Lets discuss

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• Lets discuss
• What matters next?
• Our Reality
• Economic driving forces, What does our business
  really wants
• INVISTAs MBM based framework to create value
• Vision, Virtue Talents, Decision Rights,
  Knowledge Processes, Incentives
• What will we do to create value
• Who will help us create value?
• Sorting it Out- The role of the CIO

• Lets keep in mind
• All models are wrong, but some are useful (Dr.
  George Box)
• I didnt have time to write a two page letter
  so I wrote eight.. (U.S.A. President Thomas
  Jefferson)
• Theres no such thing as an original thought
  including this one (no one seems to takes
  credit)

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Does anything about IT matter next?
IT Doesnt Matter (Nicholas G. Carr )
IT Doesnt Matter Business Processes Do
(Howard Smith Peter Fingar)
In many ways, IT is held back by its ownership
of the infrastructure today when the
infrastructure does finally go away, the
opportunities to innovate using IT inside
companies will improve, making IT more important,
not less. IT competency becomes a competitive
advantage in fostering and creating innovation
and a defense against the shrinking lifecycle for
innovation. (Christopher Koch Executive
Editor Investigations, CIO Magazine 12/2005)
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• INVISTA is a global integrated producer and
  marketer of premium fibers, resins and
  intermediates.
• The company has a manufacturing or marketing
  presence in every major market and garment region
  worldwide. Today it is comprised of five
  businesses Apparel Performance and Textile
  Fibers Interiors Intermediates and Polymer and
  Resins.
• INVISTA is committed to its customers' growth
  through market insights and technology
  innovations combined with a powerful portfolio of
  the best-known global brands and trademarks in
  the industry including LYCRA, STAINMASTER,
  ANTRON, POLARGUARD, COOLMAX, THERMOLITE,
  AVORAFR, CORDURA, SUPPLEX, TACTEL, and ESP.

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(No Transcript)
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Theyre outsourcing our industry to low-cost
off-shore labor

• not only that, although weve taken measures to
  protect our intellectual property, one of our own
  has absconded with our proprietary Arkwright
  technology and can deliver product without the
  costs of crossing the ocean- how are we supposed
  to compete with that
• (probably what the British Textile Minister said
  in 1790 referring to Samuel Slater as he started
  the USA textile industry after disguising himself
  to get out of England and defying British laws
  and tariffs on the colonies)
• 100 years previous the Indian subcontinent was
  the largest exporting region globally until
  British tariffs restructured the industry
• 100 years later, the USA industry started its
  movement from New England to the USA South where
  labor and utility costs were lower
• In the 1970sCurrent Mexico and the Caribbean
  states expand textile exports to the USA with
  labor costs at 15 of USA rates
• 1995 WTO agreements reduction in tariffs
  barriers driving movement to lower cost
  countries, principally Asia.
• Whats next? Do you mean TEXTILES or INFO
  TECHNOLOGY?

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Full effects of recently completed WTO based
tariff changes will be significant
Global Textile Industry 400B USA Imports
90B Europe Imports 155B

• But Also Consider
• Apparel manufacturers achieve competitive
  advantage by effectively managing inventory costs
  and shortening time to market through the
  adoption of sophisticated information systems to
  process real time orders, forecast near term
  demand, and plan and track international output
  competitive advantage stems more from a firms
  ability to manage the logistics within the
  channel, than from its ability to reduce costs in
  apparel assembly operations (A Stitch in Time
  Lean Retailing and the transformation of
  manufacturing lessons from the apparel and
  textile industries Fred Abernathy, et al)

Sources Washington Post, U.S. Labor data,
Bureau of International Labor Affairs, World
Bank, WTO
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What does our business need from IT?

• Our material and accumulate all over the
  place visibility is paramount
• All we really need is a daily mass balance-
  knowing where every gram of product is and every
  penny is at any time is the key to optimizing
  value
• Info Technology
• needs to be in front of the business needs! Get
  I T off the critical path!
• holds the key to human capital productivity!!
  Get more involved with new innovation!
• has a unique vantage point!! How can we use
  this to create opportunities?
• IT must synthesize corporate strategy, BU and
  Functional strategies, product portfolios,
  business development plans, mergers,
  acquisitions, divestitures, growth agendas, risk
  management, compliance issues, etc, etc
• We dont know what we dont know yet But youd
  better be ready for it
• I cant define (it) but I know it when I see
  it (U.S.S.C. Justice Potter Stewart)

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The MBM Framework to pursue our IT goals
Integrity Compliance - Value Creation
Entrepreneurship - Customer Focus Change
Knowledge Humility Respect - Fulfillment
INVISTAs Market Based Management Guiding
Principles will help strengthen and position us
to create superior value for customers around the
world. These principles set the expectation of
operating lawfully and with integrity striving
to continuously improve safety, health and
environment performance driving profitable
innovation and developing the will and talent to
be operators of choice in the communities in
which it operates.

