World Class Supply Chain

Critical IT and SAP Resolutions You Need Now!

iStock_000005289966SmallThe nerds are taking over the world!

In case you haven’t noticed the IT nerds are talking over the world. Marc Zuckerberg is the youngest billionaire on the planet, Bill Gates has been one the richest people in the world for as long as I can remember. More and more App creators are running billion dollar companies.  IT is now embedded in not only our lives but everything a corporation does from running business processes, developing new products, providing more data than you know what to do with, and now apps are creating endless mobility solutions.  If your corporation is not effectively utilizing and collaborating with your SAP or IT people you are losing a serious competitive advantage. As well as running suboptimal business processes, your legacy systems will become out dated, reporting over complicated and worst of all, your IT strategy is never aligned with the corporate strategy committee.   Time to use your talent pool of IT nerds well, don’t you think?

Why the heck isn’t your CIO reporting to your CEO?

First off, do you even have a CIO? if not get one. This one really baffles me and I see it constantly at clients. The CIO reports to the VP of Finance. The CIO should report directly to the CEO. This sends the message that the company is taking its SAP and IT seriously. Now your CIO can sit with the other executives on the senior management team and build critical relationships and collaborate on future strategy in key competitive areas. A CIO needs to be in control of his own budget and team to truly assume IT leadership and shape the strategy for the future. How many times have you seen IT projects fail because of non-existent executive sponsorship?  Having a CIO report to a CEO is a must have in this day and age. Time to get out of the cave if you aren’t following this golden rule.

What does it take to be a great CIO?

I’ve seen terrible IT executives almost ruin companies because they don’t grasp technology. I’m amazed at how many companies do not fully understand IT archiving concepts or how to harness more processing power.  When I spoke at IT and Supply Chain conferences and spoke with IT people at major cooperation’s, many complained that each new VP or CEO brought in their own IT solutions, creating horribly complex system integration that slowed down the entire business. THE ENTIRE BUSINESS! Really? First of all make sure you have a CIO. Not a senior director but a CIO. A great CIO not only understands SAP or IT but will have been involved with supply chains, multiple problems, multiple business processes and have a track record of delivering simple but effective IT solutions. Sometimes less really is more in SAP or IT.  A great CIO has to be able to build strong relationships with his peers and inspire his IT team. He will definitely fail if he can’t do this. He cannot be insecure or timid. This I guarantee. Your CIO will help make game changing strategic decisions for your company.

Please stop creating IT and Business waste

When SAP or IT is not taken seriously in a corporation the amount of waste that is generated is horrendous. When the business does not truly collaborate with IT I’ve seen uncontrolled and reckless things happen. The business invents wonderful improvements but never uses the solutions. In one case we developed a report for all vendors to have access to real time, long term demand requirements but the business didn’t realize they would have to work with all their vendors to implement it.  A client made us create a complex report promising millions of dollars of savings but we check it later and it is never used. I can write a book on IT waste. Of course accountability for waste has to shared both ways. This is where a good ROI (return on investment) governance has to be implemented. This where priorities need to be well defined. But most of all you need to align your executive committee on strategy with your IT strategy – let’s talk about this.

Aligning your Business and IT strategy at the highest level

I’ve walked into companies and asked IT directors if they understand the top 5 company strategies and if the IT strategy is aligned with them. I’m often met with blank expressions or, “We are working on it.” Seriously? Many companies want to produce products faster while maintaining high quality standards. This is a core strategy. It is also called reducing your lead times. Yet many times I don’t see SAP or IT people invited to the table on this top strategy, yet they are the ones that understand and change your entire master data or reporting needs more than anyone. Your top IT people should always help shape business priorities simply because they understand game changing technologies (or know who to bring in to do it). So whether your corporation is set on improving customer satisfaction, reducing cycle times in any area, eliminating waste, making reporting more efficient or reducing lead times, your SAP or IT people must understand these business priorities and have a seat at the table to shape them.  And please don’t just hire the lowest cost off shore provider because they really won’t care about changing your business into a world class operation. They will end up just wanting to make money, subcontract instead of truly consult and you will end up with a subpar IT system that will never make you more competitive.

Let’s recap

  1. Your experienced SAP and IT people are probably being underutilized.
  2. You need a CIO that reports to the CEO.
  3. Stop creating waste between the business and IT
  4. Align the business and IT strategy as well as priorities at the highest levels.

Terry Vermeylen is hell bent on rapidly transforming your business into a World Class Operation by major transformation or by eliminating one bad habit at a time.

Terry Vermeylen brings 30+ years of experience in SAP and Supply Chain Process improvement. As an SAP professional and Supply Chain Architect he has worked and consulted for some of the world’s largest and most successful manufacturing companies focusing primarily on the Aerospace and Pharmaceutical industries.

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