ANZ EDITION JULY 2018 anz.businesschief.com
DELAWARE NORTH
SUPPLY CHAIN INNOVATION IN THE HOSPITALITY SECTOR
Citrix
EMBR ACING A SECURE AND FLEXIBLE WORKING CULTURE
THE ROAD TO TECHNOLOGY TRANSFORMATION CIO Shaune Rosser on how Sydney Motorway Corporation is embracing AI, analytics and the cloud — WITH EXCLUSIVE VIDEO
TOP 10 TALLEST COMMERCIAL BUILDINGS IN AUSTR ALIA
The source of value
Procurement executives across the globe continue to see the potential they can unlock throughout the supply chain. They understand that business today is about engaging, collaborating, adapting instantly to evolving needs, and finding new sources of value. Getting that value, however, can prove a challenge.
FOREWORD
ello and welcome to the July edition of the ANZ edition of Business Chief magazine. For our cover story this month, we start the conversation with Sydney Motorways Corporation’s CIO, Shaune Rosser, to learn how the firm is leveraging AI, analytics and the cloud to deliver vital infrastructure projects for the region. Next, we talk to Citrix’s Safi Obeidullah to learn how the ANZ region is embracing flexible working with cutting-edge digital workplaces. According to the International Energy Agency (IEA), an estimated 50mn electric vehicles will be in operation by 2025, and 300mn by 2040. We also spoke to EQUIIS, an exciting tech company providing end-to-end encryption for businesses as the cost of cybercrime increases. Sydney is Australia’s most populous city with an estimated population of more than 5mn as of June 2017. To find out more about the thriving city, we take a look at the diverse business sectors flourishing in Sydney today and how it’s keeping manufacturing modern in an ever-competitive market. At Business Chief ANZ, we’re also investigating the top 10 tallest commercial buildings in Australia and the trade that happens inside. Enjoy the issue!
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CONTENTS
08 Sydney Motorways Corporation
FLEXIBLE WORKING FOR A NEW GENERATION
26
Cyber solutions
to cybercrime
34
L E A D E R S H I P & S T R AT E G Y
TECHNOLOGY TOP 10
52 44
CITY FOCUS
Tallest commercial buildings in Australia
CONTENTS
60
Delaware North, Australia & New Zealand Construction
76
Cushman & Wakefield Supply Chain
Written by John O’Hanlon | Produced by Glen White
How Sydney Motorway Corporation is leveraging AI, analytics and the cloud to deliver vital infrastructure projects
S Y D N E Y M O T O R W AY C O R P O R AT I O N
Most companies are moving their IT to the cloud, but very few completely depart from on-premise systems. That’s why Sydney Motorway Corporation is different, agile and demonstrating the workforce of the future as well as tomorrow’s infrastructure model
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ike most large and growing cities, Sydney faces problems of congestion, but it seems that for a variety of reasons it is worse off than similar-sized cities globally. A report just out from the Property Council of Australia says Sydney’s brand is “better than the product”, a major reason being that it has worse congestion than San Francisco, Montreal, and Phoenix, for example. However, Sydney is also leading the field when it comes to devising ways of keeping the city moving. In August 2014 the New South Wales government created the Sydney Motorway Corporation (SMC), a private company with the J U LY 2 0 1 8
Shaune Rosser CIO Shaune Rosser is an information technology professional with more than 20 years’ experience in strategy development, planning and delivery of large-scale business and technology transformation initiatives. He has a strong track record of delivering results and driving efficiencies to optimise business processes and systems. Rosser has worked across the public and private sectors in Australia and internationally, successfully leading IT mergers for government agencies, shared IT services for large government clusters and the implementation of market leading IT as-a-Service operating models. His experience in working across diverse and complex environments includes key transformation roles with NSW Health and the Commonwealth Bank of Australia, as well as consulting roles in the finance, government, university and clinical innovation sectors.
TECHNOLOGY
“Our first goal was to create a commercial construct built on business outcomes as opposed to the traditional SLA model” – Shaune Rosser, CIO 11
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POWERING AUSTRALIA’S LARGEST INFRASTRUCTURE PROJECTS
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SYDNEY MOTORWAY CORPORATION PARTNERS WITH TECHNOLOGYONE TO DRIVE DIGITAL TRANSFORMATION FOR $16B INFRASTRUCTURE PROJECT Sydney Motorway Corporation (SMC) has been tasked with building and financing Australia’s largest transport infrastructure project, WestConnex, involving the widening and extending of the new M4, duplicating the new M5 and connecting the two motorways to provide a underground link that will create a free-flowing western bypass of Sydney’s CBD. Setting up a new business to manage this multi-billion-dollar project in a short timeframe meant SMC had little resources to spare on implementing the supporting business systems. It didn’t want to own or maintain the IT infrastructure required to run its business, instead opting for a zero IT footprint in-house to deliver flexibility, cost competitiveness and scalability. Where some would see insurmountable restrictions, the team saw an opportunity to do more with less and proceeded to lay the foundation for a smarter future, opting for a Software as a Service (SaaS) solution with Australia’s largest enterprise SaaS provider, TechnologyOne. SMC’s Chief Information Officer, Shaune Rosser, said the partnership with TechnologyOne has enabled it to focus on its core business, not IT. “We didn’t want to own or maintain the software, we just wanted to be able to consume the services. We wanted to have evergreen technology, with the upgrades managed and supplied, so it’s always current,” Rosser said.
TECHNOLOGYONECORP.COM/TRANSFORM
“Our people can access the TechnologyOne software from a URL, from any location knowing that with multi-factor authentication it’s safe, secure and reliable to do so. Our people can get the information they need, where and when they need it.” Mr Rosser said SMC went to market looking for a solution that would not only meet its IT requirements, but also its complex financial management and reporting needs. SMC now uses TechnologyOne’s enterprise SaaS solution to deliver efficient and effective operations, covering financial management, project accounting, reporting and analysis, and contractor management. “Since going live with TechnologyOne we’ve been able to reengineer business processes to align with best practice and operate as efficiently as possible. We’ve been able to reduce and simplify workflows, and have moved away from traditional paper-based processes to completely electronic,” Rosser said. SMC’s Deputy CFO, Bill Hartnell, added that the business has better integrated project and financial accounting, streamlined reporting and strengthened budgeting – all essential in effectively managing the $16 billion WestConnex project. TechnologyOne is Australia’s largest enterprise SaaS provider. Powering many of Australia’s largest infrastructure projects, the enterprise SaaS solution is available on any device, anywhere, at any time.
S Y D N E Y M O T O R W AY C O R P O R AT I O N
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brief of investing and financing major road projects – in particular the new company was commissioned by the NSW Roads and Maritime Services to deliver and finance WestConnex. As Australia’s largest transport infrastructure project, the A$16.8bn WestConnex project will play a crucial role in supporting the city’s expected population growth and will get Sydney moving again. WestConnex will be the central spine of Sydney’s motorway network, providing a long overdue underground link between the M4 and M5, creating a seamless motorway without traffic lights.
