2009 has been an economically tortuous year, marking the worst recession this country has seen in seven decades. It’s also the year that IT at Johnson & Johnson launched a successful global collaboration and telepresence program, upgraded 120,000 desktops across 57 countries, and developed and distributed a free iPhone application for family caregivers to track physician information, prescription data, medical records and other health-related information.
“Improve, transform, innovate. You’ve got to play in all three areas if you’re going to prepare the organization for what’s next,” says 47-year-old CIO LaVerne Council. “As a leader, you play for what comes next. You don’t just play for now.”
Brigham & Women’s Hospital CIO Sue Schade is similarly focused on the future. Whereas a June 2009 Gartner Inc. report found that more than 40% of CIOs whacked their budgets midway through the year in response to the worsening economy, Schade, 56, stood fast. She funded 10 new IT projects at the Boston hospital, each in the range of $50,000 to $100,000, under the newly launched Healthcare IT Innovation Program, or HIP for short. One of the projects was the development of a clinical portal that brings together the numerous scattered pieces of information doctors use in the course of their daily work — patient lists, medication information and reminders about orders they need to write, to name just a few.
Taking the Long View
“Keep calm and carry on.” As it did throughout Britain during World War II, that phrase seems to epitomize the success strategies of Computerworld’s 2010 Premier 100 IT Leaders. Rather than slowing projects that were in progress, they consistently moved forward to innovate, sometimes ahead of schedule and below budget. To cut costs, they came up with transformative new systems or processes for doing business and streamlining operations. In doing so, they also created new sources of business value and even new revenue streams.
They simplified and standardized IT, all the while staying focused on keeping anxious IT staffers’ fears at bay. The one thing they did not do is stand still or even break stride, which means they’re well positioned as the economy begins to show signs of improvement.
Amy Berkowitz, CIO at New York-based CBS Corp., had an additional challenge: As the traditional broadcast business model dies away and CBS looks to become a digital content distribution company, her task has been nothing short of reinventing IT.
“Large broadcasters are in the middle of a paradigm shift from both a technology and business perspective,” Berkowitz explains. “Technically, there is a migration from what would be typically broadcast-type, linear-based appliances to spinning disks, servers and software. With more advertising options, advertisers are willing to commit less money to the traditional broadcast model.”
Yet the content remains the same. This means the innovative use of new technologies is what will enable the transition, Berkowitz says.
Over the past year, IT has been front and center in CBS’s development of a new content digitization and distribution facility on the West Coast, with a second facility planned for the East Coast in 2010. The facilities enable broadcast divisions to digitize and distribute their content to new media outlets under a pay-as-you-go model. So far, customers include the soap opera The Bold and the Beautiful, which is using the media asset management system and international distribution services. Another customer is health and fitness enterprise Jack LaLanne Entertainment.
“What’s attractive for the customer is zero risk because they have no upfront costs,” Berkowitz says. At the same time, the new infrastructure has provided CBS with a foundation for new revenue from external customers.
An added benefit is that CBS can leverage this new service model as a potential talent pipeline.
“As content comes streaming through for distribution, we can take a look, and if we find something of interest, it can be taken out of the pipeline and developed into a full-fledged show, movie or channel,” Berkowitz explains. “Who knows what the next Seinfeld might be?”
A Rare Opportunity
“Why waste a perfectly good economic crisis?” seems to be the motto of many of this year’s Premier 100 IT Leaders.
“We’re always working on efficiency and effectiveness and bringing new capabilities,” says Avid Modjtabai, CIO at San Francisco-based Wells Fargo & Co., which merged with Wachovia Corp. just 11 months ago. “The economic downturn made more of a compelling case to accelerate those initiatives.”
Over the past year, Wells Fargo has increased power and capacity to its data centers while reducing usage and energy costs primarily through a huge server virtualization and tiered-storage initiative. Initially, Modjtabai says, IT faced some stiff resistance to the server standardization and virtualization plan from those who wanted a custom server configuration for every application. But her strategy prevailed, resulting in a 67% decrease in tiered storage costs and a server utilization rate of 65% — significantly better than the industry average of 20% to 30%.
Another chunk of savings came from the implementation of an innovative “free-cooling” system in Wells Fargo’s Minneapolis data center. The company is able to shut off cooling systems when outside air is chilly enough to be used to cool the data center. This strategy has yielded substantial savings by reducing energy costs, and it has eliminated 3,582 metric tons of greenhouse gas emissions, Modjtabai notes.
In a down economy, business balloons at the New York State Office of Temporary and Disability Assistance. As far back as October 2008, the agency was seeing a huge spike in requests for help. So CIO Daniel Chan — a former GE executive who hired on with the state in 2007 as a way to “give back” — knew he would have to act fast to make services available to a broader audience through 2009. He also knew he would receive no additional resources. So Chan began conducting research and reaching out to fellow state CIOs, ultimately turning up an online application called Access Wisconsin.
“After several conference calls and demos, we thought we could use this as a building block,” he explains. “The strategic decision was to make more services available online.”
