In the various conferences I was at the week, the best presentation I listened to was by the CIO of Alcoa, Bill O'Rourke.
I had heard Alcoa present at a Hackett benchmarking conference in 1996. They have continued to benchmark every 3 years, and it was great to see how they have evolved to the first quartile in both Finance and IT benchmarks. The other companies in the benchmarks are not slouches - they are peer Fortune 500 companies who continue to evolve themselves.
They only spend 1.29% of revenues on IT and credited among other things:
- elimination of over 1,900 applications - from 44 procurement systems to 1, 40 ledgers to 1 (Oracle is the enterprise app, though Bill specifically said they could have done just as well with SAP or another global ERP platform)
- consolidation down from 50+ data centers to one
- doubled delivery of business services (not just IT) from low cost locations (mostly India)
What I particularly liked was so he said there was another "2/3rd of value" still to be captured from better IT around supplier collaboration and management, constraint based planning across plants and better integration across the supply chain. He is also pushing for best practices I have written about before such as more shared services from his vendors (I have called it "empty calories" in offshore spend), and moving from low cost countries to low cost cities. The journey continues.
He told the audience of CFOs to not forget all the cool new stuff coming out of tech markets. At lunch I asked him what he thought was cool - and he mentioned telepresence and cloud computing among others.
And how does his CFO react to emerging technology? "Loves it" was the response. Sounds like a first quartile CFO/CIO relationship....
Update: another perspective from Francine McKenna
