Moving the IT Conversation from Cost to Value

The first article I ever wrote for CIO magazine, way back in 1999, was about “demonstrating IT value.”  How, I asked our readership, can CIOs change the conversation about IT from one of cost to one of value?

While CIOs have come a long way in providing value to their companies, the “cost to value” conversational shift is still a goal for many CIOs.

Gerri Martin-Flickinger, CIO of Adobe, has worked hard to change the conversation about IT in her company. To her, the first order of business was to educate her business peers on the different roles that IT plays. “My business leaders don’t spend a lot of time thinking about IT legacy debt,” Martin-Flickinger says. “So, I work very hard to separate for them what is legacy and what is strategic. To me, that is what a good CIO does.”

A few years ago, Martin-Flickinger had a revelation: “We were using all of these complex financial models to report on how we were spending our IT dollars,” she says. “But the model was too complicated to tell the right story.” In particular, Martin-Flickinger was finding that her executive peers glossed over the role that depreciation plays in the IT budget.

“I had to get my business partners to realize that the projects we do today have a large capitalized component that will show up as operations expenses for the next five years,” she says. “Those costs can stack up like stair steps: a little money this year, and a little money next year.  If you don’t keep an eye on depreciation, it can over take the rest of your OPEX budget very rapidly.”

Martin-Flickinger realized that, as with so many things in IT, simplest was best.  While she continued to use complex financial models to determine IT spend, she changed the presentation of those numbers to something very simple.  “I started using a pie chart that had only three sections: operations, new delivery, and depreciation.”  The dashboard was concise and clearly illustrated the impact that IT had on the business.   “This made a major difference with my CEO,”  say Martin-Flickinger.

Once she started putting the pie chart on every dashboard and report she gave to the executive committee, Martin-Flickinger noticed a change.  “Every time I went in to talk to the executives, I brought that pie chart with me.  I found that the dialogue changed to focus on the three parts of the budget.”

Thanks to the pie chart, Adobe’s executive team now understands the costs of IT, the value of IT, and the role that depreciation plays.  “The pie chart solution sounds so simple,” says Martin-Flickinger. “But for me, it was the secret sauce in focusing our executives on how we are spending our IT budget.”

Convergence is Key

Educating the executive committee on the budgetary difference between operational and strategic investments is one way to shift the dialogue to value; getting IT out of the back-office is another.

A few years ago, Martin-Flickinger and her team moved Adobe’s back office functions to a services oriented architecture. “We run 15 different approval systems which created a lot of complexity for our employees,” she says. “We wanted to present a unified experience for our employees whether they were working on travel and expense, recruiting, or purchasing approvals.”

So, Martin-Flickinger and her team built an SOA model that provides a buffer between employees and a large number of back-office and SaaS solutions.  The simple user interface is delivered across platforms, so employees can do a range of approvals from their mobile devices in one interface with a simple click.  Taking this approach has allowed the IT department to evolve their back-office systems and move more to SaaS offerings, while not disrupting their user community.  “Employees love the interface for its ease of use,” says Martin-Flickinger.  “IT loves it because it gives them increased architectural freedom.” 

Having built a single successful SOA-based solution coupled to Adobe’s back office functions, Martin-Flickinger and her team realized that they could do more.  They could build a services layer that could be used right inside the Adobe product.

“Traditionally, our product engineers have been responsible for any functionality that goes into the product,” Martin-Flickinger says. “But today, Adobe’s IT organization is providing a services gateway that handles all e-commerce transactions across Adobe Creative Cloud products and services.”

When customers enter Adobe’s Creative Cloud, everything they see on their screen was developed by the Adobe product engineering team. But when they get to the point where they enter their credit card information to buy the product, it looks from a user experience perspective that the e-commerce functionality is embedded right in the product. “But it’s not,” says Martin-Flickinger. “It’s actually being delivered by a web service that’s run by IT.  We put IT offered services right into the product.”

With IT providing this functionality to the Adobe product, product engineers have time to focus on customer-facing features. “It’s a win-win-win,” says Martin-Flickinger.   “IT engineers are providing functionality that helps product engineers deliver products to market faster, which makes our customers happy.”

Adobe’s business operations team is delighted as well, because all of the core systems are also consolidated; there are no shadow systems. “This kind of work shifts the mindset among our executives about the value of IT,” says Martin-Flickinger.

Some advice

Take your time:  According to Martin-Flickinger, you have to deliver before you ask permission to play at the bigger table.  “Do not rush into these innovative initiatives,” she cautions. “You have to make that back-office sing before you move closer to the product.”

Send in a mole: “Find one really smart engineering type in your IT organization and put them on a skunk works project with one engineer,” Martin-Flickinger advises. “You need to identify an IT person who looks and smells like a product engineer; it needs to be someone the engineering people like.”  If you do this right, says Martin-Flickinger, that person will become your ambassador.  “That way, when someone in engineering says, ‘what do you think of involving IT in this?’ the engineering team will be supportive.”

Whether you use a simple solution like the pie chart or something much more complex like embedding SOA in your product, your work in focusing on the strategic role of IT will pay off. “I just came out of a meeting where we talked about the implication of usage-based billing for our products,” says Martin-Flickinger. “That’s the kind of conversation I want IT to be involved in.”

About Gerri Martin-Flickinger and Adobe

As senior vice president and chief information officer, Gerri Martin-Flickinger oversees Adobe’s global Information Technology team, providing strategic direction and management for the company’s IT infrastructure worldwide, including its hosted services. In partnership with the business, Martin-Flickinger also has responsibility for developing innovative enterprise solutions built with Adobe products and technologies that solve business issues and reduce IT costs.

Martin-Flickinger has more than 20 years of experience leading large-scale global IT organizations for companies experiencing explosive growth through acquisition, global expansion and/or implementing new business models. Her expertise includes leading organizations through transformational change, connecting IT to the needs of the business and aligning IT costs.

Before joining Adobe, Martin-Flickinger was CIO of VeriSign, where she oversaw corporate information technology services for the company’s 60 offices worldwide. Prior to VeriSign, she served as CIO for Network Associates, Inc. and McAfee Associates, Inc. Before joining McAfee, Martin-Flickinger held several senior systems roles at Chevron Corporation, including serving as process consultant to Chevron’s executive staff.

Martin-Flickinger holds a bachelor’s degree in computer science from Washington State University.

Adobe is the global leader in digital marketing and digital media solutions. Our tools and services allow our customers to create groundbreaking digital content, deploy it across media and devices, measure and optimize it over time, and achieve greater business success. We help our customers make, manage, measure, and monetize their content across every channel and screen.