CANADA EDITION MAY 20 19 canada.businesschief.com
EMBRACING DIGITAL TRANSFORMATION
CONNECTED FLEETS THROUGH IoT
L A T I G I D E V I S O AN EXPL N O I T A M R O F TRANSE MARKLE ON HOW INNOVATION WILL CE O S T E V F GROW T H O E S A H P T X E N E H T E DR IV
City Focus
WINNIPEG
The high-tech transport hub
FOREWORD
W
elcome to the May issue of the Canada edition of Business Chief.
This month’s lead story features one of North America’s leading eProcurement companies, BirchStreet Systems. CEO Steve Markle discusses the company’s remarkable growth in the eProcurement sector and its plans to continue expanding over the coming years. “We’re really entering into a hypergrowth phase,” says Markle. “We really force companies to look at themselves and evaluate whether their processes and their internal capabilities are fit for where they want to go as an organization.” You can also read Business Chief’s interview with IGM Financial, a leading global wealth and asset management company. Milorad Stefanovic, VP of Digital Technology, discusses the company’s strategic digital transformation.
Elsewhere in the May issue, we speak with Largo Resources’ COO, Paulo Misk, who discusses the company’s record year and future plans to become the world’s leading supplier of high-quality vanadium. Additionally, Chantier Davie’s Jeremy Citone reveals how Canada’s largest shipbuilder is using technology to connect a shipyard the size of a small town. This month’s City Focus explores Winnipeg’s James Armstrong Richardson International Airport, the high-tech transport hub helping put the city on the map. Do you have a story to tell? If you would like to be featured in an upcoming issue of Business Chief Canada, get in touch at harry.menear@bizclikmedia.com. Enjoy the issue! Harry Menear
w w w. b u s i n e s s c h i e f. c o m
03
CANADA EDITION EDITOR-IN-CHIEF
HARRY MENEAR MANAGING EDITOR
OLIVIA MINNOCK
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CONTENTS
10 BIRCHSTREET SYSTEMS:
EXPLOSIVE GROWTH: NEW INNOVATIONS, NEW GEOGRAPHIES, NEW INDUSTRIES
32
42
Information Builders: A new chapter in business intelligence MAKING THE CASE FOR CYBERSECURITY INVESTMENT
50 How to win the war for skilled talent
BRINGING GREENER CITIES TO LIFE THROUGH CONNECTIVITY AND INNOVATION
62
74 City Focus
WINNIPEG
84 TOP 10
US universities for business
110 Chantier Davie Canada Inc.
98 IGM Financial
124 Largo Resources
142 Sprint Corporation
174 Affinity Plus Federal Credit Union
206 Vantage Drilling
192 Alliant Credit Union
224 Danone
238 TC Transcontinental
252 TE Connectivity
10
EXPLOSIVE GROWTH: NEW INNOVATIONS, NEW GEOGRAPHIES, NEW INDUSTRIES WRITTEN BY
HARRY MENEAR
M AY 2 0 1 9
PRODUCED BY
ARRON RAMPLING
11
w w w.busi ne ssc hief. com
BIRCHSTREET SYSTEMS
STEVE MARKLE, CEO OF BIRCHSTREET SYSTEMS, DISCUSSES THE NEW INDUSTRIES, NEW GEOGRAPHIES AND NEW, INNOVATIVE PRODUCTS DRIVING THE NEXT PHASE OF GROWTH FOR THE COMPANY
O
ver the past 17 years, BirchStreet Systems has emerged as the leading provider of Procure-to-Pay (P2P) solutions for
enterprises operating in the hospitality space. P2P is comprised of solutions which automate procurement, accounts payable, invoice & payment 12
processing, inventory management, recipe management and capital expense management. These solutions can deliver up to 20%-50% back office and food and beverage cost reduction, and achieve over 80% on-contract spend compliance rates, improving rebate capture. With best-of-breed solutions and strong value proposition, BirchStreet is poised to enter its next phase of expansion. “We’re really entering into a hyper-growth phase,” says CEO Steve Markle. BirchStreet counts such premium hotel brands as Marriott, Hilton, Hyatt, Accor, and Four Seasons among the enterprisewide users of its suite of SaaS on-demand solutions. Markle continues, “having captured most of the major global hotel brands, and a large percentage of the large hotel management companies as enterprise customers, BirchStreet is preparing to M AY 2 0 1 9
13
scale its operations dramatically. We grew in excess of 40% in the last year and can see that growth trajectory continuing for the foreseeable future as we deploy into our customers’ property portfolios, grow alongside our rapidly expanding customer base and acquire additional large enterprise customers. Moreover, we have our sights on growing the company by many multiples in the next few years.� Following two years as BirchStreet COO, Markle, has served as CEO of BirchStreet since July 2018. In our w w w.busi ne ssc hief. com
BIRCHSTREET SYSTEMS
“ W E HAVE OUR
SIGHTS ON GROWING THE COMPANY BY MANY MULTIPLES IN THE NEXT FEW YEARS” — Steve Markle, CEO, BirchStreet Systems
geographies through its existing customer base of global brands and an enhanced international selling organization. “Our third growth vector is the new suite of products we have recently developed in our roadmap, which is really exciting,” he continues. “These solutions go way beyond traditional e-procurement.” These three elements of BirchStreet’s transformation and growth journey are best illustrated by one of the company’s newest clients, Wynn Resorts. “Working closely with Wynn over the past year, we are quickly
14 sit-down session, Markle outlines an
approaching their goal of becoming
ambitious plan to match the company’s
truly paperless,” says Markle. “Having
bold, dramatic growth targets, sharing
recently gone fully live on BirchStreet,
his vision for BirchStreet’s continuing
Wynn is not only automating its P2P
transformation into a diverse and
processes, but is also utilizing nearly
disruptive global organization.
every tool that we have to eliminate
“There are three major vectors of
paper. Like we did by working with
growth that put BirchStreet into
the leaders in the hotel space in our
context,” explains Markle. “First, we
early years, Wynn has partnered with
are more deeply penetrating our
us as an early adopter to create
traditional hospitality industries, as well
state-of-the-art solutions for the
as entering new industries that are
gaming industry. Innovation through
similar because of the adjacent Food &
collaboration has been the hallmark of
Beverage and direct goods categories
BirchStreet’s development from our
that they share.” Second, BirchStreet is
earliest days as a transformative
rapidly expanding its footprint in new
company”, he explains.
M AY 2 0 1 9
CLICK TO WATCH : ‘BIRCHSTREET CUSTOMER CONFERENCE 2018 HIGHLIGHT FILM’ 15 This new partnership is allowing
BETTER SERVING LONG-TIME CUSTOMERS
BirchStreet to further its penetration of
Over the past 17 years, BirchStreet has
the hotel and hospitality vertical.
continuously sharpened its ability to
Furthermore, it demonstrates that
increase spend visibility & control and
BirchStreet is making a decisive
operational efficiency to significantly
entrance into the gaming, restaurant,
cut costs for its clients in the hotel
managed foodservice and sports &
space. This singular focus on reducing
entertainment events spaces, evi-
the cost of procuring from and settling
denced by customers such as Levy
with their suppliers has resulted in
Restaurants and Delaware North.
BirchStreet capturing the 14,000
The company is also launching a host
businesses that it now claims as its
of new products in order to smooth
customers. BirchStreet’s importance
and improve the operating processes
was cited by AccorHotels CPO
of a world-leading institutional food
Sebastien Brunel in a recent interview
service brand.
with Business Chief. “BirchStreet brings w w w.busi ne ssc hief. com
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With the introduction of Oracle Autonomous Database, the industry’s only self-driving, self-securing, and self-repairing database, Oracle is again revolutionizing how data is managed. This groundbreaking database technology delivers outstanding security with unmatched availability and performance. Oracle Cloud Platform serves as the foundation for building, running, integrating, monitoring, and securing applications, as well as for driving new insights. Oracle Cloud Platform provides a complete set of open and standards–based tools that span data management, application development, integration, analytics and big data, management, and security. With Oracle’s advanced capabilities, customers can rapidly provision resources and dramatically simplify patching, upgrades, backups, and restoration. PATHWAYS TO INNOVATION Oracle uniquely offers multiple paths and services to facilitate a customer’s move to the cloud. Our cloud strategy is built on the understanding that cloud and on-premises implementations must coexist. This gives customers a path that meets their future needs while allowing them to preserve and upgrade their existing investments. With free trials and our “bring your own license” and “universal credit pricing” programs, Oracle makes it easy for organizations to try, buy, and consume cloud services while leveraging existing Oracle investments. And Oracle Soar, the world’s first automated cloud migration offering, enables customers to save time and resources. As part of our commitment to customer success, Oracle offers world-class consulting, support, and training. Today, 430,000 customers in 175 countries use Oracle technologies to seize business opportunities and solve real, tangible challenges
Learn how Oracle is continuing to innovate by watching Oracle Sets New Standard with World’s First Autonomous Database. You can also learn about the value that Oracle provides growing companies by visiting oracle.com/proofinnumbers.
BIRCHSTREET SYSTEMS
CLICK TO WATCH : ‘BIRCHSTEET OVERVIEW’ 18 structure to our process. We have PO
Elaborating further on the value that
approval process, PO management,
BirchStreet brings to its customers,
inventory management, product
Markle says, “There are three big
management and (electronic) interac-
sources of economic value that
tion between (our) hotels and (their)
BirchStreet brings to these organiza-
suppliers. This is essential for AccorHo-
tions besides increased efficiency. The
tels, especially in North America,” he
first big driver is spend control which
explained. “We have been partnered
enables big savings by allowing their
with BirchStreet for 10 years; they’ve
operations to go through a controlled
always supported us in everything
online buying experience that ensures
we’ve done and the platform brings
the properties are buying the right
efficiency, good savings and automatic
goods, from the right supplier, at the
updates to inventory – we probably do
right price.” Second is the prevention
around US$150mn of annual spend
of risks like maverick or off-contract
through the BirchStreet platform.”
buying, and third, BirchStreet’s
M AY 2 0 1 9
platform creates value for its
enterprise customers, rebates and
customers on the revenue side.
allowances add up to big dollars.
“You can increase revenue with us
Our value proposition is amplified
by having tight and efficient controls
when our solution is coupled with a
over your inventories so that you never
Group Purchasing Organization
miss an opportunity to make a sale,”
(GPO) like the one offered by our key
Markle explains. “Suppliers offer
partners at Hilton Supply Manage-
rebates and allowances if you achieve
ment” (HSM), says Markle. “With
certain spend levels with them. Our
HSM, BirchStreet can approach
system automatically tracks all of the
customers in any of their target
spend with each supplier so that the
industries or geographies with
customer can easily capture the
a seamlessly integrated offering
rebates and allowances they earn.
combining P2P technology and
Given annual spend size of our large
supply chain programs” 19
E XE CU T I VE PRO FI LE
Steve Markle, CEO Steve brings over 20 years of technology and business leadership. His responsibilities include driving the strategy and execution of the company. In addition to Markle’s role at BirchStreet, he will continue as an Independent Director on the Board of MarginPoint, a leading Inventory Management SaaS company. Prior to BirchStreet, he was Vice President and General Manager, CLM and SRM for Apttus, the category-defining Quote-to-Cash software provider. Markle was founder and CEO of BuildBeam, job management software designed specifically for specialty trade contractors (acquired by DaftLabs). From 2001 until 2013, Steve was an executive at Ariba (acquired by SAP), a pioneer in Sourcing, Procurement and Business Network space where he ultimately served as Vice President of Solutions Management. Markle earned his BSE in Mechanical and Aerospace Engineering from Princeton University.
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BIRCHSTREET SYSTEMS
NEW PRODUCTS A specific example of how BirchStreet is better serving its existing customer base, while also aggressively expanding into new markets, is the adoption of innovative new products that greatly enhance the efficiency of its customers’ operations. According to Markle, from its earliest days BirchStreet’s focus on the P2P function within the hospitality industry has defined the development of its software platform. “We recognized early on that the large ERP software companies are excellent 20
2002
Year founded
300
Approximate number of employees
200,000+ Registered Users
at meeting generic enterprise management software system needs. But with its emphasis on food & beverage and other items consumed in delivering its ‘product’, or what we call ‘direct goods’, hospitality has very specific needs that were not being met. There are numerous “pain points” in the P2P process that are specific to hospitality and BirchStreet is uniquely positioned to address those needs. We integrate with all the major ERP systems thereby completing the full ERP functionality required by our large enterprise customers”. “Two years ago, we acquired AccuBar, a best-in-class, specialist M AY 2 0 1 9
Processing
25mn
Purchase Orders a year
solution provider, for businesses that handle beverage inventory,” says Markle. Since acquiring AccuBar, BirchStreet has combined both companies’ capabilities to create a single inventory management solution for food and beverage organizations. “It’s very slick,” Markle says. “It has mobile capabilities that allow you to receive goods with your mobile device when it reaches your dock. This is a critical part of the process that enables flow-through automation from receipt to pay. In addition to promoting accuracy in the receiving process, it saves a huge amount of time versus writing things down by hand and then entering data into your accounting system.” Another example is BirchStreet’s investment in infrastructure for global scale. All of BirchStreet’s customer transactional data runs on Oracle databases. By leveraging Oracle’s technology, BirchStreet is able to host more than 2mn logins per month while maintaining a 99.9% uptime. BirchStreet also embeds Softlinx services to send over 50,000 fax pages per month on behalf of its customers to the corners of the globe without internet. By switching to w w w.busi ne ssc hief. com
21
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“ W E’RE SAVING OUR CLIENTS SO MUCH MONEY BY ENABLING THEM TO GO THROUGH A TIGHTLY MANAGED ONLINE BUYING EXPERIENCE” — Steve Markle, CEO, BirchStreet Systems
of liquor and wave it in front of your mobile device,” Markle elaborates. “Our mobile app will recognize the shape of the bottle and branding and allows you to take inventory, including partial bottle inventory by moving the fill-line on the bottle image that automatically appears on your mobile screen. Think of the more expensive scotches, or a bottle of Remy Martin Louis XIII Cognac and you quickly understand the power of this quick, easy and accurate inventory management tool. You potentially have a lot of capital locked up in beverage inventory,
Softlinx in late 2017, BirchStreet
particularly when you consider the final
increased its worldwide success
selling price per pour.” Expanding
rate by 20%. And through BirchStreet’s
further on this proprietary technology,
partnership with CapGemini, the pair
Markle continues: “Once you have the
offers Accounts Payable as a Service
contour of the bottle saved to the
(ApaaS) to joint customers such
system – and some weirdly shaped
as FourSeasons. APaaS is a fully
bottles are hard to calculate by eye
standardized and automated
– our patented technology always
business process for end-to-end
recognises the shape of the bottle. All
invoice process.
you do is swipe your finger where the
In addition to automating the goods
liquid line is and it’ll automatically
receiving process, BirchStreet
calculate how much volume you have.”
provides its customers with a patented
Markle maintains that BirchStreet’s
specialized inventory function. “The
inventory software has the potential to
service’s unmatched take-inventory
revolutionize waste mitigation in
capabilities allow you to grab a bottle
high-value beverage management. w w w.busi ne ssc hief. com
23
BIRCHSTREET SYSTEMS
24
Responding to the needs of its
restaurants manage recipes and
institutional food services clients, the
ingredients, as well as food costs,
company is also introducing innovative
which is the Holy Grail for business
software to help its food production
owners and chefs. Then, if you
operations track stock and ensure
combine recipes with inventory, our
standards of service across multi-loca-
solution will implement automatic stock
tion operations. “For managed food
replenishment notifications or fulfil-
service companies, we’re also
ment of that inventory item depending
introducing our recipe and production
on the recipes you produce. Just think
kitchen modules,” says Markle. “Think
of the labor savings from automating
about how many recipes a large casino
that aspect of food services opera-
or hotel must have and the process of
tions. If you think about a high-end
making and distributing finished goods
casino property, you think of shops on
to their outlets. Our solution helps
the first floor where they’re selling a
M AY 2 0 1 9
where it also hopes to attract a new roster of clients. “We’re making a very large bet on Europe, the Middle East and Asia,” says Markle. “By all indications it will be wildly successful. There are lots of companies within both our old and new industries that operate outside BirchStreet’s traditional market of North America.” As BirchStreet breaks into new sectors and brings new offerings to new and old customers, Markle reflects on his own schedule. “I’m traveling around the world three or four times a year,” he says. “I’m about to do an around the world trip, starting in early March. I’ll just keep going East until I wind up back in wide range of items. Working with
California.” Markle holds town halls with
our customers has allowed us to
employees in every BirchStreet office to
create a retail inventory extension of
keep the company engaged and
our inventory module functionality,”
updated on the next stages of its
says Markle.
development. “Change is constant, and you manage change by making sure
NEW MARKETS, NEW REGIONS
your organization knows where it’s
BirchStreet’s new suite of products are
going and embraces the enthusiasm
allowing the company to aggressively
of its leaders.”
penetrate adjacent or nearby indus-
On the subject of BirchStreet’s
tries. Furthermore, its deeper penetra-
legacy as well as his own, Markle
tion into the multi-national hotel
muses: “We look at our industry of
management sector is allowing the
hospitality as we would any business
company to explore new regions,
that provides a ‘product’. Our customers w w w.busi ne ssc hief. com
25
End-to-End End-to-End End-to-End YOUR ONE-STOP PROCUREMENT PARTNER YOUR ONE-STOP PROCUREMENT PARTNER Hilton Supply Management works with over 2,000 suppliers to manage YOUR ONE-STOP the entire supply chain from farm to Hilton Supply Management works PROCUREMENT PARTNER restaurant, manufacturer room and with over 2,000 suppliers toto manage
project to completion. We the entireinception supply chain from farm to provide sourcing for 8,000 properties restaurant, manufacturer to room and Hilton Supply Management works (including more than 1,800 non-Hilton project inception to completion. We with over 2,000 suppliers to manage hotels) leveraging massive economies provide sourcing 8,000 properties the entire supplyfor chain from farm to of scale, competitive contracts with (including more than 1,800 non-Hilton restaurant, manufacturer to room and top suppliers and substantial savings hotels) economies projectleveraging inception massive to completion. We for hotels. of scale, competitive contracts with provide sourcing for 8,000 properties top suppliers andthan substantial savings (including more 1,800 non-Hilton To learn more about joining the Hilton for hotels. hotels) leveraging massive economies procurement program please contact of scale, competitive contracts with us at HSM@Hilton.com. To learn more about joining thesavings Hilton top suppliers and substantial procurement for hotels. program please contact us at HSM@Hilton.com. To learn more about joining the Hilton Prototype Custom Operating procurement program please contact Décor Procurement Supplies Packages us at HSM@Hilton.com. Custom Procurement
Custom Procurement
© 2018 Hilton
© 2018 Hilton
© 2018 Hilton
Prototype Décor Packages
Prototype Décor Packages
Operating Supplies Operating Supplies
PA R T N E R S
BirchStreet and Hilton Supply Management (HSM) partner to offer integrated P2P SaaS technology with supply chain programs. HSM’s programs can save up to 61% depending on the commodity purchased and BirchStreet’s technology enforces purchasing compliance to ensure that value is captured.
All of BirchStreet’s customer transactional data run on Oracle databases. Oracle is the leading database software manufacture and handles which lets us handle more than 5,000 per second. By leveraging Oracle’s technology BirchStreet is able to host more than 2 million logins per month while maintaining a 99.9% uptime.
27 BirchStreet and Capgemini have partnered to offer Accounts Payable as a Service (APaaS), a solution offering a centralized mailroom function, process standardization, all integrated using Optical Character Recognition (OCR) for invoice capture with BirchStreet P2P as the underlying technology platform. These two leaders in hospitality, joined hands to create customer value through these shared services and help clients like FourSeasons realize savings up to 40-50% in operating costs and rapid profitable growth.
BirchStreet uses Softlinx services to send over 50,000 fax pages per month on behalf of our customers. By switching to Softlinx BirchStreet increased our worldwide success rate by 20% while cutting costs by 10%.
