Whether it’s hardware, software or a toaster, planning for when a product should go through End of Life can be a risky and grueling journey if not handled properly. From when to announce a product’s EOL to addressing existing customer needs and wrangling the decisions and needs of supply chain, marketing or even PR, a product’s EOL demands a lot of moving parts. The way a CIO handles this transition could be expensive and risk a company’s goodwill. What are some of the biggest challenges organizations are facing with EOL transitions, and how can they make it a cost effective process?

Contributor

• • Bill Chapman, VP of IT, Arrow Electronics

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Transcript

Sanjog Aul [00:00:27]:

Hello, and welcome to CIO Talk Radio. To learn more about the show, please visit www.ciotalkradio.com, and as always, we invite you to join the discussion on Twitter, #CTR live. Today’s topic is Effectively Managing End Of Life Transitions, and our guest for today’s show is Bill Chapman, who’s the Vice President of IT for Aeroelectronic. How are you, Bill? How is life treating you?

Bill Chapman [00:00:51]:

It’s great. It’s a nice day today in Colorado, so I’m having a good day. Thank you.

Sanjog Aul [00:00:58]:

Great. Now we have, processes galore for helping product line, owners determine when or how to launch a new piece of hardware or software or a widget, including how to market it and make it successful, but there comes a point when you need to sunset a product or a solution that you may be offering. Often CIOs and, product managers go well past that point because they don’t have a strong process. So today, we wanted to dig into some of the challenges that may be associated with the end of life of, such a product. So, Bill, starting with this whole, product life cycle, we know that we look at a lot of different areas when we are launching a product, and when you are trying to make sure that you have once you’ve captured enough value and you made enough money, if you will, from that offering and you want to sunset it, does that lose steam? Does that lose focus in most cases?

Bill Chapman [00:01:59]:

Yeah. It certainly appears to be the case. When IT practitioners pull together equipment renewal programs and those type of things, they tend not to consider adding services or capital expenses to secure the retirement of their assets, the disposition of the associated logic or storage devices and those type of things. So it’s kind of a second thought and I’ve known companies with large storage areas full of retired electronic assets that have been set aside for years even and they still contain intellectual property, and there’s concerns that the CIO should have regarding ensuring that the intellectual property isn’t dispositioned improperly, that it goes on and passes on to somebody else, and the assets could end up in landfills with asset tags pointing back to their companies, and they also need to be able to trust that the disposition of those assets have been effective, right? And it’s difficult to find the staff that’s focused on that because that’s not their primary duty. So, this, of course, is a dilemma. So they cannot deal with this end of life piece for assets.

Sanjog Aul [00:03:22]:

So would you say the end of life is a little not exactly depressing, but something which is not gonna directly add to the top line growth or bottom line savings? It is more like a necessary evil because you want to call it what we call sometimes as creative destruction, where you would let a particular product or solution go for it to be replaced by something which is more in line with what the market wants today, and that could very well mean, for a product company, which is launching a new product and also an enterprise application, which a CIO might be retiring or sunsetting just to make sure that people are now going to let go of that old system or software and make room for the new. So do you think that is a challenge because people don’t have a connection to the top line growth or bottom line? Like, direct impact is not there, and that’s why there is a stepchild syndrome?

Bill Chapman [00:04:23]:

Yeah. I think, the the focus on the company and it’s natural and it makes a lot of sense is essentially, looking at the strategic end of things that they’re trying to create new market opportunities and strategic growth, and so you go off and you make, let’s say, a strategic plan and that strategic plan is about doing something different, something new, and so when it comes to the tail end of that thing that says, okay, I’m going to upgrade my equipment set, I’m going to put new, let’s say, new databases in our whole new application series, you tend to get new equipment sets, there’s lots of capital associated with it, but it’s hard to say, what am I going to go do with these old assets, with this old database, this old knowledge type stuff that we have and ensure that we have a proper migration of the data that’s critical for retention, but also we have to figure out what are we going to go do with those physical pieces of equipment that are sitting there, right? And so that’s not strategic. So that tends not to be the focus, but in the end, it becomes a real boat anchor, right? And so it’s good to have a way to address it, and I think the industry has changed over the last 15 years. I remember, as I said before, there’s big storerooms full of old equipment that’s been retired, but now there’s services and companies that can help you through this. You don’t have to have that expertise and now it’s at a reasonable cost too. So, I think it’s kind of an awareness because now there’s a whole industry that has matured around this and it can help out with the CIOs, especially they can focus now on the strategic plan and the impact versus some of the stuff that they have to do in the background, such as retiring old assets to be effective.

