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Interview with Boeing Global CIO, John Hinshaw published in CIO:

Boeing CIO John M Hinshaw knows a thing or two about how to run an IT department. Hinshaw joined the aviation giant Boeing two and a half years ago as its global CIO, where he oversees all IT, including infrastructure, security, and IT revenue generating opportunities for Boeing's airline and government customers.

Prior to joining Boeing, Hinshaw spent 14 years in a range of different key IT positions at US mobile carrier Verizon Wireless, eventually working his way up to CIO and earning Verizon's IT organisation a top 15 ranking in Computerworld's 2006 Best Places to Work in IT awards along the way.

In 2009, Hinshaw was named CIO of the year by the Executives' Club of Chicago and the Association of Information Technology Professionals, and he was also recently honoured with the Top Ten Leaders and Change Agents Award at the Global CIO Summit. This year, Boeing's IT organisation was honoured by Baseline magazine as one of five leaders in business-technology convergence. Additionally, for the second straight year the Uptime Institute presented Boeing IT with an award for world-class data centre operations.

According to Hinshaw, the scale and scope of the products and services Boeing offers is unrivalled by any other company in the world. The scale and complexity of IT at Boeing is also much larger and more complex than anything he experienced at his previous roles.

Hinshaw describes Boeing’s IT souring model as "balanced", but says services are predominantly delivered in-house because of the nature of the work involved. Boeing’s sourcing ratio stands at about 25 per cent sourced labour and 75 per cent in-house. Hinshaw says others have done more, but it is less so in the defence and aerospace industries. Hinshaw spoke with CIO about rationalising IT, surviving the financial crisis, SaaS and cloud computing, migrating 200,000 desktops to Windows 7 and what it takes to be a good IT leader. "in my opinion, the effect on IT salaries over the past year has been neglig ..."

David Cowling

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What are some of you cost reduction strategies?

No CIO is ever happy with costs. It's a constant mission to get costs lower. Every dollar spent at Boeing on IT could be spent on product development. We spend less on IT every year and get more value out of it. Boeing has renegotiated better terms with key suppliers and prioritised its IT work. We have tried to balance where the work is done and we are now more certain outsourced work gives good value for the dollar.

With about 160,000 employees in 90 countries Boeing has a lot of suppliers and needs to better leverage 'the one Boeing' across the company. I can buy IT products globally as opposed to in any one country, which saves money.

What are the most pressing issues for Boeing a year after the GFC?

The good thing about our business is there is a $US320 billion backlog of defence and airline orders. The number of orders for new planes has gone down, but we will deliver more planes in 2009 than in 2008. There is still demand in emerging markets and new planes are 20 to 30 per cent more efficient that older aircraft.

We have weathered the GFC well. We are more judicious where we spend IT capital. The Dreamliner had some delays, which put pressure on it, but we hope to fly it this month.

How is Boeing’s housekeeping going? Are you rationalising the number of systems, staff, etc?

When I came on board the number one priority was to simplify IT operations. In 2007 we had 10,000 corporate applications company-wide. Each business had their own IT shops. We brought them all together and have been rationalising applications at a rate of around 1000 a year, so this year it will be 8000.

We also had about 60 data centres and are down to six today. Our roadmap is to have three, which will save significant cost reduction in the power drain.

Do you find it ironic that increasing use of technology (for example, telepresence) may be reducing the need for flights, thus impacting Boeing’s business?

We use videoconferencing in Boeing and we also travel a bit. There are times where videoconferencing makes sense and times when a face-to-face meeting makes sense. We want people to travel so there is a little bit of dichotomy, but at the end of the day what is the business need?

How are you adopting advanced technologies like digital prototyping and collaboration?

The Dreamliner was digitally prototyped. Taking computer aided diagrams to the supply chain has allowed us to get the Dreamliner to market faster. That is the present and the future -- not just the design, but the maintenance of the plane. Using software to facilitate the collaboration of engineering projects is also a big part of Boeing IT.

We use engineering manufacturing products, and the defence operations uses Siemens Unigraphic. These are global systems that engineers use for collaboration. For example, the Melbourne team designs wings for assembly in Seattle.

Do you encourage the use of social networking applications among staff?

Boeing also has an internal tool called Insight which is similar to Facebook and MySpace where employees enter a profile and join groups within the company. For example, there is a composite structural engineers group. In just one year of use the number of subscribers has risen to around 30,000 so it has been successful.

We do allow employees to go to public social networking sites, but we have a warning screen to tell people not to disclose private information. We also have frequent e-mails sent to employees on what to remember when they are outside the firewall.

What about virtualisation and cloud computing? Is it suitable for a large engineering organisation with a lot of internal IT?

