Every IT executive strives for operational excellence. How do you use innovation to drive it? How do you raise the bar high enough to meet the needs of your customers? How do you obtain the right resources – both human and financial – to support it? To find out the answers to these and other critical questions, we convened a panel of IT executives from organizations that have achieved operational excellence – all of them finalists in this year’s Canadian Information Productivity Awards.
Catalina Trevizan, Senior Manager, Health Services I&IT Cluster, Govt. of Ontario
Val Adamo, VP & CIO, Workplace Safety & Insurance Board, Ontario Second row
Loren Hicks, CIO, Lavalife Corp.
Gaston Roy, CIO, Sudbury Regional Hospital
Ted Maulucci, CIO, Tridel Corp.
Graham Kemp, Director, Admin. Management Systems, University of Toronto
Sav DiPasquale, VP Information Technology and CIO, GlaxoSmithKline
Ray Briggs, CIO, Regional Municipality of Durham
CAREY: How does your organization use innovation to drive operational excellence? How do you put a focus on innovation and identify emerging technologies that will promote operational excellence?
HICKS: At Lavalife, we’re in an intensely competitive industry. If our competitors are using any kind of new technology or doing things in a new way, we need to be all over that. But we’re not a very large organization and we run flat out, with little money and time for R&D and learning new things. So we use a strategy that I’ll call smart outsourcing. We’ll find somebody – often a small company that’s doing something we think is interesting – and we’ll buy them or partner with them. And rather than trying to meld what they’re doing into our processes, we’ll have a few things that are outriggers, running in sometimes very ugly technical environments – in sort of an uncontrolled manner – to see if they work or not. If they work, then we’ll operationalize it. It’s sometimes expensive and you get some failures, but by and large we’ve had a lot of success doing that and, as a small company, it’s a way for us to do things that we couldn’t do any other way. But it requires a lot of creativity on the part of our staff to try and deal with some of these things, which are technologically and culturally diverse.
DIPASQUALE: We put a tremendous emphasis on innovation because we’ve already picked all the low hanging fruit related to operational excellence. One example of how we’ve used IT to drive operational excellence is by bringing in a suite of collaboration tools that everybody throughout the business had to use. We let everyone know that these easy-to-use software tools would provide a new way to learn, collaborate and share information and manage meetings. It took off like wildfire and allowed us to proactively reduce training, travel and meeting costs company-wide.
BRIGGS: Municipal and Regional government, by its very nature, is conservative. To break out of that mould, one of the things we’re trying to do is make each manager in the corporate information services department responsible for instilling in their team the responsibility for thinking about new innovative techniques and investigating new emerging technologies. We promote the investigation of emerging technologies and give our employees opportunities to try them and play with them. This is a very important part of their job. We’ve invested a considerable amount of money over the last few years to enhance our training programs, and to enhance the relationships that we have with vendors we’re working with – and sometimes vendors we’re not working with – to understand where they’re going and to be participants in their plans.
ADAMO: We have a concept with our management team around leadership development and practice leadership, and there are objectives around practice innovation within each person’s annual objectives. We also have a group that particularly deals with emerging technologies, called Architecture Services. They are our research and development arm, they have a full-time staff of people that work with each of the practice leaders. We also spend a fair bit of time with vendors who are not necessarily mainstream, who do offer more leading-edge concepts and thoughts. We pick the innovative opportunities that work for us and then showcase them internally or through awards programs like CIPA. We showcase people’s achievements and promote their innovation in a way that encourages the next person to create that next piece of innovation. It works very well for us.
CAREY: One of the goals of operational excellence for IT is improving customer service. What are the critical success factors in improving customer service, and how to do you overcome resistance to change on the part of users?
KEMP: We have a number of ways of looking at our customers and working with them to improve service. A lot of these are formal committees or groups that we meet with, but a lot of it is informal – sometimes just dropping by someone’s office can go a long way because you get a lot of information and ideas from people when there’s no agenda. We also have what we call a Nutcracker Project, where anybody can bring a problem to our department; it doesn’t matter what it is. We take ownership and we resolve it, and we publish the results. We’re trying to build up a level of credibility within the organization so that when customers come to us, they know they’re not just getting an IT solution, they’re going to get a business solution. And we also say to customers that not every solution is an IT solution – it could just be reorganizing a process somehow. So we’re not forcing IT unnecessarily down their throats. How we overcome resistance to change is by building up our level of credibility and working with people and being, in some cases, extremely patient. Customers can have long memories about systems and what they didn’t do 10 or 15 years ago. You’ve got to keep that in mind and deal with it.
