Strong IT Capability Helps Midmarket Companies Grow

When sales spike, CIOs must hit the ground running.

Hollywood starlets Kate Hudson and Pamela Anderson fell in love with the pricey Ugg sheepskin boots. Oprah showcased them on her 2000 holiday gift show. All signs practically screamed that the next few years would be big for Ugg shoemaker Deckers Outdoor Corp. because, well, everything was coming up Uggs.

Too bad technology was tripping up sales at the fast-growing Goleta, Calif., company. A new Oracle Corp. system -- more than a year in the making -- was, if not dead on arrival, then gasping for air from the moment it went live in August 2001. Sales reps were calling in orders, only to be told the system was down, forcing the firm to process sales manually.

"We had problems shipping, we had problems invoicing, we had problems printing invoices, we had a ton of issues. That's why I was hired," says IT Director Kurt Sowa, who joined Deckers in 2002. "I ended up relieving my predecessor."

Fast Growth
Between 2002 and 2005, sales more than doubled at Deckers Outdoor Corp.

Working feverishly with a three-man team and mustering the know-how of 15 years at military contractor Northrop Grumman Corp., Sowa traced the meltdown to a bad implementation -- and redid it. One, two, three, four months and one fastidiously tested upgrade later, the system went live without a glitch. Sales started rolling through the system.

"It was one of those momentous days, because Doug Otto was just beaming," recalls Sowa, referring to the chairman of the board who founded Deckers 30 years prior.

CIOs of companies like Deckers have to clean up systems quickly so the business can take advantage of sudden growth opportunities. Often hired because a previous CIO was unable to deal with the rapidly changing terrain, folks like Sowa come in as riders to the rescue. They are tough guys hell-bent on cleaning up the mess and determined to exploit swiftly closing windows of opportunity.

But they are much more than cleanup artists who focus solely on the crisis at hand. CIOs of fast-growing companies will tell you that the only sure thing is that the company will be different from today, often much bigger within only a few years. They have to make IT decisions based on what they think the company will look like down the road, such as spending enough money up front to ensure key systems are scalable.

When Oprah plugged Uggs again on her 2003 holiday show -- the baby blue and pink ones -- Sowa's technology systems were primed: They helped Deckers post net sales growth of 22% in 2003 and reap $19 million in net income, up an astounding 481% from the year before. Growth hasn't slowed since. Deckers' sales more than doubled in the past three years, going from $99 million in 2002 to $264 million in 2005.

This was first published in December 2006

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