As the ongoing global economic slowdown prompts companies to become more cost-conscious, conveying the business value of technology – or selling IT – is turning into an important job for CIOs.

Over the past few years, IT has gained wide recognition as a vital component of the business. However, much still has to be done to completely convince the non-IT corporate denizens – especially those in top management – that technology does play a key role in business operations and that the IT department is not just a cost center.

With the creation of a C-level position that is now the CIO, serving as the voice of IT, many organizations have taken a huge step toward acknowledging the business value of IT. But although it has already significantly narrowed, there still exists a gap between the business and IT departments. And fingers almost always point to the CIO as the one responsible for bridging this gap.

Promoting and “selling” IT’s mission and services, therefore, has become a top priority for CIOs nowadays. Computerworld Philippines, in its third CIO Roundtable discussion for the year, gathered five CIOs and IT heads from different industries to discuss what strategies and methods they are using to communicate the value of IT in their respective organizations.

Rufino Villaluna, country technology manager for the Philippines at Standard Chartered Bank, said that, at the beginning of each year, he holds discussions with the business heads on what their plans are for the year and then he comes up with an IT roadmap wherein he identifies the business requirements, the infrastructure and systems currently available and the gaps that IT can fill.

According to Jose Ismael Robles, assistant vice president for IT, Paramount Life & General Insurance Corp., it is all about matching the right technology with the right application to meet a particular business demand and effectively communicating IT’s initiatives to all stakeholders.

“When I come across a technology that could possibly solve existing problems and solutions that could make our people’s work easier, I try to explain to management what the technology does and what it can do for the company; define the concrete benefits we can derive out of it and make them understand the value they will get out of every IT investment,” said Edwin Bañas, assistant vice president for IT-Infrastructure Management Division, Quedan & Rural Credit Guarantee Corporation (Quedancor).

Asked how the current financial crisis may impact the perception and communication of the value of IT among companies, Raul Rodriguez, executive consultant at the IPM Group of Companies, believes a company’s reaction to the crisis may depend on whether it has already found value in IT or has yet to do so. “A company that has yet to find value in IT, upon facing this crisis, will react by cutting down cost,” he noted, “while those companies wherein the value of IT has already been established may take a different approach and even turn to IT to help get them through the recession.”

“IT in our company is at the core or heart of the business. Before, the IT department was viewed as just a support team but as the business relied more on technology, its value became more apparent,” pointed out Ryan Patrick Fernandez, IT manager, Philippine Survey & Research Center.

Sponsored by security firm, Sophos Plc, the Computerworld Philippines CIO Roundtable discussion was held at the Renaissance Hotel in Makati City.

Excerpts of the discussion follow:

CWP: How is IT valued in your company? As CIO, is this how you want IT to be seen in your company?

Villaluna: Our company values IT as a strategic partner of the business. We work together with the business units to help them deliver. They are the ones who bring in the numbers, and we help them do that. In some organizations, IT may just be a support unit but in our case, we have always been considered a partner.

Fernandez: IT in our company is at the core or heart of the business. Before, the IT department was also viewed as just a support team but as the business became more dependent on technology, IT’s value became more apparent. IT is involved in the company’s everyday operations from simple Intranet messaging and networking, to sharing of spreadsheet and presentation files, up to the more complex tasks of finding new solutions and tools to help the company be more productive and efficient in what we do.

Bañas: IT plays a vital role in our company, especially in terms of communicating with our field offices. Technology makes it very easy for us to communicate with clients and the people in our field offices. However, since we are on a tight budget, there are a lot of IT projects that I have to put on hold now like the upgrade of our hardware and software infrastructure and the implementation of a real-time reporting system so that reports from our field offices can be accessed in real time.

Rodriguez: I’d like the company to see IT as a partner and an enabler of business as it enables the business to operate more efficiently and move forward into becoming more competitive.

CWP: How do you think will the current economic recession affect IT? Will it make IT more valuable to the company or will it cause IT to be seen more as just a cost center?

