Keep Costs Down, Drive Innovation

By Don Reisinger  |  Posted 09-04-2010

Procter and Gamble CIO Shares Outlook for 2011

The Great Recession has been jolting companies around the world. Budgets are reduced, employees have experienced layoffs, and the average person still goes to work each day not knowing whether or not their job will still be waiting for them. The past few years have been particularly tough for CIOs. Like so many other top-level executives, you've been forced to cut those budgets and layoff those people. And all the while, your CEO has been expecting at least the same level, if not even more, productivity from your staff.

In order to be successful, CIOs have had to change their strategies, and this will become even more important in 2011. With less money to go around, every element of an operation is expected to turn a profit and add value to the company.

"We don't just offer IT, but information that delivers useful systems for the entire company," says Procter and Gamble CIO Filippo Passerini in a recent interview with CIO Insight. "We want [the IT component] to become change agents for Procter and Gamble and transform the way business is done."

Keep Costs Down, Drive Innovation

Indeed, P&G's CEO, Bob McDonald, has made it a mission of the firm to become the "best tech-enabled company in the world," in order to achieve its business goals, Passerini says.

Even for a CIO in a small- or medium-sized firm, this kind of thinking could be exciting. The strategic examples set by big, successful companies with cash to spend oftentimes serve as jumping off points for IT leaders of all stripes. So, what's the best strategy for 2011? "What is important is to drive costs down and drive innovation," Passerini says.

Passerini relies on several strategies for innovation. P&G has employed video to help line-of-service employees in different offices around the world collaborate effectively on product development. He has also engaged in a cloud-computing push within the company to save costs and stand as a leader in innovation.

P&G's proprietary cloud-based service allows the company's top executives to meet each week, go over performance reports, and "look at data in real time." The cloud initiatives and other innovation have, collectively, has enabled P&G to save "$800 million in costs, [while] innovating three times as much" as it once did, says Passerini. "Our model works," he adds. "It's one of leadership, innovative progress, and business focus."

IT Outlook for 2011

Passerini is optimistic about 2011. He believes that P&G has found the sweet spot between value and cost-cutting that is required in this uncertain economic environment. And his advice for other CIOs is to do the same. "The future is completely in our hands," Passerini says. "If we become a commodity, we're about cost. If we drive distinct value, life will be very pleasant and interesting."

This doesn't necessarily mean that Procter and Gamble (or any other firm for that matter), will be adding IT staff to its roles next year. The future may be bright for IT but, as Passerini indicates, companies need to be agile when it comes to staffing. And he plans to "adjust and anticipate" as well as he can to determine what his staffing needs will be. For now, he's taking a "wait and see" approach to IT hiring next year.

Still, the quality of an enterprise's information and data management, and the accompanying technology choices to leverage these, will only play a greater role in the success or failure of a firm as our economy lurches toward recovery. "I always worry," Passerini says, but at the same time his outlook on the future "is very, very bright."