The bulk of CIOs are in a predicament where they come into an [IT] environment that doesn't have a long-range plan
That approach did help the IT group to determine the equipment it would need to buy and the personnel it would require to support those near-term initiatives. But project plans focused on the separate needs of each business division, says Steinhorn, so there wasn't a comprehensive evaluation of how each project might affect the overall IT infrastructure. And it hadn't become clear how Hess' IT projects fit into its longer-term business objectives as the company diversified from its roots in petroleum and expanded into natural gas and electricity over the past decade.
"It became pretty clear that we needed to lay out a long-term strategy that would allow us to figure out how IT could support our businesses' strategies over the next five years," says Steinhorn, who was previously CIO at Linens 'n Things and was recently promoted to corporate CIO at Hess.
The situation that Steinhorn walked into when he joined Hess is far from unique. "The bulk of CIOs are in a predicament where they come into an [IT] environment that doesn't have a long-range plan," says Bobby Cameron, an analyst at Forrester Research.
Prior to Steinhorn's arrival, business managers in Hess' marketing and refining division had given the IT organization decent marks for the quality of its work and for getting projects completed. But executives told Steinhorn that it typically took too long for the IT group to implement new systems or deliver enhancements to existing systems.
Still, Steinhorn discovered that the IT organization had a wide range of other issues to improve upon. Because project work had been separate for each business division, the units' systems often didn't share common customer or market information, nor were they integrated with one another, says Carl Schwartz, director of planning and architecture for Hess' marketing and refining IT group.
So, for example, a business manager in the oil supplies division could be looking at a set of pricing data that didn't match what an energy marketing manager was seeing on his screen, says Steinhorn.
After laying out a proposal to develop a five-year IT strategic plan at an executive meeting in the fall of 2006, Steinhorn got the nod from senior management to move ahead with the effort.
But winning that support didn't occur overnight, particularly since Steinhorn was new to the company and hadn't yet established relationships with members of the senior management team.
To help gain backing for the strategic planning initiative, Steinhorn started within IT by tapping some well-respected veteran IT managers to join the planning team. In his early conversations with the president of Hess' marketing and refining division, Steinhorn pointed to those managers' involvement, in order to emphasize that "it wasn't just me, the new guy, who was supporting this."
Another challenge Steinhorn faced was changing the mind-set of Hess' business executives, who had tended to look upon the IT staff as a low-cost provider and were used to making IT investments on a considerably smaller scale. "This five-year investment isn't huge, but it would require more investment than they were accustomed to making," says Steinhorn.
He gained the executives' buy-in by getting them to quantify the anticipated project benefits. "I would ask them, 'If we did these seven retail projects, what would be the bottom-line benefits for you?'" says Steinhorn. "We did that with each of the business areas, and suddenly the costs were a tenth of what all the benefits were expected to be."