Jeanette Horan is Chief Information Officer for IBM, a position she has held since May 2011. She has served as a director of the Company since June 2006.
Prior to her current position, she was Vice President, Enterprise Business Transformation, where she led IBMs transformation to a globally integrated enterprise. Prior to that, she was Vice President, Business Process and Architecture Integration from July 2006 to April 2007 where she led IBMs internal business process transformation and information technology portfolio. Ms. Horan was Vice President, Information Management from January 2004 to July 2006 and Vice President Strategy, IBM Software Group from January 2003 to January 2004, where she was responsible for strategic alliances with key platform partners and led strategic and operational planning processes. From May 1998 to December 2002, Ms. Horan was also Vice President, Development for the Lotus brand and led worldwide product management, development and technical support.
Jeanette Horan, Global CIO, IBM
(00:04) Hello, welcome to episode number 61 of CXOTalk. I am Michael Krigsman and as always, I am here truly incredible, despite the fact that we like to insult him and taunt him. Especially torment him, especially that I have just learnt that in his family he ranks below the cat. The truth has to come out, Vala Afshar. Vala
(00:37) Hi Michael thank you very much I love cats and dogs, thank you.
(00:42) And Vala we’re here with a tremendous to guest today.
(00:46) What an honor and a privilege for us to have one of the most extraordinary CIO’s on CXOTalk we have had to date.
(00:54) Yes, we’re here with Jeanette Horan, who is the vice president and the CIO of IBM. Hi Jeanette how are you?
(01:03) Hi, I’m well thank you, how are you guys doing today.
(01:07) Great, thank you so much for taking the time to join us today and I see from the background you are in the middle of New York City.
(01:15) I am indeed. I’m at the IBM office at 590 Madison Avenue today.
(01:22) Well Jeanette let’s jump right in and tell us very briefly about your professional background and then tell us about your role at IBM. What does the CIO of IBM do?
(01:34)So by my training I’m a mathematician and software engineer, and that certainly is where I began my early career working in systems programming, operating systems, and compilers and suchlike.
(01:49) And as I moved further up into management and started to learn more about business strategy and the intersection of IT in business, I really became interested in how to how technology could be applied and to improve the way that people work. And that’s what actually brought me in the mid-90s, when I was working at Digital Equipment up there near Boston to the AltaVista search engine in the very early days of the Internet, and from there to Lotus were of course the whole kind of programming paradigms around Lotus and collaboration really came to the fore.
(02:26) And from there obviously kind of into IBM and I sometimes tell people that I’m a CIO by accident, because I spend most of my career more on the product side of the business.
(02:39) And in 2006 was given an opportunity to come work for the then CIO in what I at the time thought would be my kind of 18 months to 2 years through corporate that you know a lot of young IBM execs do, and then move back into a business unit. But I found I got hooked and got the opportunity to become the CIO for three years ago now.
(03:03) And being the CIO at IBM is an interesting role, because obviously we ourselves are very large IT company, and sometimes I tell people I have 400,000 people who think they know how to do my job better than I do, and probably many of them do. So I have a lot of advisers.
(03:22) But I really look at my role in three areas. One area is really obviously to enable all of those 400,000 people and the various subcontractors who work with us to able to work effectively. So all of the tools that they use to do their jobs day in and day out I obviously have to provision and support them and make sure that they have access to the information and the tools that they need.
(03:45)The second is around integration with the business. I think if you look at what’s been happening with IBM over the last several years, our business mix has shifted tremendously and so to figuring out what the business really needs and how we can support the business and I think in some ways is probably the most critical thing that I do. And that really takes the form of kind of new projects. You know, what are the new projects we’re deploying to enable the business to work in different ways.
(04:19) And then the third area is an area that I say that if I wasn’t at a company like IBM, the business probably wouldn’t hear about because it’s what you think of us, the core IT work that we do around what actually happens in the data center and all of the technologies that we deploy their and it is the third area of what my role entails.