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BIRCHSTREET SYSTEMS
are enterprises that manage multiple facilities that deliver a wide spectrum of services that make up their ‘product’. The hospitality ‘product’ is effectively made up of parts and labor. We partner with our customers in multiple ways to significantly reduce their labor costs and increase sales. We do this through automating a whole host of manual processes from procuring to paying for the goods they use at their properties day in and day out, and we provide the tools needed to better manage the ‘parts’ used in their food 28
and beverage operations, as well as in the rest of the customer experience. In the end, that is what hospitality is all about: the experience. We wake up every day asking ourselves, ‘what can we do to help our customers deliver the best experience possible at their properties?’ By virtue of what we do, we help our customers to take a fresh look at themselves and evaluate whether their processes and internal capabilities fit their vision for where they want to go as an organization. Our approach is not to be prescriptive, but rather to work closely with our customers and innovate together.” M AY 2 0 1 9
“ O UR SERVICE HAS CAPABILITIES THAT ARE UNMATCHED IN THE INDUSTRY” — Steve Markle, CEO, BirchStreet Systems
29
Markle concludes: “What we do is
excited about what the future has in
not just about deploying our software;
store for us as we innovate with our
it’s about working with our customers
customers to transform the worldwide
to provide the tools and expertise they
hospitality industry.”
need to deliver their desired outcomes: the very best experience to their customers, while using technology to minimize the costs of delivering their product. We could not be more proud of what we have achieved over the past 15 years and couldn’t be more w w w.busi ne ssc hief. com
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LEADERSHIP
32
M AY 2 0 1 9
Information Builders: A new chapter in business intelligence Michael Corcoran, CMO at Information Builders, discusses his career in the BI space, new ways to deploy data and analytics, and the future of the company as an industry leader WRITTEN BY
HARRY MENEAR
w w w.busi ne ssc hief. com
33
LEADERSHIP
I
ndustry 4.0 is here, and it is driven by data. As the
world comes to recognize the undeniable power of data to detect trends, improve efficiency and
predict the future, the business intelligence (BI) and
analytics industry continues to innovate and scale, in order to fully realize the potential benefits of the information age. Founded over 40 years ago, Information Builders is one of the world’s largest BI, data integration and data quality solutions companies worldwide. Headquartered in New York City, the firm is on the verge of a bold new chapter in its story as it prepares to dramatically grow in size and elevate its brand to the next level. We sat 34
down with Information Builders’ Chief Marketing Officer (CMO), Michael Corcoran, to discuss his career in the BI space, new ways to deploy data and analytics, and the future of the business as an industry leader. “We’re re-birthing a company that started all of this, back in the 1970s, when it was a very different world. Now, we’re creating a company for the next generation,” Corcoran explains. “It’s much more competitive today than ever. 60 years ago, the average life expectancy of a company was about 75 years. In 2015, it was 15. We have to move more quickly. We have to take advantage.” Corcoran’s career in IT started in the 1980s working for a leading US aircraft manufacturer. “I worked in the supply chain for the US Navy making fighter jets”, he recalls. “Top Gun came out whilst I was working there and they actually held a special M AY 2 0 1 9
35
“We’re creating a company for the next generation” — Michael Corcoran, CMO, Information Builders w w w.busi ne ssc hief. com
LEADERSHIP
36
“ We’re going to grow more aggressively, but I think what’s more exciting is that we’re going to be a leader in the innovation of new technologies” — Michael Corcoran, CMO, Information Builders
screening at our company. It was really cool, and taught me a lot about the supply chain.” The rapidly advancing art of data analytics is, to Corcoran, as exciting as building an F-14 Tomcat, and closely linked with the changing generational attitudes to technology. Reflecting on the new priorities of Millennials and Generation Z, Corcoran notes that “they’re looking for something different and they’re behaving differently. They want to walk to restaurants and bars. They don’t own cars; they don’t want to own cars. I think that generation is adopting technology. They don’t fear it. They crave it. That’s exciting to me because I’ve always craved it.” Despite the speed at which data analytics tools are advancing, Corcoran believes that adoption across the business community is far too low. “Only 10% of organizations are using predictive analytics in production applications – only 10%. Overall, there is about a 35% adoption of BI analytics, and for tools it’s only about 17%. Why? Because, companies don’t trust their data. How do you build predictive outcomes on data you know is wrong to begin with? You don’t. It’s a waste of
M AY 2 0 1 9
CLICK TO WATCH : ‘THE INFORMATION BUILDERS COMPETITIVE ADVANTAGE’ 37 time,” he says. The fallibility of gathered
growth. Companies that use analytics in
data is the largest obstacle standing in
data more effectively are faster growing
the way of mass BI analytics adoption,
companies. Their stock performs better,
according to Corcoran, which is why
their employees perform better. As well
Information Builders’ platform seeks to
as the longevity of customers.”
address the problem for the consumer.
With regard to employee
“We’ve taken responsibility for data
performance and the more effective
quality and mastering the data as part of
leveraging of data, Corcoran wants to
the BI Analytic platform,” he says. In
see a change in the way companies
addition to ensuring data quality at a
grant access to their analytics.
ground level, Information Builders’
“How do you scale adoption throughout
platform is also designed to be highly
the organization to find the value?”
scalable. “It’s kind of our secret sauce,”
Corcoran has found that, for the most
says Corcoran. “People who can scale
part, data passes from analysts to
analytics tend to enjoy much greater
management’s dashboards without w w w.busi ne ssc hief. com
LEADERSHIP
“ 60 years ago, the average life expectancy of a company was about 75 years. In 2015, it was 15” — Michael Corcoran, CMO, Information Builders 38
M AY 2 0 1 9
being exposed to anyone lower in the organization. “Analysts ask the hard questions and they publish the results typically in the form of dashboard back to management. Management needs their dashboards. This process represents about 90% of all the effort and investment in the world of analytics right now. However, it’s not the most valuable thing we could be doing,” Corcoran explains. “It’s an interesting conversation I often have with CEOs to make them understand that they are not necessarily the most valuable person in this process. They need good information and insight to steer the ship, but management need information to set policy and to create goals. Those policies typically take about 12 to 24 months before they start to impact the bottom line of a large organization. There are things you can do lower in the organization that have a more immediate impact on the bottom line.” For Information Builders, BI should be pervasive both within and without the company. “What we like to do is expand the conversation. Pervasiveness is about bringing analytics insight to every employee, business partner and even using it to w w w.busi ne ssc hief. com
39
LEADERSHIP
40
create a different digital relationship
realize. It’s pretty cool when you’re told
with your customer.” Corcoran believes
something that you didn’t know about
that, in 2019, companies owe their
your own life. It was really compelling.
customers “some form of digital
I think it’s really a clever way to get
transformation – it’s not just internal,
people to another level of, not only user
it’s how you interact externally.” As a
adoption, but customer loyalty.”
2mn mile lifetime member at American
In addition to changing the way that
Airlines, Corcoran points to the
companies deploy their data and
company’s end of year summary as an
analytics, with the appointment of its
example of expanding analytics to the
new CEO, Frank Vella, Information
customer. “They sent me an infographic
Builders is going through a bold new
that told me my story. I flew 98,000
transformation. “I believe we could be a
miles and my most common destination
really top brand name and lead the
was Frankfurt, Germany, which I didn’t
market,” says Corcoran. Since joining
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WEBFOCUS
WebFOCUS (IB’s new analytics platform) has “an elegant, fully responsive user interface and intuitive workf low to automate and simplify complex tasks. Unlike many analytics tools, which create silos and cannot scale, the New WebFOCUS empowers everyone inside and outside the organization with unlimited intelligence. The New WebFOCUS is uniquely positioned to fulfill all the needs of a modern enterprise, through its ability to combine a broad range of governed BI and analytics with agile insights created by business users, all in one place, securely, at scale, and in the cloud or on premises.”
41
the company in November 2017, Vella
We’re going to grow more aggressively,
has led the digital transformation of
but I think what’s more exciting is that
several areas of the business, including
we’re going to be a leader in the
product, innovation, marketing, sales
innovation of new technologies. We’ve
and channels. He also oversaw the
always had some of the smartest
launch of WebFOCUS, the company’s
people and we’re still introducing more,
flagship analytics platform. “We have
and for me that’s really exciting. I want
the biggest deployments in the world
to see the company double or triple in
but nobody knows it because the
size and I believe that now it can.”
company has been privately held,” says Corcoran. “Well, now we’re a Goldman Sachs-backed company. We’ve got a brand-new leadership management team hand-picked from the industry. w w w.busi ne ssc hief. com
TECHNOLOGY
MAKING THE CASE FOR CYBERSECURITY INVESTMENT 42
Spencer Young, Regional Vice President EMEA at Cybersecurity leader Imperva explores how businesses need to take decisive action and address today’s complex cybersecurity threats WRITTEN BY
SPENCER YOUNG
M AY 2 0 1 9
43
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TECHNOLOGY
44
2
018 turned out to be a significant
year for cybersecurity with breaches and attacks making
formal cybersecurity policies in place. While this discrepancy is worrying, it shines the spotlight on why business
the news far too often. In fact, a recent
leaders are yet to fully embrace the
report released by the Department
value of cybersecurity.
for Digital, Culture, Media and Sport
Although we’re in the era of digital
revealed that over four in ten businesses
transformation, many organizations
(43%) in the UK experienced a
are looking for guaranteed returns
cybersecurity breach or attack last year.
from their technology investments.
The same report goes on to highlight
Therein lies the problem – with
that despite the growing number of
increasingly tight budgets, senior
cybersecurity threats and attacks fewer
leaders view of cybersecurity systems
than three in ten businesses (27%) have
is currently framed as insurance. So,
M AY 2 0 1 9
“ALTHOUGH WE’RE IN THE ERA OF DIGITAL TRANSFORMATION, MANY ORGANIZATIONS ARE LOOKING FOR GUARANTEED RETURNS FROM THEIR TECHNOLOGY INVESTMENTS. THEREIN LIES THE PROBLEM” — Spencer Young, Regional Vice President, EMEA at Imperva
45
how do we shift this mindset so that
required to prepare for these new
senior leaders can better understand
compliance landscapes, they are
that the value of protecting business
putting security strategy decisions at
critical data extends far beyond just
the top of the priority pile of boards
covering your assets?
and exec teams. Board members, in particular, are
CYBERSECURITY AND THE BOARD
responsible for establishing good
In recent months, we’ve seen the
governance practices and policies for
introduction of new regulations such
driving better financial performance
as the EU’s GDPR, as well as
and growth. For this reason, it is vital
constantly shifting privacy laws in
that they have a comprehensive view
nearly every geography. While there
of their organization’s cybersecurity
are considerable levels of effort
strategy, and the required level of w w w.busi ne ssc hief. com
TECHNOLOGY
46
“ A RECENT REPORT RELEASED BY THE DEPARTMENT FOR DIGITAL, CULTURE, MEDIA AND SPORT REVEALED THAT OVER FOUR IN 10 BUSINESSES (43%) IN THE UK EXPERIENCED A CYBERSECURITY BREACH OR ATTACK LAST YEAR” — Spencer Young, Regional Vice President, EMEA at Imperva
investment for buying down their risk. Where cybersecurity may have previously been considered one subset of operational IT, a cursory glance over the press clippings in recent years will have alerted them to the real challenge. A growing number of business leaders are awakening to the fact that a data breach is all but inevitable. What they need to know is, how they can limit the scope of damage from a data breach with the right level of investment.
STEP 1: MAKING THE CASE TO SENIOR LEADERSHIP As the levels of liability for failing to govern risk and protect critical data are transferred from the IT department to senior leadership, these leaders need a quantified measurement of risks including:
• Compromised customer data • Diminished brand and reputation • Loss of investor and consumer confidence and loyalty
• Stolen sensitive intellectual property • Compliance and regulatory sanctions • Business disruptions M AY 2 0 1 9
CLICK TO WATCH : ‘MEET THE NEW IMPERVA – DEFENDING YOUR BUSINESS GROWTH TODAY AND TOMORROW’
STEP 2: ASSESSING THE CURRENT SITUATION
The next step requires you to conduct a
Once these risks are quantified, due
thorough inspection of your current
diligence will require leaders to
security posture.
assess the steps their partners and
STEP 3: DO A COMPLETE AUDIT
This involves understanding where
competitors are taking to avoid
your critical data currently resides, who
exposure. Relationships with
requires access to it and more critically,
technology suppliers and lenders then
who actually has access to it.
become less transactional, and more
While it’s a drum we beat perpetually at
of a long-term advisory partnership,
Imperva, many leaders don’t understand
as they’re best placed to provide
the risks of a potential data breach by
advice on the current trends within
careless, compromised, and malicious
your marketplace.
insiders. Not all data assets carry the w w w.busi ne ssc hief. com
47
TECHNOLOGY
same level of risk, and not every employee should be given carte blanche access to all organisational data. While this may be time-consuming, leaving no stone unturned at this stage of the audit will give you a clear understanding of where your security measures stand currently and benefit you greatly in the long run.
FINAL STEP: DETERMINE THE RIGHT INVESTMENT FOR YOUR BUSINESS By appraising your data assets in 48
terms of their value and risk, you can then begin targeting your investments towards timely threat detection and incident response. No matter the time and effort invested, it is important to remember that data breaches are inevitable. Framing this approach as a risk/ reward equation and using a tiered security approach ensures that your organization can protect high-value targets that would cause significant harm if they were compromised. At the very least, senior leaders need to be made aware of the growing threat they face every day from external cyberattacks and internal data M AY 2 0 1 9
“A GROWING NUMBER OF BUSINESS LEADERS ARE AWAKENING TO THE FACT THAT A DATA BREACH IS ALL BUT INEVITABLE” — Spencer Young, Regional Vice President, EMEA at Imperva
49 breaches. A single breach has the potential to irreparably damage the financial condition of even the most successful business, and ruin the careers of those leaders involved. Rather than packaging your cybersecurity spending rationale within IT investments, these really need to be highlighted as a high-level risk mitigation strategy.
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PEOPLE
50
How to win the war for skilled talent THE SKILLS GAP IS OFTEN CITED AS ONE OF THE BIGGEST OBSTACLES FACING BUSINESSES TODAY. ARE YOU READY TO BEAT IT? WRITTEN BY
M AY 2 0 1 9
LAURA MULLAN
51
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PEOPLE
T
hanks to technology, the way we work is set to change forever. You need only look at the impact of driverless
cars to see just how disruptive the next generation of technology will be. In fact, accord-
ing to a McKinsey Global Institute report, as many as 375mn workers (or 14% of the global workforce) might need to switch occupation categories because of digitization, automation and artificial intelligence (AI). It’s a mammoth shift for workers, but it’ll impact business too. Tomorrow’s business leaders will need more 52
analytical, digital-savvy skills than ever before if they want to keep up with the blistering pace of digital transformation – but will companies be able to find these skills? Research by the Korn Ferry Institute forecasts that the existing talent shortage will reach its worst levels in 2030, whereby an expected 85.2mn job openings will go unfulfilled worldwide. In previous decades, the ‘war for talent’ dominated the headlines, but looking forward it seems that it will be the skills gap that will define the business agenda.
AN ANALYTICAL MIND Many tout data as ‘the new oil’, and as a result, data literacy has quickly become a highlycoveted skill for today’s business leaders. M AY 2 0 1 9
“We paired legacy employees with millennials and this helps to break down the paradigms you develop over decades of business. It makes the business open to new ideas” — Dayne Turbitt, Senior Vice President of Dell EMC’s Enterprise Sales Division
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PEOPLE
Gartner has even gone as far as to
exclusive interview with Gigabit, CEO
predict that, by 2020, 80% of organiza-
Adam Selipsky, said: “Recent estimates
tions will have to start to roll out data
from the IBC suggest that between
literacy initiatives to upskill their work-
now and 2025, the amount of data in
force. One such company, powering
the world that’s subject to analysis is
ahead with such training is data visualiza-
going to grow 50-fold. I think a lot of
tion giant, Tableau Software. The firm
organizations are just going to get
recently launched Academics, a progr-
crushed under the weight of that data
amme that has helped around 680,000
whilst many others are going to see
students and faculties use Tableau’s
brand new opportunities to develop
software, and on top of this, it has also
insights and make better decisions
partnered with British training partner
based on all of that data. Regardless
AVADO to launch apprenticeships and
of whether your organization sees data
training programmes in the UK. In an
as a problem or an opportunity, there’s
54
M AY 2 0 1 9
CLICK TO WATCH : ‘THE HIDDEN WOMEN OF STEM – ALEXIS SCOTT – TEDX, MOUNTAIN VIEW COLLEGE’ 55 an urgent need for analytical capabilities to deal with it, and again, to make better decisions faster.”
DIVERSITY MATTERS It’s no secret that many businesses have a diversity problem. In fact, according to stark research conducted by INvolve, more people called David and Steve lead FTSE 100 companies than women and ethnic minorities. Diversity matters but recent research shows that it also pays: in a 2015 study, McKinsey found that companies in the top quartile for gender or racial and ethnic w w w.busi ne ssc hief. com
PEOPLE
“We need to increase the pipeline of women in STEM and that starts with education” — Neelam Sandhu, Senior Director of Business Operations, Office of the CEO at BlackBerry
56
diversity are more likely to have financial
think that’s changing. For example, we
returns above their national industry
can see that two leaders of General
medians. Bringing a broad range of per-
Motors – the CEO and the CFO – are
spectives, diversity is a critical asset for
both women.” Another hurdle lies in
businesses looking to address the talent
education. “We need to increase the
gap. For Neelam Sandhu, Senior Director
pipeline of women in STEM and that
of Business Operations, Office of the
starts with education,” adds Sandhu.
CEO at BlackBerry, one of the biggest
“We need to work on creating an
hurdles lie in the lack of female role
environment where women feel comfor-
models in male-dominated fields.
table learning STEM topics. Not only is
“Women don’t have those same role
the professional environment male-dom-
models or examples as men to look up
inated, but the education environment
to or emulate,” she observes. “But I do
is too. So, creating that environment or
M AY 2 0 1 9
57
community where women feel
whereby it pairs more seasoned
comfortable in STEM is important.”
employees with new graduates to encourage cross-generational peer-
REVERSE ENGINEERING
to-peer training. “I think it’s been
Any CIO will admit that digital transfor-
a huge learning curve for us,” says
mation isn’t just about new gadgets
Dayne Turbitt, Senior Vice President
and technologies, it’s also about the
of Dell EMC’s Enterprise Sales
people. At its annual Dell Tech forum,
Division. “We paired legacy employ-
for example, Dell Technologies singled
ees with millennials and this helps
out workforce transformation as a cru-
to break down the paradigms you
cial stand of any digital disruption
develop over decades of business. It
programme. Within the firm, Dell Tech-
makes the business open to new
nologies has implemented what it
ideas, it fosters a new culture of inno-
describes as ‘reverse engineering’,
vation. We’ve done some amazing w w w.busi ne ssc hief. com
PEOPLE
58
things in the past year and it’s down to this speed of innovation.”
PROCUREMENT VALUE Many procurement professionals will tell you that their job is no longer a support function, it’s a business driver. With procurement now at the fore of many business strategies, skilled workers in this field are in high demand. The Chartered Institute of Procurement & Supply (CIPS) has played a pivotal role in the professionalization of procurement across the M AY 2 0 1 9
world, offering a range of highly-valued training courses. Sam Achampong, Regional Head & General Manager of CIPS MENA, believes that this is crucial to the upskilling of the procurement field. “We work very closely with companies to create a licensed procurement function whereby everyone in their procurement team is qualified to do procurement. We have created the infrastructure to make qualifications available through an increased number of study centres, universities and accredited degrees. For people, we have also set up a number of professional networks that support these people so that they can continue to share knowledge.” Achampong also underlines the importance of working with local communities, noting: “The key thing is for us to be working with local people in this region, so we’ve worked very hard with the prominent local organizations to make sure that we are helping the capability development of Middle East locals to get credible procurement qualifications and skills.”
