Motorola Takes IT to the Next Level

Motorola is using its sleek and sexy Razr cell phone to increase market share—and then some. The next-generation models promise to turn up the heat even more, making competitors scramble. Strategic plays are nothing new for this venerable company, but history doesn’t secure the future. The drive to stay ahead means that every group throughout the organization must raise its strategic contribution.

Information technology organizations are in the throes of a transformation. Looking back, the IT department traditionally provided day-to-day operations support. Moving ahead, the best IT organizations will be partners in innovation. They will be strategic, adaptable and driven by their end-customers’ needs.

Motorola provides an interesting example of this trend because its information technology experts are so deeply involved in preparing the company for tomorrow. Motorola is focusing on seamless mobility and connecting the wired and wireless worlds. It is creating solutions for mobile devices and vehicles, for connecting home and business, and much more. This requires tying everything together—customers, suppliers, extended customers.

We recently sat down to discuss Motorola’s plans with two of the company’s senior executives: David Jarvis, corporate vice president, information technology, in Motorola’s Mobile Devices unit; and Rusty Patel, vice president, information technology, in Motorola’s Corporate IT department.

We began by asking what role the IT organization plays in Motorola’s latest efforts to differentiate its company from the competition.

Rusty Patel: We want Motorola to lead the markets we do business in. Edward Zander [Motorola chairman and chief executive officer] wants IT to be a strategic weapon, a source of competitive advantage, in that quest. We have a lot of opportunities and very high expectations to meet this goal by focusing on efficiency, effectiveness and transformational IT-enabled business capabilities. We’ll also do this by taking our own advice—by successfully implementing relevant Motorola enterprise solutions within our own organization so we can lead seamless mobility by example.

David Jarvis: We receive a lot of support from our CEO and senior leadership staff who believe IT is important to the future of the business. They expect IT professionals to step up and show what we’re capable of, and to incorporate seamless mobility throughout our own enterprise. We are working to become “seamless inside,” by using our own products to enable productivity, reduce cycle times and improve costs. We call that “Motorola on Motorola” or “Mot on Mot.”

When we started down this path, everyone in IT wanted to evolve to a more consultative model, where our IT professionals operate more like strategic advisers than firefighters. As we evolve our current model, we will redesign our technology infrastructure and applications environments, then assign the more straightforward development and operations activities to capable partners. That will free Motorola IT professionals to focus on simplifying complex business processes and creating compelling business value through enabling technologies. The goal is to get much more consultative with our customers, and have confidence that our supplier partners can bring innovation and competitive costs to this equation.

Time to Think
Many IT organizations aspire to this vision of taking on a more strategic role, yet they are bogged down in day-to-day operations. People could spend as much as 90 percent of their time on their daily operations. We asked Messrs. Jarvis and Patel about how much time they initially spent looking forward versus just keeping the business running, as well as how that ratio is evolving today.

Jarvis: The distribution is probably not 90 to 10, but there is a dramatic swing in what we are focusing on. Have we been able to walk away from day-to-day operations and focus solely on what’s coming next? Not yet, but the improvement is accelerating.

We have evolved from spending a large percentage of time keeping things running to a greater focus on the future. But our goal is to keep pushing these limits to free up talented people to think about innovation in process and technology that we can apply today.

A good example would be the connection between Motorola IT and Motorola’s product teams evident in our MotoPro product line (MPx220), which is a Microsoft-based smart phone. The data and the networks required to synchronize messaging and calendaring functions are becoming a centerpiece of product offerings. That’s something we as IT professionals can make a substantial contribution to since our messaging teams have been dealing in this area for years. We haven’t been as product centric in the past; we’ve been more business-process centric.

Managing the Customer Connection
Information technology departments have traditionally thought of their fellow employees as their customers. Today, some IT organizations are looking outward. Motorola’s efforts to focus on products rather than processes represent a significant shift in both mindset and operations. According to Jarvis and Patel, the move is just part of an overall focus on the customer.

Jarvis: It’s part of our effort to look outward instead of inward, and it’s not just thinking about products, but about what our end customers want. Here’s one example: Our customers want better assurances that they’re going to get our products when they need them, and they’re going to be of high quality. So we’ve taken a fresh look at how we extend the enterprise to improve our order-commitment capabilities.

In the old days, you would hook the two companies together using EDI (electronic data interchange), but we need richer, more integrated exchanges of data to provide improved visibility and reaction time for our customers. We’re moving to a supply chain that’s much more agile and integrated. We need to be faster, quicker and smarter.

Patel: And it’s not just extending the chain, but also gaining a lot more visibility into that extended supply chain, beginning with our customers. For our mobile devices cellular operator customers, we used collaborative planning, forecasting and replenishment to better manage demand and improve responsiveness, actually reducing inventory carrying levels for us and our customers. When you couple this with demand fulfillment for key customers, they get the level of assurance that we’re going to deliver those units when we’re committed to delivering them. That creates an advantage.

