Winning by Design
by Eva Marer
In the constant flux of whirling days and careening years, it's hard to conceive of that aspect of time that the major religions define as one continuous purpose. That may be one reason why, of all of the leadership functions, executives most frequently neglect that aspect of planning known as direction setting.
Many traditions are celebrating important dates in the next two weeks. This year, the last day of Ramadan fell close to Christmas Eve, the final lighting of the menorah, even Buddha's Enlightenment Day. Because they fall on a regular cycle, the holidays are a good time to institute the yearly audit, a direction-setting exercise in which executives survey their major accomplishments and mistakes for the year, analyze whether or not they've met their goals and obligations, and determine what they should do now to prepare for the future. For observant executives, linking personal planning with important religious dates not only serves as a reminder, but also opens up the spiritual dimensions of an examined life. Of course, regardless of religious inclinations, the period around the New Year tends to be slower with more time focused on family, friends, and reflection, all good motivations for long-term planning.
This holiday season, several CIN members allowed us to peek into their personal diaries as they evaluated their major accomplishments for the year and looked forward to building on those successes in 2001.
Winning the Budget Battle
|IT Manager, New Jersey Department of Agriculture, Trenton, N.J.|
|Major accomplishment: Getting his capital request for network improvements approved by the state|
|Goal 2001: Determine feasibility of voice over IP|
It would be easy for Gary Zayas to become complacent. After all, he has worked for the state for 15 years and has been with the Department of Agriculture for eight. He feels a lot of support and goodwill in his department of six operating on a modest $21 million budget. "People like the flexibility, training, support from the administration, and the fact that they have a family life," says Zayas.
Despite the laid-back nature of his department, however, government poses its own set of challenges. Besides the bureaucracy and red tape, Zayas says, people and funding are perennial concerns. Although he is very satisfied with his own staff, he acknowledges that the best people are often drawn to the private sector, where salaries are higher and there are fewer barriers to pushing initiatives through. In addition, he says, "it's difficult to make the ROI argument in a sector that cannot show a profit." Getting funding requires showing exactly how proposed changes would benefit constituents, he says, "and that depends a lot on the mood of elected officials and voters."
Because of the difficulty involved, Zayas is particularly proud of one accomplishment: winning the funding to upgrade from shared Ethernet to a switched fiber network over ATM. "The GIS and Oracle applications really chewed up a lot of bandwidth, affecting the entire department.The upgrade will allow us to isolate that traffic to its own virtual LAN." Because his capital request fell outside the normal operating budget, Zayas had to make his case in the state legislature.
"The capital request proposal required a lot of wordsmithing, justifications, and assurances," he says. But the Capital Commission recently approved the project, which Zayas expects to complete by February 2001.
On the heels of this success, Zayas is contemplating his next budget battle. "Once the new infrastructure is in place, we need to take a hard look at voice over IP," says Zayas, who admits somewhat sheepishly that his own phone consists of one line and no speaker. "This will be a tough sell," he predicts. "The state gets a very good rate with the phone company, but we also have PBX systems that are costly, not to mention that not everyone can use them. How much could we save by getting rid of the PBX systems?" Before leveraging his newfound wordsmithing skills, Zayas says he will need to do the government equivalent of an ROI analysis, determining to his own satisfaction that the plan warrants another trip to the state house.
Winning Customer Loyalty
|Executive Director of Information Technology, Tropicana Casino & Resort, Atlantic City, N.J.|
|Major accomplishment: Moving to off-the-shelf casino management software|
|Goal 2001: Gain competitive edge through customer marketing applications|
Like Zayas, Don Kneisel is no stranger to budget battles. His casino, a division of Phoenix-based Aztar Corp., is not the largest in Atlantic City, but it does boast 4,000 slot machines and 5,000 employees. It is the largest hotel in New Jersey with more than 1,600 rooms. "Do executives want to spend $100,000 on a new slot machine or on a server consolidation project?" he asks with a grin, knowing the answer.
