In 1995, in an interview with The Economist, Intel’s chairman Andy Grove announced that one day, all businesses would be ebusinesses. Eight years on, most organisations are still struggling to move core aspects of their business online.
Not Intel, though. The microprocessor giant now processes 85% of customer orders online, and around 90% of its direct spend on materials occurs over the Internet. And it is not done yet. Intel’s goal is “to become a 100% e-corporation”, and
it is the job of Sandra Morris, Intel vice president and co-CIO to make that happens.
To do this, Morris and her colleagues have been following a detailed roadmap. By 2004, they aim to have achieved three clear objectives: first, to build quicker response mechanisms to changes in manufacturing plans; second, adopt collaborative engineering and design processes across the supply chain; and finally, increase the level of indirect procurement that is done over the web.
Each year since 1998, Morris has established one company-wide business goal to help Intel achieve these objectives. During 2002, the goal was to deliver more Internet-based services to employees, with the company adding five or six new online services each quarter. One example of this is ‘Share and learn’, a peer-to-peer collaboration system that allows employees to share files more easily and efficiently.
Unusually, Morris shares the CIO role at Intel. Her co-CIO, Doug Busch, is responsible for on desktop systems and infrastructure while Morris focuses on ebusiness systems and technology. The logic behind having dual CIOs is to split the operational and corporate ebusiness. Until the two were appointed in April 2002, there was no formal CIO role.
Morris believes that by investing as much of Intel’s technology budget as possible in new and innovative technologies, the company has a better chance of achieving its ‘e-corporation’ goals, and gaining competitive advantage. She estimates that Intel devotes as much as 40% of its spending business systems spending to ‘innovations’.
One example of this is Intel’s aggressive investment in XML-based technologies. Intel has long encouraged its suppliers to adopt the RosettaNet flavour of the extensible mark-up language, which defines business-to-business data exchange processes for the computer and electronics industry. In 2002, Intel transacted more than $3 billion in customer orders and $2 billion in supplier purchases on RosettaNet, increasing the amount of business processed by almost seven times in one year.
Morris is also evangelistic about Intel’s use of its own technology. “Everything we run internally runs on Intel – both the customer-facing systems and our back-office. It’s very important to us that we adopt our own technology,” she says. This does not mean, however, that the company is not objective in the way it purchases technology. “We do an ROI calculation on our own technology like we would for anything else – if we didn’t think we’d get a return on investment from using it we wouldn’t do it. We have to justify our projects the same way as any IT department.” The only difference might be, she can get her systems at cost price.
Morris, who reports to Intel’s CFO, also has an easier time than many of her CIO counterparts when selling technologies to the board. “It’s not as hard within Intel to explain difficult technology concepts to the CEO or CFO because we’re a company of technologists,” she says. That brings down a lot of barriers when trying to create that 100% e-corporation.