(04:40) Last week Jeanette, we had Oliver Bussmann the CIO of UBS, former CIO at SAP, and Oliver manages and 8000 person IT organization. I was wondering the size of your IT organization at IBM as the first question and then a follow up to that, you know I suspect the numbers are in the thousands and you often talk about the importance of collaboration and I wanted to learn a little bit about you know, your approach in terms of you know truly building collaboration – not only in the 400,000 employee ecosystem, but even within your IT organization.
(05:24)Yes so my IT organization is sort of an interesting one, because I outsource to IBM’s own strategic outsourcing business. So both our data centre operations and also our applications, maintenance, and development is outsourced to IBM (lost signal).
(05:42)So if you look at it from a perspective of a traditional retained organization, I have about 5000 people in my organization. But if I add the other two service providers together, there’s probably about another 12,000 people in those organizations as well.
(05:57)And because we are all IBM’ers, even although it operate as a customer in those organizations, you know we do tend to collaborate fairly closely. Especially when it comes to deployment of new technologies and how are we really going to support the business in the best way. And collaborations are a really interesting issue and challenge I think for all of us these days.
(06:22) We operate in 170 different countries, and today I think the norm is that the project teams are going to be in more than one location. I think it’s very rare that everybody comes to the same office and works together. And so, we have had to figure out what are the different tools that people can use to work most effectively. And obviously you can start with things like email, but I think one of the most important tools that we have in the business today is instant messaging.
(06:52) And it sounds strange to say, but I get more calls at the same time if the service goes down then probably anything else, because it becomes sort of the fabric like how do people connect and more salt than just the actual Instant message I think itself is the presence awareness, so my online and available to talk. People might choose to chat over an instant message or they might choose to pick up the phone, but they know at least they can reach out and touch someone.
(07:20) But more recently we’ve been moving much more towards an internal social platform that is obviously build on an IBM product and IBM connections, which has you know Wiki’s and blogs and forums and communities that allow people to share files or hold discussions or really be able to collaborate across boundaries. Because I think one of the biggest challenges that you have when you are a global organisation, there is one thing that none of us can solve is time zones.
(07:50) And so if you have got a project where people are working may be across 12 different time zones, you know they are never going to be awake at the same time so you need a way to be able to store the information and hand it off and make sure that people can work more effectively.
(08: 08) So we’ve been using that platform, and really encouraging people to think about how do they share what they are doing. You know, obviously we’ve published a lot about this on Twitter and your encouraging questions from your audience on a Twitter stream. We’re really trying to encourage people to do the same thing inside of IBM to be able to share what they’re working on. Even to be able to reach out and say, Hey, he is an issue I’m working has anybody seen this before. And what we are finding is that the community is really rallying around that as a way to be able to make what is a very large company feel like a much smaller company for people to work in.
(08:51) You’ve been talking about collaboration and we’ve had some discussion so far about technology, so my question is, what is the real job of a CIO is it about the technology or is it about the people relationships or nontechnology factors. So how would you characterize it?
(09:16)So I think the job of a CIO has been and always will be about the intersection of business and technology. Clearly, you know we don’t do IT for IT’s sake. We do to help the business colleague in some way shape or form, whether it is dealing with a problem or creating some new opportunity, that’s really what it’s about so how can we apply technology to those business opportunities.
(09:42) So I think the CIO has to understand what the business of the firm is and understand how you can actually bring some of the technologies to their. And I think that’s why we are seeing – actually in a lot of different cases today CIOs may be have spent some time in a line of business, just as I myself have. When I came into the CIO organisation, I certainly knew our software group inside and out. But I learnt more from the IBM company from this role than I ever would have done in a software group only role, because you are very deep as opposed to very broad.
(10:19)And in gaining that broad understanding I think is one of the things that is really important. And I think being able to sort of demonstrate and playback to the business that you do actually understand what they are trying to do. So when you get the inevitable challenges of the no, no you don’t understand, we are different, you can say, actually I do understand and I do understand where you need to be different for a very good reason because your business model is different.
(10:45) versus where you know a standard process is actually kind of the best thing for the IBM company. I think being able to have those discussions is really critically important.
