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Stories by Don Hill

A sense of community

The Mutt has a great understanding of the meaning of community. Each day we take a walk along Takapuna beach for morning tea. The highlight for the Mutt is the opportunity to sniff and snarl at every other dog. For me, the highlight is the opportunity to look wistfully at the lovely Czech waitresses at the Mecca café. At least I understand that I can look but I cannot touch; the Mutt, on the other hand, is capable of getting into all sorts of trouble — especially if he sees a cat. The less said about that the better.
Community is one of the things we consider essential about CIO. As most of you will be aware, we have our regular CIO Leaders’ Lunches; we also have our annual conference. And now we’ve got the CIO website. If you haven’t had a chance to look at it, take a look now (CIO.co.nz) and you will see what I mean about community. This site has been a marathon effort for the IDG staff under online business manager Mark Evans and it represents a very capable base that we intend to build upon. At the heart of the site is the CIO Lounge, a place where you can see and touch — within limits, of course — others in your community. It’s under the guidance of a moderator — IDC’s Dinesh Kumar this month — and it’s a place you can go to discuss ideas with your peers. We welcome your input. Feel free to put any questions to Kumar — his business is analysing the New Zealand IT market.

Written by Don Hill03 Nov. 02 22:00

The infinity loop

Allison likes to talk about an infinity loop between the core systems and the store systems. The process starts with the ordering or re-ordering of a product. That action prompts a notification to the warehouse manager about the required distribution method. The warehouse management system confirms the inventory system of the dispatch, passing the same message on to the stores. The stores receive the stock and then onsell it, sending a sales notification back to the inventory system. The data warehouse determines what needs to be reordered, based on sales and rate of sales. And so it goes in its infinite cycle.
One of the possibilities being considered under the Optimise initiative is how the infinity loop can be extended into the supply chain. Most of the ordering still happens via fax and email. Many suppliers overseas, particularly in China, do not yet have an adequate computer infrastructure to allow them to participate in a fully computerised supply chain environment such as an internet portal. That situation is gradually changing, however, and a number are now willing to participate in a more sophisticated offering.

Written by Don Hill06 Oct. 02 21:00

A taxing task

Certain things happen as a consequence of being in business, right? The greater part of your transactions occur, naturally, over your computer system. Since you are connected, it’s no trouble to embed your tax processes within your systems and connect them direct to the taxman.

Written by Don Hill06 Oct. 02 21:00

Let them eat bones

The Mutt has been whining a lot lately. And he’s been getting philosophical — even a bit like Prince Hamlet with his posturing and pronouncing. He’s been saying things like, “Whither the CIO? There’s no room for all of us in the dog box.”

Written by Don Hill06 Oct. 02 21:00

Seeing Red

James Allison smiles as he recalls a conversation with an NCR engineer who, in the early days of The Warehouse chain, had been asked by CEO Stephen Tindall to go to the Takapuna store to work on extracting information from the point-of-sale units. After listening to Tindall’s requests, the engineer shook his head and said to himself, “This guy hasn’t got a hope. He’s not going to survive in business.” The engineer was dead wrong, of course. What Tindall had asked of him then is considered standard practice in today’s retail environment.

