We are live at Sapphire Now 2018 in Orlando, Florida.
I'm Michael Krigsman.
I'm an industry analyst and the host of CxOTalk.
We're speaking right now with Walter Curd, who is the chief information officer at MAXIM
Integrated.
Hey, Walter, thanks for taking time in talking with us.
Hi, Michael.
Thanks for having me.
It's great to be here.
Tell us about MAXIM.
MAXIM Integrated is a $2.5 billion revenue analog semiconductor company in Silicon Valley,
California.
It seems like, compared to other companies, we're not that big, but we have over 45,000
active parts, 20,000 customers, we ship billions of units a year and, basically, the result
of all of that is 65% gross margin, 35% operating margin, and now, thanks to some of the tax
changes, we can return 100% of our cash to shareholders, which makes them very happy,
which makes our employees happy because the stock price goes up.
You have 45,000 active parts.
Yes, we do.
I can't even imagine that.
Our supply chain is very complicated.
[Laughter] Right?
On the sales side, we've really revamped things.
We call it a digital transformation, but we've gone heavy into e-commerce.
Now, this was a really interesting discussion in the company because we were very traditional.
But, we realized that we've been product-focused for so long and, in order to get customer-focused,
we had to own the customers.
That meant sort of taking it back from some of our distribution partners.
We've put a lot of time into enhancing our website, the analytics, the customers, and
so on, and then allowing us to really understand the customer experience.
Now, you're a B2B company.
We are a B2B company, but we also sell a lot of smaller quantities for samples, reference
boards, all of these different things that we sell to design engineers all over.
A little-known fact: we give free samples because, obviously, we want people to try
the products.
They're great products.
You talk about customer experience in the way that I hear consumer B2C companies talk.
Yes.
If you look at who our customer is, it's a design engineer, which is a completely different
experience from a consumer.
First, we have to get them there.
Then we have to walk them through and make sure it's easy to find what they need.
We have simulation tools, obviously the data sheets, the training videos, and free samples.
We understand the journey that a customer, in this case an engineer, goes through and
we've redesigned our website and our selling process around that.
So far, we've actually, in the last two years, each year we've doubled our e-commerce revenue.
That gives us a lot more insight to the customer, which, as we know with digital transformation,
is critical.
It sounds like this is all based on a very profound understanding and a detailed way
of what customers want, what they expect from you, how they use the products, and how they
interact with you.
Engineers are king in our company, but we've had to really expand our focus on the customer,
especially as we have 20,000 of them.
The small customers and medium customers that we can't touch directly, we have to touch
with our website.
You don't know which ones are going to become big customers.
Changing customer expectations then become a very significant driver of the actions you're
taking at MAXIM.
Expectations have gotten much higher, and we have to deliver.
What's the role of IT?
You haven't spoken about systems.
You're talking about customer experience and user experience.
All the business processes go from these systems over here to these systems over here.
The only people that understand the end-to-end process and make it work are IT.
What I realized was, if we're not getting better, if we're not executing the right projects,
we're hurting the company.
The world has changed, and IT is not a silo anymore.
Each business thing is not a silo.
It's one process, one integrated system.
You're breaking down silos.
How about from a systems perspective and a data perspective?
How does that help you reinforce the breaking down of those silos?
We created a business intelligence organization within IT many, many years ago.
The objective was to standardize, normalize, and centralize the key data in the company.
Keeping track of those billions of units across all the world and keeping it flowing is a
big challenge.
But, it's a lot easier if you have a good forecast.
IT really does have its hand across the entire company down at the basic level of systems
all the way up directly being involved with customer experience.
The business may not realize it, but you have to make it happen.
Otherwise, you hurt the company.
You have been working with SAP for decades.
Tell us a story of the early days of working with SAP.
I implemented SAP in 1995.
We were in a small office up in Foster City, California, when I first met Hasso Plattner.
We were both much younger then, but when I saw the software, when I saw the integration,
I knew it was what I wanted.
The funniest story: I was meeting with the head developer for S4/HANA, and I was telling
him the story that one of my guys comes back, and we had a SOx issue.
An asset started depreciation too long.
He sent me a thing saying it was an SAP bug.
I was like, "No."
[Laughter] [Laughter]
People who work with SAP know that it's not a bug.
There are almost no bugs with SAP, and especially with the accounting side.
I said, "Go back and get the right answer."
SAP is a great company and great software.
Walter, thank you so much.
All right, thank you.