Dan Wakeman
Vice President and CIO, Educational Testing Services
Daniel Wakeman is Vice President and Chief Information Officer for Educational Testing Service (ETS), where he is responsible for all ETS information technology assets and activity. In this capacity, he also is responsible for ensuring that ETS strategy and tactics are appropriately informed and influenced by information technology. Previously, he was the CIO of the Elementary and Secondary Education Strategic Business Unit. Wakeman’s first position at ETS was that of Chief Technologist Officer (CTO), where he was responsible for ensuring ETS had the needed information technologies required to be competitive and secure.
Prior to joining ETS, Wakeman was the co-founder and CTO for Elastomer-Solutions.com, a business-to-business exchange for the elastomers industry. Before that, he was the Director of e-Business for DuPont Dow Elastomers. During his career, Wakeman has held a number of information systems-related and business positions with Dow Chemical, IBM, D&N Bank, and the U.S. Air Force.
Ed Yourdon: It would be interesting to ask how you got to this position here. Now you had been a CIO previously, hadn’t you?
Dan Wakeman: No. I’d been a CTO.
Yourdon: So, how did you go then from being a CTO to your current CIO position?
Wakeman: Well, I was hired as the CTO here. And, initially, what I was doing when I first came here was business development activities, like trying to take the educational research that was being developed and wrap it with IT and bring it to market.
Yourdon: Okay.
Wakeman: But I’ve got to tell you, those first few years here doing that, we weren’t enormously successful at that, and it was because the model we were trying to use wasn’t really the practical one, which we learned. At that time, the CEO was fairly new and he had brought in a lot of new people. Many of us saw this wealth of R&D that wasn’t being monetized. It wasn’t going to market, and they said, “Oh my gosh. Here’s this wealth of opportunities to bring to market.” Those of us coming from the for-profit business world didn’t really understand the complexities of the education business and how it works, and that it doesn’t work like a typical market.
Yourdon: Mm-hmm.
Wakeman: In Education there are many influencers and there are many different channels as well as many barriers. Whether they’re government or union or schools or teachers or parents, you’ve got a lot of constituents who have influence over decision making and the market’s enormously fragmented. So, with the exception of selling textbooks, there aren’t many large sales opportunities. Textbooks and assessments are usually done at the state level . . . but there’s not a lot beyond that that’s done at the state level.
Yourdon: Interesting.
Wakeman: Most educational product sales are all done at the state level, district and even the school level, so it’s very fragmented and we soon discovered that the only way to sell into those markets was with a huge, well connected sales force. And so we tried to build one and we found out that it’s really expensive and the revenue for each sale is small. It doesn’t fit the way we typically operate. Over the past 65 years, ETS has been very successful in the creation of assessments that help institutions and test takers make good decisions. Typically, this is done through RFP responses or selling to a large authorizing agency, such as the GRE Board. We discovered that the fragmented sales model we were pursuing was not a good fit with what traditionally we had done very well. So, it was a retrenchment from that to kind of a get back to the basics of what we really do. And then for the last five years, that’s what we’ve been focused on—optimizing the business model that’s been so successful here in the past and trying to really make that run as effectively as possible.
Yourdon: Right, right. So was all that part of, did it also involve or include your transition from CTO to CIO?
Wakeman: At that time, I was the CTO, but as you can see, I was not working in a typical CTO manner. My transition was driven by a need to improve the Enterprise Architecture at ETS. At that time, ETS was about five years into an infrastructure outsourcing engagement and the CIO had come to recognize that there was no formal management for enterprise architecture. He asked me to formally take on the job of CTO and create an Enterprise Architecture Origination (EAO), which I did. That organization is still in place today and has made great strides in slenderizing our infrastructure, effectively managing the life cycle of our technologies, and researching new technologies that can benefit the company.
Yourdon: That’s interesting.
Wakeman: So I ran that group for a few years, then was asked to, in addition to my CTO duties, be the CIO for the K–12 business. While this started out as a part-time job, it soon became a full-time one and I relinquished my duties of CTO to a former mentor of mine, John Taylor, who was the CTO for DuPont. I thoroughly enjoyed my time as the CIO for the K–12 business, which came as somewhat of a surprise as I always viewed myself primarily as a technologist. After a few years as the CIO, I was asked by the CIO at the time, “How’d you like to be CIO for all IT?” And I said, “I’d really like to do that.” And he says, “No, no. How’d you like to be the CIO for IT?” And I said . . . I’m looking at him and I’m going, “What is he talking about? Yeah, I just told you I would like to be.” [And the CIO replied], “No, no, no. Right now!”
Yourdon: [laughter]
Wakeman: What made the transition from the very technically oriented CTO to the more business-focused CIO was how I demonstrated a willingness as well as desire to grow and learn new non-technical skills. I had demonstrated in the CIO position in the K–12 business that I could learn the business and I could be very business-oriented, and I met with a lot of customers, helped with f sales, and sought to help the K–12 business grow. I have always been good at helping the business understand how IT can help them win new business or improve operational efficiency. During this time, I really honed these skills as well as my interpersonal skills, which in a CIO role are probably more important than technical skills alone.
