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9/7/2010
12:27 PM
Chris Murphy
Chris Murphy
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Global CIO: Chevron CIO Wrings Value Out Of Existing IT

A conversation with Chevron CIO Louie Ehrlich on IT opportunity and reshaping the role of the CIO.

For most of us, our lens on the Gulf of Mexico focuses on what the lasting environmental damage will be to the area after the BP disaster. But for the oil and gas company Chevron, everyday operations continue in the Gulf, and just the normal course of business involves complex logistics, as it contracts a small flotilla of boats to go from platform to platform to shore and back out.

Chevron, and its CIO Louie Ehrlich, saw a chance to wring more efficiency out of better "marine logistics" to direct those operations.

The boats, which Chevron rents from private operators, already had GPS tracking capability. Chevron used that location information, tied it into analytics software, created a control room with visualizations of that data on big screens, and put a group of people in the room with the information and the authority to make decisions about how to best direct those boats.

The expected impact: "tens of millions” of dollars saved, says Ehrlich, and perhaps much more.

Here's the kicker. I asked Ehrlich if Chevron had to bring in new analytics software and skills, whether this was a leap ahead in its sophistication. Here's his answer:

"We mostly had it," Ehrlich says. "It's not always about bringing in the latest whiz bang technology. The trick is pairing the opportunity with the capability."

CIOs need a strategy to actively hunt down and execute on these opportunities. And they need to systematically push these opportunities in front of business unit leaders: We have this data, we could present it in this way, what else do you need from us to make it more valuable?

Here's another example under the leadership of Royal Caribbean CIO Bill Martin, which I wrote about in a recent cover story:

To look for data-driven revenue opportunities more actively, Martin created what he calls a "business information group" of half a dozen people. Rather than implement IT projects or support IT operations, group members look at the data various operating units generate and help them figure out what else those units need to make better decisions. "We've had the tools. We've never leveraged them as well as we do with this," says Martin, whose team makes use of Oracle's OBIEE analytics and dashboard software.

This isn't about the old "more with less" mantra. In fact, IT budgets are rising this year, and companies are more willing to invest in projects that will drive growth. But the projects many IT teams are finding drive value often aren't about a lot of new technology. Instead, it's about finding the hidden gems--the opportunities that come from combining data in new ways, putting the right information in front of people who have the power to make money with it.

Today's To-Do List: Reshape Role Of CIO

Ehrlich says the recession had two profound effects on IT, and its perception within companies. One, it drove a major push within IT to cut its own operating costs. Two, it increased the demand for IT. As business units felt that pressure to cut costs, it often meant more IT to automate processes and cut staff. "In hindsight, it really helped move the needle for some business leaders on the value of business technology," Ehrlich says.

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Ehrlich wants CIOs to keep that momentum going, by asking fundamental questions about the future of the CIO role. He's doing that with a group of his peers. And he's also doing it inside his company. Ehrlich thinks CIOs need a deliberate plan to push the role of CIO in new directions.

"It's something you have to put on your to-do list, everyday, as you get out of bed," Ehrlich says.

Ehrlich knows you're busy--too busy. Which is why he knows that if you don't make a deliberate plan to drive the CIO role in the direction you think it should go, it won't happen. Or rather, the role of the CIO, and the role of IT at your company, will be shaped by someone other than you.

That's a risk to you, professionally.

It's a risk to the profession.

And it's a risk to your company.

"The risk is that you leave opportunities on the table," Ehrlich says.

Global CIO small globe Chris Murphy is editor of InformationWeek.

To find out more about Chris Murphy, please visit his page.

For more Global CIO perspectives, check out Global CIO.

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