This month our series of ‘Five Solid Questions with…’ continues with an interview of Mike Rosello, CIO of Alliance Data. If you would like to see past interviews with Brian Shea, Ron Frissora or Denise Zabawski, please see the links at TechLifeOhio. A big thanks to our interviewer – Steve Gruetter, Director of Market Strategy at Expedient and dedicated supporter of TechLifeColumbus and the Central Ohio IT community.
STEVE GRUETTER: Mike, you have been a CIO here for nearly eight years. At what point in time, in your career, did you decide that you wanted to be a CIO?
MIKE ROSELLO: Well, when I was doing more engineering work, trying to go between different platforms, it seemed like it was a little more too contained for me, so I went into architecture, which is a little more broad-based. Once I got into architecture, the work shows a lot more of the bigger picture, and I wanted to combine architecture with the business acumen and the finance background that I have. That is only about a couple of jobs in this world, but CIO is one of them – So let’s go do that. From an education perspective, I did want to leverage all of my experiences and my education, and much of it was business and finance, with the balance IT, and I wanted to combine the two. So a CIO role was an actual fit for strategic thinking, as well as, still staying with your technical roots.
STEVE: As you were working up, and taking those steps, did you have anybody in particular that was mentoring you or was it self-guided?
MIKE: There was a lot of self-guided work there. I did have some key folks that were instrumental in the process, but they actually weren’t as much technical leaders in the industry at the time. They were really more around executive coaches, some of which I still have today.
And it was really about, is ‘what I am going to do is provide you guidance on how to work around the navigational landmines that are going to occur for you to get there.’ It was much more about the business navigation and negotiation that occurs. They took for granted that you know what you’re talking about technically, so let me tell you the other side of the world you’re going to deal with at this level. That is really where we focused, and I got the most leverage and most help from executive coaches at this level. Also, I had some very senior-level IT folks that helped me along the way as well. Some of which was just giving you opportunities and seeing if you sink or swim in those opportunities – and those are very important. You have to find how you break through that glass a first time. There is other IT leaders from past companies that I worked with that I called and drew upon, but it had nothing to do with my current role or my current company.
STEVE: So it was really the development of your personal network?
MIKE: Yes – and when you get the opportunity, you try to make the most of it.
STEVE: Alliance Data is certainly a growing organization. As we can look outside here and see the mounds of dirt.
MIKE: This organization was actually the pinnacle of everything that I had thought it could be years ago. I was the first actual titled CIO for Alliance Data Card Services, so I got to kind of blaze a trail. There is not a lot of hierarchy or bureaucracy between our various units. I report to the president, and we all make decisions quickly, we make them together, and the business continues to keep going forward. We have a high-growth company, the book of work, or the volume here, is really challenging. It is not the prototypical CIO job, as I have a very large part of operations, as well as IT. When you start combining the day-to-day operations side of the house, which is a couple hundred people, and then you’ve got 300-plus people in IT. Now you’re managing all of the intake, and you also have a supply side responsibility, as well, to provide the output.
In any given year, especially the last four or five years, our volume that we’re managing is somewhere in the neighborhood of 55 to 60 concurrent major enterprise initiatives a year. We’re launching anywhere from 15 to 20 new businesses a year, on top of managing the existing client base of 160 clients, which produces somewhere in the neighborhood of 1,200 to 1,500 work requests a year. That’s what the job is – it involves everything from technical decisions to financial decisions, to negotiations, contracts, you name it. Any given day of the week, you’re wearing a different hat.
STEVE: Within those different hats, is there any one that you enjoy most?
MIKE: I actually am coming around to enjoying more of the business relationship negotiation side, actually. I kept the heads-down, hardcore IT-type work for a bunch of years, and that was fine. The operation side of the house has been a different challenge. The negotiation side of the house has been, probably, the largest challenge. We have seven other demand towers, whether it’s marketing, whether it’s IT, it’s the care centers. There’s only so many hours in the day, and there is only so much money in the pot. So sometimes you’re delivering bad news, and sometimes you’re making vendors happy.
STEVE: Do you work out of a prioritization schedule with your fellow leaders?
