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The Effective Leader’s Guide to Enterprise Software: Competing with Intensity and Insight in Turbulent Times Global Strategic Partner for Manufacturing

The Effective Leader’s Guide to Enterprise Software

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This e-book is for leaders who want to excel by using information technology (IT) as a catalyst to transform their businesses. It is divided into four areas: Becoming a Transformational Leader, Leaders as IT Strategists, Leaders as Sales and Business Development Strategists and The CEO as a Leader of Disruptive Change

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Page 1: The Effective Leader’s Guide to Enterprise Software

The Effective Leader’s Guide to Enterprise Software:Competing with Intensity and Insight in Turbulent Times

Global Strategic Partnerfor Manufacturing

Page 2: The Effective Leader’s Guide to Enterprise Software

How and where CEOs invest their time has a direct impact on the performance of their firms.

Many leaders agree that setting vision and strategy,planning acquisitions and investments, motivating andleading their employees toexcel and contributing tobusiness development andsales management are all high priorities. Many CEOsand general managers arechallenged with getting theircompanies to execute as well.

Given the proliferation of socialmedia and the quickeningpace of new ventures, theseleaders are often also thecompany spokespeople on allnew developments.

From the new start-up to the suites of Fortune 100 companies,the challenges are the same. Leaders successfully guiding theircompanies through these turbulent times share a passion for makingthe most of all available intelligence, insight and information. Theyalso excel as IT strategists, aligning the complexity of informationsystems in their organizations to strategic priorities and goals.

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A CEO's priorities havea direct impact on profits.

A Leader’s GuideThis e-book is for leaderswho want to excel by using informationtechnology (IT) as a catalyst to transformtheir businesses. It is divided into four areas:

• Becoming a Transformational Leader

• Leaders as IT Strategists

• Leaders as Sales and Business Development Strategists

• The CEO as a Leaderof Disruptive Change

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The First Four Steps on the Fast Track to Becominga Transformational Leader

If you think about the best bosses you ever had, the ones you’drun through a brick wall for, they did four things really well—notjust for you, but for everyone on the team. And they did thesefour things with amazing authenticity and transparency. Today’semerging and longstanding leaders have added technology tofurther support and strengthen their roles. What can you do?

1. Show that every person matters. The greatest leaders have thisdown to an art form. They use enterprise software to connectwith every employee, showing sometimes in real time how abusiness is doing. Leaders have very high expectations oftechnology in keeping their teams together. In fact, theyhave higher expectations than the CIOs when it comes tothe transformational value of IT (Johnson, Lederer, 2007)1.

2. Create a culture that thrives on learning and intelligence.Transformational leaders know that their best performersaren’t there for the paycheck; they are there for the challenge.A strong CEO and leader will use IT to create collaborationand communication opportunities throughout the entire organization, and this includes CRM, ERP, SCM and manyother enterprise systems. Leaders and CEOs who are thrivingnow are focused on making these enterprise systems unifiedto create a world-class learning culture.

3. Inspire by doing more than you expect others to do. Thegreatest leaders all share this trait; they are willing to sacrificefar more than they would ever ask a subordinate to do. Thisbreeds exceptional trust and gives everyone a very clear idea of how their contributions matter. Great CEOs are buildingenterprise systems today that further strengthen this withreal-time feedback; not just employee performance, but theperformance of strategies and key customer-facing processes.

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4. Build accountability into their enterprise systems and regularlyrevisit its effectiveness. One CEO I know regularly visitscustomers and provides contributions to the company CRMsystem after each visit. He does his own comments on therecords of other C-level and senior-management teams hemeets. His and the senior-management team’s system usageis visible for anyone on the CRM system to see. This led tothe CRM system being adopted by more than 15 percent ofsales personnel within three days.

Great Leaders Are Also IT Strategists

Three Strategic IT Priorities

1. Projects that enable the company to develop and offer newproducts and services more efficiently and in less time

2. Projects that provide new decision support information totop, middle and lower levels of management

3. Projects that use existing and planned IT investments to findnew ways for the enterprise to compete

The most successful leaders use their transformational leadershipskills to get these three strategic priorities accomplished, whilemaking sure that every aspect of the business stays synchronized.

To get a sense of how difficult this is to do well, see the GartnerDemand Driven Value Network (DDVN) in Figure 1. This is a graphicalillustration of how complex the collaboration, communication andsynchronization challenges are for CEOs today.

