How to Manage IT for a Diverse Portfolio of Businesses

When Jeff Bezos purchased the Washington Post for $250 million in 2013, the portion of the company that was not purchased was rebranded as Graham Holdings. Its holdings include Kaplan, Slate, multiple television stations, CableOne, and Graham Media Group (which is the former Post-Newsweek Stations), among others. Yuvinder Kochar has been chief technology officer of the company pre- and post-divestiture, having held that role for more than 12 years. In this interview with CIO Insight contributor Peter High, Kochar talks about the changes afoot at Graham Holdings, his own methods of managing IT, and his thoughts about the future of technology.

CIO Insight: You were the CTO of the Washington Post Companies until that organization was split up. Jeff Bezos purchased the Post, and the other part of the organization is called Graham Holdings. What makes up Graham Holdings?

Yuvinder Kochar: Graham Holdings Company (GHC) is a diversified firm whose principal businesses include Kaplan (educational services), Graham Media Group (television broadcasting), CableOne (cable systems), Slate and Trove (news media), Celtic and Residential Healthcare, Social Code (social marketing technology and services) and a couple of manufacturing companies. We are a public company with operating revenues of $3.5 billion in 2014.

Since the divestiture of the Washington Post in 2013, GHC has acquired several health care and manufacturing businesses. In the most recent annual report, Don Graham (our CEO) very succinctly answered the question, “What kinds of businesses do we want to buy?” Businesses we can understand. Businesses with a proven record of profitability and a management team that wants to continue to run the company after selling it to us. And businesses that aren’t too capital intensive.

CIO Insight: Graham Holdings is diversifying quickly, going beyond education and media into health care and manufacturing investments. How do you think about technology in such a diversified group of businesses?

Yuvinder Kochar: My strategic thinking about technology at GHC derives from the way we manage our businesses: Our diverse businesses share common goals and values, but each has its own identity, workplace culture and management responsible for its operations. To allow maximum flexibility to our businesses to respond to market changes, we do not try to consolidate and centralize functions across our businesses.

As a result, I have structured my corporate technology team to be a service provider to our businesses. To ensure flexibility and agility required by our M&A strategy, I am pursuing a 100 percent SaaS technology portfolio. We acquire SaaS services, value add them with high-caliber functional support and project management and offer them as a service to the primarily functional teams at our businesses. We keep overhead costs to a minimum. Our businesses prioritize the agenda for our services by paying only for the ones they want and use.

I personally maintain a strong external focus on technology. I work with several VCs to constantly review new technologies and identify those that present a strategic opportunity or threat to any of our businesses. I then let the individual businesses evaluate and incorporate the ones that are relevant to their respective strategic priorities.

Finally, Cyber-security is a key focus area for me.

CIO Insight: What was the divestiture like from a technology perspective? How did you plan for and implement the necessary changes?

Yuvinder Kochar: As I described earlier, in our decentralized organization structure, the Post always had an independent technology team. However, due to the fact that the holding company grew out of the Post and was housed in the same building, we shared a lot of technology infrastructure and applications. In addition, we had numerous shared vendor contracts. We identified all the shared technologies, signed a transitional services agreement between the two organizations and then systematically separated all of our common technologies over a period of 12 months. Both teams worked hard to ensure that transition was completed without any business impact to either organization. I was very pleased with how smoothly we unwound our technologies.

CIO Insight: You have pursued a “cloud-first” strategy both at the Post and now at Graham Holdings. What have been the advantages of virtualizing and pursuing XaaS as a strategy?

Yuvinder Kochar: I was first introduced to cloud technologies when I joined BrassRing, an application service provider for recruitment automation in 2000. I immediately realized that this was the future of technology and became a very strong believer in SaaS and the key strategic value it delivers:

*Business Focus: With SaaS solutions, my team can focus on identifying and solutioning business requirements and not on solving technology problems.

*Technology Proof: Instant access to all new technology features and upgrades.

*Agility: SaaS solutions are much easier to configure and change, e.g., SSO integrations that used to take us months to implement now get configured in hours.

