CIO Canada: Briefly describe your background prior to taking over as CIO of Dell.
I was with Wal-Mart for over 20 years prior to coming to Dell in February 2000. I joined Wal-Mart right out of college as a developer, and was in the development organization for a number of years in just about every area, from distribution to merchandising to store systems. The last six years I was in the CIO role. When I joined Wal-Mart they were doing a half a billion dollars in sales per year; by the time I left, that figure had risen to 167 billion dollars.
CIO Canada: What made you decide to leave?
After 22 years I felt I had had a robust experience in retail and was interested in learning more about other industries. I wasn’t in a hurry to move but the opportunity at Dell looked like a good one. Dell reminded me of Wal-Mart in the mid-80s: the growth opportunities, the new business areas the company was getting into, how IT could support the business to enable the kind of growth that was envisioned. So it looked like an exciting time. It was also an opportunity to work with the founder again. I spent about fourteen years working with Sam Walton before he passed away, and I welcomed being in a position to work with a company where the founder’s influence and vision were strong.
CIO Canada: What was the biggest new challenge you faced when taking over the
CIO reins at Dell?
The biggest new challenge was learning the business and understanding the IT challenges around some business areas that weren’t part of my background. These included manufacturing, sales and marketing. Also, Dell had grown very rapidly, and with that growth there were a lot of opportunities for synergies and better integration in what could be done from an IT standpoint. Obviously the IT organization had supported a huge growth curve, but at the same time there was a way for us to do it better because the challenges were getting larger as Dell continued to move into the enterprise space. The company has a rapidly growing product mix and we have to guide those products into the enterprise space while diversifying the product mix for small business and consumers as well. We also have to meet the expectations of our “direct to the customer” model, and do that without having a lot of inventory. Even though products are becoming complex, there is still the expectation that they will be delivered to the customer exactly the way they need to be. We’re trying to use IT to help the business achieve these objectives without adding cost.
CIO Canada: Could you describe the structure of IT at Dell?
We’re constantly evolving the IT structure in order to better meet the business needs. Basically, there are 2,500 IT people around the world. A lot of those are in Austin, Texas but we also have groups in two or three locations in Europe. We’ve got an organization [built] around supporting the Americas, supporting Europe, and supporting Asia.
A lot of what we do is based around supporting Dell’s business model and is different from many other companies because of that “build to order” versus “build to inventory” model. So the IT organization is very centred around building things and delivering new functionality and processes for the business. I would describe it as very much a development organization.
CIO Canada: Can you describe some of the ways in which the IT organization is different to support Dell’s direct model?
Over 50 percent of the orders we take come in over the Web. So the IT organization is very focussed on constantly delivering new functionality in that area because it is a big part of how we do business. For example, we have 65,000 unique premier pages that make up the online store that our large business customers go into. This area is customized for them – set out with their standard configurations that they can go in and order from. So that whole front end – how you get the order in – is the starting point.
The other part relates to the fact that we’re not building cookie-cutter systems; we’re building very open, configurable systems that in many cases have the customer’s applications loaded on. And there is the expectation that these systems are going to work properly when they come out of the box at the customer’s location. So Dell’s IT organization is also very focussed on the systems to support that [manufacturing environment]
– not only support it, but also capture the metrics around the whole customer experience.
CIO Canada: How do things work vis a vis your subsidiaries? Take the Canadian IT organization as an example. What is it responsible for, and how does it relate to the centralized IT function?
Much of the development to support our business is happening in Austin, but a lot of the touchpoints are handled by the team that is here in Canada. And that’s similar around the world. Part of my being here is to spend some time visiting our customers, and part of that is understanding some of the issues that CIOs in Canada are facing and how well we are doing to support them. Is our product mix what they need? Are we supporting them properly from a sales and service perspective? Also just letting them know what our experiences are – the sharing of best practices that happens when you have an opportunity to meet the customer.
CIO Canada: Looking to the future, what do you anticipate Dell’s biggest
IT management challenges will be over the next two to three years?
Even though we’re well positioned with respect to our competitors, every area of our business could be better, whether it’s the supply chain, the online environment, or the systems that support our sales and service reps when they are on the phone. Our challenge with IT is how fast can we be responsive to the changes required by the business? A lot of our focus is around driving down the time from when a project is envisioned and we do the requirements, to when we implement it in the business – driving that to a shorter and shorter window, and making sure that what we deliver has applicability across all of our business.
CIO Canada: What are your biggest personal challenges as CIO?
What I’m most concerned about is making sure I build a team with the right leaders, who have the right qualities and capabilities to take us to the next level in their various areas of responsibility. I’ve spent a lot of time thinking about how we continue to develop people within our organization, how we make sure we’re in a position to promote from within, how we afford our folks opportunities from a technology standpoint, a leadership standpoint and in terms of understanding the business. That to me is a key thing in terms of the success of the organization – good people with good skills, applying them in the right way for the business.
CIO Canada: How do you try to ensure that IT is strongly aligned with the business?