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Not only must a CEO keep the Demand Networks tightly coordinated to Supply Networks, the existing product strategiesand often highly complex new product-development and introduction (NPDI) process in the Product Networks area must becoordinated. The role of enterprise software in general and theERP system specifically is to orchestrate these three strategicnetworks of a business. When one considers that each of thenetworks shown (Demand, Supply and Product) have a naturaltendency to go off on their own direction, it becomes clear that cost-reduction strategies alone in enterprise software areextremely tactical in nature.

Figure 1: Demand-Driven Value Network

Coordinating the Demand, Supply and Product networks iscomplicated by the fact that there isn’t an abundance ofoverlap and that each network has a tendency to go in theirown direction.

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Coordinating the Demand, Supply and Product Networks

What’s needed is a way to orchestrate all three networks into asingle, unified and highly powerful strategy.

The highest-performing leaders today are using enterprise softwareas an accelerator to their vision and goals. They also realize thatonly by aligning ERP systems to their top three priorities will theirbusinesses have a chance to break through a market’s turbulenceand competitive chaos to succeed. One of the most powerfulstrategies for accomplishing this is aligning the ERP system to theneed for more accurate, precise information about new markets.

One of the most effective transformational leader’s secretweapons: a two-tier ERP strategy.

Get Insight to Compete with Intensity: How Two-Tier ERP Strategies Can Help

As IT strategists, leaders are guiding their organizations to attain higher levels of agility than ever before. The longstandingassumption of having a single ERP system to serve a diverse,growing global enterprise is changing fast. No longer can asingle monolithic system keep up with the diverse strategicneeds of a company that’s attempting to penetrate entirelynew foreign markets.

Two-tier ERP systems are giving enterprises the agility they needto compete more effectively. Hewlett-Packard used this strategyto create factories that are specifically designed to create moreeffective Asian supply chains while also gathering local marketrequirements to the strategy.

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In any conversation regarding two-tier ERP strategy, the HarvardBusiness Review article, “Making the Most of Foreign Factories”by Dr. Kasra Fedrows surfaces2. Dr. Fedrows has completeddecades of research on what makes distributed manufacturingcenters globally successful.

The Roles of Foreign Factories: A Strategic Matrix, Figure 2,shows how site competence should lead the strategic reasonfor the site, and mirrors Dr. Fedrows’ research.

Access to low-cost production

Access to skills and knowledge

Proximity to market

Source

Lead

Contributor

Offshore

Outpost

Server

Strategic Reason for the Site

Site

Co

mp

eten

ce

High

Low

Two-tier ERP systems enable global enterprises to match theunique local requirements of every market.

Figure 2: The Roles of Foreign Factories: a Strategic Matrix

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The CEO as Sales and Business Development Champion

Many leadership experts contend that the best CEOs come outof sales, while an entirely different set of studies offers operationsas the best path to the top job. Those citing operations showthat in manufacturing and highly complex enterprise businesses,operations provides the CEO with a unique, global view of thebusiness—a view that otherwise would have to be learned onthe job (Koyuncu, Firfiray, Claes, Hamori, 2010)3.

Regardless of background, a CEO must excel at orchestratingcustomer-relationship and selling strategies, long-term businessacquisition and project execution. Figure 3 shows how these threeareas intersect and how critical it is to have a strong enterpriseprogram management strategy to have 360-degree views ofthese areas.

Bottom Line: CEOs who excel in their roles as sales and business-development leaders deliberately set up internalgovernance and compliance frameworks supported by enterprisesoftware to free up their time for customers and selling.

Figure 3: Getting to Optimal CEO Performance: Finding the Intersectionof Strategy, Acquisition and Execution in Your Company

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The need for process spectrum flexibility, enterprise-wide processorchestration and decision management including analytics are alsokey. Figure 3 shows the unique role of the CEO as orchestratingthese three core areas as well. Business development and salesare areas where the majority of CEOs say they want to spendmore time yet can’t due to time constraints.

The CEO as a Passionate Leader of Disruptive Change

Both the person who aspires to be a CEO and the individualserving as one today needs a very clear, compelling vision oftheir company that is centered on the customer. They also haveto be so passionate and believe so strongly in the vision of whatthey are doing that they willingly sacrifice for it and inspire othersto do the same. There must be a compelling reason for the entirecompany to go through a significant change and ride throughturbulent times, emerging stronger for it. And that compellingreason must be solidly based on the customer and deliveringthem exceptional value daily. That only happens when they aregalvanized around customer-based vision.

