e-Talk Radio: Rubin, Howard, 18 January 2001

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of labor looked at things from the view of a GDP, GNP, and consumer price index. Those didn't fairly represent the technology content of what's going on in the world, nor would reflect the future competitiveness of nations, so we developed another index and that information was disseminated around and actually used widely by the public sector e-commerce committee group. And there's a whole bunch of stuff in between. If you think of a time period of his administration, where Year 2000 stuff was going on, so a lot of this stuff is targeted around the issue of the Year 2000, so fundamentally the data supplied to the White House focused on the global competitiveness of the US, sort of the trickle-up effect of software productivity in performance and where that hits the government itself and really what it does for our nation's competitiveness and actually the details of what we've done were much more actively used, interestingly enough, by the government of Canada and the Philippines and the government of India.

Dekkers: Interesting, and we will be back to talk more about "Portfolio Management: Running IT Like A Business" with Dr. Howard Rubin after these short messages.

Announcer: Quality Plus E-Talk is back. Now here's Carol Dekkers.

Dekkers: And welcome back. We've been talking to Dr. Howard Rubin about running IT like a business, the new business of IT, and before we went into the break Howard was telling us about how he was advising the Clinton Administration, and we were talking about Portfolio Management and I guess one of my questions for you Howard is, if we move towards this Portfolio Management, into running and managing IT as an integrated part of the business, will this improve the US competitiveness overall in the world, will that bring up our competitiveness in terms of your worldwide benchmark studies?

Rubin: Yeah, actually, what actually happens, when you start managing things as a portfolio, that fundamentally means that anyone who is responsible for any aspect of IT, whether it means the operations or applications development, whatever part of it, managing like a portfolio as portfolio means you're always managing this investment and you're always watching your cost structure. In fact, what that means is IT then moves to a market ready posture, that anyone who's playing the role of the portfolio manager knows what their cost structure is, has to understand through benchmarking the cost structure of their competitors, has to understand what the open market pricing is by integrators or outsourcing providers and also has to understand what the offshore prices are and what the opportunities are elsewhere. So in fact, when you go to portfolio management you're turning yourself into a market ready organization which means you have to both serve your company in the right way and whole enterprise, in fact, is understanding your cost and performance structure against competitive national and global market, so fundamentally that will force people in an IT organization to truly look at the economics of what they're doing and I wouldn't call it best price shopping, it's best performance shopping, but in fact have a much more competitive view of their IT services they provide, which will leverage their services and products within the company they're part of and will help make, you know, companies in any nation that's doing this more competitive because it's basically making IT work as if it's a free market economy. We already know from our work that companies in Europe...if you take two companies, a company in US and a company in Europe, and you look

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