Tag Archives: ERP

Perpetual Honeymoon: How to build the (almost) perfect business collaboration

Tim Banks
Faculty IT Manager
University of Leeds

I have just attended a really interesting session delivered by Bill Hogue, Director of IT (CIO) at South Carolina University. He started by telling us that in 2014, he received a phone call from the Vice Chancellor (President) of the University with news of a new initiative, partnering with IBM for delivery of some of the core University IT services. His exact words were “It’s a great opportunity and I know you’ll be excited by it”

Bill has been seeking new model for IT delivery at University of South Carolina since 2004 and was convinced that the future of IT was going to be about partnerships, not least because the world of IT was changing so fast and the staff and students at the University now had access to world-class IT services at commodity items in their everyday lives. On January 1st 2015, the University of South Carolina entered into a 10-year partnership valued at an estimated $100m dollars. The actual contract value is less than this figure, but Bill is sure that more opportunities to work with IBM will present themselves over the contract period. He summarised the whole 15 month contract negotiation period and the first 10 months of the partnership into two basic principles:

  1. Know yourself
  2. Know your collaborator

He also sounded a note of caution which was an idea commonly attributed to Peter Drucker, namely “Culture eats strategic planning for lunch”. In other words, no matter how much strategic planning you do, if you don’t have a grip on your organisational culture and haven’t prepared your organisation for change, then your strategy will fail.

http://www.strategy-business.com/blog/Strategy-or-Culture-Which-Is-More-Important

Assumptions

Bill then went on to list five assumptions about IT in Higher Education, as follows:

1: ‘Keeping the lights on’ is necessary but not sufficient on its own to deliver world class IT service. The important thing is how we serve the University and how we serve the Faculties. He told of the Director of Facilities at a University where he had previously worked who had a sign on the back of his door which he saw every time he left his office which read: “What have you done for the students today?” We should always remember why do we do what we do at the University.

2: Most of us are not receiving A+ grades from the staff and students at our institutions for our delivery of production services. It might be OK, but we are not doing a terrific job.

3: Our grades will get worse unless we do something different. Our expectations in IT are driven by consumer IT services; the challenge is only going to get harder. Currently there are 13 billion devices on the internet and this number is growing daily.

4: Running world class IT services is not a core competency of the University. The focus is teaching, learning, research and partnerships and we tend to be just ‘OK’ at delivering IT.

5: Most of us are in the early stages of transformation programs that promises to be disruptive. The IBM Institute for Business Value said in a recent report: “Demands on and in University IT Services continue to rise […] Both academic and industry leaders believe the current HE system is broken. We need a more practical and applied curriculum to exploit disruptive technologies and develop more partnerships.”

The Deal

Seventy three positions were transitioned from the University being the employer to IBM (without the individuals changing location / office etc.) Bill spoke about the need to handle this process very carefully and to ensure that all the University senior managers, including HR are on board with the process. The contract is mainly centred on delivery of Enterprise Resource Planning (ERP) systems, as this is where it was felt that IBM could deliver the best value.

A brand new Centre for Applied Analytics and Innovation is being built. This will house IBM experts in this field alongside University researchers. There were many similarities with the recently launched Leeds Institute for Data Analytics (LIDA) http://www.lida.leeds.ac.uk  at my own University of Leeds.

There are also plans to launch several apprenticeships with both staff and students working closely with IBM to develop new skills at the leading (or possibly bleeding) edge of IT development. A key factor in the partnership is the University’s access to IBM’s Watson technology, which IBM describe as ‘Cognitive Computing Systems that understand natural language’. http://www.ibm.com/smarterplanet/us/en/ibmwatson/

One of Watson’s main benefits is undertaking large scale real-time data analytics to identify ways to improve operational efficiency in finance, purchasing, facilities management etc. If the University of South Carolina is able to save just 1% on its annual $1.5bn budget, then that is a lot of money that can be reinvested in core business. This also opens up new areas of research opportunity for both staff and students to work with the Watson technology.

Bill then went on to expand on his two core principles, as follows:

Know yourself

  • Why are we doing this?
  • We can’t assume that we have a unified agendas. He could think of at least a dozen potentially competing agenda for wanting to develop a partnership such as the one with IBM that include:

o    Economic development
o    The Leader’s Legacy
o    Getting free stuff from the partner
o    Wanting to improve services
o    The need to save money
o    Minimising or spreading risk associated with IT delivery

  • IT will continue to develop over time
  • It takes a firm commitment from the senior management at the University

o   Partnerships such as this can and most probably will be very disruptive
o   Needs total support from senior leadership team (Finance, HR, Student Education, VC, ProVCs etc.)

  • You need a comms strategy to manage the message that stakeholders are receiving
  • You need to be understanding towards affected employees. You can’t turn you back on staff who have worked at the University for many years and think of them as ‘IBM’s problem’

Things that can go wrong

  • Deals don’t always work out – you need an exit strategy
  • You need to get good at negotiating terms with the private sector with people who do this all day long for IBM
  • You need to recruit new ‘talent’ including people who love to read contracts
  • You are dealing with an organisation that is in this to make a profit and they will do this at your expense if they can get away with it.
  • That’s not a bad thing so long as you manage to negotiate fair terms and the University gets what it wants out of the deal too
  • There will always be ‘cave people’ who are always against everything. Be prepared for scrutiny and criticism.
  • Be prepared for inconvenient truths. You may find some things out about your organisation, staff and even yourself when your partner takes a long hard look at your with their world-class perspective. You may find out that some of your operations are not as world-class as you would like to believe.
  • Some of your customers will resist the new business model

o    Your customer base has to change as well. That can be a hard sell
o    They may not be interested in engaging in new processes “The old ones were just fine thank-you very much.”

  • The timing of introducing a change like this will never be right. You have to accept that it will be inconvenient and disruptive.
  • You must remember to have some fun, be creative and sustain a spirit of adventure.

o    Remember to keep talking about the 10-year strategy, not the 10 day problems.

Know your collaborator

  • They are not a 501C3 (US speak for non-profit organisation)
  • Understand their culture. The University is not going to go corporate and your partner is not going to become an academic institution. You must find your common ground.
  • Your collaborator will bring their very best people “the A-team” to the negotiating table. You have to be aware that the actual delivery may be by the B-team or the C-team. IBM has 435,000 employees worldwide. Not all of them are in the A-team. Make sure you retain the right quality of delivery once the contract has been signed.
  • Who are the champions? What are their strategies? You must understand their agenda.
  • Be prepared to receive help from a lot of different sources (not all of which will be helpful).
  • You need to be prepared to stay the course.

It was a fascinating account of a very ambitious project. I couldn’t help but think that we need to increasingly take a lead from organisations such as the University of South Carolina. There are of course challenges, technical, human and cultural but we shouldn’t let these alone prevent us from taking brave decisions to do the right thing for the future of IT in our institutions of learning and research.