CIOs need to be 'business savvy' first and 'technologist' later.

Ajay M Marathe is corporate vice president and president, AMD India. In this
role, Ajay is responsible for corporate IT, India sales, marketing and business

development, as well as providing local leadership and oversight for the India

Engineering Center.






Previously, Marathe held positions as vice president-Business Transformation
Group and vice president of operations-Manufacturing Services Division (MSD) of

the computation products group, where he was responsible for assembly and test

operations at AMD's Penang and Singapore facilities.






Marathe has held several engineering and management positions since joining AMD
in 1984. As manager of MSD engineering, he introduced and implemented total

continuous process improvements and innovations to assembly/test/mark/pack

operations to enhance productivity by 8-10% each year.









In 1999, he was promoted to vice president of MSG logistics and CPG operations.
In this role he successfully led the manufacturing efforts for the AMD Athlon

module and ran the SCI Systems operations, which resulted in the fastest ramp to

one million processor units per quarter in AMD's history.






Marathe holds a bachelor's degree in production engineering from VJTI University
in Bombay, India, and a master's degree in industrial engineering from Texas

Tech University in Lubbock, Texas. He spoke to Iishwar Daas of Dataquest on

emerging technology, RoI and other issues. Experts:






What has been the track record of deploying emerging technology at AMD? What are
the factors that drive the choice of a particular technology before it's taken

in for deployment?





The track record for deploying emerging technology at AMD had been in-consistent
and things had gone wrong in the past when the IT group started with a "cool"

technology and then went around hunting for a problem to solve! This is very

typical of large corporations when IT is not properly integrated into the

business of the corporation.






AMD realized this and about two years ago, we started changing this equation.
First, we renamed the IT group and called it "Business Process Transformation"

Group and the leadership of this group was given to me, my background being

operations management. I have been leading AMD's manufacturing operations for

over 15 years now, in the capacity of corporate vice president. The entire IT

group was re-aligned to the critical business processes that essentially ran the

company -such as "customer facing processes", "hire to retire-HR processes" and

"procure to pay-supply management processes" etc.






Since then, we have carefully defined business problems first and then found the
best technology available to solve these problems and gain measurable

efficiencies and productivity. The method of selecting an appropriate technology

is also clearly defined. It needs to be well supported, globally; it needs to be

scalable and it needs to integrate well.






So how do you do that?



We do not allow "islands" of un-connected technology. With this is mind, we

run all our businesses predominantly on SAP. All other applications which are

process specific, such as MES, engineering data repositories, global inventory

repository etc, are SAP bolt-ons.






One of the emerging technologies that we recently deployed is the SAP CRM. This
was a brand new application where we worked closely with SAP and our deployment

partners, HCL, for successful implementation. Again, the idea is to solve real

problems of the business and ensure integration to the backbone.






Similarly, in infrastructure, we work very closely with Microsoft in deploying
new capabilities such as Instant Messenger, OWA-again to resolve real problems

so payback is fairly quick!






How do you measure the impact of IT? What are the key measurement metrics and
methods for tracking accountability?




Traditional measurements for IT such as "total server uptime", "MTBF for

enterprise servers", "number of calls to the helpdesk/employees" etc are still

very much valid. But, if IT is positioned as the catalyst to drive business

transformation, new measurement metrics-which are more traditional business

metrics, become the yardstick for IT- such as "time required to get all

distribution re-sale data via EDI", "time elapsed after quarter end to close

financial books", "time required to process a purchase requisition" and "days

sales out" etc. While these are traditionally business metrics, IT, as a

business partner, has a huge impact on them and that's how an IT group needs to

measure itself.






As the senior-level manager of technology, what activities occupy most of
your time and what is your advice to other CIOs?




Most of my time is spent in understanding and mapping business

processes-both existing and desired, and overlaying them on top of each other to

identify gaps. Technology selection and defining the TCO comes as a second step.

My advice to the other CIOs: stay completely connected to the business; invest

in the right technology, which is scalable, and understand your TCO equation,

this will allow you to invest in the technology which is protected against

obsolescence-such as the AMD64 technology for both your enterprise server needs

as well as the enterprise desktop and laptop needs.






How are decisions on insourcing vs outsourcing of different technology
activities taken?




Approximately 18 months ago, AMD went through a thorough exercise of

"operational flexibility". This exercise involved mapping of IT functions and

bucketing them into three different buckets: One, those functions which are

highly strategic and governance/policy type functions, clearly were identified

as core-competence of AMD and would un-doubtedly stay within the company. Two,

those which were not AMD's core competence and can be purchased from an expert

company outside. And three, those functions which could go either ways.






I and my staff then went off and created a RFP for the bucket 2 functions and
found the right partner to engage for these functions in a "co-sourcing"

arrangement. This partnership with HCL Technologies has been working well for

past 18 months now and we have managed to optimize our total cost of IT

deployment as a result of this co-sourcing partnership.






Functions that have and will remain in-house include the IT strategy and
architecture; IT governance and Business connectivity and ownership. Rest of the

functions have been passed on to HCL.






In terms of the career of a CIO, what is your observation on the amount of
strategic say, that a CIO has in running the organization? Or is it that the CIO

is relegated to be the operational head of just another management function? In

that case, would IT dovetail into business strategy sufficiently?




I strongly believe that the CIO of the company needs to be "business savvy"

first and a "technologist" later. IT Directors need to be measured in terms of

"how they understand and resolve business problems, so it becomes measurably

easier for the customers to conduct business with the corporation".






In a technology company like AMD, the CIO also has a critical obligation to
demonstrate successfully, the deployment of solutions, the company sells to the

rest of the world-the theory of "wearing our own perfume".