Executive SummaryNike is a pioneer in TBM and has continued to innovate, moving beyond data standardization and cost reductions to business differentiation that will fuel Nike’s plans to grow from $32.4B to $50B in revenue. TBM has been at the forefront of three major outcomes at Nike, including consistent data, optimized IT, and transparency. As Nike looks ahead, TBM continues to be a key driver in cloud migration.

Nike Corporate Overview NIKE, Inc. is the world’s leading designer, marketer, and distributor of authentic athletic footwear, apparel, equipment, and accessories for a wide variety of sports and fitness activities. Wholly-owned NIKE, Inc. subsidiaries include Converse Inc., which designs, markets, and distributes athletic lifestyle footwear, apparel, and accessories; and Hurley International LLC, which designs, markets, and distributes surf and youth lifestyle footwear, apparel, and accessories.

TBM Equips Nike Technology to Help

THE BUSINESS GROW FASTER

A Nike Case Study

Finalist

TBMcouncilawards

2016

ESTD 2013

TBM Awards Premier Sponsor

Industry // Consumer Goods

Headquarters // Beaverton, Oregon

Revenue // $32.4B

Employees // 70,000

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TBM Solutions• Cost Transparency

• Business Insights

• Benchmarking

• Bill of IT

Benefits• A scalable platform enables

Nike’s rapid growth while reducing risk

• Reduced complexity, improved cost transparency, and more agile execution

• Nike is focusing the future of IT on the cloud, with goals of reducing applications by 65% over the next 5 years

In mid-2015, Nike announced a major business goal: grow from a $32.4 billion to a $50 billion company in four years. As a mature practitioner of TBM, Nike already had a strong cost model and reporting in place. But to provide the kind of IT support and innovation for the transformation they needed, they knew they had to take TBM to yet another level.

“Nike was a pioneer in TBM and having come a long way from the financial foundation of having a solid forecast, having managers understand the data that they needed to run the business,” recalled Carl Stumpf, Senior Director, Technology Data and Analytics. “Now we have to find a way to leverage our existing resources to drive much more capacity in the system. To do that, we’re using our traditional methods of reducing the cost of our run by being more efficient in our day-to-day operations, and we are investing more money in both cyber and in the projects that drive business differentiation. And that’s how Nike Technology is aligning with our revenue goal for 2020.”

In June 2015, Jim Scholefield became the head of Nike Technology as Global CIO and immediately made the company’s revenue goal his team’s priority. TBM would play a vital role.

Accelerated decision makingThere were basic objectives that Nike Technology had to reach to support Nike’s transformation goal. “To enable this kind of growth, technology has to be agile, simple, flexible, and secure,” says Scholefield. To improve in all of these areas, tough decisions would have to be made within the technology division and also between Technology and its business partners.

“TBM is a critical component of one of the foundational elements of our transformation program: making better quality decisions, faster, and at a level of granularity that we can execute them with precision,” explained Jason Booth, Nike’s Vice President of Strategy and Innovation. With TBM, Nike has the most current and accurate information about IT costs and consumption, and that helps Nike’s leadership team quickly decide which innovative ideas to pursue and tradeoffs to make.

“We want to get people information faster so they can make better decisions,” explained Stumpf. “That means we need to carefully select the right opportunities and focus our resources to drive for excellence and reach our goals. TBM gives all the leaders access to the same data on a timely basis so they can make agile decisions, instantly model and see the impact of their changes, and ensure that our investments deliver the highest value to consumers.”

“TBM helps us accelerate decision-making because it provides the framework for a consistent data set across each organization, showing clearly how that data integrates with each other which allows us to optimize IT resources, and providing a level of visibility and transparency that supports fast, precise decisions,” added Booth.

“Technology Business Management gives Nike Technology the capability to better engage with our business, providing transparency into the way we operate and helping the company achieve the vision of reaching $50 billion in revenue by 2020.”

— Jim Scholefield, Global CIO, Nike

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Optimization of business valueIt isn’t just about faster decisions. TBM is helping Nike Technology better understand its business, systems, and data, and uses that information to improve value, employee satisfaction, and risk.

“TBM allows us to really focus on data, provide in-depth understanding to the business, as we’re managing strategic portfolio decisions and working through legacy cost structures of portfolios that ultimately, we might want to decommission,” said Scholefield. “In the end, we’re making sure that we’re spending money in the right place, to really move the business forward as fast as we can.”

TBM has evolved from producing a solid spending forecast to helping managers run their business better. “Today, the pieces we’ve added focus on items like risk and satisfaction, and also on some of the more modern tools that help us manage our systems. We’re even bringing in instrumentation data from these systems, and we’re trying to bring in other types of risk information to make more informed decisions,” said Stumpf.

“We also use TBM tools to capture systematic improvements in our cyber posture and in our core day-to-day operations that influence risk,” Stumpf continued. “So one of the roles of TBM is to find the common data elements that go across all our systems. To do that, you need to work with the system owners, and you’ll find that you’ve gone from looking at just a component view to an integrated view. TBM provides everyone with an integrated view of not just cost, but of value, satisfaction, and risk. And that is the key: taking the summary and flipping it to a level that our business users can understand and use in their day-to-day efforts.”

