Replacing the Engine While the Sidewalk is Moving: CIO Forum, Part 2

By Chris Wain, independent consultant and writer

How do you upgrade your IT infrastructure without shutting down your business—either intentionally or unintentionally—during the upgrade? According to chief information officers of some major Oregon companies, it requires a company-wide focus, excellent project management, and having the right partners in the lines of business. Learn from their experiences. This is the second of four articles in the IT Moving Sidewalks series.

To understand the challenge of upgrading your IT infrastructure without shutting down your business, consider the analogy between IT and a “moving sidewalk” in an airport, where the riders are like IT’s business clients: “When it works they’re accustomed to it; when it doesn’t work, they get ticked off,” said Dave Weber, CIO of Northwest Natural. When the sidewalk needs a new motor—or the company needs a new system—operations must continue during the replacement process, or the business will fail before the new business process or model can take over.

Speaking at the second forum of SAO’s IT Moving Sidewalk Series, the CIOs explored this question through case histories at their companies. Schnitzer Steel installed a new financial system in just six months, while keeping the crumbling existing system in operation. FLIR replaced BAAN with SAP across multiple sites while centralizing its data center.

Schnitzer steel’s new sidewalk: Oracle financials
When Larry Luck joined Schnitzer Steel Industries as CIO in 2005, he inherited an aging IT infrastructure and a financial system that was breaking. For instance, the server room reportedly had an air conditioner, but it had had been removed because it caught on fire. And at the application level, Luck said, “Closing the books was becoming a nightmare.”

The company needed a new financial system, but it had to be deployed in six months to coincide with the start of a new fiscal year, while keeping the existing system running. As the company embarked on the upgrade, he said, “there were some mornings I just thought we were going to fly apart.”

What worked: The Oracle financial system was deployed successfully and on time. What made it possible was focus and project management. The IT team at Schnitzer was able to focus on the highest-priority items with the help of the company’s CEO. Early on, Luck says, “I had 47 priorities handed to me and they didn’t line up with the CEO’s four priorities. Within an IT team that was used to dropping everything when the business called, we had to focus on saying ‘no’ in order to deliver on the top priorities.”

What they learned: As they begin their next implementation (an inventory module), the IT group will build on some of the learnings from deploying the financial system. For one, they will build more technical knowledge within the business community prior to key decisions. The business, Luck adds, wasn’t sufficiently familiar with the technology and business processes to fully understand the decisions they were making. Two, they will improve testing and training. With 98 locations being touched by the next upgrade, they plan to build training centrally, and have it led by the local user community. “It’s difficult for IT to touch every location,” Luck says. Three, they will embark on a project with an aggressive timeline only when it is business-critical. “My staff told me I shoved too much on them,” Luck says. “It’s a lot of pressure to have too many mission-critical projects.”

FLIR: deploying SAP
FLIR successfully replaced BAAN with five core SAP modules in 26 weeks. Getting the infrastructure in place was about 10 to 15 percent of the effort, says Jim Kindred, IT director. The biggest part of the effort was managing the transition of ERP systems for four distinct businesses.

What worked: Bringing in outside IT consultants, because FLIR managed them like employees. Kindred interviewed each of them as if he or she was going to be a full-time employee, had each of them vetted by users in the business, and then checked references.

What they learned: “It’s important to assess the people involved in the project and how you’re going to get them up to speed,” Kindred points out. In particular, FLIR put a lot of work into picking site leads. The IT group worked with business managers to identify the right site leads, and also to ensure that each lead wouldn’t get pulled off the project by a business emergency.

Project management, IT as touchstone
For both the Schnitzer and FLIR deployments, strong project management was critical. At Schnitzer, for instance, they had what Luck terms “a very strong project manager on Oracle Financials.” At FLIR, during testing, Kindred says, “a tenacious project manager pushed users to share the details of their test results. This made users more accountable for their testing, and made the testing better. The quality of the system was better because of the quality of the test.”

For both companies, IT has been the one place where the commonality of business processes becomes apparent. “Schnitzer is straightforward business. We buy scrap steel,” Luck says. “But it’s amazing how everyone thinks they’re different.” For his part, Kindred says “At FLIR the SAP project served as a forcing function to helped four business groups, some of which were acquisitions, to see their commonalities.”

About the SAO’s IT moving sidewalk series
The SAO’s IT Moving Sidewalk Series focus on how IT can and must drive technology business value. The first forum in the series was The CIO’s Imperative: It’s More Than Fixing the “Moving Sidewalk.

About the CIO panelists
Dave Weber, chair of the SAO CIO Committee, joined NW Natural in 2000 as the company’s director of information services and chief information officer.

Larry Luck joined Schnitzer Steel Industries in July 2005 as vice president and chief information officer.

Jim Kindred is director of information technology for FLIR Systems. Jim joined FLIR in 2005 and is leading the company through a global rollout of SAP.

About the author
Chris Wain, a local marketing consultant and writer, is a 10-year veteran of e-business and Internet marketing. His e-business experience encompasses Web-site management, communications, training, managing a user experience team, and transition and change management. He can be reached at chris.wain@comcast.net.