There are a lot of areas where could computing doesn’t make sense, particularly with proprietary systems, but we are talking to cloud providers like Microsoft and Amazon about where we can leverage cloud computing. For example, the Boeing online store was developed in-house, but is now hosted by Amazon.

We have virtualised all of our servers and employees in different programs can tap into the private cloud for server and storage space. We took our existing environment and put it together in a much more cost effective way. Most of Boeing’s large servers are virtualised and about 50 per cent of the total number are virtual. That will continue to be greater trend as the collaboration between suppliers is getting better. In the future everything will be virtualised.

Also, is SaaS a viable software sourcing model for you?

I’m a strong fan of Salesforce.com and we are using it today and working on some CRM apps for commercial airplanes. For business service applications it has real promise. It really comes down to speed to market and the time it would take to develop internally.

A lot of our work is very proprietary in nature, and there is government work that needs to remain secure. Those are IT positions that can't be outsourced.

Boeing has a long history of using Linux and open source. What’s your strategy here and what do you think of open source on the desktop?

Boeing has always been on the cutting edge of technology. We have a policy for open source and work with Red Hat and other companies. We are also careful to understand the code that comes in. So much code is open source in the world we live in today, so we need to take advantage of it.

Some internal systems in R&D are open source, which makes a lot of sense. These are areas where you can take a little more risk. We've looked at open source on the desktop, but it's not ready for prime time. At this point we haven't been successful.

Another big industry development this year was the release of Windows 7. Will it be adopted at Boeing?

Boeing has been testing Windows 7 for a year and will deploy it over the next 12 months. It is expected to be running on some 200,000 desktops throughout the company. A dedicated director is now accountable for Boeing's Windows 7 deployment.

Windows 7 is stable and the application support seems to work well. About half of the migration program will be in desktop refreshes. We are also working with Dell on a "desktop as a service" package. A good monthly price will allow me to refresh the desktops more frequently.

What about aircraft IT systems, are they part of your domain?

Telemetry is in the engineering area. We assist there with testing and the security aspects of these systems. The Dreamliner has 300 computer systems and 19 million lines of code. And the pilots have full control to override these systems.

We do build unmanned planes for government. Airline systems are sourced from key suppliers like Honeywell and they are very tightly controlled. They are not commodity systems. Of the 9000 IT employees, about 10 per cent are working on IT programs with customers. For example, an airport might need new IT systems and we can help.

We are also working with governments for IT services. Boeing staff are frequently employed to work within government departments and our IT services offerings come with products and services as a bundle.

What do you think are some of the most challenging aspects of IT today?

Security causes the most challenges. Much of my time is spent ensuring we have a secure IT to work with. The threats are increasing, and so is the amount of attention we need to pay to them. Every day about 300,000 people are logging into Boeing systems -- from employees to partners and suppliers -- so we are always improving remote access to be more secure.

What are some of the things you've learned as a CIO?

A lot of CIOs like to talk about technology, but the leadership and the leaders that you pick, that is important. It comes down to people in the end. I've spent a lot of time building leaders from the inside and out.

We have leadership attributes all leaders are measured by -- like how they inspire others, find a way through road blocks, live the core values of the company and deliver results. It’s extremely important to communicate to your team as much as possible. I speak with employees regularly and have a monthly newsletter to all IT staff worldwide. I have a blog as well, and get a lot of great input to the IT team. That type of communication is important. A good CIO has good communications ability.

What do you think the CIO position look like in ten years?

The CIO role is one of the few roles where you get to see every part of the company -- every product and service. You have to understand the entire company and the people. That positions the CIO very well to be a good counsellor to the other executives, and so it will become a more trusted executive role.

As more companies run their businesses on IT they will be enabled by technology, so if the roadmap is there the CIO will be more strategic. If IT is just seen as a cost centre then the CIO "career is over" moniker will be apparent. The CIO has to manage growth and productivity, and the CIO of the future will have both in their sight.

Wireless Applications and Technology Directions

by Stephanie Neil, Managing Automation Editorial Staff

There are many reasons for manufacturers to consider deploying wireless technologies and applications inside and outside the plant. Vendors tout everything from improved productivity, to cost savings, to real-time visibility into processes.

But there is a lot to consider before taking the plunge.

First, there’s the network infrastructure. Do you need a sensor-based mesh network, RFID, WiFi, WiMax, or simply cellular? Depending upon which wireless route you take, network access points may need to be installed and managed. And the IT department must select and manage the hardware, in the form of user devices, such as industrial computers and handheld smart phones. But that’s not all.