Kneisel's IT department must run not only the payroll, accounting, and business continuity functions typical of nongaming companies, but also the casino management and guest registry systems that are critical to maintaining competitiveness. "The industry is heavily regulated, and all the casinos are selling the same product using the same software and vendors," he says, pointing out that "there's only one way to play blackjack in Atlantic City." As a result, differentiation must be achieved through customer loyalty initiatives, where he now spends the majority of his time.
The luxury of devoting himself almost full-time to marketing applications is a relatively recent phenomenon, however. "When we first started out, there wasn't much choice in vendors, and we were building most of our casino management applications in-house," says Kneisel, who has been with his company for 16 years. "My competitors were taking advantage of faster, newer technology more quickly than I could develop [applications]." Kneisel reasoned that if he converted to "vanilla" off-the-shelf casino management software, he would gain not only features and functionality, but also automatic regulatory compliance, which is embedded in these systems.
The problem was that 99% of the new applications were developedfor the AS/400, and Kneisel was still in mainframe mode. With the help of his chief financial officer, who recognized the financial benefits, Kneisel pushed through the capital request needed to convert to the AS/400. Although that happened in 1997, Kneisel says the conversion took 2 1/2 years, and the early part of 2000 was spent cleaning and tweaking the system. The results, however, have been dramatic. "Where in 1998 we had 200 terminals, we now have 600 PCs in a network-centric environment" he says. "That allows us to compete by quickly taking advantage of faster, newer technology in an environment supported by vendors."
Now that Kneisel has his network, his biggest challenge for next year is customer relationship management. The Tropicana Casino has half a million repeat customers, so Kneisel knows he is sitting on a gold mine, yet his clients are very diverse. "At this point, our customers range from somebody's grandma coming in on the bus to the guy flying in on a private jet who loses more in one night than I make in a year," he says. Kneisel would like customization to be automatic and integrated across channels, including the Web and call center. Customers should be able to book and confirm reservations, view frequent flyer miles amassed from playing the slot machines, and receive custom offers via the Web. Those calling in should be greeted by first name, and if they are high rollers, routed to appropriately trained operators. The main obstacles he faces are justifying the budget to senior management and ensuring the appropriate level of security. "I need to have a watertight solution to protect customers and adhere to state regulations," he says.
As he works out technical and architecture specs with Web developers, Kneisel takes frequent breaks along the boardwalk, dreaming of other advances such as remote check-in via PDA.
Winning Across Multiple Channels
|Vice President of Technology, Bidwell & Co., Portland, Ore.|
|Major accomplishment: Tripled customer base through redesigned user-friendly Web site|
|Goal for 2001: Create multiple communication channels, including speech recognition and wireless Web|
"I'm not as excited by technology as I am about getting something to work and watching it come alive," says Jay Hemmady, whose ability to do just that has made him the man to call for companies in need of results in record time.
In July 1999, Hemmady was hired as CIO by Renaissance Holdings Inc., a credit card services company that was later acquired by Household International in Chicago. "I knew the contract was short term, but I figured the job would last at least a couple of years," says Hemmady, who understood from the get-go that he was helping the company build equity for an eventual merger or sale. Yet even Hemmady was surprised when he successfully performed himself out of a job in less than a year.
When he joined Renaissance, there were 700,000 cardholders and about 600 employees, says Hemmady. When he left last May, the number of cardholders had more than tripled to 2.2 million, and the number ofemployees had doubled. In addition, the Web site he had helped create (www.orchardbank.com) was receiving more hits than the rest of the parent company's divisions combined. Hemmady explains his philosophy. "It's important to learn from all three kinds of consumers," he says. "The skeptic helps us overcome the perceived barriers of technology. Early adopters motivate us to get something started. And the happy people in the middle give us the impetus to take the technology further along and get to the next level."
Hemmady has moved to the next level himself, opting for a job in a smaller company where he's likely to make an outsized impact. "The online brokerage arena is one of the few success stories of the Web," says Hemmady, who joined Bidwell & Co., a retail discount brokerage in Portland, Ore., as vice president of technology last May. The company has only 85 employees, but it has a solid business plan and cash in the bank, giving him the luxury of implementing his own vision. For 2001, he's focused on automating back-office operations and multiplying communication channels, including the wireless Web. He's also looking at online signatures and faster credit checks as a way to sign up customers fast.