(10:56) I read that your team supports -hopefully I’m not mistaken, nearly 4500 business applications at IBM, so I’m wondering how much of your day in your teams work is you know meeting your internal stakeholders needs, external customers. 4500 apps is pretty incredible.
(11:21) Well the first thing is that I am actually proud to say that as at the end of last year we got that down to just under 3000.
(11:28) Just under 3000! Okay now it sounds easy
(11:36) That is just part of the strategy because part of the business strategy was to get to a more global common process and if you want global processes, you need to have global applications. So we have been in the process of moving everybody onto strategic apps and sun setting all of the kind of the more regional apps.
(11:51) But I would say that you know, for my retained organisation, you know 80% of what they do is working with the business to understand the business requirements and where the business is going. And you know either you know what modifications we need to make to existing apps, where do we need to completely reengineer and introduce a new application you know or how are we going to support where the business is going within that application portfolio.
(12:20) We have a comment from Twitter. This is not so much as a question as an accusation from my friend, Alan McCloskey who is an analyst with Constellation. So Alan says, okay were talking about collaboration and technology and he says, nice dance around the word ‘culture’. So what about the role of culture and the intersection with technology.Any thoughts and about business transformation.Any thoughts about that.
(12:52) You know I think that’s a really interesting question and I do know Alan, so it’s nice to talk to him. But you know, culture in a lot of ways is the make or break of any transformation programme. You know there are some things that you’re going to do in business, which are truly not optional and I use for example, you know if you are going to roll out and upgrade your general ledger, everybody has to use that same version of the general ledger and it’s not optional
(13:19) But in many many other application and spaces, especially where you’re talking about more individual productivity or team productivity, I mean it truly is optional for people to be able to adopt or not adopt the different tools. And obviously as well as being an IT company people always have lots of ways to kind of invent their own solutions if they don’t want the one that we are rolling out.
(13:43)So I think culture is really critically important, and what I’m seeing today certainly around – and I’m kind of going to change the term collaboration into more of engagement. And what we are seeing is is a real leadership from the top of IBM.
(14:00) As an example, when Ginny Rometty became the CEO, she decided that she wanted to engage with all employees using on a video blog format, where she will post either a replay of a video blog or even maybe a live video broadcast, and encourage employees to comment or ask questions and sort of really drive engagement in that way.
(14:26) And so we are seeing that now, obviously kind of slowed down you know and become successful, people like it and so then the next level of senior vice president are following suit and doing the same kind of thing.
(14:37)And I do think that that leadership from the top is one element of how you get your adoption for some of these technologies. But there is also the grassroots.
(14:50) Today – it used to be the position at IBM was somebody who came to IBM from college and stayed here until they retired. And today that is just not the case if you look at how our business has shifted over the last few years with acquisitions, and divestitures, and the growth in some of our growth markets. Today, about half of the IBM population has less than five years with the company.
(15:13)And so they come into the company with expectations and experiences, either from college or from other employers and they come with their own ways of working and their own ways of collaborating with other people. And so we see a lot of from the ground up communities building, the people with common interests. You know they might be a community of practice like business consultants or they might be a project team and people who are trying to work across a global project team kind of just forming their own communities and coming together.
(15:47) I think today within the connections platform, I think we have about 86,000 communities at this point in time and that’s much more as I say of the bottoms up as opposed to the tops down, but a little bit of both.
(16:00) What are some of the great opportunities where IT can serve IBM business in your opinion. You talked about you know the diversity of young talent coming into the business, obviously they’re mobile, they’re social, they’re connected and soon it’s going to be bring your own wearable, you know with their glasses and watches and sensors. So how do you feel for the greatest opportunity for IT to serve the business?
(16:31) Well you know we have the very formal means that I say which is working with either the lines of business or with our enterprise process owners to make sure we are delivering the capability that is needed.
