The China Gambit
- 05 July, 2006 12:12
Where IT Is Still a Service
One of the things CIOs learn about China early on is that while youth, excellent education and enthusiasm abound, experience does not. For Charlie Peters, who has overseen IT and e-business efforts in China for 15 years as senior executive vice president for Emerson, a $US17.5 billion electronics manufacturer, that's part of the thrill. "The drive of the people is unparalleled in the business world, yet their knowledge of even basic business approaches is nonexistent," Peters says. "So it's fulfilling to teach and experience the progress they make."
To help meld local enthusiasm with global experience, Bandrowczak has created an IT management team made up of half US professionals and half Chinese, which mirrors the makeup of Lenovo's executive team. The Western managers bring understanding of global and enterprise IT management principles; the Chinese managers bring knowledge of local management mores. The only problem Bandrowczak foresees is that those skills he's imparting are increasing in value in the local market. "You don't find many companies building data centres and housing all technology and enterprise services out of China right now like we're trying to do," he says. "But in the future, within the next year, we'll have a retention problem."
Outside of the technology industry, it's already difficult to find IT help, partly because Chinese companies don't often place a high strategic value on IT. "In China, to work for the internal IT department is considered a service job. The core business is not IT. They'd rather work for a vendor," says Charles Wan, who was born in Chongqing, China, but spent 15 years going to school and working in IT in the US and became an American citizen before being tapped by Midea, a $US5 billion appliance manufacturer based in Shenzhen, as its first strategic CIO. It's not just an image thing, says Wan; the high-tech companies pay twice as much. "I was constantly telling my CFO, these people are underpaid," says Wan. "We need more money to get people here and get them motivated."
Wan succeeded in getting a bigger hiring budget from HR and finance, but not quite enough to compete with the global IT vendors like SAP and Oracle. So he changed his tactic. "I decided it was better to train new grads than to try to hire them away from other firms," says Wan. "The strategy worked, but it took time."
Don't expect outside help to fill the gap, either. China suffers from a dearth of local third-party systems implementation partners and local software companies. "If you're doing a major implementation, there's less of a resource base so your implementations are going to be more expensive and more difficult to do," says Peters, who's currently paying a premium to IBM China for its help with Emerson's ERP implementations.
The Complexities of Hierarchy
While China may seem like a new frontier, that's not at all the way the Chinese view their business landscape. In fact, new ways of doing business threaten very old and established hierarchies. Many leaders inside Chinese companies came aboard when their enterprises were run by the state and Communist party. These men wielded tremendous amounts of authority and power in that structure. Not surprisingly, they still want to be in charge. And, as is typical in communist bureaucracies, they are accustomed to change happening at a snail's pace. They often resist new ideas - especially when they come from outsiders.
Combating this kind of opposition was a challenge for Brennan at Asimco, which is still partnered with, invested in and connected to various state-owned enterprises in many complex ways. Brennan sought counsel from his direct report, IT services manager Bruce Li, who is overseeing Brennan's current ERP project and serves as a cultural attache for the interim CIO. "Bruce has fantastic English language and cultural translation skills and keeps me on the straight and narrow in terms of how I need to be perceived," says Brennan. "I have to strike a balance between being the expert making these business units move on an issue and working collaboratively with them as a partner. I want to be authoritative and strong but I don't want to be that overbearing, know-it-all expat."
Li helped Brennan get the general managers of the company on board with both upgrading the company's existing ERP system and a more problematic new business intelligence system. "We were dealing with folks from the state-owned entity side. And even though we own a majority stake in them now, the local guys can make life difficult if you don't know how to deal with them," says Brennan. "Bruce is pretty ingrained in the corporate culture, having been here eight years. So when it came time to ask them for access to their firewalls, or to figure out how to work with their finance resources, my approach was to talk to Bruce first. I let him go deal with the local folks and call me in at the appropriate point," says Brennan.
And it worked - most of the time.
"You know very quickly whether you've grabbed the audience," Brennan says. "Either things happen very rapidly or nothing gets done at all. There's not a lot of middle ground." On one occasion, Brennan saw an implementation at a local plant grind to a halt because he hadn't spent enough time bringing plant executives on board.
Having a local second-in-command is invaluable, as Bandrowczak has also found out. His local expert in residence is actually the former CIO of Lenovo, Xiayon Wang. "She had tremendous experience and was the head architect and lead change agent at Lenovo," says Bandrowczak, who divides his time in Beijing among the local IT team, the business heads and the local factories. Wang didn't have the global deployment experience to continue on in the CIO role immediately following Lenovo's acquisition of IBM's PC division but stayed on as Bandrowczak's lieutenant in Beijing. "She's been extremely valuable to me," he says.
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