Written by Don Hill06 Oct. 02 21:00

Applying the sprinkler theory

ANTIVIRUS “The antivirus industry has done a poor job of protecting large business.” Hold it right there: the person who is speaking is none other than Chris Poulos, managing director of Trend Micro Australia.
“The reason I say that is because 96% of corporations have engaged in some level of antivirus protection in their environment. Yet, every time there is an outbreak, they all get hit to some degree or another.”
It’s a great line, coming from the head of an antivirus business, but he has a point. Security against intruders continues to be a huge problem, if only because businesses are not good at policing themselves. Poulos names two reasons for poor antivirus performance. One is that corporations do a poor job of initiating their AV software. Another is that the nature of antivirus attacks is changing. Take the infamous Nimda virus — that was a three-pronged attack that completely threw most corporations.
“We re-evaluated the game after Nimda. We talked to 1000 corporate customers and looked at the way they performed their duties when a virus outbreak occurred. What happened was that they would immediately pull every wire out of the wall when a virus outbreak came. That was a form of protection because obviously electrons could get through the walls to the computers. Then they would research the threat, find out what is going on.”
In fact, what most people do is adopt a seven-step process for responding to new security threats. For example, they will notify personnel of a new security threat via telephone, fax or email. They will individually configure gateway-level antivirus software settings to deter a specific threat, and consult with management and security specialists to determine the most effective course of action.
The trouble was that taking appropriate action took time — something few businesses can afford when faced with a critical threat. It could take a minimum of 45 minutes and sometimes at least a day for everything to be put in place. Way, way too long.
Poulos says that what Trend Micro’s CEO did was look at a fire sprinkler and say, “That’s a good idea”. If a fire starts, the sprinkler goes off to stem the intensity of the fire before the fire brigade arrives.
And so the organisation applied the sprinkler idea to its AV systems. What Trend Micro did was design its software from the ground up to be an antivirus engine, as well as a content filtering engine. The research and intermediate measures taken by security officers has now been largely taken over by the antivirus software and the result is a much faster automated response time: 15 minutes.
Poulos sees new virus challenges on the horizon. “The mobile world is concerning us,” he says. “And we look for viruses in other everyday technology areas such as Jpeg (compressed) pictures.”
Let’s not forget that the biggest weakness in the battle against viruses is you, the CIO or your security officer. Be staunch. Fight the good fight.

Written by Don Hill31 Aug. 02 22:00

Rolling out the electoral rolls

Datamail’s handling of the electoral rolls involved scanning a potential two-and-a-half million images in seven days. The process was designed to increase efficiency surrounding the checking of apparent duplicate votes and to provide valuable information to the chief electoral office about where people prefer to vote.
The innovation replaces a traditional process that employed more manual labour than leading edge technology and was predisposed to delays, prolonged uncertainty and negative publicity.

Written by Don Hill31 Aug. 02 22:00

The virtual traveller

Tony Darby bears a wide grin as he ushers me into his office. It’s not the sort of expression you’d expect to see on the face of a man who is charged with reinvigorating Auckland’s beleaguered public transport system.

Written by Don Hill31 Aug. 02 22:00

Wiring the world

DEVELOPMENT If you think setting up IT strategy in your organisation is difficult, imagine doing it for a developing nation, where even basic electrical infrastructure may be scarce.
Twelve technologically and economically disadvantaged countries are working to construct their own development strategies. They have solicited the assistance of the Global Digital Opportunity Initiative (GDOI), a partnership established in February between the United Nations Development Programme and the Markle Foundation, a New York City-based non-profit organisation that focuses on IT policy issues. The initiative’s mission is to help developing countries identify ways to use information and communications technologies to reduce poverty, improve health care and education and establish democratic processes.
Frederick Tipson, a director at the Markle Foundation, says that GDOI workers feel it is urgent to reduce the disparity in wealth and technology between developed and underdeveloped nations. “The problem with the digital divide is that it’s getting worse even as we’re all working at it,” he says.
Technology companies such as AOL Time Warner, Cisco Systems, Hewlett-Packard and Sun Microsystems are providing personnel and equipment for the project. Consultants from those companies and the GDOI help government administrators include information and communications technologies in their development strategies. For example, if a country wants to set up distance-learning facilities to bring health-care education to remote villages, it must first determine the infrastructure and applications needed to support e-learning, the cost of that infrastructure and a way to fund it over time. That sounds like a job for Superman, or at least a super CIO.

Written by Don Hill31 Aug. 02 22:00

We're so lucky, lucky, lucky ...

The Mutt is complaining. He resents not being allowed to attend the regular CIO Leaders’ Lunches and this month’s CIO annual conference. He has a point: any old dog like me — and even a few young dogs — could learn a lot by listening to the wisdom of peers. Last month’s CIO lunch featured NRMA’s Catherine Rusby, who describes herself as the luckiest CIO in town as she achieves success in her dual role of CIO and business strategist.
Well, okay, she acknowledges with a smile, the project isn’t over yet. Wait till next year when it all comes together and then check to see if she remains the happiest CIO in town. Chances are she will be happy because it is quickly apparent that one of her greatest strengths is her ability to reason with those around her — and to get them all in line with her vision. Note here that Rusby eschews the word “IT” in her communications. She is adamant that staff and her peers refer to the NRMA system re-engineering process as a business project. With business in mind, there’s no reason to turn off your peers by confounding them with technology.

