Serving The Customer

Managing the IT resources at Minnesota's 7th-largest public company.
Serving The Customer

Beth Nordin, vice president of information technology, CHS, Inc, Inver Grove Heights
 
 
In today’s environment, cost control is certainly a high priority. However, in a time of economic caution, skilled information technology professionals have a unique opportunity to help their organizations achieve immediate goals and long-term success. For CHS, an energy, grain, and food company, this means building on long-held disciplines, such as cost control, while focusing on both core business growth and acquisition opportunities.
 
CHS is a diversified company, with 14 unique business units and more than 500 individual locations spread across two-thirds of the U.S. and internationally. IT is one of few shared company services; even the company’s finance area is decentralized. IT is structured to serve both the whole and individual parts. We use relationship managers to provide all things IT for each business unit, essentially serving as the unit’s IT manager, while remaining connected to the overall company. Relationship managers are responsible for the business unit’s IT governance and prioritization, working with it to align priorities and budgets for annual spending, and adjustments throughout the year. This model gives the business unit essential flexibility to quickly adjust its scope of service for non-asset–based costs during an economic downturn.
 
Overall, this arrangement challenges CHS IT to maintain a flexible cost structure, with supply always adjusting to meet demand based upon formal service level agreements with each business unit. To connect IT success with business success, a significant part of IT’s pay-at-risk is tied to how well we manage to balance supply and demand and how well we meet our commitments.
 
We continue to selectively consolidate operations, modernize our IT infrastructure, improve our processes, and hire, train, and retain very skilled people. For example, we are selectively standardizing our applications to take advantage of size, although individual business units have the discretion to participate or not, based on their needs. At the same time, we are reducing our applications footprint through targeted end-of-life programs.
 
A comprehensive charge-back and reporting model is used to insure complete transparency to the business units. A key focal area is project reporting; each quarter, we report both forecasts and actuals for costs, schedules, and quality issues. Performance metrics are also embedded in a service catalog, for infrastructure services with a “click charge,” as well as an hourly rate for applications. This information is listed very clearly within the service level agreements. With this structure, each business unit understands how much it will spend on IT in the year and can increase or decrease their demand as needed.
 Beth Nordin, vice president of information technology, CHS, Inc, Inver Grove Heights
 
 
In today’s environment, cost control is certainly a high priority. However, in a time of economic caution, skilled information technology professionals have a unique opportunity to help their organizations achieve immediate goals and long-term success. For CHS, an energy, grain, and food company, this means building on long-held disciplines, such as cost control, while focusing on both core business growth and acquisition opportunities.
 
CHS is a diversified company, with 14 unique business units and more than 500 individual locations spread across two-thirds of the U.S. and internationally. IT is one of few shared company services; even the company’s finance area is decentralized. IT is structured to serve both the whole and individual parts. We use relationship managers to provide all things IT for each business unit, essentially serving as the unit’s IT manager, while remaining connected to the overall company. Relationship managers are responsible for the business unit’s IT governance and prioritization, working with it to align priorities and budgets for annual spending, and adjustments throughout the year. This model gives the business unit essential flexibility to quickly adjust its scope of service for non-asset–based costs during an economic downturn.
 
Overall, this arrangement challenges CHS IT to maintain a flexible cost structure, with supply always adjusting to meet demand based upon formal service level agreements with each business unit. To connect IT success with business success, a significant part of IT’s pay-at-risk is tied to how well we manage to balance supply and demand and how well we meet our commitments.
 
We continue to selectively consolidate operations, modernize our IT infrastructure, improve our processes, and hire, train, and retain very skilled people. For example, we are selectively standardizing our applications to take advantage of size, although individual business units have the discretion to participate or not, based on their needs. At the same time, we are reducing our applications footprint through targeted end-of-life programs.
 
A comprehensive charge-back and reporting model is used to insure complete transparency to the business units. A key focal area is project reporting; each quarter, we report both forecasts and actuals for costs, schedules, and quality issues. Performance metrics are also embedded in a service catalog, for infrastructure services with a “click charge,” as well as an hourly rate for applications. This information is listed very clearly within the service level agreements. With this structure, each business unit understands how much it will spend on IT in the year and can increase or decrease their demand as needed.
 In addition to the planned workload, IT must be ready to support the company in any opportunistic acquisitions that arise. This may mean tight deadlines for due diligence or quickly integrating new acquisitions. For our growing international business, it means balancing company-wide standardization with local needs and addressing both a complex application and infrastructure environment and accounting for a range of security and data privacy needs. By using experienced resources and flexible staffing with contractors, we are able to respond.
 
When we look at costs, we take both a short- and long-term view. While we make strategic and cost-effective use of contractors, we have concluded through considerable study that major outsourcing of IT tasks or components is not a strategic option for CHS. Although we do make use of targeted outsourcing, the complexity of our operations and the need to serve both diverse business units and an overall corporate entity requires internal IT leadership with knowledge and understanding of the organization and its direction.
 
We must also continually increase IT effectiveness. We are always looking at different and creative ways to reduce our work portfolio by doing the most important things faster and in smaller chunks as changing conditions make large projects less relevant. We have modified our project methodology to allow for small sub-projects, approval gates, as well as the Agile methodology when appropriate.
 
We strive to manage our infrastructure charges by optimizing our workforce, and using newer technology to expand our capabilities. Virtualization, de-duplication, and thin clients help to streamline our architecture and keep costs down.
 
Our goal is to continually reduce costs on a per-click basis. We are cognizant that today’s environment calls for cautious investments. We are a commodity-based business subject to market cycles, and we’ve positioned our IT resources for nimbleness.
 
Success, however, requires far more than simply reducing costs. It requires measuring and reporting on our effectiveness, and using metrics for continuous improvement. It means investing in our people, who are our best source of operational improvements for today and the best providers of value to CHS in the future.
 
CHS IT is an essential component of daily operations and long-term strategic direction in an environment of decentralized decision making. We must maintain the technical knowledge and commitment to cost management that demonstrates that we are partners with our business units, helping them and the whole company to succeed.