He’s the CIO for one of the largest enterprise software companies in the world, but believe it or not David Thompson faces some of the same challenges as his peers at smaller, less technology-driven companies.
As senior vice-president and chief information officer for Pleasanton, Calif.-based
PeopleSoft Inc., Thompson’s job is to oversee worldwide IT management for the organization. And even though he works for a technology company, finding good talent in hot areas such as security and database administration and meeting the demands of a tight economy are issues he faces along with his customers.
In Toronto Thursday with PeopleSoft president Craig Conway and CTO Rick Bergquist to meet with Canadian clients including Rogers Communications Inc., Thompson sat down to speak with InfoSystems Executive about what customers are asking for most and how he is addressing those same issues within PeopleSoft.
ISE: What are you hearing from CIOs about some of the specific challenges they are facing right now in a tough economy?
DT: It certainly has been tough. There is more and more focus on the cost of IT — prioritizing the projects. And I think a lot of the challenges have been sorting through those priorities. When you look across IT, a lot of CIOs just have this large budget and how do they prioritize within that budget what gets done? And that’s where there is a disconnect. If you’re not managing your IT department like a business it makes it very hard to adjust to the business environment.
If you need something now, you have to justify it to the senior management team for funding or you have to come up with the funding by driving additional revenue and the business leaders are starting to see that connection as well. But if you have that disconnect you’ll find very quickly that IT is not a value-add to the business and it becomes a cost centre. I think that’s where CIOs need to be very focused — staying connected with the business.
ISE: What do you tell customers when they ask how they can maximize results from an IT project, especially during tough times when budgets are tight?
DT: One of the approaches I always take in doing an IT project is that I don’t like to drive products from an IT perspective. I think technology is here to solve business problems and I am here as a consultant to the business leaders. So when they have a business initiative I bring technology and advice on how to leverage that to solve that business problem or create new opportunities. And when we get into the project, one of the keys to success is having the business leader owning the project, owning the success and then being accountable for the metrics. When you see business leaders heavily involved you see more success in software implementations and a true return on value on what was purchased and invested in.
ISE: Do you think companies are starting to understand that the push has to come from the business leader?
DT: No. And that’s what we as a company are working on – that companies understand that enterprise applications are there to drive business value and that’s what Craig, myself and Rick are articulating to our customers. We’ve seen the business value from the use of our own applications and some of our key customers have shown significant value in the use of our applications and cut cost dramatically and increased productivity of their employees. In this tight economy you have to find ways to drive additional value or cut costs and PeopleSoft has been a leader in that area for a long time. I think we have a really good story to tell, especially with our peer Internet technology which allows you to roll things out quickly without putting code on the client. Our applications are designed for end-users with a Web interface and it makes it easier for them to accept the application. It reduces your overall training cost.
One of the things you encounter typically is resistance to change and what I try to do is help companies overcome that by telling them to work with the internal marketing folks and build some momentum marketing around your initiative. Explain why you’re doing it so that the employees know there is value to them and to the corporation. At PeopleSoft we do a lot of marketing internally — banners when you walk in the front door, flyers to employees, frequent e-mails from business executives about the project and the value to the employee and then ask for their buy-in and support. By the time we go live to employees it’s not new to them. Really, you’re the outsider if you’re not supporting a project.
ISE: In this current economy many companies are having to re-prioritize their IT initiatives. Are you making tough choices at PeopleSoft?
DT: We began approaching things differently in 2001 and in 2002 we’re moving it to the next level. We’re using a concept called Portfolio Management. We’ve categorized things into four distinct categories: No. 1 is what we call “Keeping the Lights on” or “Running the business.” That’s the base. Basically, the phones have to work – people have to have tools to be productive – there is a base cost of IT that has to be there in the corporation. Above that you have infrastructure projects. Lets say your company is expanding into new countries, you’re scaling and growing and need additional capacity — those are infrastructure budgets and you need to budget for that because if you don’t, you’re going to be caught off-guard and you won’t be able to scale.
Then you get into transactional-based projects that are intended to increase productivity, enhance your offering to your customer and those would be offerings like enhanced CRM, sales force automation, those transaction projects and you can make some choices in that area.
Then you finally get into strategic projects and that might be a whole new product line you’re offering to the company that you’re going to put out. Typically the way things get weighted is that you have to keep the lights on, you have to do transactional projects just to keep your business running and then as you get higher up in the pyramid you can make choices. By having a portfolio, the business can very quickly prioritize what’s going to be worked on. Our enterprise services automation suite allows us to assign resources and IT to a project that is being categorized and managed by the business. So for each project you can watch metrics and costs and we use our own tool inside the company to manage our portfolio.
ISE: Is portfolio management being adopted more by corporations?
DT: A lot of IT shops don’t manage their projects as a portfolio of things being done for the business. It’s really a hot topic right now — I think it’s the next big thing in IT. I think it’s the next wave of a new management concept within IT. I think its where our experience as a corporation — we are a software firm that offers solutions but we are also a business and taking our internal IT department and sharing our success with other companies is very important. I also learn from my customers, so it’s a two-way partnership.
ISE: How are IT decisions made at PeopleSoft?
DT: We have an IT governance board with the CEO, the CFO and myself. So when we get into a large purchasing decision I bring my recommendation to the steering committee. We make the decision along with the business leader I’m purchasing it for. So the business leader and myself are justifying that purchase to the IT governance board and it’s worked very well for us because we get input from senior management and that way we can leverage partnerships as well if that’s part of it.
ISE: Are there ever any surprises?
DT: Yes, I would say there are occasions where I have made a recommendation and I get additional data from our CEO or CFO that I didn’t have that would be important in the decision because maybe we are forming a strategic alliance with a firm I’m not aware of. Senior input is very important I think.
ISE: Given the layoffs in the industry, do you find it any easier to find skilled IT people?
DT: I’d have to say there’s a lot of talent on the market, but I don’t necessarily think there is a lot of good talent. If you look at many companies, they have been cutting their poor performers. We have been taking the opportunity to manage the performance of our employees better and taking the opportunity to bring in talent that wasn’t available in the market a year ago or two years ago.
ISE: In what areas have you been boosting staffing?
DT: Certainly we have increased our security skills within our own department and enhanced our database administrator team. We’ve actually looked outside Silicon Valley and tried to move some of our operations outside of that central area looking for talent outside the Bay area. Finding security expertise is very difficult. A lot of people just changed their title and all of a sudden now they are security experts. Finding someone who truly understands intrusion detection and security architecture and can advise your business on security policies and practices is very difficult, especially to find people who are both knowledgeable and seasoned. Also, finding people in the area of enterprise architecture is a challenge is right now. With all the aggressive growth around the dot-coms there wasn’t as much attention put on enterprise architecture and the talent pool dissipated. Now I see more of a focus back on it because you really need to have that in order to scale.