We work hard at making sure that the executive committee is very much in tune with where we’re at, and that we’re in tune with where we should be going with the company. We’re really trying to get the whole executive committee to buy into the IT strategy, not just segments of it, because these things are all highly integrated and it’s very important to have a global common road map. So we work with the executive committee and with the individual executive committee members. And we work with each of the different business owners – not only within manufacturing, for example, but also within areas of manufacturing – to make sure they know who their IT contact is, and to make sure that we’re in the staff meetings and that we understand what their business challenges are.
CIO Canada: What events or activities provide you with your best opportunities for career-related learning or peer networking?
When you’re in a company like Dell that does a lot of things right, you can tend to forget about a lot of the areas where there are opportunities. Part of what we challenge the IT team to do is look at who’s doing the best at such things as logistics, or online selling, or customer relationship management – to really go out and say “who is the best?” and then compare ourselves against them. I believe strongly that [identifying] best practices or best of class doesn’t necessarily happen when you do direct industry comparisons; it happens in terms of looking across industries and looking at people that are doing certain things very well. To that end we’ve been putting together CIO roundtables – we’ll do three this year in Austin, one in Brazil, a couple in Europe and three or four in Asia. The roundtables usually consist of six to twelve CIOs, and we coordinate with them as to what topics will be discussed. We try to select the CIOs from different industries so their competitors aren’t in the room, and they feel comfortable in sharing what their opportunities are and what’s going right for them. Some of my direct reports will be engaged in leading parts of the discussion, which gives them an opportunity to grow and develop in terms of their interaction.
CIO Canada: Broadly speaking, do you feel that CIOs are contributing as much as they should to setting and achieving the strategic goals of the organization?
There are very good examples of CIOs doing very well along those lines. But I think in many cases organizations are not doing a good job of preparing people for being the person in charge of IT for the company. The requirements of a successful IT person are, in my mind, one third business, one third leadership and one third technical. There needs to be an emphasis on learning the business side and acquiring leadership skills at an early time – when these people first come into the building – not when the organization is ready to promote them to CIO. To be involved in determining strategy, you have to have practice leading and influencing people for more than the time you’ve been in the job.
If IT professionals were better prepared along these lines, they would be in a position to influence strategy by being able to articulate what is possible, where the opportunities are, and how technology can be an enabler. If you look at a lot of businesses, what else are they going to use, from a tools standpoint, to fundamentally change their business, if not technology? Technology remains the key enabler, so the IT organization has got to have a place at the table – not just the executive committee table, but every table throughout the organization.
CIO Canada: Do you see senior management’s view of the role of CIO changing? Are CIOs becoming more engaged in senior management committees?
I think we still have a ways to go. I still see a lot of places where the CIO is not a part of the executive committee. And that may be for various reasons. The exe-cutive committee may feel that the CIO isn’t, in effect, senior enough in terms of background to be there. Or they may see the CIO as being very narrow in scope – the lead technologist. There needs to be more realization in businesses that they need that element at the table, just like they need the other components of business. Too many times the one thing left off the executive committee is the CIO.
CIO Canada: What in your view are the biggest issues presently facing the CIO profession in North America?
One of the biggest challenges is that there is an awful lot of thinking that you need a business person heading up the IT organization, as opposed to an IT professional. And I’ve seen both types be very successful, so I’m not saying there is a correct answer to that. But I think some of the reasons [for this thinking] are the wrong ones. One reason for hiring an individual with a business background is so that the business can communicate with IT. Again, that’s a failure, in my mind, of the IT profession – the fact that we didn’t bring up the up-and-comers, the people that are being promoted, with an understanding of the business and the ability to communicate with it in a business fashion. However, I believe, in some cases, that thinking we no longer need to understand technology to the degree we have in the past is probably premature. Even though technology is a lot simpler in many ways, it’s more complex in a lot of other ways as well. So that’s one of the challenges that faces us.
I also think that within IT organizations we’ve got a responsibility to make sure we’re developing successors. I don’t think there is nearly enough emphasis put on the senior IT team. A lot of companies too often view only the top role; they don’t understand that they need a lot of very high quality talent at that next layer. One of the ways in which I’ve been fortunate, both at Dell and at Wal-Mart, is that those companies put emphasis on developing the whole team, as opposed to just keying in on that person at the top of the IT organization. At a lot of companies, little attention is paid to that next level of IT professionals, and that is problematic not only in terms of sustaining IT but also in moving technology forward at the rate it should be moved within businesses today.
CIO Canada: What do you think will be the most important emerging technologies over the next two to three years?
I think the most important emerging technology continues to be what has already been emerging: industry standard technologies. As industry standards and open standards become more available, they will continue to drive some very good economics within organizations. The big opportunity lies in whether or not those organizations reinvest the savings in IT-enabled business process change and improved capability. The pressure will be on IT to take it out of cost, but reinvesting it is really where the value is, and I think the companies that look at doing that will be the winners in emerging technology.
David Carey is a veteran journalist specializing in information technology and IT management. Based in Toronto, he is managing editor of CIO Canada.
