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Buying over building — Standardizing processes across units– Two CIOs are bucking these trends for good reason
by Peter High, published on Forbes.com
10-31-2012
The economic malaise of the last several years has led a lot of organizations to think about standardizing infrastructure and processes in order to cut costs and to run more efficiently. It has also led many IT departments to rethink their mix of homegrown systems versus those purchased from a vendor, erring more on the side of the latter than the former. However, a few companies have bucked these trends, and believe they are better positioned during good times and bad as a result.
Many companies have developed a standard around purchasing off-the-shelf solutions wherever possible, and only where necessary developing their own homegrown systems. In a recent interview with Jay Vijayan, the Vice President, IT & Business Applications of Tesla Motors, as part of the Forum on World Class IT series, Jay discussed the reasons why his team sought an alternative path to this trend. In fact, his team has reversed this trend, even developing a homegrown enterprise resource planning (ERP) tool suite. In this day and age, you will not find many executives who choose to develop their own ERP, but Vijayan explains that as he and his team looked for comparable examples of the use of standard ERP solutions, they were left wanting for a specific fit for Tesla’s needs. Recognizing that the usual suspect solutions would be formulated with average cases in mind with a variety of “bells and whistles” that would never be of use to Tesla, while making the application heavy and hard to maintain, Vijayan elected to build one for Tesla specifically. It was hard work, but since it has been up and running, it does all that his team and his business colleagues need.
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Norm Fjeldheim, the CIO of Qualcomm, has bucked the standard trend, and has been successful in the process. He has chosen an iterative, agile development process in some areas, and others have relied upon the traditional waterfall method, which entails a less iterative, stricter-staged development process. Fjeldheim points out that it would be inappropriate to standardize on one method over another in his case. Moreover, he has not developed a single PMO to oversee all projects and methodology. Rather, each group associated with different divisions of the company set up their own PMOs. Fjeldheim says, “There are certain product areas that we work with that have many release dates, and where requirements change based on information gathered from customers through development. This is clearly an area where agile methods are needed. Our colleagues in Finance, for example, prefer more structure, and have relatively few releases each year. Agile is not warranted in that situation, and so we use waterfall methods for them.” It is this flexibility that creates a better partnership between IT and each of the business units with which it works.
To read the remainder of the article, please visit Peter High’s Technovation column on Forbes.com.
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