*Reduced business risk: Advanced SaaS solutions are usually more secure than on-premise implementations.

*Lower Cost: and no capital investment.

CIO Insight: You have had remarkably low attrition among your leadership team over the past decade. How have you kept your team together and operating at a high level over such a long period of time?

Yuvinder Kochar: Building and retaining a high-performance team is key to the success of any organization. I consider it my most important responsibility. It starts with the caliber of the team members and what they do. I am very selective about who I hire and work hard to make their work engaging, challenging and professionally rewarding. I prefer to outsource non-strategic work, especially, where vendors offer more robust capability at a lower cost by consolidating a large volume of the same work from multiple customers. Next comes culture. My teams are diverse, cohesive and fun and everyone likes to work together. There is no place for ego or politics. In addition, we are very flexible and strive hard to accommodate personal situations for our team members. I prioritize honesty and have developed a very open environment. There are no hidden agendas. Next, I ensure that everyone on my team is always learning. This eliminates the possibility of people getting bored and start looking for positions outside. Finally, we offer very competitive compensation and benefits. It takes a lot of work, but, this is why I believe my team has stayed together for such a long time.

CIO Insight: Technology has radically changed the industries that you have grown most familiar with over the past decade, principally media and education. How have you worked with your colleagues to be more cognizant of the opportunities and threats posed by technology innovation?

Yuvinder Kochar: As I explained before, I keep a finger on the pulse of the technology industry by collaborating closely with venture capitalists. This has created a very robust pipeline of filtered information for me to review as I work on identifying technologies that are most relevant to our businesses. I have also developed a very strong network to draw on as I work with our business units on innovation and solution development. I am very selective about the conferences I attend. I prefer smaller meetings with CIO peers as I find these as the most productive use of my time. I am the president of the Washington area CTO Roundtable, a very informal network of 200-plus local CTOs that meets 5-6 times a year to take a deeper look at a new technology space.

CIO Insight: You are a believer in outsourcing. How have you determined what aspects of IT to outsource, and how have you built your team’s capabilities to manage your key vendor partners as effectively as possible?

Yuvinder Kochar: Technology tasks that support any business function can generally be categorized into the following stack:

*Business Requirement Definition & Project Management

*Technology Solution Architecture and Design

*Application Software Development/Configuration

*Application Software Management

*Infrastructure software (OS, Database, etc.) Management

*Hardware (Server, Storage, Network, etc.) Management

For any solution set, I start at the bottom of this stack and evaluate two questions:

1. Can we internally perform this function to create a significant business advantage?

2. Is the function offered as a service by several viable vendors at a competitive price?

If the answer to the first question is “no” and the second question is “yes,” I prefer to outsource the function.

I then continue to evaluate the same two questions at the next level in the stack and outsource at the highest possible level. I never outsource the Business Requirement Definition and overall Project Management functions of any technology service. This allows us to ensure that we are delivering quality services to the business and are managing the partner relationship well.

I have over 30 years of outsourcing experience, both as a customer and a vendor. First and foremost, I constantly remind my team that we outsource tasks and functions but not the overall responsibility. We are primarily responsible for the success of the business with the technology solutions we deliver. I learned this from my customer when I led the delivery team for a very large outsourcing deal at a financial services firm in New York. Secondly, it is very important to carefully select the right service provider for the organization and develop a win-win partnership. Always be open and direct with the partner and treat their resources as members of the overall team. Next, contract and implement service quality metrics relevant to the success of the business and manage the relationship as objectively as possible. Finally, always maintain an internal ability to migrate from one provider to another. This allows for a regular review of the relationship and contract to ensure that we are always acquiring the best possible service at the least possible price point. In my experience, these few items are key to the success of any outsourcing relationship.

Peter High is President of Metis Strategy, a business and IT advisory firm. His latest book, Implementing World Class IT Strategy, has just been released by Wiley Press/Jossey-Bass. He is also the author of World Class IT: Why Businesses Succeed When IT Triumphs. Peter moderates the Forum on World Class IT podcast series. Follow him on Twitter @WorldClassIT.

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