra value.”
- Complexity is still a challenge, so both big and small vendors that can help reduce it can do well.
- If your competitors are buy digesting acquisitions, take advantage of innovation as a differentiator