Written by Don Hill31 Aug. 02 22:00

Stakeholder issues

Bone says Datamail does not have a clear demarcation of IT responsibility. His role is an infrastructure one and an aspect of strategy, plus the production side of IT. “That is where it blurs with my production colleagues and we both influence the outcomes there.”
This arrangement can occasionally lead to tensions but by and large it works. For Bone, the arrangement means he has the latitude to work in strategic special projects involving mergers, acquisitions and offshore business.

Written by Don Hill31 Aug. 02 22:00

The local legacy

The current data warehoused on the legacy servers will not be abandoned — but it won’t be held in perpetuity, either. Rusby plans to set up a browser interface to the old Linc and Progress-based systems that will remain in use for the next 12 months. In the meantime, all current data is being placed on the new system. That includes a lot of freeform text of historical interest. As the old policies are renewed and updated, the legacy servers will become irrelevant and be abandoned.
“You know the 80-20 rule,” says Rusby. “Ours is more like a 95-5 rule. In other words, 95% of the information we currently need is no more than 12 months old. The remaining 5% we take from the archive. We are very confident we will have access to all the information we need by the time we are ready to phase out the old systems.”

Written by Don Hill31 Aug. 02 22:00

A strategist’s strategy

David Linstrom, head of Practical Strategy, sees worrying trends in the way New Zealand business is increasingly being managed offshore. This country has some very talented managers who are increasingly being told how to run their local operation rather than being given the responsibility to make decisions appropriate to their market. “What they are being told is that raw ability to understand local challenges and opportunities don’t really matter,” says Linstrom. “In a strategic sense, that takes away our ability to react to the marketplace.”
Linstrom, is a Balanced Scorecard specialist who believes that responsibility should be cascaded throughout an organisation to meet the challenges of local business. Sure, he says, strategies can be signed off in Australia or Singapore, but head office is hardly in a position to understand local needs. Linstrom believes management should be based on accountability, not command and control. How could anyone disagree with that?
But there’s more to strategy than accountability, of course. Linstrom says one of the great weaknesses of businesses that have bought strategy management tools is that they have tended to regard them as just that — tools. Part of the problem lies with CIOs, he says. When he was consulting for Balanced Scorecard specialist Gentia he found that many CIOs didn’t want to talk about strategy — they wanted to talk about what the application could do. They wanted to talk about how it could be integrated into the back-end data warehouse projects and the datamart projects, and so on. As for as Linstrom was concerned, those topics were fine but they indicated a disconnect from the senior management team, which wanted to talk about strategic delivery, measurement, performance management and accountability. What they didn’t want to talk about was the porting and the tools. One of the hidden concerns of those who focused on the tools rather than a process that would involve them taking responsibility was that if things went wrong they would have to accept blame. In Linstrom’s words, if a strategy failed a manager could, in effect, pin the tail on the donkey and say the tools were at fault.
“What I decided to do was move away from the tool for a while because the term Balanced Scorecard was becoming marginalised. I decided to develop my own methodology focused on strategic delivery.”
Linstrom joined forces with Paul Hannay, who was taking a break from his performance manager role at Fletcher Challenge at the time. What emerged was an internet-based framework for developing and implementing strategy. It didn’t happen all at once — Linstrom and Hannay did a great deal of research on how to deliver the project over the web. “We did research into why people bought on the web, how they bought on the web, the facilities of online transactions in real time … When we started we knew what we wanted to do but we didn’t know how to get there. That was the challenge — and it took us 14 months to develop the content and the vehicle and get it to market.”
Linstrom’s own career reflects his determination to succeed. He started out in the Air Force as an electrical engineer, then decided to focus on the real driver in his life — business management. He returned to university and gained a double major in finance and marketing, then left to join a consulting company as an analyst. It was there that his real strengths emerged as he found himself gravitating away from identifying and investigating problems to offering remedial advice. Eventually he found himself focusing on the Balanced Scorecard methodology and working as a consultant at Gentia.
Linstrom quickly recognised that few companies understood what Balanced Scorecard really meant. “What happened was that I ended up consulting to those companies on how to develop and implement strategy as well as owning the tool.” The partnership approach that Linstrom favoured did not match Gentia’s strategy and so he eventually decided to set up his own consultancy. It wasn’t too great a step from there to the online offering.
At this stage Linstrom is still working on finalising his business model for the web. The product is complete but he needs to work out, among other things, appropriate pricing for his market. The benefit of the system is that it can be used as a step-by-step approach with all the advantages that software can provide. A simple touch of a button can take you to the point you need to work on today.
You can find Practical Strategy’s website at www.practicalstrategy.net. And, of course, you can read Linstrom’s regular column in CIO.

