Successful CIOs seek to hide complexity by creating easy-to-use systems and interfaces. There’s a lot to hide. Acquisitions and mergers bring additional systems and processes. New technologies must mesh with existing ones. Business partnerships must be embraced. New products and services must be supported.
Not all complexity is bad, though. For example, companies are moving away from relatively simple, contractual relationships with external business partners and toward more complex relationships that are full of collaboration, knowledge-sharing and innovation, said Arun Rai, a professor at Georgia State University, at a recent meeting of the Society for Information Management’s Advanced Practices Council.
But beyond a certain point, more complexity reduces profits, even when revenues increase, says Michael Wade, a professor at IMD business school in Switzerland.
Sometimes the CIO is the source of the complexity. Wade illustrated with an example: Jim Barrington, CIO at Novartis, took on a problem that seemed unsolvable. In many African countries, huge supply-chain problems made it impossible to get malaria medicines to patients in time. The overall supply of medicine was sufficient, but local facilities often ran out. Wade asked council members to brainstorm solutions. The room was full of high-achieving CIOs, so the results were novel, clever–and complex. Solutions involved local stores, schools and delivery trucks.
Wade then described Barrington’s actual–and exquisitely simple–solution: Provide each local public-health facility with a smartphone loaded with a basic app. In response to a text message every Thursday, a worker enters the stock level of the antimalarial drug. On Monday, the system sends information about stock levels to the district manager, who can then order or redistribute medicine among sites accordingly. Within six months, drug shortages were reduced dramatically in three districts.
Wade used the acronym SPRING, as in spring cleaning, to help others remember the following lessons from his research on getting simple and staying simple.
Standardize. Ensure that processes and systems are standardized to the greatest extent possible.
Prioritize. Decide what to keep, what to standardize and what to drop. Use metrics–such as profitability per SKU, IT system, customer, employee or location–to uncover sources of complexity.
Rationalize. Choose a few processes and systems to become the global standard, allow some exceptions, and eliminate or outsource most others. Don’t pay attention to excuses like, “This system (or product, service, process or customer) is strategically important,” and, “It’s a cost of doing business; we need to have it,” and ignore unspoken messages such as, “I may lose my job if you get rid of this.”
Institutionalize. Ensure that simplicity becomes embedded in the corporate culture.
Navigate. Develop simple rules to guide action. For example, the Miramax studio has four simple criteria for making a film: It is based on a human condition; the main character is appealing but flawed; there’s a strong story line with a beginning, middle and end; and there’s a firm cap on production costs. Everything else is flexible.
Govern. Ensure that there’s a structure in place to maintain simplicity over time. The CEO of one global company required anyone creating a new SKU to delete an old one. Very simple and very effective.
As a CIO, you are in a great position to adopt that formula and take a leadership role in simplification.
Madeline Weiss is director of the Society for Information Management’s Advanced Practices Council (APC). June Drewry is former CIO of Chubb and an adviser to the APC.
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