Yourdon: Hmm.
Wakeman: I believe that I was offered the position of CIO because I had effectively demonstrated I had the skills to work with the business, lead change, manage technical staff, and bring a technical perspective to business challenges.
Yourdon: Absolutely. But you mentioned something just a second ago that I want to elaborate on for just a moment ’cause I’ve heard similar things from roughly half a dozen CIOs that I’ve already interviewed. One of the things that several of them have said is that in this position that you’re in now, it’s very important to maintain a reasonable core of technical skills. And I was curious as to your opinion on that. That’s sort of where you came from, but is it important to maintain?
Wakeman: You know, that’s interesting, because when I was at Dow, I worked for a CIO who came from the business side. He was a sales guy, and the guy had had zero IT skills. And the problem was, as anyone who had IT skills could see, was he lacked a solid understanding of the decisions he was making. He was also fairly easily persuaded to make dubious IT decisions.
Yourdon: By vendors or just anyone?
Wakeman: By vendors or IT people, key people, who wanted to get their way and once he would build a trust with a certain person, he’d believe whatever they’d say because he had no way to evaluate that on his own. So a guy who’s a very good mentor to me, John Taylor, who was the CTO at DuPont and then came to work here as a consultant for many years for us, he used to always say, “You can’t buy a product if you’re not an informed buyer. And to be an informed buyer means you need to understand what you’re buying.” And he said, “If you don’t have the skills to understand that, then you’d better get somebody in with you that can be your informed buyer.”
So I think, despite the fact that the whole world of IT is changing, there’s no doubt about it. There are a lot of people selling services that encapsulate a lot of the complexity of the IT processes and systems and everything, right? So you can go buy a Salesforce.com and not really understand anything about how they built it or how it works. But if you do understand or at least have some understanding of it, you’re going to make a better decision about picking that product versus another one because you’re going to ask questions like, “Well, how am I going to integrate it with my back-end systems?” or, “How are you doing security?”
Yourdon: Right.
Wakeman: Or, “How are you doing DR [disaster recovery]?” You’re going to ask questions that the uninformed buyer won’t ask. They’re going to be asking, “Well, does this process? Can I do this? Can I do this?” which are relevant and important questions to the business side, but they’re not going to ask a lot of the back-end questions like, “Are you storing my data in Ethiopia?”
Yourdon: [laughter] Right.
Wakeman: Where is your data? They’re going to look to someone else to do that, and if it’s so easy to go buy those services now, they might not even bother to, and then only to find out later. What usually happens is, they’ll go and get a service, and the first thing they want to do is tie it in to all the back-end systems. And then they’ll start sending XML files and pretty soon they’ve got an unsustainable process. You can’t run a business that way. It’s not scalable. It works initially, but then no one in those groups wants to keep doing it. Over time, operational complexity and the lack of clear processes and costs outweigh the benefit that was originally sought.
Yourdon: Okay, well, that’s good that you’ve confirmed that. You mentioned another thing that I want to explore just a little bit also, with the magic word “mentor.” You said it was a gentleman from DuPont?
Wakeman: John Taylor.
Yourdon: Is it just one or has there been a series of mentors?
Wakeman: Well, it’s been different mentors in different areas for me. If I go way back, when I was in the military, there was a guy I worked for, Steve Wegrznyek who has passed away since, he was really my first mentor. I was just a young airman, and he was a civilian, and he taught me a lot about managing and leading people, organizing and he really took an interest in helping me out quite a bit. I ended up working for him for like three years and grew a tremendous amount during this time. It was his belief in me that gave me the confidence to grow and develop. He pushed me out of my comfort zones in a way that was challenging yet rewarding. I really miss him.
Yourdon: Aha.
Wakeman: And I did quite well in the Air Force under him, so he gave me a lot of confidence in myself, just saying, “You know, you can do more. You think you can.” You know, just those simple things. But it was just enough to get you going. He was a great mentor to me. And another one—this is a kind of a funny one—there was this guy that at DuPont-Dow, who was a sales guy to us. He was our CSC sales rep. And so you could call him a Friendster, a vendor—you know, Dilbert has that thing…
Yourdon: Right.
Wakeman: So I knew that, and I knew he was trying to sell us products, but he was a very insightful guy and he knew a lot about IT and the business of running IT. I learned a lot from him. I don’t know if I’d call him as much a mentor as [much as] somebody who was willing to share a lot . . . we would just get together and talk, and he would just talk a lot about how his company sells its products and how they go to market, and how they win clients. And I learned an enormous amount about how vendors work from him.
Yourdon: Ahh, okay.
Wakeman: I also learned a lot about the whole IT industry from him, to be honest with you, because he had a real keen insight into the IT industry. When you’re young in IT, you don’t think of it that way.
Yourdon: Right.
