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What happens to your IT team after you’ve moved to the cloud? A semiconductor company CIO argues that the function becomes more strategic function than ever before.
By Olli Hyyppä, Senior Vice President and Chief Information Officer, NXP Semiconductors
At NXP, we are probably ahead of the curve of most IT departments because we’re a semiconductor company; there is not much that goes on outside of the cafeteria that’s not inherently digital.
So, being “born digital,” we were able to start migrating non-core processes to the cloud quite early, about five years ago. We chose to begin with the services that had no particular impact on the business Whether we were running Microsoft Office or if Microsoft was running it off the cloud doesn’t make any difference to our internal customers, external customers, and partners, so why not outsource the process? Today, we are probably using 30 to 40 different cloud services—Office, Salesforce, and more—almost all the software tools we use every day.
Besides holding down our fixed IT costs, being on the cloud has another advantage that I hadn’t really anticipated: it has sped up our ability to integrate acquisitions. For example, when we merged with Freescale Semiconductors last year, we realized we were both running our email from Microsoft clouds. To consolidate them, we simply hired another cloud-based service and an email migration that might have taken six months to complete a few years ago took only 30 days!
Focusing on strategic issues
Thanks to the cloud, during the merger we have been able to focus at the business process level from the very beginning without getting caught up in technical details. Having a dedicated group of people working on the project also helped. Instead of a technical team, the transition was handled by a group of skilled program managers who focused on making sure the users understood and were prepared for the change. This combination of streamlined technology and a strategically focused team of skilled communicators made the email consolidation much easier than it had ever been before.
It seems to me that, little by little, the cloud is elevating a lot of IT jobs in the same way. And it’s accelerating the evolution of the CIO’s role. These days, to be a good CIO, you not only need to be able to manage the technology, you also need to be able to have a business-level conversation – and do it without resorting to too many three- or four-letter acronyms.
The cloud is also beginning to yield some interesting new opportunities in our core business. We have 10,000 design engineers working on new chips, and they are always hungry for new technology that will let them design better chips and better solutions for our customers. From the IT perspective, their demands can be pretty tough to meet: faster processing, more capacity, and a more secure development environment. One way we are able to help them now is by using clouds to create flexible capacity for our chip simulations. Previously, the lack of variable capacity meant that we had to either over-buy computers or make the engineers wait. As we often have tens or hundreds of products running in parallel, this meant that there were periods when either that capacity went idle or the engineers just had to wait their turn. This was a particular problem when multiple teams wanted to do their final simulations at the same time.
Of course, in some areas, it’s not yet possible. The cloud capacity just isn’t big enough to test massive designs, for instance. Maybe in a few years the servers will be robust enough to run those simulations, but not yet. Then again, in a few years, the designs may be even more massive, so tomorrow’s larger cloud may still not be able to handle those simulations.
At the same time that we’ve made this move to the cloud, we’ve also sent more and more work out to partner companies. Here, the challenge is different. People evolve a lot more slowly than computers, after all, so the task of the manager is still the same as before. Whether their paycheck comes from your company or from their company, to get the best out of them you need to treat them as real partners, as part of your extended team. Of course, in outsourcing, the responsibilities and line of authority need to be clearly defined, but you’ll be able to set them out more easily if you treat your partners in a fair and non-demeaning manner.
There are a couple of practical things we do to encourage this. First, we try to make sure that there are no artificial barriers or artificial walls between the partner team and the NXP IT team. Second, in our offices, our team and the partners’ employees who are working in this building are really mixed. This is true for team events too: IT partner employees working on our premises are automatically invited to employee events.
We also do specific things to make sure everybody gets along. For instance, you need to look at what kind of communication methods you use. A teleconference is not the best way to build trust or feeling. Have a video conference instead, so you can see the body language and what kind of shirt the guy has on today. It creates totally a different feeling. And it prevents team members from focusing on their email rather than your conference call.
In five years’ time, I’m not sure if the chief IT officer will be the chief digital officer or the chief information officer. In any case, I expect there will be a greater and greater understanding about the technology and its limitations and people and their limitations. If you don’t understand both of those very well, your business is going to suffer.
The IT role is becoming less operational and more strategic. IT people spend less time plugging things in and more time redesigning business processes.
The cloud makes acquisition integration 6X faster. Especially when the acquisition uses the same applications, consolidation is so much easier.
External partners handle more of the work now – so it’s important to treat your partners well.