New M4 tunnelling
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At around 30km in length, WestConnex comprises six projects: the M4 Widening (completed 2017); the M4 East (opening 2019); the upgrade of the King Georges Road Interchange (opened December 2017); the New M5 (open to traffic in early 2020) and the M4-M5 Link which will be delivered in two stages, the mainline tunnels and the Rozelle Interchange and Iron Cove Link, with the entire scheme completed in 2023. WestConnex is a critical part of Sydney’s integrated transport solutions to tackle congestion
TECHNOLOGY
and increase productivity and will go a long way to catch the Sydney product up with the brand. Asset light, delivery strong So, SMC has been, and is, one very busy company. Spinning it out as a separate entity signalled a desire to deliver these projects in a different, non-traditional, agile way. Clearly the key to this would be how ready it was to use the best available IT systems, and adopt them as and when they were developed. To deliver this vision SMC recruited a suitably young and enthusiastic CIO. Shaune Rosser has more than 20 years of achievement
behind him but this was his first CIO appointment, so it says much that he was named in the 2017 CIO50 Awards as one of Australia’s top 50 technology and digital chiefs who are influencing rapid technologydriven change and innovation across their organisations. Unencumbered by the usual burden of legacy systems, he was not about to acquire any. SMC has no IT assets of its own, and has invested zero dollars making it, which Rosser thinks, is unique globally. It was a green field (how many CIOs must envy him) and he
‘The Workforce of the Future’ Sydney Motorway Corporation - Shaune Rosser CIO
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TECHNOLOGY
was able to establish a 100% as-aservice model for the company. “That gives us the flexibility to ramp up and ramp down as the business demands, and that is the beauty of system where we simply consume all of our services, bar none.” The model means that the business is flexible both in systems and in people. He doesn’t need a big team to manage the projects, but can bring creative specialists and highly skilled data analysts as they are required. “It’s the workforce of the future; a contingent workforce. We have embedded skilled people in the functional teams too.” This results in a collaborative relationship between IT and business units like finance, operations and HR: it also fits more easily than might be expected with a business whose core skills are engineering, planning and construction. In this business they’re well used to being part of a ‘contingent workforce’, Rosser says. They like people to come in, get their feet on the ground quickly, deliver the goods. It’s also easier for the people in SMC and its contractors to access
“It’s the workforce of the future; a contingent workforce” – Shaune Rosser, CIO
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data and documents in a cloud or ‘Technology One’ environment. Microsoft tools play a big part in delivering this through Enterprise Mobility Security and Office 365 in a solution developed in partnership with local IT systems experts. This, along with other tools from the Azure suite and SharePoint, manages mobile apps and devices while safeguarding corporate data, allowing secure collaboration. It also enables virtualisation programs. Centrally managing access and security has also ensured the w w w. a n z . b u s i n e s s c h i e f. c o m
S Y D N E Y M O T O R W AY C O R P O R AT I O N
New M4 - paving
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IT department is freed from tackling end user device issues. Through the as-a-service model, Rosser has achieved spectacular optimisation of the IT service desk, responding to and resolving 100% of requests within the stringent parameters set down in the agreed service level agreements (SLAs). “This was our first goal – to create a commercial construct built on business outcomes as opposed to the traditional SLA model. If I have an outage at 3.00am on a Sunday there’s probably time to resolve it but at 9.00 on a Monday it’s a different matter. J U LY 2 0 1 8
We may have sound contracts but if everybody is not collaborating we have real problems. It’s this commercial construct that allows all our partners to work very well together and it has maintained that operational excellence. We have made great strides in cost effectiveness but it’s also about mobilising the business and making sure it’s always available.” However, before the basic architecture could be constructed, business critical data and records had to be captured. When SMC
TECHNOLOGY
New M4 - paving
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was set up, all the data it was going to need, the financial information and the HR records were embedded within the SAP environment used by government departments. “We had to transfer those data assets and migrate our email systems in a very short space of time,” he explains. “Initially we had to separate our data and information within the existing government departments, then extract them and move them to the new business.” The as-a-service system has enabled SMC to create an evergreen environment in which all of its services
are constantly updated and patched (Rosser offers the analogy of one’s smartphone) to make sure the business is always using the latest and greatest and most mature version of the software. Welcome to the smart new world A recent independent assessment confirmed that SMC’s operating model gives the optimum balance between cost control and efficiency. “One advantage is that we can quickly shrink our head w w w. a n z . b u s i n e s s c h i e f. c o m
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TECHNOLOGY
count and with it our costs,” Rosser says. “Again, if we want to implement new capabilities we are quickly able to deploy them. And we can be strategically focused rather than operationally. That is where we start talking about AI and machine learning and predictive analytics and building a digital engineering capability.” The standard methodology for making a business case by PowerPoint is giving way to AI and predictive analytics, and Rosser wants SMC to be the leader in technology and innovation to create new opportunities and business optimisation. He understands that people can be wary of adopting new methods, but finds that once the value of those outcomes is explained, and how they enable a knowledge-based workforce to focus on the tasks that they need to be doing, they soon become as enthusiastic as he is. Building the world’s longest fourlane tunnel for the New M5 provides
a good illustration. It’s unusual in tunnelling but developing an intelligent 3D model in this case will lead to more efficient planning, design and construction. “It shows how it will look and how it will perform,” Rosser adds. “It gives a foundation for our future capabilities too, and things like design reviews, safety training; and also provision for training to ensure emergency readiness. With this 3D model people can start preparing, visualising and understanding the asset from an operational perspective. Then there’s maintenance training and planning so when they come to do it for real a lot of time will be saved.” A ‘digital twin’ of the motorway can encompass trillions of potential scenarios. SMC is creating a 3D replica model of the entire asset that will be invaluable for managing the motorway and predicting how it will perform in
Year founded
2014
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New M5 - Tunnelling
any permutation of situations. Apart from its obvious asset management advantage, its very existence attracts the workforce of the future, the best young talent who would love to work in this digital environment. The new generation At this point Rosser introduces J U LY 2 0 1 8
another passion of his – leveraging the power of technology entrepreneurs. “I think we need to look outside the organisation and complement our classical partners by teaming with high calibre startups that are leading technology innovation. In my experience the key to success
TECHNOLOGY
“We can quickly shrink our head count and with it our costs” – Shaune Rosser, CIO
is to step back and let them do what they are really good at. They are hungry, ambitious and bring a contagious sense of energy and excitement to the business.” This is one reason he is keen to partner, at the earliest opportunity, with technology startups. One example is Sydney-based AI specialist Elula,
which was chosen to scope and develop a number of AI concepts, a business made up of some very bright people. “Startups like Elula are nimble, they can meet our business needs and they are very different from our traditional partners. We get these people in because they think w w w. a n z . b u s i n e s s c h i e f. c o m
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There are currently 20 roadheaders digging the New M5 tunnels
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TECHNOLOGY
very differently and bring a real sense of excitement into the business as a whole. They spot opportunities and possibilities but, more importantly, are quickly able to prototype these faster than you could normally expect to create a business case.� It is significant that Rosser has no wish to hold all the reins himself but would rather share control with specialists, whether in engineering, or finance, or indeed any aspect of IT. One of the most valued compliments he has been paid was from a colleague who told him how much his approach was appreciated in the business: a less prescriptive approach where people are trusted and empowered through the change process and colleagues are encouraged to do what they do best. SMC is going to change – a controlling interest will soon be sold by its government owners to investors. After one of the biggest global infrastructure acquisitions, the new owners will have the right to own and operate the motorway and then perhaps position it to take on further projects. Whatever happens after 2023 when WestConnex is a reality, the capabilities of this uniquely capable organisation will surely attract the attention of infrastructure developers around the world.
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LEADERSHIP
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Flexible working for a new generation From the experienced to the tech-savvy, multiple generations make up a changing workforce. Business Chief asked Citrix’s Safi Obeidullah how secure, flexible working can be embraced in the ANZ region WRITTEN BY
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OLIVIA MINNOCK
A
s businesses demand increasing flexibility from employees and digitisation affords staff the option
to use their skills as best suits their lifestyle, Citrix develops digital workspaces and offers software for companies to meet these demands. With over 20 years of experience in IT and end user computing, regional director for Sales and Engineering, Safi Obeidullah, has seen this transformation first hand. Obeidullah joined Citrix eight years ago, having previously worked with IT training course providers, where huge amounts of time and energy were taken up installing applications on computers for each training
a n z . b u s i n e s s c h i e f. c o m
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LEADERSHIP
session. “Back then, computers had
how Citrix solutions have impacted the
very little storage,” he explains, harking
lives of people, whether it’s enabling
back to a time that must seem archaic
doctors to remotely engage with
to the likes of Citrix. “Every afternoon I
patients, affording working mothers the
went around installing the right soft-
flexibility to work from home, or allow-
ware on 71 computers.” Citrix’s offering,
ing organisations to continue operating
which allows clients to centrally host
after a financial disaster.”
applications to be accessed from any computer, offered a welcome solution.
The world of work
“I was hooked on the Citrix model.”