The wireless applications must also be selected or developed and deployed. And, when it comes to applications, there are plenty of options from which to choose. If the problem you’re trying to solve involves accessing information in the plant, automation software vendors such as Wonderware (an Invensys Operations Management company), Emerson Process Management, and Honeywell Process Solutions can get you started by helping to set up the wireless infrastructure and, in some cases, providing the handheld devices through partners such as Motorola and Intermec.

If, however, the problem is outside the plant — for example, in the sales department — there are vendors with very specific wireless customer relationship management (CRM) applications and/or middleware. They are proficient at training your team in how to move back-end applications out to a mobile workforce. Among those vendors are Maximizer Software, SAP and its partner Syclo LLC, and Sybase.And, when it comes to managing it all, there are specialty vendors for that, too, including Psion Teklogix, Rivermine, and Sybase.

That’s a wide array of choices, indeed. Fortunately for manufacturers that may not want to become experts in wireless technologies themselves, telecommunications carriers such as AT&T, Sprint, and Verizon have begun to bundle wireless services and applications, with the help of partners.“In the last 18 months, we’ve shifted away from just selling a solution to becoming an enabler and a partner with multiple developers” to add value for the customer, says Charnsin Tulyasathien, Sprint’s Mobile Business Solutions group manager.

For example, Sprint’s customers are asking for help in setting up wireless data networks for in-building communications, as well as building out mobile applications that will take advantage of the airwaves. Sprint partners with companies such as IBM, Microsoft, Nortel, and Cisco to deliver such offerings as voice-over-IP and managed services that enable unified communications.

Similarly, AT&T’s mobile platform strategy encompasses its wireless third-generation (3G) data network and mobile middleware, as well as about 100 applications, developed on its own or with partners, that deliver industry-specific solutions for the industrial, automotive, aerospace, and petrochemical segments, among others. For example, in a production environment, AT&T’s cellular 3G coverage, at speeds of about 3.6Mbps, can be used to build a wireless LAN that supports in-building unified voice communications and data applications, including asset management; maintenance, repair, and operations (MRO) management; and workforce management.

At the same time, all of the major carriers are planning fourth-generation networks that will deliver faster speeds and enable new applications.

Sprint’s recent partnership with Turnpike Technologies and Qualcomm offers a very specific example of how a telecommunications carrier can provide a turnkey solution. Earlier this year, the trio rolled out RouteTracker, a portable tracking device that acts as a low-cost fleet management system. RouteTracker uses an electronic on-board recorder mounted in trucks, along with a Bluetooth-based handset that enables drivers to record and report fuel usage as required by the recently enacted International Fuel Tax Agreement (IFTA), as well as to create and send Web-based operations reports used for fleet management back to headquarters.

Managing Information

Other vendors are offering applications that target processes on the plant floor and beyond. Wonderware’s IntelaTrac is a critical component of the “operator-driven reliability” concept that many manufacturers in the process industries are adopting. The idea is that efficient operations have more to do with equipment reliability and availability of assets than after-the-fact maintenance.

“Operators can always break it faster than maintenance can fix it,” says Charles Mohrmann, vice president of sales at Wonderware Mobile Solutions.

IntelaTrac, which is a software program that can push best practices and procedures out to a handheld device, is evolving with new applications designed to increase the reliability of operations by driving information to the end user. Wonderware says its new IntelaTrac Dynamic Procedures capability changes instructions and procedures as business conditions change. In the oil industry, for example, a storm brewing at sea might require manufacturers to push information about preparedness procedures to engineers in order to secure oil rigs.

While IntelaTrac provides a plant-based solution, Syclo does something similar for processes that take place outside the plant.

Syclo’s Smart Mobile Suite addresses areas such as asset management, inventory, scheduling, sales, and CRM. Syclo’s Agentry technology is a development framework that enables information to flow from back-end systems and databases to mobile devices. The idea is to push the appropriate information from IBM’s Maximo EAM application or SAP’s CRM system, for example, to an offsite road warrior using a handheld, laptop, or smart phone.

“We have intelligent workflows that guide workers through what they need to do with drop-down menus for things like parts, failure codes, and calculations,” says Joe Granda, Syclo executive vice president of marketing. “If you have better data, you work smarter in the field.”

CRM is a particularly important mobile enterprise application because, by providing up-to-the-minute customer history to field service people on the road, it allows manufacturers to increase customer satisfaction, which brings revenue opportunities. For that reason, Syclo and SAP announced a co-innovation agreement earlier this year to extend SAP CRM to the Syclo Smart Mobile Suite.

Meanwhile, Maximizer Software, a CRM vendor for small and medium-sized businesses, also has made its application mobile. Specifically, the company designed a clean and simple interface that can be viewed via any micro-browser that ships on any smart phone.

