Magazine. Vol. 11, Winter 2011-12.
Yolanda Sandonis “Real needs as important as IT opinion leaders” 18
Hans-Petter Aanby “The next big trends are globally controlled” 8
Edwin Erckens “New and different opinions can take you forward” 32
The social CIO: more psychology, less technology Sourcing: what do I keep? The New Mobility: optimising the workforce The Perfect Storm: brave CIO faces the crisis The Whys and Hows of IT Fusion IT leadership: a new style of management The wind of change: welcome CIOnet Germany and much more!
Donatella Paschina “Business and IT are becoming closer” 26
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Georges Epinette “CIOs must convince” 30
CIOnet Magazine
CIOnet Magazine is a CIOnet initiative sent directly to CIOnet members. Produced by: Roularta Custom Media Publishing Director: Hendrik Deckers (hendrik@cionet.com) Editorial coordinator: Kurt Focquaert (kurt.focquaert@roularta.be)
Printed by: Roularta Printing Advertising: Erwin Van den Brande (erwin@cionet.com)
Sharing and Caring In a world where IT has become the nervous system of business and society, we believe that CIOs and their teams are the new heroes that drive change and innovation in their organisations. That is why we have built CIOnet, the leading European community of IT leaders. It is our mission to provide CIOnet members and partners the best possible platform that helps
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INFORMATION BECOMES INSPIRATION
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them to succeed and make the world a better place. We do this by understanding the CIOs’ needs and by fostering their development and growth. We believe that community and collaboration are the heart of the organisations and society of the future. We are driven by the passion and ambition of our members.
Interesting times Although no one quite knows the origin of the statement ‘May you live in interesting times’ it is purported to be a Chinese proverb – or even a curse. Anyway, these are certainly interesting times for CIOs, with seismic changes reshaping society, our businesses and the way we work. High on the agenda of the European CIO for 2012 are major challenges. How do I manage my cloud vendors? How do I implement a Bring Your Own Device strategy? How do I communicate (the value of IT) to my Board? How is my role as CIO changing in my organisation? It is exactly these topics that are on the CIOnet agenda for 2012. CIO CITY 2012 – our international conference that will be held in Brussels on 19 & 20 April – will focus entirely on the IT organisation of the future. How do we structure & design the IT department tomorrow? How do we nurture the IT leaders of the future? How do we select and exploit the technology of the future? I look forward to meeting you there. CIOnet continues to grow rapidly and I’m very excited to welcome all German CIOs to our international community. Herzlich Willkommen! In 2012 we plan to grow to over 4,500 members in 9 countries, supported by 100 business partners. We are also proud of the partnerships we are developing with the European Commission and Forrester Research. This eleventh issue of CIOnet Magazine presents you a global overview of what is happening in the CIO world today. Flying computers, the social CIO, change management, leadership and IT strategy are just a couple of the topics covered. I sincerely hope you enjoy the read and look forward to receiving your feedback. Yes we live in interesting and challenging times, but we are not cursed. On the contrary, now is the time to take the opportunity to be the chief innovation officer, to be the driving force of change in our business, to reposition our role of CIO and to build the IT organisation of the future. May the Force be with you. Hendrik Deckers
Founder and managing partner CIOnet International
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CIOnet Belgium – Annual event
The social CIO The use of social media has radically changed the way people communicate and collaborate. Those same media are now creating a shift in the business world. However, the social CIO needs to pay more attention in this regard to psychology than to technology.
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Matt Brown from Forrester Research: “The industrialisation of IT creates extra pressure. More and more devices and applications are coming within employees’ reach.” PICTURE >
Hans Joris, CEO of SD Worx Belgium: “Using Yammer has enabled us to raise employees’ commitment.”
he relationship between the CIO and social media was the central theme at the sixth edition of CIOnet Belgium’s annual event. “What we are experiencing is the complete reinvention of the traditional workplace”, claimed Matt Brown from Forrester Research. “Two trends are clearly coming to the fore. There is the constantly changing content and nature of people’s jobs and there is the industrialisation of IT, which is enabling new devices and applications to come within employees’ reach ever more quickly.” Increasingly frequently, this is creating disappointment in the workplace. The youngest generation of employees in particular is likely to have technology at home that provides far better performance than the environment that their employer presents them. Matt Brown says: “An additional challenge is location flexibility. More than half of the information workers work regularly, often several times a week, at different locations. That too puts
extra pressure on IT, namely making applications and data available to employees irrespective of their location or the device that they are using.” For the CIO, it boils down to being able to interpret end users’ demands for those highperformance, flexible solutions, while behind the scenes he or she must simultaneously continue working on optimising the IT environment. It is a straddling position that does not always feel evenly comfortable. Value through commitment HR service provider SD Worx is a company that has gained experience in using social media in recent times. We may therefore describe Hans Joris as a social CEO. He makes plenty of use of the potential of social media. “Only committed people contribute to a company’s value. No added value is to be expected from discontented employees. What is more, there is a distinct link between employee satisfaction, customer satisfaction and profitable growth.” Using social media fits into that picture perfectly. “Employee commitment is usually at its greatest while businesses are starting up. There is little structure and control, limited distance between senior management and employees. That makes for a smooth collaboration.” The more successful a business becomes, the more rules and policies come in. Then inertia occurs and that tends to weigh against employees’ empowerment. Does that mean that the era of the traditional approach of command and control is therefore outdated? Hans Joris thinks not. “A new tool like social media is not enough to give empowerment back to those employees. You also need a collaborative culture for that.” There is no hier-
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CIOnet Belgium – Annual event
archy in such a collaborative business. It is a matter of dispersed, cross-organisational networks, spread across various locations. As support for that network culture, SD Worx has started to use the tool Yammer. It simplifies communication between employees, right across the various departments. Hans Joris says: “Using Yammer has enabled us to raise employees’ commitment.” However, it was not that straightforward. “Social media require a new type of leadership. You need the courage to loosen up control, without losing it. Introducing a tool like this is an ongoing process of change. Sufficient attention must be paid to that too.”
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Kurt De Ruwe, CIO of Bayer MaterialScience: “The technology of social media is only a tiny part of the solution. The process of change is far more important.” PICTURE >
Frank Van Massenhove, chairman of the executive committee of the Federal Public Service for Social Security: “Working when and where you want: selfregulation is having a really positive effect on people’s productivity.”
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New way of working Kurt De Ruwe is CIO of Bayer MaterialScience. With 14,500 employees, 110 sites and a turnover of 11 billion, that is a major enterprise. Such size produces organisational challenges, especially in terms of communication and collaboration. “We are facing a big challenge”, says Kurt De Ruwe. Soon the baby boomers will start to retire: for Bayer MaterialScience that is cause to create a new culture. “We are evolving towards a culture in which sharing information is central. We started small, introducing IBM Connections among two teams.” Kurt De Ruwe allowed the project to grow organically. Now the tool has well over eight thousand users. The solution has given Bayer MaterialScience employees a new way of working. Documents
are no longer accommodated in a directory, but are given tags. That way, all employees can easily find the documents again later. “Actually the technology itself forms only a tiny part of the solution. It is an ongoing process of change, in which psychology predominates over technology.” As a social CIO, Kurt De Ruwe is an advocate of open collaboration. “I ask the employees to talk to me through a forum or a blog and I also make sure that they get a response via the same route. For a great deal of our communication, we no longer use e-mail. Thus, slowly but surely, our way of working is changing.” It is an approach that seems to be catching on. Two years after IBM Connections was introduced at Bayer MaterialScience, the rest of the Bayer group has since decided to start using the tool. Where and when you want Not only is the way of working evolving, the labour market is evolving too. The ageing population is also posing the federal government a great challenge. “The war for talent has been underway since 2005”, says Frank Van Massenhove, chairman of the executive committee of the Federal Public Service for Social Security. “Moreover, it looks as if that quest for skilled employees will only become harder in the future.” That is why Van Massenhove has devised a plan to position his public service as a sexy employer. He has implemented a completely new working environment based on the
CIOnet Belgium – Annual event
flexible office principle. “Work at home and home at work, that is the starting point”, he explains. “Anyone wanting to work at home a bit is given that opportunity.” Now some 69 percent of the employees of FPS Social Security work at home various days a week. This is already saving the public service on equipping offices. For one hundred employees, the public service only needs to provide seventy workstations. Furthermore, the employees not only acquire the freedom to decide where to work, but also when. “Clocking in only serves a purpose with bad employers and bad employees”, Van Massenhove chuckles. “Self-regulation is having a really positive effect on employees’ productivity.” It is a form of social control that drives all employees in the team forward. In the first year after introducing the new working environment, the FPS Social Security realised a productivity gain of no less than twenty percent. Productivity
The use of social media will only increase Research commissioned by CIOnet that Nextvalue carried out shows that the impact of social media on business is only set to increase further in years to come. Businesses have more than one reason to get going with social media. For them it is about brand awareness and visibility, about connecting with professional communities and about communication with customers and partners. Security remains a concern however, as does the notion that social media can also quite quickly cause great harm to a company’s reputation. Equally, these days many companies question the return on investment of social media. Of the companies questioned, only eight percent are also actually achieving additional revenues using social media. The business world also has the idea that social media will soon belong to the mainstream and that consequently they will bring about a profound change in the way in which people and businesses deal with IT.
continued to rise after that too. It is an indication of just how poor things used to be with the public service. It has offered an environment in which people can work when and where they want to. Evidently, they are therefore working more.
