Digital disruption CIONET Magazine, Winter 2013-2014
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In a world where IT has become the nervous system of business and society, we believe that ClOs and their teams are the new heroes that drive change and innovation in their organisations. That’s why we have built CIONET, the leading European community of IT leaders. It is our mission to provide CIONET members and partners with the best
possible platform to help them to succeed and make the world a better place. We do this by understanding the ClOs’ 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.
Contents EVENTS 4
The real globalisation of IT Spanish IT organisations are at the heart of business internationalisation.
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When today meets tomorrow CIOs meet Generation Y at the CIONET Germany Annual Event.
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IT is boosting business innovation Innovation is not rocket science but it requires planning, hard work and strong management.
10 Innovation Experiences CIONET Italy planned five events in the year of the digital disruption and globalisation.
12 Developing a digital community The Lombardy region joined the E015 Digital Ecosystem fostering interoperability among private and public organisations and companies.
13 Governance of IT sourcing As sourcing is strategic, it should be subject to strong governance.
14 The evolving role for CIO’s: where next?
18 What’s next in the world of the CIO? In the Age of Context, ICT has a disruptive impact on our economy.
THE NEXT CIO 20 Creating value by enabling collaboration The implementation of collaboration tools requires strong employee involvement.
23 The rise of the CDO To implement the digital strategy, it is time for a new role.
24 Managing the entire information The Information Pyramid model offers a good basis for boardroom discussion.
CIO VISION
32 IT as a disruptive power Disruptive innovation helps in creating new markets and value networks.
35 The CIO’s unique vantage point Achieving organisational efficiency is closely related to the business context.
36 Digital disruption: old vs. new media Can new business models save independent high-quality media?
38 The quiet revolution The cloud allows new and more efficient forms of collaboration.
CIONET PARTNERS 39 See the full list of CIONET’s Premium Business Partners, Business Partners and Research Partners.
26 IT, a valuable asset for business Technology is delivering the true business value of banking tools.
30 Manufacturing a worldwide plan of attack CIOs must develop their IT strategy alongside senior peers.
The new CIO is an innovation enabler with a business-oriented mindset.
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Digital disruption At a global level, 60% of online devices are now smartphones or tablets. Technology keeps revolutionising the way we work and creating entirely new business models. What’s next? WYOD, the Internet of Things, free cloud computing, 3D printing, cryptocurrencies and many other new technologies are entering our world. They all have the potential for digital disruption. Disruptive innovators expand their activities into radically new areas. By founding new industry platforms and taking control of a number of services in their new ecosystems, they acquire disruptive power which rapidly increases in scope through increasing globalisation. This results in a global disruption with a major impact on our economy and society. Facing all these challenges, the central theme of CIO CITY 2014 will be ‘Digital Leadership in a VUCA World’. We will examine how your organisation can be a Digital Leader in this era of Volatility, Uncertainty, Complexity and Ambiguity and discuss this with accomplished leaders from industry, government and academia. On top of this, Europe’s best CIOs will explain which are the critical success factors for accelerating digital growth. Once again we have invited Neelie Kroes, European Commission VP and European Digital Agenda Commissioner, to celebrate the European CIO of the Year 2014 award winners. The aim of these awards is to recognise CIOs who have made their organisations more successful by using ICT in more effective and innovative ways.
Hendrik Deckers Founder and managing partner CIONET International
Finally, I would like to thank all our partners and all our - more than 4200 members for their commitment. You understand that CIONET - as a community - has the expertise and pioneering vision to solve or address any IT management challenge today. I am looking forward to meeting you at CIO City on 10th and 11th June 2014 in Brussels (www.ciocity.com). May the force be with you!
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Domingo Molina was recently appointed as CIO of the Spanish Government (Director de Tecnolog铆as de la Informaci贸n y de las Comunicaciones de la Administraci贸n General del Estado).
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Spanish IT organisations are at the heart of business internationalisation.
The real globalisation of IT During the CIONET Spain annual event last October in Madrid, a clear message was received from the Spanish IT organisations: they are crossing all borders and are becoming the key area for business internationalisation. More than 180 CIOs and IT Managers came together to share experiences and talk about future perspectives and strategies around the internationalisation of their companies. They discussed technological globalisation, how Spanish companies are positioned and about the new role of the CIOs. The day started with a great speech from Domingo Molina, recently appointed as CIO of the Spanish Government. He explained his agenda for the coming years and his efforts for consolidation and a more rational use of IT in the public administration. With his phrase: “Let’s all use the technology solutions”, he alluded to sharing and looking for common solutions for the different institutions. He talked about common strategies and the three basic goals: infrastructure and services consolidation, optimisation of IT purchases, and improvement in sharing resources.
International strategy Following this presentation came debates between CIOs and some
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important players from the Spanish IT industry. The first debate focused on “How to deploy an international strategy in a different country or continent”. Moderated by Krista Walochik, President of Norman Broadbent, the participants learned of important issues including those Antonio Crespo, Managing Partner of Deloitte, shared with them. He emphasised the importance of strategic planning of goals and the positioning and decision model for implementing the right business plan in the different countries. “The mistake of many companies is to start directly with the implementation phase of the business plan without enough meditation on the previous steps”. Miguel Ángel Herías, CIO of DHL, pointed out a very important factor: “The IT strategy has to be totally aligned with the company and has to add value to the business.” The second debate was on the future: “What will companies and their IT look like in three years?” The moderator, Laurent Daudré-Vignier, gave a view on the incredible changes IT has made in the past 30 years. With
a very clear vision of the future, Isaac Hernández, Spanish Country Manager of Google Enterprise, proposed to stop thinking in terms of offices and start focusing more on the people and their creativity. Faustino Jiménez, President of Arsys, also had a clear opinion: The IT sector is changing at all levels: software, hardware and services. Everything related to support, maintenance and development is more and more aligned with the cloud world.” One big concern entered into this debate: the data. Manuel Martín, Presales Manager Iberia of Informática, was worried about the fact that data bothers everybody but nobody bothers enough about data. Security in IT was also raised by Yago Cid, IT Business Developer at EMC: “Security is not building walls anymore. It is analysing what’s happening and reacting in the correct way”.
When going abroad, the mistake of many companies is to start directly with the implementation phase.
CIONET Spain EVENTS
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The third round table was one of the most interesting debates of the day. Moderator José María de Santiago, VP & Executive Partner of Gartner, elaborated on optimisation of the P&L and the sourcing strategy. Enrique Solbes, VP & General Manager of HP Enterprise Services, explained the huge cost reduction of ‘offshoring’, putting emphasis on the danger of substantial hidden costs. As a real example, Fernando Lucero, CIO of Iberdrola, showed the differences between ‘nearshoring’ in Spain and the ‘offshoring’ strategy used in Scotland. The last debate was about the technological and management strategy in international companies and the influence on business processes. Pablo de la Puente, Global CIO of Gestamp, defended the centralised model used in his company: “If you have a good understanding of your strategy and a good analysis of the risks, you can manage it perfectly”. María José Miranda, General Manager of NetApp Iberia and moderator of this debate, asked them about the problematic surrounding Human Resources and the policies to follow. Amparlo Íñigo from Telefónica Global Solutions said: “The trend in Spanish companies was always to buy in South American countries but Telefónica is now also focusing on Asia and Australia”. Miguel Angel Bayona, CIO of Grupo Eulen, pointed
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at the importance of data protection strategy. The history of an employee has to be securely saved for 10 or 15 years. The last speaker, Pedro Claveria, SI Sales Director of T-Systems, closed this interesting debate by talking about the innovation required by customers, pushing us into the cloud.
