Summary:

According to Clorox CIO Ralph Loura, companies can no longer function by walling off their marketing from IT departments. IT is an everything, requiring much closer collaboration between the CIO and CMO.


Transcription details:

Date:

19-Jun-2013

Input sound file:

1006m

Transcription results:

Session Name: Up At Night?

Announcer Barb Darrow Ben Haines Ralph Loura Audience Member 1

Announcer 00:04

One quick housekeeping thing, which is there are 17 people or so leaning against the wall. I’m sure that’s really comfortable for you, but we also have chairs that are all over. So, we’re going to have to stop the event unless you move away from the wall, due to fire regulations. Can we have the slide up for the next panel? This should be very interesting. It’s What Is Keeping Your CIO Up At Night? The obvious answer is, too much Java before bedtime. Thank you very much. I refuse to make any jokes about blue pills because they would be completely inappropriate in an audience of this level of sophistication. So, with that, you’ve heard of fabric computing and liquid computing; we have someone here from Clorox to talk about that. So, without further ado, I will introduce our next panel, which is moderated by Barb Darrow, who certainly knows this industry inside out. Barb and panel?

[applause]

Barb Darrow 01:06

Hi, everybody. Wow, it’s bright. I’d like to introduce – we have two CIO’s. If you read Gartner, they might be thought of as an endangered species and we’ll get to that [chuckles]. I’d like Ben and Ralph to introduce themselves and talk a little bit about the job and then I’ll kick into the questions. I would love to make this interactive, so about four minutes before the end I’ll open it up for questions; don’t be shy. You got them here, they’ve got to answer.

Ben Haines 01:35

Good day, everyone. Ben Haines, I’m actually just moving on from Pabst Brewing Company up to the Valley here, but I’ll be speaking from the context of Pabst and what we’ve done there.

Ralph Loura 01:47

Ralph Loura, CIO at Clorox. I’m sure most people in the room know Clorox. We’re 100 years old as of last month, and we sell about 30 other brands that you probably use everyday.

Barb Darrow 01:58

So, the title of this session is What Keeps A CIO Up At Night. You guys have both been CIO’s for a while. I would love to ask you to go back maybe three or four years and talk about what maybe worried you then, and then maybe compare and contrast about what freaks you out now, if anything.

Ben Haines 02:15

A number of years ago I was deeply embedded in the department of know. Everyone hated IT, and they went around us as much as they could because we couldn’t deliver what they needed. I set about trying to fix that and move things forward and become a valued partner within the business.

Ralph Loura 02:39

For me, it was the traditional meaning for most IT functions, which was integration; large scale, monolithic software integration. It was, “How do I land this jet on the aircraft carrier with multi-year tens or hundreds of million dollar projects”, and so on. That was kind of what cut me up at night five or six years ago and it’s very different these days.

Barb Darrow 03:03

So, what’s happening now that is really concerning to you?

Ralph Loura 03:08

One is, we’ve kind of all but sworn off large, monolithic, multi-year projects, and are delivering value in a much more agile way. We’re delivering smaller, short-cycle projects that are built around a module or model of delivery to create value to the business more quickly and and make IT a more agile partner.

Barb Darrow 03:31

So, what would keep you up, as if you’re not able to do that? That you’re not able to move fast?

Ralph Loura 03:35

Certainly. What keeps me up at night is basically, among other things, doing that in a way that allows me to more effectively do that. Can I get security right? Can I gt reliability right? Can I get cost right? Am I making the right bets on the new generation of platforms versus the old?

Ben Haines 03:58

Very, very similar for me. You can’t go into a company now and spend two to three years redoing something, and pop up and go, “Here it is”, because the business has moved on. So, we set about putting in platforms that we could build on in a very agile fashion and incrementally add business values. It’s tough to do it, but you’ve got to think about security; that’s the number one issue, but business productivity is a bigger issue. If you don’t deliver this value, the business goes off and does whatever they want to do within their little silos, and you end up with a bigger problem in the end.

Barb Darrow 04:38

And probably more expensive.

Ben Haines 04:39

It does become more expensive, and then it gets to a point where it becomes too hard for the business so they throw it over the fence to IT and say, ” Can you fix this?”

Barb Darrow 04:49

So, what we read about all the time is, BYOD and consumerization of IT, all this stuff. I think you guys – from our previous discussion – this has been overplayed. Can you talk a little bit about that?