"People like to trade on their way to and from work and be alerted throughout the day. We're on the verge of doing speech recognition so that people have yet another way to communicate at their convenience. It's all about creating multiple channels and different ways to stay in touch."
Winning Stakeholder Buy-In
|CIO, EMCOR Group, Norwalk, Conn.|
|Major accomplishment: Uniting more than 40 companies behind a centralized technology strategy|
|Goal for 2001: Harness the power of the Web to create an end-to-end management solution|
With almost $3.5 billion in revenue, 22,000 employees, and more than 40 companies, EMCOR Group is the leading provider of mechanical and electrical construction and facilities services in the world. A major player in one of the hottest industries of the moment - construction - EMCOR is being watched closely by analysts, suppliers, vendors, and e-commerce providers to see just how seamlessly one corporate behemoth can streamline its operations to the Web.
As the top technology officer at one of the nation's top companies, Puglisi has a job many CIOs would envy. He's not expected to deal with basic networking issues or field calls from staff members whose computers are on the blink (well, not often anyway). He enjoys the luxury of focusing exclusively on technology strategy for the group's network of independently managed companies, with about half his time devoted to e-business and half to knowledge management, the two biggest issues facing his industry today, he says. Finally, he has influence over 40 executive teams looking to him for the direction that will help define their corporate strategies.
Yet Puglisi is the first to acknowledge the challenge of guiding multiple IT departments in the same direction, a task roughly equivalent to herding cats. "With 40 companies and 40 IT directors, there are plenty ofopportunities for people to go off on their own," he says. "Just keeping track of new developments is a challenge. You constantly have to stay in front of it, creating buy-in as you go." Perhaps that's why Puglisi, who started his job in January 2000, considers his greatest accomplishment to be earning the trust and credibility needed to push through an enterprisewide strategy. "There's been an almost wholesale acceptance by individual companies that we should have a unified strategic plan," he says. On a personal level, he says, being "bilingual" helps. "You have to be able to communicate with executives in plain English, but whip out your propeller head when dealing with IT experts."
An essential element of Puglisi's strategic plan is knowledge management, something of an empty buzzword in the e-business arena, but a critical component of strategy for EMCOR. "The basic issue is how do you find smart people who know certain types of projects and then institutionalize that knowledge?" he says. "We essentially ASP the servers of all the companies so that we can use databases and applications such as Lotus Notes in common." In January, only 450 employees utilized EMCORnet, the enterprise WAN and business initiative meant to move key operations to the Web. That number has jumped to 1,500 employees, and Puglisi would like to see even greater growth next year. Yet he's confident that the initial territorial barriers have been overcome.
Overall, Puglisi's goals are simple: to compete effectively and better coordinate among and also between customers and suppliers. In the next 12 to 15 months, he foresees that end-to-end supply management will become routine, and he is constantly being courted by e-commerce providers hawking the latest solution. Yet the construction industry is beset by limitations that many providers tend to gloss over. "AutoCAD designers may be the most sophisticated people in the universe, but your basic project manager tends to fumble in this brave new world." Also, he says, the reality of construction is that "we're putting up new buildings where there may not be a phone or even a phone pole for miles in some parts of the world, so bandwidth is an issue."
Puglisi is examining 15 to 20 e-business vendors, a number he expects to winnow in the next year. In the meantime, he stays focused by reminding himself of his company's core mission. "Our job is to get men and materials to a location and install the highest quality materials with the least amount of problems."
Like many CIN members, Puglisi is betting his future on the power of the Web and a networked economy. Yet for each CIO, the same reality will take on a different cast, depending on corporate practices and industry culture. This holiday season is as good a time as any to take stock and paint the big picture for 2001.
Eva Marer is a freelance business and technology journalist based in New York City.