Levinson: I started my career in software engineering. I emigrated from Russia in early 1980 and really didn't have any practical experience. I got my degree in computer science and started working at TRW in San Jose. I later worked at Tandem computers (purchased by Compaq and now a part of HP). I also worked at SpectraPhysics which is a laser manufacturer. Then I went to 3com and spent about 12 years there.

I got into IT because I was very interested in the business process component of information systems. I really wanted to be closer to the business vs. just sitting out there designing software and I think it paid off quite well for me. I always worked on the IT side of companies. Palm is my first role where I manage the entire IT organization and have the CIO title. Prior to coming to Palm, I had multiple management/Senior Director positions primarily on the business applications side as well as global integration which was focused on integrating major acquisitions, deploying very large scale ERP packages across multiple geographies.

OV: How would you describe the role of your organization within Palm?

Levinson: Well, actually I think we have a very interesting history here at Palm. As you know, Palm is a spin-off. The decision was made in 1999 for 3com to make Palm an independent, publicly traded company. At the time, Palm was a very small division --though they were rapidly growing-- of a much larger corporation (3com was 12,000 people, $6 billion in revenue and Palm was really small). As a result of that, Palm never had an opportunity to build their own IT capabilities prior to becoming an independent company. All IT services were provided to Palm through 3Com so really the key challenge when the decision was made to spin off Palm was to build those capabilities from scratch. Palm was growing so fast, at the time of the spin-off (Palm was already a billion dollar company growing 100% a year) that the challenge was to very quickly put in place infrastructure independent from 3com, build a world-wide organization and put in place enterprise applications to support the growing business of Palm.

The first 18 months were extremely exciting. I joined in November 1999 as CIO, almost immediately after the decision was made to spin off Palm as an independent company. We went from 2 people in an IT organization to more than 200 and stabilized at 165. We were able to put in place very quickly within the 12 month window all the building blocks of the IT infrastructure and applications. We implemented SAP for all back office functions such as supply chain, order management, finance and HR. We implemented Siebel for customer facing applications; for customer service and marketing and also designed a custom built Oracle-based data warehouse for decision support. We moved very fast and put in place a mobile and wireless computing foundation again to support Palm from the business perspective, to help them test their technologies and showcase their technologies to other enterprise customers.

That was the first 18 months. Then, as you know, we unfortunately hit some really hard times. In 2001 the demand for Palm devices lessened, the country descended into a recession and our profitability suffered. Since Summer 2001, my primary priority was to really ramp down all the capabilities that we built during the first 18 months of our existence. We had a very aggressive objective to reduce all costs by 50% and that has been our team mandate for the past 18 months.

OV: What are your priorities going forward and what's the vision for IT at Palm?

Levinson: You've probably heard some of the announcements in the press, mentioning that we've had another round of layoffs. We still have to work hard at delivering additional savings to the company. I would say our priorities are two-fold: the first is to continuously improve the cost structure for the company and try to be creative in how we use technology to reduce the costs in the business and to help our business partners reduce their operating expenses. An example could be using collaboration tools and media conferencing to reduce travel. We are fortunate here to have a state-of-the-art campus where we have voice-over-IP (VoIP) equipment and are always looking to leverage VoIP technology to reduce our telecommunications costs. We're looking at all aspects of the IT environment and trying to be incredibly creative in how we use our limited resources and deliver value to the business. That's one objective - really focus on cost reductions supporting a smaller Palm and continuously bringing those cost reductions to bear.

The second component is more strategic: it's really helping with understanding what enterprise customers want and the value in the products that we manufacture. I certainly have a role in working with other enterprise customers promoting the message of mobility and then feeding back that information to our Product Marketing, Marketing and Engineering organizations, helping them to understand what the enterprise market is looking for. We're very intimately engaged with alpha and beta testing of our products and I speak very frequently on behalf of Palm at industry forums. I just came back from Computer World 100 in Arizona where I gave a talk on how to build a mobile enterprise. I created an internal forum for other CIOs where I invite other people to come to Palm and discuss issues of mobility. These are the more strategic components of the job.

OV: What do you think is "hot" in high tech? What areas of high tech do you like? Have you seen any interesting start-ups?