The innovation required by customers is pushing us into the cloud. Travel around the world During the afternoon all attendees were able to ‘Travel around the world with CIONET’. In a workshop format they were able to find out what the possibilities are in several countries for them as CIOs and for their organisations. For each destination they received information from the leading companies of that country, and in some cases even from the ambassador of the country. T-Systems, the Deutsche Telekom subsidiary for business services, represented Germany. They showed the Spanish CIOs their enormous worldwide infrastructure of networks and informatics centers, focusing on their integrated solutions. Santiago Cordero, Head of ICT Solutions & Portfolio Management of T-Systems Iberia, said
Mona Biegstraaten (l.), President of CIONET Spain and LATAM, and Juan Soto (r.), President of Grupo Ambrosetti. From left to right: Juan Pedro Gravel, CEO of TGT; Ramón López, Partner at Deloitte; Fernando Lucero, CIO of Iberdrola; José María de Santiago, VP and Executive Partner at Gartner; Enrique Solbes, VP and General Manager of HP Enterprise Services; Agustín González, CIO of Prosegur.
that these solutions suit the changing market needs through services that are dynamic, flexible, secure and cheaper. This is all based on cloud computing and mobile solutions together with big data and social media. In the room dedicated to India, CIONET Spain had the honour to hear from Sunil Lal, Ambassador of India in Spain; Biraja Prasad, Deputy Chief of Mission of the Indian Embassy; and Carlos Flores, Country Manager of NIIT Spain. India was shown as the biggest democracy in the world, now undergoing very rapid development. Business opportunities in India for Spanish organisations, mainly in the energy and infrastructure sectors, were discussed. Moreover, the worldwide development of the Indian IT services industry over the last 20 years is a unique case study. This sector has become the most important worldwide, not only because of the service production at an international level but also because of the presence in India of companies from every nationality.
EVENTS CIONET Spain
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The CIOs ‘travelling’ to Israel had the chance to meet and talk with Mr. Alon Bar, Ambassador of Israel in Spain, with Aldo Ami Levin, head of the Economic Department at the Embassy of Israel, and Gil Gidrón, President of the Chamber of Commerce Spain-Israel. They understood why a small country like Israel has such a huge impact worldwide. The culture, the ecosystem, the investments in venture capital and the relationship between private companies and the public sector are part of the answer. Israeli companies think about their international strategy from the very beginning. That’s why they are so efficient at breaking into foreign markets. Companies and discoveries like ICQ, the Pill-Cam (capsule with a small camera to do stomach research), cherry tomatoes, the USB flashdrive or the drip irrigation system are all Israeli products that have changed the world.
Ready to compete Huawei Enterprise was at the CIONET annual event for the first time. It represented China and invited all CIOs to see the innovation and technological effort coming out of Asia. They made clear that their solutions are ready to compete in all markets. Huawei did a great job showing to such an important audience the excellent mix between modernity, technology and tradition. Huawei can help companies to identify new opportunities and help them change in the right way.
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TCP was the company responsible for the Brazilian area. It has had a subsidiary in Sao Paulo for 7 years. The speech by D. Antonio del Corro, Executive Director of the Chamber of Commerce Brazil-Spain, focused on the economic figures and statistics of this country, showing the real and interesting business opportunities in Brazil. Miguel Ángel Fernández, Managing Partner of TCP, explained how the IT services of his company are helping Spanish companies in their globalisation.
The morning session ended with the act ‘Global CEO surprise’ by the very well known magician Luis Boyano.
The participants also had the chance to listen the success story of Telefónica in Brazil. D. Alejandro Martínez, Global network and platforms Manager of Telefónica Global solutions, talked about the start up of his company in Brazil and the main related challenges. CIOs ‘visiting’ the UK discovered a new way of communication by listening to the representatives of Truphone. They showed a solution for making real globalisation possible: there are no communication borders any more, due to their united global infrastructure and a SIM card with multiple international numbers. This solution makes people more productive, improves communication in international companies and makes the risk of huge telephone bills disappear.
Offshoring leads to huge cost reductions but beware of the danger of substantial hidden costs.
CIONET Spain EVENTS
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CIOs meet Generation Y at the CIONET Germany Annual Event.
When today meets tomorrow At the end of October 2013, CIONET Germany organised its Annual Event ’When today meets tomorrow‘ and also celebrated its second anniversary. When preparing the event in close collaboration with the members of the Advisory Board, CIONET Germany jointly decided that it wanted to present a new interactive and multidisciplinary format and split the annual event into three parts: • CIONET Interactive with four workshops based on short impulse presentations from experts;
Jürgen Renfer, CIO Public Insurance in Bavaria and Member of the CIONET Germany Advisory Board: “Very different from typical CIO events with ’one-to-many‘ presentations, the new format of the CIONET Germany Annual Event, including the BarCamp approach, led to direct interaction between all participants.” (Photo by C. Vohler)
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Timon Gaus, Bachelor of Science: “For me the event was very informative and extremely interesting. I was really impressed by the attendees, the work they do, their frankness and their mentality in general. I was surprised by the synergetic effect which arose out of the mix between IT Executives and Generation Y representatives.”
• Kick-off of ‘#sharepassion4IT’, the local initiative to attract young talent for IT jobs; • CIONET BarCamp for CIOs and Generation Y. Not only German CIONET members and other German speaking CIOs were invited to this ’disruptive annual event 2013‘, but also Digital Natives (students and young starters in IT) and experts on social collaboration, innovation management and people and skills development. There is a great deal of talk about Generation Y. CIONET wanted to talk with them to learn and share views and thoughts.
CIONET BarCamp One of the highlights of the one and a half day annual event was the ’CIONET BarCamp for CIOs and Generation Y‘, probably the first BarCamp for CIOs in Germany. According to Wikipedia BarCamps are an international network of user-generated ‘unconferences’ primarily focused around technology and the web. They are open, participatory workshop-events, the content of which is provided by participants. BarCamps arose as an open-to-the-public alternative to Foo Camp, which is an annual invitationonly participant-driven conference hosted by Tim O’Reilly. The BarCamp was started with a session in which all participants suggested topics to discuss. At the end, there was a very fascinating mix of 17 topics on the planning map, out of which a selection was discussed during the individual BarCamp sessions. Finally, all attendees came together to share the results of their group discussions and defined next steps. Due to the very positive feedback from the attendees, CIONET Germany has decided that it will continue with the interactive format and the multidisciplinary mix of attendees also in 2014.
EVENTS CIONET Germany
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Innovation requires planning, hard work and strong management.
IT is boosting business innovation Innovation is not some random inspirational achievement, a moment of illumination that leads to a solution of a problem or to a new product. Innovation is hard work. It requires involvement and commitment from the whole organisation, a clear strategy, strict planning, methodological approaches, structured investments and a strong focus on the business. CIONET Portugal recently held an event about IT-driven business innovation with the support of the Portuguese Communications Foundation, the perfect environment for discussing innovation. The guideline for the discussion was innovation and how to transform new ideas into business value. Ana Dias, Head of Innovation Management and Business Development at Portugal Telecom (PT), the largest telecommunications company in Portugal, addressed the topic ‘How to generate business innovation’. Ana enthusiastically presented some of the innovation tools that PT uses, pointing out the importance of acknowledging innovation as a project that needs proper management.
