Merrill Lynch & Co. has shrunk from 70,000 employees worldwide in 2001 to 53,500 today. Its 2003 IT budget of US$2.2 billion is down 30 percent from two years ago. Yet miraculously, its IT training budget has remained intact, largely due to the fierce lobbying efforts of Chief Technology Officer Stephen Norman. Norman says IT managers must distinguish between “starvation” and “bodybuilding” budget-cutting exercises. Training, he says, is a bodybuilding exercise. In the end, it will make the company’s IT group stronger. Norman recently spoke with Computerworld’s Julia King.
How do you preserve your IT training budget?
Whenever we get handed a target to save x amount of money, I keep on saying we can’t touch training. Training is usually about 2 percent of the total head-count cost, so you’re not going to save the planet by cutting training. I tell them (top managers) that I’ll make them happy by cutting something else.
Where are you putting your IT training dollars?
We’re putting money into project management training, service management training, time management training and courses we developed about knowing yourself and knowing your customers. Most of our people, for instance, had no formal training around how to deal with difficult customers.
Why emphasize customer service?
We’re setting up our services for unit pricing. Charging back (business units for the IT services they use) started about 18 months ago. The compelling story with unit pricing (for the business units) is, “Use less, spend less.” It gives customers the idea that they can control their costs by using less. In IT, unit pricing allows us to compare ourselves to external providers and also to compare ourselves internally across different IT centers, which creates healthy competition, say, between New York and London.