TREVIZAN: Resistance to change is something that we’re dealing with right now at all levels because we are engaged in a large initiative to improve customer services to the people of Ontario, and the initiative has many components on the IT side, including infrastructure consolidation (enterprise e-mail, server and data centre consolidation; desktop and service management). What that means in practice is that client areas, as well as IT departments, will no longer be able to buy and manage their own servers. So we’re starting to remove servers from people’s desks and from closets, and there’s quite a bit of resistance. I think the key to overcoming resistance is to consistently communicate the message to our staff at all levels why we are doing this. We have to explain what’s in it for them and for the customers that we serve. At the end of the day, we are convinced that it will create a better managed environment, where we will run our operations cheaper, faster and resulting in better services to our customers.
ROY: Customer service, first of all, is really about dealing with expectations. You have to be a very good negotiator and be able to put on paper what both the customer and the service provider agree upon. Whatever the type of agreement, you must be very clear about what the expectations are and what is included in the service fees. So we use a service level agreement as the negotiating tool – this is what you paid for and this is what we agreed on. If the customer wants changes, we’re willing to make the changes, with appropriate senior management approval. And if the nature and priority level are drastically different than what was originally approved, we determine whether or not they require a separate service level agreement.
DIPASQUALE: One thing we’ve implemented in IT is what we call our Concierge Service. It’s a higher level of personalized service targeted at senior people, because if you can get them up that curve, they’ll bring the hearts and minds of their organizations with them. It’s a one-stop shop for these people; they know who to call and there’s always someone available to respond quickly to their needs. We’ll do an assessment – sit down with them in a non-threatening way and find out what their barriers may be to using anything from a BlackBerry to a laptop, and then we overcome those barriers. Some of it is accomplished through training and education, and some of it is just giving them tips on things they didn’t know. The second aspect of the service is solving their problems. You’ve got to respond more quickly to an executive’s laptop or BlackBerry problem than anyone else in the company. So we don’t follow a standard protocol here. People don’t have to get my approval; they have free reign to do anything that’s necessary. In fact, we’ll pull out all the stops to get them back in business quickly. The Concierge Service has been in place a couple of years now and it’s dramatically changed the competency of our senior people in using and embracing technology.
CAREY: Operational excellence implies a striving for quality. What does quality mean when applied to IT, and how do you aim your IT organization at the appropriate quality standards for your business?
HICKS: Looking at the dimension of time-to-market for a product, if you do stuff very quickly, you’re going to have more – I hesitate to use the word ‘errors’ – undocumented features. If you take the time and apply the full rigour of your processes, you can get to a zero-defect product. But it takes a very long time. In the organization I’m in, time-to-market is more important than zero-defect, so our definition of quality has to include a certain defect rate. In fact, I have an issue now with one of our products, where we’re not getting enough bugs. The team is spending too much time testing and fixing and we’re delaying rollouts. We’d be better off with a higher bug rate, which is not the case for many organizations, like those in health care or retail banking. It’s a question that we don’t often think about – it’s almost second nature – but maybe it’s something we should give more consideration. Where do you aim your organization? What is the right risk level of quality for you to be taking with certain projects? What is the right defect rate? In ITIL and other methodologies it’s zero, but I don’t think that’s the right answer a lot of the time.
MAULUCCI: I see it really in two pieces. If you look at the plumbing or infrastructure side, quality is pretty straightforward. How long have you been up? How fast is everything performing? Do you have disaster recovery? That’s the boring side of IT – the old school side. The flip side is your business processes, software development and implementation, and here the quality is really the performance of the company. So you want to look at things like: are we winning the customer service awards out there? Are we buying things and operating more efficiently than our competitors? That’s high-quality IT. Because customer service is fully dependent on the fact that all the technology and everything they need to operate is there for the customer.
CAREY: What IT management methodologies or best practices does your organization use in the pursuit of operational excellence? How easy or difficult have they been to implement and how effective have they been in contributing to operational excellence?