MIKE: We have governance teams that come in and prioritize things and we have the PMO that interjects, and we have a new group we created called Enterprise Demand and Delivery that does all the intake, and all the resource management associated with the intake. Then we just get this heat map of what can I do in 365 days, based off what I have, and what my budget is, and what shakes out that I can or cannot do. I create an ‘I can’t do’ list, then I run around all of our buildings with the ‘I can’t do’ list – And I am not a fan favorite around here with that list. At the end of the day, if you produce something for everyone, and that’s our goal, and you just produce as much as you can, and you’re transparent with every single one of your business constituents about what you’re doing, even if it doesn’t benefit them – you build the trust between the teams.
STEVE: It sounds like you’re all rowing in the same direction.
MIKE: We are rowing in the same direction. The bumpy part along the way is, when you’re changing the engine on the plane, while the plane’s in the air. You’ve got to build the process and the frameworks along the way. You can’t wait until you have this pristine perfect framework, and then go and interject a mass amount of volume into it. It’s always changing and that is really the challenge here. This isn’t something you learn in a computer science 101 class – this has been the most intriguing part of the job.
STEVE: When you are working with those deliverables, you’re providing for this tower or that tower – do you have specific outcomes that are part of every project? When we’re working with our clients, we find most projects touch on some common themes for outcomes. Risk mitigation for example.
MIKE: We have plenty of filters as, at the end of the day, we have regulatory pressures. We have the FDIC and the CFPB that have requirements and demands for you to operate as a financial institution. A portion of your labor and a portion of your bucket of work has to meet their requirements. We have a compliance department and a law department that we consider a mandatory aspect of our business. We carve out 20%-25% of our total labor pool that’s associated with mandatory compliance measures. We also carve out another 20% that’s associated with new business. Of course, you get all your projects that come in that are associated with earning new business. You’ve got another 20% that’s associated with supporting your existing portfolio.
STEVE: And then you refine the projects that make sense?
MIKE: Yes, you’ve got 1,200, 1,500 initiatives that come in with that bucket, although they’re smaller, smaller in size, smaller in time, smaller in cost. There is a portion of your labor that you have carve out to accommodate these projects. At the end of the day, then your pie is full, so you might start looking at staff augmentation opportunities to get your pie larger. So any given day, I’m running somewhere between 80 and 110 contractors here as well our staff. Then, at some point, which we have hit multiple times now, it’s no longer an issue about money or people. At some point, you hit the ceiling, and I simply do not have any more days in the week that I can promote code of any sort into the public domain, into the production environment. Once you’ve hit the calendar issue, I can’t change the calendar. That’s when you have simply stepped back and said, I believe this is what full capacity is. I honestly think, and I’ll share this with my business constituents, this is what full capacity looks like. Now the question is about prioritization. Did we fill our capacity with the right stuff? And that’s where we are as a business every year. Especially at this time of the year, because we have about 10 months to get 12 months of work done, in this kind of business. So the question is, did we prioritize and make the best decisions and spend the money the best way possible?
STEVE: Does your team have the time to do postmortem on those projects?
MIKE: Yes, you have to find the time to do postmortem. We have a positive success rate, but that doesn’t mean that everything that goes out the door is of the quality we wanted to do. Sometimes we might have to slow the train down a little bit to make sure that we can push more quality out. I think it bends throughout the year. When you’re pushing that much through the pipe, things can sometimes break and sometimes things bend. You can’t be shortchanging your testing cycles. You can’t cut this corner and that corner to promote something to production to get it to market faster, or the customer experience is going to pay, just because you wanted to get to the marketplace first before your competitors. So you really got to keep that criteria in your head all the time, anytime you’re looking for a more advance execution date.
STEVE: We’ve got a similar challenge, in relation to the quality of the output. You can’t rush and rush and cut corners on validating the integrity of the environment, especially when you have a 100% uptime SLA.
MIKE: Yes, so do we.
STEVE: Right – that’s your uptime back to your internal clients. So the fact of the matter is that you are a financial institution – and you have to be up all the time. So you can only push it so much because it can’t waiver from this line, right?