Sanjog Aul [00:06:24]:

Now so interestingly, the trend that we see now is most organizations want to leverage cloud or other type of services, which would reduce at least the dependency, and yes, there are organizations who use, on premise hardware and software and you name it to run their IT, but there are quite a few people who are moving towards, cloud or other types of managed services. Do you think that is going to reduce the the the pain, if you will? Because they were, anyway, not looking at it. It was causing them a nagging pain, and perhaps this would be a direction in which organizations are going, which is gonna reduce or remove that nagging pain.

Bill Chapman [00:07:05]:

Well, you know, to some degree, it may, but it just passes to a different, entity. Essentially, if you’re going to a hosting service, then, you need to make sure that when the hosting service renews their hardware and their environment, that they’re disposing of assets properly too, and I know Arrow has formed a total, let’s say, end to end process going from everything from how do we transport the equipment and those assets securely, how do we assess and audit that everything was actually shipped properly and transported properly to the processing center, how do we address what this asset is? How do you properly delete it? Because some assets are very difficult like cell phones, they have flash memory in them and those things have a whole different storage technique than the old hard drive type technology, and so, coming together from an end to end perspective and going to a professional, that’s great, but these hosting companies now, these cloud service companies, they also have that responsibility now. It’s just kind of moved to a different, let’s say, entity, but I think it’s still the CIO’s responsibility to ensure intellectual property of the company is disposed of properly. So they still haven’t lost that headache, and so they need to make sure that whoever their service provider is or hosting service provider is properly disposes of that equipment also.

Sanjog Aul [00:08:49]:

So that was regarding the equipment side, so tangible things. Now let’s look at the enterprise portfolio, if you will, and or an operating system that, a software maker may be producing, and now they say we are going to be looking at adding new features or fundamentally redesigning the architecture, and that’s why we will have an end of life for that particular product, which means all the goodwill that we generated and all the knowledge that we created in house related to that product, all the the investment that was made in building a consistent marketing machine. I mean, you name it. It’s all been put on the hook to be removed and replaced by something brand new which we don’t know where that’s gonna go. So how does a company look at planning such a major, risk undertaking, if you will? Because you’re going from something which is tried and proven, but for some reason, the market doesn’t need that as much or they think that they will be able to do better as a company by providing a newer piece of software or solution, and thus they undo everything they did over the years.

Bill Chapman [00:10:10]:

Yeah. That’s a really, interesting problem, but we deal with that, you know, throughout our careers, right? The, we see that with the email systems and ERP systems where they’re really not compatible with their earlier versions and stuff like this, and so, it’s a major move, and you’re seeing that also with some of the operating systems. So, making those transitions is something that happens quite regularly, and normally, you have to have a fairly educated team to go off and assess how to properly move forward, and I think I always kind of like to look at it as where do we want to go, where is the future and then identify that future point and then kind of back into, okay, now how do I disposition ourselves to get to that point? Do I need to extract the data, convert it into a new format, concatenate fields together or whatever? Those things, those details, though they seem to be distracting, those details are essentially the critical pieces of a strategy to go replace, let’s say, major software system changes and stuff like that.

Sanjog Aul [00:11:36]:

Where do you think the ball gets dropped? Because of course, everybody likes to do the best they can, what are the traps and gotchas?

Bill Chapman [00:11:45]:

Well, I think in any of these dispositions, a lot of times the focus is on the new stuff. When you pitch like a capital request, you’re looking at here’s what the benefits are, here’s the ROI, here’s the plan and impact on the business and let’s say the market opportunities and so on and so forth. Well, again, just like when we were talking about the equipment assets, there’s not a huge focus on what happens with the retired, let’s say, software system or equipment set, and so I tend to use service providers that know that particular product, right? And they can help me disposition how I’m going to deal with, let’s say, the retirement, right, which could be moving data, converting data to a new set of information or structure and it’s also the same thing with the equipment. So, I think the ball gets dropped because the whole focus of the business and the IT team is really about getting the new thing up rather than retiring the old thing, and that’s why I think it’s more critical than ever to have services that are, let’s say, experts and they practice in this field so that you don’t have to worry about that. You can keep a team that has a focus on market impact, business profitability, those type of things rather than the disposition of something that’s been retired.

Sanjog Aul [00:13:28]:

So would you say all in all planning and conceptualizing and outlining the action items before how all this is gonna work out? Do you think it’s less of an issue for organizations? Is it more when we are trying to make all this happen and then you see that you have gaps in capabilities of pulling this off within a company just by themselves?