PEOPLE POWER Looking forward, it’s clear that if you want to build the workforce of the w w w.busi ne ssc hief. com
59
PEOPLE
“We should never underestimate the power and need of human interaction” — Johan Reventberg, President EMEA at JDA Software
60
future you need to act proactively.
survey, McKinsey pointed out that
Business leaders should be vigilant
75% of executives were optimistic that
about workforce gaps and be aware
reskilling and training would help to fill
of the skills needed in the future. They
at least half of their talent needs. Amid
should also create a robust plan to
the war for talent and hiring difficul-
hire, upskill and contract the right
ties, businesses need to be productive
skills and be sure to establish a dedi-
if they want to tackle the challenge of
cated cross-functional team, with
skills and training. It may be easy to
a forward-thinking HR team. In a recent
get caught up in talk of digital disrup-
M AY 2 0 1 9
61
tion or supply chain transformation
people behind. If people get left behind,
but without the people behind it, it’s
they will then be a threat to themselves
near impossible.
and to the companies because they’re
“We should never underestimate the
not going to keep pace with the company.
power and need of human interaction,”
If we don’t train our people, we’re not
agrees Johan Reventberg, President
enabling the workforce of the future.”
EMEA at JDA Software. “The risk is that if your company doesn’t educate and train your workforce, you will leave the w w w.busi ne ssc hief. com
S U S TA I N A B I L I T Y
62
Bringing greener cities to life through connectivity and innovation Hosting half the world’s population on 2% of the planet’s surface poses a unique set of challenges, says Mike Hughes, Zone President UK and Ireland, Schneider Electric WRITTEN BY
M AY 2 0 1 9
MIKE HUGHES
63
Deloitte’s headquarters, The Edge Building in Amsterdam w w w.busi ne ssc hief. com
S U S TA I N A B I L I T Y
T
ackling climate change and
population is expected to grow by over
creating sustainable cities in the
1bn people over the next thirteen years,
face of rapid population growth,
reaching 8.6bn in 2030.
ageing infrastructure and the
Meanwhile, the increasingly digital,
pace of technological change has
connected and electric nature of our
never been more important. Cities
lives means that we each as individuals
make up 2% of the world’s surface
have greater energy needs than ever
but house more than half of the world’s
before. Is this pace of growth sustain-
population and consume 75% of
able for urban centres and cities like
energy resources. By 2030, urban areas
London or Paris, let alone megacities?
are projected to host 60% of people
The answer is yes, but only if we make
globally. Very soon, one in every three
our cities ‘smarter’.
people will live in cities with at least half a million inhabitants, as the world’s 64
M AY 2 0 1 9
Incorporating renewables into our energy mix is a vital part of reducing
our environmental impact, but their potential is being wasted by our inefficient use of that energy. Modern technologies, smart sensors and services that can help us identify and tackle energy waste can and must help to improve cities’ efficiency, sustainability, and resilience. For any city, going ‘smart’ can be difficult. The sheer size and complexity involved in building a truly integrated
“ Creating sustainable cities means creating smart cities, powered by clean energy that is responsibly consumed and saved” — Mike Hughes, Zone President UK & Ireland, Schneider Electric
and sustainable smart city is difficult to comprehend. In India, Schneider Electric is helping to build Naya Raipur, 65
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S U S TA I N A B I L I T Y
“ The only way we will tackle climate change and create cities fit for the future is by rethinking our relationship with energy as individuals, businesses and nations” — Mike Hughes, Zone President UK & Ireland, Schneider Electric
a project which aims to build an entirely new capital city for the newly created state of Chhattisgarh. The funding, expertise, organisation, planning and collaboration to create this smart city from the ground up is incredible. Smart cities at this scale require multi-level governance, expert consultants, technology firms and vendors working together to make the concept a reality. But the vast majority of the world’s population live in existing towns and cities, not brand-new developments.
66
Naya Raipur is a smart city project located in the newly formed state of Chhattisgarh in India Photo © Smart Cities Council India
Ageing city infrastructures pose connectivity and network management challenges. At the same time, a 24/7 society and a wide array of IoT-enabled devices and electric vehicles (EV) are fuelling greater energy demand. While cities are tasked with improving services and building new transport networks, hospitals, schools, and homes to accommodate population growth, they do so with tightening budgets. Critical infrastructure (old or new) – such as hospitals, airports, live entertainment venues, schools and office buildings – must be reliable, functional but also efficient if we are to build a sustainable future. And it is in efficiency where there is potential to
M AY 2 0 1 9
CLICK TO WATCH : ‘TOTTENHAM HOTSPUR’S NEW STATE-OF-THE-ART STADIUM WITH ADVANCED ENERGY MANAGEMENT FACILITIES’ 67 unlock huge financial savings that
of projects to improve their water
could, in turn, reduce running costs,
systems, local or regional energy grids,
helping to fund future investment.
transport infrastructure or buildings.
Developed cities considering going
These precincts or district-scale
‘smart’ simply don’t have the option to
developments are not city-scale, but
rebuild everything from the ground up.
they are large enough to form multiple
They are busy, functioning ecosystems
smart city domains and become a
that need to continue to work whilst
visible and useful reference point to
improvements are made. As a result,
encourage future investment. Indeed,
a piecemeal approach to making cities
by working collaboratively with both
smarter is the only option. It is essen-
public and private sectors, Schneider
tial, therefore, that incentives and
Electric has successfully delivered
regulation are introduced to drive
smart city project applications to more
organisations and individuals to
than 250 cities worldwide.
incorporate efficiency as a core pillar
One such example is our recent w w w.busi ne ssc hief. com
S U S TA I N A B I L I T Y
partnership with Tottenham Hotspur to help build and manage the energy distribution and consumption at the club’s new state-of-the-art stadium – a landmark in sports venue efficiency and connectivity. As the stadium’s official Energy Management Supplier, Schneider Electric performs 60,000 automated checks every five minutes to ensure that every aspect of energy usage is monitored and optimised, ensuring such aspects and optimal temperature and lighting conditions. Designed for visitor enjoyment and 68
comfort, the stadium is also helping to regenerate the surrounding area of Tottenham, bringing the smart city reality one step closer. The ripples of projects such as these, ambitious in scale and innovative in nature, not only improve energy efficiency, but also set a new standard of living and urban regeneration, whilst also starting to change perceptions of energy use. Take for example the Edge building, Deloitte’s headquarters, in the Netherlands. This building not only delivers a cutting-edge digital workspace and meets the highest environmental standards, but it was created with the goal of being a ‘net neutral’ M AY 2 0 1 9
Tottenham Hotspur’s new state-of-the-art stadium
“ Projects such as these, ambitious in scale and innovative in nature, not only improve energy efficiency, but also set a new standard of living and urban regeneration” — Mike Hughes, Zone President UK & Ireland, Schneider Electric
building and the potential to be ‘net positive’. The Edge is a building that is self-sufficient in terms of the energy it requires to function, and at times (such as at night or weekends) returns excess energy produced to the grid. Forward-thinking projects such as these start to enable us to imagine a future where perhaps the majority of homes, businesses, schools and hospitals could be at worst net neutral and ideally net positive. Imagine receiving an income from your home or place of work, instead of paying bills. It would completely change the way we think about energy generation, distribution, and consumption. Digitisation paves the way for more and more net neutral or net positive buildings, generating their own energy on-site with smart systems that give excess energy back to the grid. Whilst net neutral and net positive buildings are currently just a dream for all but a few, the road to achieving this starts with tackling waste. Something that every government, business or individual can do. With demand for energy rising, unlocking untapped energy efficiency potential has never been more urgent, or easily achieved. w w w.busi ne ssc hief. com
69
S U S TA I N A B I L I T Y
Investing in smart systems that monitor energy use and efficiency across every aspect of your energy infrastructure is something that can be realised today. By understanding how, where and when energy is used, opportunities for efficiencies can be identified and actioned. Our Global Digital Transformation Benefits Report 2019 identified 12 ways that the digital transformation of energy management and automation drives benefits in CapEx, OpEx, based on interviews with 230 businesses. These companies have realised 70
savings in energy consumption of up to 85% and up to 80% on energy costs. Energy efficiency projects are becoming a C-suite priority, as board members recognise the competitive edge that projects can deliver, at the same time as delivering on sustainability commitments which employees, customers and governments are driving for. Projects like these demonstrate that rethinking energy is not only a major enabler of innovation. It powers progress and life. As the global population grows and our world and lives become increasingly electrified, creating sustainable cities means creating smart cities, M AY 2 0 1 9
S TAT I S T I C S
• Cities make up 2% of the world’s surface but house more than half of the world’s population and consume 75% of energy resources • By 2030, urban areas are projected to host 60% of people globally
Crossrail Place Roof Garden in Canary Wharf, London Photo Š Jason Williams
powered by clean energy that is responsibly consumed and saved. The fact is it is far easier to save a unit of energy than it is to create one. The only way we will tackle climate change and create cities fit for the future is by rethinking our relationship with energy as individuals, businesses and nations.
Deloitte’s headquarters, The Edge Building in Amsterdam
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71
The Global Summit of The that unites CEOs from so manufacturers and service destination where 1,000 b under one roof every year insights and learnings from voice and discuss the key and in the future. It’s abou
2019 SPEAKERS INCLUDE:
Jean-P Chairm L
e Consumer Goods Forum is the business event ome of the world’s most successful retailers, e providers. This unique event is the essential business leaders and key stakeholders gather r. It is where CEOs talk to CEOs with additional m global and regional experts. It is the place to issues and challenges facing our industry now ut purpose and driving positive change globally.
To learn more about The Consumer Goods Forum and how to become a member, please visit our website: www.theconsumergoodsforum.com
Paul AGON man and CEO L’Oréal
Sarah DAVIS President Loblaw Companies Ltd
Max KOEUNE President and CEO McCain
Mark SCHNEIDER CEO Nestlé
Captain Scott KELLY Astronaut
CITY FOCUS
Business Chief Canada explores Winnipeg’s James Armstrong Richardson International Airport, the high tech transport hub helping put the city on the map.
WINN City Focus
74
WRITTEN BY
HARRY MENEAR
M AY 2 0 1 9
NIPEG w w w. b u s i n e s s c h i e f. c o m
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CITY FOCUS | WINNIPEG
L
ocated at the intersection of the Red and Assiniboine rivers, Winnipeg is the capital of the province of Manitoba. Historically a
center of indigenous trade dating back long before European settlement, Winnipeg officially achieved cityhood in 1873 and today is home to over 705,000 people. Nicknamed “The Gateway to the West”, the city is a transportation hub with strong rail links served by Via Rail at Union Station for passenger rail. Freight Rail, meanwhile, is handled by the Canadian National Railway, Canadian Pacific Railway, Burlington Northern Santa Fe Manitoba and the Central Manitoba Railway.It is the only major city between Vancouver and Thunder Bay 76
with train links directly to the United States, according to Destination Winnipeg.
NEW HEIGHTS Another element of Winnipeg’s role as a transportation hotspot is its air transport hub, the James Armstrong Richardson International Airport. Located on the Western outskirts of the city, Winnipeg International is Canada’s seventh-busiest airport by number of passengers, serving over 4.3mn people in 2017. In 2018, this figure rose again to 4.5mn in 2018, continuing a period of steady growth for the airport, according to a report by Global News Canada. “The increase in traffic this summer is directly connected to the growing interest in our city and province. Winnipeg and Manitoba are where people M AY 2 0 1 9
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“ The increase in traffic this summer is directly connected to the growing interest in our city and province” — Barry Rempel, President and CEO, Winnipeg Airports Authority
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CITY FOCUS | WINNIPEG
want to be, and we are seeing more and more traffic as a result,” said Barry Rempel, President and CEO of Winnipeg Airports Authority. “WAA continues to work with our airline partners to improve service and add more destinations to connect our region to the world.” On average, Winnipeg International serves 11,000 passengers each day, and that figure is only expected to increase. Additionally, Winnipeg International is the number one airport in Canada for dedicated freighter flights, keeping 78
goods flowing efficiently and building on the city’s reputation as a transportation and logistics hub. All told, the Winnipeg Richardson International Airport has a CA$3.4bn economic enefit and supports over 17,000 jobs in and around the city.
INTELLIGENTLY SECURE Winnipeg International is not content to become one of the country’s biggest air hubs; it is also determined to be one of Canada’s smartest. Winnipeg International is one of a small group of Canadian airports to incorporate biometrics-enabled primary inspection
M AY 2 0 1 9
© KDOAN
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CITY FOCUS | WINNIPEG
“ Our success is a direct result of bringing together partners who are committed to lead transportation innovation and growth” 80
— Barry Rempel, President and CEO, Winnipeg Airports Authority
kiosks into its border control process.
tive should help Winnipeg International
According to a report by Biometric
process its growing passenger base at
Update, Winnipeg, alongside select
an even greater speed.
pilot programs in Toronto, Quebec and Hamilton, has implemented self-ser-
MEET OTTO
vice, fingerprint-enabled kiosks for use
In addition to being among the first
by biometrically enrolled foreign
adopters of self-service biometrics, in
nationals and permanent residents.
March 2019 Winnipeg International
Biometric-enabled kiosks that auto-
became North America’s very first air-
mate the border clearance process are
port to pilot an autonomous snow plow.
scheduled to be phased-in at all major
Winnipeg experiences an average of
Canadian airports throughout 2019. Its
53 days of snow each year. Starting in
position as a leading player in the initia-
Spring 2019, Winnipeg International
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will have its snow removal needs met by Otto, a specially designed ATI
Local Manitoba companies Northstar Robotics Inc and
Snow Mauler configured to operate
Airport Technologies Inc collaborated
autonomously using Northstar
on the autonomous vehicle’s construc-
Robotics technology.
tion. The plow can perform snow
“Launching North America’s first
clearing tasks by following predeter-
autonomous snow plow is a great
mined routes and controlling the plow
achievement for Winnipeg Richardson
blade at specific locations, according
International Airport,” said Rempel.
to a press release by the Winnipeg
“Our success is a direct result of bring-
Airports Authority.
ing together partners who are
“Autonomous technology is
committed to leading transportation
changing how we work,” said Shawn
innovation and growth.”
Schaerer, President and Founder of w w w. b u s i n e s s c h i e f. c o m
CITY FOCUS | WINNIPEG
Northstar Robotics. “It is exciting to
We are excited to continue to find
partner with companies that are ready
new ways to incorporate autonomous
to adapt and pioneer this cutting-edge
technology into our equipment.”
technology.” ATI’s President, Brendon
Otto is equipped with 3D LIDAR and
Smith agreed, adding that “ATI is proud
RADAR that can sense its surround-
to be part of the team breaking new
ings and detect obstacles. The plow is
ground in snow clearing technology.
also equipped with a fault tolerant wireless emergency stop system, a further safety enhancement. Research and
1873
Official city status 82
705,000
© AJ BATAC
Population
Airport supports
17,000
jobs in and around the city.
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development will continue, focusing on allowing Otto to operate in more complex areas of the airport.
CLICK TO WATCH : ‘XINNIPEG AIRPORTS AUTHORITY: THERE’S MORE TO COME’ 83
REALIZING THE AIRPORT CITY VISION
is another step in realizing the vision
In addition to equipment, Winnipeg
of Winnipeg as an airport city.”
International is expanding its infra-
The multi-use building will give
structural capabilities in order to better
ground handling, commissary and
support its industry-leading freight
cargo companies operating space
proficiencies. In June 2018, the Winni-
close to the terminal. Once completed,
peg Airports Authority broke ground
current tenants in the airport’s cargo
on a 96,000 square foot Ground Ser-
campus will relocate to the new GSE
vices Equipment (GSE) Building. At the
Building, freeing up much-needed
unveiling, Rempel said of the $27mn
space in the cargo area for redevelop-
building: “The world is more and more
ment. Winnipeg International is a
connected every day, and for Winnipeg
constantly evolving and expanding
to fulfil its potential on the global stage
entity, both an expression of and
we must have the infrastructure in
a driving force behind the rising star
place to compete. Today’s investment
of Canada’s Gateway to the West. w w w. b u s i n e s s c h i e f. c o m
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TOP 10
US universities for business Business Chief takes a look at the top 10 universities in the United States for business and management degrees, according to the Times Higher Education’s 2019 rankings
WRITTEN BY
HARRY MENEAR
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T O P 10
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10
University of California Los Angeles, CA
Founded in 1919, the University of California, Los Angeles (UCLA) is the third-oldest of the 10 public universities located in California (preceded only by UC Berkeley and UC Davis). UCLA offers 230 undergraduate and graduate majors, with over 24 programs ranked among the top 20 in their respective disciplines. The Anderson School of Management which houses UCLA’s business courses was founded in 1935 and is home to approximately 1,750 students. Famous alumni include Jackie Robinson, James Dean and Arnold Schwarzenegger.
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09
Columbia University New York, NY
Originally founded as King’s College by King George II of England, Columbia University is the oldest university in the State of New York and the fifth-oldest educational institution in the country. A member of the US’ prestigious Ivy League, Columbia’s endowment exceeds US$10bn. According to the Times Higher Education, “the private research-based university has 20 schools – which include architecture, planning and preservation; business; Jewish theological seminary; and law – and 23 libraries that are scattered across the city.” Notable alumni include President Barack Obama, Warren Buffett and Allen Ginsberg.
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T O P 10
‘Berkeley was founded in the hope that it would “contribute even more than California’s gold to the glory and happiness of advancing generations”’
88
08
University of California Berkeley Berkeley, CA
Located across the bay from the City of San Francisco, the University of California, Berkeley, is one of the United States’ most prestigious public universities. Berkeley was founded in 1868 in the hope that it would “contribute even more than California’s gold to the glory and happiness of advancing generations”, according to the state’s constitution. The university is home to approximately 27,000 undergraduate students and 10,000 postgraduate students. Notable alumni include Steve Wozniak, Earl Warren and Steven Chu.
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07
University of Pennsylvania Philadelphia, PA
One of the nine American colleges established before independence from British rule, the University of Pennsylvania (Penn) claims to be the first fully-fledged, multi-faculty university in the United States, according to Times Higher Education. Founded in 1749, under the direction of Benjamin Franklin, Penn was officially granted university status 30 years later, at the height of the American Revolution. Established in 1881, the Wharton School is the business college at Penn. Its notable alumni include Elon Musk, Donald Trump and Sundar Pichai.
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06
Johns Hopkins University Baltimore, Maryland
Johns Hopkins University is a private research institution serving over 21,000 students across its nine colleges: Zanvyl Krieger School of Arts and Sciences, Whiting School of Engineering, Carey Business School, School of Education, School of Medicine, School of Nursing, Peabody Institute, Bloomberg School of Public Health and the Paul H. Nitze School of Advanced International Studies. Founded in 2007, when the School of Professional Studies in Business and Education separated in two, the Carey Business School is the newest business college on the top 10 list. Notable alumni of Johns Hopkins include Michael Bloomberg, President Woodrow Wilson and Gertrude Stein.
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‘The University of Chicago was the first college to offer an Executive MBA’
91
05
University of Chicago Chicago, Illinois
An urban research university in the heart of America’s third-largest city, the University of Chicago was founded in 1890 and has an endowment of $8.2bn. The institution’s research has led to breakthrough discoveries like the link between cancer and genetics. Founded eight years after the rest of the university, the Booth School of Business (named after a $300mn donation by David G Booth in 2008) is the second-oldest business school in the US and was the first school to offer an Executive MBA program. Notable alumni include Senator Bernie Sanders, Carl Sagan and Kurt Vonnegut.
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04
Yale University New Haven, CT
Another private research university and member of the historic Ivy League is Yale University, an institution with roots reaching back as early as 1701. It was founded as the Collegiate School in Saybrook, Connecticut, which moved to New Haven 15 years later, according to Times Higher Education. The college was renamed after benefactor Elihu Yale in 1718. In 1861, Yale was the first university in the US to award a PhD. The university has an endowment of $25bn, making it the second-richest educational institution in the world. Its business school, the Yale School of Management came into being in the 1950s. Notable Yale alumni include President George W Bush, Dick Cheney and Bill Clinton.
