FRAMINGHAM (02/20/2004) - Companies such as Ameritrade Holdings Corp. and Exel Logistics are overhauling their IT governance models in an effort to better prioritize technology projects and manage their IT staffs more effectively.
For instance, Asiff Hirji said he made sweeping IT governance changes at Ameritrade after he became the Omaha-based online brokerage's CIO last April. Prior to Hirji's arrival, Ameritrade's IT department used a so-called waterfall application development method to manage projects in nine-month cycles and then rolled out the resulting technology to internal end users or customers each fall.
Now projects are broken down into increments of six to 10 weeks, allowing Ameritrade to complete development work faster and introduce new investment management products more quickly. Hirji cited as a recent example QuoteScope, a market liquidity tool that Ameritrade made available to customers last August after a four-month development project.
He added that if a competitor launches a new product or service, "we're 12 weeks away from responding to it under a worst-case scenario."
Under the waterfall approach, reacting to market changes would have required "a massive amount of disruption" to IT staffers and ongoing projects, Hirji said.
In addition to following the new project management strategy, Ameritrade's executive team now meets every six months to do "a top-down allocation" of IT resources, identify possible projects and determine the required technology investments, Hirji said. The CIO and his top lieutenants also meet weekly with business-unit leaders to prioritize and review projects.
Hirji reports directly to Ameritrade CEO Joe Moglia and was one of three executives named to the office of the CEO, a group that was formed earlier this month, along with Chief Financial Officer Randy MacDonald and the company's chief operating officer. Even though Ameritrade is a brokerage, "we're organized as a product company, and our product is technology," MacDonald said. "So I think it's important that the person who is responsible for building that technology sit at the table with us."
Ameritrade isn't the only company that's making big changes to its IT governance model. Exel Logistics, a Westerville, Ohio-based provider of supply chain management and logistics services, is rolling out project management software from Austin-based PlanView Inc. to help it create a consistent IT governance approach, said CIO Domenic DiLalla.
The software is being adopted worldwide by U.K.-based Exel PLC, the parent company of Exel Logistics, with the U.S. unit spearheading the project. Before, the logistics company "took a rather myopic view" of the return on investment anticipated from IT projects, DiLalla said. But, he added, that approach failed to take into account other factors, such as the effect that a project would have on the company's IT infrastructure or the risks involved.
"We have hundreds, maybe even thousands, of projects going on globally," DiLalla said. Exel plans to use the PlanView software to track the IT staffers who are allocated to different projects and the amount of time workers spend fixing system glitches. DiLalla said he hopes to have the project management software in use at the majority of Exel global offices which have IT staffers by year's end.