MIKE: We got to make hardcore decisions in regards to the support we need to provide to the business. We have had to make decisions that we use external partners for, that we’ve had to bring in-house just to keep that SLA so high. We’ve outsourced disaster recovery as we could no longer could run it ourselves, because the SLA. If you had a geographical event, wasn’t sufficient enough in the former contracts to use a third party before you could get your environment back up. We have also had to make changes to our authorizations platform because, as you know, folks are buying things at 2:30 in the morning now on the web. It used to be that, at the end of the day, brick and mortar stores are only open until 9 p.m. Well, that day is gone. So you got to be able to authorize changes at 2 in the morning, when, typically, your maintenance window was midnight to 5a.m. Well, that’s fine; you can have a maintenance window from midnight to 5:00 a.m. again, but make sure you have another environment that people can go open up new accounts and authorize. It is a 24×7 world. And it’s 365 day a year world.
STEVE: Do you find that from a couple of days before Thanksgiving, until a couple of days after New Year, is your heaviest cycle?
MIKE: We would. Nov.1 to Jan. 14 are hard, hard volume months with authorizations, and authorizations volume will go up five-, sixfold. New accounts volume will follow, so Nov.1 is really the start for the big brand names. There’s no longer a Black Friday, as the only day everybody goes out and shops anymore. Brands have stretched it out so far, that it’s almost touching October. You can really start seeing those escalations right at the beginning, at Halloween, so on Nov.1, the brands skyrocket activity with the promotions and such. It’s interesting because Black Friday, although it is still big, it is very big, it’s been spread out so far, that it’s not as big as it used to be. We’re at the season right now where you really need to get out to your client base and ask ‘What kind of promos are you going to run? Which days are you going to run them?’ Because we need to prepare a back end to make sure we can support that. If you’re going to do some huge promotion on Nov. 5, we need to make sure our call centers are ramped up ready to handle exponential call volume. From an internal view, are our machines ramped up? Are we doing an upgrade that month, trying to do one more final push before holiday? We really need to know what our brand partners are going to do from a big splash perspective before holidays, or during the holiday season, more so in today’s retail economy rather than when you knew that everyone is waiting for the same date and the same couple days of the week. We could be ready with an army right there with them those few days of the week. Well, that’s long gone.
STEVE: We have talked about your critical list of your exceptional list of projects that you get done annually. How do you measure success here? What’s your measurement of success as an IT organization?
MIKE: Some of them that are subjective; some of them are more tangible than others. One is aligning to the company’s financial goals. We are responsible to on-board all new business and that new business is absolutely instrumental in us hitting our accounts receivable targets for the year. If the new businesses don’t launch on the exact day that they were supposed to launch and they were financially modeled for the year, then we’re not going to hit the revenue. Our business is a measure of success that we have hit the dates for all those new business launches, and the dates that we were told throughout the year that we needed to hit, so that’s directly correlated to the finances. The other side of the house, let’s go all the way to the bottom line, which is the operational expense and the capital expense parameters. I spend a lion’s share of the capital to this organization, so it’s a matter of watching every one of those dollars. I would say that my capital expense budget and my operational expense budget are very large, but it is very easy to overrun them or hide or bury things in them that are unproductive. My CAPEX and OPEX lines, in general, are tied to my organization’s bonuses and their IT targets. Everybody who is a direct report of mine, who has very large towers, needs to understand the fiscal responsibilities of their jobs. A measure of success is making sure you hit your CAPEX and OPEX target, and if you do not, then it will be directly correlated to your bonus, so 20%.
We’ve got some more measures of success. Our customer satisfaction survey, for example, we do very aggressive surveys done by a third party, extensively surveys all Alliance Data associates. It is very important for us to have really good survey results, because not just about the work, it’s about culture here. A key measure of success as well that is tied to performance is our surveys and our feedback and our scores. We care about what you’re doing and how you are leading. How are you on-boarding? How are you mentoring?
This is very important for us as an organization. And our survey scores are very, very good, in the 90s. The feedback in there not only when you do the survey and you get your score, great, pat yourself on the back, we actually have action committees that are set up for all the feedback and that is in our surveys, creating actionable results for all of it. So it’s not like – ‘I’m just going to say this stuff, and it’s going to fall on deaf ears, because nothing’s ever going to happen’. No, what’s going to happen, it’s going to be documented, there’s going to be owners associated with it. And if they don’t show that they took action on it, then there is going to be consequences.
The number one thing I would say is that, from me and my leadership team, we are not here to be paid just to be IT folks. This job is 50/50. You got your IT delivery, you got 50% of our leadership skills. It has to be equivalent or better than your delivery.