(16:43) Let me just talk to you about one project actually really excited about this year that we’re rolling out and we call it IFund IT, and this is a kickstarter model, where one of the business challenges that I want to have my team solved is to help the business to truly embrace, and the big question you know once you’ve got beyond the basics of providing people mail, calendar, and contacts on a mobile device.
(17:10)You want to move into a lot of the real business applications that people would find useful. Now I could sit here and imagine and dream up what they might find useful. But instead we decided to let’s go out and ask the community, so in a kickstarter model what I did was I set aside a budget, and I said the only rule for this year’s kickstarter model is that it needs to be mobile app development.
(17:34)And so we took a budget and went out and I asked for volunteers to be investors, and then I gave them each a chip for $2000 and they said okay. Then we went out for a call for projects, and within the first three weeks we had over 1000 project submissions.
(17:52) And so the funders for their $2000, they can choose to spend $10 on a project, or all $2000 on one project, but they are basically selecting how to invest the money and we are in that process right now and going through that sort of matching and several projects have already received their full funding. And my goal is to kind of have mobile apps are the businesses asking for what they want. We have a mobile app store, so we’ll put the apps into the app store and we will let people rate them and see how many people download them and see kind of how good the ideas were.
(18:26) But it’s really away to allow us to be – I want to say the IT organization that says yes instead of the IT organization that says, no we can’t do that, or come back in six month’s time, you know all of the things that we traditionally are charged with the criticisms of traditional IT organizations.
(18:45) That’s pretty extraordinary actually to think of yourself as trying to be the yes CIO, as opposed to the no CIO. And we know that the no CIO leads to the state of IT where nobody likes IT. But it’s hard but how do you balance by being they yes CIO seems to me on the one hand the business – the company says to IT in general, you need to save money. Okay we need to reduce our costs, figure out how to reduce our infrastructure costs and so forth. And at the same time, be the yes CIO means increasing innovation. So and I think many CIOs face this almost mutually exclusive set of requests. Cut your cost, innovate for the business, how do you that?
(19:38)Yeah, I mean that definitely is the dilemma for every CIO right and you know, I try to sort of look at it from the perspective of where are we spending money today and what are the things that we spend money on. And where are the opportunities to optimize, and certainly there are cases where you know, we’re going to take advantage of the inherent you know, price performance curves of technology right. You know, as they come down you know things get a little cheaper to be able to run. Whether that’s in our data centre or whether that’s in things like kind of voice contracts with our cell phone providers.
(20:14)And there’s a lot of opportunities to just sort of walk down that natural curve. But we definitely are always looking for how we can get two more efficiency in the way that we operate the business. Because, the goal is to get more money into the new things, the things that add value to the business. So running a steady state is the first area that we’re constantly looking to optimize.
(20:36) And we have virtually a pretty good – one of the great things actually about being a CIO in IBM is you know, I have access to you know a truly world-class research organisation. And I mean if I have a challenge of something that I want to solve you know, then I can look through research for a partnership. And you know, how can we you know work on some of those efficiency things that can allow us to innovate to provide more value.
(21:04) But it’s interesting and the way I sort of see us moving now, I mean in today’s world is really, how can we provide may be more of a state of services to the business, as opposed to you know we just kind of we run IT and everything is behind a curtain. That they can really choose of kind of how can they run the business. And obviously in today’s world we are looking at more kind of software to service place and you know then we become sort of much more of the broker of those services within my organisation that allows us to provide you know some kind of innovation along those lines. So it’s probably a bit of a long answer, sorry.
(21:45) I see you active on Twitter you know public social networks and you know you mentioned how internally you and your team are leveraging social platforms to connect that engagement. How have you had to work with the business to help them better relate to IT? You know, you’re talking about 17,000 IT organizations, so are they town hall meetings, internal blogs, video summary of initiatives. How do you bring the business closer to IT and vice versa?
(22:23)Yeah, so we do a number of things and obviously I’m going to say that there is the broad communication things. So yes, I’ll do a video blog or even a kind of written blog on different topics to talk about what we are working on.
