The Art of Managing IT Transformation


The Daly Interview: C-Suite Perspectives

by Cinda Daly, with Jean Wilson and Kristy Trice


 L.L.Bean, a leading clothing and outdoor recreation equipment retailer, was built on a legacy of high-quality products and impeccable customer service. Founded in 1912, today the company generates about $1.5 billion in sales worldwide, thanks to the efforts of 5,000 year-round employees. After two years of planning, the company recently embarked upon a business process transformation that will see it replace about two-thirds of its technology portfolio. The company leaders recognize the challenges ahead and are prepared for long-term success. I spoke with Jean Wilson and Kristy Trice about how they plan to manage the transformation.


Cinda Daly: Let’s begin with a synopsis of L.L.Bean’s undertaking and the driving influences behind it.

Jean Wilson: The L.L.Bean brand is grounded in outstanding customer service and high-quality product offerings, and that’s where we want to continue to differentiate our company. We have a legacy of highly customized business processes and back-end systems that were originally developed to provide differentiation; that, however, is no longer the case. It’s difficult to maintain our current environment. It slows work down; it’s not efficient enough. From a business process standpoint, we are reengineering everything that supports the customer experience behind the scenes: how we develop and merchandise our products, how we manage our inventory, how we control the flow of goods, how we fulfill customer orders, how we handle our financials, and how we support HR. From a technical standpoint, we’re replacing these systems with large-scale commercial suites. Our intention is to keep everything as standard as possible, and to customize only where it provides true differentiation for the customer.

Daly: Obviously, the change will be dramatic, moving from highly customized to highly standardized processes. Can you quantify the impact of this shift?

Wilson: Our legacy technology environment is quite diverse in terms of its age and components. Over the past five years, we’ve gone from allocating 60 percent of our resources, staff, and money to maintaining that portfolio, putting 40 percent towards new development, to a ratio of 75 percent maintenance to 25 percent new development. Left unchecked, it would take just about everything we have to maintain the portfolio, inhibiting our forward progress. So, that is one of the simplest and starkest drivers behind this transformation. A more standardized environment will allow us to reverse this maintenance trend and invest more in new development.

Daly: How are you gaining buy-in across the organization?

Wilson: Our employees are truly dedicated to our customers and what L.L.Bean stands for. It’s quite a unique place in that regard. We want to do so much more for our customers. People will do whatever it takes, and it’s widely appreciated to be very hard behind the scenes. They’re ready for 
change, and they welcome these changes to our current practices.

Kristy Trice: Today, we’re quite vertical. Within each area, our people know how to manipulate the systems. But when our business processes start to cross verticals—from manufacturing to fulfillment, for example—it’s really hard. That’s where that extra effort comes in. We’re on this path from both an operational and a strategic view, and this road map gives us a more horizontal, end-to-end approach to processes. Everybody has different viewpoints about what the transformation is, and eventually these viewpoints are going to collide.

Wilson: People are excited about the prospect of change and what the end outcome will be. But Kristy is exactly right; we’re going to challenge a lot of practices and current assumptions. We have a five-year road map in front of us, and we’ve already got two years of solid effort behind us,
engaging outside experts to advise us and help us prepare for a successful journey.

Daly: Is there a particular framework that you’re using to guide the effort?

Wilson: For this effort, IBM is our chosen partner. We are using IBM’s change management practice and framework and following its methodology. That’s been very, very helpful.

Daly: Who is leading this transformation?

Wilson: This is a business-led initiative, which is an absolutely critical success factor. It is not and cannot be an IT-led initiative; we’re partners in the process. We’ve set up a structured, senior-level governance process and decision matrix, including executives, senior vice presidents, vice presidents, and other key leaders that are responsible for end-to-end processes across the company. This is a big step forward for us. We must break down the functional silos, which have been difficult to overcome, in order to achieve our final outcomes. Working with a third party that is an expert in making these kinds of transformations is important; we’re benefiting from IBM’s help in this regard.

Daly: Are there any particular challenges you anticipate that give you pause? How you are going to address those?

Wilson: The work we’ve done on the process redesign to date has been at a highly conceptual level. The next phase in the methodology is blueprinting, prototyping the technology, really straightening out and streamlining the processes. That’s where the true changes begin. Process owners will need to negotiate and work with each other to resolve different points of view. We have to be very, very deliberate in our change management plan. People have to feel informed, involved, and prepared, ready to take on the change.

Trice: Communication will be the single biggest factor in our success. With so much change, we have to manage the release and flow of information. What do you keep close to the vest, and what do you share? And when? We don’t want to share too much too soon. It is a struggle to balance how we do this right at all the different levels of the organization, keeping people engaged, knowing that it is moving forward, but not overwhelming them with too much at one time.

Wilson: Also, it’s a five-year journey. We have to stay on schedule. With something of this scale, you run the risk that people will just get kind of tired of the change, or burn out. So part of the beauty of staying on schedule and managing successful deployments is that you gather momentum. You establish credibility; you energize and inspire. You make sure that everybody working on the project believes that it’s the right thing to do.