Business intelligence The second keynote speaker was Alejandro Galán. The CIO of Costco Mexico stressed the challenges in retail, the main implications of the current economic climate in the sector and the most interesting innovations implemented at Costco Mexico. Topics including business intelligence, mobility and cloud computing were addressed. The use of RFID tags in logistics, for example, helped in optimising operations in a 150.000 square Alejandro Galán: “Business intelligence systems reduced the processing time of data from 72 hours to 100 seconds in the case of Costco Mexico.”
meter distribution center. In parallel, business intelligence systems recorded more than 1,000 million entries and reduced the processing time of data from 72 hours to 100 seconds in the case of Costco Mexico. To conclude, it was agreed that innovation is essential for business survival and growth in the current economic environment but it requires dedication, hard work, involvement at all levels, and some trial and error.
Ana Dias: “Collaboration tools are important instruments for innovation by involving the entire organisation in the process.”
Ana referred to collaboration tools as important instruments for innovation, by involving the entire organisation in the process, enabling a closer approach to the problems and more effective solutions. Since its launch, PT’s ‘Idea Market’ has led to the company implementing more than 250 ideas from employees, including new products.
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CIONET Portugal EVENTS
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CIONET Italy events in the year of the digital disruption and globalisation
Innovation Experiences As 2014 will be the year of the digital disruption and globalisation, the AB members of CIONET Italy brought together the keywords ‘innovation’ and ‘experiences’ in the name of their 2014 events program and called it ‘Innovation Experiences’. The top five items in the 2014 agenda of CIONET Italy are: Big Data, As a Service, Internet of Things, Additive Manufacturing and Human Resources. Thanks go to Maurizio Brianza, CIO at bticino; Paolo Daperno, CIO Business Process Director at illycaffè; Paolo Degl’Innocenti, Vice President Software Group at IBM Italia; Marco Gaeta, CIO at Sirti; Davide Gindro, Vice President & Group Chief Information Officer at Avio; Giuseppe Gorla, Managing Partner Technology at Accenture; Mara Maffei, Manager ICT at Heineken Italy; Paolo Magnani, VP IT Life Sciences & Healthcare Sector, Mainland Europe at DHL Supply Chain Italy; Paolo Pasini, SDA Professor; Luigi Pignatelli, Manager ICT at Carl Zeiss and Matteo Veneziani, IT Director at Ilva Group, who together enabled the Advisory Board of CIONET Italy to take two important decisions on the 2014 CIONET program (AB meeting - November 18th, 2014).
Program name First of all, the AB members agreed to give a name to the CIONET Italian program to highlight the aim of the annual work they would start to do. Innovation Experiences is the title fixed for 2014. This choice also has
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the effect of enabling the Advisory Board to launch a strong signal, inside and outside the community, on the reasons for being a CIONET member. The reasons are: sharing experiences and learning and improving from the experiences of each other. As 2014 will be the year of the digital disruption and globalisation, the AB members found their answer by bringing together two keywords: Innovation and Experiences.
technology/new paradigm from the four selected and analyse its impact on the organisation, processes and talent resources of the IT Department and the overall company. For the annual event, the AB members decided to focus on Human Resources (CIO meets HR) as the responsibility and the commitment of this role inside their organisations is greatly increasing, due to the transformation and consumerisation of IT.
Five single events The second important decision they took was on how to split the ‘Innovation Experiences’ concept into five single events, each of these as a part of the annual program. To do this, the Advisory Board members surveyed each other on the first four disruptive and innovative technologies already known or in the first stage of adoption by their organisations. The four technologies which came out on top were: Big Data, As a Service, Internet of things and Additive manufacturing. As next step the AB members decided to focus each event on one single
The HR role inside organisations is increasing due to the transformation and consumerisation of IT.
EVENTS CIONET Italy
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Maurizio Brianza, CIO at bticino
Paolo Daperno, CIO Business Process Director at illycaffè
Paolo Degl’Innocenti, Vice President Software Group at IBM Italy
Marco Gaeta, CIO at Sirti
Davide Gindro, Vice President & Group Chief Information Officer at Avio
Giuseppe Gorla, Managing Partner Technology at Accenture
Mara Maffei, Manager ICT at Heineken Italy
Paolo Magnani, VP IT Life Sciences & Healthcare Sector, Mainland Europe at DHL Supply Chain Italy
Paolo Pasini, SDA Professor
Luigi Pignatelli, Manager ICT at Carl Zeiss
CIONET Italy 2014 events calendar FEBRUARY 4 Innovation Experiences: Big Data and Analytics MARCH 18 CIONET ITALIA AWARD 2014 APRIL 3 CIOsummit 2014: CIO meets HR JUNE 16 Innovation Experiences: Internet of Things SEPTEMBER 23 Innovation Experiences: As a Service
Matteo Veneziani, IT Director at Ilva Group
NOVEMBER 17 Innovation Experiences: Additive Manufacturing
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CIONET Italy EVENTS
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E015 Digital Ecosystem for Milan Expo and the Lombardy region
Developing a digital community In July 2013, the Lombardy region (Regione Lombardia) officially joined the E015 Digital Ecosystem. The project aims at creating a digital service environment enabling and fostering interoperability among different organisations and companies, from both the private and public sectors. E015 has been promoted by Confindustria (the organisation of the Italian manufacturing and services companies), Confcommercio (Association of Commerce), the Milan Chamber of Commerce, Assolombarda (the local association section of Confindustria), Confcommercio Milano (the local association section of Confcommercio) and Expo Milano 2015. In the eyes of the promoters, the digital service environment will enable the creation of new integrated online services adding to the experience of Milan Expo visitors. Everyone can join the ecosystem. Membership is free and can be activated online through the E015 official website. By signing and uploading the contract, members commit themselves to comply with the E015 public guidelines and technical standards. The E015 Digital Ecosystem provides members with lightweight guidelines for participating in the ecosystem. Members can rely on a set of shared and consolidated standards and
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technologies – the E015 ‘common language‘ – for developing their software products and interoperating with other members. Members can contribute to the ecosystem in different ways. They can: • publish E015 services, i.e. expose part of their own information assets in the ecosystem through Web services and make them available for other members; • build E015 end-user applications, i.e. develop websites, mobile apps, information kiosks etc. providing end-users with value added content and functionalities by integrating the data provided in real-time by other members. By joining E015, members can immediately take advantage of the following benefits: • enrich existing end-user applications (websites, mobile apps etc.) with valuable content and functionalities provided by the E015 services published in the ecosystem;
This article was written by Antonio Samaritani, CIO at Regione Lombardia.
• significantly reduce development time and costs of new integrated end-user applications; • have their content and functionalities widely conveyed by the end-user applications built by other members of the ecosystem. For Regione Lombardia the E015 Digital Ecosystem is a strategic project as it is a way to develop a digital community in various sectors, from culture, tourism and infomobility to e-government and other economic sectors. Within this perspective, E015 is considered by Regione Lombardia to be one of the Expo Milano 2015 legacies to the Italian public and private sectors after the closure of the event.
EVENTS CIONET Italy
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As sourcing is strategic, it should be subject to strong governance.
Governance of IT sourcing IT sourcing has to be subject to strong governance which is integrated into the global company governance. “Outsourcing is a strategic decision” says Luc Chauvin, CIO of the Flemish Government. “It has to fully be aligned with the different business strategies. As a unique solution doesn’t exist, the specific business context and objectives will dictate the appropriate model: single sourcing, multiple sourcing, co-sourcing, etc.” A specific model comes from Acerta. Carl Tilkin-Franssens, CIO of Acerta: “In 2011 we agreed a ‘value based partnership’ leveraging on KBC ICT as major service provider offering mainly cloud services. The KBC Group has a highly compatible conceptual business model. As KBC’s scale is about 20 times bigger than Acerta’s, it offers stability and scalability.” The legacy applications were outsourced to another service provider. However, facing low quality, high costs and time overruns, Acerta decided to set up an improvement plan and switched towards a service model for open systems. The company also switched towards internal staffing for core mainframe applications, allowing Acerta to stay in control.
