Don’t Ask David Harkness About ‘Hard Savings’: The Interview with the CIO of Xcel Energy
What is the most valuable project, program or innovation your IT organization has delivered in the last 12 months?
As a company, we are focused on finding new ways to give better service to our customers. We are a regulated entity, so we are the only game in town for our customers when it comes to buying natural gas and electricity. That makes it even more important for us to stay focused on the customer experience. I’m proud of the fact that we have built a customer self-service portal and 50 percent of our calls are handled by an IVR (interactive voice response). I don’t care what kind of organization you are, that’s pretty good.
What does your IT organization do best?
We are not there yet, but we are getting very good at client focus and how we align with the goals and strategies of the individual business units. We have also developed a culture of transparency in terms of how we make decisions. As a business leader, you might not like that we picked a different project to work on than yours, but we are going to explain to you how we came to that decision, so that you can see the importance of that other project. We have done some reorganization so that we have an account management group dedicated to client interaction. This group owns the internal customer.
"To me, you’ve broken the CIO Paradox when your CEO leads with IT."
What kind of background do you look for in these account managers?
While people with only business experience can be successful in these roles, we have found that people who have IT backgrounds are more successful than those without IT experience. The IT people need to be able to speak business language, but they also need to have some grounding in technology.
Does your IT organization have a motto or mantra?
“Leveraging technology to improve productivity.” That statement is actually becoming the company mantra. We are in one of those industries that tend to have a lot of long term employees, where the average employee age is over 50. The aging workforce issue is very real to us, and one approach we are taking is to simplify work processes. Whether you like it or not, someone new to the business will not be as productive as someone who has been here for 25 years and knows all of the side doors and secrets. We need to use technology to get new workers up to speed as quickly as possible.
For example, we use mobile data terminals, laptops in our trucks that dispatch work orders and draw a map to the location. The majority of the workforce does not need that laptop. For example, they’ve been using paper maps in a phone book for years. But when you bring in the next generation of service people, who have never done it the manual way, those systems become incredibly important.
What is one IT word or phrase your business partners would like never to hear again?
“Hard savings,” as in “In order for us to approve this project, we need to identify hard savings,” which really means that their budget will get reduced by whatever money the IT project saves them. If their hard savings equals six full time employees, then they will lose six people when the project is complete. You get to the point where there is a disincentive to do an IT project because your budget will get cut. Let’s reinvest those savings rather than cut your budget.
What is the most valuable conference or event you have attended in the last 2 years?
For me, it is a utility CIO conference hosted by Energy Central. We are all CIOs of utilities and we are facing the same exact problems, but we do not compete with each other. Can I look through your IT strategic plan? Sure! I’ll send it to you. As an industry, we are so fortunate because we can share information freely, which benefits all of our customers.
What technology innovation or business trend are you most excited about?
The whole mobile device explosion is incredibly exciting as a consumer, but to an IT leader, it is scary as anything. We used to carry around a cell phone and a pager, but several years down the road, everyone will have a single device -- some form of tablet for your home and your work. This raises all sorts of questions: How do you keep your work and personal spheres separate? How do you make sure that when you are home, your kids aren’t approving work orders? As CIO, when an employee loses a device, do I wipe out the whole thing? Now, we worry about what’s coming in and out of the workplace on a thumb-drive. What do we do when employees can take devices to Starbucks all over the world? There is huge complexity to that.
If you were not a CIO, what other profession would you have pursued?
My dream job would be a groundskeeper and mark baseball diamonds for Major League Baseball teams. Every time you finish a field, you would think, “Oh yeah, that looks awesome.” You’d have real job satisfaction every day. Sure, you’d have occasional weather related pressure, but that would keep it interesting. And your job would be important: you are the only one to decide whether there is a game today. But I wouldn’t do the job in a dome. I would have to be outside.
The CIO Paradox is a set of contradictions (IT “and” the business, for example) that can prevent CIOs from delivering maximum business value. How do you know when you have broken the Paradox?
Last year, our COO became our new CEO. As he was laying out his vision during his first address to the company, he said, “We have aging systems and we need to make investments in new technologies.” In subsequent communications, he talked about leveraging technology to improve productivity. He’s not saying that we need to fix IT. He is saying that he has faith in the IT organization and believes that it is an important part of our path forward. To me, you’ve broken the CIO Paradox when your CEO leads with IT.
About David Harkness
David Harkness is Vice President and Chief Information Officer for Xcel Energy. In this role, he is responsible for all information technology operations and governance, cyber security functions, and the company’s business continuity program. As CIO, Mr. Harkness is expected to drive innovation and transformation in the company by leveraging technology to create business value.
Harkness joined Xcel Energy in 2009 from PNM Resources, where he was Vice President and Chief Information Officer. Mr. Harkness held a number of key leadership positions within PNM Resources, including Executive Director of Business Transformation, Executive Director BPO First Choice Power and executive aide to the PNM Resources CEO. Prior to PNM Resources, Harkness held a variety of IT management roles for MCI, McLeodUSA and Rockwell International.
Harkness holds a Bachelor’s degree from the college of Liberal Arts at The University of Iowa with a double major in Computer Science and Applied Mathematics. He has attended the University of Idaho Utility Executive Course and has completed several executive education courses from Kellogg School of Management.
While in New Mexico he was appointed by Governor Richardson to serve on the New Mexico Information Technology Commission to establish/manage IT Strategy for the state of New Mexico. Additionally, he is active in Junior Achievement, youth sports, and has served as Chairman of the Board for the College Success Network, a non-profit focused on improving the access of post-secondary education to New Mexican youth. He also serves on the Board of Directors for two non-profits located in Minnesota, BestPrep and the Minnesota High Tech Association.