BRIGGS: The Region of Durham has in the last couple of years introduced ITIL, as well as best practices. During that time we’ve established a program management office and we’ve introduced project management. About half of our staff are ITIL certified, and a number now have their PMP [Program Management Professional] certification, and we’ve introduced that into the everyday life of our department. We believe that this is the foundation for us to go forward as an organization, and that it will separate us from the expected norm in the regional government IT world. It’s been very difficult for us to get to this point. Many people in our organization have been accustomed to doing things their own way, and on their own timetable, so there has been much resistance to this change. But I think that the methodology is working wonderfully well and the amount of complaining is clearly diminishing. People in IT are now seeing that there is some value to these new designations that they have, not only inside our organization, but outside. But where we see the real difference is outside of our department. The customers and the senior management team recognize the difference. We now have a process whereby they can understand that when they ask us to do something and we commit to it, we will deliver on time and on budget.
ROY: The difficulty we have with developing best practices is that we are a small shop and both the operational and the strategic items are implemented by the same staff. We standardize as much as possible on software and hardware, and things get applied and distributed globally through an automated process, which keeps our operational resources on the low side. This allows us to deal with the new projects. We introduced project management four years ago and it has been one of the keys to our success with new projects. All projects have to go through this rigorous process, project charter, sign-off, determine executive sponsor and so on, before we allocate any resources. The difficulty is that it’s a longer process. Before, people wanted best of breed, or they wanted to do their own thing. Now they have to align themselves with us on an annual basis, therefore putting more emphasis on partnership and proactive planning.
TREVIZAN: In terms of best practices, we are focusing on project management at this time. Recently the Ontario government created two councils – the Supply Chain Leadership Council and the IT Project Advisory Committee – both headed by senior executives, to review and approve all IT projects and procurements between one and ten million dollars. To assist with project management, there is the Centre of Excellence for Project Management within the Corporate CIO portfolio with training available to everyone. In the Health Services I&IT Cluster, we have monthly meetings called Project Review Committees (PRCs). All our projects come through the PRCs for review. This is not a status report; it’s about project managers coming to the executive table explaining difficulties and seeking help. It is the role of the executives to eliminate roadblocks so that projects can be completed successfully. Project management skills are part of project managers’ performance management contracts. Accreditation is encouraged. So that’s how we are promoting the discipline of project management.
HICKS: We need to be creatively unstructured on the development side, because the requirements and priorities can change daily, yet we need to have systems that are up 7 by 24, because that’s where all the revenue is. We used Sarbanes-Oxley as a driver to clean up the operations side and that went very well. On the application side, it’s been more of a struggle. In the last few years, we’ve looked at pieces of most of the rapid methodologies. And the best success we’re seeing is something we’re trying now – co-mingling the Web business and the Web IT team; the marketing people, the creative people, the ad sales people, the developers, project managers and everyone else – all in one area on one floor. Next step is to throw away paper. We’re setting up wikis and other collaborative tools like Sharepoint for specs and for everything else. It’s an experiment and I think it’s going to work. If it does, maybe we’ll try another business next year.
CAREY: How do you ensure that you have the human resources you need to achieve operational excellence? And how do you ensure that you retain your knowledge workers?
MAULUCCI: This is an area where we do have a structured process. We have a very specific way that we go about finding people, and the key to it is testing. I don’t interview. I don’t even look at a resume. We just run them through tests. It doesn’t matter if it’s a business analyst, a programmer, or whatever. We use structured tests, real examples of what we do, and see who answers them correctly. If they can get through that, we then do psychometric profiling to see if they match to the core values that have been laid out. We go through huge numbers of people – as many as 400 – to get a programmer. Some of the schools have participated with us on this. We’ve had schools that would set up the lab for us and have the students go through and do our tests, and we were able to hand pick the best ones. We’re finding the right fit but it takes a lot of work up front to think about what you want and what you need. In terms of retention, you have to dig deep and spend time with people and make them part of the team. For example, a recent immigrant joined our team and his wife just had a baby. I went out and talked to neighbours and friends and found him everything he needed for his baby. It’s those little things you do that make the difference.