Levinson: It really depends what industry you're in. There was a lot of discussion about "hot" technologies at Computer World 100 and there was an incredibly interesting survey done that I thought was really ironic. There were two questions in the survey. The first question was, "What are the hot technologies that you're going to be devoting your time to?" There was wireless, there was web services, linux and all the buzz words. The second question was, "What are the technologies that fail to deliver to the expectations?" You would see the same technologies that people had focused on in the second list of technologies that failed to deliver. The way I translate this is right now the focus is very much on delivering benefits to the business in a very tangible way. We do nothing unless it brings ROI to the business. All the projects, all the work that we do has to have a very short term payback to the business. So my opinion here is whatever technologies can be applied to the individual business problems in a specific business sector are the technologies that should be "hot."

To give you an example let's take wireless and mobile which are kind of near and dear to my heart. There are some vertical applications that are using wireless and mobile in a very creative way that adds tremendous competitive advantage specifically in the vertical applications. For example, Palm is very big in healthcare. We probably own 80% of all the critical trials market and we've found that we can deliver tremendous ROI by using our technology in giving very cheap Palm devices to patients in all the clinical trials. They fill out their forms and synchronize their data and it saves tremendous amount of money for healthcare companies that are conducting those clinical trials. That's just one example.

I don't necessarily believe that there will be as much experimentation with new technologies as we saw in 1999 and 2000. I think people will be incredibly selective. Small companies will lose as a result of that because I think big companies and even medium-sized companies will become risk adverse and prefer to go with proven big players. I don't know if you've seen the same thing in the marketplace, but I've seen a lot of conservativism, risk aversion and not a lot of desire to experiment without understanding up front the tangible ROI at the end of the project.

In the specific Palm case, if we identify some wireless and mobile technologies that we believe will add competitive advantage to our products and we can showcase that within our environment, we would definitely invest our time and money in working with a start up. In fact, we probably will be doing that.

OV: What are some of the more interesting business trends that you are seeing or experimenting with?

Levinson: The other thing that is near and dear to my heart is the issue of outsourcing and leveraging relationships with partners. One thing I didn't mention is that the reason we were able to build our environment so quickly and so successfully is that we really embraced the idea of leveraging other people's competencies. Because we had to grow so fast, so quickly and we didn't really have a choice of growing organically, so to speak -- we just didn't have the time to build internal capabilities -- we were forced into forging partnerships and using outsourcing as the strategy for survival. Very early on in my tenure at Palm, I partnered with EDS and we outsourced probably 80-85% of our infrastructure activities to them. We partnered with Siebel and SAP and they helped us quite a bit to successfully implement their packages. I think the point I'm trying to make is the wave of the future is more in looking at creatively outsourcing and "insourcing", doing it onshore/offshore, using very creative strategies in terms of how you staff your organization and your project. This is something of huge interest to me and I think probably other companies will be adopting in the future.

OV: You mentioned that you outsource a lot of processes to EDS. How do you measure that EDS is delivering high quality in the management of those processes? Do you have a system for measuring service-level agreements (SLA) with EDS? How do you measure SLAs with EDS?

Levinson: As you well know, with each outsourcing contractor you have a set of contractual obligations and SLAs associated with different serviced hours. Every month, we get together with EDS management and we review a package of stats from the previous month and we basically go over both the standard SLAs that we have included in the contract as well as additional metrics that we've jointly defined as something we want to use to measure our business. It works very well. It gives EDS management immediate access to information about the account in terms of what works, what doesn't work, and it gives both of us the same information. We're always on the same page and we're able to build a very strong relationship between the two companies. Not everything was smooth from day one; but I think we were able to overcome that because both companies were absolutely committed to making the relationship work and I think that's what it takes. I want to stress that without having strong measurements you can't have a strong partnership - you can't manage what you can't measure. Having those operational metrics, having those reviews on a monthly basis is paramount to the success of the relationship.

OV: In addition to the meetings for reviewing those metrics, is there a system for measuring performance? Are these manual measurements?

Levinson: There is a dashboard that EDS has and has been using quite successfully for the past 18 months, and I as a customer as well as EDS management have access to this dashboard. It has several layers. There is a high level dashboard that has all "services towers" so we have datacenter, wide-area network, SAP-ASP, help desk, etc. At that level, the first stage, you can see green, yellow and red indicators, which tell you how you are doing in those areas. That's good for a high level "check your pulse" so to speak. If everything is green you know that things are going well. On a number of occasions we had a lot of yellow and red signals, and not only did I know we were in trouble and experiencing problems (all the "towns" that had a lot of yellow and red signals), but those were reviewed by different levels at EDS. That's the overall dashboard they're using to manage their accounts. In addition to that, you can drill down and you can see SLAs associated with each individual service tower. It is not fully automated. I think they have plans as part of their digital workflow to add automatically generated data that can also be viewed in Excel and PowerPoint, but you can view these metrics on-line as part of this overall dashboard.

