Interview of IT Controller for Aerospace Company (By Alissa Crescimano)
The company is a world leader in the design, manufacture, and service of aircraft engines, industrial gas turbines, and space propulsion systems. The company had revenues of $13B in 2008. There are 38,577 employees supporting more than 9,000 customers in 180 countries all over the world. The company is headquartered in Connecticut, but there are many facilities all over the U.S. and abroad.
The IT Controller's key responsibilities include budgeting, monthly financial reporting and analysis, contract management, and inventory management.
1.Governance. §CIO reports directly to the President, but dotted line to the parent company President of IT. §IT is split by: Enterprise (i.e. Infrastructure), Applications, and Security. §40% is dedicated to Enterprise, with the remaining to Applications and Security. §CIO works closely with business managers to determine and prioritize key projects.A list of “Waterline Projects” is created each year. §Waterline projects must be approved by the Executive Committee. §Positives of governance: Fair, standard process. §Negatives of governance: IT asked to do things and get “locked into the numbers”, slow approval process,More complex with security and international issues.
2.Budget Management. §CIO owns the IT budget at the top.Individual units monitor their own budget. §Everything is charged out by IT.All costs are allocated down to the business units. §This year, IT budget is pretty flat, but businesses’ budget has been cut drastically, reducing the number of waterline projects approved this year. §Budget divided by: o70%: Equipment/Basic Infrastructure o30%: Development/Waterline Projects (based on IT and business needs) §IT works closely with businesses to determine needs.IT estimates cost of project. §Decision on IT projects involve:IT plus business managers plus executive committee §Decisions on projects are largely driven by how the project will achieve the goals in the roadmap, such as cost reductions with new technologies, customer satisfaction, increased producitivity, etc.
3.Outsourcing. §Outsource most functions to Computer Science Corporation (CSC) since 1999 §Services provided: oManage equipment and servers oManage standard software (including upgrades) oProvide technical support §All services are leased to the company at a negotiated monthly rate. §Pros: Commonality of devices, Standardization of support, Lease capability reduces obsolete inventory on hand, Handles refresh of all equipment and servers, Upgrades managed by CSC, company and CSC collaborate on new technologies §Cons: Less control over equipment and support, Less knowledge in house, Less support from vendors as we customize software more and more. §Most software is not developed in house.We mainly go to vendors for software needs. This allows us to utilize their core capabilities (i.e. develop software), so that we can focus on ours (i.e. fix engine parts). §Major vendors include: oSAP (ERP) oOracle oHFM §Given our unique business, we tend to customize software.This makes it difficult to support and upgrade.We are trying to get away from this habit.
4.Implementation of Past Projects. §Most successful IT project: SAP ERP Implementation o5-year project begun in 1998 oLargest project for our company oProject implemented in phases oMultiple applications (from General Ledger, to Production, to Marketing, etc.) oLarge successes to meet business requirements.Sharing of information maximized, better reporting and analysis tools, and increased efficiencies. oUltimate goal is to have 100% of company (domestic and international sites) on SAP.Majority of sites are already live in SAP. §Why successful? oDone in phases oInvolved customers through blueprint and design phase and had customers test at end. oBusiness and IT Experience: Combination of technical programmers (vendors) and business “project managers” §Issues with project o“Scope kept creeping”.Businesses kept changing what they wanted, increasing requirements…which lead to increased costs and time.
5.Forecast of Future Projects. Future Projects: §Green Engine Initiatives §Projects in Support of Roadmap §SAP Implementation in new Belgium and Turkey sites §Strong Focus on Cost Reduction Projects oServer/printer consolidation oInventory verification
6.Key Issues. 1.Security – concerns due to international expansion, military/government requirements, control by job function (Sarbanes-Oxley). 2.Data Storage – how to manage storage and costs of such storage 3.Staying Current with Software 4.Low Cost Sourcing 5.Infrastructure Management
none Optional: a note about this edit for the page history log
(By Alissa Crescimano)
The company is a world leader in the design, manufacture, and service of aircraft engines, industrial gas turbines, and space propulsion systems. The company had revenues of $13B in 2008. There are 38,577 employees supporting more than 9,000 customers in 180 countries all over the world. The company is headquartered in Connecticut, but there are many facilities all over the U.S. and abroad.