(22:36) And I actually encourage, I mean a lot of my sort of individual project leaders will do the same thing, and we certainly share in our own internal networks, you know like if there is something that is either going to go live or something that’s just gone live. You know we definitely use that as a mechanism for broad sharing of information.
(22:53) But I do think that there are times as well where certainly where you are making changes in a big organisation, you have to have the human touch. And the benefit of stakeholder management becomes really important. And the stakeholder management is really much more than just you know, this sort of training if there is a new version of something that is going live and we bring a training class to you.
(23:15) I think it really starts at the beginning with a discussion with the key stakeholders around, what are we trying to do here? Right, what are we trying to change and why are we trying to solve a problem, are we trying to create a new opportunity? But let’s all make sure that we’re clear on what our purpose is here together. And then that gives us a framework on which to move forward.
(23:34) And one of the things that we’ve been doing is trying to engage much more with some of the stakeholder groups and even the design of a new application say, using kind of much more formal design methods. And in fact where I am today I’m actually on the floor here in New York City in our joint marketing communications and IT design lab. So where the teams come together here to work in very small collaborative teams on very fast iterations to do things together, that allows us to bring much more of that formal design thinking.
(24:11)Which I think allows us to then bring the business along with us. So in other words it’s not something that we are doing to them, but it’s something that we are doing with them and for them that I think really makes a difference.
(24:24) We have a question from Twitter from Zachary Genes, who asks about shadow IT and he asked is whether you see shadow IT as a source of innovative ideas, or to use his term as an enemy or I would say you know a problem or challenge. How do you view shadow IT?
(24:45) So I mean obviously we’re an IT company, so if I was to tell you we didn’t have any shadow IT I would be lying. But one of the things that we’ve done is to try to provide people with what I consider to be I call it a safe playground to play in. So as well as our kind of production in data centers that we have, I maintain and innovation lab, which is not subject to the same you know service level agreements and production and SOA’s etc. that the production labs are subject to.
(25:17)And I provide within that what we call our technology adoption program. And even although it started before the term, platform as a service was a popular term, you can think of it as being exactly that. So I provide an environment that has you know kind of data base and web sphere and you know sort of various other tooling for people to be able to create applications and let them do that.
(25:40) You know we have probably about 25% of the IBM population is active on tap, you know either creating short-term business applications, or downloading and using those business applications and it was very much of what I call a graduate or die model. And if the app becomes successful and becomes adopted across the business, then we figure out how to move it into production. So you know if it was sort of an interesting idea or even sometimes the requirements for an app that just lives for a short period of time for a particular project or programme for example.
(26:17)You know then that’s an ideal environment for it, because then when the need has gone you know we can redeploy the assets that was being used. And I think it’s sometimes these kinds of programs where you tell people it’s actually we don’t want to stifle innovation we actually want to encourage innovation.
(26:34) And by providing people a mechanism and a forum for them to do that it’s kind of, it’s still it’s not exactly shadow IT, but it is more in the open, but it’s alongside of the official production portfolio.
(26:49) I recently attended an IBC conference here in Boston and there was marketing track that talked about digital transformation and impact in marketing. And they showed a graph and this was a survey of you know hundreds of CMO’s and marketing experts talking about shifting programme spend, where in 2009 digital spend was roughly 10% of marketing programme spend. And that IBC is projecting that by a year or two, 50% of the total marketing programme spend will be digital marketing.
(27:26) So I’m curious and today you’re actually in the IT marketing design center in New York City. Is there more demand on your organisation from marketing today than before, and you know what are some of the projects and initiatives that you see or add advice to other CIOs in terms of making sure that marketing organizations are successful.
(27:51) Yeah, we’ve seen a huge change in our relationship with marketing, I’m going to say over the last 2 to 3 years. Where I mean if I go back five years, I mean certainly the marketing organisation probably had very little demand on IT. I mean obviously you know we kept the corporate website for them and provided them away to publish content.
(28:12)And certainly to some degree of sort of online engagement with our clients, whether it was in private stores or certainly if you think about it technical support category, then we had online relationships with many of our clients.
