24 Nov CIO Leadership Series: Mike Jackson, Rockwell Automation
Milwaukee, Wis. – To Mike Jackson, CIO leadership is largely about putting the process horse before the technology cart.
That’s no easy task when most people equate horsepower with technology. Yet Jackson, vice president of global business services and CIO of Rockwell Automation, a global provider of automation power and information technology solutions, views it as fundamental to a disciplined business culture.
The trail of failed IT projects is long and rugged, and Jackson knows from Rockwell’s own user community, many of them manufacturers under constant pressure to increase margins, that the proper sequence of events can be ignored. For him, the focus on pre-project analysis is a constant point of emphasis, especially in an age when technology is not only marketed to technology professionals, but to everyone.
In fact, Jackson believes that understanding business process and need should be a prerequisite to IT funding. “We want people to do that before they come in and ask for money, or before they come and bring a technology to the table,” he said.
Headquartered in Milwaukee, Rockwell reported 2006 sales of $5.6 billion, and it employs approximately 23,000 people in more than 80 countries. About 600 of them report to Jackson, whose project management principles now are being applied in Rockwell’s largest strategic thrust. Internally, it is called a global process transformation, and its purpose is to standardize Rockwell’s business processes and data on solutions provided by software vendor SAP.
The multi-million-dollar GPT program, which has the benediction of Rockwell’s executive management team, many of whom have engineering backgrounds, is where Jackson’s IT group is putting most of its focus. By virtue of numerous acquisitions, Rockwell has grown with isolated sites and business units, and since business processes tend to be local and limited, this has produced a series of individual cultures.
To transform these cultures into a single, integrated one, several hundred people on the IT and business sides are involved in the five-year GPT project, which will allow the company to turn off 400 legacy applications. Now in year two of the project, Rockwell conducted its first pilot in April and recently launched three major plant sites. It plans a roll out every 90 days for the next year, with completion in the United States in 2008. Then, it goes international.
“We want to do this on a global basis, so we’ll have to agree to standards globally,” said Jackson, who is well aware of the tremendous cultural change the GPT will bring for IT and business units. “No longer can the organization in France decide it wants to make a change to a fundamental business process because now it’s going to impact somebody in China or the U.S.
“But it is our big effort. Several hundred people are involved in this thing, and it’s a place where we really see the integration of IT and the business coming together because they have to work side by side.”
Return on investment will be evaluated by a series of measures on the software, and Rockwell will seek improvement in categories like response time, reliability, and inventory accuracy. With these metrics in place, the company can make the bonuses of project team members contingent on meeting objectives at various plant sites.
As a result, Rockwell expects to have global databases and the ability to mine data to obtain a much better view of customers. “We’ll be looking at profitability in all different ways to identify where the best use of our dollar is,” he said, “and how we can be more effective going forward.”
Not laboring for labor
With all this change, it’s actually been easier for Rockwell to attract IT talent because Jackson can paint multi-year pictures of the future. The pace of change also makes it easier for Rockwell to attract the kind of people it wants, those with a keen interest in seeing technology applied to business.
Another selling point is Rockwell’s core mission of helping manufacturing customers deal with global competition. In today’s environment, that means the 103-year-old business has never been more relevant.
Some companies globalize because they have to meet the competition on their turf and be “low cost” by producing things in China. Rockwell gets pulled into those areas because that’s where its customers, including DuPont and General Motors, are going. Contrary to popular belief, companies that venture into low-cost labor areas still have to automate there, and they need Rockwell’s help to establish integrated networks.
“Our business in China has been our fastest-growing area for many years because of these manufacturers moving over there,” said Jackson, who came to Rockwell in 2003 following stints with Procter and Gamble, Mead Paper Co., and DuPont. “So, yes, manufacturing automation is as relevant as ever.”
For Rockwell Automation, a telling sign of the times is the recent sale of its Dodge mechanical and Reliance Electric Motor units to Baldor Electric Co., a move that will allow Rockwell to concentrate more on being an intellectual property-based software organization, including factory-management software. Other signs of the company’s shifting mission is that it has a technically astute board of directors, one that understands issues like data mining and project management, and that now it is selling more to IT professionals and CIOs – not just manufacturing engineers.
Despite recent weakness in the North American automotive market, Rockwell believes it is positioned for growth with a global mix of business, momentum in Europe and emerging markets and, according to CEO Keith Nosbusch, a maturing productivity culture that aggressively drives cost reduction. Jackson, a graduate of Vanderbilt University, is partly responsible for driving productivity gains.
To that end, Rockwell’s annual IT spending falls between $100 million and $150 million, not counting this GPT project, and Jackson believes his IT peers will continue to spend at a healthy clip. That’s because they are desperately looking for ways to streamline processes and “remove costs from the current so they can invest in the future.”
“I don’t think I’ve ever been in a period where I’ve heard it so commonly discussed that we’ve really got to do more with less,” Jackson said. “We’ve got to be consistent about it, and it’s got to be year over year – and driving things like data center consolidation that you haven’t done. You better get to it because you’re going to need it, things like VMware and virtualization technologies, which enable you to have fewer servers out there.
“All that is being pushed, I think, to its furthest limits, and I hear people tell me that whether their IT budget is going down or going up.”