Wakeman: It’s a job. But it’s really a big business in itself. And so he gave me this whole perspective that I had never had, so I learned an enormous amount from him. And then there is John Taylor, somebody I met at DuPont, and he was just a very insightful person who really has a keen awareness of IT and how to practically use it. I can remember—I don’t know if I should repeat this, but—he was really not a big fan of Microsoft. And so he and I and a few others went to meet Microsoft, and we’re representing DuPont, and they were trying to sell us all their products. And they just came across like they knew it all and they understood big business, and John just let them have it.
Yourdon: [laughter]
Wakeman: John remarked, “You guys don’t understand a thing about how big businesses work. You don’t know what you’re talking about.” He explained it all to them. What I learned from John was how to ask really good questions because that’s one thing he really did, and how to know when you’re being bamboozled.
Yourdon: Ahh, okay.
Wakeman: By asking the right questions, you could quickly determine whether the vendor, or somebody you’re working with, really knew what they were talking about and whether they could deliver. That was his special skill, and one I have tried for years to emulate.
Yourdon: That’s very interesting. One last question in this general area. Either before or immediately after coming into the CIO role, were you given any specific training? Did they send you back to get an MBA or anything of that sort?
Wakeman: Not anything specific to a CIO role, but I have many courses in leadership, interpersonal skills, communications skills and other soft skills. I already had an MBA, and after I became CIO, I attended the Gartner CIO Academy. knew that was available. Years before I had become CIO, I had read the book called The New CIO Leader by Marianne Broadbent and Ellen Kitzis, and had met these two at a Gartner conference, and I thought to myself, boy, if I ever became a CIO, this is what I’d do. So, guess what happened when I became CIO? I pulled this book out and I called Ellen up—she was the first one I called—and I got her at Gartner and I said, “Would you help me do this? I want to do what’s in your book.” And she said, “Sure.” So she came to ETS, and she worked with us to do what’s in this book. We actually implemented pretty much everything that’s in here in my first couple of years here.
Yourdon: Aha.
Wakeman: Working with my leadership team at the time, we launched the initiative “Getting to Great,” G2G. The plan was to take this fairly good IT organization and make it into a really great IT organization, and the way we’re going to do it is by following the ten-step process that’s laid out in chapters of The New CIO Leader. Probably the most critical thing we learned during that process that really stuck is the demand-supply model. We split IT into a supply-demand organization and built a process framework around that split. It has worked very well as a way to understand the work we are asked to do, the demand, and how we supply resources to do that work. We have discovered that the most challenging process is effectively managing demand into supply.
Yourdon: Ahh, okay.
Wakeman: Today, I have leaders that managed both the demand and supply side. On the demand side, the IT relationships managers work closely with the business units to understand the needs and requirements and convert them into demand that is captured in our Book of Work. The supply side is responsible for providing the services, whether they’re through vendors or they’re through our own capability. And then there’s Development, whose job it is to build the IT services used by the supply side to satisfy demand. Development is a supply side function, and is also responsible for Solution Design, so Development straddles the line between Supply and Demand at times. Once the model was conceived, we went to work implementing it, which was a major change initiative in and of itself. There was a new language for everyone to learn and many new processes to be developed, taught and monitored.
Wakeman: The critical role on the supply side is the BTL. Are you familiar with IT account reps?
Yourdon: Yes.
Wakeman: At ETS, the Business Technology Liaison plays the role of the account representative. They work with the business to understand the needs and communicate our capabilities.
Yourdon: Oh, okay.
Wakeman: Each BTL has a small staff of business analysts to help them quantify the demand. And many of them sit right within the business teams and they work with them as part of the team. Our struggle continues to this day, though, to be the management of demand [from our business users] into supply [by our IT project teams].
Yourdon: Aha.
Wakeman: That business process is the most difficult—if there’s anything I’ve learned, that’s where the hardest process is, is getting the demand and supply, because to do it effectively you need to know your capacity and to match it against the demand. Given that this is a formidable challenge, we looked to see how others are effectively doing this. This has led us to begin implementing ITIL version 3, as our service management framework.
Yourdon: Interesting. Well, you’ve also said something very interesting here that I’ve not pursued with some of the other people I’ve interviewed, though I’ve seen examples of it elsewhere. I don’t know how best to put it, but kind of creating a common mindset, in this case perhaps by getting everyone to read the book or—
Wakeman: I must have given out hundreds of copies of the book.
Yourdon: Yeah. Well, that’s kind of what I was going to ask, that’s occasionally happened, I’m delighted to say.
Wakeman: Everyone had this. This was everywhere.
Yourdon: That’s occasionally happened with one or two of my books, which took me by surprise, but I’ve not heard other CIOs say that a critical thing in the development of their organization was creating shared values, shared vision—and it could be accomplished either by bringing in a consultant or a book or various other things.