(28:28)But today, you know I agree with the statement and what we are seeing from marketing is that you know they want sort of more and more to be through a digital medium. So we’ve been investing with them over the last couple of years and a lot of what I would consider to be the infrastructure elements of that, with respect to making sure that for example, and we’ve actually been deploying UNICA and even before IBM bought UNICA we started to deploy a UNICA platform to be able to do much for automation in the marketing processes.
(28:59)And now we are sort of working with or making sure that we have robust information about our clients. And if you think about it, IBM is a B2B company you know kind of primarily. And so our traditional view in IT of a customer master you know would be company X or company Y. But today what we are finding is that we want to know much more about the individual.
(29:24) So if an individual is coming to engage with us digitally, so do we know they are a CIO or are they a CMO, or are they a database administrator so kind of what is the role and what is the kind of information that they most likely want to see. And I think you know this kind of sort of alignment, sort of figuring out how do we build for them, the information platform that then allows the marketing teams to leverage that information in the most productive and appropriate way is really where I see the trends heading.
(29:56) And I think that this sort of difference between B2C versus B2B, you know a few years ago I would have said it was very stark, you know the way that people engaged with their clients. But I’m seeing them merging now and people want to be dealt with as an individual, as opposed to just a person in a company. And I want you to know me and I think I want you to know you know what white papers I’ve looked at before and not just that my company has downloaded those white papers.
(30:31) I absolutely agree that level of contextual intelligence that allows digital marketeers to really segment to one – you as the consumer. And certainly my own budget when I look at just the last few years compares to the next fiscal year, how much of that programme spend is going towards social listening tools, customer relationship management that touches the sales services marketing, marketing automation. Lots of studies point to touch points during the buying journey in B2B, you know over a dozen meaningful touch points before you can earn the business.
(31:20) And all of that insight is critically important to marketeers. Do you believe that marketing future you’ll have to have a technical background to be able to find employment in marketing? It seems like it’s more of a technology and science than art.
(31:37)Well I think you had better have a good buddy that is going to turn and come back around.
(31:43)You know marketing is I think sort of long been an art and certainly digital marketing it’s a science as well, and you think about the role of the data scientist and digital marketing context.
(31:57)So how do you get value out of that data is really the important thing because it really is all about improving the touch point that you have with the client, right. You know it’s wanting to make things more meaningful for that person as opposed to sort of as I say, the kind of the old notion of a website which was just a broad push of information to anybody who came.
(32:20) If I had the budget I would just by Watson.
(32:25) So let’s actually talk for a moment about Watson. Can you talk a little bit about the way that IT and IBM are using analytics and how are you using Watson internally. So what’s going on with Watson from your IT perspective?
(32:44) Yeah let’s talk about Watson first and then we can talk about analytics more broadly. Yes I mean Watson obviously yet I mean it’s just a fantastic technology and it certainly has come a long way from three years ago now with the you know original jeopardy challenge. And when you look at some of the problems that Watson is helping us to solve in for example some of the healthcare field or the financial services field, you can certainly see the power of Watson as being a tool to really help people sift through the vast quantities of information, that you know any one individual just can’t consume or the data that is coming at them all the information that is coming at them at any one point in time.
(33:24) And I think the notion for Watson to be able to be trained on these kinds of questions that are important and how do you actually navigate through that information which is really the powerful thing.
(33:34) So actually looking at a couple of different use cases internally, one of them is obviously in both the internal and the customer facing helpdesk solution. Solutions here you know for our technical support professionals, you know are currently the sort of state of the art is kind of if they are on the phone being able to use Watson to help them either ask the next best question or to be able to say have you tried this or have you tried that.
(33:59) But ultimately the goal with that would be to enable the customer is to come self-service using Watson technologies to guide them through a diagnosis which would be really interesting.
(34:10) The other area is in support of our go to market professionals. You know we have a very broad portfolio of offerings to the marketplace and new things coming every week it seems. And I sometimes sort of feel sorry for the salespeople who just must feel like they are absolutely deluged with information that is coming at them from all of the different brands and all of the different products.