Since its foundation back in 1989, Citrix
“My time working with Citrix solutions
28
has expanded across the globe to a
has made me incredibly passionate
workforce of over 8,000. Currently, Cit-
about maximising the employee experi-
rix solutions are used by Citrix solutions
ence,” says Obeidullah. Indeed, Citrix
are used by more than 400,000 organi-
aims to help people do their jobs with
sations including 99% of Fortune 100
as less hassle, increasing efficiency and
and 98% of Fortune 500 companies.
results. “It’s always so rewarding to hear
It’s certainly a company we have all
“ As organisations embrace the future of work, they are looking to better leverage technology to attract top talent, enhance employee engagement and experience, and empower their workforce to work in new and more productive ways” — SAFI OBEIDULLAH, Director for Sales and Engineering ANZ, Citrix
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come across, whether or not we realise
when it comes to cloud adoption,” says
it. “As organisations embrace the future
Obeidullah. “Citrix is helping ANZ cus-
of work, they are looking to better lever-
tomers embrace cloud-first, mobile-first
age technology to attract top talent,
strategies to advance business and
enhance employee engagement and
competitive advantages.”
experience, and empower their work-
Increasingly, flexible working is no
force to work in new and more
longer just an added bonus. “Today,
productive ways,” Obeidullah explains
flexible work covers a range of uses and
– and this rings true globally. The com-
reasons, including the ability to form
pany is passionate about affording
work teams who may be geographically
employees access to the information
dispersed, enabling them to rapidly
they need wherever they are. “At Citrix
meet and disband. Workers today are
we are dedicating to powering a better
working from an average of four loca-
way to work.”
tions during their work day, be it from a
Ctrix Digital Workspaces also allow
home office, coffee shop, customer site
organisations to boost productivity and
or even during the commute,” Obeidul-
engage more consumers. “With a flexi-
lah explains, citing Citrix research
ble and secure platform, organisations can connect, collaborate and innovate anywhere – on any application, any device, any cloud, at any time. This is how the future works.”
Flexibility in ANZ This is a noble goal for global business, and one Citrix helps MNCs work toward, but what about the ANZ region in particular? “The transition to digital workspaces is well underway in Australia, in fact Australian organisations are among the world’s most innovative a n z . b u s i n e s s c h i e f. c o m
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LEADERSHIP FACT
reporting that globally, seven in 10 employees would consider leaving their current job for one with more flexible hours.
A safer way to work With rapid digitisation, data security is an increasing risk. Citrix offers companies the assurance that their information is secure, which can then be passed on to their customers. “As organisations plan for their future, security continues to be a top priority. According to Ponemon Institute’s 2017 Cost of Data Breach Study, 80% of Australian businesses worry about data breaches and 74% 30
see a need for a new security framework.”
8,000+
Number of staff at Citrix
400,000 Organisations using Citrix solutions
98%
Of Fortune 500 companies use Citrix
70%
Of employees would leave their job for one with more flexibility
According to Obeidullah, new security policies are necessary to deal with the number of endpoints, locations, networks, clouds and data sources involved in flexible working. “As
risk and compliance; and busi-
a vital partner for organisations in Australia,
ness continuity and app security.
our solutions enable secure work environ-
“Citrix has been solving security
ments that limit an organisation’s risk profile
challenges for years. We are at
without placing undue restrictions on the way
the forefront of identifying key
people work. Our solutions are transparent
vulnerabilities and, with a robust
and enabling, not detractors from or disablers
product and services suite, we
of productivity and flexibility.”
help organisations fully prepare
According to Citrix, the key security challenges as businesses undergo digital transformation are contextual and secure
and protect against constantly evolving IT threats.” Currently under development
access; mobile and device security; secure
is the Citrix Analytics service
collaboration and IP protection; governance,
which will offer insights into secu-
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rity threats for clients to deal with
and technologies because they are too
proactively. The software will apply
complex. The solution? “Smart organi-
machine learning to identify malicious
sations will take an active role in
user behaviour or anomalies and take
engaging and uniting employees
action. “Customers from every industry
against breaches and security issues,”
– including the most highly regulated
Obeidullah suggests, recommending
sectors – rely on Citrix to provide a
fake phishing attempts and mock
secured foundation,” says Obeidullah.
breaches to enhance employee aware-
According to Citrix’s insight, a com-
ness and promote proactivity.
pany’s own staff can be the biggest threat to keeping data secure. In a study
A new generation
by the Ponemon Institute for Citrix, 60%
With all the flexibility and efficiency
of respondents stated employees and
technology brings, there will always be
third parties bypass security policies
new challenges thrown up. For Obeia n z . b u s i n e s s c h i e f. c o m
LEADERSHIP
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“ For the first time in history, workforces are comprised of up to four distinct generations, which presents a range of challenges. Multigenerational workforces are increasingly becoming the norm in Australia, presenting productivity, engagement and retention issues” — SAFI OBEIDULLAH, Director for Sales and Engineering ANZ, Citrix
dullah, a key issue is the mix of the older, more experienced versus and younger, tech-savvy members of the workforce. “For the first time in history, workforces are comprised of up to four distinct generations, which presents a range of challenges. Multigenerational workforces are increasingly becoming the norm in Australia, presenting productivity, engagement and retention issues. As businesses drive digital transformation, they need to provide the tools and culture to enable work to be done, where and how employees need. Each generation brings a unique skillset, leadership style, work-life balance perception and communication attitude. This can foster creativity and expand approaches to problem solving. Technology should be used to support productivity regardless of work style.” Although digital workplaces are on the up, it might not be time to lose physical contact altogether. “Organisations need to offer a variety of ways employees can engage and interact. Physical meeting spaces geared for collaboration are a critical part of any organisation.”
The future of work While ANZ is one of the most progressive regions for digitization, Obeidullah cau-
across the entire Citrix portfolio. “Today, cloud delivered services represent about 20% of market opportunity, and by 2020 it is expected to drive more than half.” Another mission is to unify the technologies in Citrix’s offering into one Secure Digital Workspace. These services will be available on-premise as well as in the cloud. “Our goal is to provide an intuitive, elegant experience for managing and delivering apps tions: “Cloud adoption is still in its infancy with
and data, from any cloud to any
organisations learning, sometimes the hard
device.”
way, how to operate effectively in the cloud
The Secure Digital Perimeter is
world. The pace of change in technology con-
a particular passion for Obeidul-
tinues to be both fascinating and stimulating.
lah. “Realising the full benefits of
Personally, I am keen to see how emerging
the cloud while avoiding com-
technologies such as IoT, VR/AR and machine
plexity and security challenges
learning will further transform organisations,
requires a unified, contextual and
enabling them to truly embrace a digital oper-
secure digital workspace. IT and
ating model.”
users co-create a software-
Citrix is also working to transform itself or
defined perimeter that protects
the future, to help clients power their business
the business, data and infrastruc-
initiatives. “We have outlined our multi-year
ture. Digital workspaces secure
financial plan that drives increasing customer
and integrate technologies, plat-
and shareholder value and defined strategic
forms, devices and clouds,
priorities that drive our growth opportunities,”
ensuring that organisations can
Obeidullah outlines. These priorities include
operationalise the future or work
the acceleration of building cloud services
and drive business forward.”
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TECHNOLOGY
Cyber solutions WRIT TEN BY
OLIVIA MINNOCK
to cybercrime
With data breaches highly publicised and ransomware threats on the up, Business Chief caught up with software company EQUIIS to find the solution
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W
ith the cost of cybercrime to business in 2016 estimated at $500bn in lost revenue, and this figure expected to increase by over $2trn by
2019, businesses both public and private are still struggling to implement secure communication. EQUIIS CEO Derek Roga is adamant more needs to be done to offer economical and intuitive solutions. EQUIIS provides enterprises with a range of secure communications solutions so that from oil and gas companies to law firms, businesses can communicate securely and efficiently with each other and with clients, protected against the ever-increasing dangers of cybercrime and ransomware. a n z . b u s i n e s s c h i e f. c o m
TECHNOLOGY
With a recent report from NTT Security having revealed one third of global business decision makers prefer to risk ransomware demands rather than investing in cybersecurity, despite attacks having increased by 350% in 2017 alone, it’s no surprise there are so many issues with keeping data secure and that EQUIIS is growing exponentially in a previously neglected space. Derek Roga, a tech entrepreneur with 25 years’ experience, previously worked in the telecom software space, working with Blackberry before founding EMS in Dubai in 2005, which
“The idea was involved “taking the Blackberry solution to the to provide an marketplace through mobile operators”. three years, EMS became Blackberry’s easy-to-integrate Within largest partner, representing 18% of the complatform that pany’s global sales and working with 105 could provide mobile operators worldwide. the enterprise Roga went on to work with clients in the with a tool to intelligence community. “They had a need to communicate understand what type of communications securely” took place where and if there was anything — Derek Roga, CEO EQUIIS
surreptitious they could identify.” Thus, in
2016, Roga was well-placed to go out on his own in the space and founded EQUIIS to assure clients with similar needs of a secure, compliant communication method.
J U LY 2 0 1 8
Speaking to Business Chief,
prises solutions for securer, compliant
Roga was joined by Joe Boyle,
managed communication”.