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Koen Gonnissen from the Mentally Fit Institute: “By nature, man is not very keen on change. Nonetheless, it is where the key to success lies, for the CIO too.”
Out of the comfort zone A great part of a CIO’s role consists of building bridges with other departments. That is why the CIO also merits a seat on the company’s board. “It is not always easy to achieve that”, says Koen Gonnissen from the Mentally Fit Institute. “By nature, man is not very keen on change. It is often quite hard to come through that change. As sports coach, for racing cyclist Philippe Gilbert and tennis star Kim Clijsters among others, Gonnissen has had broad experience in guiding athletes who strive towards a distinct goal. He translates that experience easily into the business world. The best way to get a CIO on the company’s board is to make such a success story of the IT department that the board is actually no longer able to get round it. “For that, change is needed”, according to Koen Gonnissen. “This costs energy, yet is sure to release energy later.” Gonnissen believes that a CIO must define a goal, just like an athlete or a sports team does. “It needs to be a sexy goal, one that everyone can side with. For this, the CIO needs to radiate confidence, ensure talent management, define and fill the right roles, and manage expectations realistically. Then the commitment will come of its own accord.”
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CIOnet Norway – CIO view
The CIO and his flying computers Running an airline company today has striking resemblance to managing a server farm. Gigantic flying computers sign in and sign off to the network, while passengers and crew connect via their handhelds.
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Hans-Petter Aanby, CIO and Vice President of Business Development at airline Norwegian: “The secret lies in the small things.”
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o there may be some logic to Hans-Petter Aanby’s apparently conflicting roles in the airline Norwegian: he is both CIO and Vice President of Business Development. The fast-growing airline Norwegian has a long record of disruptive innovations. They taught the Norwegian people to shop online. They were first out with paperless tickets. They were for a while the world’s largest airline on Facebook, and they have spun off a mobile phone company and a bank as natural supplements to carrying passengers through the air. Information technology is vital in all this, and many would say that CIO Aanby single-handedly helped raise an aging industry to a new, contemporary level. Norwegian is the story about an airline that grew from being a small ‘local route’ on the west coast of Norway in 1993 to one of Europe’s largest airlines today. When SAS Braathens merged at the beginning of the decade, a window of opportunity arose. Norwegian started their own domestic routes. After that, we saw rapid growth. As of July 2011 Norwegian had 59 aircraft operating 261 routes to 100 destinations. 13 million passengers travelled with the company in 2010, supported by the company’s 2,500 employees. And it is all about innovative cost control combined with taking out small and large gains through technology.
“When you build an industry in a price sensitive market like this, you have to think about costs all the way”, says Aanby. “In October Norwegian announced great financial results. What many do not see is that the margin is only 3.2 percent. It means that if we are able to save 3 million, we can sell for 100 million less. With a turnover of 10-11 billion it is not that difficult to save 30 million. It means that we can sell for one billion less and still maintain the same margins.” “We have no choice, we must be innovative”, says Aanby. “We are competing with the world’s cheapest flights and operate from a country with the world’s highest costs. While labour costs in Europe fell by 20%, they rose in Norway by 5%. Norwegians are amongst those countries with the highest leave of absence.” The aviation industry as a whole has faced many challenges in recent years, like the financial crisis, volcanic ash from Iceland, the Arab spring, tsunamis and new financial crises. Small things “The secret lies in the small things”, says Aanby. “Do not start with the big, sweeping projects that do not produce results until after many years. Start out small, motivate and support the employees to find ways to do things easier and faster every day. An example is our baggage handling. When you are by aircraft handling baggage and find something you need to check, the way back to the computer screens are long. Laptops are not an option, they have poor battery life and the start up is too slow, the plane has landed before you have even logged into it. The solution that staff came up with, were iPads. With an iPad staff can look directly into
CIOnet Norway – CIO view
the computer system from where they are. The iPad starts right away, and if there is no wi-fi coverage, they go on 3G. We saved big with this small hand grip.” Norwegian has created a culture of innovation in the company, and much of this is about giving recognition and room for small innovations in everyday life. Those who should be honoured, receive their honour. In this case the story was published on the intranet. It gives pride and inspires others to do similar things. Another example of innovation in everyday life are the hand-held terminals that cabin crew use when selling food and drinks to the passengers. “We made some small changes to the screen and the price structure and saved 40% sales time”, says Aanby.
‘We are competing with the world’s cheapest flights in a country with the world’s highest costs.’ Investment instead of cost The major project at Norwegian now is to get all the planes up on wi-fi. “The passengers expect to use their own screens. Their screens are what pen and paper used to be. So we give them that.” Norwegian has turned the costs of wi-fi on all flights to an investment. This infrastructure allows passengers to check mail and surf the web while Norwegian uses it to communicate more efficiently between personnel in the aircraft and the ground. “This is very interesting. Until now, communication between the aircraft and the ground was like ‘telex food’, like telegrams. Now we are experimenting with transferring data and run IP telephony. Pilots and cabin crew should be able to talk to the ground staff. An example is that if we get a cardiac arrest on board, we can talk directly with medical personnel on the ground.” “So back to the pilots”, says Aanby with excitement. “All the data we have in the so-called ‘black box’ is detailed down to a level that allows you to take them in a flight simulator and play the entire trip Oslo-Bergen afterwards. You can see everything that happened, including
what the instrument panel showed. When pilots see that there is something wrong with the aircraft, they can send the data down to the engineers. This can be played with a few seconds delay, and troubleshooting can start while the plane is in the air. When you arrive, you simply replace the component that is not functioning optimally.” Only these things make the investment in wi-fi pay for itself in greater efficiency. But the really big gains are in the future. “The biggest benefit of wi-fi is on the operational side. When employees have the opportunity and the right tools, they become creative. We have just sent out about 100 iPads in the organisation, just to see how people receive them. What we see is that the learning threshold is very low. The latest Citrix solutions handle the security required when they are on the company’s own data, and they can use other parts of the iPad as they like.” “It is all about the little things”, Aanby repeats. “Reap small gains, create mastery, create excitement, and create confidence so it is possible to take responsibility at all levels.” Flying servers CIOnet encourages Aanby to take a look into the crystal ball, not only on behalf of Norwegian, but also on behalf of the entire industry. “The next big trends are globally controlled. When we get into the new Dreamliner 787, the world is quite different. From then on, our task is to fly the planes, which strictly speaking are flying servers. When they were testing Dreamliner, there were two pilots and 30-40 IT people monitoring everything that happened. When these aircraft land at an airport we take them into our network domain as a server. People in Seattle monitor the planes and do all the engineering with the help of local people at the airports. ‘Screws, bolts and wires’ are replaced with software.” Finally, we ask the question that many air travellers have questioned: is there really any danger in using the mobile phone during the flight? “No, there is not. This is based on rigid international regulations that will not change unless we are certain multiplied by ten thousand. But do it anyway, I put it in airplane mode and turn on wi-fi”, says Aanby.
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CIOnet Spain – Annual event
Sourcing: what do I keep? Sourcing was the central theme at the third annual event of CIOnet Spain held last October.
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The third annual event in Spain was held under a warm sunshine at a charming ‘finca’ in Madrid.
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lberto Delgado, General Manager of independent IT analyst of the Spanish market Penteo, presented the most recent market analysis in the field of sourcing. 160 attendees listened to some interesting market conclusions such as ‘Outsourcing has only increased 2% in companies because of the economic situation’ or ‘Managed services and maintenance are areas of growth for next year’. Another noteworthy conclusion was that there are currently 17 companies providing this type of service in Spain. There has been a strong concentration of the offer and an increase in the duration of contracts with an average of 3.2 years. The Penteo General Manager ended his presentation with the assurance that we have increased
our management maturity to value these services, but CIOs are still disappointed about the innovation that outsourcers provide.
Managed services and maintenance are areas of growth for next year. Keep it or outsource it? We enjoyed three round tables, with exceptional panels, in order to understand what is best for our organisation: keep it or outsource it. The first debate was called ‘Strategy: what do I keep?’.
CIOnet Spain – Annual event
David Soto, Vice President of IBM Global Business Services, offered some results of the 2011 CIO Study, an interesting analysis of a survey sent to 3,000 IT managers. He told us that 40% of a CIO’s tasks are innovation, process redesign and assisting in the management of the company. 76% of CIOs participate in infrastructure and processes, and in Spain, 43% are members of the steering committee. He also said that the companies that succeed today are those with more creative and dynamic leaders, those who are ahead of customers and have extensive knowledge of the company. Another result of this study was that the evolution of the SLA will tend to be of shorter duration, suppliers will share risks with us, and service agreements will be annexed to the business, not just to IT. Suppliers therefore have to share profits and risks.
