Top CIOs Use IT to Speed Up the Business

The need for speed underpins many of the projects we honor in our 26th annual CIO 100 awards. We recognize organizations whose IT work shows innovation and impressive business value. In 2013, it’s clear that meeting those marks often requires a quicker way to get things done. External customer transactions, internal decision making, the very way IT operates to support new business ideas–it’s all going faster, then faster still.

See 2013 CIO 100 Awards: Judges List and How We Chose the 2013 CIO 100 Winners here

Think of it as the business equivalent of breaking the space-time continuum: Significantly increase your speed, and you can reach new, possibly more profitable realms ahead of competitors. After coming out with a new product or service, quickly tweaking it to reflect customer feedback can push you into an even better position, says Adi Alon, a managing director in Accenture’s innovation and product-development practice. “Designing your innovation process and operating model for speed,” he says, “is a very critical weapon.”

CIO 100 winner Stuart Kippelman, CIO of Covanta Energy, led a project to streamline a clumsy and slow customer contract process. The sooner paying clients are set up, of course, the sooner money comes in. “There’s no such thing as too fast,” he says.

Our honorees encompass many industries, including pharmaceuticals, insurance, and oil and gas, and they achieve speed through various means. Agile development, analytics, a portable ERP system and a homegrown search engine are among the technology tools they used. Perhaps more important is the “opportunity” mind-set, says Brian Garcia, a CTO at Aetna. An IT group focused on finding business opportunity will naturally want to move quickly to grab it, he says.

Here, some standout winners share insights about how they got smart about getting fast.

Get Your Own House in Order

Before the IT group can make a difference for colleagues, it should get its own house in order. At some companies, plans for systems to support a killer new product can disappear into a slow, convoluted development process, says Garcia, CTO of Aetna’s Healthagen subsidiary, which sells health-management technology and services. Healthagen also funds startups working on mobile and online health tools, incubating the small companies so the $36 billion Aetna has the option to someday use the technology internally or sell it.

A key goal for Healthagen is to create products to help hospitals, pharmacies, doctors and patients share data and, as a result, make healthcare decisions faster. That could be a mobile app to manage diabetes or a business intelligence system to navigate the federal Affordable Care Act. “We’re focused on speed because the opportunity is there to address fundamental problems in healthcare,” he says.

When he joined Healthagen from Aetna’s core IT group, Garcia set about replacing traditional development methods with agile and lean ones. The project has cut six months or more from the process of building software, he says. One new revenue-generating app built using agile methods was launched as a business recently: InvolveCare helps families coordinate care of elderly relatives with dementia.

But even as the company moved at top speed, Garcia didn’t want to lose sight of good design. Agile teams can sometimes ignore human-centered design principles in a bid to pump out prototypes, he says. His team’s watchword is “invisibility.”

That is, a key test for a new system or application is whether the user has to spend much time fiddling with it to do anything useful. Technology shouldn’t distract anyone, but hum in the background as the doctor and patient talk, decide and act, Garcia says. “Let the tech enrich that relationship.”

Technology should also work the way a customer thinks, he says. Healthagen developers sometimes write code with a user persona in mind, such as a 35-year-old woman who lives in San Francisco and has a specific health condition. Doing so helps developers avoid wasted time building features that will be omitted later. “The speed theme permeates everything we do,” he says.

Work Faster Than the Sales Team

As world economies suffer through recession, not many companies have to contend with explosive growth in sales, employee count and geographic territories. But that’s exactly what confronts Christopher Barron, global CIO of Valerus.

Valerus installs and services equipment for the natural gas industry and started life focused on the Texas market. But a large investor decided to step up its game in 2009, pursuing business outside the United States. Valerus quickly expanded to Jakarta, Iraq, and many other countries–five continents in all. The privately held company doesn’t disclose financial data, but says sales total $1 billion and have grown a whopping 39 percent per year between 2010 and 2012.

During this aggressive expansion, IT struggled at times to keep up, Barron says. Valerus’ legacy IT was not designed to be picked up and plopped down in other countries and, as a result, was starting to impede corporate expansion, he says. For example, the company bought all its computer equipment in the U.S. and shipped it to new offices in other countries. But that was slow and expensive, leaving Valerus vulnerable to losing business to rivals, he says.

Although Valerus could see where it needed to improve, some companies can’t, says Tom Pettibone, a partner at consulting company Transition Partners. For them, diagramming a business process can highlight the black holes. A hospitality company he recently worked with, for example, used a diagram to find that the finance department wasn’t acting quickly enough on proposals. Projects with the potential to improve sales and service languished. Reforming that department’s processes helped cut the project development cycle almost in half, Pettibone says. “You want to strip out the fat.”

At Valerus, Barron’s team had to move as quickly as the sales team or risk becoming an obstacle to company growth. He launched a project in 2011 to create a quick-ramp version of Valerus’ SAP enterprise systems using cloud computing and virtualized desktops. The company can now build a fully functioning office to support new business in less than 72 hours. Deploying a standard SAP “experience” to each region has cut software implementation time in half, Barron says.

