Just before the Easter break, I had a conversation with Paul Wright, CIO Accuride. He and I have spoken on many occasions and it's always both a pleasure and instructional.
On this occasion I wanted to find out how Accuride is responding to the COVID-19 pandemic since Accuride has operations in China, Russia, Germany and other parts of Europe as well as the US and Canada.
As expected, the company saw the impact early on in January when China was effectively shut down for several weeks. Russia was literally lights/lights off as that country reacted vigorously and then lockdown spread west through Europe. Surprisingly, Accuride, which makes wheels and drum brakes for the automotive industry is classified as an essential business in the US and Canada and continues manufacturing operations. However, the company has made adjustments for staff that do not need to be on site.
The first order of business is to ensure that our people are as safe as possible and look after them as best we can but it always comes with challenges. There's a minefield of stuff to work through. We can't have people who we're saying are on furlough, that can't work but are still essentially part of our team and have them receiving a bunch of emails and a bunch of calls and them somehow feeling obligated that they've got to go in and they've got to do work. That's then going to put a chain of custody problem into the company. And so we've got to make sure that we are restricting that access. So even when people want to do the right thing by the company, we stop them.
Wright says that creating new processes to handle this situation has been surprisingly straightforward, provided people have internet connections at home since much of Accuride runs on SaaS applications. However, it's not been so easy in those countries where they cannot run SaaS operations such as Russia. In Wright's words:
We've had to do some wonky stuff. But as we've ramped up tools like Microsoft Teams, I have to wonder what the future will look like and whether we'll see more people working at hime. Right now it's hard to tell what will happen.
So far so good but how about innovating in a period of crisis? According to Wright, the problem many businesses face is that we've lived in a period where cash conservation is not a top of the agenda item so there's very little cash available with which to innovate. But it's not impossible. Accuride has an IT landscape that includes Plex, Workday and SAP. Most recently, the company has used Workday to develop opportunity pipeline tracking.
We were using Oracle's CRM system. We're able now to bring in all of the results from Plex and show our performance against our sales forecasting. We've got that at a level where we've got it down to the individual ship. We can build opportunities and then track our performance against them. I don't think we expect our own internal software developers to compete with what Salesforce could do by any stretch of the imagination, but I do think that our needs are pretty low key. My big thing is always if we can have as few landing spots as possible, so a person has a natural workspace where they're doing everything they need., We've achieved that.
Earlier in the conversation I wanted to get Wright's sense of what the current pandemic means for technology negotiations. While this may seem counter-intuitive, he says:
It will be interesting to see what happens as SaaS contracts come up for renegotiation or where firms have downsized and no longer need the number of licenses they have today. If you're building your business model on what happened in the last year then licenses are going to go through the floor.
Wright reflects what we are hearing more broadly in the market. Brian Sommer for instance is advocating for a fresh approach noting that some vendors are taking a position that assumes behavior that suggests business as usual:
Don’t expect much from some vendors. When one industry analyst asked a major ERP firm this question on an analyst call over a week ago, we finally got this non-responsive, response:
____ERP Vendor___ has historically seen sales surge during and immediately after major market downturns, as organizations recognize that investing in best-in-class ____ capabilities is more essential than ever…... ____ERP Vendor’s __ role in helping customer organizations to weather this kind of storm have been well documented. To show solidarity with our customers, we have introduced no-charge ___ (names of small web apps)___.
Translation: We never cut our fees even if your firm is in a fight for its life and the planet is in the grip of a pandemic. We hope that short-term access to a couple of small apps will make you forget about that big subscription fee that’s coming due.
Elsewhere, I am hearing about buyers who are insisting that their providers behave with the same compassion for customers that they say they apply to employees. That includes changes in terms to allow for shorter contract duration, payment holidays, reduction in license needs. But it is far from universal.
As we concluded our conversation, Wright put out the tantalizing opportunity to demo the pipeline tracking system his team has developed. That will be a treat and, perhaps, a chance to show readers how innovation can work across applications in the online, cloud world.