CEO and co-founder of SaltDNA,
Together, both entrepreneurs’ experience
who started working closely with
helped fill the cybersecurity gap. “What
Roga when the businesses
drove us to start the business was that over
formed a technology partnership
the past several years there had been a sig-
in 2017. Previously, Belfast-edu-
nificant uptick in cybercrime,” says Roga.
cated Boyle had worked for
“It’s a significant issue being faced by entre-
Irish-based startups as well as
preneurs. The idea was to provide an
Ericsson. “After a number of
easy-to-integrate platform that could provide
years working in telecoms, I
the enterprise with a tool to communicate
made a switch to work in enter-
securely: secure messages, calls and file
prise networking.” In 2013, he
transfer, and being able to spontaneously
founded SaltDNA, which was
have conference calls in a secure manner,
largely focused on “giving enter-
regardless of where the team was in the a n z . b u s i n e s s c h i e f. c o m
TECHNOLOGY
“ A lot of organisations are grappling with how to do the most to ensure cybersecurity solutions are implemented with the least amount of investment” — Derek Roga, CEO EQUIIS
J U LY 2 0 1 8
world.” EQUIIS also offers the option to burn messages at both ends once read in case a device becomes vulnerable.
SECURE MARKETS EQUIIS’s closed communication network gives clients two options to communicate. “We have our
How does EQUIIS’s offering differ from a con-
own cloud network where we
sumer-facing communication service? “The
host the solution. An enterprise
WhatsApps and Vibers of the world enable
subscribes and we give them a
somewhat secure communications but are not
portal through which they can
made for enterprise,” says Roga. With EQUI-
manage their subscribers. It’s in
IS’s solution, he explains: “the administrator
our secure network and they can
controls who has access, who is communicat-
deploy it across their whole
ing with them, how they are communicating
enterprise really quickly.” The
and where they are communicating from,
second way is an on-premise
ensuring the integrity of the platform.”
solution which affords the client
“The reason clients choose us,” Boyle adds,
organisation complete control.
“is really that control and management of
“We take the infrastructure we’ve
closed user groups. Being able to do secure
developed and replicate that in
conference calls within their own network,
the client’s own network.”
not having to trust anyone else, is a key requirement for these large organisations and government bodies that can’t afford to take any risks.” Key markets for EQUIIS include the oil and gas industry, and the business is now growing in the legal and government sector. “A number of law firms use our solution,” says Roga. “In some cases, law firms are mana n z . b u s i n e s s c h i e f. c o m
TECHNOLOGY
dated to ensure the protection
transaction and communication
and integrity of their attorney-cli-
be recorded and kept for
ent privilege communications, so
future reference.”
they use our solution to accom-
A key added value for clients is
plish that.” In terms of
the assurance of compliance
government, particular areas
and safety when using EQUIIS’
include police, military and intel-
solution. “Clients are looking for
ligence organisations. “They are
a partnership,” Roga explains,
required, or have their own man-
“And if the partner and the people
date, to ensure they’re getting
representing it can really empa-
the best of the best in regards to
thise and understand their
technology, and that the solution
challenges, and provide real
they implement has the highest
world solutions, not hypothetical
of security built around it. Over
ones, it becomes a partnership.”
the last two quarters we’ve had
A consultative process also
some significant wins with
helps assure customers the
government agencies.”
solution suits their needs. “We
In addition, business in the
can get a test group running
healthcare and finance sectors is
within seconds so they can use
picking up. “We offer something
the solution. It’s intuitive; there’s
unique in this space: the ability to
not much training required and
be compliant, particularly around
this can then broaden to a wider
regulatory requirements. In the
group of users. It’s an elegant
financial services industry,
way for us to build rapport
there’s a requirement that every
and relationships.”
“ We can get the latest encryption techn then wrap up the management, cont and compliance around these techn — Joe Boyle, CEO and co-founder of SaltDNA
J U LY 2 0 1 8
hnology and trol, visibility nologies”
OPEN SOURCING SAFETY In addition, Roga feels use of open-source software assures users the solution is safe. “What we have is not proprietary technology. We use open-source encryption: it’s tried, tested and validated. Frankly, when you start touting proprietary solutions in the market, two things happen: there isn’t enough user experience to validate the technology, and secondly you are a n z . b u s i n e s s c h i e f. c o m
TECHNOLOGY
opening yourself up for people to try to
tomers are unaware of potential dangers
be the first to hack it.”
and how much data isn’t encrypted.
“We don’t see ourselves as cryptogra-
“There’s a level of apathy. But it’s defi-
phers,” Boyle explains. “We take the
nitely something we see as becoming
latest and greatest encryption technol-
more and more important across organi-
ogy and if something better comes along, sations and sectors. Our technology it’s about a three to four-week process to
should definitely be something anyone
upgrade. We’ve done that four times in
who has a trusted engagement with a
five years. What makes us different is
client where they are dealing with sensi-
that we can get the latest encryption
tive information should leverage.”
technology and then wrap up the man-
Echoing the NTT study, Roga empha-
agement, control, visibility and
sises how little organisations are willing
compliance around these technologies
to spend on cybersecurity, even in 2018.
to make it something an enterprise can
“If I’m a corporation, and I’m going to
easily buy, because we tick all the boxes.” invest say $10mn in a marketing camWith data breaches these days widely publicised, Boyle argues “the vast
paign for example, I can see my return on investment (RoI) in a very tangible
majority” of businesses and indeed cus- way. It can be measured and quantified.
$500bn
revenue lost from cybercrime in 2016 J U LY 2 0 1 8
Whereas if I take the same $10mn and
in the UK, and in Asia and North and
invest in cybersecurity, that RoI is
South America lots of people send
intangible. A lot of organisations are
voice clips. Not only does this allow
grappling with how to do the most
you to have an asynchronous conver-
to ensure cybersecurity solutions
sation with someone, but it is actually
are implemented with the least
highly compliant as you can keep a
amount of investment.
record of things as they progress.”
“We come in offering a very elegant
In addition to voice notes, Roga
solution giving peace of mind that one
adds: “From a technology perspective
part of the issue is covered – and cov-
we’re always innovating. Our service
ered economically.”
is significantly enhanced: we’re bringing in video conferencing and
LOOKING AHEAD
communication… A lot of the
An area of increasing important for the
enhancements we implement come
future will be voice clips, says Boyle.
from direct interaction with our cus-
“A lot of organisations on the con-
tomers and understanding the
sumer side are sending voice clips
landscape we exist in. That’s going to
and voice notes. It’s catching on more
happen continuously.”
a n z . b u s i n e s s c h i e f. c o m
CITY FOCUS
City Focus 44
A look at the diverse business sectors thriving in Sydney and how the city is keeping manufacturing modern
45
WRITTEN BY
OLIVIA MINNOCK
CITY FOCUS
S
ydney is Australia’s most populous city with an estimated population of more than 5mn as of June 2017. Situated on the east coast of Australia, Sydney’s borders begin at Port Jackson and run nearly 44 miles to the west toward the Blue Mountains.
Impact on the Australian economy 46
Sydney has been recognised by numerous entities for its global economy and is ranked as number 11 on the Global Economic Power Index. Nearly 50% of Australia’s top 500 companies have their bases in the city while it is also home to the regional headquarters of numerous multinational companies. One of the primary appeals of opening a business in Sydney is the fact that its time zone provides a link between the opening of European businesses and the closing of those in North America. Each year, the city of Sydney generates over $108bn in revenue. This figure comprises more than 7% of the country’s economy and provides nearly 450,000 diverse jobs. J U LY 2 0 1 8
47
‘ Of the 43 foreign banks that operate in the country, 40 of them are based in Sydney including Investec, Bank of America, Credit Suisse, the People’s Bank of China and Barclays’ The insurance and financial services
A diverse business centre
sector makes up about 43% of the city’s
The Australian Securities Exchange,
economy with Sydney being responsi-
located in Sydney, has been in opera-
ble for half of the country’s financial
tion since 1987. It boasts $1.6trn in
industry. Nearly 300 global companies
market capitalisation and is one of the
maintain regional offices in the city
top 10 largest in the world.
of Sydney.
Of the 43 foreign banks that operate a n z . b u s i n e s s c h i e f. c o m
CITY FOCUS
in the country, 40 of them are based in
or nearly 3mn people – are hosted
Sydney including Investec, Bank of
by Sydney each year. Almost $6bn
America, Credit Suisse, the People’s
is spent by international visitors every
Bank of China and Barclays.
year in the city.
Manufacturing is a huge sector for
Additionally, domestic visitors
Sydney with an annual output of more
numbered more than 8mn with an
than $21bn. The city’s shift to include
additional $6bn being spent by them
high-tech manufacturing in addition to
during their stay.
traditional manufacturing has resulted in a resilient economy.
