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CIO Confessions

Hugh Kelly on the trouble with hiring IT people at the LCBO—and keeping them there

Globe and Mail Update

WHO Hugh Kelly is senior vice-president of information technology at the Liquor Control Board of Ontario, a provincial Crown corporation that operates about 600 liquor stores.

WHAT He heads a 120-person IT department responsible for infrastructure that includes one IBM mainframe computer, more than 200 Windows and Unix servers, about 3,000 personal computers, and more than 100 terabytes of disk storage. In fall 2007, Kelly
was named CIO of the Year at the annual Canadian Information Productivity Awards.

You were named CIO of the Year for taking a patchwork of applications and moving to an IT strategy tied to the LCBO's strategic plan. What challenge did you face when you started?
The largest single issue was the separation of IT from the business. We were on the sidelines rather than part of any strategic plan, and we were in pure react mode for everything that we did. When you're in that mode, you can never, ever gain any credibility or trust.

How did you change that?
The key point was becoming an active member of the senior executive team and reporting directly to the chief operating officer, who is now our president and CEO. So the fact that I report to the head guy is number one. We also have a weekly senior executive team meeting where we sit down and discuss issues.

Number two was that, back in 1998, we came up with our first five-year strategic plan. That was the first time we got our heads above the desk far enough to look out a bit. Since then, IT has also developed an annual business plan. One of the primary objectives of the plan is to bring an articulated and systematic approach to planning, integrating and deploying technology across the organization.

What were the key technology priorities driving those plans that got you where you are now?
Consolidation would be number one—we were very fragmented, in terms of dealing with many technologies and vendors. We spent an awful lot of time dealing with our client communities, trying to get them
to play a more active role in setting the direction and prioritization of technology. Most initiatives now cross traditional organization boundaries, and there's a growing reach beyond the organization to external stakeholders. And finally, we tried—with limited success, to be honest with you—to minimize customization, because we very much believe in buy, not build.

How has all that helped change the LCBO?
It has increased our ability to proactively deal with business demands, and it has reduced complexity in terms of applications and integration.

What's your biggest IT priority this year?
We still have one dinosaur-like technology environment in place—an old IBM mainframe that's running a mission-critical warehouse-management system. Over the past year and a half, we've been moving that over to client/server platforms, and in the last quarter of this year, we'll dump the mainframe, eliminating obsolete technology support issues and saving about $1 million a year. Another key area is PCI compliance [payment card industry data security standard], and as a subset of that, we're participating in a smart-card pilot in the Kitchener-Waterloo area. We've got that in one of our stores now, and we'll be implementing it in six more stores over the summer.

Is it hard hiring skilled IT people today?
It's difficult. We tend to be reasonably competitive at the entry level, but once you get up to the project director, manager, director and vice-president level, we're not competitive at all. Once we get people in, we don't have a problem with retention, because there is so much going on and there is a huge amount of diversity, so people seem quite happy. But after about five years they start to say, "What are my promotional opportunities, and where am I going now?"

The skills are out there. A lot of people are available, and many of them tend to be new immigrants. But one of the issues is communication skills. People are qualified on an equivalency basis and are prepared to accept the salary you're talking about, but if a significant part of their job is communication with clients or with a project team, and that's a problem, then you have to say, "Do I take this person on and work with them on their English communication skills?" We've done that in many cases, with great results.

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