by Abbie Lundberg

Building the Future

Oct 22, 20082 mins

Companies need to plan today to thrive tomorrow

It may seem like hubris for a 110-year-old construction and engineering company to benchmark its IT against the likes of Amazon, Google and YouTube. It might seem excessive to undertake a major IT transformation after having just completed a massive three-year overhaul that itself resulted in 30 percent IT cost savings. But that’s just what Geir Ramleth, CIO at Bechtel and an admitted challenger of the status quo, has done.

As Ramleth looked at the realities of how his company’s operations were changing (more complex, more distributed, engaging more people and organizations with varying relationships with the company), he knew he’d have to take it up a notch. His ambition: to change the way IT serves business on a global basis, offering ten times the capacity at existing costs. That’s right: ten times.

Seem impossible? Well, in his unconventional benchmarking, Ramleth discovered some astounding things. Bechtel was paying at least 50 times what YouTube was paying for networking and 40 times what Amazon was charging for storage. Google systems administrators managed about 200 times the number of servers that Bechtel’s did. And so on. Ramleth believed Bechtel could do a whole lot better. It all boiled down to high-bandwidth networking practices, a standardized server approach, extreme virtualization techniques and a multitenant application support strategy.

Such a radical approach may not be right for you. Or maybe it is. We live in disruptive times. Every CIO should be asking himself or herself: Is this a time for incrementalism in our organization or transformation? And what do I do about that?

For Ramleth, the answer was clear. “I truly believe that we as a company can do business very differently in the future by changing the way we do our IT service offerings,” he says. He convinced Bechtel’s other senior leaders that if they wanted to be around for another 110 years, that’s just what they needed to do.

Ramleth is one of this year’s inductees into the CIO Hall of Fame. See who the other groundbreaker’s are.