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Applied Materials: IT Transformation From Order Taker to Business Enabler in 10 Months
Getting their house in order was the first step to Applied Materials’ recent IT transformation. Outsourcing through the managed-services model was the other. What Group VP and CIO Ron Kifer do right to achieve this in just 10 months?
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Ron Kifer is a renaissance CIO. At a time when most CIOs are talking about going beyond keeping the day-to-day IT ops running to align IT with business goals, Kifer is one of the few who has actually done so — and that too in not one, but in multiple organizations. His most recent win has been at Applied Materials, a $9.2 billion nanomanufacturing technology company.

Kifer has been at Applied Materials for less than a year, and his achievements list runs long and his “before and after” transformation list looks impressive.

Before: 17 independent IT groups, 90% of IT spend on “running” day-to-day ops, wrong mix of core and contextual competencies, contractor staff-augmentation model, U.S. centric geographical footprint, order-taking perception of IT.

After: Governance and budget consolidated under CIO, 30% shift in spend from “run” to “build,” core and contextual competencies redefined, managed services for context IT, consolidation of IT infrastructure, IT strategic leadership of business transformation.

And the end result? IT at Applied Materials is no longer just an “order taker;” it is a “business enabler.” And the success of the IT group has put the CIO and his team in the driver's seat for modeling change for other functional groups of the company.

“We started out as nothing but order takers and then set up an enterprise managed services model. That gave us dramatic cost reductions to be able to fund other transformation activities that the company was doing,” says Kifer.

IT and BPO Work IS commoditized, and you don't have to go out and look for a best in class service provider to get appropriate support service.
Ron Kifer, CIO, Applied Materials

 

How did Kifer manage such a transformation in just ten months? Leveraging global resources and outsourcing through a managed-services model was only one way. Other strategic pieces leading up to it were equally important.

We spoke to Kifer at length to find out what he did right and analyzed key takeaways for aspiring renaissance CIOs.


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