Today, we are lucky enough to have a guest blogger, Chuck Hollis, Global Marketing CTO from EMC Corporation, talking about how Ingram Micro is transforming its business with strategic IT implementation.
Take it away Chuck…
The Heavy Lifting Ahead Of IT Transformation: The Story of Ingram Micro
As part of my role here at EMC, I get exposed to some wonderful stories around how IT organizations have changed their strategies for the better. I meet great people who are doing wonderful things for the companies that employ them. Occasionally, I meet someone who’s motivated to share their story — how they’re working to drive substantive change in their world. And I’m doing what I can to share those stories.
I’m sure many of you reading this would like to be in an idealized world where IT is run as a business, built on the perfect cloud, complete with an attractive catalog of competitive services with all the financial and security stuff just working — freeing the IT staff to work on the really cool stuff.
But — very frequently — there’s a lot of heavy lifting that needs to be done just to even broach that topic, let alone achieve it. A wonderful house needs a strong foundation, and sometimes you need the earthmoving equipment to come in and do the prep work before you can even get started.
Recently, I had a chance to catch up with Anastasio Scalisi, who’s been working assiduously at Ingram Micro to create what I see are the necessary foundations for an ITaaS initiative.
As part of the Ingram Micro team, his story is how a small group of motivated leaders can drive meaningful change in how IT is acquired, deployed and consumed — and building the groundwork for a full ITaaS model.
If you buy IT products, you know Ingram Micro. They’ve been amazingly successful at building at $36 billion global business around value-added IT distribution.
Like any value-added distribution business, they care about efficiency and operational excellence. They care about offering value-added services that their customers are looking for. They want to offer the same great experience everywhere in the world. During the interview, it was clear to me that — ultimately – their goal is to use IT in support these business goals, and not necessarily invest in owning a bunch of it.
Full disclosure: Ingram Micro is a great EMC partner in addition to being a valued customer. But this story really isn’t about EMC — it’s about the heavy lifting that’s sometimes required just to get the right foundation in place.
Our Story Begins
Speaking to Anastasio, it was pretty clear how IT was done back in the day. Each regional business unit was largely responsible for “their” IT. Sure, there were a few centralized back-end corporate applications, but IT was largely seen as something that was sourced and deployed locally. He describes a world of “global server closets” outside of the US, and an outsourced arrangement within the US. The company hadn’t invested in a strong, centralized full integrated and networked capability. Given the nature of Ingram Micro’s business and the state of available business technology at the time, this was not an unreasonable approach – but as the business grew in multiple dimensions, it was clear that a new approach was called for.
In 2009, they recruited a new CIO, Mario Leone, who had his work cut out for him. In addition to facing an IT model that didn’t align with Ingram’s go-forward business strategy, there was an in-flight massive SAP project to wrestle with. One of his very first acts was to change the name of the group from IT (information technology) to IS (information services). Names are powerful things.
In January of 2010, Mario recruited Anastasio as a chief architect. Brought in under the heading of “emerging technologies”, Anastasio instead went to work with other IT leaders at Ingram Micro to create a blueprint for a go-forward IT strategy as defined by Mario Leone. I would identify him as one of the key “change agents” on the team. Should you ever have the pleasure of meeting him, he immediately comes across as a very smart, passionate and engaging person.
Elements Of The Go-Forward Model
One of the most impactful slides in his strategy deck is his four-part approach to building out an IT strategy. Personal note: I believe that the validity of different IT strategies can only be judged in context. Everyone is coming from a different perspective, and that’s good. Based on what Anastasio shared about Ingram Micro’s situation, I thought he came up with an extremely good organizational fit.
In a nutshell, he broke the problem into four logical chunks.
First — and foremost — governance systems and processes. From broader strategy to execution to measurement, Anastasio believed (as I do) that good governance and good IT go hand-in-hand.
Second, a sourcing strategy. What components of the IT environment create unique value for Ingram Micro, and which ones would be better done by others?
Third, a high-level “strategic architecture”. I put the term in quotes, because strategic is in the eye of the beholder. Given that Ingram Micro has a global distribution business, the key strategic element in play for this iteration was physical data centers: where and how many.
Finally, a detailed technology architecture describing the desired components, functions and key standards they wanted to drive.
Was this a full-blown ITaaS model? No – not yet. Think of it as the necessary foundation of capabilities that need to be in place in order to move in that direction. And to listen to his recounting of the team’s effort, it was no small feat.
