A CIO’s first year on the job

Despite what has been one of the worst years for the economy, especially in the IT sector, Jim Milde says he has accomplished just about everything he said he would when he took over as CIO at Sony Electronics Inc. last January. For starters, he helped develop solid business cases for Sony’s IT projects by working with different functional departments to prioritize investments and quantify their returns. Another key goal he set and met is moving toward common processes to increase the overall efficiency of IT.

As CIO, Milde is responsible for all IT within Sony’s electronics division, which comprises about 20,000 users, eight major manufacturing operations and 100 other facilities in the U.S. Milde says Sony views the CIO role as much more strategic than other companies he has been with in the past did. He spoke with Computerworld about how he has worked to drive business change while making sure that Sony gets the biggest bang out of its IT buck in his inaugural year on the job.

What has been your biggest challenge in the past year?

The biggest challenge would be repositioning IT with the business. The way we went about doing that was really just by building the level of credibility and taking the mystery out of IS — from a cost perspective, from a service perspective, from new investments and how we improve and fund projects. And most important, a lot more rigor on the ROIs of those investments. What we found was that there wasn’t a good understanding of what the investments were being spent on. And [we] started putting up screens for [justifying IT project investments].

How did you accomplish all that?

We did set up fairly active business-governance groups. Those groups have decision-making within their areas, and then broader questions go across the various constituencies for prioritizing of projects. But it’s not easy, because everyone wants what they want, and no one wants to hear about someone else’s project being screened against their project. We’ve been very successful at just building that relationship, the process for governing and taking the mystery out of the IT spend. And quite frankly, partnering — I hate to use that word — but truly having a seat at the table on these major structural things we’re looking at that have major IS investments behind them.

How do you go about determining the ROI for these projects?

We try to think about every investment dollar we spend, whether it’s on routers or whether it’s on applications. So [the] first thing is categorizing all of our investment dollars that we spend. The second thing we’ve done is taken all the “shadow IT spend” out of the business and put that all on the table so we have a true look at our total IS investment spend. Then we go through, and for every single project [we determine if it’s] for legal reasons, R&D compliance reasons, or is there real hard-dollar ROI that’s either going to drive efficiency or top-line sales growth. Then we start to screen those projects against what applications we are building them on to ensure that we eventually have a more simplified application portfolio. And we’ve got tools in place now so that every project goes through a request and we can sort the projects by these different types of categories.

Lastly, on the [projects] that are approved with the ROIs, we are working with our corporate planning group to go into the business areas and really identify where those hard dollars are going to be saved out of the business departmental budgets. A lot of companies say there’s an ROI, but you never capture the savings in the business area.

How do you get business to buy in?

My first few months just talking to people I always asked: “Well, tell me what success would look like from a business perspective for what IS needs to do,” and it was remarkable that a lot of people couldn’t answer what were the three things they would want to see different. So we put out a very formal questionnaire to the top 500 executives across Sony Electronics, conducted by Gartner Inc. It essentially gave specific questions and things that we wanted opinions on. And quite frankly, it wasn’t that positive of a scorecard. But my point is, we’re trying to lead by saying, “Tell me the things that success would be predicated on, from the voice of our customer.” We’re taking a Six Sigma approach toward this, and people are starting to see that we do want to make sure that we’re hearing the voice of our customers.

And now we’ve got actionable measures against areas that we have opportunities to improve on and communicate that back to the business. It’s always risky doing that, because people can just kick the IT dog if they want to. But the only way I know to improve is to hear what people want improved. And when people can’t articulate what they want improved, I know there’s educating that we have to do to take the mystique out of IS. . . . It’s building the credibility and the trust.