Steve Olive: Sequencing is Everything
With new leadership, new markets, and a new strategic direction, Owens & Minor is transforming itself to serve the needs and demands of a changing global healthcare market. Over the course of my career, I have had the privilege of participating in other enterprise-wide transformations like this with other companies. In my experience, successful transformation does not depend on how much you achieve in a given time period, but in the sequence of how you accomplish it.
A transformation like this often involves replacing old technology and processes and, in our case, scaling it across a global network. How you do that without disrupting the business? Obviously, you can't shut the business down for a year, so there is a delicate sequence as to how you make a transformation of this type and magnitude. I have learned that it is more important to do the correct steps in the right order, than it is to change everything at once.
The first thing the information technology team did was to embrace our new strategy, which is designed to position our company for the future. Maintaining stability, while simultaneously developing our ability to leverage our international resources, is an important element of our strategy. We are aligning our Information Technology strategy with the enablement of the overall business strategy, then prioritizing how we get there.
Some of the questions we are asking ourselves are: “What does the warehouse capability of the future look like? What do you do to modernize warehouse capability?” We may need to move to a different warehouse management software solution, but we have to look at the enterprise resource planning background, financial consolidations, and other factors. There's a progression. We're not going to try to do everything at once.
What comes with being a successful global company is having common processes. Global companies have a very standard, harmonious operation that is enabled by a global platform. In essence, we want to move to a global platform with major software releases that are scheduled and planned in a regular way. That greatly lessens complexity of running the IT infrastructure and helps to streamline costs.
The good thing about rolling out new technology in Europe is that it is really small. It's a one hour plane ride pretty much anywhere you want to go. You can gain a lot of synergy fast. It's pretty easy and convenient for people to travel back and forth for training and workshops. On the flip side, there is some localization, like the data privacy regulations in Germany, for example. It's not that much more difficult to deploy a global system in Europe than it is in the U.S.
I think one of the biggest barriers to success with the rollout of new technology is the lack of persistence over time that is essential to maintain momentum for a new platform. In the first six months, everyone is excited. You pilot the deployment. Eighteen months into it, you're on your third capability release because you're issuing a release every six months. Now you're only 40 percent deployed across the enterprise. Lack of speed becomes a deterrent. How do you keep up everyone's momentum and enthusiasm? That's a big challenge.
Another challenge is: how do you stay current on the capability software releases while you're not fully deployed? There's a delicate trade-off there, a fine tuning. You may have to dial down capability to advance the deployment. There's a critical balance between how quickly you can go and how fast you can deploy the solution. That is why sequencing is so critical for success.
In evaluating which technology partners we will work with, I see three levels of supplier relationships. With the first level of supplier relationships, I buy something and figure out how to use it with little engagement with the supplier. That is a low level type of relationship. The next level is a supplier who is a partner. The supplier tries to understand my problem, what I need for a solution, and sells me the solution, and maybe the supplier helps me to implement it. It's a bigger, more mature relationship. The highest level, which we will demand from our partners, is a strategic relationship with a supplier. The supplier really knows as much about our business as we do. They invest the time and resources to develop that knowledge and understanding, and they bring solutions to us before we come to them with a problem. They bring us a road map. We are going to demand that type of relationship.
Strategic partners agree with us that they want to be platform-centric, not project-centric. A platform view allows for greater consistency and enables us to keep our technology current. In our meetings with prospective suppliers, we discuss their 18 month road map. We want to know what's going on in their research and development, how we can collaborate, and how they can integrate their technology advances with Owens & Minor and our customers.
Our team is dedicated to keeping a strong focus on what the priorities are. It gets back to that sequencing. It really is like a jigsaw puzzle, and I'm trying to make sure I put all the edge pieces together first, before I start working on the middle of the puzzle. The executive team is extremely supportive of information technology being an enabler. They really get it. They are working hand-in-hand with me. To have that kind of support is a really great confidence booster for me and our IT Team.