Sam Coursen is a veteran in the IT industry, over 36 years — thats more than my age, thankfully :)– in an interview the FreeScale’s CIO spoke on whole lot of things that not only affect his company but also the overall industry at large. I liked his take on the onshore-offshore debate. His response, “..in the globalized world, everything is onshore somewhere”. Read the interaction as it was published in the Dataquest Magazine, the link being:(http://www.dqindia.com/content/cio_handbook07/GlobalCIO/2007/107062701.asp)
‘With IT, one needs to be agnostic in the outlook’
‘Am joining a 70-year old startup’ is what Sam Coursen had said while joining Freescale Semiconductors as vice president and chief information officer in 2005. And he was not much off the mark. Freescale had existed for quite many decades as part of the Motorola group; it was only in 2004 that the company branched out. Today, it is one of the largest semiconductor manufacturer, and a leading supplier to the automotive industry.
Even in these ‘three’ years of its existence, a lot has changed at Freescale, from being a part of Motorola to being bought out for over $17 bn by a consortium led by Blackstone Group LP. The Freescale purchase, which closed on December 1, 2006, is reportedly the largest private buyout of a technology company and one of the ten largest buyouts of all time. Sitting at the Austin HQ, Coursen is keeping a tab on everything, not only ensuring that everything goes according to plan but also keeping his eyes on the horizon for newer technologies and breakthroughs.
Thirty-six years is a long time, and that is how much Coursen has spent working in the tech industry, starting with AT&T and then Bell Laboratories. For seven years he was at NCR as the CIO, before he took up the challenge of joining Freescale. The best thing that this industry veteran likes about his job is that: ‘it is never the same. Technology is changing all the time and it keeps me on my toes…Moore’s Law has never stopped working and hopefully would not in the near future as well,’ he says with a flourish.
When Coursen is not in office or trotting across the globe, he can be found at a golf course, swinging his clubs. More recently, he has developed a liking for whiteboard surfing on a lake that is nearby. Coursen likes to travel a lot and loves Sydney, though he also likes Scotland, Germany, China and, of course, India, probably due to culinary reasons. In an interaction with Shashwat Chaturvedi, Coursen spoke about the changing role of the CIO over the years. Excerpts.
At the time of joining Freescale, you dubbed it as a 70-year-old startup. What would you term as your biggest challenge at Freescale?
When I came here, I found a very good team of professionals who were exceptionally good at their work. My biggest challenge was to get the team sort of pointed to overall strategy for IT, making it more holistic in nature. To that end, we have defined a vision state that we want to attain, and have gone for major projects. It was like adding a strategic level to the function. Fortunately, for me, the team was quite capable of actual execution, so it was not that big a challenge.
While joining a big MNC that is spread across different geographies, what according to you does a CIO need to bring to the table?
Several things, but first I think a CIO needs to have the experience of operating globally. One needs to be empathetic to differences in systems and cultures, and to succeed it is imperative to adopt a global sourcing attitude. In today’s world, the concept of onshore or offshore does not make a difference for a global company, because everything is onshore at least somewhere.
How have the systems evolved at Freescale, and what are the changes that you are bringing in?
Even when Freescale was a part of Motorola, it existed as a separate business unit, so the systems were pretty much independent, and at an enterprise level. That was quite good in many ways. Some of the systems or functions were integrated to the Motorola one, so Freescale had to actually implement them from scratch, for instance, the HR function was shared with Motorola, so in the first year of separation we went for a complete implementation of the SAP HR suite, one of the most complete implementations of the suite. So, we have one single instance of HR for all our employees spread across the globe, and all our HR systems are in one place and uniform. That is not common, I know from experience that a lot of companies have HR systems based on countries or location, which makes it difficult to do a complete analysis at times, for instance, salary planning or headcount, etc. Thus, we had a set of systems focused on the business independently even when we were at Motorola, and we had to augment the systems that were shared with Motorola.
Coming to the second point, we have initiated a number of projects. My personal favorite is enterprise data warehousing. It is a big thrust for us. While our ERP is SAP, we did have a few legacy systems like in manufacturing, while some systems were in Oracle. So, there existed these data islands that one could not do much about. We are in the process of creating architecture to bring all that data in one place. It is a long drawn process, but we are making good progress. Currently, we have the core data in place. We also have a number of projects, wherein we are replacing legacy systems with new ones.
Freescale has operations in around thirty countries and more, and an employee base of 24,000. How do all these people collaborate and work?
