3 Secrets That Oil Companies Use To Run A Great IT Department

by drjim on January 15, 2009

Peter Whatnell, CIO of Sunoco, Has Some Interesting Thoughts On How To Run A Successful IT Department

Peter Whatnell, CIO of Sunoco, Has Some Interesting Thoughts On How To Run A Successful IT Department

If you had to guess as to what the secret of running a great IT department is, what would you say? Peter Whatnell over at Sunoco has some thoughts on this subject. Peter breaks it down to three key items: knowing how your company makes money, choosing to not run against the company’s culture, and remembering to never fall in love with technology. How hard can that be?

Whatnell is a bright guy: he’ s been in charge of Sunoco’s IT operations since 2001 (remember the dot.com crash?) and he is now the president of the Society for Information Management. Ben Worthen over at the Wall Street Journal recently had a chance to sit down with Peter and have a chat about the role that an IT department plays in a company’s success.

Whatnell pointed out that the arrival of a global recession has caused all IT departments to take any plans that they had created prior to the end of August and basically throw them away. The big hit is going to be especially felt in new projects.

The difference between current events and the dot.com crash that happened back in 2001 is that that crash really only impacted the IT community. This time around, it’s really a global meltdown and it’s impacting the whole business.

IT is facing a significant challenge in that there is now a lot of easy-to-use IT technology that is available to consumers. Examples include the iPhone (of course!) and free on-line email accounts with virtually unlimited storage. What this means is that corporate users are now expecting to see similar products available to them while they are at work.

IT departments have some valid security and support issues for not diving headlong into offering such services internally. However, they do need to seriously consider how to offer their customers such services.

Whatnell stresses that we need to make sure that we don’t “…waste a good crisis.” What he means by this is that 2009 is going to be tough and it’s going to force every IT department to investigate nontraditional ways of delivering IT services.

Whatnell is somewhat famous for saying that he’d consider moving to a cheaper alternative, such as Google’s email system, if he could get 90% of the functionality for 10% of the cost. One of the reasons that he’s taken this stance is because he realizes that most users only scratch the surface of the functionality of the applications that they have available to them. Give the power users access to the fancy, expensive version of the apps and give everyone else the basic version.

Whatnell has some very specific thoughts when it comes to evaluating potential IT projects. He says that he evaluates projects based on what they do to support the company’s strategy, what the business case is, and finally, what the business risk is.

He points out that the more change that an IT project would cause to how business is conducted, the bigger the risk is. This does not mean that you don’t do the IT project, but that you need to be very careful and make sure that you give your full attention to all of the change management activities that would be required.

What do you think about what Peter has to say? Do you think that his view from inside an oil company is relevant to the rest of the IT industry? Which of his suggestions do you think is the most important? Leave me a comment and let me know what you are thinking.

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{ 10 comments… read them below or add one }

Eric Brown January 15, 2009 at 12:17 pm

Great article!

The mantra in IT (and any other part of an organization) is ‘do more with less’ and Peter’s thoughts will allow him to do just that.

I’ve been reading a lot about this topic and looking at organizations who’ve made the choice to move ‘into the cloud’ for some of their systems (email, etc). I think there are definitely some positives to looking at offloading some systems but there are a lot of security issues to overcome for most systems.

I’d be interested in hearing how others are approaching the subject.

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Dr. Jim Anderson January 16, 2009 at 10:06 am

Eric: Thanks for the complement! I agree that everyone seems to be getting interested in offloading non-mission critical applications; however, only a few have been willing to “dip their toes in the water” so far.

In my world, what I am starting to see is reorganizations start to take place in IT departments / companies. All of those activities that COULD be offloaded are starting to be grouped together. The new organization is often called something like the “services organization”. I’m guessing that when the security issues are resolved, these organizations / positions will go away and the apps will be offloaded.

Have you seen any of this occurring?

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Eric Brown January 16, 2009 at 5:39 pm

I am starting to see some movement to the services organization and many are looking at the cloud to offload some apps. Bechtel is a good example of a large organization who have already moved into the cloud for some of their apps…it will be interesting to see how their new platforms operate.

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Jason Plant January 16, 2009 at 7:58 pm

“Give the power users access to the fancy, expensive version of the apps and give everyone else the basic version.”

Absolutely!

Please, please, please Microsoft layer the next version of office so for the basic user we can roll out a super fast, basic, efficient version of Word and just give the full fat version to our power users!

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Stephen Ashley January 18, 2009 at 6:28 am

Jim

Peter’s views are absolutely equally valid outside of the Oil Industry has he didn’t really talk about any specifics to that industry. I would also agree that the approach is right, that the number one job for IT is to support the key business processes of a company. Peter’s statement on google is interesting of course, but I am not sure it would pass his own project assessment criteria on either part of business strategy or risk!

The main business processes of an Oil company are complex and driven by a huge amount of technical data. See my recent blog post on an oil company information challenges (based on Chevron). Although everyone uses email and desktop applications the technical workflows are the processes I would hope Peter is focused on.

Gmail and online business office applications are I think a very real opportunity for startups and small business and thats where I would see momentum building from.

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Dr. Jim Anderson January 18, 2009 at 4:04 pm

Stephen: you bring up a couple of good points. One thing that Peter didn’t bring up was document sharing. We all seem to (mis-) use email to push documents around among team members. I’ve been seeing a lot of web-based services spring up (Dropbox is the one that I’ve been using) that offer to help make this task easier to do.

I’m sure that there are security issues, etc. associated with all of this, but do you think that after email and Office-like applications this could be the next part of IT to get outsourced…?

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Stephen Ashley January 20, 2009 at 1:18 am

Jim

I think it is an interesting idea. For a large company this would always be seen as a risk. Web services such as Dropbox are useful to individuals but you can see how they could be attractive to a business, essentially you have a central solution that provides potential benefits in optimising storage (Backup, tiered storage, duplication). To outsource this to the cloud will require a focus not only on security, but also on overcoming a company’s reluctance to let go of its data.

Within a large organisation the approach will probably be to start by creating internal cloud services. Once the impact and benefits are well understand you may well have a number of candidates to move out.

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Dr. Jim Anderson January 20, 2009 at 3:18 pm

Stephen: I think that you are right on the mark. I can’t tell you how many large companies I’ve worked for that one division could not access the network that was being used by another division. Using a Cloud might be a great way to make information available throughout a corporation…

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Dean July 30, 2013 at 11:52 am

Hi Dr. Jim,

I came across your Blog through a Google search. If this comment still reaches your current email address (i notice that the last activity was in 2009), i’d love to hear your thoughts about about what makes a good/great IT department 4 years on from when you first posted this Blog. Would also like to hear how your opinion has/has not changed aout Cloud services.

Regards,

Dean Holden

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Dr. Jim Anderson August 1, 2013 at 9:35 am

Dean: Now, now — The Accidental Successful CIO has been updated every week since 2009! What makes a good/great IT department has not changed in the past 4 years: a CIO who has a clear vision, a good working relationship with the CEO and CFO, and a way to motivate everyone in the IT department. How hard could all of that be to do?

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