Wakeman: That was the key. It was really to get people focused on, “We’re going to become a great organization, and here’s how we’re going to do it.” Because our mission as a company is to provide fair, valid and reliable assessments that advance quality and equity in education. Well, if we’re going to do that, and that’s critical and that’s important, we’ve got to do it without making errors and we have to do it well. So how do we support that? And one of the things The CIO Leader instructs you to do is to create your business maxims. Ellen Kitzis, one of the book’s authors, was hired to run three workshops composed of the senior leaders of the company. It was in these workshops we created the business maxims.
Yourdon: Okay.
Wakeman: And from the business maxims we created the IT maxims. In fact, I have a meeting coming up to revisit those and to make sure they’re still relevant, which we do from time to time. To make sure the maxims we originally created are still our maxims, because they should be, right? They’re supposed to be long-lived. One of the things that came out of that was, given that we were struggling with trying to say, “We’re a learning company,” was “We are an assessment company.” And that became one of the business maxims. So we went from this kind of diffuse maxim, and reached outside of our core of assessment … and then we came back. We said, “No, first and foremost we’re in assessment.” And that became one of the business maxims. “We are an assessment company.”
Yourdon: Okay.
Wakeman: Another one that came out of that that’s still used widely today—and it got reworded a little bit—was, “Do what we do best and partner for the rest.”
Yourdon: Aha.
Wakeman: Thanks to these workshops I gained some much needed credibility, because I was a brand-new CIO, to run those workshops. It demonstrated that I was really interested in first focusing on what the business wanted and how I was going to ensure that IT fully supported the business.
Yourdon: Interesting.
Wakeman: I wouldn’t have done that had I not read this book. Ellen was just such a thrill to work with, so I’ve kept up with her over the years, just giving her updates on how we’ve been doing, but she was very influential in helping me work with that. And Gartner was too. I’m part of their EXP program, so I have an account rep that I talk to every couple of weeks.
Wakeman: And he helps me if I have questions or ideas. I can go get research. I can talk to other analysts. I take my team every year to Gartner’s headquarters in Stanford and we pick four or five topics that we’re going to focus on.
Yourdon: You’ve mentioned three related things in that explanation that I want to follow up on because I’m hearing a lot of common threads in my interviews. One of them was this point about being able to establish some credibility early on, and that’s something I’ve heard in different ways from a lot of the other CIOs. Some of them have said, “Here I am doing my job within the IT empire, and I’m pretty good at it—but obviously I’m at a peer level with other business leaders in other parts of the organization who have risen to some position of authority or power because they’re very good, but also because they’re very strong and they have very strong ideas, including they think they know how to do my job better than I do.”
And I’m curious as to whether you ran into that, or this whole question of how to establish a relationship of trust and working together with business peers, especially ’cause you came in and you were the new CIO on the block.
Wakeman: Right. There’s no doubt there are very strong personalities that are here, and many of them have their own ideas about how things should be done. The interesting thing about working here than other companies I worked at—probably because the compan’s roots are in academia—it’s a very collaborative environment.
Yourdon: Ahh, okay.
Wakeman: And people do tend to respect people with certain skills that they’re supposed to have, so you see a little bit more of that. Because of the jobs I had before here, I was known to many of them and they respected my technical skills—so when it comes to the domain of technology, I’m usually fairly credible. When it comes to the domain of business or R&D, I’m not an academic, nor do I pretend to be one.
Yourdon: Right.
Wakeman: And I’m definitely not from the R&D side of education, so I’ve had to be careful to respect my peers and know when their judgment or their input, combined with mine, will lead to the best answer. So that does mean there are times where we have respectful conflict We have to hash things out, but I think by building relationships with those key people first, when you get into those tense situations, you can depend on your relationships to come to the best conclusion.
Wakeman: That’s how I’ve done it. I feel pretty good about my relationships with my business peers. There’s one group at ETS, the vice presidents that run the functional centers where most of the operational work happens. And there’s the one group above that, the senior VPs that are responsible for all the functional and business areas.
Yourdon: Well, it leads to the next kind of related question, which I again heard from almost all the CIOs. They all say, “You know, I’ve got a team of people who help me get the job done.” It may have been, for example, the three who were in your meeting earlier or whoever. And the question is, what characteristics do you look for—what are the most important characteristics for people that you want to have on your team? What is it that you prize most?
Wakeman: That’s a tough one because I definitely prize their ability to execute and [have] knowledge of their domain, but it has to be done with the ability to work with and lead people.
Yourdon: Okay.
Wakeman: So I don’t know if I can say one thing. It’s a combination of leadership, personal integrity and the technical—I don’t know if I’d call it technical—but domain knowledge. In leadership roles I seek people primarily with strong interpersonal skills that can bring people together to get things done. Not people with an excess of persona, but people that truly care about other people and revel in the challenge of bringing out the best in those they lead.
Yourdon: Interesting.
Wakeman: So in different roles I may look for different skills, but at the same time, personal integrity is very high on my list.
Yourdon: Well, I’ve heard that from several people.
Wakeman: Very high.
