How a group level CIO would manage the IT for the world largest company?
Alan has been at Shell for 28 years, at various positions, in IT. His mission has started with a transformation program originated in the mid-90s, around the idea of "IT for Shell" (IT is business centric). At first they thought it would take 3 to 5 years but they are now in year 8/9.
Initially, the IT was embedded in the business lines.
The first phase was to reestablish trust and the value of IT, with the first action being to hire a new outside CIO. Globally, it was about to take control (control cost, assess skills, inventories...). It took 2 to 3 years. A cultural change was needed on the business side, starting with a "business board" (to keep them informed and aware of what was going on).
Benchmarks were done before each phases. And these benchmarks led to the decision to outsource.
There was significant hiring during the consolidation phase (50 to 75 persons, mixed up in the organization). These people were coming from IT and business backgrounds.
The CIO balances the supply and demand by having teams from both sides working with him. Managing consumption is a decision handed over to the business CIOs (they have to manage their demand and the associated costs).
There is a limited number of suppliers in each category (the goal was to select a handful of suppliers for each, taking from the "top 10"): infrastructure, applications (first 2 on-shore, 2 off-shore - Wipro & IBM, then changed to 4 vendors, location-agnostic), foundation (Microsoft, SAP, Oracle, with "10 year bets), specialties...
Shell does not do IT internally because of costs, value-based management, talent attrition. Then the technology has got a lot more complex that it used to be.
The suppliers have to provide their technical architects, not their salespersons. They are working as a community (not one-to-one, as contracts).
The governance is based on the credibility by delivery and keeping business at the center. It is just this year that the business CIOs have askeed to report to Alan.
For innovation, they staffed a unit with half IT and half research (those still reporting to the research organization). Shell is also trying to connect to the research systems of the suppliers.
When the recession hit, the budgets had to be cut and the decision was handled over to the business lines over the projects to cut or scale back. But when the business lines had to weather the recession themselves, they realized they needed the IT to achieve their goals and the IT budgets inched back up.
Enterprises are trying to figure out what to do with new technologies such as the cloud. The issue is to find where the business value lies (what the use cases are).
"One" big lesson to take: management of people (e.g. figure out who the leaders are), sustaining relationships, establishing credibility in the supplier community.
"CIOs have a lot more power than they think they have!"
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