7 November 2008

Tony Scott, Microsoft chief information officer, says smart IT decisions can help a business cut costs and get through the economic crisis in one piece.

Given the current economic climate consumers and companies alike can be forgiven for being that extra bit thrifty. And yet, it is also important to maintain business momentum. Microsoft chief information officer Tony Scott believes that innovative technology can improve efficiency, reduce costs, and improve business ability to respond to changing business conditions.

OnWindows spoke to Scott to find out more.

We are clearly in uncertain economic times. What do CIOs say to you about this?
Most fall into two camps – their glass is half full or half empty. There are those CIOs who are kind of fearful. But the more exciting conversations are with those CIOs and business owners who say, now is the time for us to figure out what it means. The companies that emerge at the end of an economic downturn are those that made great decisions. In good times it can be difficult to get somebody to focus on some of the opportunities that we have. Now, it’s a much easier conversation. Taking money invested in operations and putting into new capabilities. CIOs and companies are using this as a time to make dramatic and focused changes in their businesses. Some of the best innovations came out of critical thinking during an economic downturn. So for us to be leaders and point the way is really important.

How can technology help businesses weather current conditions?
It falls in the area of responsiveness and the ability to adapt to business change. For instance, I think we could make IT more dynamic with virtualisation technology. In our own space, we’ve gone from eight per cent to 25 per cent in terms of virtualisation in our data centres in just a year. Next year, we plan to achieve 50 per cent virtualisation. It has been great for us in terms of agility and flexibility that we have. So far the savings top US$10 million. And today it takes only four people to manage the group’s 3,500 servers.

Some of the best innovations came out of critical thinking during an economic downturn. So for us to be leaders and point the way is really important

Tony Scott, Microsoft chief information officer What else can a company do?
Take the collaboration space. It’s all about making business decisions faster and more efficiently. In this economic climate in particular, folks are going to be asked to cut travel budgets using collaborative technologies to enable faster decision making – not waiting for people to go somewhere on a plane.

Here at Microsoft, we’ve deployed unified communications technology that uses software to bring voice, e-mail, instant messaging, and video conferencing together. That allows companies to replace traditional phone and voice mail systems with integrated corporate messaging, calendaring, and directories. Unified messaging is saving us US$5 million each year through reduced hardware and maintenance costs. Combining phone and e-mail communications also increases productivity and decreases the administrative workload for our IT professionals.

Today’s communication systems also mean that face-to-face meetings can sometimes be replaced with virtual meetings. Sure, getting together with peers and partners is important, and always will be. But sometimes it’s prudent to ask if boarding a jetliner for a half-day meeting is really the best use of a company’s resources. Microsoft Australia, for instance, uses Microsoft Office Live Meeting and Microsoft RoundTable (a collaboration and conferencing device) to conduct a virtual regional meeting. That’s saved the group 160 hours in travel time, and reduced travel expenses by $18,000 AUD.

Can these technologies do more than just save money?
Without a doubt. Technology helps companies spend more time on their businesses and less on managing basic infrastructure. A good example of how poor IT design can cost money was our own Microsoft Human Resources Web. We had more than 20 highly customised sites and applications. That created extra work managing and understanding the site. We move that content to SharePoint Server 2007, which helped us consolidate all those different sites in a single location that has a common interface. We anticipate a return on investment of more than US$10 million over three years. But perhaps more importantly, it’s also easier to train people to use the new system, and they’re more productive more quickly.

What’s happening on the business intelligence front?
There are some really exciting things going on there. Software innovations are providing new ways to track and analyse the key variables in a complex business environment – people, material, and data – and discover hidden relationships, explore new opportunities, and uncover potential problems before they become significant issues.

For example, new analytical technologies make it possible to mine audio and video streams for relevant data that can be used to extend the power of traditional business intelligence tools. Today visualisation applications can help users see patterns in complicated environments at a glance. And as computers continue to become more powerful and software more sophisticated, we’re seeing the emergence of affordable simulation solutions that can mimic complex systems – both natural and manmade – enabling companies to test theories and more accurately assess risks and opportunities without committing significant capital and employee resources.

But isn’t this a time to focus on saving cash rather than making new investments?
Clearly, the current economic climate demands that businesses become more frugal. But there’s a danger in slashing too much from budgets. Technology isn’t only an expense – it also fosters innovation and sharpens competitiveness. Companies that continue to pursue innovation position themselves to survive difficult economic times and really thrive when the business climate improves. What I believe is this: companies should work to save money, but not at the expense of the future.

It’s easy to think of a slowing economy as uniformly bad. Is that really the case?
Absolutely not. In any business cycle, up or down, not every business gains or losses ground in the same way. So many businesses will still be moving forward and making good profits.

Also, keep in mind that when times get a little tougher, that’s really an opportunity for business executives to demonstrate true leadership when it comes to improving business processes. So right now is a time when company CIOs can really show the value of technology. They can find quick wins, such as working with business units to standardise they way the execute specific tasks, such as recording sales. They can focus on new technology that delivers real cost savings and improves metrics such as customer satisfaction. And they can use this time to think strategically about the business, so when the economic climate improves their company is ready to leave competitors behind.

A year ago businesses were all talking about going green. Now they’re more worried about survival. Is the green business movement dead, at least for now?
No – not at all. In fact, this is a time when businesses should accelerate any green push the have underway. It’s about being responsible from a sustainable IT perspective. Just from an architectural perspective, how we build applications is one of our big challenges going forward. As an example, we work hard to understand the total cost of applications in an organisation – the cost of new development, maintenance, operations, things like that. But if you get asked what the carbon footprint for that application is, few of us can accurately answer. I think we will be asked that going forward, and we will be looking for answers.

Any final thoughts?
Just this: we’re feeling many of the same pressures as our customers. We know what they’re going through, and believe we can offer some relief to cost pressures while still keeping them sharp competitively. We’ve all seen downturns, and all know they don’t last forever. What’s important is to be in the right position when the upturn comes, as it certainly will.

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