We use the same collaborative tools that are available to all companies like Net meeting, Live Meeting, audio and data conferencing, etc. The good thing is that we have a good culture of taking advantages of those in this company, so a lot of this collaboration happened over the IM or the email. Going forward, we are looking at modernizing product design, so we are implementing PLM suites, where in there are lot of cutting-edge tools for collaboration. We are taking the first step toward PLM by implementing product data repository. The current project is to put in the foundation of the data management piece, and then look at different collaboration tools that would ride on top of the database and allow us to collaborate inside the company as well as with our partners.
Obviously, being a semiconductor company, IP protection must be a big issue. What’s the latest on that front?
We are actively looking at enhanced technology and evaluating the potential. We do have a number of security capabilities in place that relate to data storage, especially sensitive data; we use tools like encryption and what not. The employees are also sensitized to not have data in environments where it is harder to enforce patents and copyright laws. In the future, there is lot of work happening on IP protection, so you have an emerging technology that allows you to protect by particular document. For instance, a company, Liquid Machines, lets you designate certain IP with every document, which will provide enhanced levels of security. We are looking at whether we can implement those, as these technologies are not inexpensive.
For seven years you were the CIO at NCR, before coming to Freescale. How has the role of CIOs evolved?
I must admit that it has undergone quite a change. I keep reading all these debates in Harvard Business Review whether IT is really a strategic asset that can enhance value of the company or a cost to be reduced. And, that debate relates to the job of the CIO. Let me explain, A CIO cannot afford to ignore either of those two views. IT has become pervasive in every company, and it almost underlies every process. That’s good news for CIOs, and bad news as well. The good news is that IT has become an important function that can make a difference; the bad news is that because it is so pervasive, it is in a way expensive as well. As it is such a big part of the expense of the company, CIOs need to continually look at how to do the IT function more and more efficiently. We need to focus on how the whole thing can be done in a cost effective way, thereby making the company more productive. For instance, invest in manufacturing capabilities, invest in data warehousing, thereby enabling managers to make faster decisions, better ERP, supply chain, etc thereby optimizing everyone’s process. So, I got to focus at least half of my time on driving IT to be very efficient, so we can have the most possible affordability to really drive business process reengineering, and get strategic advantage over our competitors. A CIO today needs a balanced approach to the job.
What would you term as your biggest nightmare?
I share the same fears as my other CIO peers, namely a complete network breakage, data center is going to burn up, etc. As most of the companies operate on top of the IT infrastructure, it has to be there 7X24X365. It is a challenge to keep everything running smoothly, as the world is getting more dangerous with the bad guys trying to break into your systems. If we are well connected with the rest of the business, I think we will build the right systems. But, to keep them running without a glitch is the challenge.
How is it working with a multi-cultural team, and what are your learnings?
There are a lot of learnings; to have people from all across the world with different perspectives can be quite advantageous if you can leverage the multiple perspectives. I visit different regions where we have offices to meet my teammates, and then have them visit me at the HQ, so that you get to know the people face to face. It’s good that companies today tend to drive standard processes globally. But, they do vary to some degree based on local culture, local laws, and local customer needs. One needs to have a good appreciation of what can be standard, and what needs to be truly effective, and the only way to do that is to work in a multicultural environment.
What are your views on outsourcing and the big debate on core vs non-core?
Core and non-core are things that apply at a company level. For a company like Freescale, R&D would be the core. But, with IT, one needs to be agnostic in the outlook. I strongly believe that if someone can do a particular function better than me, then I should let him do it. What I don’t really like is this big second company do a total outsourcing kind of a deal. Because, I really think that it is very hard for one entity to do all the things in an efficient manner. You could term my attitude on outsourcing as more like out-tasking. For instance, 20 years back we would have gone and bought our own PBXs and built our own voice networks. But now, you go to AT&T, or any other company and buy software, etc to set up a network. This works out quite well, so no one in the right mind would look at building a voice network by them. I see a trend toward specialization, but I want to have control on the different pieces that I outsource or out-task. The people who have regretted their actions are the ones who have taken their entire thing, and outsourced it to an EDS kind of a thing.
What is the strategic roadmap for IT at Freescale?
It is interesting, systems support not geographies, not organizations, but they do support processes or a function right? For eg, a set of systems support HR function, supply change, financial, etc. Based on this, we have organized systems by the processes that they support. I have created a structure where we have defined a function map of the company, there are like twenty of these functions like finance, HR, etc. We have identified a business owner and an IT owner of each of these twenty functions who work towards establishing the vision state that I had mentioned earlier. We are currently very focused on data warehousing and manufacturing excellence, we also have a lot of work on supply chain systems. There is lot of work to keep us busy in the future.
Now that Freescale has been bought out, do you see any changes in your function?
Not really, nothing much changes for me. The owners have changed, but we always had someone owning us. Also, I see the potential as quite positive. For a semiconductor company economies of scales are important, and if by being part of a big group it could be leveraged in a better way.