Written by Don Hill31 Aug. 02 22:00

Of course it's the people

The Mutt is a genius at CRM. Whenever I take him into the IDG offices to see CIO’s head layout person, he trots up to her desk with all the meekness of a lamb and blinks his eyes at her. She, of course, is unable to resist his subtle exercise of droit de seigneur and goes straight to her biscuit box to keep him happy with a continuous supply of crackers. No wonder he is getting fat.
You’ll find this issue of CIO focused, as always, on how to progress through the minefields of management, with a special focus on CRM. As our cover says, “It’s the customer, stupid!” We should know the message but it never hurts to recount the real-life experiences of fellow CIOs: business is about people. If you manage people successfully, the rewards will come your way. Your software and various tools can’t solve people problems. People solve people problems. Managers of security systems should have learned by now that people policies are the key to implementing safety procedures. The same applies to CRM and any other area of business. The software tools are simply that – tools to help you do the job.
Loyalty New Zealand’s Alistair Hutchens is under no illusion, as our cover story says – it’s a folly to place too much trust in technology without first having the right business processes in place. It’s about people management, stupid! And take note of Andrew Segar’s 12 Truths of CRM, as outlined on page 44. Point no 1: “You can’t manage customers. Customers manage you – just make it easy for them to do so.”
All of which brings me to another truth, as explained in the article about Garth Biggs and his views on making it from CIO to CEO: Any CIO wanting to advance his career must be able to influence his most senior customers – his fellow managers. Above all, you must remain open to experience. After you have established your authority as CIO you must be prepared to put up your hand and volunteer for roles that will expand your knowledge and demonstrate your abilities. In Biggs’ case there has always been a plan. You need to look objectively at yourself and assess your strengths and weaknesses. Then, if you want to advance, you’ve got to overcome those weaknesses – if necessary, through education and learning on the job. Finally, you’ve got to be prepared to face prejudice. Biggs now asks whether he would be acceptable as a CEO outside the realm of IT. It might not be an easy step but it can be done, as evidenced by a few other CEOs in business in New Zealand. CIOs have a unique view of the business world – they have great understanding of business processes in their organisations and need to be good at dealing with people.
Perhaps what you should do is develop a sort of Balanced Scorecard for your own career development. This month we are pleased to introduce the second of an ongoing series by David Linstrom, head of Practical Strategy. The latest article is largely concerned with the application of his approach to business management. Future articles will concentrate more on practical application and real-life examples. When you consider that between 60% and 90% of all formulated strategies fail, most of us have a lot to learn.
I have tried to apply the Mutt’s approach to building a relationship with my layout editor. I flap my eyelids and whine but I don’t even get a biscuit. It looks as if I will have to take another trip back to the strategic drawing board.

Written by Don Hill31 Aug. 02 22:00

Hands up, please!

