BOSTON -- Think you're under pressure to deliver new ideas? Pete Bigley, vice president of innovation services...
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at grocer Safeway Inc., has that mandate baked into his title.
Eighteen months ago, Bigley was vice president of Pleasanton, Calif.-based Safeway's enterprise architecture team. Senior leaders in IT recognized that the $40 billion food giant was becoming "very creative" in its efforts to stay competitive in the low-margin grocery business, but "IT was falling behind," said Bigley, a featured speaker at AMR Research Inc.'s Executive Leadership Conference 2007 this week.
Until then, the company asked two things of IT: provide services faster, better and cheaper, and deliver only those new things that the business requested. "So we were doing what was being asked, but we were not actually being a partner as the business was being innovated," Bigley said.
In an effort to create more synergy among IT and business units, the company formed a group tasked with conducting "deep research" into the technology.
"And when it looks like we have something to strike with," Bigley said, the group works with IT to architect the solution. "The early tests we've done, we've seen really good success." IT is not aligned with the business, it is united with it, he said.
Bigley, who heads up the group, is helping Safeway operate as what AMR analysts call a performance-driven business network (PBN).
Most business strategy today is still designed by executive hunch, said AMR panelists Dave Kasabian, Ian Finley and Bill Swanton. In the new global economy, business decisions must be based on data and encompass not only the internal workings of a company, but also its entire network of partners, a group that now includes "your customer's customer's customer."
AMR analysts say being able to change faster than a competitor will be the key element for success. In a PBN company, IT strategy is not just about delivering top-notch services and executing projects for the business, it's about architecting business systems that allow the company's network to react rapidly to changes in the marketplace. In fact, AMR insists PBN is not a technology strategy but a new business model.
Speed of trust
Donagh Herlihy, CIO at Chicago-based Wm. Wrigley Jr. Co., can relate to the importance of the business network. In addition to CIO, he is also vice president, supply chain strategy and planning, for the $4.5 billion gum and candy maker. As such, he is responsible for setting the strategic direction for the global supply chain function at Wrigley and for optimizing the company's supply chain network. Before adding the supply chain function to his CIO title, Herlihy spearheaded a seven-year rearchitecting of Wrigley's organization and business processes with a global implementation of SAP.
Prior to the IT overhaul, Wrigley operated as a multinational company, not a global enterprise, Herlihy said. Wrigley had 34 IT departments reporting to different people. "Lotus Notes email was our unifying architecture," said Herlihy, who talked about Wrigley's adoption of a demand-driven network strategy.
IT's imperative has to be about figuring out how to help the business adopt change more rapidly.
Pete Bigley, vice president of innovation services, Safeway Inc.
The high-margin chewing gum business is a sweet market to be in, Herlihy said, but even it is subject to intense competition. The company's goal was to more than double its revenue and to diversify its products. Lotus Notes wasn't going to cut it, nor were the company's mainframe systems designed around single sticks of gum.
But IT first had to mend fences. "Early on the business didn't trust IT, because it believed IT wasn't delivering IT services." In tandem with the SAP implementation, Herlihy built a central IT services organization. Metrics were set and measured regularly. "It wasn't pretty," he said, but when you measure, things get fixed.
At Wrigley, the unification of IT and the business started with relationships, said Herlihy, a big fan of business guru Stephen Covey's The Speed of Trust. Herlihy enticed business people into IT, as a means of building a more business-savvy IT department, and later exported people from IT into the business. Seeding the business with the best and the brightest people from IT pays dividends, Herlihy said, because they can show people on the business side where they aren't leveraging technology. "Don't horde your talent."
At the same time that IT was becoming more disciplined, Herlihy realized he needed to free up a core group to "live in the future." Dubbed "business solutions managers," the goal is to seek out groundbreaking projects and not "let perfection be the enemy of good," Herlihy said.
At Safeway, just having an innovation group has led to deeper relationships with technology partners as well as with people working in labs on emerging technologies and investors like Intel Capital, Bigley said. "We're not superseding the relationship IT has with the business," he said, but identifying projects that could be happening in a few years -- a value in and of itself.
Said Bigley: "If you're not already working in this space, you're falling behind. IT's imperative has to be about figuring out how to help the business adopt change more rapidly."
Let us know what you think about the story; email: Linda Tucci, Senior News Writer