Villaluna: People do tend to look at IT as a cost center and it may actually be a cost center, but in our organization we find ways to reduce these costs or we recommend a change in the process or in how things can be done more efficiently. We also try as much as possible to make sure that our equipment are working efficiently. We actually have a policy wherein we have a technology refresh every three years. We change our hardware this often because we actually did a study and found that it is in fact cheaper to replace them than spend on maintenance cost.

Fernandez: I believe this crisis makes IT more valuable as it hits not only a few but most of the major businesses across the globe, including ours. As a result, management is now looking for ways to lower the cost involved in their IT infrastructure. Auditing the current IT infrastructure gives the company a clearer picture of what can be done in order to save. Based on my experience, they were able to better appreciate the value of IT when I presented the open source solution. Management was actually hesitant at first but when they saw the potential cost savings, they easily gave me the go-signal.

Rodriguez: I guess it depends on whether the company has already found value in IT in the first place, even before the recession. The company I work in, for instance, has not really found value in IT yet. It has used IT as a business with its medical transcription and call center business but it has not really leveraged IT as an enabler of business. Thus, the reaction that we had upon the dawn of this economic recession was to cut down cost and reduce all expenditures in IT. We are, for one, looking at migrating to open source as a cost-saving measure.

On the other hand, for companies that have already found value in IT, the picture may be different. I know of a utility company, for instance, that uses business analytics in light of this crisis and takes advantage of this business intelligence to analyze and look into opportunities amid the crisis.

CWP: But that this only apply to a company that has already found value in IT?

Rodriguez: That’s right, yes. A company that has yet to find value in IT, upon facing this crisis, will react by cutting down cost while those companies wherein the value of IT has already been established may take a different approach and even turn to IT to help get them through the recession.

CWP: A recent issue of Computerworld US mentions five new skills that every CIO should possess to weather the global recession and one of them is to market the value of IT to the company, particularly to show that IT may be a cost center but it can be a business partner too who will be able to tell you where you can spend more wisely. Do you agree that this is the job of CIOs and IT managers and is a skill that they should have or develop?

Rodriguez: I agree with that. The CIO certainly has a marketing function because he serves as the link between the business and IT. Thus, a CIO should be able to effectively apply IT to the business and ultimately improve the business through technology.

CWP: How exactly do you sell IT to the company?

Villaluna: At the beginning of each year, I would have a discussion with the business heads on what their plans are for the year then I come up with an IT roadmap wherein I identify the business requirements – what we currently have and what gaps are there for IT to fill. Being an international bank, we also have systems that are being rolled out globally, in all countries where Standard Chartered has branches. Some of these we may adopt and there are some that we do not. So I would also talk to some regional people and ask what their plans are for the Philippines, whether they intend to roll out some applications or if there is a new technology that they want to look into.

Fernandez: One particular challenge that I encounter is how to discuss a solution to top management in a non-IT way, that is, in terms that they will understand. Since, nowadays, they are already hesitant to invest on any solution to begin with, we then have to lay out the complete plan and clearly define the benefits that the IT solution will bring to the company.

The way I communicate the value of IT to the company is three-tiered: first, I have to keep the managing director informed; second, I maintain lateral communication among department directors; and third, I make sure that the IT department knows what is going on in the business side. Keeping the managing director informed is my top priority – any changes in the IT infrastructure, any new technology to be implemented and any IT-related change that needs top-level approval should be always personally relayed to him.

If some of the services that IT provides are somewhat not working in the way they are supposed to, then it is important that all directors and department heads are informed. We make sure we give them reports on what the problem is, what we are doing about it, how we are going to fix it, and the estimated time it will take to resolve the issue. We always try to instill in all of the employees the mindset that IT is not that complex. We try to strip off the mystery by making them understand what we do and by showing them how we work.

Bañas: When I come across a technology that could possibly solve existing problems and solutions that could make our people’s work easier, I try to explain to management what the technology does and what it can do for the company. I define the concrete benefits we can derive out of it and make them understand the value they will get out of every IT investment.

CWP: How about in your case at Standard Chartered, what are the challenges in promoting the value of IT?

