by Sean Burke

Make the Connection Between IT and Business Strategy

Mar 28, 20087 mins
IT LeadershipIT Strategy

Galderma's CIO has been planting the seeds of IT as a strategic resource for eight years; the crop is about to bloom in a single-instance ERP

Every mid-size company eventually recognizes that it has outgrown the ad-hoc, local processes that allowed it to function from the start-up stage. Whether a company stays within a single country or expands globally, there comes a point when each function is too focused on location rather than on corporate direction, and an IT leader with a central guiding strategy becomes necessary.

At Galderma, that realization came eight years ago, when the dermatology products company, aware that it had a problem with IT management, brought me in to solve it. Galderma, based in Paris, is a relatively young company. Formed in 1981 as a joint venture between Nestlé and L’Oréal, Galderma is on a fast growth path, operating in more than 30 different countries. But when I arrived, the only corporatewide technology system we had was e-mail. There were 28 ERP packages; we probably had a system from every vendor you can think of. Virtually every location had a different one, and that made it nearly impossible to centrally manage data and use it effectively.

My primary role has been to develop a central IT strategy and bring some coherence to the mess. It’s taken me until now to change the company culture to one that values technology and information as strategic assets. The knowledge of how to do that—my strategic orientation—wasn’t something that I came into through chance.

Origins of an Outlook

I started in IT 20 years ago in the United Kingdom as a systems support controller at what was then E.R. Squibb & Sons (it became Bristol-Myers Squibb after merging with Bristol-Myers in 1989). I was lucky enough to work with general managers who valued IT and information asset management, and who could see their long-term strategic value. My conversations with them about my role and the role of IT in business initiatives helped more than anything to instill in me an understanding of business strategy and the key levers for IT. When you become a CIO, one of the best things you can do to improve your abilities and enhance your position is to actively seek out business partners like these, especially if they have decision-making authority, and to build relationships with them.

My view of my role and that of technology really changed when I became involved in a project to develop customer relationship systems for the whole company. I had become associate director for sales, marketing and medical systems, and I was working closely with the leader of the project, our global director of sales force effectiveness. I had the opportunity to sit down and really think about how IT could make a strategic difference to the company—from sales all the way to the management decision-making process.

In the pharmaceutical industry, as in some other industries, we tend to look at sales force activity as the primary tool for measuring our investment with the customer, and sales or sales audits as the key measure of return. However, the relationship between a company and its customers is far more complex than that; we use multiple tools to change purchasing habits and measure success.

The problem has always been to collect this data from all the silos around a company, to consolidate it, and then present it in a meaningful or usable way. The hurdles are not just technical but also political. Persuading each country manager that there was value in consolidating shampoo sales data with infant nutritional sales data was a challenge.

That experience changed my focus and my role from being operational or tactical—where I was thinking only about the next project and the delivery of services—to a strategic role where I was looking at the value of data in the customer relationship and the value of the information asset to the enterprise.

Painting the Strategic Picture

When I joined Galderma, we were still a young entrepreneurial company run more as a commonwealth than a corporation. Financial consolidation was a black art, with information flowing from local systems to the corporate center at the end of each reporting period. We had to change how data was managed in a way that both satisfied our strategic need for consistency and respected the decentralized culture of the company. I knew from what I had learned during my years at Bristol-Myers that we needed to avoid doing too much too quickly.

We needed a massive ERP replacement, but we couldnt afford to invest in such a project without approval from the business leaders who owned the country-specific systems. Getting that approval became the initial thrust of the IT strategy.

I could tell Galderma’s employees that a single system is important to the business, but it took years to get people throughout the company to understand why. They believed that having systems specific to local economies, cultures, and people was more likely to lead to good products and high sales than a system used by everyone around the world. I had to show them the value of a single ERP system and get them to want to fund such a project. Therefore, we did not start with the single ERP solution; rather we focused on constructing what would be the foundation of our future application architecture at the corporate center.

The message I focused on in the meantime was that data is an asset that must be managed properly; otherwise, it becomes a millstone rather than something of value. I had to make it clear to people in the business units that when you have unmanaged data everyone has to spend all their time translating and managing it. And when you’re spending all your time trying to figure out where your data is and how data from other departments relates to yours, there isn’t time to use it to deliver shareholder value.

When people know how a project affects their corner of the company, they develop a personal stake. But they also have to see how an IT project affects the bottom line, so that they fully grasp how the IT strategy plays into the health of the business. In the case of our ERP revamp, the message was that putting in place a single ERP was not just about having something as amorphous as “better technology” it was about the central leaders having transparency of information across units, enabling them to be flexible in using resources across the enterprise.

When our new CEO and CFO were appointed in 2004, they emphasized this message. They were not willing to work with the ingrained processes. They wanted and needed to have accurate, consistent and timely information at their fingertips to allow them to pilot the company, and they pushed that vision throughout the company. Now the time has come for the second phase, when we harmonize our ERPs and finally have a common data language in use around the world.

No Turning Back

Once you’ve started to execute a strategic vision, you cannot become complacent. You have to keep pushing for strategic value from your IT investments, even when you find yourself thinking that a tactical opportunity seems preferable to a long-term initiative. Sometimes you will have disagreements with business leaders about such decisions as balancing the roles of business and IT personnel within a project, and you have to be willing to compromise to get the job done.

Instilling a strategic, corporate-centered view of IT at Galderma is a work in process. The money for a single ERP implementation finally became available, and we kicked off the project in January. It doesn’t matter whether the ERP project itself is ever associated with me. The fact that this project is going forward is, for me, the final tick in the box to say that our strategy is right, and that people now understand the value of data, the value of consistent information, and how the IT strategy enables a business vision.

Sean Burke is CIO at Galderma International, based in Paris, and is responsible for information management strategy within the Galderma Group. He is a member of the CIO Executive Council.