Jarvis: In 2005, we are seeing a number of macro forces that we must address in order to secure business. We need more than just the product, but also the services wrapped around it. If you look back about 10 years, that’s exactly what Circuit City, Wal-Mart and Best Buy did in the consumer electronics industry with their suppliers. Now, the global telecommunications companies are saying, “You want my billion-dollar deal? These are the things that need to come along with it.”

Patel: We want to make sure that we really understand and manage the whole life cycle so that our customers can provision and manage their services, of which our devices, and perhaps services, are a component.

Going back to the “Mot on Mot” activities, we’ve helped validate requirements and capabilities for various products and services, perhaps where we ourselves would use that type of product or service. One of our seamless mobility solutions, the CN620 Enterprise Seamless Mobility solution, and our Canopy wireless broadband capability, are some examples of where IT has partnered with the business fairly well.

Wired for Change
Motorola is working hard to change the focus of its IT organization, which is a challenge for many IT organizations. A recent A.T. Kearney survey conducted with Harris Interactive found that only 44 percent of respondents believe that their IT organizations react very well to change. We wondered how Motorola adapts to change.

Jarvis: Change is wired into Motorola’s DNA. If you look at our heritage, our businesses have pioneered new technologies and created new markets with devices like cell phones. Years ago, Motorola was at the forefront of commercial cellular technology and dominated device sales. In the days before competition emerged, the business grew at phenomenal rates. Then competitors entered the market (Nokia and others) and revenues flattened. Both of these environments required an ability to adapt to changing business conditions.

Today, while our business is growing more than 50 percent, our IT function is completely reconfiguring the business model. It’s like the EDS commercial from a few years ago, the one about a team working on the airplane while it’s flying. The fuselage’s outer skin is stripped off, some engines are being repaired, coffee is splattering you in the face—and yet somehow you just keep going. This aircraft is still flying and actually making great progress.

Patel: Very few industries have actually seen this level of change, this boom and bust kind of activity, where you create an industry, and you dominate or make choices to exit or get crushed. It makes for a pretty interesting space. While all this is happening, you’ve got the IT people trying to help make those businesses successful. How does IT help Motorola build and distribute more effective business processes, more effective products and solutions for our customers? We’re answering these types of questions.

Looking Forward
Just like the overall businesses, the most successful IT organizations will be dynamic, making small refinements or major revisions to respond to and anticipate an evolving environment. What will these changes mean for Motorola over the longer term? We asked about Motorola’s IT organization over the next five years—what changes on the horizon will be most important to address going forward?

Jarvis: This has to be put in the context of a company that was, in effect, family run for nearly 75 years and now has senior leaders from diverse industries and backgrounds. Ed Zander, for example, is from Sun. He brings a refreshingly different perspective. We’re getting an influx of different views. The path we’re on now, and how it affects IT, represents a chapter yet to be written.

Five years from now, I honestly see a direction similar to what we’ve set right now. We evolve our retained Motorola contingent to get much closer to products and customers—not just internal customers, but end customers and consumers. By taking a consultative approach, we fill a much-needed role that helps improve business processes for our customers and leverage contemporary technology to digitize and simplify as much as possible.

Patel: In five years, IT will be more predictable. We’ll be able to demonstrate more of our improvements—stating better performance metrics on certain things and living by service levels.

We’ll drive even more efficiency by establishing where IT can and should play a role. We’ll put a process in place to regularly manage or govern new initiatives, driving process effectiveness and transformation. From a “Mot on Mot” perspective, we have to make some good choices about where we want to make an impact on our enterprise products and services. From an internal IT perspective, we must make choices about where we help partner on the business side and adopt and broadly implement our own solutions. There are going to be some great examples of that.

The baggage of the past, complex IT architectures, disparate applications, poor access to data, and an overly technical organization are all preventing IT from creating value today and positioning the business for tomorrow. According to an A.T. Kearney study conducted with Harris Interactive, nearly half of business executives agreed that, “Within my company, the IT department focuses primarily on the day-to-day IT requirements” (see figure).

The price for this focus is high: The more time IT organizations spend on daily operations, the less time is left to explore new possibilities.

The study indicates that the money spent on the IT innovation budget is moving away from innovative business solutions and toward daily operations. In fact, only 20 percent of IT investment is allocated to IT innovation—a 30 percent drop since 2002. The study, “Why Today’s IT Organization Won’t Work Tomorrow: Future-Proofing Information Technology,” suggests that business and IT executives need to collaborate more closely to define how information technology can most effectively support business goals. Once an IT organization’s mindset extends beyond cutting costs to creating true value, IT can shift resources accordingly. The study recommendations focus on four key areas: value-based asset optimization, customer-focused innovation, IT complexity reduction, and organizational structure and governance.

To review the study, visit www.atkearney.com.

Consulting Authors
Dan Starta is a vice president in A.T. Kearney’s Chicago office.

Christian Hagen is a principal in A.T. Kearney’s Chicago office.