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At BNP Paribas Fortis bank, IT is split up between the departments ADM (Application Development Management) and I&O (Infrastructure & Operations). The ADM sourcing mix evolves according to a multi-year plan started during the integraton of Fortis with BNP Paribas. It implies redeployment of the internal staff into key roles defined by a so-called ‘V-model’. In 2012 a decision was taken on the I&O sourcing targets. The bank decided to create a Belgian subsidiary of BP2I - a joint venture between BNP Paribas and IBM for managing IT infrastructures. Alain Goffi, CTO of BNP Paribas Fortis: “The current BP2I contract is service driven and based on detailed SLAs. It is also characterised by strong governance by means of severel monitoring committees, integrated into the global joint venture governance. Our relationship with BP2I is probably a unique set-up on the market.”
Tilkin-Franssens concludes: “Make sourcing a part of your strategy. Look for value by comparing and challenging the providers. Be severe by measuring from the first day but leave room for improvement. Finally, keep in mind that not the contract but the operating model is the key success factor.” This article is based on the Summit on IT Governance 2013, ‘The Governance of IT Sourcing’, organised by CIONET Belgium and the SIG IT Governance. Luc Chauvin, CIO of the Flemish Government
Carl TilkinFranssens, CIO of Acerta
Best practices What are the best sourcing practices? Chauvin: “Respect the golden rule of outsourcing only stable environments. Look for a strategic partnership and set up a fair deal for all parties. You also have to keep the right balance by retaining the necessary internal critical mass. Most of all, do not see outsourcing as the solution for problems the own organisation can’t master.”
Alain Goffi, CTO of BNP Paribas Fortis
CIONET Belgium EVENTS
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The new CIO, an innovation enabler with a business-oriented mindset.
The evolving role for CIO’s: where next?
The digital transformation forces companies to adopt the new ways of working. Pressure from markets with many new competitors demands existing organisations to be more agile, reactive and creative. In this environment, the CIO role has evolved to that of Chief Innovation Officer, educating CXOs in the new digital arena. Marie-Hélène Fagard, AB President of CIONET France, ex-CIO of Europcar: “A new mindset for CIOs is to be an internal teacher implementing a technology learning process for everybody in the company, with a special focus on CXOs.”
‘CIOs must be ready to take risks by selecting unknown companies.’
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would be the third largest (behind India & China); • Twitter is currently seeing 50 million tweets per day, meaning 600 tweets per second; • nowadays, there are 31 billion searches on Google every month, compared to 2.7 billion in 2006; • today, the number of text messages sent and received per day exceeds the population of the planet; • ...
‘Digital’ is all around us. Just take a look at the way of knowing people today. By simply entering a name on Google, you capture a lot of information. This is true for persons but also for companies. That is what we call the e-reputation. This is only a part of the new digital transformation in front of us with which we need to work. There is no choice today but to also integrate this in our business proposal in order to develop our companies. We have to leverage this as a key differentiator.
Educating CXOs
Did you know that: • we are currently preparing students for jobs that don’t yet exist; • contemporary students will have 10 to 14 jobs by the age of 38; • if Facebook (845 million active users, 70 languages) was a country, it
How do we work with CXOs to educate them in the digital world? By showing what is happening outside the company, and not necessarily in the same business. Our role is to open their minds and start the dialogue to bring new business models based on ‘digital’.
EVENTS CIONET France
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A key element in the new digital world is to develop partnerships with vendors.
As an example, the iPad became available in the European market during the summer of 2010. I presented this device to the top management of Mazars Group, explaining: “This is the device for the future and will bring the BYOD approach into our company.” They didn’t buy it, not understanding the purpose of this approach. My answer has been a meeting with them in which I delivered the presentation ‘Mazars 2.0’ consisting of experiences from other CIOs who were sensitive to digitalisation and examples from companies showing different business cases. I explained where Mazars stood at that time and how to move forward. After all, this was a success and iPads were introduced in some countries. We even won new clients by showing our advanced internal technologies. So, a first role and new mindset for CIOs is to be an internal teacher implementing a technology learning process for everybody in the company, with a special focus on CXOs.
Changing market landscape For years, in the ERP era, CIOs and business people have been concentrating on standardisation and harmonisation. This has been helpful in
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structuring business processes inside companies and delivering added value at a global level. Today, the market players are different and less concentrated into big companies that fulfil all market needs.
cycle. What is the point if the life of an application is three to four years for a development of three to six months, compared to the market share gained during that time?
Partnerships The range of companies available is like a puzzle, which means CIOs must be ready to take risks by selecting unknown companies able to adequately provide agile solutions. As an example, people who put their stakes on RunMyProcess or KXEN two years ago, know today that their risk has been rewarded because these vendors have been respectively bought by Fujitsu and SAP. Pressure from the market demands us to be agile, reactive and creative. One year projects are no longer the expected answer within our companies. We have to bet on technologies with short time development and life
With regard to new technologies, observing business practice must lead us to proposing new ways of working and to acceleration in changing our companies. To enable this, a strong partnership has to exist with the business and - on top of this - we should never underestimate the change this represents inside our teams. A key element of this approach is to develop partnerships with vendors as well. Our common interest is for us both to be successful. Demonstrating flexibility helps in buying the transformation program you want to implement.
Business development An important issue is the way people work together after the introduction of collaborative tools for internal and personal use. Collaboration can also be business development. An example is the collaboration between Toyota and Salesforce where the electric car was integrated as an element of the social media tool Chatter, sending text messages to drivers.
CIONET France EVENTS
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Different new actors ...
By having a strong partnership with the Sales Director at Europcar, SalesForce was deployed for 350 sales people among eight countries in ten months. The first workshop to define business requirements started in October 2012 and the last country was operational by July 2013, including historical data transfers. A situation of trust was also established by not setting up a classic RFP but by choosing the Best of Breed after a few workshops. We saved about six months with a fast decision process. Agility is money.
CIO leadership In a situation in which the context is changing, challenging and transforming, CIOs should be leaders at three levels: • they should have a business-oriented mindset, which is no longer that of a technologist or an ERPist; • they should consider infrastructure as an enabler of innovation wanting to integrate it into the company’s new business model; • they should consider an internal Business Applications Store as the future asset of the company. The above mentioned example of the Salesforce implementation inside Europcar clearly demonstrates the business-oriented mindset we are forced to adopt. Otherwise, interesting
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with new ways of working ...
innovative initiatives should be given to others such as Chief Digital Officers. Infrastructure as an enabler of innovation can be demonstrated by McDonald’s or Starbucks. The first reason why tourists look for these places is to have free WiFi. From a food business, they have transformed into a service business in which food is a consequence but not the primary purpose for a certain category of clients. My vision is that new business processes or new business models won’t be integrated within the existing legacy but built as an internal Business Applications Store allowing people to download applications themselves. Personal behaviour is increasingly influencing the evolution of Information Systems. The reasons are agility, fast response to the business and less complexity.
and collaborating
Today, the range of companies available is like a puzzle. There are many different new players with new ways of working and using collaboration tools.