Some examples of Sydney-based companies making waves in the manu-
About half of all visitors to Australia –
facturing industry include:
ARNOTT’S BISCUITS
48
Arnott’s Biscuits is the largest biscuit producer in Australia as well as the country’s second-largest snack food supplier. Now owned by US-based Campbell Soup, Arnott’s was founded in 1865 and employs over 4,300 people, including over 2,400 Australians with other workers based in New Zealand, Indonesia, Malaysia, Singapore and Japan. The company also has a commitment to Australian produce, claiming to spend around $250mn on produce, products and services within Australia each year. W W W. A R N O T T S . C O M . A U
J U LY 2 0 1 8
UNILEVER AUSTRALIA
The ANZ subsidiary of Anglo-Dutch multinational Unilever makes its home in Sydney. Unilever manufactures fast-moving consumer goods (FMCG) divided into ‘home and personal care’, ‘foods (excluding ice cream)’ and ‘ice cream’. Its ice cream subsidiary, Streets, is the largest ice cream company in Australia. Unilever Australia employs around 1,600 people while the company boasts over 169,000 staff globally. W W W. U N I L E V E R . C O M . A U
49 CSR LIMITED
CSR is an Australian industrial company which makes building products, operating low cost manufacturing facilities to serve construction companies across Australia and New Zealand. It also has a focus on researching new challenges in construction such as environmental sustainability, manufacturing products like energy efficient glass and insulation. CSR employs just under 3,000 people and is registered on the Australian Stock Exchange, with its most recently recorded revenue at $1.74bn. W W W. C S R . C O M . A U
CITY FOCUS
Home to innovative startups Sydney is home to a number of innovative startups that demonstrate the city’s talent and capacity for success. The following companies provide an inkling of the vast opportunities that exist within the city.
50
VEROMO
Having launched in 2016 after securing nearly $1mn in funding, Veromo is a platform aimed at helping entrepreneurs get started. By automating most of the processes needed to start a business, Veromo provides a streamlined experience with a focus on reducing the frustration that new business owners sometimes feel as they try to navigate the different steps that are necessary. W W W .V E R O M O . C O M
‘The city’s shift to include hightech manufacturing in addition to traditional manufacturing has resulted in a resilient economy’ J U LY 2 0 1 8
UNO HOME LOANS
Vincent Turner, the founder of Uno Home Loans, started the country’s first digital mortgage service and has a $21.5mn investment from Westpac, one of Australia’s biggest banks. After 15 years of experience as an entrepreneur in the fintech space, Turner decided to launch a platform that enables prospective homeowners to search for a home loan, compare rates and other criteria and settle their home loan all in one place. Best of all, Uno Home Loans has a team of experts in place that can help potential homeowners as much or as little as they want. W W W. U N O H O M E L O A N S . C O M . A U
51 SOUND SCOUTS
Sound Scouts works to test children’s hearing through play. Developed by founder Carolyn Mee, Sound Scouts can find hearing issues in children that might otherwise remain undiagnosed. If left untreated, hearing loss can affect a child’s academic and social development. Mee hopes that Sound Scouts will be adopted by the Australian government as a cost-effective method to screen the hearing of all children in the country. In addition, the Sound Scouts team is working with teams in both the US and UK to develop localised versions. W W W. S O U N D S C O U T S . C O M
a n z . b u s i n e s s c h i e f. c o m
T O P 10
52
J U LY 2 0 1 8
tallest commercial buildings in Australia This month, Business Chief looks at the tallest commercial buildings in Australia and what kind of trade happens inside. All measurements are correct to the building’s highest point W RI T T E N BY
S H A U N B O W IE
a n z . b u s i n e s s c h i e f. c o m
53
T O P 10
Brookfield Place 769 ft
www.brookfieldplaceperth.com
Constructed in 2012, Brookfield Place is a composite office tower in Perth, Australia and is the second tallest building in Western Australia. Initially proposed in 2007, the building was designed by Fitzpatrick + Partners and currently houses a variety of bars, dining venues and shopping opportunities along with 334 parking spaces, 54
MLC Centre 748 ft
while also acting as a commercial office block. The main tenant of the building is BHP Billiton, an Anglo-
www.mlccentre.com.au/home
Australian mining and petroleum
The MLC Centre, located in Sydney,
company which has its main head-
was completed in 1977 following five
quarters in Melbourne.
years of construction work on the tower. Designed by Australian-based architecture firm Harry Seidler and Associates, the MLC Centre was the tallest building in Australia and the second tallest concrete building in the world when it was completed. Standing at 748 ft with 60 above ground floors and eight underground levels, the structure also boasts 33 elevators and over 1mn sq ft of floor space. J U LY 2 0 1 8
Citigroup Centre 797 ft
www.citigroupcentre.com.au
Citigroup Centre, also known as Park Plaza, is a 50-storey tower with 41 floors of office space, five levels of underground parking for visitors and tenants and four floors of commercial retail space. There is also an underground
Deutsche Bank Place 787 ft
www.fosterandpartners.com/projects/ deutsche-bank-place
With its distinctive stepped profile and
retail arcade that connects the lower ground floor to the Queen Victoria Building and Town Hall Station. The building, designed by architecture firm Crone, was completed in 2000 and is the second tallest building in Sydney.
steel columns, Deutsche Bank Place is a 787 ft office tower found at 126 Phillip Street, Sydney. Construction was proposed in 1997 and building work came to a close in 2005 with the architecture firm Foster + Partners being responsible for the building’s eyecatching design. The building is owned by Investa Property Group and its current tenants include German investment bank Deutsche Bank, international law firm Allens and global management consultancy Brain & Company.
a n z . b u s i n e s s c h i e f. c o m
55
T O P 10
Central Park Tower 817 ft
www.central-park.com.au
Central Park Tower, named after the green space found at the base of the structure, is a 52 floor, 817 ft tall tower in Perth. Constructed in 1992, it has
Chifley Tower 801 ft
www.chifley.com.au/tower
56
been the tallest building in Perth since completion. Major tenants currently operating within the complex include mining company Rio Tinto whose logo
The tallest building in Sydney at 801 ft,
currently resides at the top of the
Chifley Tower is a 50-storey office
tower, law firm DLA Piper and internet
block found at 2 Chifley Square. Pri-
service provider Westnet. Since 2001,
marily a commercial building, over 30
Central Park Tower has hosted an
law firms, financial institutions and
annual stair climb up to raise money
corporations have offices located
for MS Australia.
within the tower such as Australian investment firm Ariadne Administration LTD and the world’s largest asset management company BlackRock. Although construction on the building was finished in 1992, a 10 ft lightning pole was added to the top of the structure in 2000, increasing its height from 791 ft to 801 ft. The tower, and the square in which it is found, is named after former Australian Prime Minister Ben Chifley. J U LY 2 0 1 8
1 William Street 852 ft
www.qld.gov.au
1 William Street stands at 852 ft and is the tallest building in the city of Brisbane. It has 46 floors, three underground levels housing 318 parking spaces, and 24 elevators. It cost $650mn and was designed by architecture firm Woods Bagot, being proposed for construction in 2012. From 1982 to 2013 the site was used as a government car park until construction on 1 William Street began.
Rialto Towers 824 ft
www.rialto.com.au
The building is often referred to by locals and the media as the ‘Tower of Power’ due to the perceived political importance of the structure which is
The tallest office building in the south-
entirely occupied by Queensland
ern hemisphere when it was built in
Government public servants.
1986, the 824 ft Rialto Towers in Melbourne rises as two interlinked reinforced concrete towers which reach 43 and 63 floors respectively. Rialto also featured Melbourne’s first public observation deck on its 55th floor up until its closure in 2009. The following year the fine dining restaurant Vue De Monde and cocktail bar Lui Bar opened in its place in 2010. a n z . b u s i n e s s c h i e f. c o m
57
T O P 10
58
101 Collins Street 853 ft
www.101collins.com.au
Designed by Denton Corker Marshall and built in 1991, 101 Collins Street and has 891,000 sq ft of gross floor area. Over the building’s 50 floors there are over 60 commercial tenants including law firm Allens, investment banks Morgan Stanley and Goldman Sachs Australia and asset managers BlackRock. To make room for 101 Collins Street, the CRA (Consolidated Zinc Building), which was the tallest building in Melbourne when it was built in 1962, was demolished.