‘Service level agreements tend to be of shorter duration.’
Cost not the only factor After all this interesting information, we shared the sourcing experiences of different CIOs such as Sergio Cruzado from CatalunyaCaixa and Carlos Moreno from ONO. Mr Moreno said that the issue of cost cannot be the sole decision to outsource. It also has to be carriers and specialised services that can create better development prospects for our business. He said that we must have the flexibility to change providers because “in the end you are responsible for the outsourcing, not the provider, because to the customer it does not matter who has bundled”. The opinion of Salvador Anglada, General Man-
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ager of Telefónica, is that our main concern should be value-generating projects that facilitate business growth. He talked about the concept of ‘Cloud Sourcing’ which has many advantages in this new process since its flexibility helps and has an appropriate place for new sourcing strategies that have to be less rigid in time. Sourcing experience Two more round tables took place at our event. One discussed ‘Vendor Selection, Negotiation and Contract’ and the last one ‘Transition and Service Implementation’. Ten IT professionals shared their sourcing experiences with us. We also talked about EOA (the European Outsourcing Association). Antonio Crespo, General Manager of Quint and VP of EOA explained the objectives of this international association: enacting best outsourcing practices, enhancing the transfer of human resources and promoting their ability to bring together all stakeholders in the process. Finally, Francisco Roman, CEO of Vodafone Spain, concluded the event talking about ‘Systems, companies, managers and CIOs’. Vodafone currently deals with over 60 suppliers and 800 employees in terms of sourcing! Among the company keywords are Management and Leadership. He concluded his speech with a memorable sentence: “Companies are what their systems let them be.”
Antonio Crespo, General Manager of Quint and VP of the European Outsourcing Association: the transfer of human resources is a main objective of the association. picture >
Francisco Roman, CEO of Vodafone Spain: “Companies are what their systems let them be.”
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CIOnet UK – CIO view
Going mobile IBM UK and Ireland CIO Simon Meredith explains how he is working hard to ensure his business is ready for consumerisation.
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Simon Meredith, IBM UK and Ireland CIO wants up to 50% of the company’s workforce to use a mobile device as their primary enterprise computer by 2015.
hen it comes to consumerisation, IBM UK and Ireland CIO Simon Meredith has a simple aim: he wants up to 50% of the company’s workforce to use a mobile device as their primary enterprise computer by 2015. That might seem ambitious, especially as he recognises that few employees currently use handheld technology as their primary device. But as was seen at CIO Connect’s recent annual conference in London, global CIOs must start thinking about how their workforce makes best use of consumer technology in the digital age. When asked how advanced they believe their organisation is in regard to consumerisation, a third (33%) of attending IT leaders told CIO Connect they are already running pilot projects and a further 15% are planning consumer IT projects. IBM’s Meredith is one such CIO and has been working hard to make sure his business is ready for consumerisation, implementing a buy your own device strategy and a supporting IT infrastructure. The end result is that IBM is going mobile. “We’ve had a significant change in strategy”, says Meredith, referring to the transformation in the organisation’s approach to mobile data during the last two years. The new strategy has been about finding a way to provide flexible, yet secure, enterprise access for IBM UK’s 12,000 mobile workers, including sales, services and marketing staff. Initial investigations Change, however, has not been rapid. As little as twelve months ago, Meredith estimates just 1,000 executives and
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senior sales employees could benefit from access to enterprise data on the move. “Like many organisations, we had more of a focus on laptops and wireless access”, he says. “That’s where our attention had been and, although you could connect to applications and do certain levels of enterprise work, it meant mobile workers had to boot up their laptops before they could log in.” The desire for change, says Meredith, was palpable. As well as the restrictions in flexibility associated to an over-reliance on laptops, employees were also beginning to demand more access across a broader range of devices. By the end of 2009, Meredith says a desire for change had pushed IBM to enter serious discussions with suppliers about how the organisation could address the needs of its mobile workforce. “There was huge pressure for better devices and people wanted to make their own choices”, says Meredith. “We knew that the Apple iPhone was enabling a different type of mobility; we knew we would have to provide something more interactive for our workforce.” Meredith says discussions illustrated how individuals would need to have easy access to key applications through their own devices. Above all else, security would be crucial. Through the first six months of 2010, Meredith worked with suppliers to investigate how such an approach might work at an enterprise level. The strategy that emerged meant IBM’s employees would be able to take a step away from device provision and to give workers a wider choice of devices. “There’s an element of reputation, too”, says Meredith, referring to outside expectations of how an IT giant like IBM should be working. “It wasn’t that people didn’t have mobile access, it was more about how our people couldn’t do simple corporate activities when they were out and about with clients.”
CIOnet UK – CIO view
Creating a solution The answer was to create an approach that would allow workers to buy their own device. Working with telecoms provider Vodafone, Meredith established a series of potentially attractive deals for employees. Mobile workers would pay for their own device but IBM would enable access to email, calendar and contacts, and would pay for associated data costs. By May 2010, IBM had rolled out its Apple iPhone offer to mobile employees. Debate around the transformation had created a huge amount of internal debate, establishing a strategy for mobility across Europe and potentially globally. “It was about fundamentally changing the organisational strategy, so it had important implications for other regions”, says Meredith. The implementation of the strategy was accompanied by a series of road show events at IBM’s major UK and Ireland sites. Workers were shown devices and were keen to have a hands-on experience: “There was an immediate positive reaction to the ability to have a choice”, says Meredith. Workers buying their own iPhone, for example, were given supported access to key internal applications. And in the first three months following the May implementation, a further 1,000 workers chose to buy their own device. “You don’t know if such a strategy is going to be successful until you press go”, says Meredith. “But people were prepared to commit their own money and, overall, we were pleased with the initial level of take-up.” Further workers joined the scheme through 2010 and as many as 3,000 mobile workers had access to email, calendar and contacts by the end of the year. Future challenges In the background, however, Meredith was already working on the second phase of the mobile strategy. From the outset, the key aim was to enable enterprise access on-the-go for 12,000 flexible workers. And at the start of May 2011, Meredith – with assistance from Vodafone – provided potential access for all mobile staff, regardless of device.
The benefits for IBM are clear. Individuals are responsible for their own device, so support costs are slashed and the organisation also does not have to pay for device replacement. Increased access to data, however, provides a balancing item and IBM now pays for more mobile employees to work online. “This was the right time to look at consumerisation”, says Meredith, reflecting on the transition to buy-your-own computing. “As a strategy it has created a huge amount of background chat.” Reticent individuals are provided with a simple mobile base unit with limited internet access. But Meredith is keen for all workers to see the benefits of the strategy and he is hopeful that remaining mobile workers will continue to make the switch to buy their own device through 2012.
‘We want to deliver an infrastructure that allows people to choose their own way of working.’ Vodafone, for example, provides preferential deals for early purchasers. IBM hosts its own BlackBerry environment, so RIM devices are already highly integrated, and he is also looking to increase access for Apple iPhone and HTC device users. Finally, Meredith is working on further security and application developments, particularly the ability to use business intelligence on-the-go. “It’s part of a fundamental shift globally”, he says. “Mobile devices are changing what information is available on-the-move and what you can do. Fundamentally, the CIO team is trying to drive a device agnostic environment. We wanted to deliver an infrastructure that allows people to choose their own way of working. The business is going real-time and we have to meet user demand.” This article is an edited version of an article by Mark Samuels in the autumn edition of CIO Connect magazine. If you are interested in finding out more about the IT leadership network, please visit: www.cio-connect.com.
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CIOnet Italy – Event report
The New Mobility Why is Enterprise Mobility improving business processes? To what extent are unexplored ways of giving employees access to the enterprise improving and broadening motivation and collaboration? Do all these capabilities rely purely on relatively simple applications or do they need a broader revision of the application set?