• Vision - Commitment to identified captured
  opportunities that leverage our capabilities to
  generate value- waste is eliminated.
• Virtues Talents The right people with the
  right values and skills to partner on the right
  value creating projects
• Decision Rights - Clear and measurable
  accountabilities earned and in place to allow
  people with the best knowledge to make live by
  the best decisions
• Knowledge Processes Value is created by
  acquiring, sharing, vetting and applying
  knowledge, while measuring key business drivers.
• Incentives - the right talent and partners are
  attracted, motivated, and retained. Their work
  is focused on value creation

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Vision Solve the integration paradox

• Vision Solve our biggest barriers
• Delivering integrated information globally
• The growing octopus of integration within and
  outside the firm
• Build the environments that keep IT off the
  critical path
• The inability to innovate our business processes
  
• One size cant fit allIs our ERP a one trick
  pony?
• Run IT like a business
• Strong, disciplined decision right based
  governance
• Demand-biased with internal market processes
  metrics
• Constantly evaluate our sourcing partners
  options
• Standardize for efficiency but optimize for
  effectiveness

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Value ( scale, complexity )
Optimize function for VALUE and effectiveness
Standardize function Drive SCALE for efficiency
Cost
Context
Illustrative
Scale

• We must know which curve to be on

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Passed down over generations
Vision Loosely Coupled Technology Processes
One size cant fit all

• One size doesnt fit all? Can we create our own
  sari?
• Hardwired IT makes processes hardwired also
• Loosely Coupled IT allows loosely coupled
  business processes
• Loosely coupled IT
• Dis-integrates silo-ed processes to allow
  integration within across firms
• Defines standards outputs decouples the
  transform
• Transforms how we collaborate innovate across
  enterprises
• Mobilizes large numbers of specialized partners
  to deliver more value
• Allows Rapid incremental innovation within
  modules
• Loosely coupled IT enables global process
  networks

Reference The Joy of Flex CIO Magazine,
September 2005 (John Hagel John Seely Brown)
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Value (people, process, technology )
Drive Principled Entrepreneurship to optimize
value

• People with MBM Virtues Talents
• MBM Guiding Principles Expectations
• Compliance Processes Code of Conduct
• Decision Rights Aligned Incentives
• Knowledge Fact Driven

Value (cost, benefit, advantage time )

• Focus Processes on Value
• Managing Commerce Buy, Develop, Make, Sell,
  Service, Retire
• Managing People Selection, Compliance, Conduct,
  Expectations
• Managing Finances Decision Rights, Decision
  Making Framework
• Managing Knowledge Systems, Challenge, Economic
  Thinking, etc.

• Focus Technology on Value
• Enabling value processes
• Releasing critical information
• Constantly driving efficiency
• Optimizing effectiveness

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Virtues Talents Becoming a contributor

• What is changing?
• old dogs must learn new tricks
• infrastructure is becoming a commodity- whats
  the individuals comparative advantage?
• We need the ability to partner globally to put
  best talent where its needed
• Insight to alignment with business
  opportunities becoming more critical
• End to end process knowledge creates improvement
  focus on information technology
• Critical questions I want my I.T. resources to
  ask
• When do the capabilities created by new
  information technology solve a business process
  issue for us? When will they be used against us?
• When do new business processes create better
  information that can be used to create value for
  us? When will they be used against us?
• What disruptive technologies could create
  opportunities?
• Do we need a new IT strategy or a new business
  strategy? How do I rethink my business to drive
  new revenue growth and reduce costs?
• How can we use IT to improve our customers
  experience? How can we make customers more loyal?
  Attract new ones? How can we win over competitors
  best customers?
• How can we make our suppliers more attracted to
  our business? How can we make suppliers more
  loyal? Attract new ones? How can we win over
  competitors best suppliers?
• and hundreds more that clever people will think
  of

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Other talentWhat partners will be valued?

• What I need to do
• Targeted Sourcing I need to find the sweet
  spot for my partners
• To know what is your real comparative advantage
  ??
• To truly share risk honestly - Do you promise too
  much??
• Engagement flexibility -Sometimes we dont know
  what we dont know yet
• Creativity - sometimes resulting in alternatives
  that just might reduce revenue
• What you should do for me
• Demonstrate your strengths, dont cause me risk
  with your known issues
• You should not expect me to pay you for knowledge
  transfer
• Do not just accept me (or my organization) as
  always right
• Can you positively push back challenge to
  create more value?
• If you say we should live by the intent, not the
  contract then do it!

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Why special attention needed for global partners?

• Long Acceleration period
• You - Getting to know our business
• Us - getting to know you your processes
• Ability to Communicate
• Connections with senior leadership
• Disciplined and comprehensive communications
  processes
• Specifications fitting the need
• Unrealistic Project Goals
• Costs Timing
• Actual Benefits
• This is just so different
• Much higher turnover rates
• Interaction and dispute styles
• Discipline governance to the process
• Lack of offshore experience

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Value ( functionality, time, cost )
Cost
Illustrative
time

• We must know which variable to optimize

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The three roles of a CIO

• Operating the business with ever increasing
  productivity- or Keeping the Lights on
• Using information technology to sustain
  existing value and create new value
• Constantly demonstrating theres a 2nd job by
  sorting out the issues of P-P-T.

Are we becoming the SIO next?