Ben Haines 05:01

I think it’s two or three years ago, that was pretty cutting edge. We’ve moved on, we’ve done it, and we’ve moved onto bigger issues now.

Barb Darrow 05:13

So, your employees can use whatever device they want?

Ben Haines 05:14

Yeah. When we took some new advice, we were in the process of getting it to any laptop, as well. There’s one function that requires specific software, but you can pick up any laptop and do what you need to do.

Ralph Loura 05:31

Same here, it’s kind of been there, done that. We actually don’t think it’s about the asset. The B is over-emphasized. It’s really not BYO, it’s kind of CYO. I’ve never had anyone come to me and bed me to, “Please, please let me spend my own $1, 200 to go buy a laptop and bring it into the enterprise”. So, it’s the issue of can I provide enough choice and flexibility to let them use the tool they want for the job they need in the most effective way. So, I’ve got maybe 110 users out of 10, 000 that have to use a specific device. Beyond that, we’ve moving to a kind of choice based model.

Barb Darrow 06:11

One thing that I keep hearing from people on the end-user side versus the vendor side in this move to Cloud, which seems to be happening, there’s a fear of vendor lock-in going forward; the vendors are quick to say, ” No, that’s not the case”. I’m curious about what you guys think about Cloud choices and whether we’re going to see kind of the same vendor lock-in that happened in the data center transfer over.

Ben Haines 06:37

I think you will to a certain extent. There is the movement now, I guess, for the open platforms, but they’re not there yet. I’m kind of sitting back watching now, because you can’t wait to execute. You’ve got business priorities, you’ve got to meet them, so you’ve got to make your best decision moving forward right now, and really keep an eye on where things are going. So, today, on the surface, it looks like you locked into a big vendor like SAP or Oracle at the application level and you’re data center was either Microsoft, or Unix back in the day; Linux. Right now, we’re probably just transferring that to different Cloud vendors at the moment.

Ralph Loura 07:24

We fundamentally are concerned about this false flexibility that lives in the Cloud. People have this idea about, “On The Cloud, I can consume as I go and it’s pay as you go”. Unless you’re doing a little credit card transaction to buy some storage or a compute cycle– if you’re doing it on scale and enterprise, I don’t know anybody that’s not signed a minimum three year agreement with their Cloud provider contractually obligating certain levels. Once you commit and you’ve trained your users, you’ve converted, you’ve built interfaces, you’ve built apps or functionality in what’s often a semi-bespoke model; full transparency across most platforms. You’re kind of locked in. So, you’re trading. It’s kind of out with the old boss, in with the new boss. I think we’re all trying not to get fooled again in this model. That’s part of what keeps me up at night is, making choices that give me enough flexibility to move away from the – I’d like to quote from somebody – “What’s a legacy? A legacy platform is anything currently alive in the environment” [chuckles]. So, most of our legacy code today is sitting in The Cloud. We have a Legacy Cloud and how do I get to the next version of Cloud in the most agile and meaningful way?

Barb Darrow 08:44

Do both of you have workloads running in Amazon or any of the other public Clouds? And can you talk about what they would be; what types of applications or data?

Ben Haines 08:51

Yes, I went to a Harvard approach. Once again, I had a big legacy issue, so we couldn’t just flip on all the Cloud services. I was in a traditional data center in an office block – I called it a server room; very outdated – so we moved to Rack Space and we put in a managed service there, but we also did a public Cloud there, as well, so we could move some of our compute off, which we didn’t have to run through; just started chipping away at moving.

Ralph Loura 09:29

For us, all collaboration and communications of our instant messaging collaboration platform and internal web environment that lives in a Cloud that would be very familiar to the prior speaker. Also, a decent amount of our customer facing work sits both in that Cloud as well as in some of the other public Cloud environments.

Barb Darrow 09:53

Like Hosted Exchange?

Ben Haines 09:55

Yeah, we did the same but with the Google side of it.

Barb Darrow 09:59

I’m kind of curious. Google came out with the Google Compute Engine last month, coming into broader beta. It picked up a lot of interesting support from vendors supporting the API’s, and I’m kind of curious, is GCE a viable Cloud option for enterprises?

