ibm.com/services/us/cio/ciostudy/lessons-learned.html?cm_mmc=agus_cioviddistr-20100219-uscxv100-_-v-_-greene-_-vimeo At Colgate-Palmolive, VP and CIO Tom Greene recognizes that detailed visibility into product costing is crucial in achieving business efficiency.
Tom Greene, CIO, Colgate-Palmolive:
I recall a situation where I was sitting in a senior management meeting and we were talking
about the economy and what was happening, and what was going on, and what we needed to do
to respond. One of the things that came across loud and clear from different divisions, in
different functions, for different reasons, was we needed to have better visibility to our product
cost. For all the materials, the packaging, the raw materials, everything that goes into our
product, the pricing was all over the place. We had oil prices that were tough to predict. We had
raw material going into our pet food. These prices—it felt like it was changing monthly. We had
just put in a series of price increases and it was important for us to understand how much of that
price increase we needed. Do we need another price increase? Without having an idea of what
your product cost is, it's difficult to know that. Now this was always on our radar screen, but it
was kind of a ‘nice to have.’ It was a reporting thing. It was, ""It's a priority, but we'll get to it
sometime this year."" By sitting in the meeting and hearing everyone talking about how critical
that information was, and how they would be using it, and what their exposures were by not
having that information, it was easy for me to say, ""What I'm hearing is, this is your top priority.""
I got the immediate feedback that yes it was. I said, ""So I can re-deploy resources to work on this
stuff and everything else is secondary to that?"" The answer was yes. I left that meeting, got the
team together, we re-deployed resources globally, and within three months we provided the
business with capability to get product costing at the level of detail they needed 18 months out.
That was huge. That never would have happened if I wasn't sitting in the room hearing why the
information was important, being able to quickly get a decision by saying, ""So what I'm hearing
is…”, and, “I'm going to go do this, right?"" Everybody said yes. We were able to quickly
respond and turnaround. During the normal course, if a division president was telling their
corresponding IT lead that this is important, and another division president—by the time that all
fell out, it would have been six to nine months before we would have been able to respond. We
significantly cut that down and added tremendous value to the business. I think CIOs absolutely
need to have a seat at the table, and the primary reason is insight. Insight is absolutely key.
Whenever you're getting your information secondhand, it's ineffective and inefficient.