Goodwill Industries CIO: Steve Bergman

Dan Farber: Steve thanks for joining me,

Steve Bergman: thanks Dan, it's a pleasure.

Dan Farber: Now I know Goodwill Industries, I've seen the stores all over the place but it's much more than that. Can you describe for us the panoply of services that Goodwill provides?

Steve Bergman: Sure, absolutely. Well Goodwill, if you think about it, people come to Goodwill to get training when they're having a hard time getting a job albeit because they have a disability or some kind of barrier to work. We provide those services and they're primarily funded through our retail business where people bring donated goods in, we sell them, and that generates revenue that we can then in turn provide services to help people get back into the workforce.

Dan Farber: Now I understand you have a very ambitious plan, the 21st century initiative to put 20 million into self-sufficiency and to work by 2020, how does IT fit into that?

Steve Bergman: Sure, absolutely, IT is a primary driver for that and it's really a part of our 21st century initiative. Last year, Goodwill helped a million people find vocational services and get back into the workforce. Technology is a major driver for that through many of our systems, through automation, through ways of increasing our capabilities on many different fronts of the business. So technology is a major cornerstone of that business.

Dan Farber: Now this is a very large scale operation, I was looking at some of the numbers, almost 2 billion dollars in revenue through the stores you have. An auction site, having contact with over a million people in terms of helping them get employment and getting counseling, so how do you think about IT in terms of running a large scale operation like this?

Steve Bergman: Well, it's a great question, and it certainly poses a number of challenges. Many of which is surveying and bringing together an audience of that magnitude and that size, some 80 thousand people work for Goodwill across 168 agencies across the country. So we develop many different methods and many different systems for doing that. One of which is an extranet that we created which we call "My Goodwill". "My Goodwill" is a collaboration portal, it provides e-learning and provides best practices for our people across the country. That's one of the ways that we bring people together is using this online portal.

Dan Farber: Now I understand that that online portal is based on open source software. How did you come to the conclusion that open source was the way to go? Was is it about cost savings; was it about the development process?

Steve Bergman: As you can imagine, really all those things came into play. We walked down a path where we looked at the functionality, the capability, the maturity of the open source market particularly at an enterprise level, and ultimately made the decision based on a number of different factors including cost. As you can imagine being a non-profit, we constantly struggle to do more with less with our resources. So open source gave us the ability to invest more of our money in the long run over the long term of the project and really recognize a lot of the value up front rather than sinking a lot of capital assets into this project. So it really became a viable alternative for us in terms of once again capturing that value up front.

Dan Farber: Now I also understand you have an auction site…

Steve Bergman: Yeah.

Dan Farber: …that seems a little bit counterintuitive but it actually makes sense, you have a retail store and you have an auction site online.

Steve Bergman: You bet, yeah. Goodwill manages a site called "Shop Goodwill" which actually is the only non-profit online auction site. We're really proud of this site, it's really unique. Thirty-five thousand people a day shop on "Shop Goodwill" right now. And it does kind of make sense if you think about it, we manage 2,100 brick and mortar stores across the country and a lot of those goods are sold within that store and of course those goods are sold to provide services to the people that we serve. Potentially there's another marketplace and that's the internet marketplace to sell these goods, they may not be best suited to sell in that particular marketplace, so we try to sell them over the internet through this "Shop Goodwill" online auction site. And it's really been working phenomenally well.

Dan Farber: Now being in such a diverse organization, and it sounds like you've really developed some innovative technologies, how do you foster that culture of innovation and collaboration.

Steve Bergman: Well that really starts at the core of the organization. Everyone seems to be involved and interested in developing the technology and collaborating across using technology. Goodwill is an organization of people that really want to make a difference and work for this organization because they want to make a difference. So they're constantly thinking about new ways of innovating and bringing new products to market that can help us serve more people. Certainly within our organization, the IT organization, our strategic planning process, really everything we do we try to involve everyone in the process. People that really understand the business, people that work in the business everyday and bring a lot of their great ideas into the innovation process that we utilize each year in our strategic planning. "Shop Goodwill" is something we discussed as a great idea; it came out of the Goodwill organization and someone saw this need to market and sell across larger domain and they did that through an online auction site. It's just one of many innovative ideas that have come up, it's something that we foster in the culture and it helps us deliver services more effectively.

Dan Farber: Now one of the major themes that we hear form CIOs around the world is going green. Not just to feel good, but obviously get a lot of cost savings and efficiency out of it. Goodwill industries I would guess is on that path as well?

Steve Bergman: Well actually Dan we're kind of in a unique position on the green initiative. Certainly we've got a lot of, and we're beginning to leverage a lot of the new technologies around consolidation and virtualization in our data centers to be as green as possible. But if you think about it on the other end, tens of thousands of computers are being donated to Goodwill each year and we have to hopefully figure out something to do with these computers. So we got a very elaborate system and it's actually becoming a major business unit of ours where we not only re-sell computers, so some of the computers that are donated obviously still have some life in them we actually put them back on the shelf and can resell them and can provide services through that revenue. But we also go through a de-manufacturing process sometimes if they're not computers that we can sell where we can re-constitute parts to create other computers, where we can sometimes break down the components of computers actually through e-cycling if you think about a monitor or if you think about the case of a computer we actually have manufacturing facilities that break those things down and reconstitute them for other uses. It's a big initiative of ours.

Dan Farber: It seems that you have a lot going on, what do you see as the major challenges you have in terms of continuing that pace on innovation.

Steve Bergman: Well yeah Dan, that's always a challenge within an organization. I think innovation really is our life-blood in the IT field. If we don't continue to innovate and we don't continue to drive the business forward I don't think we're doing our job. We run really fast but at the same time, that's what we're paid for in the IT world. So we're continuing to innovate new products, we just rolled out something recently which I thought was kind of interesting, geo-spatial mapping partner of ours called "Spacial Point" brought in some technology that we actually put in our public website. So now if you're looking for one of our 2100 retail stores, we can by putting in your zip code, we can actually get you to the right Goodwill, to the right store and show you all the services provided through that goodwill and where to donate. So we're continuing to innovate and we're continuing to do as much as we can to stay current and really drive the business forward.

Dan Farber: Now I know you have those over 2000 retail stores so how do you deal with inventory management and all those other issues that any other retail store would have to deal with?

Steve Bergman: Well you know, the Goodwill model is a unique one in terms of inventory management and you bring that up as a good example. We're not a typical retail from that perspective, if you think about our business model, we like to say our goods come in the back door and we immediately push them out the front door and try to sell them and once again turn them into revenues for our services that we provide. So inventory management is not the biggest issue for us. We're much more interested in figuring out how much we're leveraging each one of those goods, how quickly they're moving through the system, and what kind of return they're bringing to us. So that's our larger challenge not so much the typical retail industry management challenges.

Dan Farber: And as you look out into the future, are there some major projects, major innovations that you have planned that could really make a difference in the Goodwill industries business?

Steve Bergman: Well I think the next thing we're trying to do is aggregate information. Once again we talked about a large, diverse organization. And if we can somehow aggregate all the information, the best practices; a lot of the data that's coming out of this Goodwill organization and provide business intelligence to the larger organization, I think we can make better business decisions. That is absolutely our biggest initiative for this coming year and we're really trying to drive a lot of value out of some open source products and make determinations about the business based on the information that's being generated from that.

Dan Farber: Well Steve, thanks so much for speaking with me.

Steve Bergman: We'll thanks Dan, it's been a pleasure.

Dan Farber: I've been speaking with Steve Bergman, who is the CIO of Goodwill Industries. For CIO Sessions, I'm Dan Farber, thanks for watching.