J U LY 2 0 1 8
59
at120collins 869 ft
www.at120collins.com
The tallest commercial – and third tallest overall – building in Australia, 120 Collins Street is 869 ft tall and was constructed in 1991. Built in a postmodern style in homage to the art deco buildings of New York, the architecture firm Hassell was responsible for the design in association with Daryl Jackson. It was the tallest building in Melbourne until the residential Eureka Tower was built in 2006. 120 Collins Street is home to a number of high profile tenants, including Japanese multinational Mitsubishi, investment banks Citigroup and Rothschild and real estate investment management firm Qualitas.
a n z . b u s i n e s s c h i e f. c o m
Procurement perfection at Delaware North
Just over a century old, Delaware North is among the most admired hospitality groups in the world. Its Australian operations are diversifying, and reducing procurement complexity is catalysing that process Written by John O’Hanlon Produced by Glen White
D E L AWA R E N O RT H , AU ST R A L I A A N D N E W Z E A L A N D
S
62
port is big in Australia and Delaware North has been a big name in Australian sport since the foodservice giant entered the ANZ market more than 30 years ago. The global company has remained in the ownership of the Jacobs family right through its history, and that culture of family, entrepreneurship and flexibility continues to shape an ethos which is best summed up by Chairman Jeremy Jacobs’ remarks in the 2017 Annual Report: “Our centennial was a great reminder of the core principles and values-driven approach to business on which our company was founded. Since the early days of peanuts and popcorn, Delaware North has thrived on the strength of our industry and client relationships. Trust, integrity and character are values that we hold dear to our family, and they are the same values we have instilled in our company. We know that the strength of our partnership with clients and colleagues is the key to our continued growth and success.” This emphasis on partnership is the key to the supply chain transformation currently being led within the Australian business by Adrian J U LY 2 0 1 8
Adrian Lorenzin Director of procurement
Adrian Lorenzin is Director of Procurement of Delaware North’s Australian and New Zealand operations. A career beginning in airlines in the late 2000s it didn’t take Lorenzin long to move from his educational focus of finance into the world of procurement. A number of years were spent working at Qantas, the country’s largest airline, supporting the procurement efforts in the corporate services category. From here he moved into the procurement team at Coles, the nation’s second largest supermarket, specifically focusing on logistics sourcing. This gave rise to a number of moves made whilst at Coles culminating in his role as Head of Central Logistics, overseeing a team of 16 professionals supporting the central operations of Coles’ $1.2bn-plus logistics network. Lorenzin has managed a vast array of procurement activities with values ranging from $5mn to $200mn across the corporate services and supply chain categories. He is an advocate for the procurement profession in Australia and supporting those who see it is a viable career to drive the success of Australian businesses.
S U P P LY C H A I N
63
“We expect our revenue will grow significantly in the next three years: procurement will play a major role in that” – Adrian Lorenzin, Director of Procurement
w w w. a n z . b u s i n e s s c h i e f. c o m
AUSTRALIA’S MOST LOVED IMPORTED BEER^ BRAND HAS A NEW VARIANT AVAILABLE NOW ^Corona is the #1 imported premium beer and represents 68% of total premium imported pack beer sold in on premise. IRI AU liquor weighted MAT March 11 2017.
S U P P LY C H A I N
Lorenzin, its (relatively) new Director of Procurement. Lorenzin brought with him extensive experience in the airline and retail industries, most recently with the country’s second largest supermarket chain Coles, but with less knowledge of hospitality. However, he and the leadership that appointed him thought this an advantage rather than a drawback. What was needed was a fresh approach. The Australian business is at an interesting stage. Having established itself firmly as the leader in sports hospitality services, with Melbourne & Olympic Parks (home of the Australian Open), Melbourne’s Etihad Stadium
and the Sydney Cricket Ground in its portfolio, it expanded its travel hospitality services business, with an increased presence at the majority of capital city airports around the region. In 2009 it acquired several iconic Australian resorts including Lizard Island, Kings Canyon Resort and El Questro Resort. Growing critical mass Now the business is in growth mode, having just purchased its first two pubs in Queensland. Thus far Delaware North had not owned any pubs or purely gaming w w w. a n z . b u s i n e s s c h i e f. c o m
65
D E L AWA R E N O RT H , AU ST R A L I A A N D N E W Z E A L A N D
66
operations in Australia, though it’s big in gaming in its other markets such as the US, explains Lorenzin. “The pubs and gaming sector is where we see significant growth coming from and we will look to expand our portfolio in the next few years.” He sees his role as to extract value from the A$100mn current annual spend by developing the procurement strategy and applying that to the growth business: “We expect our revenue will grow significantly in the next three years: procurement will play a major role in that.” With pubs set to become a major business unit, Delaware North will be moving into a very closely regulated and compliance-based environment. This is an expansion that will need to be very carefully managed, though it will be a perfect marriage between the food and beverage core business and the gaming market. Exciting times for Adrian Lorenzin and his team, for whom this is about much more than scaling up an existing operation. In August 2017 he joined a business that was prepared for change. “I have always been mindful that my procurement strategy needs to fit J U LY 2 0 1 8
S U P P LY C H A I N
67
“One of the best things we can give
this business from a procurement perspective is confidence and commitment in their cost base” – Adrian Lorenzin, Director of Procurement
w w w. a n z . b u s i n e s s c h i e f. c o m
S U P P LY C H A I N
into where the business is going rather than have the business fit into my procurement strategy. The basis for the procurement transformation started at the most senior levels with our executive team – they saw some opportunities and green shoots in areas that they scratched in the twelve months before I arrived.” Nevertheless, supply change management was not as mature at Delaware North as he had been used to at Coles or Qantas – multi-billion-dollar companies with a highly advanced procurement function – and very commercial in the way that they go about managing suppliers. But these large ASX companies could also be onerous. “I came in with the view of bringing the best of what I have done previously in bluechip environments while avoiding the things I had identified as slowing those cultures down. The environment that I identified when I came here was a traditional supplier model. We’d engage suppliers without any long-term commitment, negotiating discounts and the like, but with very little true marketing engagement.” The first partnerships Lorenzin forged were internal. After launching
a three-year analysis of value in every corner of the supply chain (the first pillar of his transformation), he looked at how procurement engaged with the operational side of the business. This necessitates a broad cultural change, he believes. Rather than making sourcing decisions centrally and asking the management of sites to live with them, Lorenzin started to invite operations to make their preferences known. “There was an opportunity to increase two-way dialogue and give operators the chance to share input. I was saying to key operational partners, ‘You will have a voice more than you’ve ever had. However, it will be structured.’ We have been very clear as to what we will be sourcing from the market and where we will be seeking their input.” Procurement, he says, is the magnifying glass that draws together the expertise across the business, concentrates it and obtains the best outcome for the business. The Pareto rule applies: 80% of the total spend w w w. a n z . b u s i n e s s c h i e f. c o m
69
LEADING BRANDS WITHIN THE IMPULSE / CONVENIENCE CHANNEL ACROSS ALL SALTY SNACK SEGMENTS PepsiCo Australia & New Zealand, under the operating arm called The Smith's Snackfood Company, is Australia’s largest manufacturer of salty snackfood products. Supplying Australians for more than 85 years, PepsiCo Australia & New Zealand operates nationally with extensive operations rights across Modern and Traditional Trade channels. PepsiCo Australia & New Zealand is able to draw on its scale of operational experience from markets around the world along with the global market presence of a portfolio of internationally recognised brands.
www.smiths.com.au
21 ‘mega-brands’ with total estimated worldwide retail sales in the vicinity of US$100 Billion and Second largest food & beverage business in the world.
DISCOVER MORE
S U P P LY C H A I N
“I think I know
the route to the summit, but before I tackle that I want to get the business to base camp one” – Adrian Lorenzin, Director of Procurement 71
is on things that do not require local flexibility; 20% may be on things that really need to be locally sourced. Take wines for example: “We run bars in airports across Australia and we always need to have local wines represented. Often we’d look to the nearest winery – but the largest wine supplier that we work with owns 96 Australian wineries! We are working with a strategic national partner that can satisfy local needs but operations don’t know that because they don’t have the bird’s eye view. Procurement’s job is to create a commercial framework
for the management on the ground to satisfy their local requirements with our national partner.” There are of course occasions when nothing beats a local supplier. For instance, El Questro offers barramundi, a popular fish caught in northwest WA at Wyndham. Lorenzin knows he will never replace that with a less expensive frozen alternative, despite the potential cost savings. “We must always empower operations to support local industries. w w w. a n z . b u s i n e s s c h i e f. c o m
D E L AWA R E N O RT H , AU ST R A L I A A N D N E W Z E A L A N D
The worst thing we can do is create policies and procedures that stop people from being flexible to the customer base.”
