Overseeing IT operations for a global company brings some unique challenges. But the issues discussed here — managing technology, improving the business, reducing costs, driving revenue, and remaining customer-centric — will be familiar to all IT leaders. The CIO of Siemens Healthcare Diagnostics shares some of his insights and experiences.

David Edelstein took over as CIO of Siemens Healthcare Diagnostics in 2007, following Siemens’ acquisition of Dade Behring, where he had served as CIO for nine years. He is responsible for leading the development of the advanced information and eBusiness systems that support the worldwide organization. He is also responsible for the company’s regulatory affairs, quality systems, health, safety, and environment.

Prior to his work with Dade Behring, David was VP of Information Management and Productivity at Bristol-Myers Squibb and also held various positions in IT with IBM. He holds a BS in Systems and Information Science from Syracuse University and an MBA from Baruch College and serves on the boards of Syracuse University’s College of Engineering and Computer Science and i.c. stars, a nonprofit IT training organization for inner-city computer “stars” in Chicago.

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1. Jeff: When I think of the Siemens company historically, I think of it as an electronics company. But I see from your main page you have quite a breadth of technology ranging across industry, energy, and healthcare. How does the healthcare piece fit into the big picture?
David: The company is organized around these three areas as a result of some thorough analysis over the last couple years to identify the key megatrends in our world. Those are energy sustainability, developing industrial infrastructures around the world, and the growing need for high-quality healthcare. So looking at the global trend of more people needing better healthcare, and an aging population around the world, the healthcare piece fits very well with the Siemens strategy.

Our portfolio strategy is pretty straightforward. We want to be number one or two in the markets we’re involved in and we’re interested in industries that offer steady, profitable growth with a great future. Healthcare is that kind of industry. The diagnostic solutions we have to offer, combined with our expertise in imaging and information technology, position us uniquely to provide what customers are looking for in all these areas — not just in the mature economies like the United States and Europe, but also in developing markets in places like China, India, and Brazil.

2. Jeff: And along with better and cheaper, comes the focus on being faster — especially in medical technology, right?
David: Correct. Our diagnostics customer is the lab in the hospital, which has a lot in common with a manufacturing line where the end product is information. Into the factory come these sensitive organic materials, blood or urine and so forth, and the output is patient test results. The physician is looking for a specific diagnostic result as quickly as possible, with a high degree of reliability and cost-effectiveness. Those needs translate into our objectives and we hit all three of them very well.
3. Jeff: In addition to your position as the CIO of Healthcare Diagnostics, how many other CIOs are there at Siemens?
David: Normally, there is a CIO for each of our business units, which helps us accommodate the need for independent IT requirements and individual leadership. From the macro-organizational perspective, CIOs support our energy, industry, and healthcare sectors, and there are also divisional-level and regional CIOs who support specific divisions and regions of the world.

We leverage resources across businesses and regions by using shared systems and processes. One of the things we’re addressing with bringing Dade Behring into Siemens is which of the legacy systems at Siemens we should use or not within the corporate technology standards. We’re an SAP company and a Microsoft company, so we’re migrating to those environments, and there are requirements around data and information security and the network, so those are also part of our consideration.

4. Jeff: How do you stay connected with your peers and other executives around the globe, particularly the leadership in Munich?
David: It’s a fact that we’re truly a global company. The healthcare business sector is headquartered in the town of Erlangen, Germany, which is about a half hour outside of Munich. The headquarters for Siemens-US is in New York; US healthcare is outside Philadelphia; and diagnostics is in Deerfield, IL. The primary connection for me is the healthcare sector CIO. We’re in regular contact by e-mail, teleconferences, and meetings. The healthcare sector CIOs also get together during the year to look at the comprehensive budget and decide on project assignments.
5. Jeff: After living in Europe for a few years myself, I’ve found Germans to be very friendly to Americans, and some of the most culturally similar Europeans. But when it comes to business, there have been some rough waters — for example, with the Daimler-Chrysler merger. How important is it for you to be culturally savvy and flexible in a German company doing business around the world?
David: It’s absolutely critical to our success. Siemens is now in about 190 countries and has more than 140 nationalities in our workforce, so you have to be sensitive to other cultures and other ways of looking at the world. I’ve worked in global companies just about my entire career, and every culture has its own unique perspectives, so you need to interact on a respectful level. But even with the full range of different cultures in the company, we’re all focused on the same thing.

