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Enabling Success, The First Time Around |
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Companies often go looking to hire their first true IT executive either when they reach a certain size or when there's been an IT disaster that calls for a more seasoned hand. Here are some guidelines to make the first experience a good one:
FOR HIRING EXECS:
Define the job properly. If you want a true IT strategist, don't weigh down the job description with requirements for numerous technical certifications. If a super techie is what you need, you're looking for an IT director, not a CIO, says Dan Gingras, a five-time CIO and partner at Tatum Partners.
Don't require industry experience. Many of the skills you need are transferable across industries, and someone with a different background may actually bring more fresh ideas.
Don't hyperfocus on cost. If you're located in a rural area and refuse to pay relocation costs, you limit yourself to the local talent pool and reduce the chances of finding what you really need. You may also benefit from using an executive recruiter. Hiring well is difficult.
FOR CIO CANDIDATES:
Examine the job description. One that requires too many certifications or specific skills may keep you in the back office.
While interviewing, take note of whom you meet with. How high level are the executives? How do they refer to the existing IT group? This should tell you how seriously they take IT.
Evaluate the landscape. Look at historical IT spending (less than 2% of revenue is lean; more than 7%, aggressive) as well as what internal and external customers think of IT, says analyst Mika Krammer at Gartner Inc.
Consider your own background and the particular challenges you may face as a result. If you are "downsizing" from a large organization to a smaller one, you may be frustrated by a slower technology adoption curve, Krammer notes. If moving up the size ladder, you might feel stymied by the processes, roles and policies at a larger organization.
Once you take the job, build credibility. Seek small wins in the first 30-60 days, choosing low-risk, high-visibility projects. "You have to start collecting chips," Gingras says. "When you make a mistake later, you have something in the bag."
--A.M.
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From Latex Gloves to Miracle Cures
FFF got its start in 1988, with CEO Schmidt, an $80,000 loan and a big shipment of latex gloves. It was the thick of the domestic AIDS crisis, and Schmidt sought to supply the health care sector with a suddenly essential item. Unfortunately, a lot of other people had the same idea, and a frustrated Schmidt had trouble unloading the gloves on the market. At a diabetes clinic one day, he asked a nurse what, if not gloves, they needed. Her answer -- human serum albumin -- was to turn FFF into the largest distributor of that plasma protein, according to the company. FFF also offers e-clinical services for clinical trials in its LifeTree division, pharmacy services in its NuFactor unit, and, still, gloves via Alpine Gloves.
In the U.S., three major distributors -- Cardinal Health Inc., McKesson Corp. and AmerisourceBergen Corp. -- own 90% of the drug supply chain, according to the U.S. Food and Drug Administration (FDA). The remaining 10% comprise a host of regional or specialty players. FFF, according to its CEO, is the largest distributor of albumin and intravenous immune globulin, with a market share of 34%. The products are used by those with bleeding disorders and illnesses such as multiple sclerosis or Lou Gehrig's disease. "It's one of the most miraculous substances in the world," Schmidt says.
FFF cites as its competition not just the largest players but a network of secondary distributors, a gray market known for unscrupulous business practices such as holding on to products in short supply until prices spike. Improper temperature control and even counterfeiting are also risks in FFF's market, posing huge dangers for patients who rely on the products to sustain their lives.
All of this underscores the need for fortune and fortitude in the pharmaceutical supply chain. Channel integrity -- the assurance that the products have gone directly from the manufacturer to FFF to the end customer, in a temperature controlled environment -- is thus a big part of FFF's business strategy. Demonstrating that integrity via IT became Coates' first and most visible charge.
It was on a Saturday last March that Coates went to meet with Schmidt to discuss what's now known as the Verified Electronic Pedigree (VEP) application. Coates then designed the Web-based application, which tracks a product's lineage through the supply chain and is accessible to customers via a password-protected Web site. VEP remains unique in the marketplace today, FFF says.
"We're proving that we do what we do, and technology was the backbone for that," CEO Schmidt says.
An FDA official who hadn't heard of FFF's electronic pedigree notes that most drug pedigrees today are tracked on paper. A congressional mandate for electronic tracking, with a deadline of 2007, embraces RFID and is likely to take effect about a year later as efforts to establish standards continue. Pilot projects are also under way to ensure that RFID's radio waves don't interfere with the molecular structure or temperature of biological products, the official says.
Today, RFID is but one of a number of technologies on FFF's radar screen for future channel integrity initiatives. And numerous IT projects beyond the channel have become essential to business enhancement as well. The business intelligence project, for instance, uses QlikTech Inc.'s QlikView software to keep business executives on top of real-time data, so they can juggle resources to capitalize on sudden opportunities or respond to market trends. "That kind of efficiency, to be able to react to the market faster, will pay for itself in the long run," says Ground.
FFF's strides in IT haven't been cheap. Company officials won't comment on the costs -- even as a percentage of revenue -- except to say that they planned ahead for them and are incurring both capital and operating costs. "We have a capex [capital expenditure] budget here that we plan on exceeding, and most of that is directed toward technology," CEO Schmidt says. "The only risk that I see [in the tech investments] is if we don't do it." To which Ground adds, "There's no doubt in my mind that the technology will pay for itself 10 times over."
Of course, with all the new technologies, new processes and continued growth, there have been challenges. Even with strong business advocates, getting users' time for projects can be a struggle; getting funding and keeping costs down can require some creativity. There's also the perpetual uncertainty in the biopharma space, like the flu vaccine shortage last winter. "We don't know what our market is going to do this year, but something will happen," Ground says. "From a technology standpoint, we will have to be able to deploy Bob and his team at a moment's notice. Technology," he says, "is one of the things we are using to set us apart."
Anne McCrory is editorial director of CIO Decisions and the CIO Decisions conference. Write to her at amccrory@ciodecisions.com.
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