(34:33) And I think being able to sort of categorize and catalogue all of that information in a way that if they want to know, you know do we have any clients in the healthcare industry that has used this product or that product, and everything can become a very helpful tool for our sales professionals.
(34:50) And so we are currently in the process of teaching Watson on how to answer those kinds of questions, so that we can hopefully deploy kind of Watson for that purpose.
(35:00) So I definitely do see applicability for it.
(35:03) But if I talk a bit more broadly about analytics and as you know you are probably all aware that we’ve had a few years ago sort of launch the notion about being around a smarter planet and we’ve now been thinking internally about the notion about a smarter enterprise.
(35:19)So, how do we enable different units within the IBM company to make use of the vast amounts of information that we have at our disposal. And we have invested within my organisation and I’ll call it a kind of internal software as a service platform that actually has the cognize of SPSS technologies in it, that allows the business to be able to you know right reports using cognize or be able to do much more meaningful analytics and predictive analytics using SPSS, from all of the information that is in all of our information warehouses across IBM.
(35:56) And this has become an amazingly successful project, because it’s actually opened up information to the business that they kind of never really knew we had, or very few people knew we had. And it’s made it much more accessible for people.
(36:10)So we have a lot of projects going, obviously with our finance organisation, with our supply chain organisation, our HR organisation, you know where they can actually get access to this information. And my team’s role is not only just to support that infrastructure, but also to provide every day getting started help if you will. I call it teach them to fish. I don’t want them to always come in as me to produce reports or run analyses for them, but I want to enable them to do it themselves.
(36:40) I want to go back to something you said earlier about your technology playground, and you mentioned the term that programs either graduate or die. And to me that goes directly to the question of software adoption, so let me ask you what exactly does that mean, graduate or die.
(37:08) So generally if you think about it in this technology adoption model is going to be somebody in some line of business in some job role who says, okay, I’ve got a problem is it isn’t being solved by a traditional IT and I would like some application to help you with that problem. And if they are willing to invest kind of the time you know themselves to actually do the development to actually sort of think about how can I actually create an application to solve that, and they put on tap.
(37:37) Now, the question becomes, what does it mean to be successful? So you know if your two best friends say okay I’m going to come and use this application. That doesn’t really kind of hit the bar, but we try to look for sort of meaningful populations. And certainly kind of in the IBM case you know, if it’s one of these something that’s been started by an individual, we’re going to look for tens of thousands of people to adopt it before we could say it would graduate.
(38:05)You know, because it really has to be something that’s meaningful to a large enough population. Then as we graduate what we mean when we graduate it is that it becomes an officially supported application in our portfolio, and it would be moved into a production data center and it would be maintained and managed by my organisation.
(38:25) You know, if it’s something that you know has an initial kind of spike and the sort of high curve you know and people are very excited, but then we find it’s really not being accessed and used, you know then we’ll go back to the originator and say, look we really think this is past its useful life and it’s time to move on to something else
(38:45) I had read that your team reached a milestone a few years ago I think in 2012, where 51% of your investments focused on front office application development, versus historically you know the majority spend was for back-office applications. Is this a sign that you know successful IT organizations are reducing the gap between corporate IT and customers and really focusing on delivering insight and meaningful data and new applications to enable again, customer facing and front office part of IBM? Can you talk a little bit about that?
(39:23) I think that also comes back to your question about you know the digitalization of the business right, you know really there has been a huge increase in spending in what we do to support marketing and certainly the digital marketing.
(39:37) But even in terms of supporting you know our sales teams and our consulting professionals – our services professionals who are out with clients every day, and kind of the tools that they use to help them while they are in front of clients is where I think a lot of the investment has been. Even if it is things like running what you might think of as being a kind of an internal process such as, I don’t know, for example managing pricing approvals or something like that.
(40:07)You know to the extent that we can automate those processes and make them easier for our sales people. It gives them more time in front of the clients, and I think that’s the important thing.