Key Standards At Ingram Micro
In a world where almost anyone can make an IT purchasing decision, you end up with a lot of technology, but nothing that really approaches an architecture.
Complexity increases to the point where it becomes almost impossible to move forward in any meaningful way. All of IT’s efforts end up being spent simply keeping things running vs. building for the future.
Architectures are far easier to build when de-facto standards are in place, and the Ingram team made some key decisions that helped.
For starters, they established “single vendor” standards for CPU, server, hypervisor, network and management. I know, there are IT traditionalists out there who think it’s ideal to have multiples for each of these categories, but the resulting complexities create inefficiencies that are orders of magnitude larger than anything you might save by pitting vendors against each other.
Besides, the real job of IT is to deliver value, and not source IT components for the lowest possible cost. That’s the job of the purchasing department.
Thinking About Data Centers
Anastasio painted two pictures of how Ingram Micro was sourcing their data center infrastructure. In the US, they had entered into a traditional outsourcing arrangement, and weren’t happy with the way it had worked out. Outside of the US, there were a few big initiatives (such as a new e-commerce capability) that was forcing a re-thinking of the “distributed server closet” approach.
The Ingram Micro team eventually settled on a co-location approach; one where the in-house team was responsible for the upper-level management disciplines, and selected third party service providers were responsible for on-premises handling of the infrastructure when needed. Today, much of this is fixed capacity, but they’re starting to experiment with variable on-demand capacity for a few non-critical areas, like application development and testing.
Because much of Ingram Micro’s value proposition is in delivering superior customer experiences around the globe, many IT resources have to be reasonably close to the people who were using them. They finally settled on three corporate hubs: Chicago, Frankfurt and Singapore. The goal is to have the Frankfurt site eventually provide DR services for the US corporate applications. All good.
From IT Initiative To Corporate Initiative
When Anastasio first started presenting his recommendations to the team, there was a predictable amount of resistance. It wasn’t that anyone thought the approach was structurally wrong; it was more skepticism that Ingram Micro wasn’t big enough as a company to justify an enterprise approach to IT vs. the in place decentralized approach. Project Pegasus (as it was then called) quickly became a formal top-down corporate initiative vs. an IT-driven one. That made all the difference.
For example, a top-down executive sponsorship helped greatly during the first phases of discovery and engagement as the team worked to build their governance model. Over 150 stakeholders (IT and non IT) were interviewed as part of the initiative. It was the first time many of them had engaged around the topic of Ingram Micro’s overall IT strategy. It’s hard for me to imagine this level of broad engagement without strong executive sponsorship.
Where Are They Today — And What’s Ahead?
Anastasio estimates that the team is about a third of the way through their infrastructure and process refresh. Understandably, there are a lot of migrations that need to be done from server closets to the new centralized managed facilities, and that takes a good deal of time and effort by everyone. But it’s happening.
A few of the more critical business-owned IT functions (such as Ingram Micro’s wonderful Advanced Logistics Center) are starting to use the shared services of the corporate IS group vs. investing their own resources. That’s an important sign of trust, and a key milestone in any journey.
The demand for different skills within the IS group is starting to become apparent. Deep specialization at the infrastructure level is giving way to converged skills that are more about delivering services. The IT team has started to construct their first service catalogs — defined around what people want to consume vs. how IT is traditionally organized.
There are still some predictable challenges at hand: for example, establishing a showback model as a precursor to a more transparent financial model — as well as integrating security capabilities into the new services catalogs. All perfectly normal and to be expected, based on my experiences.
I think Anastasio has gained the same perspective I have when it comes to meaningful process re-engineering in an IT setting: it’s very important, and it’s not at all easy.
Back To Where We Started
Most of my stories around IT transformation have the benefit of a good starting point: strongly centralized IT functions, standardized technologies to build on, mature processes and so on. I think what’s unique about the Ingram Micro story is that it illustrated that not everyone has the luxury of a convenient starting point. Very often, it’s a sizable amount of effort coupled with a strong leadership team just to build the solid foundations that some of us just take for granted.
The best part?
Even though Anastasio was billed as someone brought into the organization to look at “emerging technologies”, that’s not what his business card says. He’s actually a management consultant.
That should make more than a few technologists out there pause and think for a moment. His role was to help the Ingram Micro team organize for success.
And it looks like he’s helping to do just that.
My personal thanks to Anastasio and the team at Ingram Micro for sharing a part of their IT transformation story — it’s very much appreciated.