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he new generation of cellular phones, from Apple’s iPhone to Google’s Android mobile devices, requires new application platforms leveraging on their features as well as a new focus on management policies and security issues. As these end points become the most appropriate devices to solve business needs, many organisations are looking for new applications and are rapidly transforming their existent applications to achieve better business results. CIOs are committing to exploit assets that most employees already have in their pockets. This may also help in attracting and retaining talent. The main issue for the IT department becomes how to manage these heterogeneous devices, how to prepare for mobile security and data losses, and how to control costs. Nevertheless, the opportunity for the IT organisation to build up new value with mobile technology is huge, as demonstrated by the ‘The New Mobility’ CIObootcamp held in Milan in October. This event brought together more than 60 out of 330 CIOnet Italy’s members to appraise top-level experiences. WOW experience The special guest at the CIObootcamp was Mr Daniel Lebeau, Vice President Information & Management Systems at GSK Biologicals Belgium, and European CIO of the Year 2011. Introduced by Alfredo Gatti, Managing Director of CIOnet Italia and Managing Partner of Nextvalue, the Italian Research Partner of CIOnet, Daniel Lebeau illustrated the evolution of mobile strategy at GSK Biologicals. “Three years ago, I was a little negative about mobile devices,” said Mr Lebeau, “so we decided to carry out an experiment, called the WOW experience.” In January the key decision was taken to allow
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employees’ smartphones access to the wi-fi network. GSK Biologicals already has an infrastructure of more than a thousand wi-fi spots at its headquarters, and employees, in particular new recruits – GSK hires around one thousand young graduates each year – would prefer to be able to use their own smartphones. Last September, 820 employee smartphones were connected, mainly iPhones and Androids, followed by others. A cross-functional IT team is responsible for managing mobile activities and resolving issues, including security, policies, inventories, etc., organising user groups and measuring benefits (cost savings, etc.). “In our experience, we have found that it’s very important to understand the emotional aspects of mobility”, concluded Daniel Lebeau. Mr Lebeau’s visit to Italy was greatly appreciated by the Italian CIO community as a strong contribution that the European Top CIOs can provide to their local peers. Another key value of the CIObootcamp was a brief on the state of the art of Enterprise Mobility within CIOnet Italy: a summary of the results of our CIOnet Enterprise Mobility Survey was presented by Alfredo Gatti. “Investments in Enterprise Mobility are growing rapidly, and the number of enterprise applications available over tablets and smartphones is set to double over the next six months”, said Alfredo Gatti. The main barriers slowing down this process are rising costs for mobile communications in Italy – including roaming costs –, security concerns regarding both data and devices, the availability of industry applications, the lack of clear business cases and ROI metrics. 49% of CIOs also state that they are adopting ‘best effort’ policies and only 14% of them are comfortable with the current mobile security policy which they define as “complete and satisfying”.
CIOnet Italy – Event report
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‘Emotional’ features “Our sales force is mainly using iPads”, commented Paolo Daperno, CIO of illycaffè, introducing the illycaffè mobility business case. The main benefit of the iPad is that it complements a laptop in many areas, combining the advantage of a very effective platform with the ‘emotional’ features of a device which go beyond the IT aspects. A major Italian fashion group – for privacy reasons we cannot reveal the company’s name – launched a company-wide project in 2010 to cover digital and mobile communications within the group. Its CIO presented and explained this innovative project, called ‘Going Digital’, at the event. “In order to enrich our customer knowledge and relationships at store level – explained the CIO –, we decided to enhance our existing CRM system with an easy and trendy graphical interface based on the iPad or Tablet PC, which could also be used in front of the customer.” Close cooperation between CMO and IT was put in place in the eBusiness and CRM areas to ensure a consistent and reliable roadmap of the group’s digital practice. According to both the CMO and the CIO, orchestration amongst different actions has been crucial. Many business benefits In the experience of Alberto Peralta, CIO Italy of the biopharmaceutical company AstraZeneca Italy, mobility has been a priority for a long time,
with the aim of optimising the effectiveness of a mobile workforce. 70% of their employees is using tablets, as well as BlackBerry, and is able to react quickly to the changes in the communications to customers in a highly regulated market. The iPad2 was recently chosen as the main device for the AstraZeneca sales force; a full set of new apps is available and more apps are devoted to Business Intelligence and secure browsing on selected corporate applications. This business case illustrates several benefits associated with the new tablet, such as higher engagement of the sales force, physicians more focused on content and eliminating ‘technology stress’, new opportunities to talk to customers and compelling communication, most effective use of time. Some aspects still require the CIO’s attention, such as the new content production process and management of the hype surrounding new technologies. It is their task to establish clear expectations and to set precise guidelines for users.
Daniel Lebeau, Vice President Information & Management Systems at GSK Biologicals Belgium and European CIO of the Year 2011: “It is important to understand the emotional aspects of mobility.” PICTURE
Paolo Daperno, CIO of illycaffè: “Our sales force is mainly using iPads.” PICTURE >
Alberto Peralta, CIO of the biopharmaceutical company AstraZeneca Italy: “Mobility has been a priority for a long time.”
CIO of the Year The successful organisation of the CIObootcamp is proof of the interest in the agenda proposed by the new Italian Advisory Board. Over the next few weeks, all the members of CIOnet Italia are invited to nominate and vote for candidates for the Italian CIO of the Year 2012. The CIO of the Year will be announced on January 26, 2012.
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CIOnet The Netherlands – IT trends
‘This crisis is different for the IT industry’ Dr Jerry Luftman is Distinguished Professor & Associate Dean of IS Programs with the Stevens Institute of Technology. Jerry Luftman was one of the speakers at the Dutch annual CIOnet conference, whose theme was The Perfect Storm: at this moment in time technologies are coming together that have a fundamental effect on the work of CIOs. Luftman has been researching trends like this in the IT sector for many years: “CIOs are now cautiously optimistic.”
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Dr Jerry Luftman, Distinguished Professor & Associate Dean of IS Programs with the Stevens Institute of Technology: “In this recession, organisations are specifically looking at ways in which IT can be used to reduce costs.”
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erry Luftman is responsible for, among others, the IT Trends Survey, a study among CIOs worldwide, conducted for the Society for Information Management, SIM. Comparable in intent to CIOnet, this organisation has over 5,000 members distributed across the United States. The trends survey dates back to as early as 1980, and had achieved considerable status over the years. The results are published in prominent media, from Forbes to the Wall Street Journal. In the survey, the researchers in part ask the same questions every time, and vary other questions according to the current affairs of that year. The results provide a good snapshot of the issues that matter to CIOs. Since last year, the researchers have been working together with other organisations throughout the world, including C I O n e t. T h i s p ro vides a perfect opportunity to compare data between many different countries.
The subjects researched are the issues that keep CIOs awake at night, like investments and budgets, and of course topical themes like cloud computing. Positive development “This year we are in the middle of an economically difficult situation, but one day we will come out of it. It is interesting to see the different ways in which companies are preparing for that day.” Dr Jerry Luftman is optimistic. “In my career I have seen at least ten periods of economic slowdown. In previous recessions, companies would always cut back on IT without thinking properly about the consequences. They would simply spend substantially less money on tech-
Business intelligence has been by far the most important technology in which businesses have been investing over the past ten years. nology. It is quite different in this recession, and for the CIO there is actually a positive development. Organisations are now specifically looking at ways in which IT can be used to reduce costs. IT and business are working together to look for opportunities to achieve strategic advantages.” According to Luftman, the results of the survey held this year show, surprisingly enough, that
CIOnet The Netherlands – IT trends
budgets and investments are beginning to approach the same levels as before the recession. “Although we certainly are not out of the crisis yet, the responses I am receiving show that we are certainly on the right track. If we compare the present budget of CIOs with the predictions for next year, we are able to say that they are cautiously optimistic. At the same time, they are nevertheless realistic. CIOs understand quite well that we are not out of trouble yet; apart from anything else, there are fears about things like an imminent double dip.” He sees it as a good choice to call the Dutch annual conference of CIOnet The Perfect Storm. “It shows that you are seeing the wood, not just the trees. Cloud, mobile, virtualisation, changing business models, bring your own technology, all these are new technologies that are bringing fundamental changes with them.” With all those developments, Luftman believes, business intelligence has been by far the most important technology in which businesses have been investing over the past ten years. “Yet these days much is happening simultaneously, so it is logical to talk of the perfect storm. At the same time, that perfect storm is a tremendous opportunity for IT.” Skills “Because the good thing about IT is precisely the fact that so much is happening at the same time. The main trend is without doubt business IT alignment. That demands of executives involved quite different skills than before. A successful IT professional is no longer purely a technical gearhead. You also need to have an understanding of business, management skills, and last but not least good people skills.” Because there are many questions around the improvement of these skills, Luftman is one of the organisers of a new initiative. “Working with
a range of noted universities around the world, we are focusing on companies to help CIOs advance within an organisation. We assist them in developing the non-technical skills that they need. I travel a great deal and am able to say that technical skills among CIOs throughout the world are actually at a comparable level. However, where you see the really big differences is in those other skills. Now we are attempting to do something about that with a collaboration between the best universities. Incidentally, that initiative is deliberately face to face, not web based.”
‘If we compare the present budget of CIOs with the predictions for next year, we can say that they are cautiously optimistic.’ Reservations regarding the cloud He names cloud computing as undoubtedly one of the most important technological developments, yet does have some reservations. “What is actually far more important, and what you hear too little about from my point of view, are the applications running on the infrastructure, whether or not in the cloud. That is essential to the way in which IT collaborates with the partner on the business side, in order to change what business does and how business does it. It is far more than infrastructure; it is the insight that developments like cloud computing offer possibilities to develop new services for customers. The infrastructure needs to be right, but that is not the primary issue. Business IT alignment is a collaboration between CIOs and business partners to jointly discover the opportunities that IT offers at the strategic level.” Marco van der Hoeven is the author of this article.
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CIOnet Spain – CIO view
Providing a quick return Obviously information systems provide added value to business and support the group’s strategy. Furthermore IT is constantly responding to the users’ needs through innovative solutions. Yolanda Sandonis, director of MBC at Carrefour Spain, is convinced that despite the current economic slowdown, technology investments should provide a quick return.
