Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
Al Etterman didn't sign up for a caretaker's job when he joined JDS Uniphase, in November 2004, with the title of CIO and senior vice president of customer advocacy. But coming into a company that had outsourced the management of some key enterprise software represented a new challenge for etterman, who served most recently as CIO and senior vice president of corporate infrastructure at openwave systems inc. In Redwood City, Calif. That challenge, though, is one that seems likely to become increasingly common at other companies, as software-as-a-service matures.
CIO Insight: Did anything about taking on the job of CIO at a company that outsourced so much of its software strike you as odd, or is it just a natural progression in the CIO's role?
Etterman: It really wasn't much of a consideration when I made the decision to join JDS Uniphase. I don't really concern myself about who is doing the work as long as it is being done effectively, and at a good price. I think it's a natural option that companies may choose, depending on what goals they are trying to achieve.
How is managing at JDS Uniphase different from jobs you've had in the past?
Managing our hosted applications is only a small portion of what our IT team does, and I don't manage the operations personally. So from that perspective it is not that much different. At the end of the day, it's about delivering cost-effective, quality service, regardless of who is actually doing the work. I can view outsourcing as either a defensive strategy, or an offensive one, depending on higher-level corporate goals that we are trying to achieve. It is an important part of our operational capacity.
What is different about running an outsourced operation from what you expected? Are things easier or harder than you thought they would be?
I think the most difficult challenge to overcome in an outsourced operation is getting the outsourcer to adopt the culture and priorities of our company. What's important to our employees may not fit their support model, and it needs to be transparent from that perspective. It's absolutely necessary to have someone manage the relationship on a daily basis, and to always remember that they are ultimately in the business to make money for themselves.
What would be an example of software that JDS Uniphase would never outsource under its current strategy?
We would not consider outsourcing our test systems software because of its strategic importance to the company. But anything else would be fair game.
Is there any chance the management and hosting of the software might be brought back in-house?
We continually evaluate the price and performance value of our hosting relationships, as well as their strategic impact to the company. If it makes financial or operational sense to bring them back in-house, then we would absolutely consider doing so. It's a dynamic market, and we are always looking for ways to reduce operating expenses and improve service. Anything is possible.
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