Abstract
This book authored by Dan Roberts and Brian Watson presents case studies of nine successful CIOs who tackled serious management and organisational issues in their companies. The book was produced to help readers understand many human resources (HR), and information technology (IT) challenges and their implications for HR and IT professionals. The authors interviewed nine successful CIOs of global companies, many of whom do business in Asia. They organised the information in nine chapters. Each chapter presents information concerning specific challenges of HR and information systems faced by the corresponding CIOs, and how they tackled IT and HR challenges successfully.
The first chapter narrates the story of Filippo Passerini, CIO of Procter and Gamble (P&G). In 1999, P&G created the Global Business Services (GBS) division for outsourcing IT, facilities management and employee services. When P&G wanted to generate more revenue, and reduce the operating costs in 2002, 7,500 employees across the globe were scared about their futures. Eventually there was resistance from the employees. Passerini proposed and developed an optimised solution not only to reduce the cost but also to overcome the resistance from employees. He outsourced IT services to Hewlett Packard, employee services to IBM Global Services Ltd., and facilities management to Jones Lange Lassalle in lieu of keeping GBS division which was costing much. P&G could get the service from the best service providers. Further, the company benefited more than US$1 billion. Two thousand employees made the transition with equal salary and other benefits. This optimisation strategy helped the firm not to depend on one supplier and ameliorated the resistance from employees.
The second chapter presents the story of Rebecca Rhoads, the CIO of Raytheon’s Electronic Systems. In 2003, Raytheon Company had 10 per cent market share of the industry. The company felt that it was not enough. The company had business collaborations with a few other firms in the industry. Rebecca Rhoad’s challenge was to increase the market share. She came up with an interesting approach to solve the problem. She developed a plan in association with the finance department. They built up their own Enterprise Resource Planning (ERP). The new ERP provided a common platform for the supply chain management, IT and employee services. Because of this, the company saved 30 per cent on IT services and 70 per cent on other business activities. This chapter provided an illustration of the idea that internal collaborations within an organisation could solve a tough organisational problem. The success of IT in a company depends on the people who use it.
The story of Steve Bandrowczak, the CIO of Daslay, Hillblom and Lynn (DHL) Courier Company is included in the third chapter of the book. In 2005, due to a software glitch in scanners, scanners were not able to detect packages properly. Eventually, the system failed to scan the packages. They were not able to deliver the packages on time. Because of the IT issue, the company was losing US$1 billion per annum. Bandrowczak analysed the problem and determined that Radio Frequency (RF), and antenna must be re-engineered. He pulled best people from IT and System Development Life Cycle (SDLC) to design a new IT system. They named the project as Project Terra whose objective was to deliver the goods within 2 days after an order had been received from a client. Bandrowczak established the objective of the project and shared his vision with the team. He involved employees in the project in such a manner that they felt like it was their own objective. Eventually, the company and the employees met their objective of delivering goods within 2 days after an order was received. Bandrowczak, as the CIO, demonstrated that a sense of involvement in a project because of active participation in the project by employees, produced employee commitment and made the project successful.
The fourth chapter describes the story of Carol Zierhoffer, the CIO of International Telephone and Telegraph (ITT). The ITT was a conglomerate of two businesses: defence and aerospace. Each business had its own value centre and separate CIO in 2009. Since it was costing too much money owing to a lack of coordination and integration between the two value centres, the company decided to integrate the IT services of different value centres to reduce the cost. But, the question was how to integrate? Zierhoffer came up with the principles regarding shared services, architecture, accountability, information, consistency, common process governance, behaviours, investment and funding. She started a program called Business Enabled Strategic Transformation (BEST) which was to integrate IT and financial services. She identified and discontinued the non-essential activities. With the help of team work, she made the BEST program successful and costs were minimised. The case of Zierhoffer showed that discontinuation of non-essential activities and work processes could bring synergy and cost minimisation in a large company.
The fifth chapter describes the story of Lynden Tennison, the CIO of Union Pacific Transportation. In 2005, the company had old inefficient ERP system. The company decided to upgrade it. But the employees were afraid of the new system as they were working on the old system on which they had the working knowledge. However, since, Tennison saw the huge benefits that would result from upgrading the system, he convinced the top management to start the project called Net Control. Tennison formed a new team and integrated the old team with the new team. These two teams cooperated with each other and exchanged their knowledge of the systems. Tennison also introduced a job rotation program to address the fatigue that employees used to feel. A lesson that could be learnt by HR and IT professionals from the story of Lynden Tennison was that job rotation and integration of employees would lead to knowledge spill over and fatigue reduction. Employees may initially be afraid of technological and organisational changes. But, if they were integrated with employees who were favourable to the change process, the employees will have a chance to overcome their fears.
The sixth chapter the story of Wayne Shurts, the CIO of Nabisco Biscuits, a company that is famous for its Oreo biscuits in Asia. In the decade of 1990, Nabisco had a direct store delivery model. They were transporting goods from the company warehouses to stores directly by utilizing trucks. According to this delivery model, a truck driver would unpack the goods at a retail store, and then the sales executives would stock and sell the goods in the store. The customer was the first non-employee of Nabisco to touch the goods. Albeit a powerful model, it was costly and there was insufficient space for the company’s products in stores, which resulted into lower sales. Nabisco wanted more space for their goods in the shelves of the stores. Wayne Shurts started a program called Sales Transformation Project. He provided training for sales executives to improve the sales of company goods. However, the project was a failure as it was not able to solve the out of stock problems. Shurts diagnosed the problem and found that the closest warehouses were out of the corresponding products. He along with his team developed a Software Application Program (SAP) which facilitated the sales people with new pen pad computers that generated new suggested stocks for the stores. The new software helped the stores and inventory management folks to spot the “out-of-stock problems”. Thus, the company became more cost efficient. The lesson to be learnt by management practitioners was that implementing a solution without diagnosing the root causes of a problem would leave a company with unsolved issues and cost the company a great deal of financial resources.