Ralph Loura 10:20

I would say, really almost any large-scale platform that you can expect that will consistently be there over time that you can trust some level of its scale and stability is a viable platform for enterprise today. Each of us needs to, I think, figure out what that is for us. One of the things we’re kind of advocating for is, we’d love to see some more consistency between API and platform in the open stack Cloud environment so that it’s more effectively– our ability to move from platform to platform workloads would be easier, because today it’s a manual process. There’s some porting involved and certainly all the tooling is very, very different. So, it’s not as portable as we’d like it to be.

Ben Haines 11:06

I think just on the Google side, my impression, from an enterprise standpoint is that they’re talking the talk, but they’re not backing it up yet. When you talk support, who can you call when things go wrong?

Barb Darrow 11:18

SLA.

Ben Haines 11:19

SLA. That whole thing is challenging with them, and we actually went with a provider – a partner of them – because we could actually talk to someone; whereas, you can’t talk to anyone at Google.

Barb Darrow 11:30

It’s hard to pick up a phone.

Ben Haines 11:32

Yeah [chuckles]. In the enterprise, you need someone to call.

Barb Darrow 11:35

You need a comfort level, I think.

Ben Haines 11:37

Yeah.

Barb Darrow 11:39

I’m curious how much of your time is spent on compliance issues in your respective fields.

Ben Haines 11:50

You probably know more than me.

Ralph Loura 11:51

Yeah, so–

Ben Haines 11:51

We sell beer, so [laughter]–

Barb Darrow 11:55

That’s very important to some people.

Ben Haines 11:55

Yeah. There’s a lot of compliance with the legal age and everything and taxes [chuckles].

Ralph Loura 12:02

We have a lot of regulatory compliance needs, as well; FDA claims and chemical handling, and some other things. There’s certainly an element of that. What I’ll say is, it’s not a strategic differentiator, it’s not where we’re creating value, it’s not a topless mind issue, it’s a table stakes issue for us. We have an incredible safety record, a great compliance record, we’re a very well-run company in terms of ethics and structure. We do all the right things, but it’s not something I focus strategically on.

Barb Darrow 12:32

So, it doesn’t take up 20% of your time or anything like that?

Ralph Loura 12:34

No, not even close.

Barb Darrow 12:35

I’m really interested in kind of the fragmentation of the IT buy that I keep reading about. For example, IBM, this week, announced how its reorganizing, I think, 100 applications to make them target CMO’s, CFO’s; I think they listed 20 different job titles, including CIO at the end. Then there was some Gartner feedback about CMO getting more of the IT spend than the CIO in five years. I’m curious what you think about that. I went to an MIT symposium of CIO’s and somebody asked the guy, the CIO of Guess Brands, and he was going to lose his IT spend to the CMO and he said, ” My CMO needs to be my best friend”, and ” Over my dead body will he get my budget”. Is this hyped or real?

Ben Haines 13:24

There’s a little hype, but there is a little reality there, as well. In our CPG space, where I’ve been for 12 years, marketing always has more money. I’m happy to spend their money. Even in sales, they get a way bigger budget than IT ever gets because we’re just a cost center. Marketing can fluff on and do some stuff and their ROI is a lot different [laughter].

Barb Darrow 13:50

Any CMO’s here [laughter]?

Ben Haines 13:52

What it comes down to is a partnership, because a lot of them don’t care about how this stuff runs, the data integration, and all the boring stuff. They want to care about the brand message and the reach and all of that, so it’s working well as a partnership. I’m not fussed who’s money it is, as long as it’s the right thing for the company.

Ralph Loura 14:13

So, you guys all heard Ben’s just left Pabst, so he can be a bit more cavalier [laughter]. That’s why I’ve got a tremendous relationship with our CMO. We have in fact build a three year strategy together. We’re building a technical marketing team together. We jointly own its strategy, its evolution, etc. The quote is maybe accurate, but pretty non-meaningful, because at the end of the day, technology is in everything we buy; there’s IT in everything we buy, everything we consume. We’re moving very much away from the kind of physical asset based economy to the sharing economy, which is powered in many parts by IT. From a marketing perspective, the same is true; we’re moving away from a highly produced analog model to much more significantly digital model that’s much more fragmented and distributed. 20 years ago, if Clorox wanted to reach a global audience to describe a new feature or a new product, it was simple: we ran a 30 or 60 second spot on Baywatch, and you hit 100 countries, you got the prime audience share because there were only three channels that anybody watched and you could pick up one of them. Now, the most popular channel we can attack in that space might have a four share; it’s not global. We’ve moved to not just 1, 000 channels, but 1, 000 screens. So, it’s a very different model and in order to navigate that model in a way that’s meaningful, IT and marketing need to combine talents and skills to more effectively go after that, and we’re doing that at Clorox.

