At a recent Wall Street Journal CIO Network meeting, Ben Fried, the Chief Information Officer at Google, sat with Nikki Waller to discuss the evolving role of the CIO. Edited excerpts were published in the March 14th edition of the Journal, with Fried saying that he looks at investments through a number of lenses, one of which is to do with keeping the business running. He stated his goals are to drive down unit costs, drive down marginal costs, and allow his business to scale better. He particularly emphasized “unit cost reduction” as “incredibly important”.
As I read the article, I recognised Mr Fried’s goals, which I know are the same as many other CIOs that I speak to. I also know that it’s a challenge to ensure that the underlying unit costs of an IT infrastructure reflects current market pricing. The cost structure is rarely uniform and most CIOs are reliant on a community of third-party providers to provide services to their customers – the eventual consumers of information technology. The trick is to take a flexible approach to third-party relationships. Instead of adopting rigid agreements that limit the potential for change, a better way is to embrace ‘continuously contemporary’ contract terms. That means, terms that can evolve as needs and circumstances change.
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