Frank B Modruson, CIO, Accenture, oversees all business applications and technology infrastructure, enabling over 146,000 employees in 49 countries worldwide to work anytime, anywhere. Frank is known to have transformed IT into a strategic asset for Accenture. Under his leadership, Accenture has implemented a comprehensive governance model and streamlined its technology infrastructure. He formerly served as a client partner in Accenture's Communications & High Tech and Products groups, delivering large, complex IT transformation projects and business solutions that maximized RoI. He also advises more than 100 of FORTUNE 500 CIOs on governance, IT scorecards, outsourcing, ERP global implementations, corporate search, knowledge management, collaboration, and security matters. In an exclusive interview with Sudesh Prasad of Dataquest, Modruson talks about how IT has helped in the transformation of Accenture and the changing role and challenges faced by today's CIOs. Excerpts:

You have been known as someone who has worked on IT transformation at Accenture? How did you achieve this?
We came out of a global partnership called Anderson Consulting which evolved out of Arthur Anderson and Anderson Worldwide. Anderson Worldwide is a global partnership and business function where IT was actually shared between the two. We separated in 1989 but IT was shared until 1999. When we shared, we cloned the technology, and duplicated it; finally when we split, we reworked the strategy wanting a technology which could give access to IT to everybody at Accenture from anywhere, anytime. We adopted the Internet as our network strategy. We wanted to run IT as a business and wanted to adopt some technology platforms and standardize on them. In 2000-2001, we decided to do a reality check and plan for the future. It was then that we embarked on a transformation program to change IT.

"We need to understand the business problem first and then understand the technology. What's important is to decide where one can apply new technology. CIOs need to be literate but need not be updated on every single technology."

Our partnership heritage was very distributed. We decided to be a public corporation and wanted to be a centrally managed standardized technology that is same to the entire world. We then embarked on a transformation to change IT to conform to that, which involved lot of centralization. For example, we had email spread across the world in 40 locations, hosted locally. We moved it into a global email system which was hosted in four locations around the world. We moved our financials on SAP: financials, HR, business warehouse, sales-all in one instance of SAP. This is the philosophy which we apply across the business which allows us to transform and standardize our overall technology.

Now we have one technology platform from Microsoft for our servers, desktops and data centers. We use SAP as a standard ERP platform. We have pushed this to an extreme which has really made our IT very clean-very easy to change and adapt to the business. IT is nothing more than a servant to the business. It is the lifeblood of the business and it needs to support the business, to make it do what it wants to do.

Accenture has been an aggressive user of outsourcing. How do you manage to do that?
We view IT as a small business inside Accenture supporting the business. To help the business understand IT, we package IT as a set of products and services that we offer to the business. With sourcing, the real key decision you have to make is about market efficient scale. If you are big enough, at some point, the cost per unit comes down. But at times, you are doing more of the same; you become a market efficient scale. The crucial point here is whether we are cost efficient or not. For example, we outsource our conference calls as we felt that we needed somebody who is more market efficient. Outsourcing is a tool that makes your operations more efficient. It is in the best interest of the business, which drives down the overhead cost of the business.

When we looked at our IT strategy in 2000, we looked at Accenture's go-to-market strategy and made sure that we were aligned to it. So, if we had a capability that we offered to the client, we could use the same capability ourselves too. So, one of the key things that we did when we looked at outsourcing-things around global delivery network, the applications management or around infrastructure-we used the global delivery network (GDN) and Accenture Technology Infrastructure Services (ATNS) and our primary operations provider for applications and infrastructure. Accenture's CIO Group is primarily responsible, among other things for planning, customer relationship management, IT strategy.

How does a CIO keep pace with the fast changing technology landscape?
The CIO's responsibility is to understand the needs of the business and then translate that need into how you meet them. For me new technology is not that interesting unless it solves our business problems. We need to understand the business problem first and then understand the technology. What's important is to decide where one can apply new technology. CIOs need to be literate but need not be updated on every single technology. One of the key challenges for IT is to keep up to the business. Business keeps changing-we at Accenture keep up with the changing times. My role is to understand my company's needs and demands, and make sure that we are meeting them in a timely fashion.

You also advise Fortune 500 CIOs. What are the primary issues before them?
I enjoy sharing each other's experience whenever I get to meet the CIOs. There are talks around how to align IT with business. Other topics include IT governance, security, data retention strategies, consolidation of systems, and how do you invest in them. Our philosophy is to be very aggressive on the investment side and expect return on the operation side. What we have done during the transformation period is that we have kept our investment budget constant and flat, but the operations budget has gone down. Some CIOs have a decent investment budget like us, sometimes they don't and they fall in what we call "austerity trap". We think that high performance IT organizations should invest in the future to stay updated and help the business move forward.

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