Software // Enterprise Applications
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12/31/2002
11:12 AM
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Secret CIO: That's Tradition, Not A Business Process

Sometimes, the tried-and-true slows down the here-and-now.

When I read business journals, my eyes usually glaze over. I'm one of those people who enjoy the comics in erudite periodicals more than the articles. I don't relate to theory unless I see an incisive illustration, visual or verbal. My academic friends say I prefer anecdotal learning, a common failing of American management.

In any case, I'm always on the lookout for examples of the importance of fixing business processes instead of just increasing computer systems' speed and power. It makes no sense to computerize a flawed process. But that hypothesis too often winds up becoming a synonym for eliminating people instead of improving value.

We were in a domestic operations status meeting. Ron Stegweg, a decent guy if not exactly the sharpest executive you'll ever meet, was chairing the review. I was there in case any systems questions arose. Of course, they did. The head of one of Ron's businesses was on the hot seat because quarterly sales targets weren't being met. When pressed, he allowed that plant production was messing up his ability to serve customers. The howl from the manufacturing director was probably audible a city block away.

Fred, the offended plant leader, said he couldn't be held responsible for outages caused by an ERP system that didn't give him available inventory quickly enough to adjust to changing demand. When he uttered these words, I stopped doodling and started listening intently. It made no sense. How could a real-time system not have up-to-date information? I asked a few questions, but made no headway. Ron asked me investigate and come up with a solution. He looked serious; missing sales targets is a mortal sin in our company.

What I learned by the next day was enough to solve the problem and cause me to slap my hand hard against my forehead. It seems that Fred's plant, which has a reputation for excellence, was following the tried-and-true methods that had sustained it for so long. At the end of each shift, a foreman would review the production run, as before the installation of our expensive ERP system. However, instead of clicking on the "Confirmed" icon, he'd transcribe the information to a piece of paper and place it in the out-box sitting on his desk. Then, the mail courier would make his rounds and move the paper to the in-box of the plant's financial manager, who traditionally was responsible for inventory data.

The figures would then be checked against the same screen of the ERP system. When the numbers agreed, as they should, the financial manager would press the "Confirmed" button. There were only a few things wrong with this way of doing things. The first was the time lag. Since we operate three shifts a day but only two mail runs, it was rare that inventory wasn't out of balance by at least a full day. Second, if the production numbers were miscopied on paper or misread from it, our ERP system became hopelessly incorrect.

After I calmed down, I called Ron and asked if I could stop by his office. Ron was chagrined. He saw no reason the plant people couldn't approve inventory without going through the financial group.

I was happy as I left his office. I realized that a guy who isn't the brightest is sometimes the one with the most common sense.

Herbert W. Lovelace shares his experiences (changing most names, including his own, to protect the guilty) as CIO of a multibillion-dollar international company. Send him E-mail at lovelace@comcast.net.

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