(40:18)So where I think we are going to be moving now is much much more into the truly self-service world for clients. Certainly, as you see more of our offerings going to market as a service, and you’re going to see you know, much less of a get to a point and the sales person will call you because now it’s going to be a big you know kind of corporate decision and a big proof of concept and a big PO. You know, we are moving now into where it’s kind of try and buy. You know it’s going to be much more I think truly self-service, and I think that also is going to put much more of the emphasis of the spending into that part of the business.
(40:59) Are you seeing the trend towards breaking up a large – you know we are used of these very long multi-year IT projects. Are you seeing a trend towards breaking these up and chunking then so that they are shorter projects that are producing the results faster?
(41:17) Yes, we’ve definitely been seeing that. I think it started a few years ago as we talked about sort of moving towards agile development. But I think in the early days of agile development, it was truly in the development cycle but we might still have a you know nine or 12 month long project. It might have multiple iterations, but it still would wait until the end in order to deliver something.
(41:38) But now what we’re seeing is the notion around take small pieces of functionality, delivering incremental value to the business, and I think sort of that is the way that we have to work because we have to keep up with the pace of change in the business, which is something that really has accelerated over the last couple of years.
(41:58)And you know if we imagine a multi-year project, by the time we get done, the business has moved on. So you know we really need to be thinking in much smaller increments and being able to be more flexible. And being able to respond to changes and requirements.
(42:15) What about – we’re just about done but we haven’t spoken very much directly about cloud. Do you want to just say a few words, a few thoughts about cloud before we finish up?
(42:27) Yeah I mean I definitely you know we are looking now at anything new that we do is definitely cloud first. And one of the things that I have my team currently doing is doing a pretty complete survey of all of these software as a service properties that could support a company the scale of IBM.
(42:48) And obviously IBM has a number of such software as a service properties ourselves that we offer to the market, and clearly we’re looking at deploying all of those inside of IBM.
(43:00) And I definitely see the trends, certainly of what you might consider a lot of the traditional back office functions or certainly an employee productivity of software as a service being a preferred model for the future.
(43:13)Now when it comes to and if we are really going to do brand-new development, you know the next thing is obviously is platform as a service. You know, IBM has just launched BlueMix, you know, which provide all of the middle ware products as a service, and we are working with our GBS team to be able to train them and to make sure that any new application development that we do is done using that platform as a service model.
(43:38)Then obviously is the infrastructure as a service as well, and again anything new that we do we will be using infrastructure as a service. And then we are looking at our existing application portfolio to determine you know, what really should be moved out of our internal data centre into more of an infrastructure to service model. Or even more infrastructure as a service, but within our own environment right, in order to get the flexibility and the agility from it. I’m probably just like any other CIO, here we have a lot of legacy applications and many of which were developed for scale up versus scale out, which is really the kind of cloud base model. It’s much more of a scale out model.
(44:19)So I think it will take us some amount of time to see the infrastructure as a service really kind of take hold in our legacy portfolio. But certainly everything new is going cloud.
(44:33) Well I think we’re just about at that time.
(44:38) So I know you earned an MBA from Boston University and you must be a Red Sox fan, so can we leverage Watson to help us figure out how we get out of this seven-game losing streak.
(44:53) I think we might have a few good answers for that.
(44:58) I wish we could talk more because I’m dying to know about for example, bring your own device for 400,000 employee company, but this has been a fastest 45 minutes that we’ve had on CXOTalk.
(45:10) Why don’t you come back another time and join us
(45:13)Absolutely I’d be happy to do that, thank you very much.
(45:16) I learnt an incredible amount and I really appreciate your shared wisdom, thank you very much.
(45:24) So we have to thank Jeanette Horan, who is the CIO of IBM for coming on CXOTalk live, and this is not scripted, so if anybody thinks that we’re following a script here, think again. So Jeanette your very kind for doing this and very grateful to you
(45:46) And I’m Michael Krigsman, you have been watching episode number 61 of CXOTalk with Vala Afshar, and I hope you will come back next time and thank you for watching. Bye Bye.
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