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A CIO Conversation: Plexus' Tom Czajkowski

Tom Czajkowski, CIO at Plexus, discusses how the Sarbanes-Oxley Act has made the company better and how he's managing his budget.

CHICAGO -- As the first CIO of Plexus, and in his first role as CIO, Tom Czajkowski has had his work cut out for him, but his background in business is helping. He sat down to talk with at last week's SIMposium conference to tell us about how the Sarbanes-Oxley Act has made the Neenah, Wis.-based electronic manufacturing services company better and how his budget is looking for 2005.

You're a first-time CIO, but you're hardly a newcomer to IT.

Czajkowski: I'm in my fourth year [as Plexus' CIO]. I came out of 15 years of professional services with EDS and Deloitte Consulting when I decided to transfer into [the IT] industry. It's been a challenge being on the industry side, and it's a new challenge every day. We're in a volatile industry, but it's going well. We'll be a little over $1 billion in revenue this year. You have a B.A. in finance and an MBA.

How does your business education background affect your role as a CIO?

Czajkowski: It's important to Plexus to have a business-oriented person in my role. I'm the first CIO the company has had. The role has always had a technology feel to it, and there's nothing wrong with that, but as our company grows and we spend more capital on IT, it's important to have a business feel in the CIO role. It's been helpful to me, and I think it's generally helpful to have a good business operations focus. In some cases, [it's more important than] a technology focus because you can make a lot of investments in IT for no apparent reason. I like to think my [business] background helps with that challenge.

My peer group, a leadership team of 10, is made up of business folks and supply chain people, and I need to have a good relationship with them to be effective in delivering IT services.

What are you doing to create IT governance?

Czajkowski: Over the last year and a half or so we've put a big focus on IT governance. We set up a global project management office, and the organization grows every quarter with project managers essentially governing how IT is run, how investments are made, prioritized, proposed. The company has never focused on these things before; it's always been done informally and at the discretion of the decision makers. We've put in place a pretty regimented process to formally propose all new capital that touches IT into a standard form. There's good project management lifecycle methodology, and we're in the process of deploying those standards and methods to all of our sites in 23 locations around the world. So we're in the midst of transforming the way IT runs at Plexus with a governance model that may be commonplace in some organizations, but not at all common in companies our size. These kinds of rigors and disciplines are important as we grow.

It's interesting, about governance overall, when we put in place governance in the IT organizations, it impacts all the people that consume IT services. The disciplines that we're putting in place in IT in many cases did not exist outside of IT. So it's as much a challenge outside of my function as it is inside. That's really what we deal with a lot of these days -- it's not so much the tools and the mechanics of the governance, it's the instillation of that and the discipline to stick with it.

The governance plan is weaved into the budgeting process for next year, and that's the first time we've done that, too. There are a lot of bumps along the way, but we're beginning to bear some fruit, and we feel good about it.

What's your biggest challenge right now?

Czajkowski: Plexus is in the electronic manufacturing services industry; we build the inside of all sorts of electronic equipment. We're part of a supply chain that's very volatile. So when demand shifts up or down the slide chain, it has tremendous impact on us. The greatest challenge is tighter integration with our suppliers. We have a finite group of about 300 customers, but they spawn a supply base of more than 1,200 suppliers. Integrating IT tools with our expanded partners and making them more transparent -- the Holy Grail of systems integrated with systems -- is a major challenge. Everybody's different. We're just getting our feet wet with RosettaNet. A lot of industries don't have those kinds of standards initiatives. We tie up a lot of labor dollars with our partners just doing business with each other every day. The volumes are immense, and the change that occurs is rapid. And the cost of not responding is high.

Governance is among the top three [challenges], but behind global deployment of common systems.

How are you preparing for the Sarbanes-Oxley deadline?

Czajkowski: We just met with our auditors this week to review our final plans for SOX remediation. We had a sizable effort under way. We have had six people full time for the past nine months or so, and they'll be on it for another six months. For a company our size, that level of resource commitment is pretty substantial. We've made a lot of progress. We have our IT remediation as well our accounting remediation. That's one team, and half of it is IT and half of it is other functions. We've made recommendations that have been accepted by our management team, and most of the recommendations have been accepted. So we're now in the process of implementing all the remedies we need. We feel pretty good about where we are. I've spoken to some of my peers -- some companies are ahead of us, but a lot of companies are behind.

We tried our best to make this a positive experience -- as positive as you can make something that's mandated. We knew we had a lot of undocumented processes both within and outside of IT. This gives us a chance to work on systems development, change management, methodologies, security and so on. We've put in place some better answers that are better documented across sites so future audits will be easier to digest. And we'll have an IT organization that will be better managed.

Plexus grew a lot by acquisition in the last five years, internationally and domestically. A lot of processes were done differently, and there were inconsistencies. Now we're taking the opportunity to put those fixes in place and propagate. We'll be a better company as a result. But this came from no shortage of effort. It was a substantial effort in 2004, and will be a substantial process through the first half of 2005.

How's your IT budget changing in 2005?

Czajkowski: It's changed modestly -- under 10% growth. We scrutinized IT investments very carefully. The company has been through two to three years of IT projects, ERP consolidations and things like that. We've made a pretty substantial investment. We're reaching the point where, after we do our U.K. facilities, we'll focus on gleaning benefits out of systems deployed in many sites. The budgets reflect that and are less aggressive than they were in past years, but we've dubbed 2005 'the year of value.' We're trying to glean more out of the systems that we have. There are so many capabilities in these new systems that when you shove old processes into the new software, you get suboptimal results. So with deployment activities on the decline, we'll focus more of our energy -- IT and otherwise -- on value realization.

Learn more in the second part of our CIO Conversation with Tom Czajkowski.

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