Keep Calm, Carry On
Virtually every successful IT leader will tell you that their success depends largely on the people on their teams. Up against flat salaries, sliced benefits, hiring freezes, budget cuts and, in some cases, layoffs, finding ways to keep those teams focused and energized has been one of the Premier 100 honorees’ greatest challenges.
To keep fear and anxiety at bay, “I really emphasize the value of teamwork and collaboration,” says Sue Schade, CIO at Brigham & Women’s Hospital. “I’m passionate about what I do, and I can’t imagine not working in health care. I want people to share that passion.”
To fire up that enthusiasm, Schade pushed through an innovation program that solicits project ideas from employees. The ideas are reviewed twice a year to determine if they should continue to be funded.
At Johnson & Johnson, CIO LaVerne Council insisted on going forward with an employee satisfaction survey at a time when many companies quietly shelved the practice — at least until the economy improves.
“But whatever the news was, we wanted to know so we could affect it,” Council says. The best way to do that is to overcommunicate, she adds.
“People want to know the truth. They want to understand where they stand and where the business stands,” she says. To that end, Council held town hall meetings, brown-bag lunch meetings and invitation-only meetings with a group of eight or so staffers at a time. “There’s no agenda. I’m just there to talk to. The more transparency we have, the better,” she says.
At CBS, CIO Amy Berkowitz notes that despite the recession, “we have maintained recognition programs and mentoring programs. We also do employee leadership development, so we can maintain [staffers’] access to training and leadership classes.
“My greatest responsibility as a leader is a combination of a need to be open and empathetic and to communicate,” Berkowitz says. “I agree to reduce fear, keep people motivated and keep them excited about coming to work.” — Julia King
In a mere 17 weeks, Chan’s team brought online myBenefits.ny.gov, a self-service Internet portal that allows clients to determine their eligibility and apply for multiple social service programs online. “It was a phenomenal accomplishment, especially in state government,” Chan says. “The innovation is the speed to market or speed to value. If you looked at the economic indicators, you could see that people would be losing their jobs and they would be coming to us asking for nutrition programs, feeding programs and job training programs. We saw that coming, and we made a conscious decision to leverage the Internet channel to manage the demand for services.”
In a way, Chan reflects, the economic downturn has actually helped the agency to better align IT with the organization’s strategic objectives. “We had already started an enterprise architecture program, and we had been doing a lot of work around business strategy and IT alignment. This was an almost-perfect opportunity to focus on getting value from our investment at a very fast pace.”
Optimize What You Have
Brian Hedberg, CIO at Chicago-based Health Care Service Corp. (HCSC), believes that a down economy is precisely the time to bring in new technologies that can not only help deliver business value, but also cut costs. One example is the deployment of virtual call center technology that enables more customer service employees to work from home. “We get a productivity benefit, plus it reduces fixed costs” such as spending on office space leases, he says.
Hedberg says HCSC was forced to “reduce the IT budget by substantial millions without sacrificing any quality of service delivery.” His solution was to create teams within IT and set them loose to find ways to optimize costs and services.
As part of an operational excellence project dubbed Complete-to-Turnaround, the IT employees identified 30 to 40 projects. Those initiatives included an effort to streamline the tools and processes used for system and network monitoring.
“We had found we had two and three of the same tools,” Hedberg says. “One of the things we did is create a single command center where we monitor the entire environment and fix things proactively before they affect the customer.
“What we’ve seen is that there are a lot of optimization opportunities out there that can lead to innovation,” he adds. “Part of optimizing what you have in place is removing complexity. It creates opportunities to make things easier for customers and staff.”
Standard Practices, Steady Growth
“When you have an economic downturn, what you’ve got to do is maintain great business practices,” which in turn promotes steady and measured growth, says Council. At New Brunswick, N.J.-based Johnson & Johnson, standardization tops the list.
“Standardization truly enables leverage,” Council says. It’s what has made it possible for the company to reduce the cost of creating Web sites by 50% to 80% while boosting its ability to market new products faster.
“We put in a standard Web support platform and a standard set of world-class tools, but we defined how they would work,” Council explains. “In marketing pharmaceuticals, for example, there are a lot of rules which must be followed, and these were built into the tool set.” The result: “The cost of producing Web sites is much lower, and the quality of what we can bring up is much better.”
UST Global CIO Tony Velleca, 46, has used the economic downturn to develop an enterprisewide business process map and significantly improve what is perhaps UST’s most critical business process: hiring and retaining skilled IT professionals. This is especially important as the 6,000-employee IT services company in Aliso Viejo, Calif., prepares to go public in 2010.
“We spent a lot of time with our sourcing and hiring department to understand their problems and examine the span of time it takes to bring someone on board, and we looked for any wasted effort in that process,” Velleca explains. By re-engineering the process, his team was able to cut the work involved from 22 days to 13 and shave $2 million from the budget.
So, what’s next for these extraordinary business leaders and IT strategists? Virtually all of them say they will maintain a strict focus on business value, innovation and, yes, hard work. But what they see more than anything else is an opportunity to put their teams’ hard work and innovation from 2009 to the test in a slowly-but-surely improving economy.
Bring it on.