Saving 15% is Easy ... - Page 1

Jul 29, 2009

Allen Bernard

Alright, nothing is that easy, but the point is if you have a mandate from on-high to cut costs and consolidate IT into a centralized, shared-services organization with a solid reporting line back to the CEO's office, well, then, things are definitely tilted in your favor.

In April of 2008, it was just this situation in which CSC CTO John Glowacki found himself. For years, CSC had been trying to consolidate IT. M&A had led the 90,000 employee behemoth outsourcer, systems integrator and solutions vendor down the path of having IT everywhere. Pockets of servers and applications were all over the place. Multiple examples of every conceivable type of software could be found in all kinds of places. Business units (BU) called the shots and business unit-focused IT departments filled the orders. There is a corporate CIO but only dotted-line reporting existed back to his office from the BUs, so the BUs pretty much did what they wanted when it came to technology.

"CSC was a confederacy of pirate ships because of the way we evolved," said Glowacki. "The simple way to put it is we were much distributed in our decision making as far as internal IT spend."

As with most such consolidation efforts, the end goal was savings but savings through efficiency, not just cost cutting. Corporate had to wrestle control of IT spend away from the BUs and manage it centrally if they ever stood a chance of controlling it (not to mention spending on what was best for the corporation as a whole). And because part of Glowacki's job is managing CSC's IT infrastructure, that duty fell to him. He had to take the CEO's directive and implement it ASAP. This meant stepping on a lot of toes since the IT budget had already been set by April and the BUs were happily spending away.

"Because we had that top down mandate it settled a lot of things quickly," he said. But that is not the way the former Air Force project manager would have liked to get things done. Managing by proclamation only goes so far. Managing by consensus is where Glowacki feels the greatest results can be garnered. HR and finance had already been centralized before Glowacki arrived, so the writing was on the wall. Within IT, the consolidation of the knowledge management and email systems was already under way but that didn't mean his BUs were happy about it giving up their control of spending.

"The IT arm within the business units is now solid-line reporting to the corporate office of the CIO where previously they hard-lined it to their business unit and they had a dotted line to the CIO, which meant, on occasion, they could take liberties," he said. These "liberties" often resulted in IT doing what was good for the goose, in this case the BU, but not for the gander, i.e., CSC as a whole. If Glowacki was ever going to show results, he would have to change the thinking of his BUs.

Since his mandate allowed him to strong arm initiatives through without consensus, Glowacki was able to get some things done, like server virtualization and an SAP ERP consolidation effort (that is still ongoing). But, that was last year's, approach. Now that he has some numbers to show that these efforts are effective cost savers―around 15% of total IT spend, his BU presidents are more inclined to listen.

"At the end of the year our results were we gave back to the company tens of millions of dollars in savings compared to what we otherwise we might have spent," he said. "We improved performance of what we had and we even introduced some new capabilities. That's not bad for a first year after such a strategic change that was made as the year was beginning as opposed to having time to ramp planning and everything.

"When you demonstrate the business value of IT―the way it's being done compared to the way it can be done and that that money can be used for something else―you get people's attention. So, what it really comes down to is demonstrating the business case to everybody and good communication."

Good Communication = Good Leadership

Although it may seem a bit oxymoronic, the CEO's mandate allowed Glowacki to exercise good leadership principles, albeit not very democratic ones, but good ones none the less. You see, explained, Glowacki, having a mandate is fine but no mandate fulfills itself. It must be implemented by at least somewhat-willing employees. Without good communication and productive back and forth, corporate would probably still be wondering if their efforts were ever going to pay off.

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Tags: IT management, IT Leadership, Cost Cutting, CSC, Communication Strategies,

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