Using IT to Transform the Business: Three Keys to Success

CIO — For a company that manufactures products that protect the flow of materials, Flowserve was having a tough time pumping standardized technologies and business processes throughout its 300 global locations. The culmination of a series of mergers and acquisitions, the company, based in Irving, Texas, found itself saddled with a whopping 68 ERP systems, scattered data center structures, and fragmented voice and data networks.

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Faced with mounting operational and regulatory pressures, Linda Jojo, Flowserve’s CIO, knew it was time to simplify the company’s entire IT infrastructure—an endeavor that would bring about sweeping changes across an enterprise spanning more than 56 countries. How she accomplished this task helped the company earn a 2007 CIO 100 Award. Applying IT in innovative ways at the enterprise level is certainly no small feat. Implementation headaches, configuration nightmares and employee backlash are only a handful of obstacles that are bound to arise. And for companies such as Flowserve that choose to forgo a piecemeal approach in favor of a complete IT overhaul, the challenges can seem insurmountable.

What’s the best way to determine a project’s scope? How should investment dollars be divvied up? What steps must be taken to win the support of senior-level executives and frontline employees alike? And how can you even begin to capture the impact of a project that touches every aspect of an organization? These are questions that Jojo, along with fellow CIO 100 honorees from Delphi, the Air National Guard, Johnson & Johnson, and Merrill Lynch had to ask themselves before tackling one of the largest undertakings of their IT careers.

Transformation is tricky stuff, after all. So it’s not surprising that Andy Woyzbun, lead analyst at Info-Tech Research Group, refers to today’s expansive IT undertakings as the “Big Bang.” “The reason why a lot of organizations don’t propose the ‘Big Bang,’” he says, “is because they don’t feel that they can generate sufficient excitement, belief or faith [among senior-level management]. Therefore, they decide to tentatively chip away at problems a bit at a time.”

That doesn’t have to be the case though. Translating an IT project into business terms, developing a strategic communications plan, building a solid business case and creating a governance team to oversee change are all steps that can lead to a successful IT overhaul, as proven by these CIO 100 honorees.

Get Everyone on Board
At Flowserve, Jojo’s assignment was heavy on IT change as the company sought to update processes and systems: establishing a common IT infrastructure, introducing global help desk capabilities and cutting dozens of disparate ERP systems. But that didn’t stop her from taking a decidedly business approach to simplifying Flowserve’s IT footprint.

“The first step was making sure that this wasn’t viewed as an IT project,” says Jojo. “From our CEO, our leadership team and our board of directors on down, we’ve made sure that this project is something we talk about in terms of its business impact.”

It’s a tactic that helped set the scope for a project that could have otherwise become unwieldy. For starters, Jojo helped assemble 35 divisional representatives from across the globe at the company’s world headquarters. Here, holed up in a conference room for 17 weeks, these divisional representatives pored over disparate systems and processes, deciding what was—and wasn’t—worthy of improvement. Throughout this period, Flowserve also called on internal subject-matter experts, from engineers to sales representatives, to offer their in-the-trenches take on the company’s shortcomings.

The result: a blueprint for business standards, the design of a common financial chart of accounts, and the creation of a set of data standards for customers and suppliers. In addition to creating project perimeters, Jojo says that by involving business leaders in the critical design phase, she was able to garner widespread support for a companywide strategic business initiative costing more than $60 million over four years.

That’s not to suggest, however, that IT manpower isn’t an excellent source of support when a company is tackling a gargantuan IT project. Just ask Bette Walker, CIO at Delphi, a mobile electronics and transportation systems supplier in Troy, Mich. In late 2005, Delphi conducted a comprehensive global benchmarking of its IT infrastructure, which revealed that the company was in desperate need of rebuilding its IT capabilities.

With the twin goals of managing costs more aggressively and delivering services more efficiently, Delphi orchestrated a plan to move to a managed service environment, cut global outsourcing contracts and reduce IT operating costs to industry benchmark levels. But not before Walker pulled together a special forces team—a cherry-picked, six-person unit of IT professionals adept at working under pressure and able to address the project’s most urgent technical issues.

According to Walker, while Delphi’s Special Forces unit oversaw uniting employees “around any given issue or initiative that needed focus,” she dedicated as much as 80 percent of her time to meeting with department heads every other week to discuss planned actions to the IT operating model. With senior-level management support firmly in place, Walker then went about winning the vote of frontline employees. A long-term communications strategy ensured that IT’s goals were communicated concisely and consistently and in a manner that was sensitive to employee concerns. After all, says Walker, “this amount of change creates a lot of trepidation in the employee base. When that happens, you can start to have attrition.”