Erin Griffin, CIO and vice-president of IT at Loyola Marymount University (LMU) and Mitch Davis, CIO of Bowdoin College, met three summers ago at Snowmass, near Aspen, Colo., during a conference on academic computing. They chatted, shared experiences about their respective challenges and traded some ideas. But it didn’t occur to either of them that they could join forces until they met up again in 2005 at the same conference.
They were leaving a session about disaster recovery, reflecting, Griffin remembers, that they were both in similar jams. Disaster recovery solutions from vendors were expensive-especially for small colleges (like LMU and Bowdoin) with limited budgets. Griffin and Davis joked about how easy it would be for people to replicate each other’s data centres if only they were willing to work together. Then came the epiphany.
“We said, What if we actually did it?” Davis recalls. Half a year later, Griffin, who is based in Los Angeles, and Davis, in Brunswick, Maine, began developing a solution that allows them to host each other’s disaster recovery sites. And it has cost a mere fraction of what it would have to hire a vendor.
Samuel Gaer, executive VP and CIO of the New York Mercantile Exchange (Nymex), faced a different problem. A major competitor was encroaching on Nymex’s market share by offering competing energy futures contracts on a “side by side” system for trading both securities and their options, while Nymex was still executing them manually (brokers screaming out orders in the trading pit) from its trading floor during daytime business hours.
Gaer needed to get Nymex’s contracts online in a hurry. Nymex had a system ready (ClearPort) that it had upgraded, but Gaer knew that the Chicago Mercantile Exchange (CME), which specializes in financial futures, had a well-established electronic trading platform called Globex.
“From a technical standpoint, our system was robust, but CME [and Globex] still had some distinct advantages,” he says. For instance, Globex, which had been around since 1992, had been more heavily tested and as a result was more scalable. So Gaer swallowed hard and called CME COO Phupinder Gill to propose a partnership.
“I essentially said, ‘Why should Nymex reinvent the wheel when we can collaborate?’” Gaer recounts. Working together over the next year, Nymex and CME came to an agreement that enabled Nymex to list its futures contracts on Globex.
The partnership helped extend CME’s Globex platform, improving its customers’ experience (many also did business with Nymex). For Nymex, trading volume in the crude oil futures it offered grew from 220,000 to more than 500,000 a day in six to eight months.
When Gaer proposed listing Nymex’s energy futures contracts on the Globex platform run by the Chicago Mercantile Exchange, he told his boss: “This has nothing to do with a lack of faith in our abilities; this has everything to do with a forward-looking business relationship.”
A successful collaboration pairs partners with complementary skills, says Griffin, and that’s what she found with Bowdoin College CIO Mitch Davis. “Mitch is the king of the creative idea. I’m a process and planning person.” Together, Davis and Griffin built a disaster recovery system for both schools. “Not only did our staffs have complementary skills,” says Griffin, “we did as well.”
The collaboration imperative
These efforts represent a growing trend among companies toward collaborating with industry peers. A global study by IBM of 765 CEOs last year revealed that more than 75 per cent place a priority on partnering outside their organizations to create innovation. But there remains a collaboration gap, with only 50 per cent actually reaching beyond their own enterprise to partner with another organization. That gap, the study concludes, represents an opportunity for CIOs to lead the way as facilitators of intercompany collaboration.
But taking on this role is a challenge for IT departments, which typically take pride in in-house innovation. “The role of the inventor is disappearing,” says Navi Radjou, VP at Forrester Research. “They need to stop inventing and take on the role of...transforming raw technologies into a meaningful application for [the] business.”
LMU and Nymex have reached out to transform the way business is done in their industries. In so doing, they’re helping to define best practices for partnerships in business innovation.
How to bring the boss along
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