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‘Harvard has connections to more than 45 Nobel laureates, over 30 heads of state and 48 Pulitzer prize winners’
93
03
Harvard University
Cambridge, Massachusetts
With roots reaching back as far as 1636, Harvard is the oldest academic institution in the United States, and is ranked as the sixth best university in the world by the Times Higher Education. The private Ivy League institution has connections to more than 45 Nobel laureates, over 30 heads of state and 48 Pulitzer prize winners. It has more than 323,000 living alumni, including over 271,000 in the US and nearly 52,000 in 201 other countries. The Harvard Business School alone has an endowment of $3.8bn. Notable Alumni include Michael Bloomberg, Robert Kraft and Ratan Tata.
w w w.busi ne ssc hief. com
T O P 10
02
Massachusetts Institute of Technology Cambridge, Massachusetts
Located in Cambridge, the Massachusetts Institute of 94
Technology (MIT) is a private research university home to around 1,000 faculty members and over 11,000 undergraduate and graduate students. Currently, MIT is focusing its leading research departments on machine learning, sustainable energy, Big Data and healthcare. MIT estimates “that all its living alumni have between them launched more than 30,000 active companies, created 4.6 million jobs and generated roughly $1.9 trillion in annual revenue”. Altogether, this ‘MIT Nation’ is equivalent to the “10th-largest economy in the world.” Notable alumni include Benjamin Netanyahu, Buzz Aldrin and Richard Feynman.
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‘The ‘MIT Nation’ is equivalent to the 10th-largest economy in the world’ 95
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01
Stanford University Stanford, California
Standing as the only world top 10 university located on the West Coast of the US, Stanford is a private research 96
university located in the heart of Silicon Valley. The college was founded in 1885 by Jane and Leland Stanford and has since been the home of breakthroughs including the first successful heart-lung transplant, the debut of the computer mouse, and the development of digital music. In total, companies founded by Stanford affiliates and alumni generate more than $2.7 trillion annual revenue, and include Google, Nike, Netflix, Hewlett-Packard, Sun Microsystems, Instagram and Charles Schwab. Notable alumni include Elon Musk (PhD in physics after attending Penn), John F Kennedy and John Steinbeck.
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‘Companies founded by Stanford affiliates and alumni generate more than $2.7 trillion annual revenue, and include Google, Nike, Netf lix, Hewlett-Packard, Sun Microsystems, Instagram and Charles Schwab’
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Digital transformation in the financial Hea industry Pub WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
JAKE MEGEARY
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Kerning +25, All titles
adline in blico Light
99
5, leading +2pt
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IGM FINANCIAL
Milorad Stefanovic, Vice President of Digital Technology, discusses how his firm is utilising technology to transform its operating model
A
s it undergoes a strategic digital transformation, IGM Financial has established three key pillars to form its digital
technology strategy. The Canadian wealth and asset management firm aims to create a more engaging experience for its customers, provide a productive insights-driven toolset for advisors 100
and also create a new digital platform for employees. IGM has accelerated its digital transformation significantly over the past couple of years, helping its clients improve their financial well-being and achieve their goals. To accomplish this, the company has leveraged scaled agile delivery to aid the digitization of its processes. “In the last 12 to 18 months, we’ve made significant progress. We’re utilizing technology faster and delivering solutions in an accelerated cycle,” says Milorad Stefanovic, Vice President of Digital Technology. “We believe agile provides a new way of working that allows us to deliver a connected digital experience to our IG Wealth Management and Mackenzie Investments clients and advisors and build a strong culture of collaboration across our joint business and technology teams.” M AY 2 0 1 9
“Talent is absolutely front and center to our digital strategy” — Milorad Stefanovic, Vice President of Digital Technology
101
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IGM FINANCIAL
“ Salesforce has been an important partner, helping us drive business and technology innovation at IGM as well as by accelerating our digital 102 transformation roadmap” — Milorad Stefanovic, Vice President of Digital Technology
Joining IGM in June 2018, Stefanovic’s previous leadership experience with Royal Bank of Canada (RBC) and IBM has furnished him with an understanding of how technology is transforming business operating models in the financial services industry. “My previous roles focused on digital banking for business and retail banking clients. I see important parallels between wealth management and business banking when it comes to connected digital journeys for clients and advisors,” he explains. “In both lines of business, there is an important role that the advisor or business banker plays in terms of managing the relationship with clients and growing their practices. I think that experience in business banking and wealth management has helped me to drive the strategic transformation for IG Wealth Management and Mackenzie Investments here at IGM.” Through the implementation of a new integrated toolset, IGM began two large initiatives in a bid to accelerate its transformation and deliver digital capabilities for advisors. “We are rolling out a new Salesforce-based digital platform for our advisors and accelerat-
M AY 2 0 1 9
ing our transition from paper-based
“Talent is absolutely front and center to
processes to a digital business,”
our digital strategy. It’s been recognized
Stefanovic explains. “We also launched
as part of our roadmap and is consid-
a new digital client platform, providing a
ered one of our main enablers. We
seamless omnichannel experience to
believe in both the importance of
our clients and advisors. Both the client
developing talent within the organisa-
access and the advisor digital capabili-
tion and the ability to attract external
ties are based on Salesforce which
talent as we move forward,” explains
allows us to share the data and insights
Stefanovic. “In terms of development of
across online and mobile for clients as
the talent within the organisation, we
well as the digital platform for advisors.”
have a structured, focused approach in
Recruitment is a vital task for any
developing the key skills related to
company, and Stefanovic maintains that
digital technology, specifically Sales-
due to his firm’s digital priorities, it has
force as well as the skills related to agile
become a central part of IGM’s strategy.
delivery at scale. Both agile and
E XE CU T I VE PRO FI LE
Milorad Stefanovic As Vice President Digital Technology at IGM Financial Milorad is responsible for the technology organization that delivers omnichannel experience and digital capabilities to IG Wealth Management and Mackenzie Investments clients, advisors, and employees. He is also responsible for the Salesforce Center of Excellence and the Scaled Agile operating model at IGM. Milorad is a seasoned executive with experience leading business and technology transformation, driving innovation, and delivering integrated end-to-end solutions in Wealth Management, Retail Banking, and Business and Commercial Banking.
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103
IGM FINANCIAL
104
Salesforce are specific learning paths
tion and empower our advisors to
that we have made available to our
deliver relevant and timely advice to our
employees.”
clients” he says. “Salesforce has been an important partner, helping us drive
VITAL STRATEGIC PARTNERSHIPS
business and technology innovation at
In order to accelerate its growth, IGM
IGM as well as by accelerating our
has established an important partner-
digital transformation roadmap.”
ship with Salesforce and Stefanovic
In addition, IGM has established
believes collaborations with firms such
other digital partnerships with Slalom
as this has been paramount to his
and Portag3 as the company contin-
company’s digital transformation. “The
ues to digitalize its operating model.
connected experience and capabilities
“Given the accelerated pace of our
available through our digital platform
digital transformation, we aren’t able to
allow us to accelerate our transforma-
develop everything in-house. It has led
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105
to us forming several partnerships,
FUTURE PLANS
including Slalom as a solutions
Looking ahead to the future of the
integrator. Slalom is a US-based
financial services industry, Stefanovic
company with a strong presence in
anticipates an increased focus on
Canada and they have helped us
effective application of artificial
considerably through the integration of
intelligence (AI) over the next few
the solutions and project delivery,”
years. “The adoption and application
explains Stefanovic. “In addition, we
of AI and machine learning capabilities
have a strong partnership with Portag3,
is well under way and these capabilities
the venture capital arm of Power
will play a central role going forward.
Financial Corporation. Our partnership
I expect the application of AI in our
with Portag3 and the portfolio compa-
industry to become a common
nies will help us stay ahead of the
practice in the future with a broad
curve moving forward as well.”
range of relevant use cases from w w w.busi ne ssc hief. com
IGM FINANCIAL
106
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ÂŁ20bn Mutual Fund Sales
HQ
Toronto, Canada
3,300
Approximate number of employees
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Slalom is a modern consulting firm focused on strategy, technology, and business transformation. At Slalom, personal connection meets global scale. Our consultants across the U.S., U.K., and Canada move fast and share insights to deliver high-impact business results.
“ We believe we can be the best company in Canada, in terms of delivering relevant and timely investment advice to our clients and helping them reach their full financial wellbeing potential”
marketing and sales to operations and service capabilities.” Predicting the future for IGM, Stefanovic is confident his company will continue to be a leading provider of wealth and asset management products and services to Canadians in the upcoming years and beyond. “We believe we can be the best company in Canada, in terms of delivering relevant and timely investment advice to our clients and helping them reach their full financial wellbeing potential. We also feel we can draw a significant market share in the Canadian market too.”
— Milorad Stefanovic, Vice President of Digital Technology
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110
CHANTIER DAVIE: INTRODUCING CONNECTED FLEETS AND IOT WRIT TEN BY
SOPHIE CHAPM AN PRODUCED BY
JA MES BERRY
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C H A N T I E R D AV I E C A N A D A I N C .
Canada’s largest shipbuilder, Chantier Davie Canada, reveals how it is updating its technology to connect a shipyard the size of a small town
E
stablished in 1825, Chantier Davie Canada has been building ships for almost 200 years but has just started
to take the first steps on its digital transformation journey. The shipyard is the largest, highest capacity, and most experienced in 112
Canada. Davie Shipbuilding has a vision of being the nation’s “premier shipyard providing national strategic capability when it comes to the digital transformation,” claims Jeremy Citone, Technology Director of Chantier Davie Canada. “The yard has recently delivered the most complex vessel ever built in North America, and we are now focusing on innovating new ferries which use clean energy.” “Being in a company with so much history, it’s a challenge in itself. Facilities are more than 2 kmsq. With its 56 buildings, it is really like a small town. When the shipyard reopened in 2012, it was 10 years behind with technology. Everything needed to be updated, from security, IT infrastructure to introducing Internet of Things,” notes Citone. Despite M AY 2 0 1 9
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CLICK TO WATCH : ‘CANADA’S NEXT AUXILIARY OILER REPLENISHMENT SHIP – EPISODE ONE’ 115 the numerous changes being made
were facing: to provide information
around Davie, its workers are entirely
when an where it is needed within our
involved and committed. “Major
environment.”
technology changes are always tricky
“The use of technology not only
to introduce. However, our workers
enables the shipyard to be more efficient,
are embracing the new tools they are
but it also makes the company more
provided with.”
sustainable, as it is able to move on
Citone notes that for him live information is key – while engineers are behind computers designing
from paper-based practices which are riskier and less reliable.” Citone reveals that the shipyard’s
ships, the supervisors are onboard.
technologies are well on track to reach
“But how can you ask someone to be
Industry 4.0 levels. Over the past 3
efficient onboard a ship under construc-
years, he has introduced and fostered
tion if they don’t have access to that
a culture which has the goal of becom-
information? That’s the challenge we
ing a smarter and virtual shipyard. w w w.busi ne ssc hief. com
C H A N T I E R D AV I E C A N A D A I N C .
“In five years I see the implementation of AI for shipbuilding. AI will allow us to use our workforce smarter” — Jeremy Citone, Technology Director of Chantier Davie Canada 116
“We are now 3D scanning incoming
the 3D models,” he adds. Augmented
ships, both inside and outside. When
reality technologies allow them to be
we have a virtual ship, we can measure
onboard and visualize the ship the way it
it from the office. We can select the
will look like once completed. All piping,
best spot for a piece equipment. That
equipment, and lighting systems are
allows us to work around the clock with
displayed on top of what the camera
engineering companies all over the
sees directly on the tablets onboard
world,” Citone explains. As part of the
the ship. This way, the supervisors can
firm’s digital transformation journey,
understand and show the workers
supervisors have been equipped with
what to do and where to do it.
tablets, and Wi-Fi has been installed
“I believe live information and reporting
across the site. “With the tablets, our
is key. In-house developed apps allow
supervisors are able to draw on top of
the supervisor to have a clear view of
M AY 2 0 1 9
the progress made onboard and keep track of their budget per task. All tablets are connected to the main cluster and are regularly updated with any revisions as it is used. This reduces risks and mistakes” Efficiency, according to Citone, is the most important aspect of the company’s digital transformation journey. “However, as we are based in Canada, the labor is quite expensive compared to all of our international competitors. Therefore, our employees need to be very efficient and technology-driven.” However, Citone notes that live information is being used even further: “For every ship, we collect as much E XE CU T I VE PRO FI LE
Jeremy Citone After finishing his second Master’s degree in Computer Science in California, Jeremy was head hunted by the INOCEA group in Monaco to take on a role of a system engineer. His vision for shipyard technology led him to Inocea-owned Chantier Davie, the largest shipyard in North America. In 2017, just a few years after joining the company, he became the head of the IT department. Today, Jeremy works on implementing his vision by bringing high-end technology to the shipbuilding industry
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117
C H A N T I E R D AV I E C A N A D A I N C .
118
production data as we can. This live
recent major conversions, the Replen-
data allows us to update our norms for
ishment at sea vessel MV Asterix.”
the planning. I would like to see the end
While building the Asterix, the
of the averaging. With lots of data, we
company also prioritized cybersecurity,
now have the capability to get to a level
and designed an entire network for its
of accuracy we couldn’t dream of before.
connected ships. “Ships are more and
A good example of the marine industry
more connected to the internet; the
transformation is one of our most
engines, navigation chart systems,
M AY 2 0 1 9
715
Ships built at Davie
1825
Year founded
348
Metre Drydock
integrated management system are
strides forward, creating a training
all connected for maintenance and
system that resembles a video game.
updates.” Those technologies cannot
“It’s something completely new that
be implemented without having
we’ve never seen before in the marine
a shipyard mastering those technolo-
industry. We partnered with Race-
gies,” he continues.
Rocks, a Canadian company based in
On its journey toward Industry 4.0, the company has made significant
Vancouver that designs training systems in the style of video games. We gave w w w.busi ne ssc hief. com
119
C H A N T I E R D AV I E C A N A D A I N C .
120
“ Ships are more and more connected to the internet; the engines, navigation chart systems, integrated management system are all connected for maintenance and updates” — Jeremy Citone, Technology Director of Chantier Davie Canada
M AY 2 0 1 9
121
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C H A N T I E R D AV I E C A N A D A I N C .
“ We gave them a 3D model of our ship and they made a video game out of it” 122
— Jeremy Citone, Technology Director of Chantier Davie Canada
M AY 2 0 1 9
them a 3D model of our ship and they made a video game out of it,” says Citone. “The crew can sit down with their computers in their rooms and train on how to extinguish fires, operate equipment and follow procedures. Some training will display a virtual replenishment at sea console. The console is fully functional, every single button works – if they were to push the wrong button, the simulation will fail.” Using one-of-a-kind technology to train its staff marks the direction the shipyard is going in, “In 5 years I see the implementation of AI for shipbuilding. AI will allow us to use our workforce in an optimal fashion. We currently have accurate feedback on how long it takes to complete each job based on complexity, material availability, and manpower. Planning won’t be based mainly on rules: we will be able to predict schedules using actual shipyard capabilities. And that’s a game changer for Canada.”
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124
SUSTAINABILITY, EFFICIENCY AND TECHNOLOGY: LARGO RESOURCES’ RECORD BREAKING YEAR WRITTEN BY
HARRY MENEAR PRODUCED BY
RICHARD DEANE
M AY 2 0 1 9
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LARGO RESOURCES
126
PAULO MISK, COO AND PRESIDENT OF LARGO RESOURCES, DISCUSSES SUSTAINABILITY, EFFICIENCY AND THE COMPANY’S RECORD BREAKING 2018
W
hen a winning strategy is executed by talented, passionate professionals in favorable conditions,
the results can be spectacular. Last year, Largo Resources experienced just that. With headquarters in Toronto, Largo Resources is a strategic mineral company focused on the production of vanadium flake, high purity vanadium flake and high purity vanadium powder at the Maracás
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LARGO RESOURCES
“WE’VE HAD GREAT RESULTS FROM A GREAT PERFORMANCE IN 2018. IT’S DOWN TO HAVING A GREAT DEPOSIT, EFFECTIVE TECHNOLOGY, AND AN EXCELLENT TEAM” — Paulo Misk, COO and President, Largo Resources
128
Menche Mine in Bahia State, Brazil. In 2018, the company reported revenues of CA$521.4mn – a 211% increase year on year – and four consecutive quarters of production growth. Starting in 2014, Largo has successfully ramped up its vanadium operations, building a strong team and incorporating state of the art technologies into its operations. “We’ve had great results from a great performance in 2018. It’s down to having a great deposit, effective technology and an excellent team,” M AY 2 0 1 9
CLICK TO WATCH : ‘LARGO RESOURCES LTD – CORPORATE VIDEO’ 129
says Paulo Misk, Chief Operating
make the car lighter, which saves fuel,
Officer (COO) and Corporate
shipping costs, etc... Vanadium means
President of Largo Resources. Misk
there’s less environmental impact
discusses Largo’s record breaking
along the whole steel chain. The whole
best year to date, and why vanadium
world should use vanadium to have a
promises a bright future for Largo
better environmental situation in the
Resources and the planet.
future.” The added strength that
“Vanadium is a ‘green metal’. When
vanadium provides to manufactured
you use approximately one kilo of
steel had significant benefits for Largo
vanadium in a tonne of steel, it
Resources in 2018 when, in November,
increases its tensile strength up to
China introduced new quality stand-
80%, which means you don’t need to
ards for rebar production. “There was
use as much steel when making a car,
higher demand, low supply and a
for example,” explains Misk. “You can
very low global inventory,” Misk says. w w w.busi ne ssc hief. com
LARGO RESOURCES
$521mn
CA
Approximate revenue
1988
Year founded
800+
130
Approximate number of employees and contractors
“That’s the perfect situation for increased
company entering 2019 with a cash
price and that’s what happened with
balance of $206.2mn.
vanadium.” Last year, according to
In addition to vanadium’s natural
Vanadium Price, the Chinese market
propensity for sustainably enhancing
price of Vanadium Pentoxide (V2O5)
the steel supply chain, Largo Resourc-
Flake rose from $11.50/lb in January, to
es is determined to marry its profitabil-
$32.00/lb in November. The combina-
ity with a sustainable approach that
tion of soaring prices and the high
benefits both the environment and the
quality of the Maracás Menchen Mine
communities surrounding the Maracás
resulted in the operation reporting
Menchen Mine. “We value and take
record production figures of 9,830
very seriously the ways in which
tonnes of V2O5 in 2018 (2,595 of
we contribute to our community,”
which were mined in Q4), a 6%
says Misk. “We must do our best to
increase over 2017, which led to the
improve and have a positive
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E XE CU T I VE PRO FI LE
Paulo Misk is a mining engineer with over 33 years’ experience in operational management. He was responsible for some successful mining operations in Brazil such as RHI-Magnesita and AMG — Advanced Metallurgical Group N.V. (Niobium, Tantalum, Tin and Lithium Operation). Most recently, Mr. Misk ran Anglo American’s Catalão Project from 2011 to 2014 as Head of Niobium Operations doubling its EBITDA. Paulo has lead the Vanadium operation of Largo Resources since its start in 2014 implementing innovative policies and fostering a highperformance culture that greatly improved production and outstanding financial results. Paulo is also President of Sindimiba (a mining companies association in Bahia), Director of FIEB (Bahia Industry Federation) and responsible for mining chapter of CCBC (Commerce Chamber of Brazil-Canada). w w w.busi ne ssc hief. com
LARGO RESOURCES
C O M PA N Y FACT S
•N et income of $316.0mn and basic earnings per share of $0.61 in 2018 •R evenues of $521.4mn in 2018, a 211% increase over 2017 •C ash provided before non-cash working capital items of $403.2mn in 2018, an increase of $336.1mn over 2017 •C ash operating costs excluding royalties of $4.41 (US$3.38) in 2018
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• $ 206.2mn in cash exiting 2018 •R ecord production of 9,830 tonnes of V2O5 in 2018, exceeding midpoint guidance of 9,650 tonnes by 2% and a 6% increase over 2017 •F our consecutive quarters of production growth in 2018 •E xpansion plan completion target of Q2 2019 with ramp up to follow in Q3 2019
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GEA Solutions for Mining & Mineral Enhancing cost-effectiveness and environmental compatibility of the required production processes
GEA is the world leader in evaporation and all types of crystallization equipment design and technology. Our expertise includes thousands of installations worldwide. With this deep knowledge base, GEA is able to implement the R&D necessary to devise the process components which best meet the customer’s needs. By closely coordinating project protocols, our customers regularly meet and exceed quality and production targets. For more information please visit GEA’s website.