EDS is responsible for the measurements, but we know how many outages we had. We know how many priority one, two and three requests we have. We have access to the data. We're really not flying blind because we have access to the same system they have access to. If we want, we can audit those numbers. There are certain numbers that will be much more difficult for us to measure; for example network up-time, but it's been pretty close to 99.99 so we've been actually quite stable for a long time.

OV: As the CIO, you deliver IT services to the rest of your organization. Do you have a CIO platform or dashboard that you use to measure your projects and how you're delivering your own services to the rest of the business units?

Levinson: We don't have that in a computerized dashboard or in a data warehouse format. I do have an IT steering committee that I chair. The IT steering committee has VPs from all Palm functional areas represented. We meet quarterly and have pretty much a standard agenda for those steering committee meetings. There are two objectives for the steering committee. The first one is to hear about our accomplishments for the last three months. We have a roadmap and we report back what's been done, what's been accomplished, what's been canceled, what's been delayed. We report on all our cost reduction efforts. The second part of the meeting is focused on prioritizing and making decisions on funding for the projects for the next 3-6 months. We are adjusting this roadmap on a quarterly basis. This is the primary mechanism for me, personally, to communicate to my peers at the business level. I am also a part of our CEO's staff meetings so I see these guys on a weekly basis. This helps with the relationship building because if they have any issues, requests or concerns for me they can do it right then and there. I see them very often and they see me very often and I think this is very important to have that relationship; to have that contact. This is really my business linkage.

OV: From a system perspective, if I were the head of one of the business units at Palm and I say, "Hey, Marina, I see that I'm being charged $10 million for IT services and I don't know how I'm using those services. I'd like to decrease that to $6 million. How can we work on that?" Do you have a system to tell that person how you are spending $10 million in IT services?

Levinson: We don't approach it that way. We have two types of IT expenses. One is IT baseline. I basically own that and we really don't allocate IT within Palm. We agree as an executive team how much we're going to spend on IT as a percentage of revenue. I report back on a regular basis how much we're spending on different service towers at a high level and what cost reductions we're delivering to those service towers. The second component of the funding is what we call business funding. In addition to baseline we have the capability to work on projects for different functional areas. These projects are really funded by the business and we decide to fund them by sitting down with the business and deciding what the priorities of the business are for the next 3, 6, 12 months. We jointly come up with a roadmap and ROI associated with different activities that functional heads want to do within their organizations. Once we agree that these are the top priorities, the business has to find the money for the project. The advantage of doing it this way is we never have to have the discussion that I had in my prior life, "why are we spending $8 million on IT?," because we've made this decision jointly. It really helps the business make very tough decisions. Do they want to hire two engineers or do they want to do an IT project? It's a very healthy discussion and it really ensures that our investment in IT generates the best ROI for the company. That's how we do projects. Once we agree on a functional level, anything above $100k of funding goes to the steering committee and there we have debates and agree on the roadmap. The funding really comes from the business.

Prior to joining Palm, Levinson was senior director of global integration at 3Com Corporation, where she was responsible for all IS activities for deployment of SAP throughout the organization during a time when the company experienced billions of dollars in revenue growth and an expansion from 2,000 to 13,000 employees worldwide. She also supported all IS-related activities for 3Com's US Robotics acquisition in 1997. During her 12-year tenure with 3Com, Levinson managed various IS functions, including global business applications development and corporate systems management. Prior to joining 3Com, Levinson spent seven years in various IS management and analyst positions at Spectra-Physics, Tandem Computers and TRW. Marina holds a B.S. degree in computer science from the Leningrad Institute of Precision Mechanics and Optics.

About Palm, Inc: Palm, Inc. is a pioneer in the field of mobile and wireless Internet solutions and a leading provider of handheld computers, according to IDC (2001). Based on the Palm OS® platform, Palm’s handheld solutions let people carry and access their most critical information wherever they go. Palm™ handhelds address the needs of individuals, enterprises and educational institutions through hardware add-on options and more than 13,000 Palm OS based application solutions. With shipment of more than 20 million Palm handheld computers, many carried in pockets, purses and briefcases around the world, Palm delivers devices that make it easy for people to use and keep track of what matters to them.