Innovate, But don’t Fall in Love

A lot has been said and written about the CIO's evolving role and the growing challenges that he needs to face in a swiftly changing
technology environment. Yet every time you talk to a new CIO, you will find some uniqueness-in his approach, his personality or attitude, or his understanding of technology, which makes it a very interesting experience altogether.

As the technology head of an R&D focused company that predictably requires complex technologies to enable productivity and higher value for its R&D engineers, Neil Kole, Global CIO, Cadence, sure has some daunting battles to fight every day. Especially as the company has been on an expansion mode with some significant acquisitions happening in recent times, the need to successfully integrate was paramount.

Kole takes us through some valuable realizations he had in his career, also telling us why he thinks M&A integration can be the route to attaining strategic power, and why innovation and trying new things is good, but not at the risk of falling in love with it.

THE NEW GAME PLAN

Today the CIO's role has evolved much more to be able to connect together solutions that are built by a much broader range of companies.
Cloud applications have changed the game and the CIO's game is about balancing-do you build things yourself or do you buy things or do you enhance tools. There are many more options than there were ever before and wading through and figuring out how these options play together is much more complicated than in the past.

Electrical engineers in companies like Samsung, Fujitsu, Hitachi, and so on, need to build electronic circuits and they leverage our tools and products to do that in a way that is very automated and saves tremendous amount of time.

Our current challenge is that how do we enable the company to grow faster. What can we do in IT to support two key teams better-the team that builds products and the team that sells products? If we can drive just a small amount of productivity for those teams from within the IT organization, it will have a significant impact on the company's bottom line.

Most of the companies I had worked for had very intelligent R&D engineers who had very strong opinions on technology they want to leverage and they had a good understanding of IT. That's something unique to an enterprise software company. This is very apparent here as well. What is unique about Cadence as compared to any of my past employers is simply the amount of computing power that they require is exponentially more. So we spend a lot more time and money delivering services to R&D engineers here than I have ever done before.

THE CIO'S ROLE IN M&A INTEGRATION

The first thing that we do is we realize that within IT we are the foundation for the company and when we acquire a new organization, the faster we can integrate them, the more quickly we can connect them to our network, the more quickly they can become part of Cadence. So network connectivity, email, calendaring are different tools that we use to make the collaboration better. We roll out global tools like Webex, which allow us to connect employees no matter where they are.

The big challenge with M&A is that when we acquire a company, we want to realize value out of that company as quickly as possible. So if we can lay an effective foundation, we accelerate the time it takes to integrate these companies. My goal is always to integrate an acquired company within 90 days. The typical metric in the industry is somewhat more than that and the reality of how long it takes to integrate an acquired company is often in years, not in days or months. So IT is in a unique position as we touch every function in an acquired company to drive a lot of value. HR can't do their integration if we don't do our own. R&D cannot guarantee that code would be secure and well managed if we don't step in.

Earlier on in my career I realized that the best way to get visibility in a company is to participate in M&A integration because that's the place where I would meet senior executives within the firm and be in a position where they wanted something from me. They needed me to execute within IT in order for them to be successful. So it really raises the strategic power of IT and gives us the chance to be more than just a commodity service provider and be much more strategic to their success.

LEVERAGE TECHNOLOGIES FOR COST REDUCTION

Like in most technology rich companies, the demands on IT are never ending. There will always be demand no matter how much we provide. There have been some historic technologies that we have leveraged to realize significant economies of scale and cost reduction. Things like virtualization have been around for many years and there isn't any more money to save there at this point. But there is a whole new frontier that is starting to push the boundaries and that frontier is around automation. So the next opportunity for us is around taking the labor out of the equation. In cadence it is not about reducing our staff, but by automating the tasks, they can perform much higher value work and we can drive much more productivity.

CLOUD, SOCIAL, BIG DATA-WHICH OF THESE IS THE BIGGEST OPPORTUNITY?

The biggest opportunity for us in the short term is cloud. The most important benefit in cloud is the elasticity that it provides. If we can seamlessly and safely move our workloads to the cloud and pay a small fee, there is a huge ROI there. The cost that we pay is very
small compared to the benefit that we get.

WORD OF ADVICE FOR CIOs

Whatever we provide, whether it is for internal use or external use, has to be secure. Security is paramount. Availability is second most important area. IT needs to be like electricity, you plug something in the wall and it works.

What can we do to drive innovation for the company? What can we do to drive shareholder value and to enable the key teams? That is what we need to focus on.

THREE ESSENTIAL QUALITIES FOR A SUCCESSFUL CIO

Listening to what customers are telling us, and being ready to take them up. Our internal customers want us to feel that we are carrying the burden of their problems and we are going to get it resolved.

Being able to support the company's strategic values and provide a solution that really makes a difference.
Ensuring that everything we buy has a strong return on investment. Make sure that every dollar we spent is spent as if it's our own money.

IDENTIFYING THE ‘TWO OUT OF THE TWENTY'

I tell my team that we want to innovate, we want to try new things but we don't want to fall in love with them. If something doesn't work out, we quickly say it didn't work, so we are going to try something else.

A lot of what we do is like investing in start-ups. There may be twenty start-ups, and two of them might work. In IT we may try 20 new ideas out of which two may have a big impact to the company. That's where we can add value, by finding where the two innovative solutions are that can really make a difference to the bottom line.