CIO Review >> Magazine >> February - 2013 issue

Do not Assume Existing Processes are Superior

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Friday, February 1, 2013

Dominic Martinelli Silicon Graphics, Inc. (NASDAQ: SGI) delivers high performance computing, server, storage, data center and cloud computing solutions and professional services. Headquartered in Fremont,the company has a market cap of $425.03 million.

Mandate as the CIO

I am responsible for all aspects of IT and manage some other functions including coordinating cross-functional process improvement. Some of the operational priorities are modernizing various processes and systems. We are focused on improving process and upgrading while replacing obsolete systems and infrastructure. Another example is as soon as we announced our new product, SGI NAS, we started planning how we would add it to our infrastructure. It is important that my team and I consistently ask what we can improve on and leverage the best resources.

Silicon Graphic and Rackable System: The Tech Merger

I started with the company Rackable Systems six years ago. At that time there was very little IT infrastructure. The initiatives for the first couple years were to implement ERP and CRM systems, achieve SOX compliance, as well as scale the infrastructure to support a rapidly growing business.

Soon after these essential systems and infrastructure were in place, we acquired Silicon Graphics, Inc.,which greatly increased the scale of operations further. As with all integrations, we had to integrate people, processes and technology so we could operate as a single company. Our employee count also increased from approximately 300 employees to 1400 the day after the acquisition and went from operating in a couple of countries to offices in over 20 and operations in 50, obviously, business on a much larger scale.

Fast integration was critical for the success of the acquisition. We had a very aggressive plan and used an "adopt and go" methodology for quick decision-making. It took us a few months to integrate critical systems infrastructure and seven months to integrate our critical applications.

In 2010 we acquired Copan Systems and in 2011 we acquired SGI Japan. While the Copan integration was not as complex and was completed in three months, the integration of SGI Japan was more challenging. There were fundamental differences in our systems and processes that had to be reconciled before we could start the systems integration. For example, our ERP environment did not support double-byte characters which was a requirement and many business processes were very different. While we wanted a quick integration, we also did not want to make changes without understanding the differences in the business. We needed to have the required infrastructure in place to avoid any negative impact on the business.

This integration took about a year. We integrated SGI Japan into most of our corporate processes, with the exception of a few areas where the SGI Japan process was more efficient. The key to a successful integration is not to assume that existing processes are superior – sometimes something new is required to support business changes due to M&A.

Radical technology trends

Mobility and bring your own device (BYOD) are key trends evolving in the workforce. People want to use the most productive device possible at any time from any location. Mobility makes our workforce more productive, whether they are at home, office or travel.

However, the spread of mobile devices in the workplace can add to operational complexity. In the past, IT departments kept tight control over the kinds of devices they allowed as a security precaution. Now, organizations including SGI are warming up to the idea that they need to establish security and compliance policies to support mobility, including the growing use of a wider variety of company supplied and employee-owned devices.

Keeping our intellectual property safe is a big focus for any company. A company needs to use an array of technology to help do the job, but also resist the temptation of tightening the security screws so much that it undermines productivity. There needs to be a balance between security and allowing flexibility that leads to improved productivity.

Obstacles to overcome

One of the major challenges that we have faced is the increasing scale of operations due to both organic and inorganic growth. After an acquisition, we would end up with two of every major system. It was important that we decide which systems was the best for efficiency, cost and speed of integration.

As mentioned earlier, BYOD is a big trend. People want the same experience at workplace as they have at the home. We have to stay on top of consumer innovation and how and when it makes its way into the business environment. Supporting an extremely technical business community adds to the challenge and makes it more exciting. Our employees want to push the envelope and it gives IT an opportunity to have a positive impact on the business.

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