The corporate culture is extraordinarily open and understanding about how people work and one of the most enjoyable parts of my job is going to meet people around the world. Seeing how people in other cultures view Americans has been even more interesting over the last few months as we transitioned from one U.S. president and political party to the next. People I talk to always want to understand what is happening in the United States.

Our global diversity allows us to take the best from each culture and use it to our collective advantage. The result is a new amalgamated culture that’s the best of everything.

6. Jeff: In business terms — and being part of a global workforce of more than 400,000 people, with about 70,000 of those in the United States — how does your work fit into the global enterprise?
David: Well, from a revenue standpoint, about 19 percent of our business is in the United States, with the rest balanced around the world. In the number of employees also, the United States is first and Germany is second.

From a customer-facing perspective, customers have their own unique needs. A diagnostics customer has a different profile from a general healthcare customer buying a CT scan or an MRI, and of course there’s even more differentiation from an energy or industrial customer. But as you move further to the support functions, like information technology, the business is much more integrated by the common systems, technologies, and processes. In fact, I expect the support functions to become even more integrated, while customer-facing parts of the company stay more independent in response to customers’ needs.

7. Jeff: How would you describe the difference in the way your position involves the use of information versus the management of technology?
David: The CIO as the head techie is obsolete thinking. Among the members of the executive team, each of us is expected to be an expert in our individual field. We still need to make decisions from a functional perspective, but when we meet as a group, we are each responsible for knowing how we can embrace the customer, improve the business, drive revenue, and bring down costs. My job is more about how to use the technology, which investments to make, and how those investments drive the company. Very rarely do I talk about technology outside the context of a business project. My management team understands the technology in detail and I count on them to handle it efficiently.

There are some cases where we bring a specific technology to the attention of the whole company. For example, in light of the current economy we are looking for ways to reduce our operating costs, and one of the obvious ways is to cut back on travel. But our geographically disparate teams still need to interact, and we’re going to rely on technology to address that. We’re rolling out a fairly robust set of tools from Microsoft that will enable us to improve our Web meetings, instant messaging, and desktop video.

8. Jeff: Are there other areas where you have brought about change in the company since you have taken on this role?
David: In the diagnostics IT area, we have been intensely focused on the integration of companies that were acquired over the last two years. We’ve put together a detailed roadmap, and we’re moving through the change process. At the same time, we can’t lose our customer focus. The sales force has to be equipped with details about what our customers need and must continue to meet their expectations for the same high level of service during the transition. So one of our key themes is around providing one face to the customer. Even though we have this synthesis of three companies coming together, our goal is for the customer experience to be like working with just one company.

From a larger Siemens healthcare perspective, we’re in the business of selling IT. We sell software to help run a hospital or provide information resources to the healthcare provider. There’s a major trend right now in the use of IT to drive down healthcare costs, eliminate medical errors, and generally make things more efficient. We’re very excited about some of the things in the new stimulus bill and President Obama’s initiatives in areas like electronic records. Siemens is in a perfect position to respond to this and enhance our own customer service at the same time.

9. Jeff: In the current economy, Germany appears to be faring better than some other countries, and healthcare stands out as one of the more resilient industries — which puts you in a great position on both counts. Does that seem like an accurate assessment to you?
David: Germany is not escaping the pain of the global situation, but I do think it has a strong economy. Healthcare is also strong and stable, and we’re actually seeing steady growth, although it’s not at the pace we had seen. People still need healthcare, and what we do helps healthcare providers drive down their costs, which is becoming even more important.
10. Jeff: How do the long-term prospects look for someone coming into the IT field today?
David: All the demographics make it a great industry to be in. If you’re going into college and looking at a field of study, IT is a great area to go into. Every company in every industry is looking for ways to streamline, cut costs, and get the full picture of what their customers are doing, and the way you do that is through IT.

There’s a lot of talk about IT being outsourced, but I’m on the board of the school of engineering and computer science at Syracuse University, and I know there are lots of great technology jobs in the United States. You and I have both been active on the board at i.c. stars in Chicago and have seen the people coming through that program landing good jobs. I’m still very bullish on IT. A lot of great things are going on in this field, and there are good reasons to be bullish on healthcare too because there is always demand for efficient, cost-effective healthcare.

I have 300 people who work for me around the world, and I’ve had very little turnover. I think the reason is that they see a bright future at Siemens. We’ve got some challenges at the moment with this economy, but we’ll overcome those, and IT will be at the front of the pack.