CEO-CIO Relationship Review
High Speed Business and IT Transformation Takes Off
at the Auto Industry’s Premium Transportation Manager
SIM Detroit
August 31, 2010
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Introductions
• Chris Healy
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President and Chief Executive Officer, AAG
– 35 years experience in business operations,
planning, logistics management, and customer
service
– Sr. VP and GM North America FedEx Global Logistics
– Executive leadership positions Caliber Systems,
Boyd Brothers, Roberts Express, & Emery Air Freight
– Member of the Council of Logistics Management
• Greg Davidson
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Chief Information Officer & Chief Marketing Officer
– 27 years of software development, product
marketing, IT consulting, and senior management
– Recently CIO and Vice President of Professional
Services Delivery, Accretive Solutions
– Vice President Enterprise Systems Development,
Sage Software, Irvine, CA
– Vice President Systems Development, Platinum
Software (now Epicor), Irvine, CA
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Introduction to Active Aero Group
Active Aero Group
• Essentially two business units
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Active On-Demand – specialty 3PL
USA Jet Airlines – cargo and passenger
airline
Active On-Demand
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Expedited freight services
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7 by 24 by 365 call centers
Expedited culture!
USA Jet Airlines
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Air Charter
Ground Express
Air Freight
Full Truckload
MD-83s
DC-9s
Falcon 20s
Began as air charter
Added charter passenger services
7 by 24 by 365 flight operations
Heavy dependency upon IT
systems to operate AOD
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AOD BUSINESS MODEL
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Key Customers
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Agenda
• Initial state of IT-Business relationship
• Initial state of IT
• CEO-CIO relationship evolution over last 3 years
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Stages of IT-Business relationship development
Forming: aligning people, process and technology
Storming and Norming: process development for IT and the Business
Performing: IT driving Business innovation & competitive stance
• Questions and Answers
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Initial State of IT-Business Relationship
• CEO and CIO worked closely for 6 months prior to CIO beginning
work
• IT leadership role did not exist on a peer level with business
leadership
• Business viewed IT as:
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Unable to meet delivery dates
Systems deliveries were of poor quality
Dictating software feature and functionality
Not as a partner
• IT viewed the Business as:
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Unable to provide functional requirements
Unrealistic relative to delivery and timing expectations
Not as a partner
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Initial State of IT
• People
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Organization lacked structure
Initially “we know more about the business…” attitude was present
Some personnel were not a good fit
Administrative management of resources was not evident
• Process
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IT organization lacked a defined process
Business roles and responsibilities relative to working with IT were never
defined
Business process was largely undefined and lightly documented
• Technology
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Older technology was in place in production – relatively stable
New technology had performance and quality challenges
Some infrastructure was in need of replacement
Telecom vendors were not managed well
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FORMING
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Forming: Aligning People, Process and Technology
• People
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Got “the right people on the bus” (From Good to Great by Jim Collins)
Developed and institutionalized a few documented policies, procedures and
processes – involved educating both IT and the Business
Built a culture around quality and working “harder and smarter”
• Firefighting was initially the name of the game
• Crisis management was continual during the Forming phase
• Process
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Selected best practices from ITIL and CMMI process sets
Prioritized implementation of best practices due to existing challenges
Implemented Change Management and Release Management first
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Policies and procedures were formally documented and trained
Needed a way to implement Change Requests quickly with a high level of quality
Change Management gave us a way to define unique changes and assess impact
Release Management provided a controlled means to bundle sets of Change
Requests through the development, testing, and deployment phases
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Forming: Aligning People, Process and Technology
• Technology
• Tactical: triage of new applications and
existing infrastructure was then a daily event
• Strategic: completed Single Point Of Failure
(SPOF) analysis
• SPOF then drove significant infrastructure
projects
• New corporate email system (Exchange)
• New network switches, routers and firewalls
• New SAN, web servers and database servers
• Built out Disaster Recovery data center
• Virtualization (VMWare) kept costs down
• DoubleTake served as single technology for
Exchange and SQL Server data synchronization
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Forming: The CEO’s Take on This Phase
• General comments on the state of the IT-Business
relationship at this time
• Crisis situations decreased significantly over this short period of time
• Many small, incremental, tactical systems changes went into place
(e.g. limit of 5 Change Requests per department)
• Business noticed the increased professionalism throughout the IT
Release Management cycle – they were now heavily involved!