Bill Chapman [00:13:54]:

Yeah. That’s a really good question, and I used to have, like, a well, I have a playbook that kinda says, here’s the things that, I would do in a project, and one of those sections of that playbook says, here’s retirement, and the retirement could be equipment or it could be software, data, whatever, and there’s a lot of things to consider there, and so I used to kind of keep that up to date.

Bill Chapman [00:14:23]:

It was like, is there’s government information on here? Is there, regulatory type things I have to deal with? Is there personal information, contained in this equipment type stuff? And that became fairly complex, and so, it was definitely a worry, but it was something that I know that in the end, you don’t get a lot of credit from disposing of something correctly because that’s just kind of part of the baseline that they expect a CIO or an executive to go deal with. So, I now believe that it’s much simpler. You don’t have to deal with all that stuff. You can outsource that and not have to keep that expertise and your expertise can be focused on having the business impact and moving forward with the business versus trying to take care of some of the past, right? You don’t want to take 1 step forward and 2 steps back type of thing, and that’s why I think that’s why I was so interested to kind of get into this industry a little bit, and I think it’s a great opportunity for companies to kind of offload some very complex stuff and be comfortable, right, and ensure that assets are going to be dispositioned properly.

Sanjog Aul [00:15:46]:

Let’s take a quick break, listeners. When we come back, let’s talk about the ability to be proactively think when should we stop supporting a product that is no longer profitable or know when the right time is to sunset. Because there is no crystal ball, but if you’re gonna take that product or solution to the very nth mile where it has got no value left, you might be incurring losses already. That will not be looked very positively by anyone involved, but if you leave it too early, you’re leaving money on the table. So what is what that what all goes into the decision making and what all issues that we feel or, face, and the dilemmas that we face while we try to do it? Let’s explore that. Please stay tuned listeners. We’ll be right back.

Speaker 0 [00:16:46]:

HP is proud to sponsor this program. Find out how the HP as a service solution for SAP HANA can help you gain instant impactful business results without capital investment by logging on to hp.com. Transform information into intelligence and a competitive advantage with a full spectrum of SAP HANA products and services from HP, a global SAP hosting partner.

Speaker 0 [00:17:16]:

Bosch Software Innovations is proud to sponsor this program. Visit www.bosch-si.com/connectedmanufacturing to find out how Bosch can help you improve your operational performance and become a manufacturing industry leader in a connected world. Change the way you predict, manage, and produce outcomes. Bosch Connected Manufacturing.

Speaker 0 [00:17:48]:

HP is proud to sponsor this program. Tap into our expertise, innovation, and services to bring your most important workloads to the cloud. You are listening to CIO Talk Radio with Sanjog Aul. To learn more about the show, please visit www.ciotalkradio.com. If you have a question or comment, call toll free at +1 (866) 472-5790. That number again is +1 (866) 472-5790. Now back to the show. Here’s Sanjog Aul.

Sanjog Aul [00:18:34]:

Welcome back. So, Bill, when we look at supporting, a product line and or a solution, as a product company or as an enterprise, we look at solutions. If you let go or announce or even think of letting go of a solution early enough, then it is frowned upon because we spent millions of dollars why are we doing it. If you wait till the last moment when we were already, bleeding because of the inefficiencies that got creeped in just just by virtue of things not working properly or, other reason, that also is a reason to get the pink slip. So how do you handle this dilemma? How do you make what we call a decision, an intelligent decision, which is seen as intelligent and informed decision by the stakeholders?

Bill Chapman [00:19:26]:

Yes. So you’re talking more from the, let’s say, the producer of the products, right? And in that case, I think it’s really critical to have a strategy around that, right? And you need to have the reasons well identified on why you’re going to make that transition, so that you can, let’s say, manage expectations on your customer side, and I think that’s really critical. As you go through and you say, okay, here’s my software product, I’m just not getting the revenue back, I’ve got a lot of support costs forward and technology is moving forward and associated technologies are becoming incompatible or whatever those factors are, then you decide that I’m going to have this new strategy, I’m going to pull out this new product and what’s the impact on the end customer, and you do know that because you know what the features were and the capabilities of the old product were, and so, understanding what the impact is going to be to the end customer, I think, is really critical, and then take that as an opportunity, turn that around and look at that opportunity and then say, okay, how can I provide a service? And it may be a fee based service, right, or maybe a free service depending upon how you are in the market on this, but how can I provide a service to retain my customers, right? And make that transition over to the new product, right? Or the revised product, easy or amenable so that they’ll essentially stay with our product line, maybe it’s the new one or the old one, but there’s a whole another side to that. There is this whole secondary market that says, it’s okay to run old. It’s okay to run old equipment and it’s okay to run old software, and you can see products every day that have old operating systems in it are using old processors and those type of things, and I think when we look into some of these, like asset disposition parts, there’s also this whole other side of when you dispose of an asset, creating spare parts out of that, and I think this whole spare part things on old equipment that have old software running on it gives that whole, a generation of second life, right? And it’s less expensive, and it may be very applicable to your particular needs, right? You can certainly see it in the aerospace industry or the missiles and those type of things, the government side of things, but it’s also that case with a lot of some of the industry type stuff, medical equipment and that type of stuff really could have a second life, and I think that’s one of the things that the product manufacturers, both the hardware and software companies, should look at that they could support the second life instead of trying to avoid that happening, right? I think that’s probably good for the society as a whole because 3rd world countries could leverage some of this stuff, and so, I think there’s a whole different perspective to this. It’s not just about moving to the new product to be competitive. It’s about can I offer a service to help transition existing customers that want to move? And is there a whole different avenue of can I create a renewal, a second life or extended life and how can I do that? And you don’t have to do that as a product company. You could do that as, you know, go out and ask a company that’s capable of doing that for you and pull that together, right, as a whole plan and then you push that out into the market, right?

Sanjog Aul [00:23:24]:

Would you call that as a corporate social responsibility and a good PR initiative versus something which is looked at in terms of dollars and cents?

Bill Chapman [00:23:36]:

Well, I think, and that’s one of the reasons I kind of got into this whole thing. I think there is a social responsibility to this, but I think it needs to be effective and profitable, right? I mean, companies can’t maintain old antiquated stuff and lose money. That’s just the stockholders, the stakeholders in the company aren’t going to support that. So, I think it’s really important to say, if there is a second life, if there’s a renewal or disposition where you’re scrapping and salvaging stuff, they need to be able to make money on it. So, it’s a partnership, and I think that the technology now and the maturity of the industries and especially in the asset disposition side has come to that point where you can now leverage that and partner up with somebody who’s capable of doing that.

Sanjog Aul [00:24:34]:

Now what you just mentioned actually makes total sense when you’re talking about something which can be leveraged as is or with minor changes in another organization or to a can we send to a 3rd world country, etcetera, that you mentioned? When a CIO or another leader has built, say, a mothership ERP, not just customized another provider’s ERP, for example, this option may not be available, but they had spent millions in producing it over the last, say, decade or decade and a half, and now comes the time when they say, we gotta go and change it. The requirements have changed so much. The maybe the code, the way it was written is so kludgy that we cannot keep, you know, ripping it apart and fixing it. So let’s fundamentally revamp. How does someone get funding to let go of something which has been working even though it is bleeding, to get a revamp, you know, get the blessing for that?

Bill Chapman [00:25:39]:

Yeah. I think, you know, that’s the old cash cow type of thing, the business has to face all the time and you go through the business program, economics type program and they say, okay, how do you extend that life or how do you create a new curve for that product lifecycle, and so, I think those are really important questions too because that’s part of being an effective leader I think is saying, okay, at some point, there is an end of life. When I created this or when my customers create a capital request or a plan to spend all this money to put in a solution, then part of this also should say, you know what, I should be getting my ROI back in 3 to 5 years, and then when you get into this extended life where customers are using something for 10 years, right, you need to make it attractive for them to transition and you need to look at the ROI too because you’ve introduced other products, you’ve done these different things. So, can you provide a migration path and all of those things are part of the I would say also part of the sales playbook, right? The sales team should be able to say, hey, listen, part of one of our services is to help you migrate over to here, and if you can understand that because of I think, let’s say, security, let’s say application security is a critical type thing and it drives a lot of changes, and you could say, listen, our system works, but it’s not going to work on these on a newer equipment set, your equipment set is aging or the patches for security have changed and they essentially put a liability on a risk to your software running consistently. How do we make you go through this process so that in the end you can reduce that risk and you can run your solution with the perspective that you’re not going to have any business continuity issues and that type of stuff. So, I look at these things as opportunities, but I do think that it’s really important that both sides, the customer and the manufacturer or supplier of the products should be making money off of this thing, right? And that should have happened, let’s say, the original money, the original ROI should have been taken care of and now you’ve got the secondary ROI that you need to kind of look at, but it may not be like something that’s outlandish, but it’s something that’s reasonable and both companies can move forward with it. Does that make sense?