Villaluna: The biggest challenge for me is to look for funding for my existing budget because, right now, it is really difficult to convince the business to invest, especially given the current crisis where everybody is trying hard not to spend unnecessarily. I try to do what is within my control, that is, to juggle around with the numbers we have and find the most strategic IT areas to invest in. What we are doing is really just managing cost and keeping it at a certain level, at a particular ratio versus our income

CWP: In IPM’s case, you mentioned that your company has yet to realize the value of IT, how are you promoting IT and what are your challenges in doing so?

Rodriguez: Right now at IPM, I’m just trying to see where IT can add value to the business. For the construction business, for instance, most of the project management work is done through Excel spreadsheets so I try to introduce and expose them to certain project management tools and even accounting tools. I ask vendors to come in and make presentations to make them aware of the solutions available out there. Also, since we are on a cost-cutting mode, I look into even the littlest areas where IT can help cut cost, something as small as printer ink cartridges and how can we save on these by networking printers rather than having one printer for every department, things like those.

It helps a lot to sell or promote IT projects when, first, the one promoting the project is in a C-level position, this is why the CIO is really in a position to promote the value of IT because he is in a strategic position. Second, I think it will help a lot if the users themselves are the ones to initiate a major project. Even if the idea comes from the IT department, the requirement or the need almost always comes from the users so it would be easier if they themselves champion such projects.

CWP: In the of Paramount, is it difficult to sell IT to the company?

Robles: I think the kind of management we have is very IT-oriented so the push to develop our IT infrastructure is actually coming from the top.

CWP: How do you find the right balance between what the business demands and what technology can deliver?

Villaluna: Basically, what happens now is we have two types of projects: those that are IT-initiated and the others which are business-initiated. What we’ve done with the latter is we normally would get somebody from business to champion a project such that they become the project manager and we become a member of that committee. Before, the IT department is always expected to drive any IT-related project, but we have turned this around and now ask the business to spearhead the project while we support it.

Fernandez: Technology nowadays can range from the simplest to the most complex solutions you might want to implement. It’s just a matter of what or how and why you need such technology. Finding the right balance is about implementing a technology that will help your organization solve current issues while also keeping in mind how it can help the company in the future. My motto in finding balance is “use the right tool for the right job.” Implement a solution that fits your requirements, is scalable, efficient, and cost-effective.

Rodriguez: IT should naturally follow through on the business requirements and demands. For example, if there’s a requirement to shorten the receivable cycle in the company, IT becomes a natural solution, say by implementing something like hand-held computers, a faster billing system or having an electronic payment systems. These things can shorten the billing cycle. This is an example of meeting the business demands and, I believe, it’s not really about achieving a balance but more about marrying business demands with IT where IT and business become one and the same and the business demands become IT demands as well.

Robles: For me, this is like having a .45-caliber gun and using the bullets of a .38-caliber revolver; it simply does not work that way. So my philosophy is there has to a right technology and a right application to meet a particular business demand.

Bañas: I think it’s all about finding and implementing a technology that fits your needs and is necessary to the business. No matter what type of business demands you have, as long as you have the appropriate technology in place, it’s easy to manage a business.

CWP: Do you think that the commoditization of IT has somehow lowered its strategic value?

Bañas: I don’t think so, because if you really value IT in your company, no matter how much the value of the product is, you should invest on it so that you can efficiently and effectively manage your business.

Villaluna: I think it’s a case-to-case basis. Let’s say in my case, technology changes so fast and we sometimes think that we may be lagging behind in adopting the latest technologies, but in our organization, we look at it from a broader perspective and don’t just say “that’s a good technology, let’s implement it.” Being part of an international firm, everything is evaluated at the group level and controls have to be in place, because one of the worst things that could happen is if we take a step forward and implement something only to expose the company to risks.

There are, of course, some initiatives which we are able to push through on a local group level. We even do small program development ourselves but we still have to advise them about what we are developing and explain that it is designed to address a local requirement. When we develop these programs, everything has to pass the group standards and somebody from the regional office has to certify that it meets all the standards.

