What CIOs can learn from Honda

On Tuesday The Wall Street Journal ran an interesting story on Honda's flexible manufacturing strategy (subscription required), and how it's helping the company stay ahead in a bruising economy. Today, chief information officers should be scratching their heads to figure out how Honda's manufacturing excellence can be applied to their IT operations.

While not exactly the same, Honda's "manufacturing dexterity" is similar to savvy CIOs' use of open source to keep IT flexible, avoiding long-term investments on proprietary software that has yet to demonstrate even short-term value:

The manufacturing dexterity of Honda's plants, now the most flexible in North America, is emerging as a key strategic advantage for the company. In an era of volatile gasoline prices, Honda can adjust production to inventory levels faster than its competitors. Earlier this year, when gasoline prices reached $4 a gallon, the company slowed production of its Ridgeline pickup truck at its Canada plant and increased output of better-selling vehicles.

The U.S. General Services Administration (GSA) understands this, with its CIO stating last year that open source lowers costs and boosts IT flexibility:

By using open source, the agency won't be locked in to using a proprietary software program, at least for the duration of the contract.

Not having sunk costs in a commercial software program also means the agency can move to a new program more quickly should its needs change. The general openness also means the agency could become a collaborator in the further development of the software itself.

"You get much more transparency and interoperability, and that reduces your risk," she said.

Proprietary software vendors' insistence that buyers buy before they try makes it difficult to gauge the likely success of a product in advance. Proprietary software's often burdensome licensing costs and customization inflexibility further complicate matters, making the blind decision even more fraught with risk, all of which is placed squarely on the CIO's shoulders.

Open source shares risk between vendor and CIO. It's a more equitable and intelligent way of deploying software, because it allows the CIO-- Honda manufacturing style--to quickly adapt to changing conditions and custom-fit software for a CIO's particular requirements.

In crushing economic times, CIOs need to shepherd their resources carefully. Open source is one way that CIOs can spend less, get more, and remain in charge throughout the process.