One size fits all? The infrastructure is no more standard when applications have to work on iOS, Windows, Chrome, Android, etc. A few years ago, the debate was only between Windows and iOS in some companies. With BYOD, new platforms have appeared. The Information System has to be more open than before. It makes no sense to believe we can continue to think ‘one size fits all’.
The abbreviation ‘CIO’ originally stood for Chief Infrastructure Officer and has now evolved to Chief Innovation Officer. Future success will be dependent on embracing this evolution.
This article was written by Marie-Hélène Fagard, AB President of CIONET France, ex-CIO of Europcar. (mh@fagard.org - @mhfagard)
EVENTS CIONET France
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In the Age of Context, ICT has a disruptive impact on our economy.
What’s next in the world of the CIO? The 2014 Annual Event of CIONET Belgium in the beautiful Théâtre du Vaudeville in Brussels went TED-style with short, crisp and passionate speeches from a plethora of speakers who spoke from their soul. The event focused on ‘what’s next in the world of the CIO’.
Thomas Power, Co-founder of Scredible and LeadORS: “Armed with so much data our personal devices can serve us to the maximum.”
3D printing has the power to bring back production to our own countries.
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Social media expert Thomas Power, Co-founder of Scredible and LeadORS, referred to the book ‘Age of Context: Mobile, Sensors, Data and the Future of Privacy’ (Kindle Edition). The authors Robert Scoble and Shel Israel report there are five converging forces that form a new generation of personalised technology: social media, mobile, data, sensors and location-based technology. Together, they are continuously collecting information on what we do, who we speak with, what we look at, where we are, etc. Armed with all this data our personal devices can anticipate what we’ll need next and serve us to the maximum. Jurgen Laudus, Director AMS at Materialise, stated that 3D printing is not a new technology but today it is a hype and it is here to stay. “Think about Malona shoes that can be printed according to your personal wishes or 3D printed hearing aid shells that are perfectly customised to the individual ear using the data from a CAT scan or MRI scan. In the past
it took months to produce a hearing aid shell but now, using 3D printing, it only takes a few minutes.” 3D printing can have a huge impact on the economy. “Not only everybody can become a manufacterer but 3D printing also has the power to bring back production to our own countries and make warehouses disappear as they will be replaced by stocks of 3D data.” What’s next with privacy? Amelia Andersdotter, member of the Swedish Pirat Party, is the youngest member of the European Parliament. Since her inauguration, she has focused her efforts around information policy. Areas she’s currently working on include a recast of the EU privacy regulations. “As privacy regulations might influence the big data business model, we are experiencing strong lobbying from the USA. We also have to deal with centralised US agencies such as the NSA. We now see big public entities causing security problems themselves. This should not be the objective.”
EVENTS CIONET Belgium
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Tuur Demeester, former editor of MacroTrends, pointed at the spectacular growth of bitcoin use with a 1200% annual market cap growth and increasingly more businesses accepting bitcoin. What are his expectations? “Bitcoin is going physical with the appearance of bitcoin payment cards. We also see the emergence of safe storage solutions for bitcoin. Moreover the various vendors of bitcoin-based solutions are expected to integrate by mergers and acquisitions. Another trend is the appearance of bigger bitcoin miners focusing on energy efficient computing power. Finally, intermediaries will appear on the markets, introducing bitcoin-based banking, credit markets, financial contract infrastructures and insurance contracts.
‘Bitcoin has a 1200% annual market cap growth.’ Business Applications Store Dr Marie-Hélène Fagard, AB President of CIONET France explained how the changing ICT landscape influences the CIO’s leadership. “The CIO should develop a business-oriented mindset and consider infrastructure as an enabler of innovation. He/she should also consider an internal Business Applications Store as the future asset of the company. Think about app users. They simply install a new app without
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any training. That’s the way we have to start thinking as pressure from the markets demands us to be agile, reactive and creative.” (Read more about Fagard’s view on page 32) Sabine Everaet, Europe Group CIO of the Coca-Cola Company, pointed to the advantages of big data for precision marketing. “We collect, store and analyse data at a much lower cost than ever before. The increasing amount of data is being used in predictive analytics leading to superior customer understanding. As a result, better and smarter decison making creates a competitive advantage.” About the use of new data collection technologies Everaet said the CIO has to be ready to take risks but her advice was to source it as a service. Martin Ulbrich, DG Connect, European Commission, gave an update on the Grand Coalition for Digital Jobs. The Grand Coalition is active in five
Amelia Andersdotter, MEP and member of the Swedish Pirat Party, is currently working on a recast of the privacy regulations in the EU. Digital Girl of the Year 2013, Lune van Ewijk, was interviewed by Martine Tempels, Senior VP Telenet for Business.
areas: ICT training, ICT education (trying to influence ICT curricula in schools), certification (supporting the roll-out of a common eCompetences framework), mobility encouragement and awareness raising. “The lack of ICT graduates is a mystery as they always find a well-paid job. ICT is not nerdy at all. It is everywhere, even in the most exciting environments such as football clubs. People from other sectors should help convince youngsters to go for ICT.” The last speaker was Lune van Ewijk who has won the European Commision’s ‘Digital Girl of the Year 2013’ award. She was interviewed by Martine Tempels, Senior VP Telenet for Business. At the age of ten, Lune already develops her own games and interactive movies and she also designs robots. She is a member of CoderDojo Belgium. There she has learned and practiced various open source digital skills including programming in Scratch. CoderDojo is the open source, volunteer led, global movement of free coding clubs for young people. Currently there are already over 220 Dojos in 27 countries.
CIONET Belgium EVENTS
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Markus Bentele, Corporate CIO of Rheinmetall AG: “Let the employees make the decision on which collaboration tool they want and how they will use it.�
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The implementation of collaboration tools requires strong employee involvement.
Creating value by enabling collaboration A succesful implementation of internal collaboration platforms takes much more than choosing the right technology. One of the biggest pitfalls of internal social media projects is to apply a top down approach without involving the workforce broadly. In Spring 2006, Andrew McAfee, associate professor at the Harvard Business School, introduced the term Enterprise 2.0 in a research feature in the MITSloan Business Review. In this feature, he raised the question: “Do we finally have the right technologies for knowledge work? Wikis, blogs, group-messaging software and the like can make a corporate intranet into a constantly changing structure built by distributed, autonomous peers - a collaborative platform that reflects the way work really gets done.” Since then, many companies have tried to implement internal collaboration platforms with mixed fortunes, but they all have learned that it takes much more than choosing the right technology, to make it successful. Enterprise 2.0 is not a purpose on its own. It is a requirement to enable agility and flexibility in a business environment where demand for change is constant.
Power to the people One of the big success stories of Enterprise 2.0 can be found at Rheinmetall AG, a global player in the
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automotive components and defence equipment industries. Corporate CIO Markus Bentele, who has gained a master degree in economics and who also studied organisational psychology, started his Enterprise 2.0 project as early as 2002 by providing a toolbox of popular free unified communication and collaboration tools to the knowledge workforce at Rheinmetall AG. At that time, he took a bold step as he started the project with a limited budget only and without prior testing he made a variety of basic collaboration tools available to all employees at Rheinmetall. He had only three guidelines for the project, leaving the success of the project in the hands of the individual employees: • employees can choose the tools they want to use; • no anonymous usage of tools; • employees get time to learn themselves how to use the tools. His philosophy behind this approach: “By creating an open environment in which the individual can decide what he/she wants to use, you make people comfortable as they are in charge of selecting the best fit. Thus, you get much better engagement and people,
across different age groups, are much more motivated to participate and use the new toolset.”