The seventh chapter describes the story of Don Imholz, the CIO of McDonnell company. During the decade of 1990s, many companies were outsourcing their IT services to the companies like IBM and Oracle. Imholz understood that to make the decision on outsourcing—one should set priorities, strategy, financial analysis and then picking the partners. In 1992, McDonnell Company had decided to outsource their computing services to IBM. Many employees were resisting this because of the fear of job loss. However, it was the best option for the company. Imholz made IBM offer 1,400 jobs to the employees of McDonnell. A few of them rejected the offer, but many gladly accepted the offer from IBM. Retrenchment is a difficult job for HR professionals in Asia owing to a host of very rigid labour regulations. As shown in the case narrated in this chapter, Imholz’s creative idea of McDonnell employees’ employment and transition to the outsourcing company IBM, provided a solution the problems experienced by McDonnell employees. The HR professionals need to learn how the displaced employees from a company could be assisted if an agreement is made with the outsourcing company to take over some employees for employment in their organisation.
The eighth chapter describes a story of how organisational politics affect the careers of people. Sheleen Quish had no technical background. However, with her leadership skills and endeavour, she became the CIO of Illinois Blue Cross in which the IT department was in some disarray, and it required transformation. Despite resistance from the employees towards IT transformation, she forced the employees to change. Like many other organisations, Illinois Blue Cross had a great deal of internal politics inside the company. One of Sheleen Quish’s colleagues made a deal with the CEO to fire her from the role of CIO. She indeed lost her job and failed in her bid to transform Illinois Blue Cross Company. After her failure with Illinois Blue Cross, Sheleen joined Ameristar Casinos Company in 2007 as a CIO. Ameristar had seven casino properties in six states of the USA. The company had not done any major innovation systems maintenance for several years. After Sheleen joined Ameristar Casinos, she came up with the idea of building a new enterprise of IT. She focused on team building to strengthen the new enterprise instead of being authoritative. She got the desired outcome because of the effective team building approach that facilitated the organization’s transformation. By being authoritative may not work in all situations, especially in a participative cultural environment that prevails in most of the organisations in the Western countries.
The ninth chapter is a case study based upon the career of Greg Schwartz, the CIO of United Services Automobile Association (USSA). In 2004, IT department of the company was getting the essential funds from the budget of CEO. Greg noticed the lack of accountability for the funds. Schwartz and his team made a new product catalogue to make people understand what they were purchasing from IT. The team narrowed 2,500 system applications into 125 critical system headings. The team improved the billing system. They made 90 per cent of interactions with the customers electronic. The team had also introduced a platform called Innovation Communities for the Enterprise. It was a portal through which the employees of the company could suggest new ideas. This case study illustrated an application of the concept of employee empowerment. When employees are empowered by a company and allow them to share their innovative ideas, a great deal of synergy occurs in the company.
The stories of the nine CIOs have been included in the book with an understanding that the stories would assist HR and IT professionals to solve problems in their own organisations. One should, however, be mindful that that the CIOs in the nine case studies had chosen different solutions that suited the external and internal factors of their specific company at a given time. Every solution they provided may not fit the situations of all organisations. The case studies were developed and published by the authors to provide certain approaches to solving specific problems. It is the sensibility of the leaders and managers to leverage on those approaches and underlying management principles to build their own solutions to the problems/issues faced by their own companies.
This book maybe considered as an appropriate reading for HR executives and CIOs in the South Asian countries also for the following two substantial reasons: first, unfriendly labour regulations pose many challenges to HR professionals to deal with situations entailing people. Second, South Asian countries are emerging markets in which transaction costs are higher owing to poor institutions and infrastructure (Khanna & Palepu, 2000). The case studies and their managerial implications offered by the authors in the present book might guide IT and HR professionals in the South Asian countries to optimise transaction costs. For an example, as described in the fourth chapter, Zierhoffer, CIO of ITT Company, integrated IT and financial services to reduce costs. She also identified and discontinued the non-essential activities. Further, as shown in the seventh chapter, employees’ employment and transition to outsourcing company would reduce transaction costs as it would help in tackling with the situations like retrenchment of people in Asian countries in which removal of employees is arduous as it hinges on rigid local labour laws.
Authors focused substantially on the positive side of the nine case studies. They needed to discuss limitations of the solutions offered in each case. For an example, in the first and seventh chapters of the book transition of employees to outsourcing company delineated as a solution for ameliorating employees’ resistance and retrenchment. However, employees may lose their identity if they change their organisation. Adjusting to the new culture in a new organisation is always a challenge for employees. The book did not discuss how the CIOs tackled cultural challenges across business units. For an example, job rotation may motivate employees, but they may not be able to harness their skills in one domain perfectly.
Not only differences in organisational culture existing within an organisation would be an issue but also a bigger and broader issue of cross cultural differences between the South Asian and the Western countries. Many of the solutions developed were based upon the Western cultures and these solutions my not fit the culture that exists among the organisations and people in the South Asian countries. For example, the principle of employee participation and involvement as an antidote to breaking down resistance to organisational changes is based upon Western cultural assumptions that may not prevail in a company in the South Asian region. Notwithstanding the limitations concerning the implementation of ideas presented in the nine case studies, the book should be considered a must-read book for South Asian executives.