The IT Controller's key responsibilities include budgeting, monthly financial reporting and analysis, contract management, and inventory management.
1. Governance.
§ CIO reports directly to the President, but dotted line to the parent company President of IT.
§ IT is split by: Enterprise (i.e. Infrastructure), Applications, and Security.
§ 40% is dedicated to Enterprise, with the remaining to Applications and Security.
§ CIO works closely with business managers to determine and prioritize key projects. A list of “Waterline Projects” is created each year.
§ Waterline projects must be approved by the Executive Committee.
§ Positives of governance: Fair, standard process.
§ Negatives of governance: IT asked to do things and get “locked into the numbers”, slow approval process, More complex with security and international issues.
2. Budget Management.
§ CIO owns the IT budget at the top. Individual units monitor their own budget.
§ Everything is charged out by IT. All costs are allocated down to the business units.
§ This year, IT budget is pretty flat, but businesses’ budget has been cut drastically, reducing the number of waterline projects approved this year.
§ Budget divided by:
o 70%: Equipment/Basic Infrastructure
o 30%: Development/Waterline Projects (based on IT and business needs)
§ IT works closely with businesses to determine needs. IT estimates cost of project.
§ Decision on IT projects involve: IT plus business managers plus executive committee
§ Decisions on projects are largely driven by how the project will achieve the goals in the roadmap, such as cost reductions with new technologies, customer satisfaction, increased producitivity, etc.
3. Outsourcing.
§ Outsource most functions to Computer Science Corporation (CSC) since 1999
§ Services provided:
o Manage equipment and servers
o Manage standard software (including upgrades)
o Provide technical support
§ All services are leased to the company at a negotiated monthly rate.
§ Pros: Commonality of devices, Standardization of support, Lease capability reduces obsolete inventory on hand, Handles refresh of all equipment and servers, Upgrades managed by CSC, company and CSC collaborate on new technologies
§ Cons: Less control over equipment and support, Less knowledge in house, Less support from vendors as we customize software more and more.
§ Most software is not developed in house. We mainly go to vendors for software needs. This allows us to utilize their core capabilities (i.e. develop software), so that we can focus on ours (i.e. fix engine parts).
§ Major vendors include:
o SAP (ERP)
o Oracle
o HFM
§ Given our unique business, we tend to customize software. This makes it difficult to support and upgrade. We are trying to get away from this habit.
4. Implementation of Past Projects.
§ Most successful IT project: SAP ERP Implementation
o 5-year project begun in 1998
o Largest project for our company
o Project implemented in phases
o Multiple applications (from General Ledger, to Production, to Marketing, etc.)
o Large successes to meet business requirements. Sharing of information maximized, better reporting and analysis tools, and increased efficiencies.
o Ultimate goal is to have 100% of company (domestic and international sites) on SAP. Majority of sites are already live in SAP.
§ Why successful?
o Done in phases
o Involved customers through blueprint and design phase and had customers test at end.
o Business and IT Experience: Combination of technical programmers (vendors) and business “project managers”
§ Issues with project
o “Scope kept creeping”. Businesses kept changing what they wanted, increasing requirements…which lead to increased costs and time.
5. Forecast of Future Projects.
Future Projects:
§ Green Engine Initiatives
§ Projects in Support of Roadmap
§ SAP Implementation in new Belgium and Turkey sites
§ Strong Focus on Cost Reduction Projects
o Server/printer consolidation
o Inventory verification
6. Key Issues.
1. Security – concerns due to international expansion, military/government requirements, control by job function (Sarbanes-Oxley).
2. Data Storage – how to manage storage and costs of such storage
3. Staying Current with Software
4. Low Cost Sourcing
5. Infrastructure Management
none
Optional: a note about this edit for the page history log