Leading by engagement Markus Bentele: ”In my view, one of the biggest pitfalls of internal social media projects is to apply a top down approach without involving the workforce broadly upfront. You will not get participation by telling them what tools they must use and then just provide them with standardised training. Rather than doing that, we engaged with our employees, shared experiences with them showing how others have used these tools to increase their
Increased idea and knowledge exchange led to significantly increased productivity at Rheinmetall AG.
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Markus Bentele: “An intra-company collaboration system can be open but definitely not anarchistic.”
If you take the time to explain the reasons, why do’s and don’ts exist, people will understand and engage actively.
productivity and most importantly, we listened to them when they described their requirements and expectations.” “At the same time, we put a lot of emphasis on explaining why we want to use these tools and how guidelines should be used in our very sensitive business environment. The latter was very important, as an intra-company collaboration system can be open but definitely not anarchistic. There are company rules as well as legal and political constraints, to which we need to comply. In fact, the implementation of our knowledge sharing approach was a very collaborative process.” Did it work? Today, more than 50% of the global workforce of Rheinmetall AG are using various collaboration tools daily. Interestingly enough, the group of older employees - which has been considered to be possibly more reluctant to use the new collaboration tools - has broadly embraced the new tools at least as enthusiastically as their younger peers. That by itself is a huge achievement, but it led to much more positive results. While travel and communication
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costs decreased since its implementation, the work performance of individuals increased significantly. Faster decision making led to higher throughput and a much more agile and flexible working environment. It also led to an increased idea and knowledge exchange amongst peers, all together leading to significantly increased productivity at Rheinmetall AG.
‘You won’t get employee participation by telling them what tools they must use.’ Wouldn’t it work in your company? Think again. Imagine the internal and external restrictions of a highly sensitive business segment such as the defence industry which is part of a global player. In such an environment, you are not only concerned about how to protect and secure your intellectual business property, but you are also bound by specific legal and political constraints. For example,
the production and sales of defence products are restricted by special laws in Germany. These regulations can go as far as restricting intra-company communication between subsidiaries of global companies such as Rheinmetall AG. But even with these political and legal restrictions, Markus Bentele and his team have been able to establish a new workplace throughout Rheinmetall AG. Using a popular line of a famous song, you could say: “If I can make it there, I’ll make it anywhere. It’s up to you...” Looking back, Markus Bentele summarises why his daring project succeeded: “Let the employees make the decision on which collaboration tool they want and how they will use it, but take them with you on the journey to explain why you think it is important. If you take the time to explain the reasons, why do’s and don’ts exist, people will understand and engage actively - something that will not happen if you just sent out a rulebook, as it is doomed to fail as we can see in many cases“.
THE NEXT CIO CIONET Germany
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To implement the digital strategy, it is time for a new role.
The rise of the CDO The digital transition is both challenging and offering great opportunities. It is time for a new role: the CDO. To cope with the rapid changes in technology, such as Cloud, Mobile, Social and Local, organisations are increasingly developing a digital strategy. To implement and manage this, they often appoint a CDO (Chief Digital Officer). Gartner predicts that in 2015 around 25% of organisations will have a CDO. Some 12 years ago 20% of the IT spend fell outside the CIO’s department. Today IT has become pervasive and part of almost any system, process or department connecting stakeholders both inside and outside the organisation. Nowadays we have over 1 billion smartphones and last year over 50 billion apps were downloaded. Consumers use digital technology to seek information, compare prices and buy products. That is why Gartner is predicting that by the end of the decade around 90% if the IT spend will fall outside the department of the classic CIO. The CDO is there to help transform organisations in the 21st century to a digital economy and society. The definition is still under development, but it is already clear that the
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CDO will be a ‘dual thinker’: someone with knowledge of IT combined with, for example, marketing and business development. Someone who can use analytics, social media and mobile to increase market share. Organisations often appoint the current CIO. At first glance this is an obvious and wise choice. However, thought leader Peter Hinssen, member of the advisory board of the Center for Digital Transformation at the University of California in Irvine, states that CIOs have become synonymous with supplying copies of Microsoft Office on laptops. And that they have the reputation for being responsible for complex, expensive, painful ‘IT projects from hell’. He sees organisations appointing CDOs with a marketing, business development or sales background. This article was written by Frits Bussemaker, Liaison European Relations CIONET. Sources: blogs.gartner.com, russellreynolds.com, blogs.wsj.com and Wikipedia.
The CDO’s skills As previously stated a CDO must be a dual thinker given the complexity of the role. Essential is experience with digital technology. But it should be in combination with knowledge of, among other things: • e-commerce and supply chain management to increase revenue and avoid channel conflicts; • online marketing and social media focusing on personalised attention rather then mass marketing; • digital product and service development with a focus on change management as the whole organisation can be affected. The skills any CDO should have include being able to develop a long term strategy but also being able to make quick changes if needed. Moreover, he or she should be able to deliver the results even in a complex and volatile environment, to cooperate with the different departments at every level from boardroom to shop floor, to lead high level teams which are geographically spread and to deal with different cultures. The Chief Digital Officer will have one of the most exciting roles of tomorrow’s organisations. The CDO is where the organisation meets the customer and where the money is made.
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The Information Pyramid model is a good basis for boardroom discussion.
Managing the entire information Aloys Kregting, CIO of DSM, has processed his many years’ experience as Chief Information Officer in the Information Pyramid. This surveyable diagram, described as ‘deceivingly simple’, comprises all aspects a modern CIO should consider in his work. “The Information Pyramid puts IT and information in the right context”, says Aloys Kregting. “It enables you to make clear decisions, for IT as well as for business. Everything is about output, as IT is worth nothing when it doesn’t provide your company with clear advantages.”
If IT projects fail this isn’t necessarily due to bad IT managers, but often due to a poor connection with reality (the context).
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He developed the Information Pyramid himself over the years, “I learned by experience”, confirms Kregting. “You learn to recognise the dynamism that ensures that some projects are successful and others aren’t. This is in fact always for the same reasons, which can be traced back to one of the five layers the pyramid consists of. Meanwhile, this model has stood the test of validation, as the CIOs that use them at other organisations are also enthusiastic.”
Hierarchy The Information Pyramid is also referred to as ‘deceivingly simple’. Deceivingly, as all complex issues are treated. “If you make it difficult when
you note it down, it remains difficult”, says Kregting. The build-up of his Information Pyramid is based on the pyramid of Maslow, which indicates the hierarchy of human needs. “The basic principle is that when something goes wrong on a lower level, you should take this on first, and then move on to a higher level.”
‘Everything begins with the objectives and strategy.’ The Information Pyramid is also built up hierarchically from the bottom up. “Everything begins with the objectives and strategy that form the ground under the pyramid. Governance and management from the bottom layer and this layer has to fit in with the objectives and strategy of your company. The second layer is staff and organisation. The third layer is crucial. In it you measure whether - and how - you are achieving the objectives and strategy. The fourth layer consists of
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business processes and control. This is gradually becoming familiar territory for most CIOs.”