Daly: What do expect from your service management team during this transformation?

Wilson: It’s a tough role, for sure. The most important thing we have to do during this transformation is keep everything—all of those things we rely on to run the business—up and running flawlessly. Service managers have to maintain that as their top priority. At the same time, we have to make sure that service managers and their teams feel involved with the transformation, that they are building skills in the new platforms and technologies they’ll be responsible for once they’ve rolled into production.

Trice: They also have to solve real problems on the old systems. We know those systems are going away in a year or two, and we can’t keep developing the old system in the meantime; but we can’t have people working eighty, ninety hours a week, either. It’s a tough balance. When a situation comes up, we have to ask ourselves, “Okay, where’s the priority?” If the system is up and running, that’s our priority. If it’s not a safety issue, it isn’t a problem. Sometimes it means we say “No,” reinforcing our end state.

Wilson: Our service managers have a lot of very rewarding work in front of them, I believe. But it’s a lot for the team managers to figure out. There are those who are going to relish the opportunity to learn new things and build new skills, and they will be very, very successful during the transition.

Daly: How will you track progress and measure the impact of this transformation?

Wilson: We have several metrics, but at the end of day, from an IT standpoint, we hope to get back to what we consider to be a best practice for a well-run operation: 60 percent supporting legacy systems, 40 percent supporting new development. Two years ago, we put a moratorium on all new development for systems that we knew were going to be replaced. Using a principle-based set of criteria to evaluate each proposal, we cancelled half of the projects on our plan. I got no push back from the business community, across the board. They understood completely. If they hadn’t, we wouldn’t have been able take on this transformative initiative.

Daly: Kristy, you have a new role as a business relationship manager. What part will you be playing in this transformation?

Trice: As an intermediary, I will make sure that the business understands what’s happening from an IS perspective and relay back to IS the business concerns that need to be addressed during and within the process changes (“This is what I’m hearing from the business. How do we address it?”). This has already influenced a few changes in the way we were doing things. Also, my role is to make sure that the projects that the business needs are in our IS plan, or that if they aren’t, the business understands why they aren’t, following the business criteria Jean mentioned. It’s a balance between making sure we’re meeting the business’s needs today and following through on what we need to do during the transformation.

Wilson: Every area across the company has a business relationship manager, six in all. Fifty-one percent of their time ought to be focused on being a member of that team—more than an IT representative—and helping solve business problems. The change agent role will become critical going forward. They are expected to be well versed in the plan, understand it thoroughly, and work with business partners to ensure that everybody understands it and is on board.

Daly: Many organizations struggle with the perception business leaders have of the IT organization and becoming better partners. You’ve made some significant strides in that area.

Wilson: It’s all about partnership, working together to advance the whole. Two years ago, we assessed our situation and realized we had a problem with growing legacy demands. We weren’t an organization that was easy to work with from our business partners’ perspective. Lacking a single point of contact, it wasn’t clear who in IT to consult with to get work done. As such, the business relationship manager role has become one of the most important roles in the entire IS department.

We fill these roles very carefully, and it has made a big difference. We systematically review the business’s perception of how well IS is partnering and performing with them on a variety of criteria. This KPI is an element of our IS balanced scorecard. It’s on my performance plan and the plans for every one of my direct reports.

Daly: Kristy, was there anything specific you had to learn to prepare for your new role?

Trice: My management training and previous work history helped me step into this role without much effort. Mostly it was just a matter of switching my mindset away from “technology first.” I’ve had to learn to really listen to the whole business problem and not say “No” right away. However, when “No” is the right answer, I probably say it in a more polite way than I would have in the past! I’ve learned a lot about the business, and it’s been fun.

Wilson: BRMs need a wide range of professional skills to be successful. They have to be viewed as a knowledgeable, helpful advocate, with credibility in all aspects of business and technology. They have to be quick studies, really good listeners, and good negotiators. They also have to be creative and somewhat innovative, because the right approach or solution is often completely different from the one that was originally conceived.

Daly: In the final analysis, what will be the most critical success factors?

Wilson: Major changes need to be led by the business, and top-level support is critical. The board of directors, the CEO, the CEO’s management team—all have their parts to play in clarifying the way that an initiative is going to be governed. And CIOs, too, need to be all about the business.

Trice: Again, communication is key. Everybody needs to be marching down the same path, willing to help each other. It means getting on board with something you might not agree with and being willing to carry it out, knowing that your leaders have set the right course. When I run into an obstacle, I know that management will support me and help clear the way so I can be successful in my role.

 

For more than twenty-five years, Cinda Daly has managed teams, written dozens of industry articles and thousands of pages of technical documentation, developed training courses, conducted sales and service training, and consulted in the technical support and customer service space. In her current role, as HDI’s director of content, she is responsible for HDI’s virtual events, research, and print and electronic publications.

Tag(s): business of support, infrastructure change management, IT-business alignment, support operations, case study

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