Valerus now buys computers locally, rather than shipping machines from its Houston headquarters. That’s quicker, less expensive and avoids the vagaries of customs in each country, he says. IT’s newfound speed lets the company set up equipment for new customer projects in less than a week, which is faster than competitors and has helped Valerus win deals, Barron says.

Look for Slow Spots

When it isn’t clear where to apply IT to speed things up, try analyzing how external customers interact with the company digitally, advises Kippelman, the CIO of Covanta, a $1.6 billion company that converts waste into energy.

When Kippelman did that last year, he saw immediately that the contracting process took too long–weeks or months. It was largely manual and every deal was quite different from the one before. It seems no two municipalities create exactly the same kind and amount of garbage and, therefore, the process of converting that waste into energy differs, too.

The IT group interviewed teams from sales, legal and other areas to help revise the business process behind getting a contract in place. Then IT built an application for managing and tracking contract documents as they wind through approvals. To keep the process moving, the system notifies individuals directly of items they must address and tracks changes and routes them to the legal department for review. Customers can access contracts and initiate changes through a secured website, decreasing the need for back-and-forth with sales people. As a result, approval times for contracts shrunk dramatically.

A related electronic billing system cut paperwork sent to customers by 75 percent and has increased the number of customers paying by credit card by 50 percent. Both of which save time, he says.

As the sales agents use the new system, IT incorporates their feedback in a continuous stream of improvements. “No one likes change, but if they can see this is built on their ideas, they will accept it,” he says.

Travel Forward in Time

Fast is great, but getting ahead is better. That’s true innovation, says Alon from Accenture. Too many companies fall into what he calls an innovation death spiral. That’s when new ideas or processes are developed only to defend the company’s current position, rather than to push the company forward. Refreshing something that already exists, he says, “is renovation, not innovation.”

Analytics and search technologies, in particular, can help companies go from reacting quickly to business changes to anticipating them, Pettibone says. A CIO who can help tell the future is valuable indeed.

Amgen, a $17.3 billion pharmaceutical company, puts a premium on spotting potential trouble. The CIO 100 award winner analyzes manufacturing and laboratory data with such precision and depth that it can identify budding problems–and avert them–sometimes more than a month in advance.

In the pharmaceutical business, product shortages due to manufacturing issues can leave patients without needed medicines or scientists without research materials. Slight deviations from the precise specifications that pharmaceutical companies must follow can shut down production. Even a brief delay can cost the company a lot of money.

Amgen makes biologic medicines, made of cells and proteins. The cultures can take months to grow. One wrong move and whole manufacturing lots can be ruined.

Using statistical analysis of data points collected in real time during the process, Amgen identifies “weak signals” that could indicate brewing problems in the manufacturing cycle. Scientists then delve deeper, taking corrective steps if necessary. The analytics system includes virtualized data warehousing tools from Denodo, multivariate analysis tools from Umetrics and various software modules from SAP.

By modeling multiple potential variations that could be indicated by the weak signals, Amgen can draw conclusions much faster than in the past, says CIO Diana McKenzie.

In one recent example, Amgen identified the cause of a cell culture problem about a month earlier than it otherwise might have. For that biologic product, making the fix early–and not losing that month–saved $2.4 million, she says. Depending on the product, manufacturing a lot can cost more than $1 million, she says. “This is Amgen’s taming of big data.”

Steve Randich, CIO of the Financial Industry Regulatory Authority (FINRA), is slaying a data analytics monster of his own. The primary mission of FINRA is to protect investors from Wall Street crime. But investigating alleged Wall Street criminals, even with politics aside, is immensely complex.

FINRA keeps a few dozen structured and unstructured databases and other electronic collections of information on about 4,250 brokerages and 630,000 brokers and other registered financial advisers. Employees can search all these sources for material related to an individual or company under review, developing multi-stage queries that weight data sources depending on the kind of information they’re after. They can also set up alerts so they are notified when new pertinent data is available. But it didn’t used to be that way.

Until 2011, some FINRA employees didn’t have immediate access to some sources. Other critical files were still paper, stored in boxes and cabinets. It could take weeks to complete a basic background search. FINRA decided to digitize most data sources and build its own search capabilities. The Enterprise Search engine, built on Solr open-source software, does full-text searching like Google, but is tailored to FINRA’s need for “intelligent” filtering and weighting of information, Randich says.

Now a typical search takes less than a minute, allowing more time for more investigations. FINRA suspended or barred 843 individuals last year, compared to 684 in 2008, a year when it logged 94 percent more complaints.

“If you’re getting information faster and easier, the cost of doing so is going to be less,” he says. “Investigating a case is easier, cheaper, quicker and more likely to result in catching the bad guy.”

Focus Beyond IT

Some IT groups hesitate to move too quickly, worried that if they get too far in front of business plans, they will eventually discover that they have wasted energy and money on the wrong projects.

That’s a legitimate concern, Pettibone says. But it’s easily addressed, in part by placing staff members with hybrid business and technology expertise in key spots in various departments, he says. Randich and Barron, for example, are big fans of that tactic.