STEVE: How do you approach leadership training?
MIKE: We do offsite with Ohio State Business School’s business programs from a senior leader, six month programs, and executive leadership. We do our own site leadership, it’s everywhere. Several different measures of success, it’s not just about crossing out the objectives on your white board.
STEVE: What is the best part, and worst part of being an IT leader, right here in Central Ohio?
MIKE: One the best parts of being an IT leader in Central Ohio, and it’s been progressing over the years, is the IT leader community that’s establishing here. Columbus, or Central Ohio in general, is big city. But the IT leadership forum in the community, and the communication between the IT leaders, is not to where you really have to struggle to find it or give conversation or information. I’ve come from New York, so it’s really refreshing to bounce ideas off your peers in town. I do a lot of calls with different sales for things that they’re about to ramp up projects, or whatnot, that I might have already done, and it happens all the time – and it’s really great to do that. Because I’m part of worldwide forums, like the CIO Executive Council – that’s a very scheduled, very time-oriented type of process to talk to another CIO who might be working in, for instance, a ski lodge in Colorado. It’s just a different type of engagement than it is locally. It’s very easy, it’s very flexible and conducive to our schedules, and it happens often. So I love that part about being an IT leader here in town.
STEVE: You’re not the first local CIO that I have interviewed to say that either.
MIKE: It’s a good thing.
STEVE: It is a good thing, because what the culture that Angelo (Mazzocco) and Ron (Frissora) and people like that have fostered, I think it benefits all of us.
MIKE: The unfortunate thing is I want to make sure that I’m helping the local communities and involve our partners as much as I can. I do a lot of business with our local providers, and I have been for years. These are companies that you very well know that are selling to us, that are doing not only product but also engagements for us as well, on a consultative side. The problem is, there’s a lot more of them than there are me, so many of them I cannot get to. I know this because I get the emails and phone calls – and the hardest part is that you can really get saturated by that. So you have to make some calls, and you have to make some preferred providers, and some preferred partners. Sometimes you’re going to come across others that you didn’t do business with throughout your tenure here in the community, and it’s not a personal matter, it’s just there’s only so much you can do. There are only so many firms you can work with, and you know, that’s probably similar to any larger metropolitan area. I get around the community, and I try see a lot of folks.
STEVE: What aspects of technology do you view as most important changes coming up in technology over the next two to four years? What is the biggest thing that is going to help you as technology changes?
MIKE: So for my role, and for this company benefit, the transition to the digital and the digital landscape has been already a very deep journey for the past two years. We have another two years ahead of us, if you were to look at our digital road maps in regards to the industry, whether or not innovative, or similar digital capability of the marketplace. What we’ve already been able to produce and put out there and what we have coming up and that trajectory will continue.
Obviously, data analytics is not new to anyone, or it shouldn’t be at this point. But what you’re doing with data will also matter to this company, and for my group in particular, data is a competitive advantage if you leverage data properly with the right tools and the right people backing it. This is my data road map here and what we’re about to target here for the next two years, and when this is in the marketplace, this will set us up for at least a couple of years. No one gets too far ahead of themselves in this market, but this will give us a good couple year jump on the competition. So between digital and data, those are where we’re going to be really pressing a lot of capital. We already have been pressing a lot of capital into information security as well. We’ve got some really new innovative products that are going in information security landscape right now. They’ve already been purchased, the teams are actively installing and configuring them now. And then, you know if we win that game, you basically are, you’re doing great if you’re out of the news. As you know, you never win that game, but you can’t turn your back on that game either.
STEVE: No, but you can lose.
MIKE: You can lose it quick. So those are the three areas of focus for me.
STEVE: Professionally, what makes you the most happy?
MIKE: I am happy walking around here when we have executed on the plan, on the very structured, regimented, no surprise individual, I consider myself pretty organized. I know in my head everything that needs to have to be done. When I’m driving on 270 to work and driving back on 270 to home, my head is spinning with deliverables that I know are outstanding and have not got across the finish line yet. It makes me absolutely miserable until they get across the finish line. And when they do get across the finish line, I’m ecstatic. So if it’s on time, it’s on scope, it’s on budget, and if it a quality job, if all the partners are happy, I’m happy.