Garth Biggs recalls a conversation with a finance chief some years ago. This particular chief financial officer was trying to sell him the idea that being a CFO was more advantageous than being a CIO. After all, CFOs have all the numbers, and this knowledge enables them to see what is happening in the business, where it is being impacted and how it all works.
Hmm, said Biggs. Yes, the CFO had a big picture view, albeit a very dry view, of the business because all he could see was financial cause and effect. The CIO, on the other hand, can see all the processes that make a business function. “A CIO can get an overview of the business, a view that looks comprehensively at cause and effect and how things flow together. I think that’s a real advantage to the CIO. Everyone else, with the exception of CFO and CEO, tends to be much more in a vertical silo.”
Behind those two views, between the CFO and the CIO, lies a world of difference when it comes to climbing to the exulted ranks of CEO. The CIO finds himself being placed in a glass box labelled “Restricted”, while the CFO or the marketing manager is far more likely to be given the green light to advancement.
The man who is making this assessment of CIO prospects for advancement is a former CIO and now a CEO. So, you ask, if Biggs can break through the glass barrier, why can’t any other CIO? The answer, says Biggs, is that he is CEO of a technology company, systems integrator Gen-i. He doubts whether he would find it easy to break into the top job at any other company outside the technology area. So, in addition to the Restricted label on the glass box of constraint, add another label: “Technology”. These two labels reflect a prejudice that is hard — but not impossible — to penetrate.
The right stuff
So how’s a poor CIO able to make it to the top of the corporate ladder? If you aspire to the top job, take a good look at yourself first. Are you really made of the right stuff? “I am not sure there are people out there with the right style for every point in business,” says Biggs. He points to the fact that some CEOs are great at making a company grow rapidly — they remain safe in the job until at some point shareholders start calling for consolidation and stability. Typically, CFOs are good at getting costs under control, while marketing people are much better at saying, “hey, let’s make this thing grow”.
Once you have decided you are the right material for the top job, you might like to think about what background and experience are best for the future. In Biggs’ case, business education is a strong point. Before embarking on his career he did a commerce degree, majoring in marketing and business administration — with a strong line of financial discipline thrown in — in Durban. “At that stage I also had aspirations to be a lawyer, so I did Latin and Roman-Dutch law as well as constitutional law and some other interesting things that didn’t really apply very well to my future career. After that, I started work as a trainee programmer and, after about four or five years in the industry, I went back to university and did an MBA. My thesis was on the subject of word processing — you could make a thesis about that topic in 1978.”
A couple of years later, after a bit more work in the IT industry, Biggs emigrated to New Zealand. He had felt uncomfortable with apartheid and envisioned a future of either oppression or revolution in his country of birth. “I am not sure anyone picked the middle road that was taken,” he says. Today he has no regrets. He is, as he says, fully committed to his adopted country.
Career plan
Biggs’ progress through the ranks has not just happened willy-nilly. Years ago he developed a plan that would take him forward. Ironically, inspiration for development of a career plan came partly from a senior IT person he worked with in his first job. Biggs had joined Olivetti after leaving university, and it was there that he discovered a strong talent — he was a gun programmer. “I was writing machine code on a 1K machine, and I discovered I had a real talent for it,” he says with a smile. “I could run a payroll quicker than anyone else in Olivetti and I became a reference point for people with coding problems. I really enjoyed it. I was about 21-22 and I was working with a guy about 30. Within two days of getting a new computer — and this happened every nine to 12 months — I would be productive. For the next month, though, this senior person would be coming to me to ask how to do this or that. It made me realise I was going to be 40 one day and there was going to be some punk 21-year-old who was going to make me look stupid.”
That thought made Biggs sit back and think about what he was going to do by the time he was 40. If he was going to avoid feeling threatened by young newcomers he would need to move on and up — ultimately to the position of chief executive. Today he acknowledges a broad understanding of computer technology but he no longer has hands-on programming expertise — that’s for the young punks.
Up goes the hand
When Biggs arrived in New Zealand he started work with AHI Computer Services. The organisation had HP 3000s and an IBM mainframe. Biggs moved into the role of development manager on the mainframe and stayed there for about 18 months before taking on the job of strategy and planning manager, with the operations staff, the network staff and the strategy section under his command. “The business model was really interesting,” he says. “We were part of the AHI group and funded by that group, but it didn’t really want to spend money on IT.”
