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From co-CIO to CIO

From co-CIO to CIO

Microsoft CIO Stuart Scott on his revolutionary role and being his company's best customer.

Why would a successful CIO leave one company to become co-CIO of another with only one-third the revenue and employees? Answer: The new company is Microsoft. Stuart Scott moved there in mid-2005 from General Electric, the US$160 billion, 319,000-employee behemoth where he had worked for 17 years, most recently as CIO of GE Industrial Systems. Then, about a year ago, co-CIO Ron Markezich was tapped to run Microsoft's budding managed services business. Scott has been Microsoft's sole CIO since then. How is managing IT at Microsoft similar to or different from managing IT at GE? GE grew a lot through acquiring and integrating different businesses. IT had to be at the forefront of that, to be able to connect people and to make the combinations of businesses be successful by enabling people to work together and leverage the talent that crossed from the acquired company to the host company. That's very similar to what we're doing at Microsoft.

As an example, how are you integrating the recently acquired advertising firm aQuantive? Does the company use a lot of Adobe or open-source technology? Will that be dumped in favor of Microsoft technology? We're going to look at what they have and continue to leverage the technology that's in place. But yeah, we're certainly going to move them to Microsoft technology. We run our entire business today on Microsoft technology on the infrastructure side, and we're going to continue to do that.

Is there an actual prohibition on non-Microsoft technology, or do you allow exceptions at the departmental level or for esoteric back-end applications? If we have a problem that we need to get technology for, we look at the marketplace. If Microsoft has the best technology, then we certainly choose it. And if they don't, then we take that information back to our product group and we work with them to identify our needs as a customer. In some cases, we decide it's just not a large enough market for Microsoft, so I'll go out and buy third-party products.

Is there any third-party software that I would be shocked to find is widely used at Microsoft?

Nothing's really surprising. We use SAP for our ERP, and that's been in place for a long time. We're actually moving some of that functionality into our [Dynamics] product. We have a large installed base of Siebel CRM that we're rapidly replacing with our own Dynamics CRM products.

Is dealing with employees who think they know better than the IT department a challenge at Microsoft? Microsoft is a challenging culture. Everyone seems to have input into everyone else's job. It keeps you sharp. Certainly, there are people at Microsoft that think they can do my job, but they really don't want to do my job. I think that just goes with the territory of any CIO.

What do you consider your main accomplishments in the two years you've been on the job? We continue to up our game in terms of being Microsoft's first and best customer. We're doing more work with the product groups, to continue to bring an enterprise customer perspective. That's a fun part of the job. I spend about a third of my time with product groups, a third with customers and a third actually running the IT organization. We have dramatically improved our execution, in terms of program delivery and financial accountability. Our spending has remained flat [while] we've more than doubled the benefits in terms of revenue and growth, as well as contributions to margin and cost-effectiveness.

You've said that you think IT should serve as a value-added partner for business. That's the approach I've always tried to take. So when I came in, we shifted 30 percent of our investment to higher-growth, more-strategic business areas.

Still, despite your philosophy of partnering rather than dictating, it seems like your role as CIO is more consolidated, and hence more powerful, than that of prior CIOs at Microsoft. Prior CIOs have always run the corporate systems and infrastructure for the employees. What we've added is the direct line-of-business systems. It's all part of Microsoft learning how to be a big company but still remain innovative and agile. So we have brought together the IT organizations from around the company into a more traditional enterprise structure, but I've organized it so that we stay very close to the businesses.

You hosted a summit for about 300 CIOs several months ago. What did you hear from them? That more and more, CIOs are strategic partners with their CEOs. The majority of the discussion was not about technology or the latest version of a product; it was about how you could make technology drive growth in your company, how to connect customers and salespeople together, how to speed a product to market faster than your competitor.

I believe the CIO role is going through a dramatic revolution. It is no longer about putting in monolithic ERP systems; it's about connecting people. When I look at the programs where we're getting the highest payback and benefits, it is when we bring in collaboration tools like presence awareness or unified communications or wikis and blogs, and blend them in seamlessly with the business environment.

Enabling people still means making sure that their equipment works well and is economical. It's not about command and control anymore. At the same time, you don't let go completely. Because if email is not up 24x7, then I don't get invited to the product strategy meetings.

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