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ach director of information systems is faced with the challenge to find new formulas to be even more cost competitive, guaranteeing quality and deadlines. Yolanda Sandonis: “Our contribution is to optimise and automate processes, enabling users to increase daily productivity in order to provide greater added value for our customers. This year we marked projects as ‘Reinventing the Hypermarket’ which involves implementing the new ‘Carrefour Planet’ concept in our supermarkets. For this reason we have gone in for new technologies to make shopping in Carrefour a pleasant experience for all our customers.”
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Yolanda Sandonis, director of MBC at Carrefour Spain: “Despite the current economic slowdown, technology investments should provide a quick return.”
Dynamic distribution world The consolidation plan will roll out logistical systems and extend to other formats (Super, Proxy and Cash). Alongside this, the company will continue developing new projects providing a response to needs as a result of the dynamic activity that characterises the distribution world.
Relying on advanced technology Carrefour is committed to new technologies that help customers in shopping and that simplify management tasks. Proof of this lies in Carrefour’s systems based on radio frequency. For example, the ‘self-scanning’ and ‘self-check out’ systems in stores, shelf review and restocking with mobile terminals on the floor, or electronic labelling with real-time updating of prices.
‘We have gone in for new technologies to make shopping in Carrefour a pleasant experience for all our customers.’ SAP experience expert Besides, Carrefour relies on extended SAP technology for years. The company started to use the Financial Accounting, Controlling, Purchasing, Treasury and Assets modules since the end of 2000. In 2005, Carrefour incorporated Investment Management, Projects and SAP-SRM. Since 2007 the concern has been working with SAP-PI and the last modules to be introduced have been SAP-BW with BPS (for reporting and budgeting), REfx to manage leasing and FSCM for franchise payments and risks. Furthermore Carrefour has been pioneer in outsourcing tasks that do not form part of its core business and that do not provide added value for business. It is an initiative that has been integrated into its strategy for years. Yolanda Sandonis confirms that IT user associations help to mark the trend in IT according to the customers’ real needs and play an important role as IT opinion leaders.
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CIOnet Spain – Special feature
EVOlution through SAP In February 2006, the group Vodafone started a transformation programme to standardise and unify financial, supply chain and HR processes in the company. The processes from the operating companies were integrated in the different countries. This project was dubbed EVO (EVOlution).
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VOlution’s purpose was to build an integrated operating model, supported by a single ERP system across Finances, Supply Chain and Human Resources. For two years meetings were held with experts from the different operating companies. They faced four targets: define the future operating model for business, understand the impact of future changes on business, decide how to carry out such a change and agree on what would be necessary to make the project a success. The new operating model and its processes would need a common system that could support all.
Implementation The chosen model for rolling out the project was to implement the changes by releases with one or several operating companies being incorporated in the new operating model in each release. Development of the implementation project went on for almost a year and a half. Finally the project was officially completed in December 2010. Currently the seventh release is being rolled out, which will show twelve operating companies integrated in the use of the common EVO operating model based on SAP ERP 6.0. Before According to initial analyses performed in 2008, Vodafone Spain started from SAP version 4.7 with heavy customisation and integration with a number of third party systems. The first analysis identified around 75 external systems (non-SAP), of which approximately half would be dropped or needed adaptation.
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Araceli García Cuartango, Director of Information Systems at Vodafone was in charge of the EVO transformation programme.
After The main technical outcome from implementing the EVO operating model is that all customised developments for the different operating companies have been dropped. The CBM (Core Business Model), which defines the global operating model, is used by all operating companies of the Vodafone group. From this base system, only local customisations justified by TLS (tax, legal, statutory) have been implemented. On completion 34 interfaces were built between the Vodafone Spain legacy SAP system and EVO. Only local changes supported by the standard SAP were implemented due to TLS requirements. The EVO project reduced the complexity of the Vodafone group’s operating model and also streamlined the systems that support the process. SAP has proved to be a key tool in achieving this goal, enabling and supporting the creation of the EVO business model.
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Business partner view
Interview with Salvador Anglada, Managing Director at Telefónica España
‘The cloud model is key for competitiveness and innovation’ Telefónica has been one of the leading providers in promoting the cloud computing model and has spent years working on a range of cloud services, as well as on what the market refers to as IaaS (Infrastructure as a Service) and SaaS (Software as a Service), for the benefit of its clients, in addition to making significant investments in this area.
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Salvador Anglada, Business Services Managing Director at Telefónica España: “Telefónica has committed itself from the very start to setting the cloud trend in the market.”
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n this context, Salvador Anglada, Business Services Managing Director at Telefónica España, claims “there is not the slightest doubt that cloud is no longer a trend but a reality, that clients are adopting this model due to the undeniable benefits it offers, particularly in terms of finance and flexibility”. It is for this reason that Telefónica has established a division at corporate level known as Telefónica Digital, which is promoting this range of services within all territories in which the group is active. One of the essential features of cloud services is that they are provided via the networks, and Telefónica combines both worlds into one. At the moment, cloud services meet very horizontal needs that apply to any sector: public authorities (such as district councils, county councils, autonomous regions and European bodies), financial entities (banks and insurance companies), industry and distribution, major commercial chains, companies in the automotive sector and media. There are also primarily technologybased companies that have created their own cloud services on the basis of Telefónica’s. On the other hand, Salva-
dor Anglada assures us that Telefónica’s recent purchase of Acens will further reinforce the company’s cloud strategy, particularly for small and medium-sized enterprises, and serve to complement the IT services Telefónica already offers to large enterprises. Over the next few months, Acens’ services will of course be promoted via Telefónica’s sales network. By way of an example, a remote backup service for servers has just been launched that will allow clients with servers at various locations and offices to make backups that are stored on the network and can be recovered at any time if information is lost at one or more locations. The agreement with 2e2 in the UK, or the creation of a new legal entity in Germany, amongst numerous other initiatives, is irrefutable evidence of Telefónica’s commitment to a cloud strategy at global level. Total flexibility Another option for clients is to create virtual data centres in no time at all with total flexibility, creating the network infrastructure, security and processing capacity needed to support their applications. “Telefónica offers a service boasting these features with a highly flexible structure and billing system. What’s more, this is all integrated into the clients’ VPN (Virtual Private Network), which provides an additional level of security and safeguarding compared to other solutions on the market”, states Anglada. Today, the flexibility and savings offered by cloud services mean that they are suitable for any type of company, from SMEs to large-scale and sector
Business partner view
companies, and that they are gradually bringing about a change in mentality within the management of all these organisations. It is also certainly the case that companies currently class the security of their data as their main priority when introducing this type of cloud model. Consequently, 65% of companies still consider this aspect to be a potential obstacle to cloud computing, 49% express concerns about the legal implications and 31% have reservations due to the difficulty of measuring and managing the service. According to Salvador Anglada “Telefónica is responding to these concerns with designs for secure and multiclient platforms, with their servers physically located in Europe and the US”. In addition to the ‘pay as you go’ structure, the cloud designed by Telefónica provides added value in the form of a ‘self-service’ version of the services for the client, explains Anglada. “The aim is to ensure that financial and functional benefits are guaranteed from the very outset.” To achieve this Telefónica has developed an extremely rapid setup process, from just a few hours or even minutes, depending on the service required, while a dedicated web portal allows the client to easily register, manage and monitor its use fully independently. Solid infrastructure In order to guarantee companies and authorities the highest possible quality, Telefónica has a solid infrastructure that makes good use of the synergies and economies of scale of its multinational dimension. The two global hubs in Madrid and Miami function as the dual core of the system and are joined by satellite hubs in each country in which the service is provided or supported. Sales, advice or tailored support is provided at local level to ensure no reduction in quality or accessibility for the client. In any event, states Salvador Anglada, there is no
doubt that Telefónica has committed itself from the very start to setting the cloud trend in the market, something which is now here to stay. “Cloud computing is a new programming and commercial paradigm that is proving to help organisations make significant cost savings and optimise their processes”, he maintains. “But above all, it is transforming the way that we consume and supply IT resources and services, and becoming one of the key elements that make a company more adaptable when it comes to driving the search for innovative new products and services and, as a result, more competitive.”
Onto the scene with a vengeance Interest in the adoption of cloud computing tools has boomed amongst the CIOs of companies around the world, and particularly those European companies that have also demonstrated a growing focus on risk management, which up until now has been the main obstacle to their mass roll-out. We live in a climate in which companies and governments are working to recover from the economic crisis, centring on reducing costs and increasing efficiency, and therefore with a focus on the use of IT. As we are aware, cloud computing has come to be a priority within the strategy for technological modernisation and a transforming element for organisations around the world. Today, the cloud paradigm is attractive to companies because not only does it offer greater functionality, flexibility and simplicity than on-site systems, but it also facilitates innovation and creativity, as well as having a positive social impact as a result of the optimisation of resources to which it contributes, and the concept’s ability to grow. We can read and learn about the benefits offered by the cloud concept on a daily basis. In fact, today the leading concept in the global IT market is without a doubt cloud computing. We can affirm that cloud computing, which has been talked about for such a long time within the industry, has burst onto the scene with a vengeance on a global scale. Organisations are learning more and more about what a cloud model means and the effects of using IT assets more efficiently, having greater flexibility to launch new services and reducing IT-related costs.
