There is, in the reality of running IT, a tension between the old and the new, stabilization and innovation, the known and the unknown. How do you squeeze value from the existing systems while bringing on the new?
But what if you could ditch all of your current systems and start fresh? An IT greenfield sounds dreamy, doesn’t it? How would you do it?
This was the situation for CIO Walter Kwiatek at Bioventus. He started and runs a $250 million spin-out from a larger organization. And it spun out with nothing but the data. His systems and team were all built from scratch.
A greenfield can be pretty intimidating. Where to start? His approach: invest in differentiations that the market will reward.
Let’s back up a bit…
Smith & Nephew, a major manufacturer of traditional medical devices, had a division that wasn’t a strong fit with the rest of its business. Smith & Nephew is a major manufacturer of advanced healthcare-related hardware such as replacement hips and knees, and surgical equipment.
The outlier is categorized as a bio-pharmaceutical because it interacts with body chemistry. It needed a significantly different business model than the traditional business. As a result, Smith &Nephew entered into a joint venture with equity partners to launch the new company, Bioventus, in 2012.
Here is the fun part: It was decided that none of the existing company’s IT would transfer to the new company. Data came with, but hardware, software, people, processes, policies and procedures did not. Again, keep in mind this was a $250 million start-up. It operates in over a dozen countries directly, 30 countries indirectly, in a highly regulated industry. Walter and his new team had about 18 months on Smith & Nephew’s existing systems to build what was needed from scratch.
Is a greenfield opportunity a dream or nightmare?
As Walter put it, “There were those defining moments … where clarity comes pretty quick. Given the time constraints, there really was only one option: build a roadmap that was 70% cloud based and 30% hosted.”
But what goes where?
Walter continues, “We thought through where are we going to invest our time and money and where do we want complete flexibility? Where can we tolerate working in a shared environment? And we very clearly defined those business processes that needed to be as good as our competitors, and those things that we want to strategically compete with.”
Those strategic or differentiating business processes were put in a hosted model where Bioventus could control modification and customization. Everything else went to the cloud.
Bioventus was consolidating their data from six ERP systems into one global instance. There were bound to be creatures that go bump in the night, and their’s turned out to be their biggest asset: data. The effort around data extraction, cleansing, normalization and importing, though vanquished in the end, kept them up many a night. Hardly a dream, but it did have a happy ending.
That happy ending (although nothing really ever ends) is what Walter calls “an environment that is probably the most stable, most efficient environment I’ve ever worked in, from lack of complaints, to up time, availability, and productivity.” Truly understanding Bioventus’ competitive advantage enabled that bold 70% cloud decision, making hitting the deadline achievable. Going from only data and himself to systems and a team that support a substantial business is a huge accomplishment that most people can only dream of.
Now Walter is heightening his concentrating on the people part of the equation. The small IT team is focused on working with an outsourced cloud provider, not managing the nuts and bolts. The goal is to move the IT team upstream to become trusted advisors, consultants and process optimization experts within the company. In other words, they are focusing on those strategic business processes the business can compete with.
Next time you are shaking your fist at your legacy systems, remember Bioventus’ approach: Invest where it will make a difference the market will reward.
And second, you can’t plan everything. A greenfield will still hold surprises. It may seem like a stroll down a garden path, but in this instance, it was not.
Easy, not so much.
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