‘Storytelling is one of the most important skills of a CIO.’ Mistakes “IT is the tip of the pyramid. It’s the hard-coding of all layers below it. It is no coincidence that this comes last in the hierarchy. The bottom layers form the context in which we operate, whereas the top two form the content we manage as CIO. A good CIO focuses on all layers: he tries to influence the context and manage the content.” “Most mistakes are made in the two bottom layers”, says Kregting. “If IT projects fail this isn’t necessarily due to bad IT managers, but often due to a poor connection with reality (the context). All too often IT people try to make something out of it, while they already know that the project has no prospects. You then need to dare to question the context with a few courageous conversations.”
play this game. The old-fashioned CIO only concentrated on IT, while there should now be a focus on all layers. This requires a strong vision and insight into the direction in which the company is heading. You must also be able to tell a good story. Storytelling is one of the most important skills of a CIO. And you must of course eventually also be capable of managing the necessary changes. Or, to put it in oldfashioned terms: you must be able to say what has to be done, and you then have to do what you say…”
Aloys Kregting, CIO of DSM: “The oldfashioned CIO only concentrated on IT, while there should now be a focus on all layers of the Information Pyramid.” The Information Pyramid: the bottom layers form the context in which we operate, whereas the top two form the content we manage as CIO. A good CIO focuses on all layers: he tries to influence the context and manage the content.
IT
BUSINESS PROCESSES & INTERNAL CONTROL REPORTING & MASTERDATA and KPI in line with governance and organisation
PEOPLE & ORGANISATION in line with governance
Boardroom This model seems to be an ideal basis for discussion in the boardroom. “As a modern CIO, you need to be able to
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GOVERNANCE in line with objectives and strategy
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Dominique Valschaerts, Member of the Executive Committee, Luxembourg Stock Exchange, and CEO of Fundsquare: “E-file is an extremely appreciated technology-based product that contributes significantly to LuxSE, both in terms of revenue and visibility.”
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CIO VISION CIONET UK
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Technology is delivering the true business value of banking tools.
IT, a valuable asset for business
Nowadays companies and institutions alike say that IT has become an essential part of their business. IT has come to play the vital role of a profit centre. Given the importance of the service-oriented economy in Luxembourg, IT can guarantee companies’ success by supporting strategic choices that strengthen their position and help them regain growth. Disruption is possible. IT as a core part of business E-file.lu, the brain-child of the Luxembourg Stock Exchange (LuxSE), saw light of day as far back as ten years ago. It has since then become the standard legal reporting platform for the Luxembourg financial sector and is also the core element of Fundsquare, the market infrastructure for investment funds that LuxSE launched last July.
‘The unified file repository approach is unique in Europe.’ E-file.lu seeks to address a specific demand – coming in particular from the Luxembourg fund industry, the world’s second-largest measured by fund assets – for an efficient and secure financial communication platform. More than just a file repository, e-file is a financial information exchange node on which the Luxembourg Stock Exchange has been able to build and develop new services.
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E-file is the perfect example of how technology becomes a core part of a product. “This unified file repository approach is unique in Europe. Only Edgar, the U.S. Security Exchange Commission’s file management tool, has a similar approach, but of course this is supported by the size and means of the American market”, says Dominique Valschaerts, Member of the Executive Committee, Luxembourg Stock Exchange and CEO of Fundsquare. “Every year, 1.2 million reports are transmitted through the e-file platform, which also stores 700,000 documents for the fund industry and 100,000 prospectuses. E-file supports a massive quantity of Net Inventory Values and static as well as dynamic statistical data, and it represents 60,000 ISIN codes. Eighty percent of these correspond to funds based in Luxembourg but we welcome more and more securities from France, Belgium, the Netherlands, the UK, ... E-file is therefore an extremely appreciated technologybased product that contributes significantly to LuxSE, both in terms of revenue and visibility.”
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IT must enable marketing operations, help decision-making, support the creation of financial products, etc.
When IT focuses on IQ Luxembourg is a first-class location for BNP Paribas’ securities business. IT systems expand continuously, especially in branches that are experiencing accelerated growth, Asia being first. It also is required that IT supports the development of commercial activities. IT can create added value by dealing with increasingly large volumes of data and different types of clients.
‘IT is selling itself abroad.’
Gilles Jamann, Head of IT Hub Luxembourg at BNP Paribas Securities Services: “We have gone from merely being a support service provider to becoming a true player in change.”
Daniel Von Aesch, COO of Cetrel: “We were avoiding, at all costs, a service left on standby during the replacement of our core application with an integrated system.”
“The expectation of high quality customer service and of 24/7 access is even more critical in Asia”, says Gilles Jamann, Head of IT Hub Luxembourg at BNP Paribas Securities Services. “Our expansion is an acknowledgment of our teamwork, of the quality of our tools and of our methods”. Here too, IT is selling itself abroad. The role played by IT has changed. “IT is now positioned next to the end client”, says Gilles Jamann. “We have gone from merely being a support service provider to becoming a true player in change. We cannot limit our vision of IT to doing calculation only. Instead, IT must enable marketing operations, help decision-making, support the creation of financial products, etc.”
Legacy and simplicity Cetrel, the Luxembourg branch of the Swiss-based SIX group has decided to transform its legacy system to better align its business on its vision of the future. Cetrel specialises in electronic card payments processing. “The company noted that its legacy environment had reached its limits from both a technology and functionality point of view and could not support further the group’s high ambitions for card management services”, says Daniel Von Aesch, COO of Cetrel. “With close to 3 million cards under management, the in-house development created from scratch at the end of the nineties did not have the capacity we needed to support the group strategy.” Cetrel thus started to replace the core application with an integrated system. This transformation and the daily business were run side by side for a while…
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CIO VISION CIONET Luxembourg
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Financial transactions should never stop moving.
In Daniel Von Aesch’s words: “With this migration we aim to keep people’s freedom to make card transactions.” And that is what Cetrel’s business is about. This means avoiding, at all costs, a missing statement report or a service left on standby… as financial transactions should never stop moving. “Payment processing is very simple. This is why people trust it so much”, says Daniel Von Aesch. With 100 percent IT inside.
Delivering the true business value Over the years Raiffeisen has changed, in more ways than one. Still, the cooperative bank has always managed to stay true to its values, never letting go either of its approach or of its preference for locally-based services. Building on the trust of customers, employees and management, Raiffeisen has transformed its IT from A to Z and generated more visibility. Today, this ambitious, long-term project allows the bank to stand on new, solid foundations.
Jean-Luc Martino, CIO of Raiffeisen Bank: “We have transformed our IT from A to Z and generated more visibility. Today, this ambitious, long-term project allows the bank to stand on new, solid foundations.”
‘IT and marketing successfully undertook the bank’s rebranding activities.’ Data centre, core banking application, new headquarters… “This operational and IT migration of Big Bang proportions which hit us on the Easter weekend was perfectly pulled through, both where the headquarters and our network of bank branches are concerned”, says Jean-Luc Martino, CIO of Raiffeisen Bank. Alongside this massive project that mobilised the whole company, the IT department successfully undertook the bank’s rebranding activities, together with the Marketing department. The next step was a new look for the R-Net website, which was live as of last July. The multiple channel mobile internet project was launched at the same time and should be ready at the start of 2014. Here too, IT is now aligned on the bank’s strategy – delivering the true business value of banking tools.
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CIONET Luxembourg CIO VISION
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CIOs must develop their IT strategy alongside senior peers.
Manufacturing a worldwide plan of attack LoneStar’s Business Systems Director Doug May says IT strategy is best created through a global steering committee that brings senior executives together.
Doug May, Business Systems Director at LoneStar: “Executives have to approve the decisions we make at the steering committee, so it’s a self-regulating system.”
Sometimes it’s good to take a back seat.
