What new challenges do CIOs face as they move to on-demand service models?
Chou: Why should a company manage transactional HR or CRM systems? CIOs know that is not the most efficient use of resources. The biggest cost for most businesses is human labor, and going through a major software upgrade is a vastly inefficient waste of money. You are doing it for the first time, but the software company delivering its software on demand has done it a hundred times. Which company do you think will do it quicker, better and at a lower cost? Many people think you have to pay more for reliability, but the opposite is true. If you want to buy the most reliable car, don’t pick the $1 million handcrafted sports car; find a Toyota that’s been produced a million times. As author Geoffrey Moore says, know what’s core and what’s context to your business. A lot of software is all contextual: You don’t need it to differentiate your business. You don’t have to be your own power company to run a network. Once you realize this, you can turn attention—and dollars—to your real busines