Yourdon: One or two other characteristics I’ve heard and I’d be curious as to your feeling about them. A couple of people have said, “I need people who are willing to work hard because with kind of the economy we’ve got, we’re all working 12 hours a day. And if you’re going to work for 12 hours a day with a group, they have to be people that get along with each other and who I get along with.”
Wakeman: Absolutely. I look for people to join the team, which is a very collaborative, highly functional team that really works well together, that I believe will contribute to the team. We have all used Gallup’s Strengths Based Leadership program to better understand and appreciate each other’s strengths. A small group of us worked with a coach for a whole year. The coaching focused on how to leverage each other’s strengths to do more than we can as individuals. It was a fantastic personal growth experience that has had great results.
Yourdon: Interesting.
Wakeman: I’ve come to the conclusion that sometimes you have to work a lot of hours, it’s not hours that define how much work gets done.
Yourdon: True.
Wakeman: And that’s a misconception a lot of people have. I have people here who work 8-hour days, and they get far more done than some people who work 12-hour days because they’re just a lot more effective and they know how to do work. They don’t waste a lot of time, and they go from task to task, they get things done, and they keep their meetings just to the right length, and if they’re done with that meeting they move on to the next thing. They’re just very effective at managing their time and getting and prioritizing the work, and knowing what needs to be worked on and what can be not worked on. They have focus.
So I tell this to my staff all the time: “One of the critical things you’re hired for is judgment. Judgment is very important in what I’m paying you to do. And by ‘good judgment,’ I mean judgment in how you manage your people, judgment in how you use your time, judgment in how you make decisions about what technologies and products you use. So I’m counting on your judgment. And that’s what I’m evaluating you on—the decisions you make.”
Yourdon: Interesting, interesting.
Wakeman: When you have a person with good integrity who has great judgment you have a star.
Yourdon: That’s very interesting. Let me go into a couple of the more general questions. What would you say are the two or three top priorities that you tend to focus on? You’ve already said it’s the balancing the supply and demand side. Is that kind of the general answer there?
Wakeman: No. I think that what I need to do is make sure that we are delivering, more than anything, the appropriate level of service to ensure that ETS can fulfill its mission. That’s the most important thing I need to do. Are the tools, the capabilities, the people, the processes and all the things we’re doing here helping ETS to fulfill its mission? And can I see a direct link between what we’re doing and the advancement of what the company’s doing. I don’t want IT to be viewed as having to align to a mission. I want IT to be the mission, or part of the mission. We’re no different than marketing, we’re no different than sales, we’re no different than R&D. We are part of the company. We don’t need to align with it. I want to see us as ingrained into the business as everyone else. We work together. We build products together. We explore new markets together. We advance the company together. And where we can take what we know that’s special and unique, we do that, and we combine it with the other skills so that we actually get something that’s “1 + 1 = 3.” We’re really looking for that synergy and trying to get more than just each of us working independently towards a common goal. We’re working together towards a common goal.
Yourdon: And certainly, ETS as a business is very much about packaging and selling information—those assessments or whatever. Even an automobile company these days is not really just making tangible widgets. It’s a whole bunch of code flying in close formation.
Wakeman: It really is.
Yourdon: But it’s more obvious that within ETS, you guys are in the information business.
Wakeman: Oh yeah. When you walk around our campus, you can’t find anything to describe us except people and buildings. It’s all in the intellectual property. There’s no factory creating tangible widgets.
Yourdon: That certainly is true. Speaking of factory, one of the phrases I’ve heard quite often from some of the CIOs is that at least a part of their job is just keeping the lights on in the factory. How big a part is that for you?
Wakeman: It’s a huge part. Operational excellence, as you know—any mistake we make in an assessment affects a person’s life and that means they might not become, for example, a teacher when they wanted to become a teacher, or they might not get in the school they wanted to get into. Whether it’s GRE, TOEFL, Praxis, or the SAT. So we have to be very careful, in that what we produce has accurate, reliable, and fair scores. And that all runs through the IT engine. That’s our factory.
Yourdon: Some of the numbers you gave me when I was here last time were staggering in terms of the millions of tests that you process.
Wakeman: We have to do them all, they have to be done perfectly. So our objectives are 100 percent on-time, 100 percent accurate score reports. And the only way you can get there is to continually improve by learning from mistakes and making use of great quality programs such as Six Sigma. Great process plays a critical role as well, thus the reason we are implementing the ITIL v3 process framework. We continue to train staff in quality methods, defect detection, and continual improvement techniques. And it’s paying off. Defects continue to decrease and our customers are noticing.
Wakeman: We also embraced standardization in an effort to reduce complexity and reduce variation. We’ve reduced the number of opportunities. The standardization effort is looking not just at where can we standardize; it’s focused on where can we standardize that will reduce our defect rates. From an IT perspective, one of the big areas I have to focus on is defects in code.
Yourdon: Mm-hmm.