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CIOnet France – CIO view
The Whys and Hows of Information Technology Like any other department, IT must contribute to the company objectives specified at a high level in the mission statement and in detail in the strategy map.
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Daniel Lebeau, author of this article, is VP Management and Information Systems with GSK Biologicals.
The 5 values of IT In our environment, the value of IT is based on 5 pillars: compliance, growth & globalisation, productivity, customer satisfaction and innovation. These are the 5 areas of benefit which describe ‘why’ we initiate and prioritise an IT project. Like the aeronautical, finance or nuclear industries, the pharmaceutical industry is highly regulated. However, IT systems can address compliance requirements while simplifying administration and the impact of policies. Indeed, IT systems provide a wide range of workflows, electronic controls, paperless processes, electronic signatures, audit trails and other tools to address regulations as well as creating simplification if business processes are adequately reengineered. Growth & globalisation is the second value of IT. By their nature, IT processes are virtual, instanta-
neous, irrespective of borders and highly scalable. So is our business. It is built upon global processes which are multilingual, multi-country, multi-currency, supported globally but sufficiently localised. Based on a single worldwide ERP foundation, IT can bring a sound and necessary structure to support growth wherever we need it, including in emerging countries. Productivity is the third clearly understandable value of IT. Automation can allow any flow of data to be produced cheaper, faster and more efficiently. A good business process brings immediate value by reducing the transaction cost, improving speed and urgency, and increasing data quality. Patients and all actors within health ecosystems, including payers, authorities, doctors, and pharmacies, are our customers, for whom we need to improve satisfaction and delight. This is the fourth value of IT. In other words, effective planning tools can help to reduce stock-outs and increase satisfaction. Finally, IT can fundamentally change the way we operate or carry out research. This is the value of innovation. Bioinformatics or certain advanced business processes can bring significant innovative advantages in relation to the competition. The 5 cultures of IT Knowing ‘why we do IT’ is fundamental. However, it is equally important to have a shared vision of ‘how we do IT’. Year after year, within GSK Biologicals we have been building an IT approach based on 5 dimensions: the culture of simplification, the culture of integration, the culture of impact, the culture of asset optimisation and the culture of quality.
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CIOnet France – CIO view
‘Aggressive decomplexity’– more than ‘simplification’ – describes a culture in which we try to make business processes leaner and decrease the number of systems. In an IT department, business analysts are key players. By questioning and conceptualising the business process together with key users, they ultimately simplify and reduce the number of exceptions, transactions or useless steps in these processes. In addition, simplification is not only in the analysis and the code, but also in the technology. Every day, we are confronted with lots of different software addressing similar needs and we need to reduce solutions, systems, technologies and vendors. ‘Less is more’, the paradox of decomplexity, frequently shows that by freeing resources, we focus on better services.
IT must be run like a factory, and the culture of asset optimisation is therefore important. A cancer for IT Integration is the second culture, because proliferation of interfaces is a cancer for IT. The distributed copy of similar data generally failed to deliver the highest level of quality. Interfaces work perfectly in PowerPoint and in meeting rooms, but exceptions are often underestimated. Visible signs of a workaround approach, interfaces do not drive business process reengineering but may promote silos. More than a technology, integration drives a holistic approach that aims to improve key enterprise objects such as employees, articles, vendors and projects – which are strategic assets. The culture of impact, the third culture, focuses all IT efforts and energies on the delivery of new functionalities: the go-live. Everything before the project charter, and everything after the project go-live, is waste, useful waste but waste nevertheless. All meetings, emails, vendor evaluations
and analyses have no value unless they accompany a go-live. There is no single proof that discussions one year before the start of an IT project will bring better results than discussions held one month in advance. The culture of impact focuses the IT organisation on adding tangible value through new functionalities. Factory IT must be run like a factory, and the culture of asset optimisation is therefore important. Applications, software, servers, infrastructure, all IT assets, are unfortunately underused. We therefore continuously upgrade and maintain our IT assets and keep them up to date. Why are we using only 20% of certain software functionalities? Why are we having servers unloaded? Optimising IT assets as a whole increases the company’s return on investment in its IT department. IT quality, the final culture, focuses on the quality of IT employees, the quality of IT processes and the quality of IT programs. Firstly, IT analysts and engineers should have sufficient potential to maintain the current applications with the right level of services, to manage projects with the right level of methodology, to reengineer business processes with the right level of assertiveness, to engage decision-makers with the right level of emotional intelligence and to build longterm plans with the right level of experience. Secondly, IT processes (incident management, change management, release management, etc.) should be perfectly qualified. Thirdly, programs, usually written by contractors, should be carefully reviewed and tested. A direction and a method Describing the 5 ‘whys’ of IT provides a direction but articulating the 5 ‘hows’ provides a method. Both the direction and the method provide explicit guidelines which encourage the right behaviour to correctly prioritise a project and deliver value.
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CIOnet UK – Special feature
Fusion IT leadership Alistair Russell says a new style of management is required for CIOs who want to succeed in the era of integrated global business.
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hat organisations need now is a new fusion leadership capability. It is a conclusion I have come to following five years of renewed interaction with Hong Kong and the rest of Southeast Asia, and a reflection on the most effective contemporary leadership behaviours and competencies. As with the fusion style of cooking, this new leadership profile integrates the best of heritages and cultures. The fusion style is at the same time challenging, interesting, demanding and, perhaps, a
Fusion IS leadership competency model • Sets direction – Deeply aware of the changing nature of the market and customer needs; clearly envisions the long-term direction and shape of the organisation; able to make connections between disparate areas and align technological advances with ongoing organisational developments; able to reflect on what needs to happen next and what might get in the way. • Leads stakeholders – Able to manage the political climate, using a broad range of approaches dependent on the cultural context; develops relationships that benefit the organisation; creates a sound understanding of the motives, needs and concerns of others; impassively observes the behaviour of others and is sensitive to non-verbal behaviour; personally robust in pursuit of objectives for IT and the organisation. • Delivers value – Brings together a wide range of groups inside and outside the organisation; pursues continuous improvement across the entire organisation and delivers best practice through benchmarking; gets to the heart of any given matter quickly and is inquisitive about the key issues; identifies opportunities when technical solutions create strategic advantages. • Develops organisation, team and self – Always prepared to raise difficult issues with others in the face of expected opposition; effective in managing change and responsive to the dynamics of internal and external environments; has a strategic approach to professional development and actively seeks feedback from others; fundamentally recognises the importance of maximising the capability of others.
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little uncomfortable to the palate. But it is this unfamiliarity that helps to develop a new form of integrated leadership. My emerging conclusion is that success in IT stewardship will come from a new set of leadership skills, rather than imposing a one-world view that worked in the past in a different context. We need to avoid the mistake of assuming that an established approach will work in our new globalised world. A new leadership approach My experience, at an individual and at an organisational level, suggests the most productive and effective approach is to develop a new leadership approach. And the successful fusion style will integrate the traditional and respectful culture of the Chinese heritage with more direct and assertive Anglo-Saxon managerial approaches. The cover star of the last issue of CIO Connect magazine – Sunny Lee, CIO at the Hong Kong Jockey Club – is a case in point. Lee is one of many leaders who are integrating higher education and leadership experience. In his case, Lee mixes significant experience from the United States with knowledge from leading IT in complex, Hong Kong-based organisations. My hypothesis is that leadership in China, and indeed all the fast-growing economies now integrating into the global economy, will be most successful as a new set of integrated leadership styles are developed. So, what is a fusion leadership capability? And how do we accelerate its development? We cannot just wait for fusion leadership to happen. The passive approach of waiting to mop up returnees, as I have heard Chinese executives with US and European experience described in Hong Kong, is not effective or efficient. After reviewing new global requirements against CIO Connect’s already developed competency
CIOnet UK – Special feature
framework (see box), I believe a fusion leadership profile will have a honed skill set that will need to be applied to meet specific demands. The fusion leader will have a broad perspective on customer understanding, strategic thinking and forward thinking, with an open mind that accepts input from non-traditional sources. Interpersonal awareness will also be crucial, with the fusion leader able to accept new styles and to recognise that behaviour is based on different heritages.
