How to Keep IT Up With a Rapidly Changing Business

By CIOinsight  |  Posted 12-05-2005 Print Email
Top IT executives—all finalists at the Fourth Annual CIO Insight Business-Technology Alignment Awards—at companies whose technology dovetails masterfully with their business plans share thoughts on managing IT during times of change.

After years of contraction, companies large and small are once again turning their attention to growing the top line. And CIO Insight's own research shows that 80 percent of business and IT executives believe their IT alignment efforts have a direct, positive impact on their company's growth.

With that in mind, the finalists for this year's Fourth Annual CIO Insight Business-Technology Alignment Awards are three very different companies striving to stay aligned during times of rapid change. The winner, Quaker Chemical Corp., is a $400 million specialty chemical company serving the steel and automotive industries in 40 countries around the world. Runner-up Constellation Energy Group Inc. is a $12.5 billion provider of energy to commercial and industrial customers on the East Coast, while runner-up PHH Mortgage, a subsidiary of

$3 billion PHH Corp., is one of the top-ten mortgage retailers in the U.S. Here is a snapshot of the stories they shared at the awards presentation dinner, held in mid-November in midtown Manhattan.

WINNER
Quaker Chemical Corp.
Irving H. Tyler
Vice President and CIO

Growth has been tricky for us. The business market we serve—steel manufacturing and automotive companies around the world—is incredibly mature. How many times have you seen a new steel manufacturing plant going up down the street from you? It just doesn't happen. The existing players are either going out of business or getting much bigger as they absorb each other.

So for us to grow, we had to increase our market share and look at new regions of the world. The biggest growth opportunity for us is in the Asia-Pacific region.

A key part of our business model has always been our process knowledge orientation. How do you get this process knowledge out of one region and into other growth regions? You can't just turn it on like a switch overnight, and you don't have the time to train people in the local regions. The real answer that we discovered was information technology. We needed a collaborative model. We needed to find a way to share information in a very fluid fashion from one region to another.

Our success in alignment has really been sort of an educational process, helping the business transfer its knowledge and experience and competencies from one region to the other, and then helping the business operate on a global basis by being able to understand our business results at all levels of the enterprise.

What this has enabled us to do is to grow, not spectacularly as in some cases, but we've added almost $200 million to our top line over the last seven or eight years. For example, last year, General Motors had 15 suppliers of chemical consulting services worldwide; then they narrowed it down to three, and little Quaker Chemical was one of those three. RUNNER-UP
Constellation Energy Group Inc.
Beth S. Perlmam
Senior Vice President and CIO

I was the first CIO Constellation hired, back in 2002. So they really never had a good foundation to build upon, and there was a lot of skepticism about what we were doing, and why we were spending money on putting in data centers, and a common desktop, and financial systems and architecture.

But where the alignment actually showed up was when we had a hurricane, which for a utility is quite an event. During that hurricane we were actually able to survive because of the reorganizations we had done. This wasn't really about growth. This was about survival and learning how to spend the least amount of money while recuperating from a hurricane. We had all our systems up and running, even though we lost a data center in a building that had been flooded. We were able to restore our customers because we had deployed technology that went out on the trucks with the crewmen, so they were able to see what the maps looked like, what the problems were.

Something like that proves the value of spending money on technology. It usually takes some sort of disaster to prove your value.

But there is still a lot of managing of expectations. What scares me is when all my users start talking about service-oriented architecture. It's a scary thought when they're talking in techie terms, mostly because they don't really know what it means. They're expecting this new nirvana, and I'm supposed to design it.

That's why I'm not a big believer in service-level agreements. I hate them actually. I don't have these hard-core contracts with my users because I believe if there's something that has to be done that makes business sense, you do it. You don't hide behind an SLA that says you have eight days to do this, or whatever.

We do business cases for everything we do, so it has to have a sound financial impact. We hold ourselves accountable. RUNNER-UP
PHH Mortgage
John Sterling, Vice President,
Information Technology

Our CEO often reminds us that PHH Mortgage is a technology company that happens to be in the mortgage business. So I'm a firm believer in alignment. We don't have a company without alignment—it's that simple.

Through next year our growth is predicated on a new business model, which is trying to get "feet on the street," as we call it—selling mortgages. It's not a space that we've traditionally played in. Historically, we've been a mortgage provider, but you don't ever see your loan officer. And now we're taking it to the street. That requires new systems. So we won't stay in business if we're not joined at the hip with the business.

Our three fundamental players are the senior leadership team, the project office, and the relationship managers. Within each operational area, we have a relationship manager who is embedded in the operational area. And that relationship manager has the responsibility of really owning that line of business as it relates to their strategy, and then how the technology integrates with that strategy.

So the relationship manager understands the line of business and produces a strategic set of initiatives, the project office prepares a project portfolio, and the senior leadership team then authorizes the portfolio or the specific initiatives.

Through that process, we end up with exceptionally detailed project plans as to what needs to happen around fundamental things.



 

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