Wakeman: I have quite a big effort under way right now. I introduced the Software Development Life Cycle (SDLC) process and the Reference Architecture over the past year. These are efforts to bring high-quality code that’s defect-free to production. And by “defect-free,” we mean there are no critical defects. There’s no such thing as perfectly defect-free code. Our goal is to have no defects that have an impact to the business, such as a test taker getting the wrong score.
Yourdon: Right.
Wakeman: This has been an area of continuous focus for us and one in which we still have a lot of work to do. We will not yield until we have eliminated defects that can result in severity 1 incidents. We can settle for nothing less if we wish to serve the test takers with the level of service they expect from ETS. We have created a scorecard to ensure we are effectively measure our progress.
Yourdon: Interesting.
Wakeman: I’ll send you a copy of the scorecard, and an article that was written by Gartner about it. They actually did a best practice research note on our scorecard.
Yourdon: You know, it’s interesting you mentioned this now. None of the other CIOs I’ve spoken to so far have mentioned scorecards.
Wakeman: We worked really hard on getting a simple, one-page scorecard that defines what’s most important from a business perspective of what we do. And we track it. We use Six Sigma techniques to ensure our processes are in control. There is a control chart for each process metric.
Yourdon: Interesting.
Wakeman: Being a CIO of a big organization like mine, I’m always open to competition. There are many excellent firms out there that would like to run the IT department for ETS. It is my desire to be in a position where even if such a firm gains a sympathetic ear with ETS management I can say, “Compare us to anyone. Can they reach this level of quality? And if they can, what are they going to charge you?” We must be competitive, we must be service oriented and we must know ETS better than anyone else as the business has many other sources of IT supply now.
Yourdon: Yeah.
Wakeman: I don’t ever want to be in the position where it isn’t clearly visible the value we add to the organization. I want to quantify the value we add, not just through quality, but also through our costs being competitive. We benchmark ourselves each year, too, from a cost perspective.
Yourdon: Well, that was going to be my next question. It’s one thing to have a scorecard for internal discussion, review, and so forth, but the next obvious step is benchmarking, which everybody’s aware of and lots of companies do. But I’m intrigued that that also has now been part of the conversation that I’ve had with other CIOs, that it hasn’t been right up in the front of their radar screen.
Wakeman: We benchmark our costs each year using two firms’ yearly benchmark studies. Being in a small industry, it’s difficult to find good companies to benchmark against, so we look to industries that are highly information intensive, such as the financial industry. Each year we strive to become more cost competitive.
Yourdon: Okay.
Wakeman: Currently I find that our costs as a percentage of revenue are higher than other information intensive industries. So I’ve been trying to bring that down, and I have. I’ve been able to bring down IT expenditures as a percentage of revenue by four percentage points over the past five years while delivering more projects and services than we have in the past. That’s one measure of value.
Yourdon: Interesting.
Wakeman: And we will continue to bring this down by standardizing our systems, processes and taking advantage of new technologies such as virtualization and cloud computing.
Yourdon: Right, right.
Wakeman: We also analyze how much of the revenue goes to innovation or new products, O&M [operations and maintenance]. Our objective is to change the split so more of our IT dollars go towards growth and less towards maintenance.
Yourdon: Interesting. Now, there’s one other related thing that I had scribbled in as a question to ask you. Aside from metrics and quantitative benchmarking, one of the things that seems to be almost universal is this sense of being part of a club—the “CIO club”—so that you can ask questions, compare notes, just sort of schmooze with your CIO buddies. How important is that in your case?
Wakeman: Yes I do. I do some of it through Gartner, but I do more of it through the CIO executive board. I go to a few of their events and I get in group conference calls with them. But I also have picked up some great ideas from the Accenture CIO board.
Yourdon: Oh, I didn’t know that.
Wakeman: Yes, they’ve had some pretty good meetings with other CIOs. I attended a few calls on consumerization, which is something we’re trying to do here. Accenture hooked me up with a bunch of people who are doing it, so did Gartner. And Gartner introduced me to not only their CIO, but to a whole bunch of other CIOs who I got to meet and actually learn about how they’re doing consumerization in their company.
There have been other examples where speaking with other CIOs has been a great benefit, such as with the Security Standards Council PCI Standards were introduced and those of us that process many credit cards were trying to figure out how to comply.
Yourdon: Well, certainly, it does emphasize this point that regardless of what industry you’re in, uhh, you all share a lot of common issues.
Wakeman: We do, especially in security, where we all are facing similar threats like you are. We deal with that every day, as do many other CIOs.
Yourdon: I’ve got a whole section of questions here on problems and issues and so forth—of which the first one was, what are the main problems and threats that concern you? Obviously, the one that’s at the top of everybody’s list has been security.
Wakeman: Security is a very sensitive area for us as we must ensure the integrity of our score results and the personal identifiable data maintain for our customers. It’s without a doubt one of the risks that keeps me up at night.
Wakeman: It is disconcerting to know that there are organized groups out there, very sophisticated groups, that seek to steal information or shut down a company’s ability to operate on the Internet.
Yourdon: Yeah.
