Shahidian on how he got upper management to recognize the importance of IT: We (hired a) new CEO three years ago, where he came and looked at IT as a cost center. Turning that perspective that IT is not a cost center was a challenge for us. I made sure that he understood that not only are we not a cost center, [but] we are part of the core business. … You cannot take an order, you cannot ship an order, you cannot collect (without IT).
Making that recognition and selling that to the CEOs and CFOs is the biggest challenge. Once you’ve done that, it’s all up to your IT management team. One of the other things we did about three, three and half years ago, was we created responsibilities for our business relationship managers. These are purely IT folks, very smart guys. We picked the smart guys who are business analysts.
We embedded these folks into the business. They are all part of the staff meetings, and any kind of challenges that they have [are discussed], so you understand the pain points and bring back the pain points to solve issues.
For us, the biggest challenge was recognizing that our CEO and our CFO recognized that IT is not a cost center.
Huntsman on how she bought in to IT and her beginning steps: I think technology supports the business and doesn’t run the business, and the feed stream comes from those people who are engaged in the processes.
I think what we’ve learned through our culture at Lauren is that the IT department was willing to listen.
If you’ve worked in manufacturing systems in any way, so many times, systems are very candid [and] they’re not flexible enough to really address the real needs of what you need in manufacturing. So from our perspective, the IT helps support our business and we do what is necessary because we’re spending countless hours looking at schedules trying to change schedules. We have 900 customers, so they change all the time. …
A lot of (the beginning steps were) back stream mapping. There was a lot of process mapping. What are the inputs we have for the right output because there’s a lot of loss? If you don’t know exactly what you need and you don’t have the right inputs, IT can spend a lot of time getting to the wrong stuff.
The knowledge leaders of the different processes — it’s important they’re part of the system, part of the preplanning, so when IT gets ready to start programming, they really do have an accurate picture of what needs to be achieved at the back end.
For more from Huntsman, you can watch her share some thoughts with Dustin Klein, the executive editor of Smart Business, before the event.
Hyland on how he sets up incentive programs based on efficiency gains: We have the same targets as far as revenue and operating income and earnings. In the past it’s been more of a global target, but in the past few years, … I would say for managers, it’s about 20 [or] 25 percent of their total earnings tied to performance.
But we’ve been moving it to be more specific, so we’ve developed what we’ve called best-in-class ratios. For example, our division across the street is our consulting division, which does implementation, and they have very tight margins, very slim margins, so we push down (mandates) to them and (say), ‘This is where we are, and this is where we think the best-in-class ratio is.’
Then we set and improve the targets; we want a little bit of target improvement each year. And then it’s their job to actually build the operational metrics for how they’re going to hit that improvement.
We kind of tell them what we want the target to be, and then we let them tell us operationally what they think they can change in the business to meet those targets.
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