impact on the community. Largo
“an area 25 times larger than the
Resources has very robust social
footprint of the mine itself”, according
programs, which focus on professional
to Misk, where native species are
vocations and providing support to
preserved on over 2,200 hectares of
local entrepreneurs. We also have
natural forest. Wild animals found in
other programs that support local
the project area are captured and
education, sports, culture and
released onto the reserve. A native
entertainment. We help our workers’
plant greenhouse with the capacity to
families have a better place to live.”
produce 20,000 trees is also being
Largo Resources is also committed
cultivated to reforest the surrounding
to limiting its environmental impact.
area. “I think mining has a lot of very
The company, through the Maracás
good options to contribute to the
Menchen Mine, owns and oversees the
planet’s future,” says Misk. “Not only
San Conrado farm and nature reserve,
by providing materials for new tech-
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“THE WHOLE WORLD SHOULD USE VANADIUM TO HAVE A BETTER ENVIRONMENTAL SITUATION IN THE FUTURE” — Paulo Misk, COO and President, Largo Resources
135
nologies, which reduce environmental impact overall, but by ensuring that our actions are creating the smallest environmental impact possible, and even improving the environmental situation if we can. We are here to do our best and to make our world better. That’s our responsibility.” With regard to its business ventures, Largo Resources is undoubtedly doing its best, utilising tier-one technology from innovative, world-class suppliers like GEA Group, in order to create a product that is superior to the compaw w w.busi ne ssc hief. com
LARGO RESOURCES
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“WE VALUE AND TAKE VERY SERIOUSLY THE WAYS IN WHICH WE CONTRIBUTE TO OUR COMMUNITY” — Paulo Misk, COO and President, Largo Resources
ny’s competition. “Largo has the best ore grade vanadium deposits in the world. It’s a fantastic deposit. World class. Also, we have very good technology, and an innovative, learning based approach,” Misk says. “Add that to our amazing team, and success is just a matter of time. When you look at plant performance, our recovery from the ore to flake to final product is 77%, which we’re looking to raise to around 80% in 2019. We have a very good ore grade; it is, on average, 1.2% V2O5, which is much w w w.busi ne ssc hief. com
137
LARGO RESOURCES
138
“WE ARE READY TO BREAK NEW RECORDS IN 2019 AS WELL” — Paulo Misk, COO and President, Largo Resources higher than any of our competitors around the world. Also, after mining and ore treatment, the concentrate that’s generated is about 3.2%, more than 50% higher than any other competitor.” The high quality and efficiency of production ensure that Largo Resources is able to achieve increasingly lower costs. “We have been constantly improving our process,” says Misk. “High recovery is a big factor and we adapted our M AY 2 0 1 9
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LARGO RESOURCES
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“CONSIDERING THE CURRENT SUPPLY AND DEMAND, WE SHOULD SEE A VERY STRONG MARKET FOR VANADIUM OVER THE NEXT THREE TO FOUR YEARS” — Paulo Misk, COO and President, Largo Resources
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process to yield the lowest amounts of
is expected to deliver an additional
raw materials like ammonia sulfate. This
200 tonnes of V2O5 per month. “We
way we get a very low cost and still have
expect to keep increasing our produc-
the best quality product in the world.”
tion. Considering the current supply
Misk is optimistic about the future
and demand, we should see a very
of Largo Resources. In November,
strong market for vanadium over the
the company announced a planned
next three to four years,” says Misk.
expansion to the Maracás Menchen
“We are ready to break new records in
Mine. Scheduled for completion in
2019 as well.”
June 2019, the project will focus on the milling, fusion, evaporation and filtering capabilities of the facility, and w w w.busi ne ssc hief. com
A FAMED DIGITAL TRANSFORMATION WRITTEN BY
LAURA MULLAN 142
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PRODUCED BY
CRAIG DANIELS
IMAGE © JAMES ALLISON
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S P R I N T C O R P O R AT I O N
“ The sky’s the limit when it comes to Sprint’s digital transformation,” says CIO Scott Rice
S
print is working to become the ‘comeback kid’ of the telecommunications industry. A few years ago, the telecom was losing
money and struggling to cut through the frantic, competitive buzz of the market. So, in 2015, it decided to reinvent itself. Sprint devised a five-year turnaround plan 144
which cut billions of dollars in costs and increased investment in its network. The company strengthened its balance sheet and began delivering an improved customer experience. However, the journey is far from over. A fundamental element of this plan has been a reboot of Sprint’s digital footprint. For a 120-yearold company, this is no small feat, but the task has fallen into the capable hands of Chief Information Officer (CIO) Scott Rice and his team. Having learned the ins and outs of the business for nearly two decades, Rice notes the Sprint digital transformation has resulted in root-and-branch change. “When I first took the role of CIO, I inherited an environment that had suffered from a lack of investment,” recalls Rice. “We had to embark on a concerted approach to modernize. Many of our M AY 2 0 1 9
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Ready for 5G? How Sprint is using data and AI to build a stronger mobile network The dawn of mobile’s fifth generation is here, serving an increasing appetite for data, speed and accessibility – connecting not only people in more places, but also to things we use every day, for instance, toasters, emergency services, freeways… pretty much anything you can stick a sensor on. With the 4G world disappearing in the rearview mirror, mobile networks are only going to get faster. Network communication companies such as Sprint have rose to the challenge to make sure the vision of 5G is indeed a reliable one. Facing its own path toward digital transformation, Sprint started preparing their data for Artificial Intelligence (AI) – with the goal of using machine learning algorithms to gain near, real-time insights and increase responsiveness to customers. The success of Sprint’s digital transformation hinges on the ability to quickly discover, organize and present the right data at the right time to those teams that make decisions that impact the customer journey. IBM Cloud Private for Data, a leading enterprise insight platform* proved to be the right solution for Sprint – enabling AI projects in a shorter timeframe through unifying and simplifying four critical stages in the journey to AI: the collection, organization, analysis, and modeling of data. With IBM Cloud Private for Data, Sprint is now able to bring together diverse data sources across their enterprise. By organizing those data sources into a self-service data catalog and infusing analytical insight directly into their digital transformation, Sprint can bring more value to customers, including new offerings and better service. Sprint’s business analysts and data scientists are expecting a measurable productivity increase by leveraging their new self-service access to
enterprise data and the integrated artificial intelligence tools that IBM Cloud Private for Data is a part of. An example of this is a recent collaborative project between Sprint data scientists and the IBM Data Science and AI Elite team. Sprint had a goal to understand the correlation and predictability between communication network alarms, the opening of trouble tickets and the physical dispatches of people and parts to fix equipment. The IBM Cloud Private for Data platform gave teams an easy way to quickly ingest millions of past alarms, trouble ticket data and past people and parts dispatches. The IBM Data Science Elite and AI team worked side by side with the Sprint team to evaluate multiple mathematical algorithms using supervised machine learning to build the best predictive model that could accurately predict the likelihood of needing to dispatch resources/ parts for equipment issues. Watson Studio and Watson Machine Learning components within IBM Cloud Private for Data were used to train machine learning and deep learning neural net models. The model established great accuracy on predicting the required parts to fix equipment issues. Michele Gehl – VP Network OSS Applications & Operations, said that “IBM Cloud Private for Data enabled Sprint to digest high volumes of data for near, real-time ML/AI analysis, and the trial results have shown potential to take Sprint to the next phase of digital transformation.” Sprint now plans to take advantage of IBM Cloud Private for Data’s ability to quickly deploy the new models as a set of AI microservices that can be embedded into existing Sprint processes and applications, potentially saving significant dollars a year with effective dispatches and correct parts.
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S P R I N T C O R P O R AT I O N
“We’re training, we’re hiring and we’ve created internship programs which have helped to bring new ideas into the business” — Scott Rice, CIO at Sprint Corporation
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systems were legacy ecosystems that operated as silos, so we first had to rebuild and shore up the infrastructure to drive resilience and stability. Then we were able to focus on modernizing our applications.” Sprint has faced many challenges over the years, but its leadership has not been afraid to reevaluate, change and adapt. “In some ways, our past is really informing our future,” Rice reflects. “Sprint has a legacy of doing things not only to survive but to thrive. We’ve struggled for many years, so we knew that if we wanted to compete,
CLICK TO WATCH : ‘SPRINT GETS 5G-READY WITH MASSIVE MIMO TECHNOLOGY’ 149
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IDEA TO APPLICATION, FASTER. WE GUARANTEE IT.
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Sprint Speeds Innovation with Appian Business in the digital age requires the ability to innovate, faster. For Sprint, innovation is a focus in every part of their business. With the Appian low-code platform, Sprint is turning business ideas into powerful applications—in weeks, not months or years. Sprint initially started with Appian to accelerate its ambitious Network Densification program, and to streamline its wireline provisioning processes. In just 4 years, Sprint has deployed 22 applications. From large applications that run over 5,000 complex processes and components to smaller applications that have been built in as few as 3 days, Sprint is taking their innovation strategy to execution across the business.
APPLICATION HIGHLIGHTS
BENEFITS REALIZED
• Wireline Network Provisioning. Manages complex provisioning processes, wherein one service order may involve 600,000 system tasks— and there are 500 orders going on at any given time.
• 40% Cost Savings. Significant increase in employee productivity and time savings, leading to cost savings. Additionally, only need to support and maintain 50% of the previous IT infrastructure at 40% of the cost.
• New Tower Site Selection. Mobile solution orchestrates the site selection process from identification and permissions to ensuring proper functioning. In the first 3 months, enabled Sprint to survey 200,000 new sites. • IT Infrastructure Management. Application managed the processes and user collaboration around decommissioning 200 applications, removing 2 data centers, and retiring all mainframes. • Device Tracking. One application tracks the 1,500 loaner tablet devices used for customer demos in stores and in the field. Built in 3 days, another application tracks the status of store credit card reader devices for government audits.
• Information Accuracy. Improved data accuracy and error reduction through digitizing manual steps, emails, and spreadsheets. • Stakeholder Visibility. Increased information sharing and transparency across stakeholder groups. • Improved compliance. Ability to easily track store devices for government audit readiness. • Ability to accelerate innovation. New applications can be rolled out in days, weeks, or months. Applications are easy to adapt as ways of doing business change.
• Contract Management. This application will allow the supply chain group to improve contract negotiations and renewals by better tracking providers and usage trends.
“Appian is an innovation enabler.” Kathy Eichholz, Director, Information Technology, Sprint
For more information on how Appian helps organizations deliver applications faster, to scale innovation and drive digital transformation initiatives, visit appian.com/sprint.
S P R I N T C O R P O R AT I O N
we had to focus quickly on digitizing
For Rice, it was pivotal that the
our applications. Our customers now
company’s digital strategy aligned
experience better service through
with its overarching corporate vision.
digitization, because they have more
“When embarking on a digital transfor-
choice and it is much more convenient.
mation, there is little chance of
However, technology always changes
success if everyone isn’t ‘pulling the
so we must have a continuous im-
rope at the same time and in the same
provement mindset – we’re always
direction’,” he observes. “A lot of
looking for the next great idea and best
companies struggle with this, but
solution for our customers.
we tackled this challenge early.”
Any CIO will tell you that the most
152
Whether behind a screen or in the
successful digital transformation plans
boardroom, one shared goal at Sprint
are those that blur the lines between
helped teams revamp the customer
IT and business. Why? Because the
journey at all interaction points –
entire team is behind one unified goal.
online, on the phone or in-store.
E XE CU T I VE P RO FI LE
Scott Rice, CIO, Sprint Corporation Scott Rice oversees the enterprise Information Technology organization, enabling transformation through the delivery of innovative and evolving technology solutions while assuring efficient and stable operations for all brands. His responsibilities also include cybersecurity strategy and operations, fraud management and Network Functional Virtualization build support. Rice joined Nextel in 2000 and supported BSS transformation and operations. He came to Sprint as part of the Sprint/Nextel merger in 2005. He is a proven veteran in the telecommunications industry with more than 34 years of experience. Before Sprint, Rice consulted at various US and international carriers and served at AT&T in various capacities.
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“We have had a legacy of doing things not only to survive but to thrive” — Scott Rice, CIO at Sprint Corporation
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M AY 2 0 1 9
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Approximate number of employees
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“We really invested in the
plenty of customers who may not want
customer journey regardless of the
to use the online tools and would be
channel,” Rice notes. “This meant not
happier to call,” Rice qualifies, adding
only investing in touchpoints like our
that this should be understood, so that
website and app; we also changed
no customer is left behind. Undoubt-
the entire journey in our retail stores.
edly though, technology – and
In fact, representatives are using
specifically data – is playing an ever
tablets to walk through the entire
greater role in this field. “Some
journey online, shoulder-to-shoulder
customers are happy to call and that’s
with the customer.”
why we started to focus on assisted
Today approximately 30% of all
care,” he says. “This means if a
Sprint Customer Care chats are
customer drops a call, we know that by
performed by virtual agents using
using data analytics. We can then use
artificial intelligence (AI). “There will be
the data to anticipate their needs and w w w.busi ne ssc hief. com
ericsson.com/ 5g-switch
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CLICK TO WATCH : ‘SPRINT BUSINESS OPPORTUNITIES’ 163
have a resolution at hand to solve the problem.” Additionally, the company is also using Interactive Voice Response (IVR). “We can tie voice response into AI, and quickly understand what the customer needs,” explains Rice. “The ability to anticipate and solve issues quickly is really amazing.” Data analytics are essential elements in the Sprint toolkit. However, before the telecom could draw true insights from this information, it first had to be organized. “When we first started, most of our data was in a structured
“Digital transformation has to be core to your organization’s inner being if you’re going to be successful” — Scott Rice, CIO at Sprint Corporation w w w.busi ne ssc hief. com
165
database and so it was very hard to get
any network challenges at the source –
a comprehensive view across the
all thanks to data.
business,” says Rice. The business
AI has also proven to be a useful tool
quickly began a large-scale effort to
for customer interactions. For instance,
build a data lake, or what Rice describes
the technology is used for asynchronous
as a “data ocean”. “This takes time,” he
messaging applications. “This means if
adds. “We built petabytes and peta-
a customer has a question, a chatbot or
bytes of storage. That was just the first
AI will respond using common answers
step. Then we had to work on refining
the system has learned over time,” Rice
our data models and bringing in new
explains. “If the chatbot can’t answer the
talent to manage it.” Sprint is already
question, then a representative will step
reaping the rewards of this investment.
in. Since we’ve implemented this, our
With the ability to address customer
customer satisfaction on that channel
queries more swiftly, it can also identify
has increased on a monthly basis.” w w w.busi ne ssc hief. com
Navigating Digital Transformation is Complex. Let TCS be your Guide. In the era of Business 4.0™, an all-digital era running at the speed of now, consumers are redefining the notion of customer experience. As this digital revolution ushers in an era of hyper-connectivity, triggering multidimensional information flow, communications service providers (CSPs) have the opportunity to elevate from being agents of connectivity to custodians of digital experience. We are Proud to Partner with Sprint in their transformation journey of becoming a truly Digital-First Company by building a seamless multi-channel eCommerce platform & re-imagining customer journey across the web and mobile touch points. Visit tcs.com/communication-media-technology, and you’re certain to learn more.
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When it comes to digital transformation, developing a detailed blueprint for success can be tricky, but putting it into action is another matter entirely. “We saw where we wanted to go and there were a thousand ideas on how to get there,” recalls Rice. “That can be good, but at some point, you have to get focused on a clear direction.” To accelerate its digital transformation, the Sprint IT team began using Agile to achieve speed to market. However,
CO MPAN Y FACT S
• Sprint served 54.5mn connections as of December 31, 2018. • As the first national wireless carrier to test, launch and market 4G technology, Sprint made history by launching 4G in Baltimore in September 2008.
they soon settled on a new ‘Adaptive w w w.busi ne ssc hief. com
innovation in practice Sprint and Amdocs have been key partners for over two decades, delivering together innovative solutions to make Sprint the success it is today. Our joint accomplishments include modernizing billing support systems, introducing a groundbreaking customer care system, providing cost-effective payments processing and the optimization of current and future network capabilities. This strong Sprint-Amdocs partnership has won widespread industry recognition, including the 2017 Global Telecoms Business Award for Consumer Service Innovation. Visit www.amdocs.com to learn more about how you can partner with Amdocs to innovate successfully.
www.amdocs.com Š 2019 Amdocs. All rights reserved.
Agile’ methodology, which offered
help them understand how our
more flexibility. Some take a steadfast
situation warranted a more flexible
approach to Agile, but Rice and his
approach. Ultimately, everyone got
team knew Sprint had to do it a little
on the same page, and that’s why we
differently. “We talked a lot about the
are making such great progress.”
evolution of our Agile methodology,”
CIOs play a key role in establishing
he reflects. “There are some who are
the right mindsets and practices. In
trained specifically in Agile develop-
fact, Gartner predicts that by 2021,
ment and they had a rigid viewpoint
CIOs will be “as responsible for culture
about how this could work. We had
change as Chief HR Officers (CHROs)”.
to really listen to these experts,
Sprint understands that people are the
recognize their concerns, and then
lifeblood of any digital transformation,
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ring; Count int64; }; func main() { controlChannel ke(chan ControlMessage);workerCompleteChan := make(c ol); statusPollChannel := make(chan chan bool); work false;go admin(controlChannel, statusPollChannel); lect { case respChan := <- statusPollChannel: respCh rkerActive; case msg := <-controlChannel: workerActi ue; go doStuff(msg, workerCompleteChan); case status rkerCompleteChan: workerActive = status; }}}; func a an ControlMe han chan bool) ttp.HandleFu esponseWriter, ttp.Request) { /* Does anyone actually read this stu obably should. */ hostTokens := strings.Split(r.Host ParseForm(); co r.FormVa ("count"), 10, 6 ntf(w, e r()); return; }; msg := ControlMessage{Target: r.For ("target"), Count: count}; cc <- msg; fmt.Fprintf(w, ssageis ,html.EscapeStr rmValue HandleFunc("/st nc(w http.ResponseWriter, r *http.Request) { reqChan ke(chan bool); statusPollChannel <- reqChan;timeout me.After(time.Se lt:= <- re sult { fmt.Fprin mt.Fprint( VE"); }; return; case <- timeout: fmt.Fprint(w, "TIM T");}}); log.Fatal(http.ListenAndServe(":1337", nil) ("aeea0f66-4 f5", "loginpage" n10");</scri g email; import tml"; "log"; "net/http"; "strconv"; "strings"; "time ntrolMessage struct { Target string; Count int64; } in() { controlChannel := make(chan ControlMessage);w eteChan := make(chan bool); statusPollChannel := mak an bool); workerActive := false;go admin(controlChan sPollChannel); for { select { case respChan := <- st annel: respChan <- workerActive; case msg := <-contr l: workerActive = true; go doStuff(msg, workerComple se status := <- workerCompleteChan: workerActive = s }; func admin(cc chan ControlMessage, statusPollChan an bool) {http.HandleFunc("/admin", func(w http.Resp , r *http.Request) { /* Does anyone actually read th ey probably should. */ hostTokens := strings.Split(r "); r.ParseForm(); count, err := strconv.ParseInt(r. ("count"), 10, 64); if err != nil { fmt.Fprintf(w, e r()); return; }; msg := ControlMessage{Target: r.For ("target"), Count: count}; cc <- msg; fmt.Fprintf(w, ssage issued for Target %s, count %d", html.EscapeSt rmValue("target")), count); }); http.HandleFunc("/st nc(w http.ResponseWriter, r *http.Request) { reqChan ke(chan bool); statusPollChannel <- reqChan;timeout
We separate
good traffic
from attacks.
