How Technology is Shaping the Future of Business – a CIO Interview with Fernando Leite
Recently, I had the pleasure of sitting down with Fernando Leite, a Global CIO for the past 12 years in both the manufacturing and telecom sectors; we discussed his perspective on the role disruptive technology is (and in some cases is not) playing in reshaping and reinventing the business world we used to know. You can read more about Fernando’s BIO at the bottom of this interview.
Q Patrick: I have often heard you discuss the need for today’s executives to embrace a shift in mentality to break free of the trap of ‘past thinking’. Could you elaborate on what you mean by this?
A Fernando: We need to move away from the 2000 mentality that thinks of I.T. as only a cost center and embrace a 2020 mentality that sees I.T. as a strategic enabler for changing the business model and driving competitive differentiation. Look at how much the world has changed since the 90s: smart phones, social media, Big Data, real-time OLTP, the Internet of Things and so on, but how many I.T. departments still plan and execute the same way they did in the year 2000? The 2000 mentality is where you structure your roadmap and organization based on what you are used to and what you know to be available to you. In other words you ignore considering the ‘art of the possible’ because you can’t think past your knowledge of existing technological limitations that actually may no longer exist. Today’s business leaders need to break free of these past paradigms and embrace disruptive technology to solve the big problems no one has thought were solvable.
“You can’t build modern business processes if you limit your considerations to the way you’ve always done things and old technology paradigms.”
Q Patrick: This sounds like your definition of 2000 mentality is the lack of thinking out of the box?
A Fernando: Well, not quite. It’s a lot more than that. Metaphorically, imagine if you were going to design a new mobile phone today – but all you know, and are willing to consider using, are pre-smart phone technologies, so you wouldn’t have email, facetime, social networks, etc. In other words, you wouldn’t have any access to real time information. And now imagine that you must take this ‘new-old-thing’ you created and compete in a world of smart phones. You couldn’t do it, right? So why are we doing that with our I.T. enabled business processes? That is what I am talking about with the 2000 mentality verses the 2020 mentality. You can’t build modern business processes if you limit your considerations to the way you’ve always done things and old technology paradigms. There has been a huge shift in technology enablers in recent years. If you are not embracing them to drive a real time business and your competitors are, well, its game over isn’t it?
Q Patrick: What should CIOs and businesses do to take advantage of recent technology evolutions?
A Fernando: There is no doubt we have reached an inflection point. We are now living in a world where everything relates to technology. Let’s first think about it from our personal lives; today you interact with technology to do all the simple daily activities:
- you ask for opinions
- you want to know what are the new trends and social ideas about products and companies with whom you interact
- you want real time response to your needs and issues, etc.
So why aren’t we doing this in our business lives?
Conclusion, organizations need to use real time tools to map, understand, interact and answer what their customers want.
Let me give you a specific business example. You go to a month end meeting to discuss sales, revenue and financials. There is nothing more 2000 mentality than an excel file displayed on a powerpoint slide, right? It’s static, aggregated, non-interactive, took a long time to create and may not even be the truth. Instead, you want to see real time data and it all needs to be “double clickable”. That is, you want to be able to drill down to the sales numbers and explain:
- how many orders you received during that period
- what product and customers relates to that
- what customers are talking about that product since the beginning of the day,
- why do you have an order backlog list, a quality or a profitability issue.
This needs to be real time during the meeting and not a static powerpoint slide that can’t answer most of the questions that arise during the meeting. What you usually get is, yes, we understand your question and we will come up tomorrow or next week with an analysis or an answer.
Do you see the inflection point, we are living in a real time world today and we are still acting and behaving as we were in the early 2000’s.
“…organizations need to use real time tools to map,
understand, interact and answer what their customers want.”
Q Patrick: What then is stopping businesses from making these changes? Why aren’t more embracing the 2020 mentality you say is imperative to business survival?
