Computerworld - When Joel Gruber became CIO at RouteOne LLC, a joint venture of four major automakers, he found himself with more help than he had bargained for. The CIOs of the partner companies—his advisory board—were very opinionated, senior people with more experience than he had. No one was quite sure how to relate to one another. "The situation was really ill-defined," Gruber recalls.
As a result, his first days were filled with too much advice, too much discussion and too few decisions—until he took charge. "I had to assert that this is my show to run and my job to make or break it," he says. "I'd say, 'I've heard all your input. Now we'll do it this way.' "
Between 1991 and 2001, joint ventures increased sevenfold, according to the MIT Sloan Management Review (Summer 2003). CIOs in these hybrid organizations need to learn new survival skills: to serve the start-up venture, but also the founding partners; to leverage the IT expertise of the partners without being overwhelmed by them; and to assert their own authority or cede it.
Southfield, Mich.-based RouteOne is a joint venture of the credit arms of the Big Three automakers—DaimlerChrysler Services North America LLC, Ford Motor Credit Co. and General Motors Acceptance Corp. (GMAC)—plus Toyota Financial Services Corp. It was formed late in 2001 (Toyota joined in 2002) in response to dealer requests for a Web-based credit aggregation system. Dealers wanted to complete each customer's credit application once and send it simultaneously to their in-house credit companies as well as independent lenders for immediate responses. Previously, each lender had to be approached separately, and responses took a long time.
The heads of the four global finance companies realized that because so many of their processes were similar, they could form a joint venture, with each investing less and gaining a better system sooner. That's how RouteOne was born.
Since then, a team of 50 RouteOne employees, half in IT, have built a system that's securely integrated with back-end decision engines at more than two-dozen lenders. "Web services is really what we're talking about," says Gruber. "We are a gigantic XML messaging conduit with a user interface attached on the side." The system is currently being piloted with several dozen dealers, and after adjusting for dealer feedback, it will be broadly launched over the next several months.
Joint-Venture Virtues
RouteOne benefits from the financial power and expertise of four top companies, each of which has mature, sophisticated technology. Its executives are on loan from the automakers' finance arms; its board of directors includes two representatives from each company, and Gruber heads the CIO advisory board.
The board's expertise came in handy in making some early decisions on core technologies. For example, in discussions of how to handle messaging, GMAC weighed in with the details of its standard technology from SeeBeyond Technology Corp. "We had instant access to people in-the-know as to the pros and cons of this technology," Gruber recalls. He eventually adopted it.
When RouteOne needed to negotiate a key service contract with Cap Gemini Ernst & Young for systems integration services, Linda Taggart, global CIO for GMAC at the time, pitched in to help. "She has a very tough negotiating style," Gruber says. "It was eye-opening and very beneficial."
The parent companies also helped Gruber get his evolving IT house in order. When he tapped Ford Motor Credit for help in setting up his project management office (PMO), key staff members were generous with their time and advice. "They really opened up their PMO book," he says.
But there were difficulties as well. Cultural differences among the partners made communication frustrating and put people on edge. "We'd have long conversations," Gruber recalls, "and at the end, people would go back to their offices and close the doors and breathe for a while and then come back out."
In a joint venture, seemingly simple technical decisions can have political ramifications. "Decisions can create turmoil if one of the owners feels shortchanged because the decision made more sense for the others," says RouteOne CEO Mike Jurecki, who is on loan from Ford Motor Credit.
For example, there are differences in the way the partners identify dealerships. If a dealership has two branches in different parts of town, some count it as one dealership and some as two. "We needed to build a mechanism so that we would not force a uniform definition on all to the disadvantage of some," explains T.N. Subramaniam, RouteOne's chief architect.
Navigating the political terrain of a joint venture is "very difficult" for a CIO, says Jurecki. "My single biggest concern was how [Gruber] was going to handle the three 10,000-pound gorillas he had to deal with day in and day out," he says, referring to the three original venture partners.
Before Gruber was hired, IT decision-making at RouteOne had been a jump ball, with various people taking the lead. "It was a mishmash," Jurecki says.
When Gruber arrived from DaimlerChrysler Services, where he had been responsible for lease and loan programs, asserting his authority as IT chief wasn't easy. "We've got four very mature, very capable technology organizations, and if you get three technologists in a room, you get five opinions," Gruber says. But he learned early to draw the line. "They're an opinionated bunch," he says of the CIOs, "and though I cherish their input, it's my decision."
And Jurecki backs him 100%. "You have to let the CIO do his job," he says. There was some early pushback from the CIOs, Gruber recalls, "but I think it was just a test to see if I meant it. I think it was actually a relief for them that they had someone who was going to make a decision and stick by it."
Still, the CIO advisory board meetings can be "noisy," Gruber says. For example, developing Web services standards was a challenge because several possible standards were still in draft form at the time. Subramaniam's recommendation to develop a "lite" version of the Web Services Reliability standard made some people nervous, Gruber recalls, but he ran with it. "There was some concern that we were moving too fast, but T.N. made a convincing case, and we thought the benefits outweighed the risks," he says.
Gruber likes a good debate. "Your best friends are those who challenge you on your beliefs and cause you to think it through and prove to them why it's a good idea," he says. "There's a lot of that going on, but almost entirely in civil tones."
Gruber has become a "human systems integrator"—able to listen to all sides and find common ground for making good decisions, says Shaun Coyne, CIO at Toyota Financial Services. Along the way, RouteOne has developed its own unique culture, which makes things go smoother than in the early days, Gruber says. But no one claims that it has been easy. "From an IT project perspective, it's every bit as complex as it seems," says R.J. Bussone, IT project delivery manager at RouteOne. "You can never forget about that."
Now that Gruber and the others have hammered out a way of working together, he's looking forward to the next phase. "We really want to hear what the dealers have to say" after the pilot, he says. "And we already have a whole list of enhancements. Release 2 is where it gets kind of fun."
Melymuka is a Computerworld contributing writer. She can be reached at kmelymuka@yahoo.com.
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