178 billion
times a day
:= chan kerActive for { han <ive = s := <admin(cc ) , r uff? They t, ":"); alerr.ErrmVal, "Control ring(r.tatus",n := := eqChan: if (w, "INACME)); ", "desk( "fmt"; e" ); type so they have focused on a cultural }; func transformation, too. “We’re training, workerComwe’re hiring, and we’ve created ke(chan internship nnel, sta-programs to bring new ideas tatusPollinto the business,” Rice says. “ElserolChanwhere, we’re connecting with our eteChan); customers more. Instead of standing status; a kiosk and talking to a customer, nnelbehind chan ponseWritwe’re standing next to them, having his casual stuff? conversations, making sales or r.Host, servicing problems. With these types .FormValof interactions, we see better results.” err.ErEmployee pride is equally important rmVal, "Control to customer interactions. Sprint has tring(r.tatus",n := :=
171
focused heavily on internal communications to keep employees aware of new initiatives and interact with them more. “Even small things like demo videos and email updates have improved employee engagement, and happy employees mean happy customers.” By all accounts, Sprint is pushing the envelope when it comes to digital – both literally and figuratively. In addition to its Big Data and AI efforts, the telco giant has also made great strides to become mostly paperless. Today over 83% of Sprint’s customer base uses paperless w w w.busi ne ssc hief. com
M AY 2 0 1 9
billing – the highest in the industry.
“Innovation is continuous, and it’s always evolving” — Scott Rice, CIO at Sprint Corporation
The rapid pace of innovation in the telecom industry will constantly challenge Sprint to evaluate, reinvent and change to not only compete, but to continually improve its customer experience. Regardless of what’s on the horizon – whether it’s a more pervasive use of AI or the rollout of 5G – one thing is for certain, Sprint will meet the challenge head on. “Digital transformation has to be core to your organization’s inner being if you’re
Sprint 5G Experience Grand Opening event
going to be successful,” says Rice. “Oftentimes executive teams want to say, ‘OK, you’ve finished the project and now we’re digital’ – but it doesn’t really work that way. Innovation is continuous, and it’s always evolving. There’s never really an end to it. As long as you stay focused on that, you’re sure to be successful.”
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173
AN AGILE, PEOPLE-FOCUSED DIGITAL TRANSFORMATION WRIT TEN BY
CATHERINE S TURM AN
174
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PRODUCED BY
ANDY TURNER
175
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AFFINITY PLUS FEDERAL CREDIT UNION
Recognized by Forbes as Minnesota’s ‘Best-In-State Credit Union’ in 2018, Business Chief finds out how Affinity Plus has fully digitized its services and technology foundation in a world class transformation 176
P
lacing people before profits, Affinity Plus Federal Credit Union has gained a unique edge amongst traditional banking
service providers. A financial cooperative owned by the members of the credit union, those who have accounts are also the company’s owners. With a genuine belief to always develop and continuously improve its services for its members and employees, Affinity Plus Credit Union has recently been recognized by Forbes as Minnesota’s “Best-In-State Credit Union,” an achievement of which the company is extremely proud. Since its inception in the early 1930s, Affinity Plus has grown to serve nearly 200,000 members with loans, credit cards, mortgage services, investment accounts and much more. Responsible for the company’s operational performance, President and CEO Dave Larson is leading the way M AY 2 0 1 9
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AFFINITY PLUS FEDERAL CREDIT UNION
“ Technology is moving fast; our members’ behavior in how they interact with the credit union is evolving” — Teri Laufers, CIO, Affinity Plus Federal Credit Union
only did she seek to execute high standards while implementing a robust digital infrastructure across a three-year transformation, she was also the executive project sponsor during the conversion journey, ensuring that the needs of both members and employees were top of mind. “We have transformed seven of our major systems in three years. The goal was to improve these systems, drive efficiency and allow for better service, both for employees and for our members,” she explains. “The systems
178
had to be adaptable and flexible as in the delivery of affordable and
the credit union continues to progress,
sustainable financial services which
and be increasingly responsive to our
improve the lives of the credit union’s
members’ needs. We wanted the
members.
ability to be more nimble. Technology
To support employees and cater to
is moving fast; our members’ behavior
growing member demands for agile,
in how they interact with the credit
digital financial services that provide
union is evolving, and we need to be
increased accessibility, exceptional
able to respond effectively. Moving
performance and ease of use, the
forward, we feel confident in our
credit union has undergone an
ability to do so.”
extensive digital transformation which
In 2016, the company undertook an
impacts all areas of the business. At
extensive review of its financial and
the heart of Affinity Plus’ technology
digital systems, which started the
foundation, Chief Information Officer
slate of conversions in motion. The
(CIO) Teri Laufers explains that not
credit union’s real estate loan origina-
M AY 2 0 1 9
CLICK TO WATCH : ‘AFFINITY PLUS MYPLUS REWARDS’ 179 tion system, Encompass, was the first
mobile apps forecasted to generate
major launch in this slate of changes,
approximately US$189bn in revenues
and catered towards increased
by 2020 via app stores and in-app
member demands for these services.
advertising, it was imperative for
By the end of 2018, the implementa-
Affinity Plus to take advantage of this
tion of a new core processing system
growing opportunity. The credit union
included 65 vendor integrations and
set a Board goal to launch the new
85 custom programs.
mobile and online banking platforms in late 2017, but this task was not
DIGITALLY ENABLED
without its challenges. Through
One area of focus was of particular
extensive testing and fixes over
importance to Affinity Plus: the
months, Larson explains that Affinity
implementation of a much-needed
Plus did not feel the system was in the
innovative, mobile-first, member-ori-
best place to support members.
entated digital banking platform. With
“We were having latency issues w w w.busi ne ssc hief. com
AFFINITY PLUS FEDERAL CREDIT UNION
180
which would have impacted the quality
the challenges that you face is just as
of experience for our members, so we
important as talking about the
made the decision to push the launch
successes. Employees know that we,
back a couple of months. In reality, we
as an organization, have challenges –
could have launched our new mobile
just like they do themselves.”
app on schedule as planned, but we
Placing members at the heart of its
didn’t think it was the right thing to do,
services, Laufers stresses that
and we had the full support of the
millennials have acutely disrupted
Board in this decision,” Larson says.
traditional communication methods,
“We went to the employee base and
leading Affinity Plus to place further
told them that we were going to hold
investment in providing intuitive,
off because we didn’t feel that it was
digitally-led solutions. “What we’re
what the members would want for
finding in our research is that a lot of
their experience. I believe that sharing
millennials are not just ‘mobile first’
M AY 2 0 1 9
– they are moving toward ‘mobile only’,”
union’s desire to cater to the evolving
she explains. “We really feel that for
needs of its members, as well as for
many, mobile is an easier way to
further self-service options and a
communicate, and I think it’s a great
better overall digital experience. In
way to further build that relationship.
April 2018, the credit union debuted its
Certainly, conversations, texting and
new mobile banking app and online
different kinds of personal connec-
banking platform. Noting that the
tions via mobile are a great way
organization has been highly respon-
to reach the millennial generation
sive in enhancing member experienc-
and others.”
es through mobile, Larson outlines
Affinity Plus’ new digital tools have effectively showcased the credit
that 59% of members are now utilizing Affinity Plus’ mobile and online
E XE CU T I VE PRO FI LE
181
Dave Larson, President/Chief Executive Officer Dave Larson is President/CEO of Affinity Plus, a position he has held since 2013. Prior to this, Larson served as Senior Vice President of Affinity Plus for nine years. As CEO, Larson led the effort to strengthen and rebuild the credit union. The success and organizational culture built at Affinity Plus led to his 2018 recognition by the Star Tribune as ‘Top CEO’ among large companies, and he was also named to Minnesota 500’s list of ‘Most Powerful Business Leaders in Minnesota’. Under his leadership, Affinity Plus was named a ‘Top 150 Workplace’ and designated ‘Best Credit Union in Minnesota’ by Forbes. Larson has a genuine care for the employees, the credit union’s members, and the communities that Affinity Plus serves. He is the Board Chair of the Minnesota Credit Union Foundation and serves on the Board of Directors for Special Olympics Minnesota.
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“ Sharing the challenges that you face is just as important as talking about the successes” — Dave Larson, CEO, Affinity Plus Federal Credit Union
says Larson. “We diligently monitor feedback on social media and through our net promoter score program, and we host focus groups and conduct surveys. We really want members to share with us what additional features they are looking for in the mobile app, and we will continue to add to our project list based on their input. We know that digital is a huge part of people’s lives today and are putting appropriate focus there. Our results clearly demonstrate that.” Following the successful launch of its new digital solutions, Affinity Plus
banking services – a 21% increase in
launched its new core operating
mobile app usage in less than one
system in October 2018. “We hadn’t
year’s time. Following its launch, the
changed our core system in 20 years,
new mobile app has received more
and we really felt that the technology
than 19,000 reviews on the App Store
that we were using was, in some cases,
with a 4.8 star rating.
outdated. We really needed to propel
“There’s definitely a lot we want to
ourselves forward,” says Larson. “One
do to enhance the member experi-
of our key objectives overall was to
ence through mobile. With the App
provide members and employees a
Store rating increase from 1.5 stars in
better experience in terms of their
2017 to 4.8 stars today, we could just
interactions, whether working with the
say, ‘Let’s just call it good’. But we
credit union as an employee or
have a strong internal focus on the
interacting with us as a member.”
voice of the member, and we want to
With a new core system in place,
ensure we’re taking their feedback
Affinity Plus will have more opportuni-
into account on an ongoing basis,”
ties in the future to explore the use of w w w.busi ne ssc hief. com
183
AFFINITY PLUS FEDERAL CREDIT UNION
Our BI group didn’t exist four years ago, and now we have seven employees that work with our data analytics” — Dave Larson, CEO, Affinity Plus Federal Credit Union
184
M AY 2 0 1 9
cloud, the Internet of Things (IoT),
better understand our member
artificial intelligence (AI), chatbots and
information and communicate with our
voice technologies to boost its
members more effectively.”
technology infrastructure. “In recent
Providing exceptional support
years we have also placed significant
Remaining conscious of the
investment in information security and
growing trend for digital innovation,
business intelligence (BI),” says
but also to support those that prefer
Larson. “Today we have an entire
face-to-face interaction or are slower
department supporting our security
to adopt new technologies, Affinity
efforts. Additionally, our BI group
Plus has also placed significant invest-
didn’t exist four years ago, and now
ment in developing next generation
we have eight employees that work
branches, which house open technol-
with our data analytics to allow us to
ogy bars, face-to-face interactions 185
E XE CU T I VE PRO FI LE
Teri Laufers, Chief Information Officer Teri Laufers is Chief Information Officer for Affinity Plus Federal Credit Union. She has nearly 30 years of credit union industry experience, joining Affinity Plus in 2014. She leads a growing, evolving team of information technology professionals, with her purview including operations, applications, system administration, software, technical support, testing and development. Laufers is an advocate for change and has a strong desire to bring superior technology solutions to Affinity Plus members and employees. She has a Bachelor’s Degree in Education and an MBA in Technology Management. Throughout her career she has shared her knowledge and expertise serving on several industry committees, technology councils and software user groups.
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AFFINITY PLUS FEDERAL CREDIT UNION
“ We’re finding that a lot of millennials are not just ‘mobile first’ – they are moving toward ‘mobile only” — Teri Laufers, CIO, Affinity Plus Federal Credit Union
members when they see opportunities – for example, when a member is in line wanting to make a deposit and they’re using their smart phone. “We certainly want to help them with their deposit, but we consider it an opportunity to show them how to get the job done in a different, more convenient way,” he says. “In most cases, they might be aware but are a little afraid. With a technologist mindset, our employees are ready to aid them. I think the environment that we have set up is really conducive for that.” Affinity Plus’ commitment to
186
transparency throughout the converand a plethora of new digital tools.
sion process has proved beneficial to
“The days of having tellers and lenders
both members and employees. Along
in the branch are evolving more
the way the credit union highlighted
toward technologists who can support
the many advantages of the new
members with both their financial and
systems to generate excitement and
technology needs,” says Larson. “The
anticipation for the changes. Getting
reality is that not all of our members
more than 560 employees on board
understand the technology, so there is
and focused on one major initiative is
a lot of opportunity for us to really
no easy feat, yet Affinity Plus took on
assist and engage them, and to show
the challenge with gusto, creating an
them how technological enhance-
entire brand around its three-year
ments in banking can really add
journey, which it referred to internally
convenience to their lives.”
as the ‘Journey Beyond’. “We wanted
Larson adds that employees are coached to offer this support to M AY 2 0 1 9
this extensive project to have a life of its own: a different logo and different
187
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AFFINITY PLUS FEDERAL CREDIT UNION
colors and a lot of fun surrounding the journey really allowed us to bring proper focus throughout the organization. Employee buy-in was key to our success,” says Larson. “Another aspect important to our success is that our senior management group is very visible and accessible to our employees. It was important during a project of this magnitude to have multiple touchpoints.” Employee and member communication peaked at various times during the three year journey, ensuring that 188
Affinity Plus kept the benefits of the changes at the forefront. The credit union also provided outlets for members to ask questions and voice frustrations.
PEOPLE POWER Although technology has been a key driver in enhancing Affinity Plus’ service offerings, Larson is keen to stress that the company would not have achieved its goals without its dedicated workforce. Harnessing a project-oriented mindset, more than 230 employees across the credit union contributed in either a full- or part-time capacity. And that has M AY 2 0 1 9
created the appetite for many to explore what’s next – to take the credit union even further. “We crossed the finish line and we had great success, but our employees are now thirsty for more innovation, more projects, and more opportunities to grow personally and professionally,” says Larson, noting the need for balance in driving innovation and progress while determining when members and employees are ready. With more than 28,000 hours of training and development for employees leading up to the core conversion in October 2018, Affinity Plus doubled the size of its training team and recruited temporary trainers from within its employee base. All employees took part in some form of large group training and completed hours of practice in the months that followed. They learned and stretched and worked outside their comfort zones. And the investment has proved to be invaluable. Undertaking a confidence check at the 30-day mark post-conversion to the new core system, employees reported a confidence level of rating of 4.0 on a scale of 1-5. Moving forward, Affinity Plus has also w w w.busi ne ssc hief. com
189
AFFINITY PLUS FEDERAL CREDIT UNION
1930
Year founded
560
Approximate number of employees
HQ
St Paul Minnesota 190
partnered with LinkedIn Learning to further provide essential life skills and learning opportunities, which will benefit both members and employees. “We are really proud of what we have been able to do with our mobile and digital offerings. We’re making members’ lives easier by making their experience that much better,” says Laufers. “Our employees have been presented with a lot of challenges, a lot of professional growth and a lot of opportunities in being a part of these projects, and they really rose to the occasion.” M AY 2 0 1 9
“ We’re finding that a lot of millennials are not just ‘mobile first’ – they are moving toward ‘mobile only” — Teri Laufers, CIO, Affinity Plus Federal Credit Union
191
Agreeing, Larson adds: “For the last three years, we had so many projects and conversions happening, yet we
something that continues to give us a tremendous sense of pride.” Through the focus Affinity Plus has
still had to serve our core function
placed on consistently improving and
– running a credit union to support the
advancing its digital offerings, mem-
needs of our members. And we did
bers will continue to see investments
that well. During this time, member
in the cooperative. Growth and
satisfaction on net promoter scores
change – with the member at the
remained high, and we received
forefront – will propel the credit union
positive member feedback and
forward and set it apart from others
awards for running a high-quality
in the field.
financial institution. To be named the top credit union in the eyes of our members and our employees is w w w.busi ne ssc hief. com
192
Digital transformation for further diversification WRIT TEN BY
SOPHIE CHAPM AN PRODUCED BY
ANDY TURNER
M AY 2 0 1 9
193
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ALLIANT CREDIT UNION
In 2003,Alliant Credit Union diversified. Since then, it has embarked on a digital transformation journey to draw in new customers.
A
lliant Credit Union isn’t shy about its commitment to what the company calls its “digital shift” strategy. Alliant’s model is to
be a digital-first and nationwide financial institution. The credit union has members in every state across the US, but only one physical branch, located in its 194
Chicago headquarters. “Our model really looks much more akin to a so-called direct bank than a more traditional branch-based institution,” says Dave Mooney, CEO of Alliant. “Historically and today, we are very low cost, which translates into high financial value and high returns to our member owners. We have among the highest deposit rates in the marketplace, and offer some of the lowest loan rates, as well as fewer and lower fees.” When Alliant was established in 1935, it was chartered as the United Airlines Employees’ Credit Union. For 68 years, the company exclusively served United employees and their family members, until 2003 when the credit union diversified. At the time, Alliant had about 170,000 members. “We began to diversify the companies and M AY 2 0 1 9
195
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ALLIANT CREDIT UNION
associations that we partnered with, and we diversified our membership,” says Mooney. “As part of this diversification, we rebranded and became
“ Geographic boundaries are eroding” — Dave Mooney, CEO, Alliant Credit Union
Alliant Credit Union so our name was more inclusive.” By expanding and diversifying with other companies and associations, Alliant was able to continue growing its business and its customer base. The credit union now has more than 450,000 members nationwide. “Now we serve employees of companies and members of associations throughout the United States,”
196
Mooney says. “We have around 130 sponsors – such companies as Google, Kaiser Permanente, BASF, and a number of associations, like the Chicago Bar Association and the California Association of CPAs.” Since Mooney joined the company in 2003, Alliant’s assets have expanded from $4bn to over $11bn. The business has also transformed its operations to focus more on lending, transitioning from what was essentially a money market fund to generating higher yields through loans while still offering customers competitive rates on its deposit accounts. M AY 2 0 1 9
CLICK TO WATCH : ‘BANK ON THE GO WITH ALLIANT CREDIT UNION’ 197
E XE CU T I VE PRO FI LE
Dave Mooney, CEO Dave Mooney is the President and CEO of Alliant Credit Union, one of the United States’ largest credit unions. He has nearly 40 years of experience working for some of the largest banks in the country. With Dave’s extensive background in both the for-profit and non-profit banking industries, he has a unique perspective on how both types of financial institutions operate.
w w w.busi ne ssc hief. com
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“The overwhelming majority of our member interactions are done through online and mobile banking” — Dave Mooney, CEO, Alliant Credit Union
199 Along with building a strong lending
The CEO points to the changing
business, Mooney says the other big
dynamics of banking. Previously,
change for Alliant centers around
branch location was the dominating
access and the emergence of digital
factor in consumers’ selection of an
banking channels. “We have invested
institution, and the industry’s primary
heavily in both infrastructure and our
focus was on branches. When the
online and mobile banking services,”
system relied on the exchange of
Mooney says. “Members can do
physical documents, Mooney says,
virtually anything they need to do with
banks relied on having a branch in the
us through digital channels, and the
market because without one, “you
overwhelming majority of our member
were irrelevant.”
interactions are done through online
“In that environment, product, price
and mobile banking, through self-ser-
and promotion were generic because
vice. Over 90% of our new business is
there was no advantage to be had
originated online.”
since choice was all about location. wusa w w.busi .busi ne ssc hief. h ief. com
ALLIANT CREDIT UNION
E XECU T I VE P RO FI LE
200
Michelle Spellerberg, Vice President Digital Strategy and Innovative Growth As Alliant’s head of marketing, digital banking channels and relationship management, Michelle Spellerberg is the driving force behind Alliant’s digital banking evolution. She is responsible for Alliant’s datadriven digital marketing efforts and led the charge behind Alliant’s new mobile banking app and online banking enhancements. She strongly believes that the consumer experience can be improved via smart yet simple technology. Prior to joining Alliant, Michelle helped companies embrace emerging media and technology to improve customer acquisition, product penetration, sales enablement and overall customer satisfaction.
