IT Insights From Intel’s CIO

Doug Busch is vice president and chief information officer of Intel Corp. As CIO, he jointly coordinates Intel’s information technology solutions and efforts to be a 100% e-corporation.

Before his appointment as the company’s first CIO, Busch was director of IT. In this position, he was responsible for delivering IT capabilities to Intel’s employees worldwide, including voice and data networks, enterprise applications, engineering and manufacturing operations, and office and e-business solutions. Intel’s IT organization services more than 83,000 individuals in more than 70 countries. Prior to joining Intel, he managed research and development programs at Battelle Memorial Institute. Busch received a bachelor’s degree in mechanical engineering from Ohio State University and is a co-founder of The Information Architects Collaborative.

Q: Tell me about some of the work that is presently underway to make Intel a fully e-corporation.

Intel made a commitment three to four years ago to drive a really aggressive e-business strategy to make our business more efficient and serve customers better. We’re focused on using industry standards like RosettaNet, the vertical consortium that is setting ebusiness transaction standards. There’s a group of really diverse companies in the computer industry [participating in RosettaNet]…that have all agreed on a set of XML- based standards for ebusiness transactions and it has proven to be extremely valuable, so about 85% of our orders are coming in over the Internet today and 35% to 40% of our purchases come in over Internet. We’re also focusing internally on our employee interactions. We view employees as one of three major constituencies along with customers and suppliers. So almost everything an Intel employee does today for their job is done electronically and the only paper form I’ve used in the past two years is filling out [a request for] a sabbatical I took over the summer. We’re also focusing strongly on supply-chain optimization — optimizing the way we plan our factory production operations.

Q: What are some of the factors IT managers should consider when determining when to invest in upgrading PC hardware?

We’ve spent lot of time making sure we’re making optimized decisions [internally]…we look at the internal cost for my IT operations and we look at the business productivity and business capabilities we deliver to customers we serve internally. So in that category [we look at], “What are my support costs?” and “When is it more cost-effective to do an upgrade?” We look at wear-out costs of batteries and laptops and make sure we upgrade before we incur high-service costs. The turnover time on notebooks and laptops is 3 to 3 1/2 years. It’s a little longer for desktops. So the replacement cycle is driven by sustaining costs and security issues — one thing we want to do is make sure we have hardware running the current generation of the operating system to ensure we have strongest security measures available and make sure we have enough performance and strong security tools [without] impacting user productivity. I talked with our CEO yesterday about the services we deliver and his comment was, there are strong security measures we need to take but if he’s not on the fastest laptop available he starts to see some performance impact from the security. For example, we run virus scanning at boot up time and it’s a pretty intense scanning, so the boot up can be long if you don’t have a high-performance machine.

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The other thing we’ve recently done is an in-depth human factors study on productivity. We were in the process of planning our next system upgrade, which will start in 2003, and we did an assessment with our human factors engineering team of the productivity difference between the oldest machines in our environment and the newest machines (hardware and software load in both cases). We did a representative sample of the kind of tasks people do in the office like opening an email attachment or taking a table out and putting it into an Excel spreadsheet and creating a PowerPoint presentation, and what we found for that kind of task behavior was we got a 20% performance improvement when you gave someone the new machines versus the oldest equipment doing those tasks.

Q: What are some of your main project goals for 2003?

I just had a review of my goals for next year this morning with the COO and CFO. We have a number of things we’re focused on; a number of programs we want to deliver like supply line optimization and data quality improvement. We also are going to start a major focus on improving the productivity of teams in the engineering environment. Intel has about 16,000 design engineers, the people who actually design the circuits…and in many cases those engineers work in teams scattered around the world, so a group in India may work with a team in California and Israel. So we’re focused on trying to use information technology to work more effectively and do projects with fewer engineers and over less time and maintain the same high quality levels. The way we’re approaching it is to form a partnership with the product divisions that run those teams and focus on their business processes and how the teams work together and how they do project management and how they make decisions as a group; how they share information and documents and help them redesign their business processes with readily available business information technology solutions. We think there’s an opportunity to streamline business processes and make pretty dramatic improvements.

One of the key things we’re focusing on is a major architectural redesign of our infrastructure — meaning we’re going to look at focusing the investments over the next four years as we replace equipment and make new investments by taking full advantage of parts of systems that get cheaper over the time. So servers are getting cheaper, clients are getting more powerful at the same price, and we want to make sure we’re focusing on taking full advantage of that so we’re redesigning our systems to reduce labor content in our IT operations. By applying more automation system management tools we don’t need as many people to run servers. We’re also focusing on taking advantage of the higher density of new systems so we can reduce investments in data center facilities.

Q: Will your IT department receive a larger budget next year or do you anticipate any cuts?

We’re still working through our budget for next year and it will probably map to what happens with the rest of Intel’s business. I would expect it to be flat or slightly down.

Q: How heavily have you increased network security spending since 9/11?

That’s been a real significant focus area for us. We’ve increased spending to some degree but we’re focusing more in terms of engineering and operations activity. I have a group of engineers that design our network, our data center, data platform, infrastructure and so forth and they balance their efforts on capacity improvement, security, and reliability and operations automation, and they have shifted more of their efforts on security.

Q: How large is your IT department and what skills are you in most need of right now?

My organization is a little over 4,500 people. The skills we need now are the same we’ve needed forever. To some extent, security is a highly in-demand skill, but in general, [we need] solid engineering, application development, customer relationship skills, communications skills. One interesting aspect of my job is running an IT organization of this scale in some sense is like running a standalone business. Some of the same financial processes that a medium sized business would need are what I have, so there’s a broad range of requirements.

Q: Which of your skills has served you best in managing IT?

I think the role I play actually requires the intersection of two major skillsets. One is a solid knowledge of information technology. I have long background in the application development area…the other is large organizational leadership skills — the challenge of setting the right goals for a team of more than 4,000 people scattered around the world and communicating to them and encouraging the right behaviors and helping continually to improve the organization. Running an IT organization like this is the functional discipline.

Q: What advice would you give someone looking to advance their career the same way you have?

Focus on what your customers and employees need and find a common ground.

Q: What keeps you awake at night?

The thing that keeps me awake at night is Intel’s really central role in the computer industry and central role in world’s economy. I have a real clear understanding that we have to keep all those wheels turning smoothly.

Q: What do you do in your spare time?

I have far too many hobbies; I ski, scuba dive, I’m an amateur machinist and woodworker. I have two teenagers and a wife and a dog that are clearly above me in the pecking order. I spent Thanksgiving weekend running a backhoe to dig a pond. That could be a career alternative.

Know any CIOs or CTOs who might be good subjects for a CIN interview? If so, contact Esther Shein at [email protected].