Fernandez: I believe we can look at this based on two situations: for an IT- related company, the strategic value of IT may have lowered especially for companies that offer IT services like BPO, software customization, technology builders, system integrators, because a drastic drop in prices will most likely occur. Competition in this space will rise and having many players offering the same services will just make the situation worst, causing not only the value of IT to become lower but such companies that offer similar services may end up closing down.

On the other hand, IT being a commodity for corporations and enterprises is good because, like in our case, we can choose what solutions we want to implement. We can pinpoint who among the wide variety of players can deliver the solution and we can also play around with the numbers and refine budget allocations for such projects.

Rordriguez: By strategic value, we mean something that gives the company competitive edge, right? I have two views about this. I could perhaps cite the deployment of ATM (automated teller machines) as an example. I think the first ATMs in the country were installed by BPI and when they did, that gave them a strategic edge. However, when ATMs became very prevalent or were commoditized, BPI lost that edge but they still had to maintain the ATMs. In that case, the commoditization or prevalence of a certain technology does not add strategic value any more. However, my other view is that commoditization of IT can, at times, provide strategic value. An example is the wireless technology. The mindset before was to get the most profits from the A and B market, but as the SMS has helped the telcos earn revenue from lower down the pyramid to include the C and D market. With the increasing prevalence of such technology, say I work for a water utility company, I can then consider sending our customers’ billing through SMS, which might speed up the collection and allow us to remind them when their due date is near, ultimately reducing the possibility of getting their water supply cut off.

CWP: What technologies have had an impact or may have an impact on how IT is being valued in your company?

Bañas: I think VPN (virtual private network) and IP-PABX technology may have a significant impact in our company. I have wanted to implement these because they could address our communication and report submission issues.

Fernandez: One technology that has had an impact on how IT is valued in our company is data management. Data for us is very important, which is why we implemented data backup and recovery in our company. It’s a serious business for us to make sure that the data is always available so we invested on hardware that will hold the data coming from desktop PCs, laptop computers and our main servers.

Security is another thing, we are all aware that threats such as adware, viruses, phishing, backdoors, spyware and spam are very cumbersome issues that IT heads face on a daily basis. In our office, we deployed a managed antivirus solution and implemented application control, content filtering, and spam filtering to make sure that e-mails going in and out of our network are secure. Lastly, we also make sure that firewalls on all our sites are secured and locked down to avoid potential break-ins and to avoid denial of service attacks.

Communication technology has also played a major role in promoting the value of IT in our company as all our employees access now largely depend on their e-mail for internal and external communication, even while they are out of the office.

Villaluna: Document imaging is probably one of the technologies that we believe may have an impact on promoting the value of IT in the company. Being a bank, we have customer data which we have to archive for as long as a particular account is in existence and even after the account is closed, Bangko Sentral ng Pilipinas regulations require us to keep it for another 10 years, so we are talking about a perpetual archive which would, of course, translate to cost, where the storage company is the only one making money. So what we have done recently is to conduct a study and consult the Central Bank about whether we could archive documents by scanning them and keeping digital copies instead. These are among the things that we are looking at now.

One other thing that we are looking at which I think has been implemented in Standard Chartered in Singapore, is the work from home policy which they call the “mobile desk” where you no longer have your own desk, such that, whenever you come to the office, you just plug in your laptop to connect to the network. But the premise is, of course, that you very seldom have to go to the office. We are looking at implementing this in our operations here in the Philippines as well, at least for the sales and marketing people, because this will translate to savings on rent and utilities. We might even be able to give up a few office floors.

Robles: One particular IT project, which is actually ongoing, that is very important to us right now is document imaging. We have a whole floor full of insurance policy documents, which we are trying to archive and make available over the Internet so that we can quickly and easily access any file or information that we may need in the future. We expect this to have a very big impact on our operations because, aside from the convenience of finding documents, this would also save us office space, which is very expensive nowadays.

Possibly Related Posts:

• Unifying Communications
• Managing the Mobile Workforce
• Crossing the Skills Gap
• Getting the Right Balance of Application Outsourcing Providers to Succeed
• Compliance: A Tough Sell

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