ADAMO: I have a dedicated HR team. They focus primarily in two main areas: workforce planning and leadership development. They have created a workforce plan which regularly assesses our resource needs, including such things as what motivates staff and what drives them. Those needs are aligned to both the organization’s five-year business plan and the IT strategy that supports it. We took that down to determining our leadership competency requirements and technical skills assessment level, so we know where our gaps are. Then we put on a promotion around retaining our internal staff. This was a very visible commitment to the gap analysis and to boosting our career pathing and career planning. We’ve been taking this direction for about two years now, and we’ve increased our training spend three-fold for internal people; and we report quarterly to our staff what the progress against the training plan and the training spend is. That’s made a significant difference in the ability to grow people internally. In terms of attracting new staff, we have the standard quasi-government problem of people thinking that it’s death by bureaucracy, so we do a lot of external promotion. My senior management team and I take virtually any chance we can get to speak about the really cool things that we’re doing. We use awards programs to showcase our work and we volunteer to do business case studies because we want to get people to think of us somewhat differently. We’ve also done an extensive program in working with recruiters, so that they understand the type of people who will flourish in our environment.
KEMP: In the past, we’ve found the University has been a very attractive place to work. It has a relaxed atmosphere, you get two weeks off for Christmas, and there are many other significant benefits working for a university with respect to tuition and the kinds of people who you come in contact with. What we try to do very much with the staff in my group is to organize them into various groups, so we have a financial team and an HR team and so on. Within each group, we don’t have people who deal strictly with operational stuff, such as running the payroll. We have a number of people who do have operational responsibilities, but they also all work on other projects. So they’re not stalled in one position for any period of time. Between the different teams, too, we also move people back and forth, so somebody from our HR team will work with the financial team for a while. This approach gets people learning more about the business and what’s going on. And when we bring in new technologies, they aren’t introduced just to one group, it’s broad-based across the entire department.
TREVIZAN: We follow interview protocols very strictly as we are a unionized shop for all IT positions except management. We usually do one to three interviews and we test people thoroughly. We score very carefully and typically, the person with the best score is hired. While we test for technical abilities we also look for inter-personal skills. We strive to recruit people who can work with others and share the glory. We’re very limited in what we can do regarding salaries and financial compensation, so how do we support our staff so that they stay with us? There are mainly two methods. One is through learning plans. All of our managers meet with their employees, twice a year at least, at the beginning of the year to set up the learning plan, and we’re very, very focused on training. Every member of the IT staff needs to have at least 10 days of training in IT. We support people who want to go for PMP certification by paying the fees. We also encourage them to look at secondment opportunities in other Clusters. Because the government is so big, there are always opportunities for people to do cross-training, to learn about different areas and technologies.
CAREY: How do you ensure that you have the financial resources that you need to achieve operational excellence?
ADAMO: We treat the operational excellence or the operating budget as a separate resource pool from the change budget. The change budget is a corporate pool, which means we have to compete for funding with every other initiative in the organization. So what we’ve learned to do is to build a really great value-based business case to keep our costs as low as we can in both sectors. At the same time, were looking to build the best overall business case. We try to submit our business case early when the funds are still available for allocation, and when we’re able to do that then the funds are allocated from the capital budget to us. To assure that we’re aligned with the corporate strategy, the IT strategy has a matrix that cross-references the IT strategy initiatives against the corporate initiatives. And then as a separate section within the IT strategy, we’ve identified both capital and long-term operating costs associated with each initiative. So when they annually review and approve the strategy, they know what kind of capital costs they’re up against. The question then is only ‘Can we build a business case that allows those funds to be allocated?’
ROY: In health care, we have to balance primary care needs, such as wheelchairs and stretchers, against technology. What we’ve been able to do, from an IT perspective, is very clearly articulate our strategy around what we need to do, and align some of the projects in a timely fashion over a course of five years. We make it very clear that these are the priorities we want to achieve, like getting to a certain level of automation with the patient chart. What we’ve been able to do is bring in consultants, content experts, and partners, which could be vendors, and make sure that what we are doing or what we are proposing is truly aligned. We’ve also shared with some consultants what we anticipate to be the costs on a yearly basis, on top of what’s required for our ongoing replacement strategy for their input.
KEMP: It’s very difficult for us to get the funding we require because unless you’re teaching or doing research, then you’re not seen as contributing directly to the student experience. We’re looking at new ways of doing budgeting this year for the university. We’re preparing the annual operating plan, and we’re making sure that we specify in it exactly the things that we’re doing, and the value that we’re bringing to the organization. We’re able to quantify the savings for the university and we can say that by doing these things the organization is saving money – and a dollar saved is a dollar that can be put toward the student experience. With the capital budget it’s also difficult, as we are competing with many other projects on campus. So how do we get to the front of the line and get the money we need? We try to tie things in directly with the institutional or divisional goals. We’re very clear and open on what we’re going to do and how our projects are prioritized. And sometimes getting the capital we need also involves beating the bushes. It’s not necessarily through a budget process, it’s sometimes getting sponsors to contribute funding to specific projects.