Success in IT stewardship will come from a new set of leadership skills. The scale of change And there is much change for the fusion IT leader to contend with. As was illustrated during CIO Connect’s recent annual conference in London, the CIO action plan for 2012 must take account of the consumerisation of IT and must consider leadership, strategy and performance. In the case of leadership, the conference demonstrated that key concepts are likely to include creativity, engagement, influence and the next generation. When it comes to strategy, CIOs must pay attention to delivery, agility, innovation and value. High-performing IT leaders, meanwhile, will consider governance, flexibility, service levels and branding. Independent consultant Roger Camrass introduced an exclusive peak into CIO Connect’s 2011 Horizons research at the conference with a stark reminder that the rate of change continues to accelerate. He said a majority of the 200-plus CIO-level respondents to the Horizons research believe consumerisation is the most powerful driver for change in IT. Traditional refresh cycles have been slashed from
three years to three months and CIOs are under huge pressure to manage the blurring boundaries between business and personal IT. The Horizons research provides a good barometer of that transformation – the majority of CIOs responding in 2009 said they faced 10% to 20% cuts in their IT budgets. This year, a large proportion (41%) of CIOs say they are now engaged as change leaders. The CIO as change leader is the portal for innovation in the organisation, with 97% of Horizons respondents believing one of their areas of strength is connecting technological possibility to business opportunity. CIOs, then, are in a prime position to take advantage of the fastchanging nature of IT-enabled business change. Fusion CIOs must be able to show the board that their ideas are in line with the business plan. If CIOs lose that clarity and simplicity, they will struggle. Fusion leaders will also be able to build relationships across new cultures and will be tenacious enough to cope in an uncomfortable and uncertain space. Independence of spirit will be an asset, along with an unparallelled focus on the development of self and others in the new integrated world. Does this approach align with your experience of leading across cultures? What are you doing to develop a global fusion leadership style? I share my initial thinking with you as a prompt for feedback. And I am sure your peers would benefit from collective insight in this important subject.
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Alistair Russell is advisory practice director at IT leadership network CIO Connect: alistair.russell@cio-connect.com
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CIOnet Italy – CIO view
Much more strategy than technology We often use the term CIO as synonymous with Information Systems Director, however its meaning is wider. The role of CIO not only entails both managing the available technologies and providing the services required by the internal customer, but also being proactive in process innovation and integration. The direct relationship with top management and the expectations that the company places on the CIO are adding new accountability to this role.
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nnovating the business processes, supported by information technology, is the right way to leverage the IT in terms of business and value creation for the company. The CIO must be able to understand the challenges and opportunities of the different business functions with which he or she interacts, and make sure that the organisation is able to create the glue between Business and IT at all levels, both strategic and operational. The business strategy can and should be supported by a coherent IT strategy. The IT must evolve and become the lever factor on which the executives should build innovation and new opportunities of business. Success factors The key word remains ‘alignment’. There should not be any IT project that is not focused on the achievement of a business objective. Reducing costs and increasing revenue are the basis for all business activities and IT must be aligned to this approach. Some companies or market segments are more ‘IT intensive’ than others, but the need to calculate and express in business language the advantages of the IT service is a priority. IT and business are allies if they are able to keep promises towards each other. A project is successful if it meets business expectations in terms of timing, cost and content. Close collaboration with business functions is the main factor in the success of an IT project. IT competences and IT organisation – both of
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these factors must be constantly managed and adapted. On the one hand, it is important to understand and govern the solutions offered by the market. On the other hand, it is important to align the IT organisation model to the company’s needs and business model. Innovation versus consolidation in times of crisis Innovation and consolidation are not mutually exclusive or alternative. Consolidation may also represent a driver of innovation, such as IT performances improvement and service levels enhancement. Innovation and consolidation might require different levels of investment. A company that has the courage to innovate in a time of crisis will take advantage of this innovation when the recovery comes around. Advantage represented by more streamlined internal processes, shorter production times or new value-added services for customers. And it is even more crucial, however, for the CIO gaining approval to invest in times of crisis to deliver the projects on time and on budget. IT trends Among the many new terms used within IT communities, I recently heard ‘business technology’. I liked the real meaning: not only having consistent and timely information through IT, but also acting business processes that otherwise could not be possible without the support of IT. Then the network, ‘the great resource’, enhanced
CIOnet Italy – CIO view
by smart applications that enable cooperation between different, concurrent, delocalised but easily connected competences. Modern, high-performance and affordable IT that does not require any ‘intermediation’ and that meets the habits of the digital natives, the new generation grown with internet and a browser on a PC. This is the challenge for the CIO, and this is the challenge for companies which must deal with a global economy.
IT and business are allies if they are able to keep promises towards each other. ROI enables decisions An IT project is an investment and, like all business investments, the decision on undertaking it is based on the calculation of return on investment. The assessment tools are therefore the same as those applied to other investments, for example, in facilities, infrastructure or fleet. Payback period, NPV, ROI, any of those metrics can be useful to evaluate the economic sustainability, according to the methodology used by the company. To better clarify responsibility, it is appropriate to distinguish between ‘IT-driven’ investments, such as technological tools and technical infrastructures, and ‘Business-driven’ investments, mainly relating to new IT applications needed to improve a business process. In the first case, the IT department is fully accountable and benefits relate to different areas such as improving service levels or reducing the maintenance costs of an obsolete technology. In the second case, the business line has to be accountable for the benefits arising from a new system, like cost savings or additional revenues, customer basis or market share. IT has the responsibility to adopt the right technology, to choose the proper tools and resources, providing the best solution. According to the different roles, we can truly measure the alignment of IT with the business, as the willingness to invest needs to be formally shared by both the business and the IT functions. The resulting project staffing should reflect the common responsibility, with represen-
tatives of both functions hopefully facilitated by a PMO bringing a common methodology. Being a CIO in Italy During my professional experience, I have often had the opportunity to work with people and companies of other countries, in particular in the transportation industry that has developed and operated highly advanced information technologies since many years. How to play a managerial role and the style to adopt is surely influenced by the culture of the country. In Italy the awareness about the importance of a sounded and professional IT within a company is growing. Business and IT are becoming closer, starting with the use of a common language and sharing an economic sensitivity. The road is still long on both sides. We need to improve our ability with the use of metrics in the investment decisions and in project management to ensure the competitive advantage resulting from the wise and innovative use of information technology in business.
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Donatella Paschina, author of this article, is CIO at Ermenegildo Zegna Group: “An IT project is an investment and the decision is based on the calculation of ROI.”
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European Commissioner’s blog
Putting the C-I-O back into ‘Commission’ On the 17th of September EU commissioner Mrs Neelie Kroes met with CIOnet. Below is the blog Neelie produced as a result of the meeting.
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ome time ago I had a fascinating meeting with people from CIOnet. Among other things they organise CIO CITY – at which I had the pleasure to speak back in March, and where I presented awards to some topperforming CIOs. The meeting was a fascinating insight from a mixture of academics and those in the industry – including some of the award winners themselves.
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© Constantijn van Oranje
Neelie Kroes (third from left), author of this blog, is European Commissioner for Digital Agenda.
At a crossroads They explained the changes in the role of CIOs. Once they were seen predominantly as an administrative function given the sole job making sure everyone’s email worked, and maybe saving some cash while they were at it. Now they are increasingly seen as major strategic players in company development. Because these days, IT isn’t just something that adds value to a product – it’s essential to getting a product to market.
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I stressed to them my view that Europe is at a crossroads – if we embrace IT now, we can create jobs and growth for the future. But how successful we are in meeting that challenge depends on how well we make the case for IT. These people are out there every day doing that, convincing others of the benefits of IT, for all kinds of innovations. I know that we in the commission need to be doing that too; so there’s lots we can learn here. Across borders I also asked them what they most wanted me to be doing as European commissioner. Some very interesting answers came back – about the frustrations of dealing with multiple standards across borders or even within regions. About the need to put into practice e-Identification so that new technologies can be ‘consumerised’. And the need to have a decent system for acquiring and demonstrating IT skills – given the serious risk of a shortage of workers in the future, leading to an IT skills gap. It was comforting to know that these are all areas already covered by the Digital Agenda – but all the more underlines the need to deliver our objectives. Digital Agenda Survey CIOnet and the European Commission have agreed to carry out a survey on the position of the Digital Agenda within the organisations of the CIOnet members. This will be aligned with the ‘European CIO of the Year’ survey of CIOnet and INSEAD. You can expect an invitation for the online survey in your inbox in January.
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CIOnet France – Special feature
The intangible assets approach It is in CIOs’ best interest to commit to a new approach to analysing the performance and added value of their activities: the intangible assets approach. Intangible investments represent an essential resource for increasing competitive advantage.
