Fifty-three percent of CIOs in Fortune 500 companies now report to the CEO, compared with 46% five years ago, according to Korn/Ferry International, the executive recruiting firm. And one of the most urgent conversations that a CEO and a CIO can have involves the cloud, and how effectively it is being used to further the CEO’s strategic vision and key business objectives.
As the CIO of a company that is nearing the midpoint of a major change program based in the cloud, I’ve learned some lessons that will prove helpful to CEOs contemplating their own move or about to start one. The lessons are relevant regardless of the size of the company or line of business. After all, the goal of these change programs is the same: to take advantage of the cloud to become more nimble by using operational systems that are more transparent, faster and less expensive.
Glory Global Solutions set out to transform its front- and back-office supply chain function from an unruly collection of essentially manual legacy systems into a sleek, fully digitized operation. Glory Global supplies secure cash management tools (ATMs, cash- and coin-counting machines and other equipment) to banks, retail companies and the gaming industry and was almost tripping itself up by its very success and growth. Inevitably, the acquisition and running of numerous lines of business in more than 25 countries and the management of worldwide sales operations had left the company with a Tower of Babel of legacy systems. Cloud-based technologies will allow it to pursue further growth by seeing into its businesses with more clarity, highlighting ways to streamline and standardize processes, offer better service and pick up the pace.
Glory Global began working with Tata Consultancy Services (TCS) on the transition, which was launched late last year, and it is one of the biggest projects of its kind. The goal is to complete the makeover by April 2018, just in time for the 100th birthday of the parent company, Glory Ltd.
I consult with the chief executive and the executive committee often about the project. Their concerns include making sure that the new technology is fully aligned with Glory Global’s strategy, protecting day-to-day operations from disruptions during the transition, keeping corporate and business unit managers up to date on the makeover and, of course, holding to the promised timetable and budget.
Here are the 6 main lessons learned along the way that will help other companies use the cloud to achieve an operational and strategic breakthrough. Make sure to discuss all of them in conversations with your CIO.
1. Find the right partner for the journey. A transition of this kind is not easy. Glory Global recognized early on that it needed someone to function as a guide, and not to raise the cost at every turn. TCS had a good end-to-end solution and price point. Importantly, the relationship has turned into a mutually beneficial working partnership.
2. Opt for a single-vendor solution. There are virtues to having just one vendor involved, especially if your project is complicated. Glory Global’s project certainly is because of the many differences between all of the systems used across its varied markets. The company spoke with a significant number of providers and settled on Oracle once it was sure that Oracle was up to the challenge. Having only one vendor ensures that whatever problem arises, the client knows where to go to get it resolved. Only one hand to shake, (or occasionally) only one throat to choke.
3. Provide strong business involvement. Although the heart of the program is the deployment of new technology, the actual transformation requires business leadership. Therefore, both the project leadership team and process owners were chosen from the ranks of the company’s best business leaders, with strong board-level sponsorship. This gave the project instant business credibility and gravitas and allowed the focus to be on the business benefits rather than just the implementation of a technology platform.
4. Crawl, walk, run. Given the complexity of the task, Glory Global had to focus on getting immediate benefits and concentrate on the low-hanging fruit while waiting for its global business processes to mature and drive significant value from some of the more advanced functionality. Because many of its businesses are at different stages of maturity, the goal is to make some of the functionality plug and play. Companies that aren’t as large may find it useful to focus first on smaller lines of business or certain processes.
5. Don’t forget the personal touch. Yes, some of what Glory Global is developing has to be plug and play—but the company also has to make sure that each set of changes is appropriate to the local business. It has to cover everything in each market and that requires a deep understanding of the particulars of that market. You always need that personal touch despite the modular nature of the technology. The personal touch, in this context, means a savvy application of change management in marrying the broad contours of the technology to the specific dynamics of the business.
6. Be patient. Speed to innovation is a benefit of turning to the cloud. Still, this isn’t an overnight change. In Glory Global’s case, it’s going to take 27 months to get to the finish line and the payback on its investment is going to take longer than that, around four years of operating with the new systems. But when the payback does arrive, it will be enormous, cutting IT legacy costs in half, for example, and trimming purchase cycle time by 45 percent.
Glory Global’s Tower of Babel cast a shadow on its operations. Soon, the company’s cloud platform will give it the perspective it needs to see more paths to growth.
The cloud could do the same for you. Are you ready?