At the Churchill Club CIO Agenda event last Thursday, 
Peter Solvik (formerly CIO at Cisco) led a discussion among a powerhouse of IT leadership: Matt Carey, CIO of Home Depot (former CTO, eBay and Wal-Mart), Karenann Terrell, CIO of Baxter (formerly CIO at Daimler / Chrysler), and Lars Rabbe, former CIO at Intuit and Yahoo. Topics included SaaS, Clouds, the good an bad of vendor consolidation, and the uptake of Web 2.0 and collaboration technologies.
Here’s a summary of their views and my takeaways on these top-of-mind IT themes:
Q: What are you focusing on over the next year?
All three CIOs are managing costs more actively, but key strategic projects are still very much under way. Baxter is doing a massive new ERP deployment, and Home Depot is continuing its supply chain upgrade. Home Depot’s CFO says that right now, “cash is king,” so the company has stopped construction of multiple new stores (while competitors are continuing to build at a faster rate, and cut costs in IT and operations.
Takeaways:
There are two ways to sell in this environment. 1. Show concrete cost savings and a short time to realize them. 2. Find out what your prospects’ one big initiative is, and show how you add value to it.
Q: Consolidation – Good or bad? Giving vendors too much power?
Here the CIOs disagreed. Lars felt consolidation helps ease integration, though of course too much consolidation eliminates alternatives. Overall, he felt he’d benefited from consolidation as a CIO. Matt agreed that better integration was a positive, but is concerned that vendors may gain too much power in negotiating contract renewals and maintenance fees.
Karenann, on the other hand, believes that the benefits of integration are limited, that it moves slowly, and that it “has not unraveled the complexity.” Even worse, while everyone is busy with integration, there is a pause in innovation. Karenann also voiced a concern about unjustified support and maintenance costs: “I’m willing to pay an annuity, but only if I get extra value.”
Takeaways:
- Complexity is still a challenge, so both big and small vendors that can help reduce it can do well.
- If your competitors are buy digesting acquisitions, take advantage of innovation as a differentiator
I came across a great summary of an all-too-common problem on the MarketCulture blog. The article recommends that companies focus “on a demand that needs to be met (rather) than a tech that needs to be sold.” Well said!
Apple is a great example of what happens when a company switches from product to market focus. Apple started as a product-focused company. And almost disappeared, despite its loyal following among creative types. Its computers were easier to use and better designed, but the mass market who needed easy-to-use computers wasn’t there until later, by which time MS had introduced Windows, washing away Apple’s design superiority. While Apple was still focused on cool product design, MS wooed a broad community of application developers to meet the growing demand for specialized applications. The need was for a broad range of software functionality, and Apple missed that completely.
But Apple learned. When music sharing came along, launching wars between record labels and music enthusiasts, Apple saw the need, and designed around it. This time, Apple focused on the demand side, with savvy marketing and even more savvy ecosystem creation. Significantly, Apple didn’t give up its leading-edge product design competency in order to become market focused.
To all the entrepreneurs with great ideas, and the larger vendors touting product features: Spend time with customers to find out where they really will spend money. Then DO make “products so good they don’t need sales and marketing.” Then market and sell like crazy.
After 2 days at the Sales 2.0 conference, I fear we may be on the same path CRM took in its early days. Though some of the new tools are great, and MUCH easier to adopt, there is too much talk of technology, not enough about behavior and cultural changes. All things 2.0 are really about interaction and collaboration with customers. And that requires a change in mindset.
Basic example of 2.0 principles in action, that actually requires less technology. (A version of this focused on customer references was used very successfully by Beverly Chase and the BEA marketing team)
Instead of arming your reps with the new and improved power point presentation, design a white board talk. Script it with questions and discussion points instead of spiel. The result is a conversation where customers contribute ideas, and the content evolves based on the here-and-now in the room, and not what marketing thought up a month ago back at corporate.
