Erik Viens

Slide1: 

Let’s discuss… What matters next?… Our Reality… Economic driving forces, What does our business really wants INVISTA’s 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… Let’s keep in mind… All models are wrong, but some are useful (Dr. George Box) “I didn’t have time to write a two page letter… so I wrote eight..” (U.S.A. President Thomas Jefferson) “There’s no such thing as an original thought …including this one…” (no one seems to takes credit…)

Slide2: 

IT Doesn’t 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) Does anything about IT matter next? IT Doesn’t Matter (Nicholas G. Carr )

Slide3: 

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®, AVORA®FR, CORDURA®, SUPPLEX®, TACTEL®, and ESP®.

“They’re outsourcing our industry to low-cost off-shore labor…: 

“They’re outsourcing our industry to low-cost off-shore labor… …not only that, although we’ve 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 it’s movement from New England to the USA South where labor and utility costs were lower… In the 1970s…Current 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. What’s next? Do you mean TEXTILES or INFO TECHNOLOGY?

Slide6: 

Global Textile Industry = ~ $400B USA Imports = ~$90B Europe Imports = ~$155B Full effects of recently completed WTO based tariff changes will be significant… 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 firm’s 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

What does our business need from IT?: 

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 don’t know what we don’t know yet… But you’d better be ready for it…” “I can’t define (it)… but I know it when I see it…” (U.S.S.C. Justice Potter Stewart)

The MBM® Framework to pursue our IT goals…: 

The MBM® Framework to pursue our IT goals… 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… INVISTA’s 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. Integrity – Compliance - Value Creation – Entrepreneurship - Customer Focus – Change – Knowledge – Humility – Respect - Fulfillment

Vision: Solve the integration paradox: 

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 can’t fit all…Is 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…

Value = ƒ( scale, complexity ): 

Value = ƒ( scale, complexity ) We must know which curve to be on… Cost $ Scale Illustrative… Optimize function for VALUE and effectiveness… Standardize function & Drive SCALE for efficiency… “Context”

Passed down over generations…: 

Passed down over generations… Vision: Loosely Coupled Technology & Processes One size doesn’t 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)

Slide12: 

People with MBM® Virtues & Talents … MBM® Guiding Principles & Expectations Compliance Processes & Code of Conduct Decision Rights & Aligned Incentives Knowledge & Fact Driven… 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. Drive Principled Entrepreneurship to optimize value… Value = ƒ(people, process, technology ) Focus Technology on Value… Enabling value processes Releasing critical information Constantly driving efficiency Optimizing effectiveness Value = ƒ(cost, benefit, advantage time )

Virtues &Talents: Becoming a contributor…: 

What is changing? “old dogs must learn new tricks” infrastructure is becoming a commodity- what’s the individual’s comparative advantage? We need the ability to partner globally to put best talent where it’s 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 I&T strategy or a new business strategy? How do I rethink my business to drive new revenue growth and reduce costs? How can we use I&T 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… Virtues &Talents: Becoming a contributor…

Other talent…What partners will be valued?: 

Other talent…What 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 don’t know what we don’t know yet… Creativity - sometimes resulting in alternatives that just might reduce revenue… What you should do for me… Demonstrate your strengths, don’t 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!

Why special attention needed for global partners?: 

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

Value = ƒ( functionality, time, cost ): 

Value = ƒ( functionality, time, cost ) We must know which variable to optimize… Cost $ time Illustrative…

The three roles of a CIO: 

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 there’s a 2nd job… by sorting out the issues of P-P-T. Are we becoming the “SIO” next?