72
Founded in
1915
J U LY 2 0 1 8
The future state For now technology is taking a back seat to structural and cultural change. The current stock control management (SCM) ordering system holds all the SKUs pricing information and supplier data. “The system works well and with 100% compliance. It is the only way you can order anything within the business.” Lorenzin says he would like some refinements, but these will be addressed in a later phase of the transformation. For now he wants to reduce the SKU list to a manageable size and reduce its complexity, and at the same time reduce the supplier ‘tail’. At the head of the list of strategic partners are the sponsors of major sporting events. High profile food brands and franchises are represented in the Delaware North portfolio through license arrangements. At this stage the extent of the
S U P P LY C H A I N
About Delaware North
73
procurement relationship is the use of Delaware North’s systems to do the ordering. There is little upside in this arrangement, Lorenzin says, but there could be a lot more. “There’s potential in the future to partner with these companies and make use of the synergies that exist: there is a real case for forming a buying group with others in the market. An alliance of strong brands that are purchasing in comparable volumes to our own would make us a very significant entity for the supplier market to consider.” Starting with the top categories, the team he has been hand-picking will
systematically go through the suppliers, driving value where it can be most easily achieved. “I have made a commitment to the business that we will reduce like-for-like costs by between 5% and 10%. One of the best things we can give this business from a procurement perspective is confidence and commitment in their cost base.” In the second phase, Lorenzin will look to value opportunities in the logistics operation, through collaboration with partners. By far the biggest transport operator w w w. a n z . b u s i n e s s c h i e f. c o m
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into all operations is their national food distributor, but there are many smaller suppliers, and this can create problems, especially in a city. For example, when there’s a big game at the Etihad Stadium there could be up to 20 deliveries in a day coming through choked streets. “There’s so much room for optimisation here,” says Lorenzin. “The second wave of transformation may well see consolidation in our delivery service with just one temperature-controlled delivery and one ambient delivery each day. That is achievable because we have geographical critical mass – at Melbourne for example where we have the airport, the stadium and the tennis park – to run consolidation into those operations.” The measured approach is very much in accord with the CEO and Lorenzin’s colleagues in the senior leadership. We could look to go more quickly and land this all in the first phase of the strategy, but we’ve been in this market for more
than thirty years and will be around for decades to come. I wanted to take people on the first journey of procurement by which we are rationalising the supplier and SKU bases and forging longer term relations with strategic suppliers: then I want to overlay that with the right technology platform and the right logistics network.” Always fond of colourful analogies, Lorenzin likens the procurement transformation to climbing Everest. “I think I know the route to the summit, but before I tackle that I want to get the business to base camp one. Getting that far has its own rewards and it is achievable. I consider myself lucky to have been able to hire an excellent team and to have the support of an executive team that gives me the autonomy I need.”
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HOW
BEST PRACTICE PROCUREMENT IS DRIVING GROWTH AT CUSHMAN & WAKEFIELD
Cushman & Wakefield, following a major merger, is reimagining its global business to reflect the depth and reach of its property management portfolio, and supply chain transformation has been crucial to this process Written by John O’Hanlon Produced by Glen White
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he built environment is a great metaphor for globalisation. It’s getting axiomatic to say that the great cities of the world are becoming more alike, and that if you were to be dumped at random in any one of them the buildings alone would not be a sufficient clue to where you were. Populations are migrating to these environments because this is where the industry, commerce and housing is all concentrated and as a result, cities are getting larger, sometimes exponentially as populations explode. Global businesses have one thing in common – they need premises, offices, factories or shops. Another thing is that, totally dependent as they are on getting the working environment right, securing and maintaining and managing those premises is very unlikely to be their core business. They universally resort to the services of a specialist to source, negotiate and eventually manage their premises, whether these are rented, leased or owned. It was in 1917 that J Clydesdale Cushman and Bernard Wakefield went into the real estate business together in New York. A measure of its success J U LY 2 0 1 8
is the number of times it has been acquired by larger groups – most recently in 2015 merging with another long-established global real estate services provider DTZ, backed by the private-equity giant TPG to create a company in contention to become the world’s largest company in its space. The strength of the Cushman & Wakefield brand is recognised in its adoption as the name of the new entity, which has an annual turnover of more than $6bn and some 45,000 employees. The year following the merger, 2016, saw the company transact over $191bn in deals and today it has a total of around 4.3bn sq ft of commercial property under management. Cushman & Wakefield’s clients include many if not most of the biggest global businesses, including the likes of Unilever, Nokia, Lego, Coca-Cola, Nomura, Zurich Insurance, Rolls-Royce or Shell Oil (for whom Cushman & Wakefield negotiated the largest office space lease in the world in 2011). It’s also a truism to state that companies like
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this would not place a businesscritical asset in the hands of a firm they did not trust implicitly. Transformation fundamentals The firm has a global policy, delivered through offices in 70 countries divided into major regions. Each of these offers nine core services in 21 sectors from airports to technology. Clearly the importance of each of these sectors will vary depending on the region, but all of them are well represented in the Asia/Pacific (APAC) business, which covers the burgeoning aspirations of India and Vietnam as well as the mature markets of Singapore and Australia and New Zealand (ANZ). The merger with DTZ presented an attractive opportunity to Stuart Smith, a procurement professional with more than 15 years’ experience in property supply chain leadership, when he was appointed to the job of Chief Procurement Officer (CPO) APAC, based at Cushman & Wakefield’s Brisbane office. His role is to lead ANZ in procurement capability development as well as integrating APAC opportunities
Stuart Smith Chief Procurement Officer – APAC
Stuart Smith is an executive manager and project director offering proven success realising strategically important mandates for multibilliondollar businesses. He leverages a diverse, international career history that spans procurement, property and facilities management, organisationwide transformation and large-scale program management to establish and implement effective operating models for future state success.
as part of the company’s unified regional programme of procurement initiatives and maturing category strategies. It was a huge opportunity to overlook a very large regional spend. “I was also very interested in the ownership structure,” Smith says. “Being owned by a private equity firm meant that the whole organisation, not just w w w. a n z . b u s i n e s s c h i e f. c o m
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procurement, was going through a transformation and a culture change. I could see that procurement would be a big part of that: I was keen to see how I could contribute to that journey.” The procurement function manages up to 70% of Cushman & Wakefield’s revenue. The company’s brand reputation and relationships depend on the processes and partnerships it manages. “We see our vendors as strategic partners to our own success,” says Smith, as he introduces the transformation he is leading, with enthusiastic support from the APAC leadership and in line
with global strategic goals. “This is about more than saving money. It is about trying to line up functionality with company strategy, as an integral part of our clients’ success. If we don’t manage our vendors well and help them understand what we are trying to achieve then the outcome is going to be detrimental to us. Seamlessness of expectations, transferred up and down the supply chain, is where I want procurement to go.” Leveraging people, processes and systems, aligned
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with Cushman & Wakefield corporate policy, is the way to achieve this, he says. Digitising core processes Technology is the backbone of efficiency in our times. While outputs and IP remain in the hands of the teams, technology is what drives the process. Cushman & Wakefield’s global intranet is a powerful platform that carries all of the templates, vendor registration and compliance documents and other tools that help to automate processes that used to happen manually. Smith obtained permission to replicate that portal in the Australia network: “I wanted to find an effective means of J U LY 2 0 1 8
communication to save our team being disrupted by phone calls and emails on a regular basis with the same question. “The team is now able to focus on the delivery of new outputs and the development of new tools and products and commercial outcomes. I want them to be focused on developing vendor relationships on refining our panel agreements. To do that we need to give our category leads bandwidth. The accounts teams can deliver client expectations in the field while
STUART SMITH’S TOP TIPS FOR TRANSFORMATION 1. Discovery and preparation Don’t rush, particularly if you joined an organisation looking for a ‘transformation’. What does the transformation mean to the various staff, team, vendors, executive and other stakeholders. Most likely everyone will refer to outputs or KPIs of the function. These are consequences of transformation, therefore your role must be to identify gaps and address opportunities in the fundamental governances and foundation operating model, that will in-turn result in those desired consequences. If you approach a Transformation transfixed on savings or speed to delivery or client relationship scores, then you will likely have short term achievement but with volatile results, and inability to sustain the change. 2. Balanced and rounded Your transformation Journey, will comprise many initiatives, each one chipping away at the enormity of the project, and providing manageable pieces for each person to Innovate, own and deliver. Most will be inter-related to other initiatives, and so coordination across initiatives by a formal program is critical. When identifying the initiatives, you need to ensure you have captured capability pillars of people, process and systems to have a rounded and holistic transformation journey. 3. People - innovation, ownership and delivery You might be the lead of the transformation Journey, but its success rests in both the people actioning initiatives, and people accepting the change. You will need to achieve both actioning and accepting the journey, by entrusting and empowering the team to be their own drivers of the journey. You must inspire them to innovate. You must encourage them to be brave to own their initiatives of the journey. You must hold to account the delivery to the standards upon which the next/future initiatives are able to rely on for their own success. 4. Simplified objectives, with manageable pieces The objective of your transformation Journey needs to be framed in a way which is universally understood and believed, not just by expertise in your function, but by the entire stakeholder group to the journey and its outcomes. The idea being to agree the objective, but quickly be able to articulate the journey by a series of initiatives that manage the improvements needed in each pillar (people, process, systems), and have a manageable timeframe to each initiative’s completion. 5. Don’t forget BAU All too often the journey is more enticing than business-as-usual (BAU). It’s exciting, innovation, the buzz topic… but BAU cannot suffer. The journey needs to result in an improvement, but not on the basis of losing further ground on BAU performance.