But how do the highest-performing CEOs make their visions ofbeing a customer-centric business turn into great results? By beingpassionate and entirely focused on the attainment of challenginggoals, regardless of market uncertainty or turbulence in their industries. They push through those obstacles and knock downone goal after another, undaunted.

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How? By creating teams who believe they can, by setting up teamsto win and by balancing short-term (transactional leadership) withlong-term (transformational leadership) goals. They also do thisby balancing transactional leadership skills that reward immediateperformance with a compelling vision of the future everyone canidentify with.

Figure 4: Transformational Balance

Balancing short-term needs while making progress toward long-termgoals is the mark of a true transformational leader.

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The balance of transactional and transformational leadership iswhat separates the highest-performing CEOs who deliver greatresults year after year. This ability to move between transactionaland transformational leadership has to be based on trust tosucceed. The best CEOs get it. They realize trust is the catalystof disruptive change, and information technology can makethem more effective as leaders of change.

Eight Key Takeaways for Transformational Leaders

1. The highest-performing leaders and CEOs have developed astrong set of transformational leadership skills and continuallywork to improve them. These transformational leadership skills,including emotional intelligence, help the highest-performingCEOs move quickly between their roles of IT strategist, sales andbusiness development leader and leader of disruptive change.

2. CEOs who are IT strategists are able to better align theirexisting and planned IT systems to challenging and highlyprofitable customer-driven strategies. Measuring the performance of IT systems by their contribution to grosscontribution margin (GCM), Lifetime Customer Value (LCV)and the success of multichannel selling and service strategiesis more important than just measuring cost reduction.

3. Efficiency only matters when it’s measured from the customers’standpoint, not from internal metrics. The top-performingCEOs who are IT strategists are able to define analytics andmetrics that measure collaboration that meet and exceedcustomer expectations first. These CEOs seek to architect theirsystems so that customer expectations get met and exceededas a result of having excellent internal system performanceand coordination.

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4. Using two-tier ERP strategies as a strong catalyst of globalcompetitiveness and gaining the critical intelligence and insight that’s necessary to excel in new markets is a must-do.Each regional, national or foreign market has its own uniqueattributes, characteristics and cultural factors that influence thequality of information in IT systems. Having an ERP system inspecific subsidiaries, especially for manufacturing companies,can mean the difference between staying competitive or not.The greater the quality of information in a subsidiary thegreater the agility. CEOs who are IT strategists are relying ontwo-tier ERP as a means to quickly enter new markets andget operations up and running quickly.

5. Excelling as an IT strategist requires a leader to see IT systems as sources of differentiation not just cost reduction.The highest-performing CEOs are championing these threepriorities within their organizations today, making sure that IT systems align to their attainment:

a. Projects that will allow the company to develop and offernew products and services more efficiently and in less time

b. Projects whose primary benefit is providing new decisionsupport information to top, middle and lower levels of management

c. Projects that use existing and planned IT investments tofind new ways for the enterprise to compete

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6. Be ruthless about aligning IT systems to customer requirements to excel in the role of Sales and Business Development Strategist. From GE with their Six Sigma programs that are specifically designed to keep their productsaligned to customer needs, to FedEx and their world-classapproach to tracking customer packages, making IT systemsalign to customer requirements is critical to succeed.

7. Leaders of disruptive change start with a compelling customer-centered vision and use IT to galvanize their companies around it. CEOs who have exceptionaltransformational skills have the ability to balance short- andlong-term goals while keeping their enterprises focused onexcelling for the customer. Using IT as the catalyst of makingdisruptive change permanent are what these CEOs are capableof achieving. We’ve provided a graphic of how this dynamicworks in Figure 3.

8. Most important of all, a leader lives the vision. Daily, withpassion, they lay it all on the line, and people respect andtrust them for it.

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References1Johnson, A. M., & Lederer, A. L. (2007). The impact of communication between CEOs and CIOs on their shared views of the current and future role of IT. Information SystemsManagement, 24(1), 85-90.

2Fedrows, K. (1997), Making the most of foreign factories. Harvard Business Review, 75(2), 73-88.

3Koyuncu, B., Firfiray, S., Claes, B., & Hamori, M. (2010). CEOswith a functional background in operations: Reviewing theirperformance and prevalence in the top post. Human ResourceManagement, 49(5), 869.

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