5 lessons for CIOs in the age of the cloud

Kevin Ledford has been CIO of Chiquita Brands for five years. This is the company that brings all those bananas and pineapples to your table — and tons of fresh produce to restaurants and food services.

Founded in 1899, Chiquita is proof positive that use of cloud — at least in the form of software-as-a-service (SaaS) products — is no longer just the province of startups and web 2.0 companies. The adoption of these technologies is integral to how older, established companies compete. And it’s a big part of how Chiquita manages its complex and time-sensitive supply chain (how much is a rotten banana really worth?) and how it pays its 21,000 employees.

Here are five things I learned from a recent chat with Ledford:

1: Go cloud first.

For new applications, Chiquita goes to the SaaS model right off the bat. Chiquita was also an early user of Workday human resource management software which it uses to manage its North America payroll, for project management, talent management and some time tracking. It started down the SaaS route years ago when it implemented LeanLogistics transportation management system.

In terms of running on-premises IT and cloud, Chiquita is still a mixed shop but “anything new is pretty much going to SaaS or PaaS (platform as a service),” he said in an interview.

In Ledford’s view, smart use of SaaS is the great equalizer that lets smaller companies roll out features and functions systems that are every bit as good as what the big boys can do. And while the SaaS sales pitch has evolved from the ability to pay per user per month to more of a long-term enterprise software contract, the advantage remains that Chiquita does not have to sweat hardware or software upgrades for its SaaS portfolio.

2: Avoid vendor lock-in.

By dint of Oracle’s amazing M&A run of the past decade, Chiquita — which uses or used Hyperion, BEA Systems and PeopleSoft/JD Edwards — found itself perhaps a little too reliant on one company.

“We’re a big brand but we’re a mid-sized company — about $3.2 billion. We like to go with vendors that are not so big that we get lost in the shuffle. Bank of America and Wells Fargo can push IBM around, we can’t.”

Lessening its reliance on one provider is one reason it’s likely moving to Tidemark from Hyperion.

3: Have a sound middleware layer.

As companies acquire and merge with each other, they have to incorporate new IT systems and make them fit. For Chiquita that’s the Java-based WebLogic (now Oracle) middleware. If that’s in place you can mix and match SaaS and on-premises IT as needed.

4: Don’t rip things out just for the heck of it (or because a new vendor tells you to.)

Said Ledford: “Invoicing and accounts receivable hasn’t changed much in 80 years, so why buy a new system every ten years to support the same old functions?” Again, a solid middleware layer means you can integrate the oldie-but-goodie gear with the shiny new SaaS stuff.

5: Don’t buy into the CMO threat

A good CIO knows he has to be responsive to the internal customer — if that job gets done, no problem. But if not, well, all bets are off and a stronger leader –maybe the much-hyped CMO — will win out.

“If you’re still trying to run mainframe on-premises stuff that nobody wants, then people will go off and do it on their own,” he said.

In short, if the CIO gives the people what they want, he has nothing to worry about.

Original content can be found at: https://gigaom.com/2014/02/08/5-lessons-for-cios-in-the-age-of-the-cloud/

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