Ben Haines 15:53

I also just see it as an evolution of technology working through the departments, because ten years ago we were putting in these monolithic EIP solutions. IT didn’t do that, it was finance and IT. Now it’s just that marketing has caught up to the digital world, so it’s the same type of partnership.

Barb Darrow 16:09

I’d love for any questions. Just step up to a mic if you’ve got any questions for these guys, or I’ll forge ahead. It’s hard to see. Well, if you come up to the mic, just shout and we’ll come back to you. Because you guys both came from kind of consumer packaged retail kind of stuff, I’m curious about this whole ‘internet of things’ wave we see coming. What does that mean for your businesses? Can you gain data from the store shelves? Talk a little bit about the opportunity there.

Ben Haines 16:40

There may be an opportunity, but it depends on the maturity of the organization, and at Pabst there’s still data we can’t interpret that we have, so we’re not looking at the next generation just yet, but we’re keeping an eye on it. The other thing is, we’re third party distribution, so we’re removed from the consumer and we’re seeing a lot of companies monetize their data, so it’s becoming very expensive to get the scan data. So, what we call ‘going out the front door’, we’d love to know who our consumer is, but it’s expensive to do.

Ralph Loura 17:16

We’re doing both. Similarly, we have a treasure trove of point of sale, loyalty card, and supply chain data that’s not entirely effectively utilized to gain better insight. So, we’re working on what we may call ‘small data’ first to get the best value there. To us, the term ‘digital exhaust’ kind of comes to mind. As a consumer moves through the world today, they leave little electronic bread crumbs around from your browser history, or your browser interaction, your IP address, your phone, your location information, what apps you use, and so on, so to the degree I can begin to use that data to get a better picture, or greater consumer insight and consumer behavior desires and lifestyle, then I can more effectively target products that are more meaningful to them and create a better customer experience. Understanding how to access that information and create better insights is a big initiative within Clorox, as well.

Barb Darrow 18:15

I think we have a question here.

Audience Member 1 18:18

Yeah, as long as I don’t fall down by leaning on this [laughter]. I’m in the development side of a large company, and what I see from the engineering world competing with IT and how that relates is, in engineering we’re automating Sys Admins out of their jobs, so in order for IT to scale, there’s a lot of automation pressure and development is moving into a lot of IT functions. So, when you talk about the competition between the CMO and the CIO, or their lack thereof as a partnership, how will people in the IT function react? Are they going to learn new skill sets? Are they going to evolve? They’re going to feel a lot of pressure that their job today isn’t what it was five years, let alone what it’s going to be in a few years. Just curious to hear your thoughts from the CIO side.

Ralph Loura 19:02

So, we started a journey over two years ago, almost two and a half years ago, of transforming IT. In fact, the language we used is kind of ‘in me, on me, and around me’. So, within IT, a capability transformation – an alignment transformation – fundamentally blew up and have rebuilt the way we manage portfolio. The ‘on me’ part is our interface with our business, and the ‘around me’ part is our interface with our vendors and platform and solution providers. All that’s oriented toward changing the role IT plays in the company, and to do that you’ve got to change who you are and how you deliver that. Within our user population, people have talked about this idea of Shadow IT – we like the term ‘Shallow IT’ [laughter], and I mean that in the best possible way. Really, what it is, for instance, I don’t have a bunch of people who can go out and look at the 12 different ways I might do revision management, release management, etc in engineering, but there’s a bunch of people in engineering that are very incented to go and explore different solutions and better tools and better systems. Ultimately, someone in engineering will come back and say, “Hey, out of the 20, these three have bubbled to the top”. IT can then get involved and do the deep integration maybe into other systems of relevance to create greater value more quickly. So, we love our users to be out exploring on the edge for us, it’s very important.

Barb Darrow 20:25

Before Joe has– I felt the hook coming [laughter]. Thanks very much you guys.

Ben Haines 20:35

Thanks everyone.

Ralph Loura 20:35

Thank you.

[applause]

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