Strategic CIO // IT Strategy
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1/18/2012
11:05 AM
John McGreavy
John McGreavy
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The Ambush That Set Me Straight

It's never easy getting criticized by a customer--but it can be valuable.

Our largest customers are distributors of our products, and they receive special treatment. In a number of cases, we have built unique technology integration with these key customers, which provides product-handling intelligence that translates into a competitive advantage for them. And for us.

Vic, our VP of marketing, recently invited me to a quarterly strategic review with one of these flagship customers. "We want to build a stronger partnership by giving them insight into our plans and how the work could be of benefit to them," Vic told me. "I'd like for you to present your vision of how IT will further enable competitive advantage for them." It sounded like a great idea.

I prepared a few PowerPoints I thought would impress the audience. We have under way some exciting IT investments that will benefit our customers. For example, we plan to embed in mobile equipment low-cost tracking devices that will transmit health and load factors in real time, helping our customers move our products more efficiently. We're adding analytics to the data our key customers collect and correlating it with industry data, something that's nearly impossible for a single distributor to do on its own.

The strategy meeting began well, with introductions and discussion of our objectives. After about half an hour, it was my turn. I handed out the few pages I had prepared and began to describe the IT trends we're seeing--new devices, faster wireless networks, big data. I discussed the technology investments we're making that will be of value specifically to our customer.

As I started wrapping up, a bit full of myself at that point, I noticed that guns were being loaded beneath the boardroom table. The next stage of the meeting then became painfully obvious, as our customer's executives pointed their weapons at me and started firing.

"Hey, John, what about the connectors between our systems that don't work today? What are you doing about these issues? We lose orders routinely because the software doesn't work."

George, the senior procurement exec, was clearly frustrated. It was his opinion that it was all our fault, and others in the room agreed. "This system has never worked, not from day one," remarked another exec. "We're looking at putting in a competitor's system, because we know it will work."

The barrage continued for about 15 minutes--what seemed like the rest of the day. I felt like the bad guy in a B movie who gets riddled with hundreds of bullets and takes what seems like forever to die. But I listened intently, took notes, and didn't attempt to cut the discussion short. I acknowledged their frustration, as they must wonder what the point of future investments is when the existing investments aren't paying off.

Our customer service department is empowered to address all of the issues raised by our customer. The problems it has been encountering are operational in nature, and our IT organization would normally get involved once customer service had determined we had a true software problem. I didn't expect these types of issues to be addressed at a strategy meeting.

But all that doesn't matter. Our customer had nagging problems tied to our IT efforts, and I should have been prepared to address them.

A swift kick in the teeth is healthy from time to time, as the most effective learning can come from discomfort and duress. The night before the meeting, the thought had crossed my mind that I was in for an ambush--it was like seeing a dark cloud and thinking it could rain. But the weatherman (Vic) had assured me that no umbrella was needed. Come as you are. Which I did, unprepared.

I don't fault our customer. Its IT problems are our problems to solve. The buck stops here; it always will.

We've since taken the appropriate action, including enhancing the customer service processes that should have addressed the root causes of our customer's problem. But the experience was a bracing reminder to me that no matter how strategic CIOs become, we're always a moment away from the hot seat. If what our organizations have delivered isn't working properly or is perceived so, fix it fast. And if you think it's someone else's job, you're wrong.

I had no idea how valuable this meeting was going to be.

The author, the real-life CIO of a billion-dollar-plus company, shares his experiences under the pseudonym John McGreavy. Got a Secret CIO story of your own to share? Contact jmcgreavy@techweb.com.

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ANON1254363859367
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ANON1254363859367,
User Rank: Apprentice
3/25/2012 | 3:47:04 PM
re: The Ambush That Set Me Straight
Why is the CIO hearing about these issues for the first time at this meeting with distributors. If this has been going on for a long time, there is a communication disconnect in the company.
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Guest,
User Rank: Apprentice
1/31/2012 | 3:58:02 AM
re: The Ambush That Set Me Straight
"I don't fault our customer. Its IT problems are our problems to solve. The buck stops here; it always will."

If this was a software/product defect, that is obviously on you. If it was an "operational issue", it is easy to say, "whatever your problem is, we will fix it... for free", and if they are a large customer it definitely makes sense, but if they are a customer that uses one of your technologies with a smorgasbord of other technologies, you cannot constantly be putting teams on every integration issue or you will go out of business. CIOs are, not entirely but generally, moving toward massively distributed, heterogeneous environments due to capital costs, operational costs are not considered. They buy an assortment of technologies from all sorts of vendors, many of which hate each other, so they can lower capital costs and then expect everything to work seamlessly when they intentionally created the seams. If they want everything to just work, buy a mainframe and call it a day. Otherwise, integration and the inherent problems with the decentralized model are the price they pay for flexibility.

No technology vendor provides day-to-day integration support outside of their products and support SLAs over the long term. They may do it for a short period to displace a competitor or protect a large install (e.g. your story), but not over years. CIOs that are going to separate vendors for hardware, OS, hypervisor, database, application server, business applications, etc and expect it all to work together as seamlessly as the big iron need to consider their skill sets. Their staff had better be up to the many challenges of DIY builds. They all see Google and peers creating these open source, massively distributed x86 environments and think they can do it in their organization. If they can hire hundreds of MIT and Stanford engineers to design and manage the environment like Google, they probably can do it.

I think most reputable technology vendors are willing to make a good faith effort at solving any problem their customers bring to them, but in the age of massive decentralization no technology vendor can take on the system integration role as part of product support. It is really a question of whether CIOs want to spend budget on high-end systems, system integrators or staffing and what is the right mix of those three categories.
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