And so, after three years, Biggs moved to Progressive Enterprises. The move was part of the big plan — if a company couldn’t do the right thing for his career, he would move on. By the time he joined Foodtown as IT manager he felt he was ready for bigger things. He was initially responsible for Foodtown’s classic IT environment, which excluded point of sale. After nine months on the job he inherited point of sale.
Biggs is the sort of person who believes in putting his hand up when a new challenge arises. That challenge arose once again when he volunteered for the role of logistics manager — the distribution and warehousing operation — while continuing to run IT. “At the time a lot of people said, ‘Well, isn’t that really different from IT?’ In fact, there were two major components to the job: one was the focus on the internal customer; the other was the process — making stock flow through the system.”
Under Biggs’ guidance, the entire warehouse system was upgraded, providing major benefits to the company. At the same time Biggs found himself in charge of 30 IT people — platinum-collar workers — and 300 blue-collar warehouse workers and truck drivers. It was a contrast, but he loved every moment of it.
Biggs found his enjoyment dwindling when Coles Meyer took over Foodtown. The management took a black-and-white view of the world, he says. The executive team had never met anyone who ran both IT and distribution. “That was the point where I first encountered something that bedeviled me a little from there on,” he says. Biggs continued to contribute to debates at an executive level but when it came to the crunch in any discussion he found himself on the losing side as his peers asked: “Did you start out pushing a trolley around a supermarket? Have you worked in a supermarket? If you haven’t actually filled the shelves of a supermarket, what do you know about this business?” Faced with these inflexible — and unreasonable — attitudes, Biggs decided the time had come to move on.
Next stop was Deka, where Biggs assumed the role of chief financial officer. It was not his most enjoyable role — he did not get on well with his chief executive. Time to move on again.
When Biggs started at Sky Television he was executive number four. The newly born company had one PC — for Biggs to use, of course. “I walked into the door of the office and said, ‘Where do you want me to sit?’ They said, ‘Wherever you like’. I said, ‘Where do I find a desk and a chair?’ Somebody else said, ‘I will buy desks and chairs’. It was a real start-up operation.”
The newness of the business — it did not go live until a year later — meant everyone had to define their roles. Biggs would sit down with newcomers and ask, “What information do you need to run your business successfully?” The response would usually be a nervous laugh or an answer along the lines of “That’s a good question”.
“We set off around the world to look at pay TV systems,” says Biggs. “We bought a couple and brought them back. Then we told staff that this was the way we were going to run the business. It gave us a unique opportunity to use the system to define the business, at least in its early stages. We could change it later rather than try to fit a piece of software to a running business.”
After a couple of years Biggs once again put up his hand and asked to take over the direct sales team. He had around 40 people knocking on doors to sell Sky TV subscriptions. Then Biggs spent six months as general manager of sales and marketing while continuing to run IT. “I can’t stop fiddling, you see,” Biggs explains. “I have a very low threshold of boredom.”
Three years was enough at Sky. Biggs joined Air New Zealand, initially as a consultant in the finance department. “I was doing work on the core financial systems,” he says. “We implemented a new general ledger and accounts payable/receivable system.”
He describes his next role at Air New Zealand as trying to mesh systems together. “We would have two general managers sit down and they would be debating with different numbers. My role was to produce one version of the truth. But after a relatively short time my predecessor at Air New Zealand retired and I took over the CIO’s role. I ended up spending six-and-a-half years with the airline. I enjoyed it immensely, although towards the end I got very frustrated trying to make things happen with Ansett. And I think it is fair to say a number of my peers were pretty frustrated as well.”
Biggs sensed there was an issue that was preventing the two airlines getting closer together. Major shareholder News Corporation didn’t want that to happen, he felt, because it could hamper a possible sale to any other party. “You had a sense that Ansett was almost deliberately using technologies that weren’t the same as Air New Zealand’s. For example, we had Microsoft Exchange running on 3500 seats. Ansett decided to install Lotus Notes. You couldn’t make it more incompatible if you tried …”
Biggs found himself flying to Melbourne to spend a day at meetings in an attempt to resolve the IT differences. He would return to New Zealand later in the day with the sense that nothing had been achieved. It meant long hours with few rewards.