Sanjog Aul [00:28:31]:

No. Definitely. Now we would love to kind of also get into some of the risks that could come up if you really decide to cut it off, any product off at its knees. What do you think are the risks which you feel may get unnoticed or are not given the due focus as part of us deciding that we will go end of life with a specific solution or product?

Bill Chapman [00:29:00]:

Well, you know, I think if you’re looking at a product end of life, you know, that’s an interesting problem set, and there are lots of products out there that really can’t effectively be end of life by the end customer, right? It just isn’t practical. So, and I think that’s an interesting problem set, and, we have a business called Resolve, and Resolve essentially tries to manage, let’s say, spare parts and they have a sister company called Converge that helps manages like semiconductor second life type thing or let’s say, not second life on all parts, but also new parts and retaining critical parts for critical systems type of thing, and there’s this whole different market set that’s out there that says, how do I find spares, right? And those spares become critical and these companies go off and try to assess what type of products are they going to need, what type of spares and can I retain those spares or retain a source for those spares, so I can help the companies that need that, and support the repair service companies, right? And that’s kind of an interesting thing that’s also has been evolving. So, I’m coming to go back to the perspective of if you’re a product company and you’re sunsetting something, these options weren’t considered, let’s say, 20 years ago very often, right? And that created outages and shortages and those type of things. I think now, if you have products that are critical or software that’s critical, you can go to companies now and they can like for example, Arrow will reserve product and retain product and then there may be inventory carrying costs or this or that or there’s margins that you have to pay for because both companies need to one company needs it, the other company needs to spend money to provide it, right, to be able to provide it, and, I think that’s a big thing that we can start leveraging because the supply chain is a lot more dynamic now than it was 30 years ago, and so there’s a way to leverage this and it’s all about demand, the supply and can we make this a reasonable profit so that companies will stay in this marketplace.

Sanjog Aul [00:31:46]:

Let’s take a quick break listeners and let’s look at the way the supply chain could get impacted when an organization decides to sunset a product, and what we mean by supply chain is if suppose you had a software or a hardware product and you are saying we are going to not carry this anymore, that means the folks who used to provide service and support, the folks who used to provide the components for that particular product or adapters or other type of software pieces, if you will, whatever goes into a product, everything gets shifted or disrupted. How do you make sure that your supply relationships stay intact? They understand why this is happening, and in some form of fashion, keep them on your side so that when you build a new product or you build a different product, you are able to go to them and they will be as favorable in terms of maintaining a relationship as you always had maintained with them in the past. How do you make sure the supplier ecosystem is kept in the best possible spirit? Please stay tuned, listeners. We’ll be right back and explore.

Speaker 0 [00:33:07]:

HP is proud to sponsor this program. Tap into our expertise, innovation, and services to bring your most important workloads to the cloud.

Speaker 0 [00:33:19]:

Bosch Software Innovations is proud to sponsor this program. Visit www.bosch-si.com/connectedmanufacturing to find out how Bosch can help you improve your operational performance and become a manufacturing industry leader in a connected world. Change the way you predict, manage, and produce outcomes. Bosch Connected Manufacturing.

Speaker 0 [00:33:50]:

HP is proud to sponsor this program. Find out how the HP as a service solution for SAP HANA can help you gain instant impactful business results without capital investment by logging on to hp.com. Transform information into intelligence and a competitive advantage with a full spectrum of SAP HANA products and services from HP, a global SAP hosting partner. You are listening to CIO Talk Radio with Sanjog Aul. To learn more about the show, please visit www.ciotalkradio.com. If you have a question or comment, call toll free at +1 (866) 472-5790. That number again is +1 (866) 472-5790. Now back to the show. Here’s Sanjog Aul.

Sanjog Aul [00:34:53]:

Welcome back. So a supply chain ecosystem, we nurtured it like our baby while we were developing a set of products and had everyone work together to make it successful and create value for our customers. Now it’s time to say goodbye to the product, the very baby that we created, but supply chain still needs to remain intact or at least it should be available. The partner should work and be having a relationship to a certain level that we can build new products and solutions and continue to deliver value. Do you think it is as easy as I make it sound?

