CXO Innovation

How to keep the Lights on while we Innovate

How to keep the Lights on while we Innovate

In my previous blog (Who should lead a Digital Transformation?) I described why I decided to play a role in the Digital Transformation as CIO and CDO. In this position I can manage the resources that can enable a true transformation.

As CIO, we need to manage day-to-day transactions in a competitive scenario where efficiency is a must and we are measured by incidents and internal customer satisfaction. At the same time, we are surrounded by legacies and aging infrastructure that needs investments to keep it running and prevent cyberattacks. How do we make these worlds meet? How can we invest and accept mistakes while we keep a lean bottom line? There is no clear and straight answer.

First, you need to be open and clear to your CEO on this reality. The CEO must understand that you need to keep on investing in your overall infrastructure. For the ones that are not familiar with the IT world, it is difficult to confront the fact that 80 percent of what you invest (according to Gartner) is in maintaining and updating what you have.

Second, you need to take actions. You need to see where you are heading. You need to design a strategic plan that shows how the new infrastructure, based on cloud solutions, edge technologies, and micro services, will end up being more efficient than your old on-premise solutions that are already depreciated. We found that operative costs in the cloud have a huge variation according to the components that you use in a particular platform when you work in PAAS (platform as a service). If you move to IAAS (infrastructure as a service) you probably need to spend more compared to your on-premise setup, if you manage a longer life cycle in your equipment.

There is no easy and straight road. Consultants will push you to innovate and show the beauty of the new solutions. If you are not careful in managing costs while you grow, you will find yourself with an exponential growth in operative expenses that you cannot control. At the same time, if you don’t define your target architecture, you will maintain the old infrastructure too long, doubling costs and headcount.

I have a particular challenge in understanding the direct relationship between Applications, Databases and Servers. What drives the costs? Which are the applications that consume more resources and are less critical? How do we develop more performing solutions in the cloud environment? How do we construct new ecosystems? New apps, agility, time to market, and data availability are what our customers want to see and value. The rest, nobody wants to know.

Last but not least, once you have your strategy in place, you need to communicate and move the entire organization in this direction. This is very important for our people who will need to transition, understanding that we must control costs on one side while we grow on the other one, reshaping skills while keeping knowledge on legacies and processes. I am very proud and acknowledge the effort of our IT team in leading this change. I am sure that in your organizations you are having a  similar experience.

Challenging and exciting times. In my next blog I will explore how Digital Transformation is impacting the oil and gas industry.

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Contributors

Alejandro Lammertyn

Alejandro Lammertyn, Chief Digital & Information Officer, Tenaris

Alejandro Lammertyn is Tenaris Chief Digital & Information Officer.He began his career in Tenaris in 1990 as a Young Professional. He has held several positions within the company: Economic and Financial Planning, Industrial Engineering... More   View all posts

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Alejandro Lammertyn

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