Impending mergers, ultrafast growth and sharp dips all put pressure on IT leaders to make quick decisions about tech plans. Here’s how to make IT shine in times of change.
Most organizations experience growth in fits and starts, with alternating periods of expansion and contraction. IT used to have to react to those twists and turns on the fly. But now, with a role more tightly aligned with business, IT is instead helping lead through such changes.
“In the past, IT was routinely too late to react to change,” says Chas Hartwig, strategic account executive at TayganPoint Consulting Group. That was mostly because IT wasn’t in the loop — not knowing why the company made a certain acquisition or pulled back on spending, he says. But now that IT has a direct influence on the success of budget cutbacks or mergers and acquisitions, CIOs have to know “when to put the brakes on, accelerate or drive around in circles” when it comes to tech investments, Hartwig says.
Here are some tips from IT experts about how to be well positioned for ups and downs:
1. Be at the table, not just in the room.
Having stature and having a direct say in decision-making are two different things, according to Michael Restuccia, senior vice president and CIO at Philadelphia’s Penn Medicine, a $6 billion healthcare organization made up of the Perelman School of Medicine at the University of Pennsylvania and the University of Pennsylvania Health System.
Although Penn Medicine’s C-suite offices are located a mile away from Restuccia’s office, he makes sure to meet regularly with top executives, including the CFO, the CMO, the chief scientific officer and the senior vice president of business development. His approach to governance involves pairing executives and IT for strategic initiatives, and operational leaders and IT for tactical issues.
“The collaboration of these roles lets us go lockstep at the pace and direction of our leadership and to properly identify, prioritize and sequence activities,” he says. For example, before a chief scientific officer recruits someone for a new chair position, Restuccia is consulted about the tech investment required (which could include, say, a mini data-center room and increased bandwidth) and the risks involved (a new employee may want to use a personal server, for example).
2. Understand the rationale for business changes so you can make appropriate technology changes.
Following bankruptcy filings in 2007, Accuride, a large supplier of wheels, wheel components and other vehicle products, brought in new leadership that instituted a “fix and grow” policy.
“We started getting rid of stuff when it wasn’t the right stuff for us to be focusing on,” says Paul Wright, CIO and vice president of IT. The company put in play new products, processes and systems, fixing everything from leaking roofs in manufacturing plants to aging computer environments.
With capital to spend, Wright consolidated seven stand-alone ERP systems into a single cloud-based platform from Plex, feeling the cloud aligned best with the company’s business strategy of mergers and acquisitions. “We took away all the basic nuts and bolts configurations and instead created a template we can use to spin up an instance as necessary,” he says.
This approach proved correct when Accuride acquired a small company with an outdated ERP platform. “We were able to put our template in there quickly and move them to our models,” he says. The cloud-based ERP also was helpful in expediting a partial buyout where the seller wanted the unit it was selling taken off its SAP system immediately. Accuride was able to oblige without interfering with the supply chain, Wright says.
3. A slowdown doesn’t mean a shutdown.
David Giambruno, CIO at Shutterstock, a provider of stock photography, stock footage, stock music and editing tools, says slowdowns and cutbacks are times when IT can shine. “I used to be a drill sergeant and believe that idle hands cause problems,” he says.
Although he has been at Shutterstock only a few months, Giambruno had been a transformational CIO for large companies such as Tribune Media and Revlon for many years and he says he combats budget doldrums by putting his team to work, even if projects have been halted.
“There is always documentation to do or processes that can be cleaned up,” he says. Also, he encourages his staff to use downtime to help business units by identifying functions that can be automated. “You might cancel contractors, but you still have internal resources to put to good use,” he says.
4. Develop a multiyear road map.
“One of the strongest correlations to performance that we have found in our surveys is the presence of a multiyear road map,” says Chris Curran, CTO at PwC. “Organizations should have more than an annual budget cycle perspective on revenue performance so that they can think longer term about investments and other decisions and not be whipsawed by quarterly changes.”
Penn Medicine’s Restuccia takes it a step further, saying IT must be willing to do benefits realization cases for all larger-scale projects. For example, a realization analysis showed that after implementing a new billing system, Penn Medicine was able to collect substantially more revenue because it had documentation. The patient portal, also a complex undertaking, showed improved patient satisfaction, a key metric in healthcare reimbursements. “Doing benefits realizations has really elevated the stock of the IS team,” Restuccia says.
5. Be transparent about your project pipeline and priorities.
At CBS Interactive, an online content network for information and entertainment, and a division of CBS Corp., IT’s project plans are aligned with business goals and are clearly communicated to users, so there is no confusion when priorities have to shift, according to CIO Steve Comstock.