Bill Chapman [00:35:31]:

Sanjog, I think that this continuously occurs in the electronic supply chain. Semiconductor manufacturers, board manufacturers and product manufacturers decide to sunset products and there’s a ripple effect throughout the supply chain, including creating the demand for used parts and repair that we just talked about. So, as we kind of look into this, we’re finding that there’s a need even if people are moving to new solution sets, there’s the old solution and the old parts that need to be dealt with, and either new or used can be costly, time consuming and complex when you look at it from a supply chain perspective, but the general dynamics of the supply chain are consistent, right? But how the network within the supply chain can be extremely complex, and it’s an interesting effect to see the rippling across that supply chain. It’s important to understand that this could be used to be not just the cause, right, but it can help with failures that are not aligned just let’s say with the product itself, but there’s other disasters that could occur like fires and raw material, supplier bankruptcies and those type of things that all affect the supply chain, and it’s actually very similar in effect to somebody retiring product, right? If you’ve got a semiconductor supplier who’s providing plastics or something like that to the semiconductor house and that plastics company burns up, then they can’t produce their packaging for their electronic goods and that kills that supply also, and those tend to be even worse than, let’s say, a planned retirement, but in the case of computers, there’s another dynamic. The need for computer manufacturers to continuously change their product to support new consumer markets or the consumer market shifting, right, and they’re always one upping each other. That can drive a demand down so quickly, even though the product was introduced 6 months ago, but now the demand has fallen off significantly. Those products essentially get sunsetted, and then that creates this, okay, how do we support those old products? Somebody bought a computer thinking they’re gonna have 3 to 5 years of life on it. You know, they put an ERP system on and they really tried to would like to get 20 years of life off that ERP system. Yet, the environment that you built that whole thing on is already obsolete in 6 months, right? So those create some huge dynamics that says having a secondary channel, right, a second life channel becomes so much more critical. I think for us as CIOs, as executives and companies, we have to consider that as we decide to make these big strategic projects because there is change and there’s a lot of dynamic change, especially even more so I think on the hardware side.

Sanjog Aul [00:38:45]:

Would you think that, while there are, for the most part, the partners are not trying to sabotage any attempt for you to continue or build new products, there could be disruptions that are intentional versus unintentional, and how do you manage those? So do you create a plan b for every supplier, every element in the ecosystem that you have?

Bill Chapman [00:39:08]:

Yes, and I think in some parts in some ways that’s fairly difficult, right, especially when you start looking at intellectual property rights and patents and those type of things because there may not be a secondary product out there and that becomes fairly critical. So, if there was a way to circumvent somebody’s patent and come out with a different product that competes with it, there’s that’s ongoing. People try to do that all the time. Companies are driving that to essentially share, let’s say, in a high market margin on profitability there for those, let’s say, unique products, and so, and I also think that gets right back into this whole thing of end of life. You need to plan that says, hey, listen, the semiconductor house, let’s say, is building the processor has to keep moving that line forward in technology. So those lines may be running for 6 months to 8 months and it takes them 3 months to build them and then they switch it over. So, let’s say it’s a 1 year, there’s no reason for those guys to go back in technology and produce those old parts again, right? Now, there are some companies that will go do that, the secondary semiconductor houses and stuff like that, but that’s kind of like the plankton in the ocean, right? And that’s the food source, the semiconductors, and so if you look at the dynamics there and you kind of move up, it’s an interesting dynamics and that’s why I think there’s all these nuances in the supply chain that provide these extended lives through like renewal, recycling and those type of things. So, yes, I don’t think you can say that I’m going to buy two computers because of the fact that one of them may go, you know, not have spare parts or something like that. I think that there’s more effective ways in the supply chain to deal with some of those things.

Sanjog Aul [00:41:16]:

So one is the risk coming from supply chain. Another is your own people. Do you think, coming to the enterprise environment where you may not be building a product per se, but then suppose you are a you have a solution which you are trying to sunset and go out and and take something new. What is the problem or risks that could get introduced because of our own internal people who were users of the products or champions of the products, and now they see that their trump card has been we have decided to take that away, and that’s what was the reason they were getting their paychecks, and there were other issues. How do you handle the people issues when it comes to end of life?

Bill Chapman [00:42:02]:

Yeah. I think that’s a really, interesting question, and I’ve dwelled on that quite a bit because it does occur and that is a big factor and it is a problem because you could look at let’s say COBOL, right, there’s a lot of COBOL solutions out there, the programming language COBOL on mainframes and the mainframes haven’t they are kind of moving away from that in the industry, but they haven’t gone away, and there’s a lot of critical systems and there’s a lot of efficiencies for the business to continue to run on those mainframes that have, let’s say, older languages and you start looking at it and there has been over the last 15 years of development of a secondary support type thing for some of the retired languages even, right? And you can see that in India. There are outsourcing companies that focus on that. So, but I think there is a lot of dynamics and I think it’s also critical that companies understand that, they need to recognize the people that are critical to the continuity and the business disaster recovery, right, are also some of these people that support the old antiquated systems, right, because those are critical to the day to day operation of the business, and it’s not just let’s say COBOL, I mean, I remember one time we were looking at sunsetting a large printer, one of those mechanical printers with conveyor belts on it that would do mass mailings for invoicing and for paychecks and all those type of things, and to replace that thing was just a huge, huge deal and because they’ve been using it for 30 some odd years, and so, and the people that supported it mechanically along with the people that supported the code that supported that, the printer, were critical. So, it took a lot of effort to say, okay, we’re going to replace that, and when a company looks at that type of replacement, they’re saying, boy, that doesn’t give us any new revenue. It doesn’t reduce our costs. As a matter of fact, it’s going to increase our costs because the newer technology is more expensive than the older technology and retaining those people were critical, but if those people start retiring, then you’ve got to make a move and that gets fairly expensive. So, I think it’s important not just to look for people that are on the leading edge and having impact on the leading edge. You also need to look at the people that are sustaining and that are happy sustaining things because that’s how you’re going to leverage that end of that the bottom side of that cost curve, right, because now you’re making a lot of money off that initial investment.

Sanjog Aul [00:45:03]:

Let’s take a quick break. We’ll be right back, and let’s look at, the marketing and PR response to some of these transitions because, again, yes, there is there are hard dollars and numbers, but there is a lot to be said about the kind of impression and image that we maintain for our company because that has a direct impact on how well our new products will be received and how our company is gonna grow and be profitable. So what all are the challenges that are faced and how have organizations successfully, there may be examples when they have done it successfully, and then there are examples when it was not done as successfully. Not taking names, what are some of those strategies that are being deployed to make sure when you’re doing such transitions, end of life transitions, they are done with utmost caution so that the end result is satisfying. Please stay tuned listeners. We’ll be right back.

Speaker 0 [00:46:11]:

Bosch Software Innovations is proud to sponsor this program. Visit www.bosch-si.com/connectedmanufacturing to find out how Bosch can help you improve your operational performance and become a manufacturing industry leader in a connected world. Change the way you predict, manage, and produce outcomes. Bosch Connected Manufacturing.

Speaker 0 [00:46:43]:

HP is proud to sponsor this program. Tap into our expertise, innovation, and services to bring your most important workloads to the cloud. HP is proud to sponsor this program. Find out how the HP as a service solution for SAP HANA can help you gain instant impactful business results without capital investment by logging on to hp.com. Transform information into intelligence and a competitive advantage with a full spectrum of SAP HANA products and services from HP, a global SAP hosting partner. You are listening to CIO Talk Radio with Sanjog Aul. To learn more about the show, please visit www.ciotalkradio.com. If you have a question or comment, call toll free at +1 (866) 472-5790. That number again is +1 (866) 472-5790. Now back to the show. Here’s Sanjog Aul.

Sanjog Aul [00:47:58]:

Welcome back. So let’s talk about the softer side of how brands fail and or succeed. So marketing and PR, when you are doing end of life or planning end of life, in what capacity and in what way have, you’ve seen Bill organization handle the softer side of the brand’s image so that it aids the process versus becoming, you know, something which is gonna take it down. Yeah.

Bill Chapman [00:48:26]:

I think managing your end customer’s expectation at an end of life, from a communication PR marketing standpoint is really important when you’re sunsetting. It goes way beyond just marketing and PR and communicating. It should ripple through the organization a little bit because it’s in that supplier’s interest to create avenues for the customers to transition these product sets and services to their next generation or actually create an opportunity to support that old product set, right? And so, you have to have that plan that can support it because your customer, they are kind of sitting there unadvised, unfamiliar with how they are going to move forward with this, especially if you are just announcing this thing. So it’s nice to be prepped with, let’s say, how is it going to impact the customer and how can we help that customer resolve this. So the supplier should devise an obsolescence stocking plan maybe and by consulting with their customers regarding the future needs, if they need to like take more time to deploy something. You can see that also, let’s say, on the software side, you need to upgrade your Exchange servers worldwide. That’s a difficult problem. You have different types of patch levels, different, let’s say, Exchange servers, and so now maybe you may want to go to a hosted emailing solution or an on premise solution or something like that. Well, that may take years for a large company and they move over to it. The small company, it seems to be more agile and you can do some of these things a little quicker, but for a large company, that change could take a lot of time, but also those large companies have a lot of potential revenue behind them, right, for these suppliers. So, I think gaining an understanding of how the business plans of the supplier and how it relates to the sunsetting of key products is key, and I think it’s not just enough to say, I’m going to go have a marketing campaign and communication campaign, but I think the businesses need to look at this as an opportunity to help provide guidance to their customers, but provide guidance to the customer that’s beneficial to both the customer and also the supplier of the product.