Eventually the time came when Biggs decided it was time to move on. He felt he was at the point where he was finding it difficult to break some of the things he had created in order to move ahead. “Some of them needed to be broken. If something doesn’t work, my natural response is to say, ‘Well, we are not trying hard enough’. Sometimes, though, you need someone to come in and say, ‘It ain’t going to work. Let’s just move on’.”
Biggs’ final stop before Wang was at Progressive Enterprises, where he was involved in stabilising a platform and producing a strategy to move forward. It was a job he enjoyed but it ended after he received a call from an acquaintance asking how things were going with Anthony Howard, head of Blue Star Business Solutions. At that time, Blue Star also ran Wang, later to become Gen-i. Biggs contacted Doug Wilson, former chief at Wang, to ask about the role he had vacated. After further discussion and bouncing around of ideas, Biggs landed his latest role. That was two-and-a-half years ago.
Luck and opportunity
Clearly, Biggs’ route to the top job has hardly been direct. He has worked in numerous roles and faced some prejudicial attitudes. At all times he has refused to accept the “Restricted” label. When an opportunity has come his way, he has raised his hand to volunteer for the job.
“CIOs have three levels of performance they need to be coping with,” says Biggs. “The first one is to make the factory work. The network has got to be up, the numbers have got to be right. The operation has to be running smoothly. That then gives you the credibility to make changes, to put in new systems — whatever is required to keep the technology moving along. If you do that successfully, the business will then give you the opportunity to play in a strategic area outside IT.”
Biggs emphasises that CIOs are right when they argue that their job is not about technology — rather, it’s about business. That’s why it is important for them not to be seduced by the excitement and change inherent in running IT. If they want to go higher they need to understand about accounting, and it is up to them to gain the necessary knowledge. Without that knowledge, they will not gain credibility with the executive team. Be warned, though, it is not just about taking another 3% off the cost of IT. It is, says Biggs, about having enough knowledge and chutzpah to say, “Hey, guys, why aren’t we doing this or that or the next thing”.
The second big lesson for CIOs who want to go up the ladder concerns responsibility, particularly in relation to budgets. It’s a lesson that probably applies to most executives stepping into the CEO role. Biggs confesses that he felt, as a CIO, he could play the budget game with his eyes closed. If the CEO or executive committee told him he needed to take 10% out of his costs he would draw up a list of projects under way and take them back to the executive team. “Take your choice,” he would tell the team. “These are your systems, not mine, so tell me what you want me to stop doing.”
Now, as chief executive, he does not have the luxury of presenting a series of choices to his board: he is the one who must make the choice. “I go back to the board every month. I have a number that I am accountable for. I can’t ask the board what number I should change to get a different result. I have gone from being cost-accountable, and a reasonably adept manager of costs, to being bottom-line accountable. That’s a very different responsibility. I find it quite exciting and challenging.”
Being a CEO means you can go from hero to zero in 24 hours. At the end of the month you are a hero when you make your figures, but then you must start all over again.
The third big lesson concerns the customer side of the business. As a CIO, your customers are largely your peers. If an idea doesn’t work the first time you can always go back to them with a slightly different sales pitch. Ultimately, if your peers won’t accept your ideas, you can go to the CEO and ask him to apply his influence. Now, however, Biggs’ customers are the companies Gen-i is doing business with. He has no appeal above them and he has no automatic right to go back to them if he is not successful the first time round. “I need to be very careful thinking about what I am going to say to someone when I approach them. I don’t want to get a reputation for wasting their time.”
Biggs thinks back to his old days as CIO when he could manage his internal customers through a process of change. “It was the old, old story. You tell them what you are going to tell them and then tell them again. You could go to someone and say, ‘Shucks, we could be running out of disk space’. The next month you could go along and say disk space is getting really tight. The third month you could say they need more disk space, and they would say, ‘Yes, fine, we understand’. With an external customer you don’t have an opportunity to prepare the ground so carefully. You have got to go in, do it once and do it properly.”
Breaking the rules
Biggs has a few confessions to make. “If I didn’t have to pay a mortgage and school fees — in other words, if I had a choice, I wouldn’t work for any organisation as a CIO if I didn’t report directly to the chief executive. But my CIO at Gen-i doesn’t report directly to me. Neither does my human resources chief, and I believe this person should report directly to the CEO. To be fair, though, I have 11 direct reports and the two I can’t accommodate are IT and HR.”