By empowering both Technology employees and line of business leaders with better insights, TBM helps Nike make decisions that improve simplicity and agility. “By simplifying our application landscape, we’re probably reducing the number of applications by over 60%,” added Booth. “We look at the business value of those applications, how much it costs to run them, how much labor is associated with running them, and the infrastructure they sit on. The consistent fact-based data set that we’ve achieved through TBM has helped us make those decisions.”

The impact of these decisions goes beyond cost optimization or portfolio simplification; they’ve helped to improve the business partnerships Nike Technology fosters with its key leaders.

“What I’m most proud of, so far in our TBM journey, is the ability to really engage at a strategic level with our business partners and customers around the future of the company and make sure that we invest all of the company dollars in the right places, to really deliver the technology that matters,” explained Scholefield.

Three keys to better business decisionsTo fuel better business decisions, Nike Technology focused on three key aspects of its TBM program: consistent and high-quality data, data integration and analysis, and transparency with the business.

1. Consistent dataA primary area of focus for TBM at Nike was getting the right, consistent data, even as those data sources evolve over time.

“There were three opportunities we focused on in our journey over the last few years,” said Booth. “The first was just getting a consistent set of data whether that be infrastructure, labor, or etc. But as our ecosystem expands — as we move to the cloud, as we leverage more external labor sources — it’s critical to have a consistent view of the data.”

2. Data integration and analysisWith TBM, data from every source in the business is consistently managed and reported, which allows all those consistent data sets to be integrated and used in making good decisions.

“One of the interesting moments for us, where we really realized the power of TBM, was in the intersection of data. Each of the data domains that we looked at—infrastructure, applications, labor, finances, and so on—in and of themselves are interesting and drive a lot of opportunities,” Booth commented. “When you connect them together, that’s where we’ve been really impressed with the types of insights we’ve been able to get and then consequently, the level of opportunity we can go after.”

As noted by Stumpf, Nike Technology looks at more than just cost with TBM. They create a data-driven picture of risk and satisfaction by integrating the right information. In doing so, their people make decisions that consider the broader tradeoffs and implications for the business.

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3. Transparency with the businessTBM presents accurate and complete information about IT consumption in a way non-technologists can clearly understand and use to take action. This is an essential element in shaping the demand for technology at Nike and communicating value.

“Transparency with TBM has changed the nature of the dialogue that we have with the business,” said Stumpf. “While we’ve always had great discussions around the portfolio of investments that we make, we haven’t had it at the level of granularity that really allows them to tweak the dials and work in partnership to drive great technology decisions. Now, we’re presenting information that the businesses have never really seen before—and feedback has been outstanding.”

Looking ahead to the cloudA significant part of the transformation is the move to the cloud. “Our goal is to reduce the number of applications by 65% over the next five years, and for the vast majority of the remaining applications to be in the cloud,” stated Booth. TBM is a key enabler to this shift.

“TBM is picking up some new concepts as all the businesses are changing,” explained Stumpf. “For instance, we’re really focusing on the cloud, which includes Amazon and how you ingest the bill, explain the value, and optimize the spend. Also, we have many instances of SaaS. We are bringing these tools in, we’re looking at them in terms of cost, risk, capabilities, and how we’re delivering against best practices. With TBM, we’re trying to focus on the future of IT, which is predominantly going to be in the cloud.”

Insights into TBM success at Nike

They took advantage of the communityGaining access to the knowledge and best practices of other TBM teams and users put Nike on the fast track to success. “The community for TBM has been critical. Other companies face the same challenges in running technology like a business. To be able to connect with others who are trying to go through the same journey helps us both go faster as well as lets us contribute back into the community and help others,” explained Booth.

They started with the basics and built on themBooth advised that companies start with the basics and then evolve. “You have to first master the fundamentals which is something else that we say quite a bit at Nike,” said Booth. “You have to have data, making sure that it’s the right data and that it’s consistent. Once you do that, you can start to unlock some of the opportunities. When you unlock opportunities and points on the board, you get wins that build momentum. From there you see the organization really beginning to rally around it.”

Data that’s relevant and clearThe clarity and focus of the information customers receive and work with from TBM is paramount to getting buy-in and long term support across the business. “At Nike, there’s a specific focus on risk, financial forecasting, satisfaction, and many disparate things,” said Stumpf. “Through these different TBM lenses, executives can use this information, in turn, to talk to their customers. We try to deliver results faster, in formats the executives can easily consume, and with information that’s relevant to them in their unique situation. And we’ve gotten very, very positive feedback from people wanting to contribute to our effort.”

TBM and the Nike transformationTBM provided clear value to Nike by enabling them to take conversations to the next level. “The ultimate goal of TBM is for our executives to be able to explain to our internal executives what the value of IT is, which is much more than money,” Scholefield explained. “It’s in features, it’s in capabilities, it’s in managing risk. With TBM we can go far beyond just cost to have a better discussion with our internal customers.”

The Nike transformation is not just in revenue but in how IT interacts with the business. “I think that one of the big changes we have in business today is moving from a transactional business where we buy something and we own it, to a service business. A service business needs continuous engagement with the customer,” Stumpf said. “TBM lets us provide information that lets managers see where they’re at with their third parties, and to manage them on all of these different dimensions.”

“At Nike, we always say there is no finish line. So as we move from a $30 billion company to a $50 billion company, we have to reinvent everything we do. That drives a different level of speed and agility that we’ve utilized TBM to help provide,” concluded Booth.

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