Wakeman: We work hard to protect the information we are entrusted with and use leading edge technologies to do so. A few years ago I created the position of Chief Information Security Officer and was fortunate enough to staff it with an outstanding security leader. He has built a great team that works every day to improve our ability to protect ETS’s information assets and monitor for potential threats.
Yourdon: Right.
Wakeman: His team is constantly looking for vulnerabilities and we always take care of them. Protecting the enterprise is a balancing act between the threats we may face and the costs to protect against those threats.
Yourdon: And I assume that’s something you share with your business peers. Because ultimately it is a business decision.
Wakeman: It is a business decision. Well, yeah, because they fund how big our security budget is, or how much we’re spending on security.
Yourdon: Right.
Wakeman: We participated in a security benchmarking study on how much we’re spending on security a few years ago and came back and found that we’re under-spending. And I used that as justification with the Board of Trustees and the Office of the President to get more money to staff up, to beef up my security organization. And luckily using this information I was able to persuade the board and Office of the President that we should spend more money on security. We were able to increase staffing and we’re completely redesigning our network. It’s really, really amazing what we’re doing, and it’s going to allow us to take advantage of virtualization and cloud computing in a very secure way.
Yourdon: Interesting.
Wakeman: There’s a lot of great new security technology out there.
Yourdon: Funny you should mention that. That was the very next thing on my list of questions. What are some of the new trends that you think are really going to influence your situation over the next couple of years?
Wakeman: Well, call it virtualization, call it cloud computing, call it private public, or call it infrastructure as a service. That is huge. The ability to buy infrastructure and software as services is having a tremendously disruptive impact to the IT industry.
Now, I think for my IT organization, where we outsourced our infrastructure nine years ago—we’re on our tenth year of that contract—we’re better prepared for that transition than others because we don’t own our data center or the staff that manage it. This gives us the opportunity to more quickly adopt these new offerings as our transition will be a bit less painful than for those that are still saddled with a data center to contend with.
Yourdon: Yeah.
Wakeman: We welcome the benefit these new technologies offers us, such as being able to move away from the concept of renting servers to buying infrastructure services to run our workloads only when we need them. This increases our ability to respond quickly to business demand while simultaneously reducing costs.
Yourdon: Right.
Wakeman: So, to me, that is an enormous change for IT because it’s going to change how we buy and use infrastructure. But it will not be without new risks and challenges. We will have to change the way we operate to take advantage of these new offerings.
Yourdon: Mm-hmm.
Wakeman: What really surprises me, Ed, is how fast it’s happened. Really, cloud computing is really new. Didn’t Amazon start this trend about five years ago?
Yourdon: At most, yeah.
Wakeman: And look where it is already!
Yourdon: Yeah.
Wakeman: Now, I know there are security concerns, I know there are other things, but you know what? You can’t be stymied by those because this is so disruptive and the costs are so big, different—the storage costs, the compute costs, everything. Because if I have to buy a server and run it for a year for something, I’m going to use [it] only a portion of the year, like some of our assessment programs. I was just quoted in an article in the Wall Street Journal about this topic, where they were asking me, “Well, why would you even want to buy these on-demand services?” I said, “Well, because I have demand that fluctuates.” I said, “We have large scale assessment programs that happen only once a year and I need a tremendous amount of computing power. You know what that computing power does the rest of the year?”
Yourdon: Just gathers dust.
Wakeman: Right, it does nothing but burn up electricity.
Yourdon: Yeah. And it’s amazing how many situations there are like that. I think of the Oscars or the Olympics.
Wakeman: Super Bowl.
Yourdon: Super Bowl. Yeah. On and on and on. Christmas shopping season for most of the retail industry.
Wakeman: Mm-hmm.
Yourdon: Yeah, it is, it is amazing to think about it. In terms of futures, I’ve got a related kind of social question. This whole issue of the “digital nation,” the Gen X or Y or Z or whatever generation it is that’s grown up with computers, how do you see them impacting what you do here at ETS?
Wakeman: Well, first, I’m going to say something that’s a little bit controversial. I don’t believe any of that Gen-Xer stuff.
Yourdon: Ahh, okay.
Wakeman: Because—well, how old are you? And you’ve got an iPhone?
Yourdon: True.
Wakeman: And I’ve got an iPad right here and I’m not a kid. We adopt technology just as rapidly as kids. Now, granted, there are some people who don’t, but there are plenty of kids who don’t either.
Yourdon: That’s a good point.
Wakeman: There’s a whole slew of kids out there who don’t know much about technology. Oh, they know how to play a video game. They know how to program the VCR. But that doesn’t mean they know technology. You know, there’s this sort of misconception that they’re all geniuses and we’re not. And I’m telling you, it’s wrong, because if you look at the demographics for adoptions of Facebook, for example, the biggest group of adopters is the baby boomers.
Yourdon: [laughter] Sure. Well, I certainly agree with that. I guess the only area where I might disagree—and it may not even be significant—is the fact that in my case, it still takes a conscious mental process to say, “Oh, I should Google that,” whereas it’s “wired” into my kids.