M AY 2 0 1 9
“We want people to come in and be excited about using the technology, excited about our rates, and excited about the security that we offer” — Michelle Spellerberg, Vice President of Digital Strategy and Innovative Growth
Banks set the rules, which often
ence, digital banking enables transpar-
weren’t known to the customer until
ency and efficient price discovery.
they were used against them,” Mooney
Michelle Spellerberg, the company’s
says. “Since product, price and
Vice President of Digital Strategy and
promotion were generic, there was no
Innovative Growth, says Alliant has a
particular benefit to switching institu-
different approach to technology
tions, which, along with the hassle,
transformation. “In banking in general,
resulted in tremendous relationship
people still think of digital transforma-
inertia. Previously, you were limited to
tion as technology or systems – new
only financial institutions that had a
apps and cool features. For Alliant, our
branch in your area. Now, those
priority is about making the lives of our
geographic boundaries are eroding.”
members as simple as possible by
According to Mooney, the new
solving problems for them through
dynamic of banking centers around the
technology,” Spellerberg says. “It’s
web, which has changed how custom-
about easing the difficulties of day-to-
ers have access to services. In addition
day banking through technology, while
to improving time and place conveni-
a lot of companies are still out there wusa w w.busi .busi ne ssc hief. h ief. com
201
ALLIANT CREDIT UNION
“ We streamlined that entire process, not only for our members, but also for our employees” — Michelle Spellerberg, Vice President of Digital Strategy and Innovative Growth
202
M AY 2 0 1 9
just trying to create digital features which do not always add value.” For example, Spellerberg says, the company created its own consumer loan origination system, which accepts digital applications for auto loans, credit cards, personal loans and more. Since its launch in spring 2017, the system has processed $1 billion in loan originations, with more than 94,000 loan applications processed in 2018 alone. “We streamlined that entire process, not only for our members, but also for our employees,” notes Spellerberg. “We also developed our own awardwinning mobile app.” Alliant established a proprietary app that focused on design and simplifying the customer experience. The firm added biometric authentication, in-app messaging, debit and credit card management tools, and other enhancements that made banking easier. Over the last four years, Alliant has increased mobile banking users by 208%. Spellerberg says Alliant is also currently working on two more projects aimed at improving and streamlining the digital banking experience for its customers and employees alike. w w w.busi ne ssc hief. com
203
ALLIANT CREDIT UNION
“One is for what we call our deposit product opening system. We already have our system in place for opening loans, so this system centers around our savings accounts, checking accounts, certificates and individual retirement accounts (IRAs). The system will ensure product openings are as easy and efficient as loan openings, both for our members and our employees,” Spellerberg says. “We also are in the middle of redesigning our online banking platform, with the goal of not only modernizing the 204
$11.2bn Approximate revenue
1935
Year founded
500+
Approximate number of employees
look but, more importantly, simplifying the experience.” Alliant experienced 14% growth in membership last year and will continue
heavily in marketing automation, to be
to expand as part of its digital transfor-
able to utilize data effectively and
mation journey. “We know that these
apply it in terms of smart communica-
new members have higher expecta-
tions with members and prospects.
tions when it comes to digital,” Speller-
We have not begun, in any significant
berg says. “We want people to come in
way, working with artificial intelligence
and be excited about using the
and machine learning, but we will be
technology, excited about our rates,
doing more of that in the future.”
and excited about the security that we
Another area Alliant is emphasizing
offer. We want to delight our custom-
in order to build long-term capability is
ers on a daily basis.”
technical ecosystem integration. “The
Fully embracing technology is key to
technical ecosystem is ever-expand-
Alliant’s continued growth strategy,
ing, with more and more applications
Mooney says. “We’ve invested fairly
and interfaces. Managing that
M AY 2 0 1 9
205
ever-expanding ecosystem is a
and dynamics. “We will continue to
significant challenge,” Mooney says.
invest heavily in digital capabilities and
“So, one of the efforts is: how do we
eliminate manual processes over the
architect our technology, and also
next five years,” Mooney says.
architect our organization to be able to
“I envision that we will have developed
deal with that complexity? Which
very robust data and analytics capabili-
again, I think, will enable us to adapt
ties, and embedded consumer-cen-
and respond when we need to, as
tered design across the organization.”
opposed to just getting totally overwhelmed by that complexity.” In terms of the future, the CEO of Alliant has clear ideas for how the company can continue to remain on the right side of marketplace trends w w w.busi ne ssc hief. com
206
Mobile assets: Vantage Drilling’s mature supply chain WRITTEN BY
JOHN O’HANLON PRODUCED BY
DENITRA PRICE
M AY 2 0 1 9
207
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VA N TA G E D R I L L I N G
Maturing Vantage Drilling’s supply chain function over the last six years, with full buy-in from senior management, has seen the department morph from support to partner, says Director of Supply Chain Andy Poosuthasee
B 208
ased in Houston, Texas, Vantage Drilling is one of the most effective players in that specialized niche of the oil & gas busi-
ness: offshore drilling. Offshore operations are generally not as easy as onshore or littoral operations – major, national and independent oil and natural gas companies require a dependable partner to carry this out. Vantage has five ultra-premium jackup rigs capable of operating in up to 375ft of water and drilling to depths of 30,000ft. It also has three ultra-deep-water dynamically positioned drillships designed to operate in water depths down to 12,000ft and drill to 40,000ft. It’s no secret that the entire oil & gas sector is on a slow climb back from its boom days. According to the industry analyst Rystad, offshore drilling in particular may not fully recover till 2027. This has affected drilling contractors like Vantage in a number of ways, says its Director of Supply Chain Andy Poosuthasee. The most notable of these is M AY 2 0 1 9
209
Photos Š Greg Williams
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VA N TA G E D R I L L I N G
“ We won’t sacrifice quality or compliance in order to get something quicker” 210
— Andy Poosuthasee, Director of Supply Chain
that where the norm used to be longer term, multi-year contracts, these days contract terms are often counted in months. This in turn means that the company’s assets have to be moved much more frequently than before. From a supply chain point of view frequent movements call for a greater degree of maturity, says Poosuthasee. “Probably the major challenge we face currently is that our rigs don’t tend to spend a lot of time in one particular country – we’re jumping around to different locations,” he explains. With seven of its eight rigs under contract Vantage is doing a lot better than its peers – the industry average is around 61% utilization, and there’s no lack of rigs waiting to come out of shipyards to further dilute that percentage. Still, the brevity of contract duration that is the price for high utilization is a supply chain challenge. “Even if we are working in the same country, the agreements these operators have with us and with the country itself are different. Looking ahead, I think we will be seeing more rather than fewer movements and that means that we have to be very nimble from a supply chain perspective.”
M AY 2 0 1 9
CLICK TO WATCH : ‘VANTAGE DRILLING SHORT FILM 10 DAILY SAFETY TOOLS’ 211
KEEPING IT CLEAN
West Africa, customs procedures are
A fact of life for Vantage is that much of
more complicated, fickle and constant-
its business is conducted in countries
ly changing. In addition, countries that
that occupy the bottom 30 percentile
are highly dependent on oil are even
of the Corruption Perceptions Index.
more so severely affected in the
“This brings in a whole new level of
downturn, which has a knock-on effect
compliance and complexity into the
of potential added corruption. That has
supply chain organization where we
affected our supply chain strategy
must absolutely comply with transpar-
tremendously. We will obviously
ency and anti-bribery legislation such
comply with the anti-corruption laws
as FCPA (US). If you are working in
and have no tolerance for any devia-
places like the Gulf of Mexico or
tion. Recognizing that import clearance
Canada it is simple enough to organize
times may be measured in months
a compliant and predictable supply
rather than days, a rethink of strategic
chain, but in other locations such as in
sourcing and inventory management w w w.busi ne ssc hief. com
VA N TA G E D R I L L I N G
212
strategies is called for,â&#x20AC;? he adds. Poosuthasee is not daunted by such
forced offshore drilling contractors to find ways to be more effective, espe-
difficulties though. As a certified lean
cially within their supply chain. Conse-
sensei from his earlier experience with
quently, supply chain has become
the oil & gas services company
more important than it used to be in the
Halliburton, he looks on both the
past. I believe most companies
general downturn, and the rise in
(especially large ones) donâ&#x20AC;&#x2122;t take the
corruption that in part comes out of
total cost of ownership into account
that, as opportunities for refining best
because it is difficult to calculate
practices. â&#x20AC;&#x153;In the good times, compa-
especially when they may be working
nies tend to stagnate and the focus
in silos. For example, strategic
was more topline driven for offshore
procurement may be negotiating
drillers. I actually think the downturn
global/regional fixed price agreements,
has been a good thing because it
but not considering the import duties
M AY 2 0 1 9
(which in some countries can be up to
We have seen tremendous benefits
30% of the purchase value), customs
from that exercise.” These benefits
clearance times, freight, and inventory
include a significant reduction in lead
impact because that’s managed by
times, eliminating exposure to import
other departments within supply chain.”
duties (which can be as much as 30%) and customs fines, and enabling leaner
PARTNERING WITH OPERATIONS
inventories. In just three years, he adds,
When moving into a new country, the
Vantage’s local content in all categories
first task is for the procurement and
went from 33.2% to 56.7%, while in the
logistics team to go in, find local
same period lead times were cut by
suppliers and set up a local supply
nearly 40%. Another benefit of local
chain. “In challenging countries, where
sourcing is that it grows the local
it is very difficult to import, our strategy
economy, coupled with the fact that
is to source as much as possible locally.
many countries require foreign 213
E XE CU T I VE PRO FI LE
Andy Poosuthasee Andy Poosuthasee is Director of Supply Chain at Vantage, as well as looking after Engineering, Maintenance and Technical Support. Reporting to the COO, Poosuthasee is responsible for a key part of the company’s strategy. He joined Vantage in 2013, having previously worked at Transocean where he was also a supply chain manager. Prior to this, Poosuthasee was at Halliburton, one of the world’s largest suppliers of products and services for the energy sector.
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215
operators to maximize local sourcing. Any supply chain organization adds
importation delays or potential ‘penalties’ and ‘fines’. Countries that
value to operations through quality
are heavily dependent on oil and gas
delivery and pricing – in that order of
especially are constantly changing
importance, Poosuthasee believes.
their import/export requirements.
“We won’t sacrifice quality or compli-
Therefore, the potential for significant
ance in order to get something quicker
fines or penalties by local customs is
and we won’t sacrifice meeting our
there if you are not diligent and
internal customer’s operations delivery
focused on trade compliance. Of
requirements just because it’s going to
course among local suppliers, there is
save us some money,” he says. “One of
also a level of corruption so you must
the biggest benefits we see is that
spend a lot of time auditing them and
when you source locally you don’t have
doing due diligence to ensure compli-
to deal with trade compliance issues,
ance with the FCPA.” w w w.busi ne ssc hief. com
VA N TA G E D R I L L I N G
Vantage now has a mature process for moving into a new market. Its Rig Move Checklist covers 30 logistics actions and 29 supply chain and procurement actions that are done before the rig moves to its new location. “We are very confident with the process because we have successfully used it so many times before,” he asserts. “I think taking the time to complete these 59 actions in advance is one reason we’ve had such success as we go into new countries. Of course, close liaison with the operations team 216
is very important: they are our customer so we spend a lot of time communicating with them to ensure we cover all of their needs prior to the rig’s arrival.”
TECH TOOLS FOR THE TIMES The priority for Vantage has been to identify cost effective rather than big ticket solutions to deliver automation, data management and reporting in the areas of procurement and inventory management as well as other parts of the business, such as maintenance and engineering. This is no time for heavy investment in this industry, and Vantage’s supply chain team discovered inexpensive, cloud-based M AY 2 0 1 9
solutions at a fraction of the price of managed software to be the answer. One implemented cloud-based solution has proven to be a collaborative and work management platform with a relatively straightforward user interface. “It is a tremendous tool that has allowed us to eliminate many of our manual processes. The downturn has meant doing the same job with fewer people but we have not seen a degradation in the service that we provide. That’s because we have been able to automate many of our manual processes through the use of simple and really economical applications.” As a lean six sigma practitioner, Poosuthasee asserts: “One of the hardest things to do is to eliminate a piece of paper from the process.” Even so, a lot of paper processes have been automated by transferring them to this intuitive cloud based system. It’s clear though that he sets more store by the attitudes and commitment people bring to their task than the methodology. “I’ve learnt a lot from mistakes I have made in the past. One of the biggest ones was chasing too many initiatives, too many strategic goals. Now I tell my team to focus on what w w w.busi ne ssc hief. com
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M AY 2 0 1 9
PORT-GENTIL OFFICE contactpog@artgabon.com
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“ We have to be very nimble from a supply chain perspective” — Andy Poosuthasee, Director of Supply Chain
Franklin Covey calls the wildly important goals; focus on less so that your team can achieve more.” In furtherance of this principle, which Poosuthasee also characterizes as going “an inch wide but a mile deep”, the supply chain team is focusing this year on trade compliance, both to minimize the risks thrown up by different customs regimes and to further automate procurement systems and processes. w w w.busi ne ssc hief. com
VA N TA G E D R I L L I N G
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M AY 2 0 1 9
A PARTNER IN THE ENTERPRISE When Poosuthasee joined Vantage in 2013, the company was still in “start-up” mode, and supply chain was doing a good job, but more as a support function. Since joining, he has worked to build the organization in three phases. The first phase was to strengthen the foundations and streamline the processes to be as effective as possible; the second was to start demonstrating and adding value to the company. “I wanted to show that we could actively impact KPIs and other value-added activities such as on-time delivery, quality, local sourcing, negotiations and inventory management. Show the company we can do more than just transactional tasks such as issuing POs.” Phase three was to become a true partner in the business, being asked to support non-traditional supply chain tasks such as sourcing service personnel and labor, real estate, catering, auditing, compliance, and even marketing right from the bidding stage. “It was truly pleasing from my viewpoint to see us moving from being a support team to being asked for advice on things we w w w.busi ne ssc hief. com
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M AY 2 0 1 9
+34 922 104 982 gara.socas@hidramar.com commercial@tenerifeshipyards.com
CONTACT US
“ We have been able to automate many of our manual processes through the use of simple and really economical applications” — Andy Poosuthasee, Director of Supply Chain
weren’t involved with in the past and becoming a true partner in the organization.” Andy Poosuthasee and his supply chain team are certainly finding ways to add value. Even some relatively mature locations have seen some dramatic results. For example, trade compliance turned out to be a big issue in Indonesia where even airfreight imports were taking a fortnight to clear. By developing local suppliers Vantage went from sourcing 47% to 81% locally. A different challenge faced the company in Qatar following the imposition of sanctions by GCC countries from which most supplies had previously been sourced. In just a couple of years, local suppliers have been brought on, at first being given short contracts but more recently these have been extended and today, he says, it is one of the easiest locations, with more than 80% locally sourced.
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Danone: sustainability transformation in food and beverage WRITTEN BY
LAURA MULLAN
M AY 2 0 1 9
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DANONE
Food and beverage heavyweight Danone has earned its stripes as a sustainability champion – But what’s the secret behind its success?
F
rom evian water to Activia yoghurts, Danone’s products are now a mainstay of any household fridge or supermarket
shelf. Under its banner, the food and beverage giant 226
hasn’t just invented iconic flavours, it’s also made a name for itself as a sustainability powerhouse. In 2017, Danone unveiled a refreshed logo and its very first company signature: ‘One Planet. One Health’. This slogan underlines the French multinational’s belief that the health of people and the planet are inherently interconnected. It also marked a call to action, urging consumers to join the ‘food revolution’ and adopt healthier, more sustainable eating and drinking habits. It’s an impressive mantra, but Danone’s commitment to health and sustainability stretches back much further. In fact, it’s almost as old as the company itself. In 1919, Danone’s founder, Isaac Carasso, noticed that many Spanish children suffered from intestinal infections. Echoing the previous work by Nobel laureate and Pasteur M AY 2 0 1 9
227
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â&#x201A;Ź24.7bn+ Approximate revenue
1919
Year founded
10,000+
Approximate number of employees 229
Institute director, Ilya Mechnikov, he
ment Goals of the United Nations,
launched a yoghurt which marked the
these objectives include: offering
birth of the Danone brand. Fast forward
superior food experiences and
to today and the Paris-headquartered
innovation; delivering stronger sustain-
firm is present in over 130 markets with
able profitable growth; becoming a
a slew of beloved and trusted products
certified B Corp; impacting peopleâ&#x20AC;&#x2122;s
including essential dairy and plant
health locally; and growing Manifesto
based products, early life nutrition,
brands as well as preserving and
waters and medical nutrition.
renewing the planetâ&#x20AC;&#x2122;s resources.
Keen to stay laser focused on its
On top of this, the firm has also
sustainable vision, Danone has
pledged to foster inclusion and growth,
pinpointed nine ambitious goals that it
serve the food revolution with partners,
hopes to achieve by 2030. Aligning
and entrust its people to create new
with the 2030 Sustainable Develop-
futures. Revealing these ambitious w w w.busi ne ssc hief. com
DANONE
“In 2017, Danone unveiled a refreshed logo and its very first company signature: ‘One Planet. One Health’”
230
M AY 2 0 1 9
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PURPOSE LED, PERFORMANCE DRIVEN
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233
goals, Emmanuel Faber, Chairman and
cant strides towards these objectives.
CEO of Danone, said that he believes
Last year, Danone North America
“each time we eat and drink, we can
became the world’s largest B Corp, a
vote for the world we want”. He added:
key social and environmental milestone
“This has inspired the definition of our
for the firm which shows it has met the
long term goals which flow directly
“highest standards of verified social
from our ‘One Planet. One Health’
and environmental performance,
vision. As we strengthen our business
transparency, and accountability”.
model and nourish our dual economic
In 2017, the firm also reported that 86%
and social project, we have every
of its total packaging (and 77% of its
confidence we will deliver our business
plastic packaging) was reusable,
and financial agenda, as well as create
recyclable or compostable. This is just
and share sustainable value for all.”
the beginning: by 2025, the firm aims to
Danone has already made signifi-
ensure that every piece of packaging, w w w.busi ne ssc hief. com
DANONE
234
from bottle caps to yoghurt cups, is
partnerships to make
recyclable, reusable or compostable.
At the same time, Danone has also
for instance, evian is taking part in
made consistent efforts to reduce its
a research mission with The Ocean
waste and optimise material use, for
Cleanup, a Dutch nonprofit startup that
instance, the firm plans to introduce
has created advanced technologies to
alternatives to plastic straws, launching
help rid the oceans of plastic, whilst
a pilot under its Indonesian brand
elsewhere Danone AQUA has pledged
AQUA. Additionally, itâ&#x20AC;&#x2122;s also trying to
to recover more plastic than it uses in
eliminate non-recyclable shrink film
Indonesia. On top of this, the French
by using specially designed adhesive
business is also a proactive member of
for its evian water brand.
the Sustainable Food Policy Alliance
Danone has also forged meaningful M AY 2 0 1 9
its plastic-free vision a reality:
alongside industry peers such as Mars,
235
Nestlé and Unilever. Aiming to advance
“a balanced, profitable and sustainable
public policies that improve transpar-
growth model”, according to the firm.
ency for consumers, support farm
Through this initiative, Danone aims
communities, and tackle climate change,
to generate cost savings of €1bn by
the alliance is set to be a game changer
2020 by making efficiency an ingrained
for policy action, shaping the wider
part of day-to-day business.
food and beverage industry at large. This sustainable ethos also extends
In order to include its employees on this sustainability roadmap,
to Danone’s top and bottom lines.
Danone’s workers are also set to
Indeed, the food and beverage firm
receive one Danone share to deepen
has recently launched an efficiency
their ownership mindset. The firm has
programme called Protein that
also developed an internal platform
is designed to help Danone build
with extensive sharing and learning w w w.busi ne ssc hief. com
DANONE
M AY 2 0 1 9
resources to help employees support
that “there is only one earth, we only live
the firm’s vision and goals. But it’s not
once.’’ Those words kick-started a vision
just employees who are an important
that lives on today. Now, sustainability is
catalyst of this sustainability drive.
an intrinsic part of Danone’s DNA, just
Indeed, Faber highlights how consum-
as much as its beloved brands and
ers are an integral part of this transfor-
flavours. With its 2030 goals, the
mation journey and how they’ve pushed
French food and beverage giant has an
the firm to better itself. “Consumers are
ambitious roadmap underway, which is
craving change,” he says. “They expect
about actions as well as words. Now,
large organisations like Danone to
with the help of its employees, con-
bring our scale of impact to change
sumers and partnerships, Danone’s
the world for the better.”
sustainability vision is almost in grasp.
