David Barnes is senior vice president and CIO of United Parcel Service of America Inc., which has a presence in...
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more than 200 countries. He has held the post nearly six months after nearly 28 years of service at UPS, starting part time as a package loader.
Today UPS sells supply chain technology to global customers striving for visibility in processes that cross borders and change hands at dizzying speeds. Last quarter, revenues at UPS rose to $9.89 billion, and the recent acquisition of Menlo Worldwide Forwarding is part of an aggressive UPS Supply Chain Solutions strategy. At UPS, technologists are viewed as strategic business partners, and something called the Program Project Oversight Committee (PPOC) means there is a single drop-off spot whereIT managers can make their business case. The key to making it all work, Barnes said, is to train technologists to speak the language of bottom lines and improved customer service -- words that are never lost in translation.
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Do you have any practical advice for CIOs who want to become business contributors within their organizations -- and aren't there yet?
Barnes: I think it's interesting because the topic of IT alignment is so popular today. It's popular for a reason -- because there are issues out there. If you look at UPS, we've worked hard until we can make the statement, certainly, that at UPS the business drives technology.
What that means is that we've been successful in taking the technologists -- in the role of senior IT management -- and moving their skills forward so they have a technology base, but they also have a good business base. Once we've established that, it was very easy for us to leverage the technology as part of the strategy team. It makes it so much easier because you get the alignment right there.
What advice would you give CIOs who are trying to get closer to that model? A lot of them say they don't always feel like they have the CEO's attention.
Barnes: You have to be able to speak the language of business. When you are coming to talk to the CEO and the senior members of your executive staff -- if you are coming to talk pure technology, it's usually not as well understood -- nor as well accepted. But if you are coming there to talk about business issues -- how does one grow the business and how technology might enable new products or innovation in the marketplace -- you see the tables turn where people are wide open to participate with you. You have to be that co-partner at the table -- which means you have to share the responsibility of growing the business on a broader scale than just through implementing technology.
When disagreements over technology priorities arise, are you torn by your roles as vice president and CIO?
Barnes: No, I think it makes my job much easier. I wear two hats. I'm senior vice president of operations -- and in that area of responsibility I sit on the UPS management committee. And I also wear the hat of the CIO. By having both of them, I'm intimately involved in strategy and the formation cycle all the way through to execution. On the CIO side, I head up the technology committees in terms of setting technical standards, technical architectures -- the other things that are required in order to make a large IT shop work. But it's easy when you understand very well what the strategy is that your company is trying to achieve.
Tell me more about the PPOC model.
Barnes: We've organized ourselves in terms of portfolio managers who report to the CIO. Each of those portfolio managers has an area of responsibility which is as sizable as many other CIOs would have in other organizations. The PPOC takes a look at significant projects, whether technology driven or not -- and we have one organization where we can bring all the projects once a month. It's really a clearinghouse so we can bring in different groups that are proposing projects. We can make sure the projects are aligned with our strategy, that they have the right RIO (if that's the key measure, there are other measures) and the right process management. If we can accomplish that right in the meeting -- if they are approved (and they can get approved -- or not -- right after that meeting), it's clear that the resources are available.
So, do you and the CEO (Mike Eskew) ever disagree?
Barnes: Mike and I have a very good relationship, and Mike is an engineer by trade, which is a bit of an inside track. But at UPS, we have a term called 'constructive dissatisfaction.' We are always challenging 'Is what we have the best? Can we do better?' And it's in a very favorable light, because we put that word 'constructive' in there. So from that perspective, Mike is always pushing, always looking down the road. He does a very good job of envisioning what the future is and rallying the team behind the vision.
When you make senior-level IT hires, are you looking for a technologist you can mold into a UPS business executive or do you go looking for business executives (with technology backgrounds)?
Barnes: I don't think we have just one approach as to how we recruit a senior IT staff. What we do certainly understand is that they have the ability to assimilate technical knowledge; there is no substitute for that. Does that mean somebody has to come in -- and be an in-depth expert and have 20 years-plus in IT? No. What we do try is get a blend between having good technical foundations and good business skills. Now that does mean that we can move senior business people who have the propensity to assimilate and learn technology into technology roles and vice versa. We work very strenuously to develop technologists who have a high degree of business skills.
Your Supply Chain Solutions group is growing. How important is it that your supply chain technology be delivered through Web services?
Barnes: Web services are one channel. Web services have been an expanding area -- and you see UPS moving in this area. If you think of UPS OnLine Tools, which we have made available for a few years now, they are XML based. In their original form, that wouldn't qualify as a Web service. However, those have migrated toward Web services as the customers themselves have migrated toward that. In addition, though, large numbers of customers may not have Web services -- or may not want XML. They want pure EDI [electronic data interchange] or customized EDI -- and they want flat files. UPS offers significant strengths in all those areas.
Are you one of those people who believes that radio frequency identification is going to revolutionize, going to change the world?
Barnes: I don't actually take the position that it's going to revolutionize and change the world overnight. A lot of people ask if it's going to replace bar codes, for instance. I try to take people back, with perspective. When bar codes came out they weren't immediately universal. Though, today it's intuitively obvious that they have a key role in commerce. It took about 20 years for that technology to reach the type of presence that we see today. It will take a similar period for RFID. And the issue is that RFID is many things to many people. It's not one item. I think the biggest key is that you have to keep in mind that RFID is going to evolve rapidly, as it has been. The most important piece in there is the standards. We sit on the EPC Global Standards board for that reason.