Welch's CIO strengthens the IT grapevine |
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By Linda Tucci, Senior News Writer
23 Mar 2006 | SearchCIO.com |
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Larry Rencken has no interest in talking sour grapes.
The upbeat CIO at Welch Foods Inc. is a forward-thinking guy making positive changes to the juice and jelly producer's IT department.
Next month, Rencken will send proposals to outside vendors asking for bids on various parts of Welch's technology, from the storage area network to disaster recovery.
"It's been a refreshing process because it really has forced us to document everything we do, to see if we can compete against world-class outsourcing companies," said Rencken, who took over IT operations in June. Asked if there will be layoffs among his 47-person staff, he said, "We'll make a sound business decision based on how this process comes out."
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We had come from a culture that saw IT more as a pure cost center.
Larry Rencken
CIO, Welch Foods Inc.
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The exercise is part of a big push by Rencken to transform IT from unsung servant to strategic partner at Concord, Mass.-based Welch, which did $578 million in revenue last year. The restructuring is not only forcing IT to rationalize how it does its job, but it's also making top executives accountable for the technology decisions that can improve their business processes. And it's being done against the backdrop of a large ERP deployment. The company is halfway through an Oracle E-Business Suite implementation.
Under the business-minded Rencken, who joined Welch 15 years ago as a regional sales manager and was director of ERP II Solutions prior to being named CIO, the IT staff is shifting its focus. It's moving from filling requests to improving business processes -- and being recognized, financially and otherwise, for its efforts.
"We had come from a culture that saw IT more as a pure cost center. We were there to deliver goods and services as requested by the business and [to have] a system that was up and available," he said. "Certainly IT was doing more than that, but that was the general perception and nowhere in there was a statement that IT was considered strategic."
Business ownership
Welch's prides itself on being a customer-oriented company, and the IT department is no exception, Rencken said, explaining, "You never want to say no." When asked to do something, whether by users within the company or an external customer, his staff's inclination was to jump to. But those ad hoc negotiations with customers could be "emotional" and ultimately resulted in an IT organization that was overworked and unable to prioritize, he said, because all the requests had the same weight.
That changed last year. Technology requests are now vetted by a governing body that includes a steering team made up of company officers; "business process owners," high-level executives who understand their business areas well enough to know how the technical processes need to change and have the clout to make the personnel changes needed to effect those improvements; and application managers. Also on the team are "business process specialists," full-time IT employees who reside in the specific business department they support, close to the action.
"We have created these layers so we don't have large gaps between understanding the business requirement and developing the technology," Rencken said.
Now when a request is made, it comes to the steering team through its business process owner. The IT specialists in that business process area calculate the resources required for the project, and the request is then weighed against the IT needs of the other business process owners. An agenda is set. If a new opportunity from an important customer comes in, the governing body reconvenes and decides what "we don't do, so we can fulfill that customer request," Rencken said.
The IT agenda is continually measured against the company's strategic goals. In today's economy, as the price of transportation and goods rise, taking cost out of business processes remains a priority for Welch. Rencken's No. 1 goal is to go live with the supply chain and order management applications in the Oracle deployment.
"That is just as difficult as configuring the software. And as CIO, I plan to play a significant role in that," he said, adding that in the previous Welch IT culture, that is not something the CIO would have been asked to do.
"It all gets back to being a strategic player. Our vision is the company's vision: to maximize value for our owners, our growers," Rencken said. "As the things we are trying to accomplish as a company change, then we are going to make sure our IT priorities change to help fulfill them."
Let us know what you think about the story; e-mail: Linda Tucci, Senior News Writer
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