Risk Vs Bon Appetit

Is the buoyancy around 2010 translating on IT areas as well?

Well, for us it’s a little different. In 2010, we have a mandate to reduce costs. There could be a little dichotomy as other industries are looking up and we are working the other way round.

Do you have any targets on curtailing costs? What areas?

We are targeting a reduction in cost of about 12 and a half per cent. We have been asked to cut on new applications, new changes in applications if any, as well as a shrink-down on the ERP landscape.

Would this squeeze come from IT plumbing areas or from fresh growth areas? For how long?

As to the day to day operations, the maintenance costs used to be high. If the industry standards are 40 to 45 per cent, ours is around 55 per cent. To cut 12 and a half per cent, I can’t cut on growth. The only way to reduce then is on maintenance areas. So we intend to cut on storage, consolidating our data centers, as well as money channeled to various consultants. We also have no plans to indulge with new vendors at the moment. In a cash-strapped scenario, IT appetite is bound to shrink. I guess this approach would go till December 2010.

And tightened purse strings affect risk appetite with new stuff?

There has to be a real need of something, be it cloud computing, Green IT, whatever. First of all, I don’t know how much cost promising technologies like those around clouds, reduce actually. Does it really drive my company? May be. May be not. I would use it only if does, and then my risk appetite would be not so low. Everything depends on the horizon value.

So are you comfortable with cloud stuff yet?

It has to essentially have a good trial for me. Our mails for example are entirely on cloud. But we are not still ready for it when we think of moving SAP elements, for instance. Is it secure enough for me to move to a cloud platform? That’s an obvious but important question. I have to be sure of the 12 and half per cent return value with it if I decide to move resources on to clouds. It’s a good technology. May be very easy to talk about and sell out to management but at the end of the day, management understands money, which is why my approach would be more cautious.

From service layer technologies, IP based packet technologies to various cutting-edge access technologies, Ericsson has been on high-octave engine when it comes to advanced research and demonstrating workable models. Do you consume or take note of all the research action as a CIO?

When it comes to in-house research of any kind, I won’t jump overboard with any new work. I am not one of those guys who try out new stuff because my mandate is around the thousands of apps and people working on them. I have to keep IT running. To be honest, it’s a difficult question to answer. This company is full of geeks. So, yes, they for sure don’t want anyone to come and tell them what’s new and what’s old. I think what users really care for is the ‘useful’ factor. If it’s useful to them, it’s on. Else not.

So what’s your formula?

Testing something new is not a CIO’s work. Why should I test something jazzy and tell the world it works. I am not running a research engine. My actual job is to extend a good functionality to business. I have to manage day-to-day IT operations. Candidly speaking, I want a tried and tested technology. I want business to tell me what they need. At the end of the day you have to apply a tool in context to a business. Since we are a technology company, it becomes easier.

Ericsson is also a strong advocate and promoter of open standards, open systems etc. What is your line of thought here?

Yes, it’s a large player. My view point comes from some questions. They can’t be really open. Open genre of products or companies has to be managed beyond a time frame and scale. It’s good to embrace it if it makes sense, but just not for the sake of it.

That means there is no real pro- or anti-open source league, when it comes to customers?

No. Whosoever says that, it’s not right. It’s only vendors who have created that divide.

Any implications coming to your role, with the acquisition of Nortel’s CDMA arm, and LTE wireless assets?

These companies come with their own tools and products. A little bit of mid-night oil burn is obvious with any acquisition. Integration work is huge but that’s a part of life. This only means more products, more users and more customers. Of course, more people too. Redesign of some strategy pieces, taking care of WAN and international connectivity needs, location projects, office connectivity are some areas that would need work after an alliance.