Thinking Out Loud: CIO Bob Travatello

During Bob Travatello’s tenure at Blue Rhino—he has been Blue Rhino’s CIO since early 2001 and senior director of MIS for five years before that—the company has experienced tremendous growth in sales and earnings, much of it attributable to management’s strong belief that technology is a critical productivity tool. That’s why Travatello and his team have been busy with re-engineering efforts for nearly eight years, transforming manual processes into state-of-the-art automated systems. Beginning in 1996, this involved creating a handheld system that allowed distributors to input daily delivery data for propane cylinders while on the road through modified PDAs.

With the passage of Sarbanes-Oxley, Travatello’s most important initiatives have revolved around meeting the disclosure and data-security standards demanded by the legislation. Travatello views this task as another opportunity to continue exploring the systems that Blue Rhino uses to process and share information and to overhaul these systems if they can be made more efficient and improve the company’s bottom line.

CIO Insight: Was it hard to convince Blue Rhino employees to get serious about Sarbanes-Oxley compliance?

Travatello: Not really. We’re a small company [fewer than 400 employees] and my boss, CFO Mark Castaneda, made it clear to everyone that complete compliance with the law was essential. We were doing it for the future of our company. Then I met with people and tried to soften the tone. I said, “You guys all know what you do from day to day. You’ve been following the same processes for years. You’ve got it in the back of your heads. All right, now write it down so we can make sure it meets with Sarbanes-Oxley, or tighten the procedure where we have to.”

What is your relationship with Castaneda and the business side of Blue Rhino, and how has it changed during the Sarbanes-Oxley initiative?

We’re fortunate in that we’ve always been close to the business side. IT is always involved in every important business decision, always able to offer our opinions to the CEO and the CFO. And we’re never taken lightly. With Sarbanes, IT is essential to compliance. First of all, a lot of data flows through networks that reside with us, and we have to make sure they have proper controls. Also, we handle the programming of how the data flows throughout the organization. We have to be certain there are appropriate levels of approval so that none of the applications is tampered with. This is a big responsibility for IT, and it has certainly helped make the business side realize how central we are to company operations.

Gartner has said that because of Sarbanes-Oxley, CIOs and IT executives should have board-level representation on the audit committee. You understand how information moves within the company, which is essential to an honest audit. Are you on the audit committee?

No. CFO Castaneda is on the audit committee, so I have a link to it through him, I guess.

What will be the key results of your Sarbanes-Oxley initiative?

First, we’ll meet the compliance date. Second, we’ll be able to close our books in half the time, and that will be a productivity boost. Third, the data throughout our company will be more accurate. Finally, we’ll be able to grow our business without adding a lot of head count. The new controls should enable us to keep SG&A flat, because our processes will be more efficient. Meanwhile, our sales growth will not be affected.

You’ve complained, though, that the company itself will slow down.

Business won’t slow down, but the process of getting things accomplished will change and be slower. Companies that work with us will just have to realize that it’s no longer pick up the phone, get it done.

What’s your biggest fear about Sarbanes-Oxley compliance?

I’m not sure that every company is taking it as seriously as we are. Some are perhaps changing some processes, but not all. As the first few companies go through the compliance requirements for Section 404 this summer, if there are a few that aren’t totally compliant, they could be made a public example of—and their stocks might plunge. And the companies, even if they’re honest but just didn’t put the right effort into it, could be affected very negatively. We’re not taking any chances.