Profile: Maricel Cabahug, CIO, Yaskawa Electric America

By Pam Baker

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Three years ago when CIO Maricel Cabahug took the reins of the world’s largest manufacturer of inverter and servo drives, servomotors and industrial robots, she knew she had to blow management away from the very first day on the job.


In the skill-charged halls of Yaskawa Electric, perfection is an automated certainty; quality a surety driven by unerring engineering; and business processes an exacting path calculated by some of the finest minds on the planet. In this environment, even the “best” work of most professionals can be seen as woefully lacking.


“When I got promoted to CIO, part of me was excited about the possibilities but I also knew I had a very short time to make a difference,” she said. “Yaskawa let go two of my predecessors, a very good indication that the business was very dissatisfied with its current IT organization.”


But change for change sake wasn’t going to fly with upper management or the rank and file. The steps she needed to take had to be precise, accountable and solid. Surprisingly, she opted for a cultural upheaval as her first move.


Cabahug rose through the ranks and had been working with essentially the same people since 1995. She said she knew first-hand how bad it feels to be "unappreciated" and labeled by the business as "project killers." Beyond hurt feelings and low morale, she knew the disconnect between IT and business created a strangle-hold on both sides of the fence that was dampening company profits.


There was within the walls of IT, a sense of helplessness, of being "snowed in" and “buried” under tons of backlog. “We were accused of having ‘no sense of urgency,’ ‘no clue about the business,’ ‘being uncaring,’ etc.,” she said. “Today, it is very rewarding to hear our president talk about how our revenue grew 65% since 2001, our headcount decreased 35%, our fulfillment rate and customer satisfaction ratings continue to climb year after year. The productivity gains he attributes to how we've leveraged IT tools and systems to streamline our processes and enable our employees.”


But leveraging IT tools and streamlining processes takes more than technical skill. Ultimately, people have to actually use the technology. This meant people skills came into play first. The much-needed culture change required strong management skills, an increasing need in the CIO makeup as IT continues to shift from technical support to business partner.


“It's a matter of changing how we view ourselves and how we are viewed by the business,” explains Cabahug. “Hence, I came up with the following rules. They're mostly common sense, simplistic even, but they work … ”


       IT's main reason for existence is to provide service to our customers.

       We're here to make their jobs easier through IT tools.

       By the way, they're customers, not users.

       We are technology professionals, not order takers.

       It is our responsibility, not the customer's, to find the best way to apply technology to a business opportunity.


"No" or "not possible" without an explanation is not acceptable. There's always a solution, understand the reason for the request and you'll find it. Present the solution and alternatives and let the business decide. If you do your job right, you should be able to convince them. "If it is still an issue, come to me."


Designing a solution exactly like a user requested it is not "doing your job." If they change their minds later on, they're not being difficult, the business might have changed. They're not deliberately hiding details from you, it may just be too obvious to them and they did not think it was important to mention. You did not ask the right questions or anticipated the scenario, you did not take time to understand the business need, and you’re partly to blame. Better yet, it's nobody's fault, just fix it and learn from the experience.


When they don't understand technology that does not mean they're less smart. You don't know how to sell our products, but you obviously are not stupid. You know IT, they know the business process, work together and you'll come up with a great solution they'll actually use.


“I pointed them to the direction I wanted them to head towards; the rest is up to them. I cannot forge a partnership between IT and the business on my own,” she said. “It has to be nurtured consistently at all levels. Ultimately, they're the ones that make it work. I have the easy job of just setting the strategy and the direction.”


Cabahug said company executives now brag: "We have the competency to implement IT projects successfully," "adoption is not a real issue," and "our CIO knows a lot about how we do business.

“To top that off, we now have engaged, highly-motivated IT professionals who have great relationships with their customers,” she beams.


Bridging the Gap


Once people issues were resolved and the gulf between IT and business was bridged, Cabahug and her team began a forklift upgrade of the company’s infrastructure—specifically, LANs at ten locations, WLANs at three locations, and WAN (from Frame Relay to MPLS). The upgrade included moving from a hybrid VoIP solution to pure IPT, adding video over IP and setting up teleworker infrastructure, and new rationalization and renegotiations of all contracts with telecommunication companies. In a nutshell, they moved from separate voice, data and video networks to a converged network.


“The biggest challenge was, I came from the systems and applications side of IT and I had a total of three people in my infrastructure group, none of us were experts on data networking much less had any experience on voice,” she said.


Initially, Cabahug had a three-year plan to complete the project, plus a “pretty good proposal” from her chosen vendor and an implementation partner. The CEO, however, had other ideas and Cabahug’s plan accelerated in the middle of its presentation.


“When I made the presentation to my CEO, he said, try to negotiate for an additional discount and I want all of this done by February 2006,” she recounts. “To make a long story short, we were able to deliver on all fronts: A vendor discount that's three percent better than my CEO's requirement and more importantly, we went live on time, within budget with no disruptions to business operations.”


“Additionally, as a result of putting in an end-to-end solution, we were able to cut our annual infrastructure-related consulting expenses to zero, without increasing headcount,” she added.


Also in 2005, Cabahug’s team replaced the call center applications with an IP call center solution, upgraded the SAP R/3 systems from 4.6C to 4.7, did a Unicode conversion and platform migration in three months, and implemented SAP CRM Interaction Center and Order Management in five months.


It was an incredibly productive showing for a “lean and mean” 12-person (including Cabahug) IT organization.


“It’s an excellent example of quality over quantity; each one an asset to any organization, collectively, every CIO's dream team,” she said. Since then, “we've been busy working with the business to enable business processes with IT systems and tools.”


Before Cabahug became CIO, the company had SAP R/3 and BW (one cube) in its SAP landscape. Since then they have added SAP CRM—specifically the Interaction Center, Service, Order Management and Marketing components – SAP SCM, SAP Enterprise Portal, and the Solution Manager. Now they are working on adding sales force automation and partner channel management.


 “Then there's the websites and portals and manufacturing execution systems,” she adds.


Economic Affects


The stumbling U.S. economy is giving companies worldwide reason to pause, including Yasawa, but it isn’t slowing Cabahug’s projects.


“We definitely are more cautious with our investments, but we have not slowed down on projects,” she confirms. “With the devaluation of the dollar, offshore consulting in general has become more expensive, but we have great relationships with our partners, and this does not have an impact on us right now.


“We learned our lesson the hard way in 2001 when we had to reduce our headcount by 35%,” she explained. “Since then we as an organization have been proactively controlling headcount and expenses and have been quite successful at it.”


Cabahug’s top priority right now is high availability and disaster recovery. As the company becomes more and more reliant on IT infrastructure and systems, reliability and availability are “main concerns.”


Like other CIOs, Cabahug is also keeping one eye on the horizon. “Web services and mobility applications are all very exciting technologies that have real benefit to the business." In this regard, she is not merely proactive, she is a stimulus.


A year or so ago, Cabahug pushed SAP leaders for an integrated Blackberry application. This year, just before SAP’s annual Sapphire meeting, SAP and RIM announced SAP applications would be native on Blackberry handhelds—a potential “market changer” that can conceivably save SAP using enterprises like Yaskawa millions.


“Excellent!” beams the petite powerhouse as she moves on to the next project without missing a beat.