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our category strategy teams manage The journey the whole client/vendor relationship. When Smith came in to lead APAC The technology advantage was key in 2017, he found a procurement to the separation of roles, allowing team with a strong desire to be at our people to work more creatively.” the centre of the change process Spend cube analysis is another but without a clear idea of the corporate goals. “My role was to key enabling technology. This brings bridge the gap by directing people visibility to complex client requirements towards the objective, articulating and expectations, allowing effective that objective to contract life cycle management and the business and integration with the J D the team, and Edwards ERP platform. then breaking There’s plenty of data that journey down available fed back from Year founded into manageable financial and operational phases.” Policies communication in and procedure the field, but many for APAC were, systems still sit in however, decided in isolation, Smith feels: conjunction with the global teams analytics draw these and the executive leaders of the together. He gives a simple example: business worldwide. Smith’s “It’s nearly impossible to compare, leadership role included making when asked, our rate per square metre sure that his team had ownership against a benchmark figure without of the journey, were clear about linking commercial with operational the objectives and that each of performance. No current system does the three pillars, tools, policies that but without that link you can’t and procedures advanced hand benchmark reliably.” Linking scopes of in hand, at the same pace. work with commercial outcomes is an The ‘bite-sized’ approach as yet uncracked nut but he has it in his proved effective, for example when sights.
1917
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THE CUSHMAN & WAKEFIELD ADVANTAGE:
• Consistent delivery across multi-market client portfolios • Timely delivery of value conclusions • Compliance with financial regulatory requirements • Valuations based on access to constantly updated market data
considering procedures: “We took our large procedures document and broke it down into a user-friendly form both for ourselves and for our stakeholders.” Getting the technology in place to support these changes is a work in progress, though advances have been made. A whole new system whereby vendors manage their improvement and compliance via Rapid Global, an Adelaide-based partner, is in place. Compliance monitoring had been a big issue, with some vendors, particularity those used less frequently, not keeping the necessary registrations and licences up to date. “We are looking at new tools to take
up the next evolution of Rapid Global and have reinvigorated our internal compliance committee,” Smith says. The results so far have seen compliance performance improve by 35% over the last six months alone. Another positive outcome was reducing the entire APAC vendor base by 25% by removing those suppliers whose compliance levels had been identified as wanting, and with whom the company was spending small amounts of money. The creation of panels made up of vendors with whom Cushman & Wakefield has a strategic relationship in each of w w w. a n z . b u s i n e s s c h i e f. c o m
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its 21 categories has driven further value. Cleaning, for example, is one of the largest categories. “We have around 230 cleaning organisations: our strategic category for cleaning now has no more than 15. Our panel agreements and more than just commercial contracts – they focus more on driving value, for us as well as for the clients.” Standardised service level agreements (SLAs) and KPIs, focused purely on operations, ensure standardised scopes of work. Vendors have access through the intranet to all the templates and standards they need. This helps ensure that no service parameters are missed, and as a consequence the clients are secure in the knowledge that Cushman & Wakefield has their interests at heart. This drives competitiveness. “Many of our competitors don’t have that fully integrated supply chain procurement model,” explains Smith. “They are just expediting the requirements of the client to the vendor and back again with no real sophistication in defining the scope of works.” Vendors are empowered to suggest improvements, and clients are able to manage their own expectations, w w w. a n z . b u s i n e s s c h i e f. c o m
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he adds. “Some of our clients are large enough to have dedicated procurement resources, and at larger clients we have embedded Cushman & Wakefield procurement specialists and managers. But we have an obligation to ensure that our strategy works for largest through to the smallest clients. As the client accounts get smaller the need for an individual dedicated resource reduces, so we have a floating team who handle multiple accounts.” Local sourcing to large clients ‘Think global and act local’ is nowhere more important a mantra than in APAC. It’s a critical part of Cushman & Wakefield strategy to support indigenous businesses. At the end of 2017 the company launched its Reconciliation Action Plan (RAP). This pledged to provide employment and training opportunities, build community awareness, and facilitate collaboration with Aboriginal and Torres Strait Islander Australians. Since 2015, Cushman & Wakefield, in partnership with its clients, has spent approximately $25mn with
“MY ROLE WAS TO BRIDGE THE GAP BY DIRECTING PEOPLE TOWARDS THE OBJECTIVE, ARTICULATING THAT OBJECTIVE TO THE BUSINESS AND THE TEAM, AND THEN BREAKING THAT JOURNEY DOWN INTO MANAGEABLE PHASES” 93 – Stuart Smith, Chief Procurement Officer – APAC
indigenous businesses across its supply chain, and now Smith is determined to go deeper. In 2017 he made a presentation at the annual conference of Supply Nation, Australia’s leading diversity organisation, exploring how indigenous businesses might evolve and what they should w w w. a n z . b u s i n e s s c h i e f. c o m
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consider in their tendering processes. larger industry representative “Our indigenous procurement policy is bodies to bridge the gap.” a supply chain promise to indigenous Smith started by dropping communities nationwide,” he says. some big names. In the APAC At least four of the 15 organisations region they don’t come much we mentioned earlier in Cushman & bigger than the Anglo-Australian Wakefield’s cleaning category panel mining corporation BHP Billiton. are certified by Supply Nation as bona Cushman & Wakefield has just fide indigenous-owned enterprises. signed up BHP as Companies such as a client, but what is ARA Property Services, different about that is founded in 1994, sit the regional operating alongside equally model of this client, Number of well-established which before the employees at cleaning firms as merger might have GJK Facilities on this been difficult to panel. His aim is to accommodate. “We achieve an equivalent have a procurement level of representation manager in Australia who is on each of the category panels. liaising our APAC sister companies Firms that are too small to make the in development of the BHP panels on their own can still participate programme of procurement through ‘aggregators’ like Supply initiatives to achieve contracting Nation itself or Fresh Start. “We have model they want,” Smith explains. separate indigenous panels,” Smith “The challenge is to deliver says. “They are not category specific, commercial benefit and but where a client wants to use an consistent performance, not indigenous organisation for which we just across Australia but across can’t quite see a place in a procurement the Asia Pacific region. Having category panel, we are willing to an integrated APAC model is engage with Supply Nation and those a fundamental benefit of our
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“I WANT TO START BUILDING STRONGER RELATIONSHIPS BETWEEN THE SENIOR LEADERSHIP TEAMS ACROSS THE REGION” – Stuart Smith, Chief Procurement Officer – APAC
transformation journey. We are no longer talking of countries as silos, but engaging with a large client to leverage our categories and operating model.” The BHP deal is setting a benchmark, he adds. From this year on, more clients will be coming on board to take advantage of Cushman & Wakefield’s APAC operating model, delivering consistent services, tools, vendor strategies and category strategies. In this encouraging environment Smith is confident that his teams will be able to achieve further savings in the supply chain over and above the 67% they managed last year. Indigenous engagement will double.
The vendor tail will be reduced by a further 30% by increasing the number of strategic relationships. Compliance levels among the 220 panel vendors is due to grow by 65%, and Smith believes this will be exceeded. “These are the key targets for ANZ and more broadly. We have a very good team in ANZ and an excellent relationship with the country procurement leads. I want to start building stronger relationships between the senior leadership teams across the region and drive consistent scopes of work, consistent SLAs and KPIs.”
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