How to Stay Close to the Business

CIOs love to talk about how they’re partnering with the business. At Kimberly-Clark, the $16.7 billion maker of Kleenex, Scott and Huggies products, CIO Ramon Baez is doing more than just talking about it. He has embedded his senior IT staffers in several key departments, enabling them to work on innovative projects that have, in turn, allowed IT to be come more strategic, according to a recent Forrester Research report by Bobby Cameron.

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The December 2007 case study details Kimberly-Clark’s Innovation Design Studio project and the role IT has played—transitioning from service provider to critical partner. The Innovative Design Studio is a virtual store application (a 3-D-type theater) that allows K-C R&D and marketing managers to test the positioning of merchandise inside its partners’ (Kroger, Target, Wal-Mart) stores. The goal is to better understand (and, ultimately, serve) consumers’ shopping habits.

The insights extracted from the Design Studio and the simulated store shelves have decreased the time-to-market for introducing new products by 50 percent, according to the report (“CIOs Can Learn From Kimberly-Clark’s Innovation Design Studio”).

Staffers from Baez’s IT infrastructure group were initially involved with the project to provide operational platforms and infrastructure help to the team of R&D and marketing folks. But as other CIOs have realized, Baez knew that IT could get even closer to (and become more strategic for) the business if he could insert the right IT managers in on the Design Studio project as well as future initiatives.

Baez “observed that while IT allocates a percentage of IT budget to researching emerging technologies, the primary way to identify other technologies that can be useful to K-C is through relationships with the business groups—led by the IT business partners,” the report states. Baez tells Cameron: “They bring IT investment opportunities to me from their knowledge of what the business units need, whether it is better decision-making information or a more efficient use of SAP. Our portfolio management process looks at those opportunities, which I then take forward to the CEO.”

Now, according to the report, Baez has senior IT staffers, called IT business partners, who are de facto CIOs to business functions such as R&D, and marketing and strategy. “These folks are solid line to me, and dotted to and co-located with the business functions or units,” Baez tells Cameron. “They work with leaders in those functions and businesses to decide how to make them more effective internally or externally.”

For CIOs and IT leaders who are interested in this plan, the report offers three recommendations:

Make structural IT changes to get closer to business idea creation. “As is so often the case, Kimberly-Clark’s Innovation Design Studio was initiated by a business unit,” Cameron writes. “But IT became involved early on, if only from an infrastructure planning point of view. The IT organization is structured today to ensure ongoing connection to new business ideas as well as the extensions of the existing studio and technology, and IT has a portfolio process to move cross-functional ideas forward for funding.”

Assign senior IT staffers to work with R&D. “The IT business partners, who Ramon described as ‘CIOs for the functions and business units,’ are clearly senior enough to work closely with the executives of those organizations, including the R&D (what K-C calls Innovation) function,” Cameron states. “CIOs should follow the K-C example of co-locating senior staffers with the business units and functions to ensure that IT is engaged and involved in future innovation success.”

Ensure that IT staffers are looking for innovative ideas. “Business units are just as likely today as IT to be out meeting with other firms, participating in consortia and special interest groups, and talking with vendors,” Cameron writes. “CIOs should make sure that IT staff join them in these innovation networks, whether from inside the enterprise architecture group’s emerging technology research or from across the infrastructure and apps groups.”