The Maximizer application can be customized to a specific business, but mainstream functions such as calendaring, contact lists, maps, and e-mail are also available. While those are seemingly simple capabilities, they can increase productivity. For example, if a salesperson has 45 minutes of downtime, the mapping function can be used to find out whether a customer is near enough for an impromptu visit.

Ultimately, having the right application to do the work — and solve a problem — is what will make mobility a valuable business proposition.

“We do have to give a nod to e-mail as the first line-of-business application to get value out of the smart phone,” says Will Anderson, executive vice president of technology at Maximizer Software. “But e-mail was the first generation of business applications on the phone. Now we are onto the second wave.”

Managing the Infrastructure

While Wonderware and Syclo manage the content that is pushed to the end user, other programs, such as Psion Teklogix’s Mobile Control Center (MCC) and Sybase’s Afaria, manage the mobile devices themselves.

MCC is deployed on a centralized PC, but it is used to monitor and control devices all over the world via LAN, WAN, or cellular networks. The software can remotely monitor, troubleshoot, upgrade, and fix devices, including Psion’s own rugged handhelds and any other device, via a Windows interface. In the latest version of the software, released this summer, location services have been added, allowing GPS-based devices to be located and tracked in real time.

Companies need to know where their devices are at all times in order to reduce or respond to the risk of loss or theft. “If an individual loses a device, we can shut down the device so it is useless to anyone,” says Ron Caines, Psion’s president of worldwide sales.

Sybase’s Afaria Management and Security system offers similar capabilities. Afaria is a function within the company’s mobile enterprise suite, which includes iAnywhere Mobile Office, a middleware application that extends e-mail and business processes to wireless devices. Afaria includes a backup manager that archives frontline workers’ critical business data, a configuration manager that ensures that required connection settings are enforced, a document manager that delivers updates for content and data files to the devices, and an inventory management feature that tracks all frontline systems, from PDAs, to laptops, to point of sale, to handheld systems.

According to Senthil Krishnapillai, director of product management for enterprise mobility at Sybase, securing enterprise devices requires a multi-pronged approach. So, aside from encrypting data, the Sybase software turns a mobile phone into an intelligent device that, if not connected for a certain period of time, wipes clean potentially sensitive data.

Managing mobile devices also requires staying on top of the telecommunications plans that connect them. To that end, Rivermine’s Telecom Expense Management is an application that analyzes carrier invoices, auditing them to make sure customers are paying only for what they should be paying, and reviewing usage to ensure that the best rate plan is applied.

The tool helps manage what can be a truly unruly process. “Oftentimes, employees bring in their own device and want to hook up to the corporate plan. This mix of managing corporate and individual devices is a complex situation,” says John Shea, Rivermine’s chief marketing officer. If too many individuals start submitting expense reports because they are not on the corporate plan, suddenly telecom costs are spiraling out of control because there is no visibility into usage, Shea says. “The reason [companies] come to us is because we can save them between 20% and 40% of their wireless expense,” he says.

SIDEBAR: 4G Force: The Second Wave

Manufacturers will soon have everything, from streaming video, to videoconferencing, to 3D graphics, at their fingertips.

With AT&T, Sprint, and Verizon all in various stages of rolling out their fourth-generation (4G) wireless networks, which will bring WiMax broadband speeds into mobile users’ hands, manufacturers will soon have everything, from streaming video, to videoconferencing, to 3D graphics, at their fingertips.

Sprint 4G, offering speeds up to 10 Mbps, is already available in Baltimore, with 14 new markets planned by next year. AT&T, too, is designing its 4G infrastructure to be ready to start rolling out in 2011. And Verizon recently announced that it will test its Long Term Evolution (LTE) 4G networks in Seattle and Boston later this year, with commercial launches to follow in 30 markets in 2010.

Verizon’s latest announcement that it will partner with Qualcomm, a provider of M2M technologies, on a joint venture, however, may mean the most to manufacturers. The agreement calls for the two to deliver machine-to-machine (M2M) wireless communications and smart services leveraging 4G speeds to provide customers with a single source for end-to-end M2M solutions, the companies say.

Intelligent sensors communicating over the Verizon network via the Qualcomm APIs could be used to monitor an oil pipeline or to measure chemical tank levels, for example. The infrastructure will also enable aftermarket services providing industrial equipment vendors with new revenue sources.

Verizon’s LTE 4G network is an important element in the “always-on” connectivity to assets that Qualcomm’s technology platform enables. With 4G, “you do get speed, but you also get better coverage in buildings and in manufacturing plants. That is a big deal for end-to-end solutions,” says Steve Pazol, president of the new joint venture, the name of which is yet to be determined.