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rofessor Ahmed Bounfour (Université Paris XI) and Georges Epinette (CIO Les Mousquetaires, CIGREF Treasurer) – co-authors of the book ‘Valeur et Performance des SI’ – express their views on this matter. For Ahmed Bounfour, the value question has “emerged in the 1990s because of the reactions of companies’ management to the need for reporting and transparency constraints. Leaders, under pressure from the markets, have been forced to develop a vision of value creation. CIOs therefore had to create a way to describe the value creation that should be understandable by the various company’s departments and practices. However, at this time, CIOs and more generally the IT teams were asked to present the created value of their activity with standard criteria such as ROI.” 30 years of interest Economists have been interested in the value question for a long time, around 30 years. They focus on a scientific debate regarding the link between company performance and Information Systems. Ahmed Bounfour adds: “The review of the main empirical works dealing with the complex and recurrent question of IS performance and value measurement clearly shows the progressiveness of the approach. From the macroeconomic type input-output approach, we have progressively seen the emergence of an approach oriented towards the integration of further assets, oriented towards either processes or specific resources (human, technological and organisational).” He also states that if there is a consensus regarding the existence of an input-
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output type relationship, there is a debate regarding the possibility of a link between investments in information technologies and the company’s overall performance, which can be measured, for example, by its market value or the growth in its market share. “The first tools defined to analyse intangible capital are pretty static: they mainly give a view of the level of performance evaluated by management. They are not based on a model taking value creation dynamics into consideration. This is the objective of the IC-dVAL® methodology I developed”, states Ahmed Bounfour. There is a direct link between intangible assets and governance. “In reality, IS governance is intimately linked to the intangible asset evaluation question. This governance must take place at two different levels: the strategic level and the operational level. Being aligned with the company strategy implies stakeholders’ acceptance and approval.” Regarding the definition of intangible capital, Georges Epinette highlights four different types of components: human capital (an essential component of the organisation’s identity), structural capital (such as patents, brands, intellectual property rights), organisational capital (its ability to innovate) and relationship capital (the relationship with clients, suppliers and partners). Ahmed Bounfour views intangible investment as a ‘dynamic spiral’ and explains its dynamic by saying that “IS investments are significant and represent 4% of the United States’ GDP. This is why leaders must pay attention to the value created by the system and to its management. Statistics
CIOnet France – Special feature
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show that IS represent an essential and dominant component of companies’ intangible assets.” A decisive role In this context, CIOs have a decisive role to play. “CIOs must convince: convince computer specialist colleagues, convince financial management and, above all, convince the head of General Management and the Board of Directors. The current context is very favourable to this proselytism. Indeed, for a lot of companies, IT was considered a ‘necessary evil’, but it is now becoming a Value Creation resource. Company leaders are starting to understand this message”, states Georges Epinette. This new approach could lead to the re-positioning of the CIO within the company. The evolution of the information system takes place in an increasingly universal context. This change is also in sync with a new approach to management of information systems. “IS are no longer driven solely by IT, but are co-managed by the various departments. Thus,
the CIO should get more involved in the intangible capital approach.” However, this implies certain prerequisites such as “clear knowledge of costs and formalised service quality”, adds Georges Epinette.
Professor Ahmed Bounfour, Université Paris XI: “Leaders must pay attention to the value created by IS.” picture >
The IC-dVAL Methodology Over the last five years, several frameworks have been suggested for the development of corporate competitive advantage on the basis of intangible resources. These frameworks are mainly managerially oriented; they require the design of a set of metrics dealing with organisational inputs, hence the importance of making the link between internal and external perspectives, especially those relating to financial performance. Making this link is the main aim of the intellectual capital dynamic value (IC-dVAL®) approach, which integrates four dimensions for measurement – inputs, processes, assets and outputs – and defines ad hoc metrics for measuring intellectual capital in a dynamic way. ®
Georges Epinette, CIO Les Mousquetaires, CIGREF Treasurer: “IS are no longer driven solely by IT, but are co-managed by the various departments.”
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CIOnet The Netherlands – Special feature
CIOnet Advisory Board
Changing of the guard The chairman of the Advisory Board of the Dutch branch of CIOnet is changing. After two years, Jan Peter de Valk (DHL) is handing over the baton to Edwin Erckens (Heineken). Both chairmen have their say.
EXIT Jan Peter de Valk CIO DHL Benelux Jan Peter de Valk has had over thirty years’ experience with major international companies. CIO De Valk sits on the board of the Benelux division of logistics services provider DHL. A substantial amount of his attention has been devoted to cost saving in the past few years. Within DHL, they are aiming internationally at centralisation and consolidation. De Valk says: “That does create a permanent area of tension with giving your local customers optimum service. We now use as many central solutions as possible, but try to exert as much influence as possible on their development. That is going quite well for us, because we enjoy a leading position in logistics in the Benelux. We are good at it. It enables us to play the role of a centre of excellence.” Roles rather than functions How does he look back on his years on the Advisory Board? De Valk says: “To me, CIOnet is a very useful organisation. The prime element is actually the network that it lets you develop. Your contacts with others go more easily once you have met up a little and belong to the same network. As a member of the Advisory Board, I was certainly able to influence the choice of meeting topics. I am thinking of such themes as social media, the New World of Work and personnel policy. One issue that I am constantly engaged in with DHL for example is how to remain an employer that is attractive enough for young and older
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workers alike. I think really in terms of building organisations, of permanent education. For that reason, I try to define work more in roles than in functions. I can assure you that this can lead to some lively discussions.” Virtual network Had his role as chairman contributed anything for him personally? De Valk is doubtful. “It is always a question of struggling with your time. I did it mainly because I find CIOnet a useful club and, if asked, you should be willing to sit on the board for a period. Because of the time factor, I would prefer to see it organised largely as a virtual network, yet understand that you still need to meet each other face to face a few times a year.”
‘A club like CIOnet is valuable if it can bring together the diversity of people and ideas.’ “Yet, come to think of it, it does contribute something extra. My company likes it that, thanks to my role, the company’s name features more often in the news. Plus, you are invited to things to which otherwise you would probably not be asked. For instance, not long ago I was a speaker at a BRIC conference in Brazil.” That brings him to a tip for his successor. De Valk would be glad to see CIOnet’s international dimension become greater. He would like to learn more from the experiences of colleagues in other countries.
CIOnet The Netherlands – Special feature
ENTer Edwin Erckens Director of Global IT Service Delivery at Heineken International His predecessor De Valk passed on the advice to reinforce CIOnet’s international dimension. However, the new chairman Edwin Erckens became a member of CIOnet precisely to get to know colleagues in the Netherlands. For a good many years, Erckens worked for Procter & Gamble abroad. In 2007, he returned to Heineken to work as Head of IT at Heineken Nederland and since 2010 as Director of Global IT Service Delivery. Through CIOnet, he hoped to establish contacts with Dutch colleagues quickly and that has indeed proved to be the case: “It then seems that a good neighbour is worth more than a faraway friend. Naturally, a purely Dutch approach is no longer enough and we are part of a global economy. Yet, those physical encounters are important. Sitting round the table with a few people is definitely when the true inspiration comes through.” Anticipate the hype Erckens has already been on the Advisory Board for several years and is pleased about his chairmanship. No, he has neither an agenda nor any list of things for CIOnet to address urgently. “I would be glad to see the back of some topics. We have now really talked enough about Business IT Alignment. And the whole debate about the cloud too. In the IT sector, so much is still changing, that we can hardly predict what should be on the agenda in two years’ time. I find it inter-
esting of CIOnet that many meetings frequently anticipate the hype just before it happens. In any event, I would like to draw more attention to leadership development, decision development. Ultimately, the success of projects still boils down to the efforts and quality of individuals. That remains the case even if you have the work done in India. Other issues that greatly preoccupy me are consumerisation and multi-sourcing strategies.” In the virtual age, Erckens continues to attach great importance to personal encounter: “After all, every day in your business there is always something that absorbs you. There is a huge chance of you missing what is happening outside. A club like CIOnet is valuable if it can bring together the diversity of people and ideas. Just being confronted with new and different opinions can take you forward.”
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Jan Peter de Valk, CIO of DHL Benelux: “Because we enjoy a leading position in logistics in the Benelux, we are able to play the role of a centre of excellence.” picture >
Edwin Erckens, Director of Global IT Service Delivery at Heineken International: “A purely Dutch approach is no longer enough, we are part of a global economy.”
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CIOnet Germany – Column
The wind of change
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he wind of change is the title of a song of the German heavy metal band Scorpions. The lyrics of the song were inspired by the end of the cold war and the perestroika in the former Soviet Union. In 2005 it was chosen as the song of the century by viewers of a German television show and it is recognised as the song of the German reunification – although that happened two years before the song was released. This title is also appropriate for this column, and not only because it relates to Germany. Recent statements about the future of the CIO gave warnings about strong winds ahead for the CIO. New technologies, new social trends and new economic challenges will have an impact on the future of the CIO, so we have to gear up fast to face the wind of change. “Wissen ist das einzige Gut, das sich vermehrt, wenn man es teilt!” This 19th century quote refers to one of the basic principles of CIOnet. You become ‘richer’ by sharing your knowledge. As we finally add Germany to the CIOnet community, there will be new opportunities for incremental insight and for new connections in our network. Germany has always been part of CIOnet. More than 24% of the German companies listed in the 2011 Financial Times European TOP 500 are already represented through members of CIOnet today. Some of you work for a subsidiary of a German company, some of you are from Germany and some of you are non-German but work here. Having started in Germany in November 2011, we will work hard to grow the German community in CIOnet significantly. CIOnet today already counts more than 3,000 members, and is now joined by the new CIOnet members from Germany. Let’s connect and learn from each other how to master the challenges of the ‘Wind of Change’ for CIOs now and in the future – and by sharing our knowledge we will create more richness for all of us!
Kurt De Ruwe
CIO Bayer MaterialScience Member CIOnet Advisory Board Germany
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