vnunet.com analysis: CIOs outline IT spending priorities

IT chiefs at CA World 2008 advised their peers to focus new IT investment on the highest value areas

At the CA World user event in Las Vegas this week, IT chiefs from large organisations advised their peers to find strategies to focus new IT investment on the highest value areas, rather than reacting to the financial crisis by suspending technology spending.

Antonio DiCaro, senior vice president of Technology Architecture and Development at AXA Tech, the technology division of insurance group AXA, said that the firm's overall objectives are achieving quality of service to create a seamless customer relationship, and working within very tight financial goals.

"We're consolidating our datacentres again – this is the third round. We've got 37 datacentres going down to five. Standardisation and optimisation are the key to getting higher quality and better cost. We try to reuse and offer common tools," he said.

"We're supporting over 50 AXA companies operating in insurance and banking across developed and emerging markets, which means different compliance rules in the different countries. We've looked to centralise service but give CIOs the customised services they need to run their business."

DiCaro added that there is a standard group brand across all markets, and his team enables the technology component of that for each local area.

Ahmed Abdelmoteleb, chief technology officer at GE Money, highlighted the use of IT automation at his firm as a means of improving efficiencies.

"Two years ago I used automation to take some of the mundane tasks away from manual labour to give me a higher standard of IT. That frees up my resources to do more innovative stuff," he explained.

"Our IT is about giving access to people to consume information. We're using automation or collaboration tools to allow any business user or customer to consume information and do self-service. That removes the demand on specialist skills to fill the gaps."

Myrna Soto, vice president of IT governance and chief information security officer at hotel group MGM Mirage, advised that the current economic climate should not be a barrier to new technology investment.

"The pressure IT can put on an organisation is enormous. IT is not a core element of our business but over the last five to six years it has become an extremely large enabler to innovation," she explained. "We're starting to make significant IT investments. It's not the time to suspend spending."

Soto cited the MGM Mirage's CityCenter resort complex, which is currently under development, as an example of innovative use of technology. It will offer in-room digital concierge services, and customised climate control and music and entertainment. "This will eliminate guests having to flip through video screens, and the guest rooms will have the ability to recognise you," Soto added.

MGM Mirage's IT team has experienced much change over the past few years. Soto said that in 2004, the IT department embarked on a change in leadership and focus, moving from an engineering-focused team to a business solutions practice.

"This has enabled IT to gain more frontline information to ensure IT is aligned more tightly with business objectives. Over the last couple of years, we've got closer to the customer, and we've had IT professionals working in different business units to understand the opportunities and challenges," she explained.

Kamal Bherwani, chief information officer for New York City's Health & Human Services, said that the key to getting value from IT is to focus everything on the outcome for the organisation.

"This means going through your portfolio of projects and overfunding ones that have clear returns, and deferring the risky ones for the future," he said. "All our projects have been very successful as they've focused on the client and measuring value for the client."

Risk management was also highlighted as a priority by the panel.

GE Money's Abdelmoteleb said that managing risk was a much easier task when the different business units were siloed. "The centralised model meant risk was elevated to board level," he said. "All our reporting is consolidated under the governance board. You need to do risk at an organisational level."

AXA Tech's DiCaro said that the insurance group has a very sophisticated model in place for analysing business risk, as would be expected.

"We also have IT risk processes in place, for example consolidating datacentres introduced new risks. These risks are elevated to executives, and we provide transparency to our customers so they can build risk profiles," he explained.

But he concluded that firms that are completely risk-averse will be " paralysed".