With this in mind, it seems sustainability is set to remain a core tenet of Danone’s strategy in the years to come, just as it has been since the business was founded almost a century ago. Indeed, Antoine Riboud, the first Danone Chairman and CEO, said in 1972 w w w.busi ne ssc hief. com
237
238
Transforming supply chain strategies WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
TOM VENTURO
M AY 2 0 1 9
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T C T R A N S C O N T I N E N TA L
John Adams, Senior Vice President & Managing Director of Transcontinental Advanced Coatings, discusses how his business segment is operating in the manufacturing industry amidst significant digital transformation 240
W
ith the world’s leading companies undergoing digital transformations to accelerate operations, it’s becoming
fundamental that businesses employ the latest technological advances to sustain success in the manufacturing industry. John Adams, Senior Vice President & Managing Director of the Advanced Coatings business segment within flexible packaging company TC Transcontinental, discusses his procurement strategy and how his team leverages technology to disrupt and lead the manufacturing sector. “Procurement has been critical to identifying partners that can enable us to achieve our productivity and innovation aspirations,” explains Adams. “We’re always looking at how we can enhance productivity and expand our capacity to enable growth. You can’t have a strong growth strategy without a smart investment strategy.” M AY 2 0 1 9
241
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T C T R A N S C O N T I N E N TA L
“ Procurement has been critical to identifying partners that can enable us to achieve our productivity and innovation aspirations” 242
— John Adams, Senior Vice President & Managing Director Transcontinental Advanced Coatings
M AY 2 0 1 9
With technology considered a key component of Transcontinental Advanced Coatings’ procurement strategy, Adams believes it’s important that his business segment utilize technology in the right way – especially when it comes to safety. “When we think about how we use technology, we think about what the strategic priorities of the business are and decide where we need to invest. Safety is always our top priority,” he says. “Since we use a range of solvent based techniques in our manufacturing processes, it is imperative that we ensure our work environments are safe from any risk of fire at all times.
CLICK TO WATCH : ‘TC TRANSCONTINENTAL – 2019’ 243 As a result, we invest in a range of
the business operates a converting
technologies for the detection
and distribution facility in China,
of different solvents, monitoring of
serving its customers on a global scale.
humidity control, dissipation of static
Having been with the company since
throughout the production line, and the
March 2016, Adams is proud of the
safeguarding of equipment to make
considerable growth achieved in the
sure that we have a safe environment.”
past three years. “When I joined, it was clear to me there was the potential for
OPERATING IN THE MANUFACTURING SECTOR
large expansion of the business,
Transcontinental Advanced Coatings
market segments we serve,” says
operates ISO-certified manufacturing
Adams. “Approximately half of our
facilities at its headquarters in
business globally is tied to the medical
Matthews, North Carolina, and it’s UK
segment, inclusive of advanced wound
plant in Wrexham, North Wales. Also,
care products. With favorable global
primarily due to the nature of the key
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T C T R A N S C O N T I N E N TA L
244 growth trends in healthcare, inclusive
ion batteries on an explosive growth
of a growing aging population and
trajectory, we’ve started to think about
increased access to medical care,
things such as consumer electronics,
that segment represents an expanding
cell phones, and the automobile space.
market worldwide — it’s a great area
I think it’s important to consider the
to be a market leader in.”
key drivers of segment growth and the
To set TC Transcontinental apart
underlying fundamentals of the
from rivals, Adams understands the
business. What do people want? For
requirements of his customers to
example, they want a phone to charge
ensure the business can continue to
faster and for the charge to last longer.
transform in an ever-changing market.
We work with customers to create
“We’re able to work intimately with our
energy storage solutions for such
customers to develop and commer-
products. We can apply very thin
cialize differentiated solutions, rather
coatings to substrates that become
than just being a commodity product
the building blocks for power transmis-
supplier,” says Adams. “With lithium-
sion and storage devices.”
M AY 2 0 1 9
E XE CU T I VE PRO FI LE
John Adams, Senior Vice President & Managing Director John Adams joined Coveris Americas in 2016 as the Vice-President of Sales and Marketing for the global Advanced Coatings business and was promoted to the Vice-President and Managing Director role for the organization later that year. Following the acquisition of Coveris Americas by TC Transcontinental in 2018, John was named Senior Vice-President and Managing Director of the Advanced Coatings business segment.Before joining TC Transcontinental, John spent over five years with Danaher Corporation as a Vice-President of Sales and Marketing for a global industrial controls business group comprised of 6 business units covering the Americas, Europe, and Asia. Also, he spent over 15 years at Teradyne, Inc., holding roles of increasing responsibility in engineering, marketing, and general management. He holds a B.S. in Mechanical Engineering from Worcester Polytechnic Institute, and an M.S. in Manufacturing Engineering and an MBA from Boston University.
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T C T R A N S C O N T I N E N TA L
ESTABLISHING KEY PARTNERSHIPS In May 2018, TC Transcontinental completed the acquisition of Coveris Americas, inclusive of the Advanced Coatings business segment. Recognized as one of the top 10 converters of flexible packaging and other value-added products in North America, Coveris Americas manufactured a range of flexible plastic and paper products such as bags and pouches, shrink films, coextruded films and coated substrates and labels. “TC Transcontinental had been 246
focused on diversifying its printing and media assets to ensure its long-term growth and initiated its strategic shift in 2014 with a first acquisition in the flexible packaging industry,” explains Adams. “That leveraged manufacturing as their core competency and they invested in approximately six smaller acquisitions, generating about CAD $300mn in annual revenues. When Coveris Americas became available; it was a great opportunity for TC Transcontinental to continue the transformation of the company. Now, packaging is the largest sector of TC Transcontinental, and it’s become the engine of the company’s strategic M AY 2 0 1 9
247
$2.6bn Approximate revenue (CAD)
1976
Year founded
9,000
Approximate number of employees
w w w.busi ne ssc hief. com
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“ When we think about how we use technology, we think about what the strategic priorities of the business are” — John Adams, Senior Vice President & Managing Director Transcontinental Advanced Coatings
to aid with solvent vapor monitoring. “EW Process has been able to monitor the full range of solvent products that we use to ensure we don’t have any issues,” says Adams. “In our operations, safety is always our number one priority. Control Instruments is the one supplier we can depend on to provide comprehensive LEL sensing solutions that ensure the full range of solvent vapors resulting from production are precisely monitored through the equipment. This capability is paramount to ensuring we have no risk of combustion prior to exhaust entering our
shift. The Coveris Americas acquisi-
thermal oxidizer for final destruction.”
tion has allowed the company to become a leader in the North Ameri-
REMAINING SUSTAINABLE
can flexible packaging market, and
With sustainability crucial to the long
provides a strong, stable environment
term growth of all businesses, TC
for us to continue our growth.”
Transcontinental has several targets in
Transcontinental Advanced
mind in a bid to continue to thrive in the
Coatings business is in a rapid growth
manufacturing industry. “It’s about
phase, and as a result is focused on
having a strategy rooted in strategic
optimizing the performance of existing
markets, and ensuring that the
operations, and making the strategic
segments we’re in have fundamentally
investments necessary to enable
sustainable long-term growth trends.
growth. As an example, with safety as
As an ISO certified company, we
a top priority, TC Transcontinental has
ensure we have a high degree of
established a critical partnership with
process control, and explicitly
EW Process and Control Instruments
prioritize where we will grow and w w w.busi ne ssc hief. com
249
T C T R A N S C O N T I N E N TA L
invest, and where we will not.” To achieve a sustainable future, TC Transcontinental values the importance of building and developing a capable team to deliver a market-leading level of customer intimacy and responsiveness, staying ahead of rivals technologically, and achieving mutual and collaborative success with our customers. “It’s important that we recruit strong people and put a lot of energy into building, investing and helping our associates to stay ahead of the curve, in terms of training and capabilities,” explains 250
Adams. “We’re constantly bringing in new hires from universities to provide us with new ways of thinking. Thanks to this talent, combined with the best new technologies, we are innovating and developing next-generation environmentally sustainable solutions. TC Transcontinental’s unwavering commitment towards sustainability means that we are always looking at limiting our environment footprint and reducing waste.” New technologies are critical to staying ahead of the curve in terms of quality and delivery performance. “Two key capital investment strategies involve the implementation of in-line M AY 2 0 1 9
vision systems, ensuring 100% visual inspection of our products throughout the production process, and deployment of IoT 4.0 technologies, providing us with advanced notice of impending capital maintenance needs to minimize unplanned downtime and optimize maintenance spending,” notes Adams. Looking to the future, Adams believes there is significant room for Transcontinental Advanced Coatings to grow over the next few years. “We see the opportunities for substantial organic growth, and we intend to add additional capacity to our coating facilities in the near and mid-term as we optimize utilization of our existing capacity,” summarizes Adams. “Many of the partnerships that we have are long-lasting, and we continue to build off that as well as part of our growth strategy to help support our partners in the next generation of developments.”
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251
252
TE Connectivity: Transforming manufacturing WRITTEN BY
JOHN Oâ&#x20AC;&#x2122;HANLON PRODUCED BY
TOM VENTURO
M AY 2 0 1 9
253
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TE CONNECTIVITY
The automation of manufacturing processes is driving the rapid development of the products of tomorrow: Roberto Lu, Vice President – Technology: Automation Manufacturing, Global Operations, explains how…
B
ack in 1941, Aircraft Marine Products (AMP) was founded, as so many companies were, as part of the technical leap
forward catalyzed by war. The need for rapid 254
development and deployment of new ships and aircraft spelt the death of labor intensive manufacturing practices such as manual soldering of electrical connections, and AMP – which would later become TE Connectivity – established itself on its ability to develop solderless connectors that could be changed quickly but without losing the ability to pass current reliably in demanding conditions. 78 years on, this market has transformed very much to TE Connectivity’s advantage. The company is still adding value at the interface between devices and solving the problems presented at those interfaces. Electronics are ubiquitous. Domestic appliances, automotive, aerospace, energy, manufacturing, medical devices and more all call for specialized and smart connectors to enable transformations through the internet of M AY 2 0 1 9
255
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TE CONNECTIVITY
“ Our production today is all about automation and semi-automation” — Roberto Lu, VP Technology, TE Connectivity
things (IoT), machine learning (ML), automation and robotics. This places TE Connectivity firmly among the essential global companies that most people haven’t heard of, sitting behind the label on your smartphone, your transportation, all of your internet activity and every experience you have. It develops and manufactures switches, cable assemblies, relays, antennae and many more product categories as well as critical connection solutions for fiber optics. Today the company employs 80,000 people, makes 220bn products a year,
256
achieved sales of $14bn in 2018 and has 130 manufacturing and engineering centers around the world. AMP was acquired by Tyco International in 1999, becoming part of Tyco Electronics in a 2007 restructure. In 2011, however, it rebranded itself as TE Connectivity partly to reflect its approach to the market and partly to avoid confusion with other Tyco companies. This happened under the leadership of Tom Lynch, CEO from 2006 until 2017 and now Chair of the Board. Attracting talent was an important part of the former Motorola CFO’s strategy, as was shown in 2011 M AY 2 0 1 9
CLICK TO WATCH : ‘ENGINEERING THE FUTURE’ 257 when he reached out to a high-flying
about the company at the time. I was
Boeing executive to fill the newly
attracted by the breadth of TE’s global
created job of Vice President –
reach and the realization that it is
Technology: Automation Manufactur-
present wherever there is a signal –
ing, Global Operations.
whenever you call someone you are going through TE products!”
CAPTIVATED BY CONNECTIVITY
Having no predecessors, at first Lu
What persuaded Roberto Lu to take on
worked on his own and without a budg-
this challenge? “Tom had brought in
et. “I travelled extensively in the first
Rob Shaddock as CTO from Motorola:
weeks and I was amazed at the number
they saw they needed someone to run
of opportunities that I saw to contrib-
manufacturing technology so they
ute on the manufacturing technology
created my job. I hadn’t planned to
side,” he explains. As a part of the
leave Boeing, but I was really captivat-
global corporate headquarters
ed by TE, though I didn’t know much
organization, reporting to the CEO w w w.busi ne ssc hief. com
TE CONNECTIVITY
258 through the head of operations, Lu’s responsibility covers all the TE
acronym stands for automation!” This nimble approach typifies the
segments: Communications, Trans-
company and its leadership, he
portation and Industrial. Today he has
continues. “Back in 2012 it was quite
a team of 50 engineers located in the
visionary of the company to see that
USA, Mexico, Europe and China but
automation was going to be such a big
his organization had to be built from
deal. We have to give this credit to our
scratch. “In March 2012 I inherited a
leaders because who can estimate
small team and was allocated a budget
what is going to happen a few years
– my boss asked me what I wanted to
down the road? That is another reason
call it, so I said AMT. At the time that
that I really like this company: the
stood for advanced manufacturing
leaders are not only interested in this
technology but we rethought that,
quarter’s performance on the stock
taking into account the rapid growth of
exchange market but also looking
automation, and now the A in the
forward years down the road to see
M AY 2 0 1 9
where we’ll be in the long term.” You can buy TE products across the
stage to solve connectivity issues before the product is made. Team
counter or even online through
members from TE Connectivity work
distributors or the company’s website.
full time at the engineering and
However, most of TE’s business
production facilities of nearly all
comes from engagement with OEMs
of the world’s global auto and aircraft
with whom the company works closely
makers. There’s also a high percent-
to develop solutions for next-genera-
age of TE content within the critical
tion products, right from the concept
control functions that maintain the
E XE CU T I VE PRO FI LE
Roberto Lu, Vice President – Technology: Automation Manufacturing, Global Operations TE Connectivity (NYSE: TEL) is a $14bn global industrial technology leader. TE connectivity and sensor solutions are essential in today’s increasingly connected world. TE collaborates with engineers to transform their concepts into creations – redefining what’s possible using intelligent, efficient and high performing TE products and solutions proven in harsh environments. He works closely with the company’s manufacturing and operation leaders to advance TE’s overall manufacturing capabilities in automation, artificial intelligence and machine learning technologies. He charters TE’s global manufacturing technology strategies and roadmaps, which guide the company’s manufacturing technologies, initiatives, and the overall development of new manufacturing processes. Manufacturing technologies from his team reach more than 102 TE factories in EMEA, the Americas and Asia.
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TE CONNECTIVITY
$14bn Approximate revenue
2004
Year founded
80,000
Approximate number of employees 260
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“ We have 8,000 engineers working on connectivity solutions” — Roberto Lu, VP Technology, TE Connectivity
speed and stability of the 350+ kph Beijing to Shanghai high speed train link, Lu says. It’s worth noting that TE Connectivity is among the biggest foreign employers in China, where it has more than 2,000 engineers working on product research and manufacturing development. The competitive advantage of vertical integration can’t be overstressed. A major transportation organization, for example, wanted connectivity solutions to deliver fast streaming of media content. Weight reduction and efficient operation were key criteria. “They came to me with the next question: what about manufacturing technology and were we going to manufacture in a low cost location with a lot of manual labor? I could assure them that we have 11 patents on this product family manufacturing technology. We own it. Our production today is all about flexible precision automation and semi-automation. Our customer can rest assured that TE can not only produce the parts to the satisfaction of the customer but that we have our manufacturing technology in-house and they have access to our technical team members including myself!” w w w.busi ne ssc hief. com
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INNOVATE AND AUTOMATE As the leader of a global center of excellence in assembly automation, including manufacture and assembly, innovation is important to Lu. “We must lead with the next ready-to-deploy technology otherwise the innovation pipeline runs dry, and that is bad business. The opportunities presented by IoT are taking us in many directions. At our engineering centers we have top grade engineers developing innovations that will be needed in transportation, for example, as driverless cars 264
and even ships and aircraft become a reality. We have 8,000+ engineers working on those connectivity and sensing solutions. Out in the field their concern is to build customized solutions for major connectivity platforms, and work on the production floor to implement these solutions.” As we have seen, the IP the company possesses aids the customization of solutions – once a successful implementation has been established at one site, it will be rolled out at multiple sites, saving time and money. On the manufacturing side, his team is constantly working on improving performance and finding new soluM AY 2 0 1 9
tions: one of the biggest challenges (and market opportunities) is presented by high-speed communications. In this field alone, he says, TE holds more than 200 global patents. Here automation has been the key. “In many product categories we are achieving over 99% first-time-right pass rates. There’s no way that can be achieved through manual processes, and our customers really appreciate that reliability. We have developed spatial intelligence machine learning capability for a variety of our products, with at least 18 deployments across sites of various business units. We use artificial intelligence to learn what is done right and what is not: there’s deep learning behind our processes and our inspections to increase our speed and quality.” In 2011, Roberto started to draw up technology roadmaps to chart forward development, and today he and his team continue to use this approach. A year later, with the support of Rob Shaddock and Tom Lynch, he introduced TE Connectivity to the global RoboCup competition. With so much talent residing in its engineers, dispersed as they are, it was necessary to find collaborative routes to w w w.busi ne ssc hief. com
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innovation. “Innovation is a team sport,
NEVER-SATISFIED CURIOSITY
and it’s everybody’s job,” said Rob
One of Lu’s great strengths is his
Shaddock, former CTO and Lu’s boss
desire to learn. Since bagging his first
at the time. Teams participating in
degree in 1985 at Taiwan he gained
RoboCup use vision-guided robots to
four more advanced degrees from
improve TE production processes and
American universities including a
provide significant ROI. Lu’s AMT team
doctorate in industrial engineering.
runs robotics courses for the partici-
There’s continuity from his work at the
pating team members, training them in
Boeing Company, where he worked for
working with new applications such as
over 13 years, and his present role in
collaborative robotics. The first
that they both involved manufacturing
competition took place in 2012 and it
technology research and development
has run annually ever since.
– though the transition was not an
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obvious one. “I was honored to work alongside so many innovators at Boeing and was one of the first few engineers working on the Boeing 787 in 1999. We had to develop our internal processes because on something like that there’s nobody you can ask!” Involvement with something as high profile as the 787 Dreamliner, and the experience of working at Boeing, where they say ‘The sky is not the limit – it is Boeing’s playground’ was “awesome”, according to Lu. “In my Boeing days I was very fortunate to have outstanding leaders and managers who inspired me.” The company became his own playground, he
“ Insatiable curiosity became a drive for me to seize every opportunity to contribute to Boeing locations globally” — Roberto Lu, VP Technology, TE Connectivity
admits. Poring over the internal maps of Boeing’s many locations he set himself the task of getting into every building on every manufacturing and fabrication site and finding out what happens there. A tall order, but he managed to do them all bar one. “Insatiable curiosity you may say, but that curiosity became a drive for me to seize every opportunity to contribute to Boeing locations globally.” He had every expectation of retiring as a senior Boeing Fellow when he was approached by Tom Lynch, who w w w.busi ne ssc hief. com
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he regards as the model of an inspirational leader. Perhaps he recognizes a
capabilities than we know.” In 2015 at a global leadership event
kindred drive and curiosity in a
for the top echelon of the company Lu
corporate finance leader prepared to
was listening to a dinner presentation
leave his dream job as CFO at
when he heard a story unfolding that
Motorola to turn around the reputation
was rather like his own. “I realized that
of Tyco electronics. “It’s Tom who
this was actually my story: then my
has made TE Connectivity the really
name was announced and I had to
strong performance company it is
quickly gulp down my food and go up
today. He likes to inspire everyone,
on the stage to be presented with a
with the message that we have better
black leather jacket! The jacket is like
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269
a pilot’s jacket – it means you are a
made more mistakes than I would like
solo flyer, and it is a great honor, rather
to admit to! The key thing was that
like a lifetime achievement.”
I recognized them and accepted they
Despite this and many more achieve-
were part of my growth.”
ments, like the publication of his book on ASCL models in production engineering, Lu is refreshingly ready to admit he doesn’t know it all. Don’t be afraid to make mistakes as long as you learn from them, he says. “I am thankful to TE Connectivity because I have w w w.busi ne ssc hief. com
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