Growth: The Good Problem to Have

Growth is what everyone who runs a business desires. But growth that takes off like a jet plane and doesn’t come down to refuel comes with heavy costs to an IT department trying to manage all the risks. What happens to innovation when it takes all a CIO’s gumption to just keep the lights running? And how should a CIO manage the risks of ramping up so quickly?

The short answer is that it’s a good problem to have. The last 12 to 15 months have been a whirlwind for Guido F. Sacchi, CIO and executive director of shared services for CompuCredit. In his presentation “Being Innovative and Managing Risk,” Sacchi told the story of CompuCredit’s amazing spurt, and how’s he tried to innovate during that time. “I’ve learned that you can drive faster if you have brakes on the car,” he said.

At the specialty credit card company, which targets the underserved consumer (below the prime market of consumers), Sacchi identified these four areas to focus on: managing business diversification; going after competitive advantage; accommodating growth; and dealing with technology mega trends. “The challenges could be met if we had a good plan,” he said.

Through some classic risk management, Sacchi developed a plan of what he specifically would have to do to succeed. “If I nailed four elements, I would be in good shape,” he said. He first needed a clear strategic plan that could evaluate business demand, link the demand to where investments in infrastructure and architecture, and link in a human capital management function.

But what was more interesting was the fact that Sacchi decided that he needed to make IT into a brand (echoing other CIO presentations from the CIO 100 Symposium). The brand strategy, not surprisingly, was an outgrowth of the need for speed and execution: “Do More, Faster” became the charge.

The IT governance model also needed to adjust to the new hyper growth environment—where the business would take on a much more expanded role. Which is exactly what CompuCredit IT needed. Four senior executives now sit on the IT steering board. Sacchi eliminated cross-business prioritization. And now the CFO approves investments, demanding accountability from the business. “We have credibility now,” he says, and he’s also able to have much more engaging debates on business demands with the business folks.

But Sacchi would be even bolder, linking future success on his department’s ability to change in a big way. “It’s not about incremental improvements; it’s about transformation,” he said. “There must be a fundamental change to business processes.”

Sacchi says it has become an “innovate or die” type of brand. “We were forced into it because the business wants to grow,” he said. As to the risks, Sacchi’s mirror most other CIOs in attendance. Risks include: ensuring execution and delivery; resourcing for the projects and security issues.

In short, he was able pull off the transformation in less than 15 months because he employed a risk-based approach that, in some cases, transferred risk out of IT, using offshoring to gain flexibility and agility, for example.

Overall, he learned many hard lessons. “I also made a lot of mistakes,” he said. The takeaways for other CIOs in attendance were:

1. It takes time, and trial and error to optimize outsourcing relationships, especially offshore. “I believe it’s a contact sport,” he said. “You cannot do it from your desk.”
2. Specific skills must be heavily upgraded (contract management, project managers, data modelers).
3. Contract workers have been a success.
4. CIOs need to deploy mechanisms for quick decision-making within a governance structure.
5. CIOs also need to know their cost drivers and how those will impact future projects.
6. And last, he said that CIOs need to celebrate their successes.

–Tom Wailgum