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2016 MIT Sloan CIO Symposium: The digital CIO has arrived

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CIO Minute: Cost transparency opens door to business value

In a previous CIO Minute, David Neitz, CIO at CDM Smith Inc., a Boston engineering and construction firm, talked about how improving IT and business alignment is not simply a matter of asking for more money. Before petitioning the business for more funds, Neitz advised CIOs to take a hard look at their IT portfolios, weeding out the dead weight and bolstering the IT investments that deliver the most business value.

Here, he follows up on that approach by describing how cost transparency is critical to the process of smart IT portfolio management.

Could you give an example of a technology that you've either killed or replaced from your portfolio?

David Neitz: We had this one system that was actually a voice recognition system for automated dialing. At the time when it was created, it was really a clever idea. It was before we had Siri and other capabilities on your phone. So, if someone was driving, hands-free, they could say, call, whatever, and it would recognize the voice and it would do the dialing. [It] was a safety thing for us -- a very important thing.

Well, we all know that technologies change, but we had some people [who] were just very comfortable with using that technology, and it was costing us data center space, people to run it and support it, but there were only 10 people using it. We call up the 10 people and say, 'What do you think? Here's an alternative.' There were a couple of resistors, and we said, 'OK, if there's a strong enough business need, it's going to cost $250,000, unless you and I go to your president. If they are supportive, we'll have that charge go to you so that you can do the styling and pay $250,000.' It changed their mind pretty quickly. They said, 'Wow. Well, maybe I really don't need it. When I thought it was free, I was OK.'

Whenever you don't have that cost transparency, it becomes this perception of, 'Well, we've already paid for it, so, therefore, it's free.' Well, nothing in this world is ever free. It's something; it's costing you something -- data center space, power, people's time and attention. Even though you think, 'Oh, it's only a small amount,' well, you add up enough small amounts and it makes a big difference.

We actually celebrated those ideas. We put out a contest to say, 'Who can come up with the biggest idea of what we can stop doing?' And we celebrated those wins. So, $10,000 here, $20,000, $120,000 ... you get enough of those added up, you free up some serious dollars that you can really redirect to something that adds value -- which is what we should be doing.

Let us know what you think of the story; email Nicole Laskowski, senior news writer, or find her on Twitter @TT_Nicole.

SearchCIO's CIO Minute is a video dispatch providing CIOs and IT executives with tips and trends from leading technology experts. Check out another CIO Minute with David Neitz on the three types of innovation he practices.

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Conference Coverage

2016 MIT Sloan CIO Symposium: The digital CIO has arrived

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What is an example of an underused application you were able to get rid of by using cost transparency?
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