A Fernando: It’s been seven years since the LB crash. CIO’s were forced to adopt a cost center mentality. Key projects kept being postponed or not approved. Cost reduction was the word of the day. This whole scenario deferred the shift from a 2000 mentality to a 2020 mentality for a representative set of companies. And even continues to do despite the global CEO shift to growth. Even on the growth side, consolidations and acquisitions put extra burden on CIO’s to most cost effectively combine different platforms and manage complex change management scenarios in lieu of a more strategic transformation initiatives. For me, those are the key examples of why many CIO’s are still forced to act with a 2000’s mentality. No doubt, there is a big task on the CIO side to promote this mentality change within the management team.
Q Patrick: Why is this a struggle between CIOs and their Leadership teams?
A Fernando: First, I need to expand that by leadership teams I mean more than just C-suite executives; I am also talking about all of the key stakeholders and decision makers, those with political capital who can help bring change about.
Second a CIO is really a Chief Change Management Officer – especially with all of the transformation that technology is imposing through all of the business.
Innovation is competitive disruption. ‘What’s APP’ removed billions in revenue from the SMS providers. Uber and Airbnb are doing the same. For manufacturers, their customers want response and availability immediately. If availability is not now, then the response better be now and it better be right. If you give them an answer based on some fact sheet, a fixed lead time guess, then the only way you can meet these kinds of commitment is with lots of extra inventory. We CIOs, we want to replace that inventory with information. If we enable real time analysis for the business then we can provide real time answers. Analysts can conduct real time diagnostics to find root causes faster, solve problems, save money and make customers as well as shareholders happy.
“SAP’s HANA technology is changing the world. It is the key to enabling the real-time business…”
Q Patrick: So are you saying that this massive change can put the CIO on the driver seat together with the CEO?
A Fernando: That is spot on. I.T. needs to a be a partner with the business; they need to strategically enable the business to go where it needs to – now – not in 12, 18, 24 months. Think of the situation where the CEO needs to re-invent some portion of the business model to deal with an immediate market condition; he needs to be able to immediately look at the CIO for the big how. How are we going to implement this quickly and cost effectively. So, CIO’s more and more are taking the driver seat to partner with the CEO’s to change the business model and help move their entire organization to a 2020 mentality.
Q Patrick: Thank you for your time and candor, Fernando. It is always a pleasure speaking with you. I hope we can do it again soon. In the meantime, and at the expense of perhaps sounding a little salesy, are there any specific technologies you would endorse and/or want your fellow CIOs and business colleagues to be aware of?
A Fernando: First, you are welcome. The pleasure is all mine. I look forward to doing this again soon. With regards to technology, I have am a huge advocate of SAP. I have been deploying SAP ERP, CRM, BW and manufacturing solutions like MII for many years now in various countries and hemispheres. I encourage everyone to enroll in open online courses by SAP. Especially the SAP S4/HANA deep dive. It was one of the best investments of my time. The SAP HANA technology is changing the world. It is the key to enabling the real-time business we discussed.
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Fernando Leite (https://www.linkedin.com/in/fleite ), – has had the pleasure of being a CIO in both the Global Manufacturing as well as Telecom sectors for the past 12 years. He has a strong history of leading I.T. and business transformations. He was most recently the CIO of ESAB, which prior to their acquisition by Colfax, was one of the world’s largest manufacturers of welding and cutting equipment and related consumables serving customers in the automotive, construction, fabrication, mining, power generation, and shipbuilding industries. While there he lead several major enterprise application turnarounds in both North and South America. Prior, he lead all product launches and IT projects for one of the largest telecom companies in South America. And prior to that he was with one of the largest auto manufacturing companies in the world.
Patrick Maroney (https://www.linkedin.com/in/patrickmaroneysap/) at the time this blog was posted, Patrick was part of the SAP Global Hana Platform Center of Excellence. In this role, he works closely with SAP customers to help understand the impacts of business trends on their processes and the use of technology in order to help architect business improvements. Patrick has a background in industrial engineering and business transformation consulting. Since 1992, Patrick has been working with the management teams of leading companies on improving their processes and leading business transformation initiatives.