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Increasingly, CIOs and other IT leaders come from a non-technology background. Here’s how one drew on his finance experience to help a traditional IT department transform itself.
I joined Cooper Tire as a financial person in 2008 but moved into IT two years later – I like to joke that I missed a meeting and they volunteered me for our ERP installation. In fact, I think the leadership was looking for a business person with a financial bent to help take our lengthy list of legacy systems and replace them with a global ERP solution to foster our growth as a global organization. As a former business user and financial controller, I was in a position and had the perspective to try to make sure the system worked well from the internal customer’s point of view.
More recently, I think my financial background has been useful in helping Cooper’s IT department start to make the transition from traditional on-premises hardware purchases to an IT as a Service environment This shift has changed the accounting treatment of IT in a significant way, because IT purchases now often go directly to the operating budget as an expense rather than a capital expenditure that the company can amortize and depreciate.
This might seem trivial, but it’s a big deal in the way that budgets are constructed and IT costs are allocated to process areas and business units. If the IT operating budget is going up because the cost of X as a service is greater in a given year than depreciation might have been, the business’s allocation to the IT department will also go up. Regardless of the allocation process, CIOs need be effective at developing and communicating this shift in approach and the accounting and budget ramifications and certainly the ROI associated with that service acquisition.
Managing the long-distance relationship
The shift to service-centered IT has affected us in other ways too. Until we deployed our ERP solution in 2013, we used no offshore support; now, just a few years later, the primary way we handle that space is through offshore partnerships. More recently, we began using offshore support for our infrastructure and many of our apps, too.
This has been a difficult cultural change for my department, as well as for Cooper Tire generally. People were naturally (and often justifiably) worried about their jobs and about a change in the culture as the IT organization became more offshore, outsourcing focused. My view was that this shift allowed us to leverage core competencies of the respective partners and free up Cooper resources to focus on initiatives linked to growing and transforming the Company.
This shift in approach has forced leadership to acquire and exercise new skills, too. If you don’t work with your staff face-to-face, you have to learn how to manage your partner remotely – on the phone, on WebEx, on conference calls – and that in itself is a learned skill. It may sound matter-of-fact-ish and natural, but I don’t think it is. When you can’t do it in person, that changes the dynamic.
However, face time is still best. Two of my managers who just came back from a trip to Chennai and Noida in India said, “You know, we could have done those meetings by phone and probably got most of what we needed to get accomplished done. But doing it in person and developing the personal relationships has longer lasting positive ramifications.
I think in some ways this experience has unified my department, not because we became a “we” against “them” environment but because Cooper’s IT staff have realized that the only way we’re going to be effective and get things done is to blend the teams together and work as full partners.
What I preached from Day One is that we just couldn’t talk in we/they terms. Whether the team members are here or in India, it had to be “us.” Our users weren’t going to care whether it was me or ABC or XYZ company on the phone or in a chat; they were going to care that they had the right experience and the right environment and the right support and the right response time. I think we have evolved from the we / they phenomenon, but I have to admit that it does creep in from time to time and I don’t find it healthy.
Supporting the customer
At the same time, we’re trying to work more closely with our internal clients. We have made a very, very intentional effort to reestablish strong relationships with the business. We have dedicated relationship managers who concentrate on supporting particular process areas, such as order-to-cash, procure-to-pay, or the operations group. Wherever they are, they spend their time in ideation, project development, project planning, and project delivery.
Over the next five years, I see three challenges ahead. We have traditionally been a replacement tire company, and we are now working to alter some of our approaches so that there is more focus on the consumer – for example, by developing our OE partner relationships and expanding in to underpenetrated channels. That means that, one, we are going to have to be more informed regarding new channels and customer preferences that take us squarely in to the digital space. And therefore, two, our IT environment is going to have to be more flexible, so we can work with the business in understanding those demands.
But I think the biggest challenge most IT organizations will continue to face over the next five years – and we will for sure – is finding the right balance between running your IT environment and transforming it. I’ve got to find the right balance of investment between keeping my infrastructure environment appropriately safe, current and supported, while at the same time making the strategic investments we need to grow and transform. Both are important, but the latter is what I like to refer to as the “really fun part.”
Buying services rather than investing in hardware makes business units more focused on their IT costs, which makes the CIO’s job more challenging.
External partnerships can give a geographically constrained company access to the latest thinking about technology.
External partnerships can only work if both parties are treated as equal partners. Talk of “us” versus “them” undermines this.