CAREY: Consumer gear is getting better and is increasingly being used by the enterprises’ employees. What is your IT organization doing or thinking of doing to leverage that, so that the people will support their own devices?
DIPASQUALE: We have a strategic focus on what we call ‘Consumerization of IT’ and it’s part of our emerging technology framework. This strategy asks IT to start looking at the rapid movement taking place in the consumer space of technology. People are buying things like cell phones, and iPods, and perhaps better computers than we provide them, and when they run into a problem they don’t call IT for help. I think there’s a great opportunity for us to leverage what’s happening with this new generation, or next generation coming on. We hope to leverage the capability of pervasive consumer IT tools in the corporate world to reduce cost. You have to wrap that all around compliance, risk management and security. But there is an opportunity there to take the consumerization of IT to the next level and perhaps drive hyper-growth in operational excellence. There’s no doubt it’s a very exciting challenge.
CAREY: Even when IT does achieve a high level of operational excellence, it is often reluctant to tell the rest of the organization what it has done. What does your IT organization do to get the message out and communicate effectively with the rest of the business?
MAULUCCI: One of the core skills that I focus on is public speaking. It’s critical for our group to come across professionally and to take every single opportunity to be in front of the company and really make a bang. So both I and the business analyst team take at least one public-speaking course a year. Any time we have an opportunity for an engagement, we go into rooms and do dry runs – we take it very seriously. Because it’s marketing, it’s sales, and I want my group to be the absolute best speakers that they can be. So that’s something we really strive for. In one of the courses I took, someone said that public speaking is the thing people fear the most. But if you can speak, even if you’re completely incompetent, people will think you know what you’re talking about.
BRIGGS: We have a number of ways of getting the message out. Perhaps the most important is our intranet. That’s our primary source for internal information. Our department plays a large part in that, and we make sure people are aware of everything that we’re doing through what we call our ‘Insider’. We also have a quarterly newsletter from the IT department, and we give people an opportunity to write narratives about certain projects they’ve been working on. I encourage people to participate and we ask them to write stories about things they’re doing, projects that they’ve been working on, successes they’ve had, and sometimes even failures. We’ve sent some of our folks to the Toastmasters Club – people whose first language is not English – and we encourage them to do presentations both inside and outside the organization to better their public-speaking skills, because not only are we marketing IT inside the organization, but outside too.
CAREY: If asked to contribute a single short piece of advice for a book on achieving IT operational excellence, what would it be?
TREVIZAN: My focus would always be recruiting the best you can – and retaining, promoting, developing, and supporting people so that they can work in teams and achieve success for the organization. Without people, no matter how brilliant the executives are, the organization will not go very far.
ROY: We all have the right plans and ideas but we can’t seem to deliver on time or on budget, which then affects the value of what IT provides. So reliably delivering our projects becomes key to our credibility.
DIPASQUALE: Make OE a strategic priority for IT. Get your IT operations, your services, your project delivery and your people practices to best-practice levels. If you do that, you not only gain credibility from the business but you can leverage that to persuade the business to invest in technology to drive competitive advantage.
MAULUCCI: Learn how to communicate at an exceptional level. Learn how to write and how to speak. You can have the greatest ideas in the world, but if you can’t deliver them, if you can’t market them, you’ll never get them implemented.
HICKS: Operational excellence is not about technology or financial resources, it’s all about teams. It’s people working and communicating effectively together. So if you really want operational excellence, a good place to start is focusing on the teams.
BRIGGS: Best practices, policies and standards are essential. You’ve got to have a plan. You’ve got to tell people what’s expected of them and what their roles and goals are. Keep their objectives clear and understood, and then you will move forward successfully.
KEMP: Understand your staff and what they want, and be clear about what you want them to do. And understand your customers, what they want, and what you can do for them. And communicate all those concepts.
David Carey is a veteran journalist specializing in information technology and IT management. Based in Toronto, he is editor of CIO Canada.
CIO Canada’s fall roundtable was sponsored by Hewlett-Packard Canada.