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Subaru CIO gets technology to align with business goals

Ed Scannell, Senior Executive Editor

From his first day on the job, Subaru of America Inc. CIO Brian Simmermon saw his role as that of business analyst. Adopting this role is what has allowed him to deliver meaningful innovation

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by pulling together technology solutions for the company that align with business goals.

"In terms of innovation, I see the CIO's role as that of a senior business analyst, someone who brings to the table new ideas and who works productively with the business side," Simmermon said. 

"You can always find a technology to solve a business problem, but you need to find out what the business problem is first," Simmermon said. The role Simmermon and his management team assumed was to be the only group that can see operations from one end of the company to the other, he said. This position is a "luxury," he said, that enables innovation solutions. "When we look to create business innovations and improve business processes, we are mandated to look at end-to-end solutions, not just solutions that are one-offs," he added.

Technology assessment helps IT align with business goals

A main case in point: When Simmermon joined Subaru in 2005, the first thing he did was to conduct a thorough technology assessment of core systems company-wide. What he discovered was a technology landscape like that in many large companies whose divisions are spread across continents: a tangled mix of proprietary and homegrown systems. Many systems were siloed, a situation that introduced redundant technologies and business processes that sucked away productivity.

Simmermon, a seasoned CIO, and his management team took a calm, measured approach. On "one big piece of paper," he says, they sketched out every system in place, and analyzed the role each served as preparation to knit this patchwork of systems into one seamless, integrated system.

This exercise took some time to complete, but happily the team discovered that many of the tools they needed were already in place -- albeit in different versions from one department to another. That fact allowed them to shelve a savage rip-and-replace strategy.

"It was important to understand the entire portfolio of systems to see clearly how we could collect these siloed systems up into an integrated system, creating a much smaller footprint," Simmermon explained.

A plan to evaluate technology, align it with business goals

With a clean blueprint in hand, Simmermon laid out a three-year plan that had "simplicity, flexibility and cost-effectiveness" as its mantra, he said. Part of the plan involved re-evaluating the company's aging warehouse management system that was no longer supporting Subaru's business growth effectively. He traded it in for a shinier version from RedPrairie Corp. that now runs six of the company's warehouses across the country.

In addition, Subaru had two instances of an Oracle Corp. ERP system, one for vehicles and one for its parts business. Simmermon saw an opportunity to improve the efficiency of the two business units by re-engineering their respective business processes. That would set the stage for them to be governed by a single ERP instance.

A third technology-based move was designed to eliminate inefficiencies caused by multiple unconnected customer relationship management (CRM) modules. Simmermon standardized on Siebel Systems' CRM software as a solution that reached across divisions. The new system greatly improved communications across manufacturing facilities and customer service reps. For example, the reps could update customers on where their customized vehicle was in the manufacturing and delivery process. The system also centralized information about every vehicle a customer had ever purchased, along with their service histories.

Subaru also implemented a new "sold order" system that allows customers to locate a car in the pipeline, customize that car from color to onboard electronics, and have it delivered to the dealership of their choice.

"We now have a true end-to-end process flow that takes you through ordering a vehicle from our parent company, tracking the manufacturing process of the vehicle [and its] delivery to the dealer, and selling the car. And on the back end, we hooked in the systems that track selling of all the support pieces, like parts and services, and present that information to the customer," Simmermon said.

The benefits of a standardized technology infrastructure

Standardizing its core server-based applications and middleware allowed Subaru to consolidate its server hardware as well, thus realizing further cost savings and avoiding having to switch vendors. The company remained with Sun Microsystems-based servers running the Solaris operating system.

The decision to stick with Sun hardware however, had little to do with the company's substantial investment in Oracle and Siebel software. Simmermon had decided to go with Siebel before Oracle purchased the company. Similarly, the decision to standardize on Oracle ERP and database systems was made before Oracle bought Sun.

Because most of Subaru's key infrastructure pieces ended up being owned by the same company, namely Oracle, Simmermon's efforts to piece together an integrated environment made him look rather prescient. He downplays any Nostradamus-like forecasting abilities: "Well, let's just say I didn't necessarily plan it all that way," he said.

There was a substantial amount of swapping in new applications, merging functions under an upgraded version of existing software and tossing out a lot of older hardware for a single server. Simmermon estimates that about 75% of applications and 95% of the technology infrastructure were changed: This was hardly an exercise in deploying technology for its own sake.

Three-year plan succeeds through flexibility and C-suite support

Looking back, Simmermon said one factor contributing to the success of the three-year plan (which actually took four) was the credibility he gained in the C-suite. That credibility wasn't for the milestones reached as part of the plan but for the successes achieved in other, small projects that delivered big benefits to the company.

"Day 1 support [from the C-suite] lasts only as long as the day after you deliver the system. So, I didn't come in focusing on a three-year project that would be delivered in three years. You need to deliver almost right away," Simmermon said.

A second factor in the plan's success was its flexibility, which Simmermon made sure was built into its bones. Without flexibility, he felt unexpected developments could bring even a well-funded project run by experienced personnel to a grinding halt, he said.

"The day you create a plan is the day it changes. You have to build a plan that accommodates any number of business process changes that can re-steer you one way or another. If you have a plan that allows you to refine things as you go along, your end result will be better," Simmermon said.

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Let us know what you think about the story; email Ed Scannell, Executive Editor.


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