Moving fast doesn’t necessarily mean making risky moves, Alon says. In fact, quick experiments with prototyping new marketing campaigns or product ideas, for example, can decrease risk by revealing tactics for breaking into new business segments, finding ways to make better use customer data, or providing other valuable insights.

Even an internal back-end process like Amgen’s manufacturing analytics system can affect the company’s overall speed with measurable financial results. With in-depth manufacturing knowledge, “we react more quickly and it allows us to produce a higher-quality product and have more manufacturing throughput,” McKenzie says.

As Kippelman puts it, “Speed is a game-changer.”

How We Chose the 2013 CIO 100 Winners

Beginning last November, we solicited applications for the 2013 CIO 100 Awards through ads in CIOand our online newsletters, and through electronic mailings to our print subscribers, event attendees and publicists who sign up to receive our editorial announcements

Entrants filled out an online application between November 2012 and late February 2013. Although most applications came from companies headquartered in North America, the pool included entries from multiple continents.

Each application was read by two of the 42 CIO 100 judges–a list that included former CIOs, academic experts and independent consultants. The judges evaluated the applications according to two criteria: innovation and business value. Applications that received a score of 16 or higher (out of a possible 20) were selected for a second round of scrutiny by CIO editors.

We examined how each company stacked up against the others in the pool, putting emphasis on submissions that told the best stories about generating business value through creative and cutting-edge uses of technology. We sought to pull the most exciting initiatives from the pack and reward them with the CIO 100 honor.

The companies we selected for this year’s CIO 100 Awards range from nonprofits to multibillion-dollar global powerhouses, and they come from every industry. Companies had to demonstrate not only that they were able to create new value using IT and to execute their project well, but also that they did so in uncommon, innovative ways: pioneering a new technology, applying a familiar technology to a new purpose, setting the bar higher for their competitors. We also emphasized projects that, due to their scope and impact, are helping propel companies to a more profitable future. In short, these organizations are technology leaders.

The list of award winners was published in the July 1 issue of CIO magazine, and award plaques will be handed out at the 2013 CIO 100 Symposium and Awards Ceremony, August 11-13, in Colorado Springs, Colo.

2013 CIO 100 Awards: Judges List

Dennis Anderson

Professor & Chairman of the Department of Management & IT

St. Francis College Stephen Andriole, Ph.D.

Thomas G. Labrecque Professor of Business Technology

Villanova University School of Business Robert D. Austin

Professor of Management of Creativity and Innovation

Copenhagen Business School Doug Barker

President

Barker & Scott Consulting Paul Bergamo

Partner & Practice Lead

NewVantage Partners Jack Bergstrand

CEO

Brand Velocity Hans Brechbuhl

Executive Director, Center for Digital Strategies

Adjunct Associate Professor, Tuck School of Business, Dartmouth College Bob Bruce

President & CEO

BlueCod Technologies Howard Dresner

Chief Research Officer

Dresner Advisory Services Les Duncan

CIO (ret.)

Atmos Energy Charlie Feld

Founder

The Feld Group Institute Martha Heller

President

Heller Search Associates Peter High

President of Metis Strategy

Author of World Class IT: Why Businesses Succeed When IT Triumphs Dion Hinchcliffe

EVP of Strategy

Dachis Group D. Kevin Horner

President & CEO

Mastech Cathy Hotka

Principal

Cathy Hotka & Associates Mike Hugos

CIO at Large

Center for Systems Innovation M. Eric Johnson

Dean and Bruce D. Henderson Professor of Strategy

Owen School of Management, Vanderbilt University Matt Karlyn

Partner

Cooley LLP Michael Krigsman

CEO

Asuret Kristen Lamoreaux

President & CEO

Lamoreaux Search Michael E. Lawson

Professor of Economics & Associate Dean of Executive Education

Boston University School of Management Jerry Luftman

Professor & Managing Director

Global Institute for IT Management Abbie Lundberg

President

Lundberg Media Thornton May

Futurist, Executive Director & Dean

IT Leadership Academy Jerry McElhatton

President

Virtual Resources Kavin Moody

Executive Director of the Center for Information Management Studies (ret.)

Babson College David Moschella

Research Director

Leading Edge Forum Honorio J. Padron III

Managing Director & Global Business Services Practice Leader

The Hackett Group Bart Perkins

Managing Partner

Leverage Partners, Inc. Tom Pettibone

Partner

Transition Partners Ron Ponder

Founder & CEO

The Ponder Group Chris Potts

CIO Mentor

Author of the FruITion trilogy: FruITion, RecrEAtion & DefrICtion Dr. Howard Rubin

Founder & President

Rubin Worldwide Phil Schneidermeyer

Partner

Heidrick & Struggles Eric Sigurdson

CIO Practice Leader

Russell Reynolds Associates Sheila Smith

President

Omega Point Consulting Jim Spitze

Executive Director of the Fisher CIO Leadership Program at the Haas School of Business

UC Berkeley Jim Sutter

Senior Partner

Peer Consulting Group Rick Swanborg

President

ICEX Madeline Weiss

President

Weiss Associates George Westerman

Research Scientist

MIT Center for Digital Business

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