Markers for Success

By Larry Dignan  |  Posted 2005-10-19 Print this article Print

If you're trying to turbo-charge your business, how well you manage technology matters less than how you manage information. Here are some of the 500 ways the Baseline stars did it.

The quintessential Baseline 500 company does the following:

KEEPS COSTS IN CHECK. Wilmington Trust Corp. (No. 419) chief information officer Mike Chandler benchmarks his technology staffing levels against those of his peers to keep labor costs in check. Meanwhile, Ampex Corp. (No. 9) is the smallest company in the Baseline 500 with $102 million in sales, and has only two people focused on information technology. Both of them have other responsibilities.

Last year's No. 1, Washington REIT, fell out of the rankings entirely because its expenses soared. The company says that 2004 general and administrative expenses increased 17.5% to $6.19 million, up from $5.27 million, partially because of expenditures related to new financial reporting requirements of the Sarbanes-Oxley Act of 2002.

FOCUSES ON THE BUSINESS FIRST. Mitchell Gregory, chief information officer of Sonic (No. 65), a chain of burger joints, is responsible for market research, such as taste tests and telephone polls, in addition to technology. For Sonic, having one executive responsible for technology and market research ensures that

information management will lead to its primary goal—to cook up new burgers and sandwiches to juice sales.

KEEPS PROJECT TEAMS SMALL AND EMPLOYEES MOTIVATED. Chesapeake Energy CIO Cathy Tompkins encourages employees to make decisions and not overanalyze (see profile, p. 18). To comply with Sarbanes-Oxley, Chesapeake didn't budget any technology projects. Instead, internal auditors mapped out controls in Microsoft Access; then, the information-technology team translated that model to the company's Microsoft SQL Server databases to control companywide processes. Werner Vogels, chief technology officer at Amazon.com (No. 225; see profile, p. 32), has embraced Amazon's two-pizza rule for his project teams. If a team needs more than two pizzas for dinner, it's too big.

Of course, this year's Baseline 500 does contain a few constants. Energy companies still rank high, because they don't have to add any new management to take advantage of the rising prices of the black gold they sell. Gas prices at the pump in September topped $3, double that of a year ago.

And financial services firms keep ranking high because they do not deal in a substance or packaged good—their stock in trade is numbers. They can automate almost any cash, securities or even real-estate transaction to keep costs low and profits up.

Nevertheless, newcomers filled the Baseline 500, and more than half of them are small or midsize companies. Seven companies in the top 10—KCS Energy (No. 2), Cimarex Energy (No. 3), Eagle Materials, Entertainment Properties Trust (No. 7), Valero LP, Ampex Corp. and Overseas Shipholding Group (No. 10)—have sales below $1 billion.

Next page: Industry Makes a Big Difference

Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET News.com. Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.

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