“The struggle I’ve seen is we only have so many resources, so you’re going into a queue, and we’ll get to you,” he says. “Sometimes there are difficult conversations where an organization or group might want to do a release or do something that’s important, but when you look at it as a whole, it’s not the most important for the organization.”
Restuccia says he tries not to say no too often, even at busy times. “Instead, we offer clear transparency on our project list and explain prioritization based on feedback from governance groups,” he says. “People appreciate that here. They might not get their request fulfilled today, but it’s never an absolute “no” as long as they are following our core principle of common systems that are centrally managed and collaboratively installed.”
6. Don’t be an obstacle to progress.
If a business unit has the money and time to bring on a new tool that will improve workflow, IT should be willing to play an advisory role.
“The IT budget cannot be the bastion of every single solution in the world,” Giambruno says. “If a business unit has budget and I don’t, I can act as a service organization to them, helping them make decisions and work with vendors.”
Comstock says business leaders often know what tools best meet their needs, so he encourages them to identify the applications they would prefer to use. IT then verifies that the systems are secure and handles the integration process.
“A lot of CIOs try to hold stuff close to the vest, but we’re moving to a world where everyone’s a technologist. Sometimes the best thing I can do is to get the heck out of the way,” Comstock says.
7. Redirect resources to innovate out of a crisis.
“If you’re in an upheaval, it doesn’t mean you take an axe and cut everything,” Hartwig says. “You should be receptive to opportunities to grow your way out of the problem.”
At Accuride, Wright did just that. While IT belt-tightened in some areas, Wright’s team focused on making the sales department more efficient. For example, IT deployed a cloud-based CRM system to enable salespeople to do more with less.
Using the CRM’s mobile app, sales representatives can see all the customers and leads within a certain region. With this insight, they can use their time more efficiently, visit more customers per trip, and save the company money on travel expenses. Wright’s team also added tools that enabled sales teams to collaborate with pricing analysts and people in finance to create promotions and bundles on the fly from their mobile devices.
“Any time the market is going up or going down, your ability to make a decision quicker than your competitor is a significant advantage,” Wright says.
PwC’s Curran says companies should invest in small pilots that would provide data about the performance, cost and user experience of new applications or platforms. “Business cases are not one-size-fits-all,” he says, “and the reason they often don’t get funded is there isn’t data about real performance.”
8. Architect your environment to support divestitures and budget cuts.
“You have to be prepared to cut things off,” Wright says. “That becomes a selling feature when you’re going to divest something.” He says using the cloud helps him do that because, if necessary, he can cut off whole business units with the flip of a switch. “You’re not forced to hunt and peck through millions of servers to see what data is where,” he says. “You can grow easily and shrink quickly.”
9. Look for ‘gold nuggets’ during M&A due diligence.
When you’re doing due diligence about a merger partner or acquisition target, keep an eye out for what they can do for you. At Penn Medicine, the patient safety and quality team approached Restuccia about obtaining a certain application. He found out through due diligence that a company Penn Medicine was considering acquiring had that tool, so, if the merger went through, they’d be able to adopt it.
A similar scenario happened to Hartwig when he was a CIO. His company had acquired another company for its book of business, sales team, and execution and delivery capabilities, but as he was exploring its assets, he found a core system way more advanced than what his organization had. His company was able to migrate onto that platform post-acquisition and get even more value from the purchase.
10. Don’t wait for a crisis to make improvements.
Every IT organization has low-hanging fruit to tend to, such as orphaned servers that can be turned off or cycled down. “If you already know where these areas of improvement are, step up now to make them happen,” Curran says.
Hartwig says if you know you’re headed into crisis, start to work with your service providers to “share the pain” and reduce hosting costs. Even if you’re formally bound by the terms of a current contract, they may play along to earn your loyalty in the long run, he says.
Also, if your company is about to readjust earnings to take a write-off and loss, he says, IT can use the opportunity to write down or write off systems to get out from under depreciation in the future. Likewise, in the cloud, you can look for research and development environments that can be temporarily turned off or applications that can run on a less costly platform or at a lower service level, he says.
“You have to look at what’s changing your users’ world. Figure out what you would do differently,” says Giambruno. “You have to be willing to sacrifice sweat equity, wipe it out and start with something new. And, if you’re going to fail, fail fast.”
To read this article as it originally appeared in Computer World, please click here.
Contributed by: Chas Hartwig | TayganPoint Consulting Group | email@example.com | @chashartwig