• State of CEO-CIO relationship at this time
• IT Portfolio Management increased Business’ awareness that they
were dealing with a finite set of resources
• Trust was quickly earned via relatively large IT infrastructure
investments in a very short period of time
• Time working together was spent addressing tactical issues, hoping for
a time when strategic issues could be addressed soon
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Forming: The CEO’s Take on This Phase
• Ultimately what I wanted from IT
• Fast
• Bulletproof
• Scalable
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STORMING AND NORMING
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Storming and Norming:
Process Development for IT and the Business
• People
• Moved from no structure to an effective, 3-part IT organization
• Business Analysis and Quality Assurance (the alpha and omega)
• Systems Architecture, Project Management, and Development
• IT Operations
• Instilled a culture of personal responsibility and accountability
• Project postmortem Lessons Learned sessions proved invaluable
• Mistakes became learning opportunities
• Honesty and openness became woven into the IT team fabric
• On the other hand, repeating mistakes became intolerable
• Working with the Business was something new for key IT staff
• Initial resistance and concerns raised
• Immediate value was realized by doubters
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Storming and Norming:
Process Development for IT and the Business
• Process
• Implemented IT Service
Continuity Management
(ITSCM) for BC/DR
• Business had a high
level of incentive to make
this happen
• Provided a ranking of
applications in terms of
Business importance
• ITSCM then became the
backbone of the
Business Continuity
framework
• Completed ITSCM buildout, quarterly testing, …
Yankee Air Museum Fire, Oct. 2004
Willow Run Airport
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Storming and Norming:
Process Development for IT and the Business
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Process continued, also implemented:
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IT Portfolio Management*
Project Management*
Configuration Management
Incident Management
Problem Management
Requirements Management*
Quality Management*
Vast majority of projects were on time
and achieved quality objectives
* Significant Business involvement
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Storming and Norming:
Process Development for IT and the Business
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Technology
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Implemented a Service Management mentality within IT Operations
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Renegotiated telecom contracts
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ServiceDesk software was a key acquisition
Established ITIL Service Desk processes for serving the Business
Began proactively monitoring key systems and servers
Voice services provider changed
Network circuit providers rationalized and BGP implemented
Costs significant reduced
Software tools and versions updated
Additional new software tools were acquired and implemented
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HP Mercury LoadRunner
HP Mercury Quality Center
HP Mercury QTP
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Storming and Norming: The CEO’s Take on This Phase
• General comments on the state of the IT-Business relationship at
this time
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Systems stabilized giving IT and the Business more time to collaborate
IT gained a deeper knowledge of the Business
Business gained an insight into what a disciplined IT team could deliver
With IT Portfolio Management in place, and with Change Management/Release
Management running well for several months, IT earned a place at the
leadership table; the Business and IT were aligned
• State of CEO-CIO relationship at this time
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This relationship became more strategic in nature
Tactical efforts lessened as crises became rare events
CIO’s knowledge of the Business increased rapidly, earning the respect of
peers
CEO began to see CIO as a strategic partner
Tactically, CEO brought CIO into an increasing number of sales pursuits
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PERFORMING
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Performing:
IT Driving Business Innovation & Competitive Stance
• People
• Performance Management implemented
• First goals and objectives defined for team
• For many, first performance reviews (manager and self-evaluation)
• First Performance Improvement Plan efforts
• Educational opportunities arose – investing in our people
• The people in turn responded with greater throughput and enthusiasm
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Performing:
IT Driving Business Innovation & Competitive Stance
• People: as CIO, took on additional roles
• Informally as “Chief Process Officer” per ISO certification efforts
• Formally as Chief Marketing Officer
• Began leveraging past marketing experience to assist driving new sales
• Began executing upon a number of marketing efforts
• Developed detailed marketing plan and strategy
• Delivered set of collaterals that leverage technology and services
• Began rebranding efforts
• Rebuilt marketing websites
• Conducted first customer focus group
• Conducted first marketing webinar
• Initiated direct marketing and telemarketing campaigns
• Now poised to build marketing team to expand upon driving quality leads
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Performing:
IT Driving Business Innovation & Competitive Stance
• Process
• Workflow development was completed for all Business units
• Identified several Business bottlenecks and rework loops
• Graduated to running ISO certification effort for entire AOD division
• Sales
• Operations
• Accounting
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Performing: IT Driving Business Innovation &
Competitive Stance
• Technology
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Implemented competitive features into mission critical applications
• Key selling points for large enterprise customers
• Competitive barriers to entry
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IT began playing a more active role in team sales efforts
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Team of equal partners: Sales, Operations, and IT
Defining technology solutions for new customers
Demonstrating new product features
Collaborating with customer IT organizations on joint projects
Delivered new functionality for customers where required
IT took proactive technology stance
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Increased systems monitoring efforts
Instituted monthly reviews
Availability now averages 99.98% per month
Built out Performance Testing Lab to stay ahead of Sales team and company growth
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Performing: IT Driving Business Innovation &
Competitive Stance
• Technology case study
• Customer: Celestica
• Contract Manufacturer of
Blackberry and other devices
• High value theft issues
• Defined new functionality for
mapping and truck movement
alerting
• EDI-to-XML interfaces with their
truckload carriers
• Alerts for truck not moving in
addition to existing alerts
• Detailed mapping app for
Celestica and RIM
• Became key marketing case study
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Performing: The CEO’s Take on This Phase
• General comments on the state of the IT-Business
relationship at this time
• IT grew beyond alignment with the Business, now a growth catalyst
• Landing and delighting Customers is our focus and IT plays a key role
• IT automation and streamlining of Business processes serves as a
catalyst to Business scalability
• IT has an interwoven, symbiotic relationship now within:
• Business operations planning
• Business strategy definition
• Sales pursuits and proposal development
• Ultimately, IT delivered what I wanted
• Fast
• Bulletproof
• Scalable
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Performing: The CEO’s Take on This Phase
• State of CEO-CIO relationship at this time
• The CIO role has helped move the company into a technology
leadership role within our industry
• CIO role is vital to continuing company’s growth
• CIOs must have the following attributes to become a
trusted CEO partner
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Vision
Business knowledge and perspective
Leadership
Innovation
Communication
Teamwork
Alignment
Business and customer relationships
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QUESTIONS & ANSWERS
SIM Detroit
August 31, 2010
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