Executive Briefs: April 2004

By CIOinsight  |  Posted 04-01-2004

Strong Signals: The Pursuit of Productivity
By John Parkinson

In this month's column, John Parkinson, who's also the chief technologist for the Americas at Cap Gemini Ernst & Young, looks at how best to increase productivity, first by getting more output out of each hour worked, then by cutting the total number of hours required for a particular task, and then by cutting the unit cost of an hour of effort. And where best to lower those hourly costs? Offshore, where the hourly rate for software development, even when adjusted for risk, is significantly lower than in the U.S.

Mindshare: Growth Done Right
By Darwin A. John

Traditionally, businesspeople think of growth as entering an expanding market or adding a new product in a bid to boost revenues. That's a near-certain way for a company to miss the best opportunities, writes columnist and veteran CIO Darwin John. For companies, as well as individuals and teams, growth is more than the pursuit of opportunities. It is also a pursuit of self-knowledge about purpose, strengths and weaknesses. Deciding what businesses and products to shed is also an important part of the growth equation. John illustrates this with an approach to growth that was successfully used at Scott Paper Co. when he was both the CIO and a top strategist for the company, before the arrival of Al Dunlap.

Expert Voices: Ricardo Semler
With Brad Wieners

For nearly 25 years, Ricardo Semler, CEO of Brazil-based Semco, has let his employees set their own hours, wages, even choose their own IT. Doing so, he argues in his new book, The Seven-Day Weekend, has led to increased productivity, longer-term loyalty (annual employee turnover is 1 percent), and phenomenal growth. In fact, Semco has expanded from a $35 million to a $212 million enterprise in the last six years. In an interview, Semler explains why his approach to management is more relevant than ever, and an especially effective way to attract and keep talented people.

Case Study: MCI
By Elizabeth Wasserman

Everyone knows the story of Bernie Ebbers and the alleged $11 billion fraud that drove WorldCom into bankruptcy in 2002, but few know the story of the cadre of IT execs who led the Herculean effort to consolidate, integrate and streamline the 1,000 IT systems WorldCom accumulated during its glory years. This "IT transformation," Elizabeth Wasserman reports, became even more essential to MCI's survival once all hell broke loose. Under acting CIO Jim Gwinn, MCI has used this transformation not only to reduce redundancy and costs, but also to fix an historical trouble spot—the ordering-thru-billing process. As the company prepares to emerge from bankruptcy in April, CEO Michael Capellas tells CIO Insight that IT is crucial to the telco's long-term competitiveness.

Trend: Outsourcing
By Janet Rae-Dupree

The anti-offshoring voices are becoming louder, even as the impetus to cut costs by sending jobs out of the country grows. And most experts concede that the trend will not be slowed much by the politics of the U.S. job market; the benefits, in terms of cost, speed and flexibility, are simply too attractive. In this analysis of the offshoring trend, technology journalist Janet Rae-Dupree maintains that it's critical to manage the outsourcing process not just to control the costs involved, but also to control the political, social and security risks as well.

Research: ROI
By the editors of CIO Insight

Despite the increased pressure to calculate the return on IT investments, accurately assessing ROI remains a challenge, according to the 370 IT executives who responded to this month's survey on ROI practices. Less than a fifth believe the ROI information supplied by vendors, and a third say their business colleagues don't trust the numbers they provide. Yet calculating ROI has many beneficial effects. The great majority of respondents say that taking the time and effort required to analyze the return on IT investments gives IT greater credibility throughout their organizations, and more than two thirds say their ROI practices have had a positive effect on IT alignment.

Strategic Technology: Instant Messaging
By Debra D'Agostino

Once a rogue application used mostly to chat with friends while looking busy, instant messaging is finally taking hold for legitimate business communications. Stock traders IM share prices and performance metrics to their clients. Energy brokers IM to negotiate rates. Service companies IM to provide real-time online customer service to their clients. In short, companies have seen IM increase collaboration and customer care, and do it cost-effectively. But the Securities and Exchange Commission has taken notice, ruling that IMs need to be archived just like e-mail. To avoid fines, and discourage abuse, CIO Insight Reporter Debra D'Agostino says companies need to manage their IM networks, but carefully, so as not to alienate staff, or end up stuck with an also-ran software application.