Behind The Numbers: Technology Solves Unexpected Issues

Outside pressures can dramatically affect business operations. One way executives are resolving these issues is by relying on IT to provide solutions.

InformationWeek Research recently asked Lee Hunter, VP and CIO at Southwire Co., one of the largest cable and wire manufacturers in North America and an InformationWeek 500 company since 2002, by E-mail what has been the biggest challenge to his industry in the past 12 months and how he has used IT to address the situation.

"Over the past 15 months, copper and aluminum prices have risen dramatically," Hunter says. "These prices have also experienced tremendous daily price swings as they have risen.

"Because our products are very metal-intensive, these price swings have a big impact on our profitability. In order to help sales cope with this, my IT group developed a real-time view of sales bookings so that the sales group management could see an up-to-the-minute view of what is being sold where," he says.

"Since metals prices and transportation costs are both principal factors affecting profitability, more complete and current data on product sales by location allowed the sales management team to be quickly proactive in marketing strategies by product and by location," Hunter says. This real-time information allows strategic decisions on price and other selling factors to be based on the criteria that most directly impact profitability, he notes.

Tech solutions that provide real-time information continue to be a priority for companies. Slightly over half of 300 business-technology managers surveyed in our 3Q Priorities study say real-time processes are directives for their IT personnel.

What real-time projects is your company tackling?

Helen D'Antoni
Senior Editor
Research
([email protected])

Software Development

Do your IT division's priorities include improving software quality?

"At Southwire, we don't do IT projects; we do business projects where IT is an enabler," Hunter says. "If software under consideration for a business project will give us a competitive advantage, make it easier for customers to do business with us, lower our overall cost of doing business, or if it's for a core process unique to our industry, then we will most likely build it." Improving software quality is a priority for half of companies we surveyed.

Project Expectations

Are you optimistic about your company's IT project starts for the next three months?

"I usually spend several hours per week reading about emerging technologies," Hunter says. "My electrical-engineering training and 34 years in the business are helpful in cutting through the hype about hardware and software." If an emerging technology looks promising for Southwire, Hunter will ask one of his engineers to dig into it. Sometimes this leads to a skunk-works project or a pilot project to validate these emerging technologies. Most executives continue to be optimistic about prospects for new tech initiatives, according to our 3Q Priorities study.

Return Strategies

Is gaining better return on IT capital investments a key business priority for your IT division?

"If software is for a business project that offers no competitive advantage, doesn't touch our customers, or is non-core, then we will most likely buy the software," Hunter says. Since one of Southwire's strategic goals is to remain the manufacturer with the lowest total delivered-product cost, the total cost of ownership of the software is important when deciding whether to build or buy. More than half of executives we surveyed are focused on gaining better return on IT capital investments.

Business Practices

Is your IT division implementing or supporting business-process outsourcing?

About one in 10 survey respondents say business-process outsourcing will be implemented or supported in the third quarter of 2005. For Hunter, the time isn't right to outsource business processes. "With the anticipated advances in wireless coverage and bandwidth, the fiber-optics infrastructure, ever-increasing processor speeds, and advances in software, business processes that are not candidates for outsourcing today will become obvious candidates. I just think it will be 8 to 10 years before it will have a transformational impact on business."