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Innovation strategies: IT transformation is on track at Amtrak

In the second article in a periodic series on innovation strategies, Amtrak's CIO talks about his approach to large- and small-scale business and IT transformation.

Talk about a high-stakes journey. Three years ago, Amtrak's IT operations, which previously reported to the CFO, were moved to the purview of the CEO, with the goal of making IT a strategic partner to the business. CIO Ed Trainor was recruited to make it happen.

Ed Trainor
Ed Trainor,
CIO, Amtrak

Trainor, who oversees 300 employees and an IT budget of about $275 million, came on board as a seasoned IT leader. Before joining Amtrak (the better-known name for the National Railroad Passenger Corp.), he served a dozen years as CIO of Paramount Pictures, managing a $100 million IT budget and 250 people. Before that, he was CIO at Southern California Gas Co. In this second of a periodic series featuring CIOs' perspectives on 2010 innovation strategies, Trainor talks about "big T" and "little t" IT transformation strategies at Amtrak, the challenges of getting longtime employees to embrace the latest management initiative, and how he does his best creative thinking.

How do you think about innovation at Amtrak?
Trainor: We are interested in making a large investment in what I call transformation. We struggle with what we call "big T" or "little t" transformation, and how fast we are going to try to transform the company. In these transformations, IT is the enabler, but they are really business-driven transformations. An example of business ownership of projects is our new wireless [service] on Acela [Express] trains. The marketing department was the instigator, and we supported them.

What is the difference between 'big T' and 'little t' transformations?
Trainor: It has to do with how much change we are willing to handle. Here's a "big T": We have a large ERP initiative underway, primarily SAP but also integrating Maxima into it --across literally all of our non-customer-facing business processes, meaning: transportation and engineering, mechanical, logistics, financial processes, [and] human resources/payroll processes, and integrating all of that. We are spending a fair amount of money doing that.

A "little t" transformation would be, 'We'll put in new systems and we'll refine some of the stuff, but we really are not going to change much of the way the company has been doing business.' Whereas in a "big T," we are going to challenge ourselves to rethink these things and look at a totally different way of doing them, or if not totally different, then a materially different way of doing them.

How do you get people to challenge their preconceived ideas -- to attempt the big IT transformation initiatives instead of sticking with the smaller ones?
Trainor: Actually, we had a meeting of the senior leadership team on exactly that question this morning. We're in the middle of the first phase of this ERP transformation journey, and we are really challenging ourselves and each other to take a clean sheet of paper and try to rethink these things; otherwise, we are probably going to be wasting a lot of money.

How do you challenge people to do that?
Trainor: It's not easy. Human beings don't really like to change. We try to communicate what is coming. Speaking very candidly, we have a number of unions here who see senior management, people like myself, come and go. When the next CIO is sitting here, and the next CEO, and COO, CFO, there may be yet another whole new initiative. They have seen that happen. So, not only is communication important, but also essential is the buy-in from senior leadership.

What kind of access do you have to the business leadership?
Trainor: When the new CEO came in three years ago, he moved IT from underneath the CFO; and he elevated IT to report directly to the CEO and hired me. By raising the stature of the IT department, he made it more strategic; and my role was to try to lead a transformation of the IT function, which we translated into business functions as well.

I tell my people to their face, I don't have all the answers. I want them in a collegial, respectful way to be able to argue with me. I want them to tell me when I am wrong.

Ed Trainor, CIO, Amtrak

How did you go about doing that?
Trainor: I had to bring in almost a whole new layer of senior IT people as well, who in turn have brought in good, strong people underneath them. I have seven direct reports, and five of them have come from outside the company in this period of time. The IT team then worked on the infrastructure, and we're still working on it. We decided collectively on a strategy to take on a much more comprehensive transformation of the company. Instead of just replacing the ledger and financial systems, a "little t," we have taken on a "big T" effort, and we continue to challenge ourselves not to fall into the trap of simply paving over the same old way of doing business.

How do you do your best creative thinking?
Trainor: With others. It is hard for me to go to a corner by myself. I would rather brainstorm ideas than think alone. I also would rather have a collaborative culture, both internally in IT and in the company. I tell my people to their face that I don't have all the answers. I want them, in a collegial, respectful way, to be able to argue with me. I want them to tell me when I am wrong. And on a larger scale, outside the department, I want the same kind of rapport with my colleagues.

Do you think cloud computing will be transformational?
Trainor: I have seen a lot of silver bullets come along. The whole concept of IT as a utility, I don't see it going that way. In our case, our customer-facing reservations system is really unique. It is not a generic system we can go out and buy over the Web from other people. Is cloud computing transformational? Yes, potentially, but I have just seen so many of these things be oversold; and we do move in that direction, but we don't leap.

This is a condensed version of our interview with Trainor.

Let us know what you think about the story; email Linda Tucci, Senior News Writer.

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