With a limited IT budget, CIO Rich Hoffman told the InformationWeek Fall Conference that the automaker focuses its time and resources on a few vital projects as it aims to reach 1 million sales by 2010.
Rich Hoffman has a frustration, and apparently many business-technology executives share it. Speaking at InformationWeek's Fall Conference, the CIO of Hyundai Motor America asked the crowd of almost 300 business-technologists if they have IT vendors asking them for dramatic increases in what they pay, either for maintenance or through a licensing change. About half raised their hands.
One software vendor asked for increases that amounted to a 20% price hike. "I can't charge 20% more for a car," Hoffman says. "With one vendor I won't name, I challenged him to bring his CEO in to meet with my CEO to explain his price increases. I haven't had him take me up on it."
Hoffman talked about how Hyundai has set a goal to sell 1 million cars by 2010, more than three times its sales today, and what business technology it needs to accomplish that.
Hyundai, which spends 0.3% of sales on IT, compared with an industry average of 1% to 1.5%, has taken an approach Hoffman calls focusing on "the vital few" IT projects. From a technology standpoint, those include data warehousing, security, integrated voice response, Web self-service tools for customer service and training, and learning development.
CIOs often talk about needing to speak the language of business. Hoffman, who reports to the CEOs of Hyundai Motors America and Hyundai Financing, says for him that meant learning the language of the automotive industry. Car-design projects range from Class 1, which are new vehicles from the drive train on up, to Class 3, which are minor design changes. He started using that to describe IT projects. Says Hoffman, "When I say Class 1,2, or 3, it makes sense to them."
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