The person these two do report to is — you’ve guessed it — the chief financial officer, who also has the role of corporate services general manager. Biggs sits on the steering committees for both HR and IT. Both are owned by the executive team rather than by just one person, he says.
Despite this imperfect situation, Biggs believes CIOs have some singular advantages when it comes to climbing the corporate ladder. “First, though, I would emphasise how an understanding of the business is essential. If you can’t understand the numbers I don’t really think you have got much hope. But CIOs learn to be articulate. They take charge of large projects. They do really great presentations. We have a whole lot of skills.”
The glass ceiling
Biggs doubts whether he would ever have been invited to jump from CIO to CEO in the airline industry. A similar prohibition would have existed in the pay television and supermarket industries. “I think we are discriminated against to some degree because we have our own industry,” he says. “I mean, I came back to the IT industry to become a chief executive. I think there is a prejudice against CIOs. If you look at the supermarket industry, at Foodtown you used to spend about 10 years in a store before you were posted to head office. IT people don’t do that. They have to cut through all that.”
So is it important to have worked on the shop floor? Not necessarily so, says Biggs. IT people have an opportunity to understand a complete process, whereas store people are required only to understand what to do with a shipment when it reaches their warehouse door. Biggs, and other CIOs, have to acquire a good understanding of how a business infrastructure works.
Being a former CIO helps Biggs understand the problems of CIOs who are struggling with issues that might not be easily understood by someone from another background. “I know what it is like to walk into the office and get into the lift with a CEO who asks why the network is down — and you don’t even know the network is down. I have been in the shoes of CIOs in situations such as this.”
Biggs believes some Kiwi CIOs record awesome achievements under limited budgets. Even when we are compared with our closest neighbour, Australia, we manage to do things at a fraction of the cost. “I think the reason we don’t get heard of in the US is because it just doesn’t seem feasible we could do something for so little.”
Living in NZ
Biggs admits to one deep prejudice he doesn’t want to change — he likes living in New Zealand. People living in this country tend to see things too much in black and white, he says. We always argue about the bottom line when we should be looking at our own balanced scorecard.
“I have just spent a week skiing in the South Island with my son. I have a place on Waiheke Island and I can walk out over the water on my front deck. We complain about commuting in Auckland but it is not really a big deal. I feel safe and secure. My kids have a good education. If you balance all that together you could say we are not that badly off. But yes, we could do better. There is too much competition in a lot of spaces, and this industry is tough. We have some multinationals that haven’t made a profit for years, and logically they should go away …”
Gen-i has opened offices in Sydney and Melbourne. They are primarily involved with infrastructure projects. A small software development team has been set up in Melbourne as well. Development work for Australia is also being done from Christchurch. One of the projects involves a pathology laboratory in Sydney. Another being worked on from Christchurch is a portal for a Queensland company.
Yet another project near fruition is a subsidiary company that will take some of Gen-i’s intellectual property to market both locally and internationally. “We are really good at relationships with 100 fairly substantial organisations,” says Biggs. “What we are not saying is, ‘Gosh, this is a really clever widget. We are going to sell it to 10,000 people’.”
Biggs muses about why New Zealanders are regarded as not being particularly good at taking products to market internationally. He recalls how he sat beside someone — presumably a Kiwi — on a flight to the United States. His companion told him how he was going to take a product to market in Brooklyn. “I asked him how he was going to take it beyond Brooklyn and he said, ‘You don’t understand how expensive it is to take stuff into New York. I can do this borough but I can’t afford to market outside it’.”
Biggs recalls that the first website Air New Zealand created for the US was cheaper than a four-page advertisement in the Los Angeles Times.
Timing is all
Biggs says timing is everything. “If I had been at Air New Zealand when this job came up, I don’t think they would have offered this job to me. Air New Zealand is an important customer of Gen-i.”
An even greater barrier to getting into the top job is the glass ceiling. “The test for me is whether I will become CEO of a company that is not in IT. I suspect that won’t happen.”
So what will he do next? “I guess I will just have to make this company bigger,” says Biggs.

Written by Don Hill31 Aug. 02 22:00