Sanjog Aul [00:51:03]:

So when you look at, suppose you had to define a playbook and you could look at end of life transition, where would you say is a benchmark or is there a benchmark or set of standards that you would feel are tried and tested and proven? Which organizations who have not yet embarked upon that, either journey or not done it the right way could follow?

Bill Chapman [00:51:30]:

Yeah. I think,

Sanjog Aul [00:51:32]:

Is it the Wild West where people do whatever they think is best, or is there some method to the madness?

Bill Chapman [00:51:38]:

Well, I think it is kind of the Wild West and that’s why there’s been a number of companies that have really kind of started up into the asset disposition industry, and also then there’s a lot of things that come in the news. You see these landfills with electronic goods and then you get concerned about the environmental issues and the company may have no consideration of, oh, yes, I’m going to end up getting on the news because we dispose of assets improperly or the end of life type improperly, and so, but they do pop up and those are things that are disheartening, right, for any executive in the company to say, gosh, I’m trying to do this new thing and have this big impact, and yet on the tail end of something that shouldn’t be that critical and shouldn’t have been that visible and now becomes very into the light and it could be a big problem. So I think the playbook and I used to use a playbook because it was like I tried to learn from my experiences, but as I got into this industry and I started looking at how like Arrow was addressing this thing, it was so much more than what I had imagined, and so, I think it’s really important to go off and say, you know what, I understand, this is not part of my key business initiatives. I’m going to get help. It’s not that expensive. It could actually be you can actually make money on the disposition of product that you’re transitioning out of your organization and you get all these services and then if you introduce it into a secondary market through a service provider, then there’s actually help in your ROI case to move forward with your new stuff that you’re trying to go do. So, I think it’s really interesting these playbooks that I’ve kind of changed mine around and said, here’s the things I got to go do when I do a major project and I’m doing a retirement as part of it, right? I’m now kind of saying, I’m not going to worry about the all the details of that the retirement side of it, the disposition side of it. I’m going to go out and pick up somebody who knows it because actually they can do it more effectively and I can actually probably make money on the backside of that.

Sanjog Aul [00:54:05]:

One final question. What type of leadership that you think one might need to demonstrate when you’re dealing with this end of life? What is it that a technology leader and their corresponding business unit leaders have to do? And, how do they work together to make this happen in the most successful manner?

Bill Chapman [00:54:28]:

So are you talking from the supplier standpoint or the

Sanjog Aul [00:54:32]:

The company which is initiating this end of life, their own leadership.

Bill Chapman [00:54:37]:

Okay. So if you’re talking about how you’re using equipment and a solution set and that type of stuff, that’s actually a project in itself and there should be an ROI and maybe the ROI has to assess business continuity and risk and those type of things, and it should be managed just like any other project with, okay, here’s where we’re going to go, here’s how we’re going to here’s the budget for it, here’s the plan and here’s the project details and stuff like this. If you’re talking more from a supplier side end of life, I think that as we were talking about before, that’s also an opportunity, and I think it’s important to say, do we want to partner with somebody to stock spare parts? Do we want to partner with companies that help do the migration over to the new products that we’re producing? What are, let’s say, deficiencies on our new product that aren’t covered by that don’t cover some of the features that were in the old product, right, or now it’s two sets and they’ve split up the licensing package on the software or whatever. All of those type of things, the supplier should have a playbook that they’re telling their salespeople and their marketing and PR groups how to manage that transition, right, and help those customers because the last thing you want is to have these customers bad mouthing you into the marketplace, right, because it really could be an opportunity versus an issue, right?

Sanjog Aul [00:56:20]:

So on behalf of the show and our listeners, I’d really like to thank you, Bill, for sharing your thoughts about how organizations can effectively manage end of life transitions.

Bill Chapman [00:56:32]:

Yeah. This has been a great discussion. I’m glad that you decided to kind of venture into this because this is a difficult topic. It’s certainly not what some companies would consider strategic, but in the end it could be just incredibly could create an incredible issue, right, if it’s not dealt with properly. So, I’m glad you kind of brought it out to the surface. It’s a great discussion.

Sanjog Aul [00:57:01]:

Thank you so much again, Bill, and listeners, hope you enjoyed and got some value out of this conversation. Please like us on Facebook, search for CIO Talk Radio, and please be sure to follow us on Twitter, and also join our new and improved newsletter. Thank you again for listening to CIO Talk Radio. This is Sanjog Aul, your talk show host. Until next week, take care and God bless.