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Information systems as a driver for creating value

From ERP to SCM, liberate the full potential of your IS

Interview with Alberto Araujo, General Manager, Bull Latin America

Why is the job of the CIO within organizations currently at a premium?
Since 2003, the economy has been experiencing strong growth, not only in emerging countries (notably the BRIC* countries), but also in the US and in Europe. At the same time, markets are rapidly changing with globalization, an accelerated pace of innovation, and on line exchanges. As a result, organizations are finding themselves in a changing business environment, with not just numerous opportunities (new markets, customers, offerings and services) but also a host of potential threats (new market entrants, regulations, business models…).

With the commoditization of IT infrastructures, there has been some debate in recent years about the real value of technology, in the wake of research from analysts such as Nick Carr (“Does IT matter”?). The important point is: the experience of companies such as eBay or Amadeus now shows that IT really does matter to gain business advantage.

The result of all this is that CIOs have revised their job profiles, realigning them from their currently rather technical perspective to a more business-oriented one. Today their key role is more and more to do with managing the IT department so it can become a real contributor to the business overall, supporting strategic enterprise challenges. The priorities of today’s CIO put a sharp focus on integrating business process management and business intelligence, developing, retaining and growing customer relationships. Cost management remains a key issue, of course, and CIOs continue to build IT in the most cost effective way they can, not forgetting infrastructure security for both data and processes - an extremely challenging task in today’s open and connected world! Value creation is now at the top of every CIO’s agenda.

Can CIOs easily align information systems with business challenges to maximize value?
In the past, IT has brought tremendous improvements to enterprise productivity. Closed systems, however, have often resulted in a large number of isolated IT silos (HR, sales, production, etc.) that are efficient for their specific function, but that lack flexibility. Each business process change is then difficult to handle, causing IT to be viewed by some Chief Executive as, “the first barrier to change”!

Successful business alignment therefore depends on the ability to make IT more flexible, from the infrastructure to middleware and SOA-based applications. This is important both internally and externally since, in the open world, an enterprise is no longer an island as regards its business activity. It is increasingly part of a whole: a multi-enterprise dynamic ecosystem needing to automate transaction and information flows between suppliers, partners and customers. Web 2.0 trends reflect this new philosophy: products and services need to be centered on customers (one-to-one, long tail economics); customers need to be able to contribute to offerings (collective intelligence); new applications have to be built very rapidly by combining external services (with mashups), without reinventing the wheel.

This is also important in B-2-B. For example, an aircraft manufacturer such as Airbus must collaborate with hundreds of suppliers around the world to design its aircraft, which will then in turn be manufactured at multiple sites. E-governments require dealing with millions of citizens and hundreds of thousands of enterprises. This is what we have done in Latin American for BPS (Banco de Previsión Social) called on by the new political authorities in Uruguay to manage the ‘Citizens minimum income’ program, part of their National Emergency Plan. We’ve built together the new applications to support the program. States’ information systems have also to interoperate in the domains of Customs, Security and so on. In Brazil, for example we have implemented in co- operation with the teams from SERPRO a nationwide border control solution, therefore modernizing and improving international traffic control security at Brazilian ports, airports and borders, using one of the most modern, comprehensive and effective identification and authentication systems.

IT systems must therefore evolve from monolithic systems to organic, dynamically evolving, network-centered systems. And the role of the CIO is changing. They must continue to be extremely well-informed on IT trends. At the same time, they need to be very business oriented, with their focus lifted away from IT infrastructure to the level of business processes (BPM, etc.).

What are the key factors for success?

Openness, speed and innovation.
The first step IT has to take is to be open and to move right away from the closed ‘silos’ approach, opening up to flexibility, and internal and external interoperability for all business processes. Open infrastructure solutions, middleware, open business applications (SAP, Oracle, Microsoft…) and SOAs will play a major role in this respect. This is an area we are pioneering, with our unique expertise in open middleware (OW2, JBoss) and close partnerships with leading ISVs.

Secondly, the enterprise has to find a way to significantly increase development speed. Speed is a vital part of the equation, and Open Source and outsourcing offer some compelling answers. With Open Source, vast libraries of software components are becoming available, and you can incorporate them within your application solutions to speed up development at very low cost. Outsourcing takes the whole process one stage further: one can choose to rely on external partners for some functions (for example ASPs, B-2-B transaction providers, marketplaces, integration service providers, logistics service providers, etc.). As a leader in Open Source services (with Open Energy) and a systems integrator and outsourcer, we work on all these domains.

When O Boticário, the leading Brazilian cosmetics manufacturer with a worldwide reputation and more than 2,400 stores around the country, decided to overhaul its way of doing business while gaining ground vis-à-vis its competitors, Bull has been selected as outsourcer. In partnership with its customers Embratel and StarOne, we have integrated the communication infrastructure between the headquarter and the stores network, with services such as Internet access, IP transactions, Voice over IP, secure electronic transactions and video through a dedicated VSAT network. To develop a new market solution creating value through a collaborative work with its customers is a new innovative way to work.

The third key factor is quality, both in terms of compliance to budgets, timescales, and requested functionalities. IT is becoming ever more complex. According to the Standish Group, more that 71% of IT projects today fail to reach their targets, whether in terms of cost, delivery date, or features. This has serious consequences for enterprises: failure to meet time-to-market deadlines, high costs, and problems with aligning business needs to the IT project in hand. The new generation of distributed open software development factories appearing today offers an innovative answer to this need. NovaForge is making it possible to capitalize on the experience of the most successful Open Source development communities, to build a coherent creative framework for the enterprise: Bull is a pioneer in this movement.

In order to succeed, CIOs therefore need to combine technical leadership with in-depth knowledge of their industry, their company and also the competitive environment of their industry. They will also need to foster the loyalty of reliable technology suppliers and providers of applied IT business knowledge. These potential suppliers must be capable of providing solid, industry-oriented, technological skills, in-depth knowledge of business processes, IT business processes and regulatory domains. As ‘Architect of an Open World™’, with its strong expertise in business applications, and its unique knowledge of open middleware and next generation open IT forges, Bull is well-positioned to help businesses and public sector bodies as they undergo this change.

*BRIC: Brazil, Russia, India, China

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