Wakeman: Well, that’s wired into them, but guess what won’t be? What’s going to come next. This isn’t going to stop here.
Yourdon: Right.
Wakeman: This is just going to keep changing. And it’s going to keep changing faster. So they’re going to be at the same disadvantage we are in just a few short years.
Yourdon: I completely agree. But now you’ve got not just people coming into IT but the entire workforce coming in out of university to ETS with whatever expectations or assumptions they have.
Wakeman: Well, so, here’s how we’re dealing with that. And believe me, it’s not just the kids: a lot of the people are just here, too. I’m getting it from people here. “I want to use a Mac. I want to have an iPhone.”
Yourdon: Aha. Okay.
Wakeman: You know, it’s not just the new people coming in. It’s even the existing staff. Now it’s not as much. I’ve got people here like my boss, who says, “Just give me a computer. I don’t want to manage it. I don’t want anything to do with it.” And I’ve got another group who is saying, “I want to use my technology and I want it to use it to do my job the way I want to do it.”
So we’re introducing a consumerization program called “Computer Choice,” and the idea is it’s a volunteer program. We’re starting with cell phones. There’s a certain group with business uses for cell phones that we can work with, and smart phones, and they’ll be able to go out and get one through Verizon or AT&T, put it on our network, get access to our e-mail and whatnot. You have to sign something that says we have the right to remote-wipe it and you have to have a firewall and you have to have it encrypted and—you know, there are certain rules. But the idea is, for most of them, that they’re going to get a stipend to pay for it. For some we’re just going to say, “You have your own phone and you want to use it, but you’re not authorized for a stipend. Well, we’re going to let you connect anyway, but you have to follow these rules.”
Yourdon: Right.
Wakeman: There has to be some security that we can control. So luckily the iPhones and some of the others have encryption, they have the ability for remote wipe, they have the ability for password lock. So as long as they meet those minimum constraints, which seem to be almost universal across platforms, BlackBerries do, too, we can let them on the network. The next thing we’ll introduce is Computer Choice on the laptop front, and that one’s a little more challenging—the problem is the technology’s not quite there yet.
Yourdon: Interesting. Ahh, one last question—and I think it’s the perfect wrap-up question: where do you go from here? After you’ve been a CIO here for X number of years, do you have any thoughts, plans, dreams, hopes, aspirations?
Wakeman: Well, the one thing I look at is where is the role of the CIO going?
Yourdon: Oh, that’s a good one. Okay.
Wakeman: And, it’s something I read a lot about and I try to get some understanding. I’ve talked to other CIOs to get their perspective and, there’s a lot of debate about where the role of the CIO is going. Some think it’s going to disappear. The CIO Executive Board has sure made a case that it’s all going back into the business, it’s going to be bought as services, there’s really no need for a CIO. Others have said, “Well, in a company like ours where intellectual property and IT play a big role or like a bank, there is still a need for someone who is the technology leader.” So I foresee myself staying in a technology leadership role, but the scope may expand to more shared services, beyond just IT.
Yourdon: Ahh, okay.
Wakeman: So maybe some operations services or whatever. So the role may get a little bigger, I’d say, because so much of those other functions depend on IT to operate.
Yourdon: Sure.
Wakeman: So you can see that there’s a synergy between them, and you do see some CIOs, like Dave Kepler at Dow, who I know. He eventually rose up to be vice president of all of the services— HR and operations and quality and other similar shared service areas. Do you know Martha Heller?
Yourdon: No.
Wakeman: Anyway, she’s made kind of a case that the role of CIO is going to broaden out to a more service basis. It kind of makes sense. If we’re really moving to a world of buying services, and you know as well as I do, the future IT organization is not going to be about running a data center. It’s going to be about buying these services and packaging them in such a way that you can use them to run your business.
Yourdon: Well, and integrating them.
Wakeman: And integrating them, right.
Yourdon: But the involvement in the business leads to another possible future, and that is running the whole bloody business.
Wakeman: You could, yeah.
Yourdon: And that’s up to the CEO level, which at least a couple of CIOs have done.
Wakeman: I think if you’re in a very technology-centered business, if you’re in a Google or something that technology plays a very big part in where you could do that. I think it would be harder for me to do it here because the CEO here really needs credibility in the education space.
Yourdon: That’s right.
Wakeman: There are a lot of CIO information-intensive positions I could see myself doing, financial or something else where they still value IT as a core competency. This is why I so enjoy working for ETS. I’m not really interested in going to work for some company that doesn’t value IT as a core part of their business.
Yourdon: Why would you? [laughter]
Wakeman: Right. And you’re seeing that, though, in a lot of businesses where they see IT as just a service they buy from someone else, where they’ve outsourced everything. I believe over time many companies that do that come to regret it as they soon find that that they lost a tremendous amount in intellectual property that was locked in heads of those they dismissed. Innovation slows and it takes longer to get things done.
Yourdon: Well, I think I will hit the stop button on that one.