Cisco CIO Talks About the Chanllenges and Opportunities for Making IT a strategic Asset
Article summary by Ram Ramanathan
This article is an interview with Cisco's CIO Rebecca Jacoby. She talks about ways to transform an IT organization from a operations-support
laden role to a strategic role to enable the business in new directions.
Key Takeaways
Most organizations spend 55-65% of IT budget on supporting operations. This covers support of the company's current software/hardware
assets, communication systems and likes. The second area of spending is called "business capabilities" and it takes up 20-25% of the budget.
Here the budget is used to expand on the existing operational capability whether it be for increased storage space, newer tools etc. The third
category called "Strategic Growth" is left with 10-20%. Here the funds are allocated to align IT with the company's growth strategies. The CIO
needs to invest in the third category ahead of time in order to support the business when the growth strategies take hold. However, most organizations
today are caught up in meeting their day-to-day operations support, that they get little to no time/budget for the strategically important third category.
Rebecca's plan is to divide up the budget equally among the three categories. She would like to wring out efficiencies out of the first two categories
and use it to fund the third, most important category.
Cisco has a plan for getting IT in to the strategic business mix. Cisco has a cross functional team in each business area of the company.
These teams involve the business folks and the IT folks. The teams come up with roadmaps to meet the common goals of the IT architecture and
business architecture. The roadmaps define the metrics to measure success of each project. There are various checkpoints in the roadmaps for business
capability deliverables. At these points, the team analyzes the real-time results against the established metrics and recalibrates the process in order to
achieve better performance in both IT and business processes. One key point is that Cisco's CEO (John Chambers) backs this roadmap process and
advocates greater tie-up between the IT and the business architectures.
Rebecca also talks about some of the challenges faced by CIOs. The new breed of employees always want the newest available tools. The CIO/IT
has to balance these needs aganist the impacts of the new technology. Security is a growing concern for many of these new technologies. Maintenance
of existing legacy infrastrucutre while transforming to the new tools is a big challenge.
Cisco's CIO advocates two things in order to make IT a strategic business asset and to solve many of its challenges. The first is that the CIO/IT
needs to impress upon the business leadership the value of technology. The IT department also needs to be business savvy and not be involved in its own
world. It is a case of cross-training. In order to achieve this, she stresses the need for communication skills among the IT folks. People in IT need
to understand the business and be able to communicate to the non-IT folks in a language comfortable to them.
Cisco CIO Talks About the Chanllenges and Opportunities for Making IT a strategic Asset
Article summary by Ram RamanathanThis article is an interview with Cisco's CIO Rebecca Jacoby. She talks about ways to transform an IT organization from a operations-support
laden role to a strategic role to enable the business in new directions.
Key Takeaways
- Most organizations spend 55-65% of IT budget on supporting operations. This covers support of the company's current software/hardware
assets, communication systems and likes. The second area of spending is called "business capabilities" and it takes up 20-25% of the budget.Here the budget is used to expand on the existing operational capability whether it be for increased storage space, newer tools etc. The third
category called "Strategic Growth" is left with 10-20%. Here the funds are allocated to align IT with the company's growth strategies. The CIO
needs to invest in the third category ahead of time in order to support the business when the growth strategies take hold. However, most organizations
today are caught up in meeting their day-to-day operations support, that they get little to no time/budget for the strategically important third category.
- Rebecca's plan is to divide up the budget equally among the three categories. She would like to wring out efficiencies out of the first two categories
and use it to fund the third, most important category.- Cisco has a plan for getting IT in to the strategic business mix. Cisco has a cross functional team in each business area of the company.
These teams involve the business folks and the IT folks. The teams come up with roadmaps to meet the common goals of the IT architecture andbusiness architecture. The roadmaps define the metrics to measure success of each project. There are various checkpoints in the roadmaps for business
capability deliverables. At these points, the team analyzes the real-time results against the established metrics and recalibrates the process in order to
achieve better performance in both IT and business processes. One key point is that Cisco's CEO (John Chambers) backs this roadmap process and
advocates greater tie-up between the IT and the business architectures.
- Rebecca also talks about some of the challenges faced by CIOs. The new breed of employees always want the newest available tools. The CIO/IT
has to balance these needs aganist the impacts of the new technology. Security is a growing concern for many of these new technologies. Maintenanceof existing legacy infrastrucutre while transforming to the new tools is a big challenge.
- Cisco's CIO advocates two things in order to make IT a strategic business asset and to solve many of its challenges. The first is that the CIO/IT
needs to impress upon the business leadership the value of technology. The IT department also needs to be business savvy and not be involved in its ownworld. It is a case of cross-training. In order to achieve this, she stresses the need for communication skills among the IT folks. People in IT need
to understand the business and be able to communicate to the non-IT folks in a language comfortable to them.