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Doug May is the epitome of the time-pressured IT leader. We have been struggling to find a slot in the business systems director’s diary for a year. After a series of near misses, May recently visited our London office to provide the lowdown on his transformation strategy at manufacturing specialist LoneStar. “I am busy”, he says, before explaining the breath of his global leadership role. “LoneStar is a small, strung-out set of inter-related businesses. It includes 12 entities around the world and I manage IT across all of those operations.” May joined the firm, which specialises in producing components for energy companies, in March 2011 and was tasked with helping to create an underlying technology platform for the amalgamated worldwide business. That level of integration necessitated strong links with line-of-business peers. “You can’t just go out and buy technology – our executives have an opinion,” says May. Rather than being viewed as a potential problem area, he has worked hard to reposition the IT department as a set of people that
exist to help the organisation meets its objectives and create business benefits.
Building a framework for growth May spent his first year in-situ establishing a strong technology foundation for the business. First, every member of his IT team was a given a new, well-defined role that the rest of the company could understand. The team was then split into two areas: services, which covered infrastructure and dayto-day operations; and projects, which covered the implementation of new technology to meet set business aims. Key IT projects that have already been implemented include an enterprise resource planning (ERP) system from Epicor, cloud-based business intelligence from Matillion, customer relationship applications from Salesforce. com and Hyperion’s financial consolidation technology. Alongside these implementations, May has developed a long-term business IT strategy for LoneStar, the basic fundamentals of which were completed during his first 90 days.
CIO VISION CIONET UK
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Part of this strategy involved the establishment of a global wide area network and a single email system for the entire business. “My team didn’t have an email or a telecoms specialist, so we decided to have both systems fully managed in the private cloud by outside partners”, says May. “I don’t need the extra administration. The suppliers do all the hard work and that gives me the time to take a higher level view and to point internal IT resources towards business projects that create a bigger return.” LoneStar is now reaching the end of May’s first strategy and is looking to identify next steps and potential aims. “A lot of it comes down to the sector the business operates within”, he says. “As a manufacturing business, we’ve already thrown a lot of resources at ERP. And our next big project will be to make the most of that investment. We want to sweat the assets we already have.” He is currently consolidating ERP systems for LoneStar’s three sites in the Midlands and will then tackle the rest of the UK, before taking the same approach across the firm’s businesses in the United States and the Middle East. The project will see LoneStar consolidate 10 ERP systems into three platforms and, inevitably, just one in a final stage.
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Pushing technology in the right direction May says the ERP project demonstrates the direction the business is moving in, but he and his IT team have to recognise that changes can occur. Salesforce, for example, had long been touted as a viable system for the business. Yet it was only when a new executive joined the board that organisation-wide interest peaked. “You always need that business buy-in and a senior sponsor”, says May, who recognises CIOs must develop their IT strategy alongside senior peers.
business and delivers the projects it demands. To meet that level of delivery, CIOs must have a clear idea of what the organisation requires. And at LoneStar, May has implemented a global IT steering committee to maintain control while ensuring business buy-in.
‘You always need that business buy-in and a senior sponsor.’
“We meet once a month and talk about the requirements for technology”, he says. “The committee includes a range of executives. We analyse proposed projects and audit requirements as well as new opportunities. The approach limits the scope for shadow IT because the business has a forum for its demands. Executives have to approve the decisions we make at the committee, so it’s a self-regulating system.”
“It’s a balancing act – these aren’t IT projects, these are business projects that require great technology systems”, he says. “There’s still an element of users who think anything that runs on technology is an IT problem. For example, some people will think bad customer data – inputted by staff – is an IT issue. That sentiment needs to shift if the business is to really understand the significance of the technology team.”
May says board members at the committee have to decide which of the proposed projects it wishes to prioritise. “The hardest part is not being hung up on control”, he says. “But if we’re running a data cleansing initiative, and the business doesn’t deliver to the deadline, then the problem rests with the executives. Sometimes it’s good to take a back seat while the steering committee provides real control.”
May says progress is being made. Ten years ago, IT leadership was all about control. Great IT now involves the creation of a service that listens to the
This article is based on an interview by Mark Samuels with Doug May, Business Systems Director at LoneStar.
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Disruptive innovation helps in creating new markets and value networks.
IT as a disruptive power Disruptive innovators break away from their core business. They completely transform and expand their activities into radically new areas. By founding new industry platforms and taking control over a number of services in the new ecosystem, they acquire disruptive power.
Jos Echelpoels, Director IT, Regional Initiatives EMEA, at Janssen Pharmaceutica: “Amazon started selling services rather than just products and its competitors became clients.”
Investments in R&D or innovation by themselves don’t seem to be enough to continue to lead or compete. “Think about Nokia which was constantly innovating but eventually overtaken by Apple a few years ago”, says Jos Echelpoels, Director IT, Regional Initiatives EMEA, at Janssen Pharmaceutica.
Rethinking the ecosystem
Disruptive innovators have been breaking away from their core activities.
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“On the other hand, rethinking the entire ecosystem can be very disruptive” he says. “When Apple launched the iPod and iTunes, it was the first time a computer manufacturer offered a platform for the music industry. And the iPhone with its App Store platform disrupted the phone companies, revolutionising the way we communicate and live.” Another example is the Amazon transformation from being an online bookstore to an online marketplace and a provider of cloud platforms. Echelpoels: “Amazon started selling services rather than just products
and its competitors became clients. We also saw Google evolving from a search engine to competing with MS Office, to developing wearable computing and self-driving cars, etc.” A classic way to innovate is to focus on the core business and improve it. “But Apple, Amazon and Google have all been breaking away from their core activities. They completely transformed and expanded their businesses into radically new areas. Moreover, they have managed to rethink entire ecosystems by creating an industry platform. The platform founder gets disruptive power by taking control over a number of services in the ecosystem. For the participants, the platform offers immediate access to the entire world market.”
‘The platform founder gets disruptive power.’ Thinking of ecosystem platforms requires a shift in how to look at
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business models. “You have to think more broadly in terms of markets, customers, products and information. You should consider models in which your competitors may become your customers, revenue from products shifts to revenue from services, volume contracts shift to transaction charges, and enterprise data shifts to the world’s data - true big data. Key technologies that enable ecosystem platforms will be the cloud, mobile devices, big data, social media platforms and authentication.”
‘IT can make the difference between mediocre and best of class.’ New value network “A disruptive innovation helps creating a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology”, says Alain Conrath, IT Director at LCM/ ANMC. “The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in a new market and later by lowering prices in the existing market.”
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Conrath stresses that disruptive technology doesn’t only appear in the IT sector but also in others, for instance in advanced oil and gas exploration, advanced materials, next generation genomics or autonomous vehicles.
Alain Conrath, IT Director at LCM/ ANMC: “Without ICT, there would be no more business at LCM/ANMC.” Alain Guillemyn, CIO at International Car Operators, concludes: “IT people should be pioneers but stay risk-averse and define a solid business case.”
Technological innovations are multiplying at increasing speed. They demand of both IT and business departments unprecedented capacities of expertise and flexibility. They require regular reviews of the vision and the project planning. Moreover they require shorter decision cycles, methods based on trials and the possibility of making mistakes.
Evangelist CIO, Chief Integration Officer, Chief Infrastructure Officer, etc.”, says Conrath. “My conclusion is that the future CIO should be a true stakeholder or business facilitator in the various business departments.”
Disruptive differentiators
How does disruption change the CIO role? Conrath: “In 2006, the ICT role was about supporting the business by developing the ICT strategy, developing and building ICT systems, and keeping them operational. By 2010 this role had evolved to creating business value by means of ICT. The next step will be to make a choice between ICT just supporting the back office applications and ICT being a true business partner.” Conrath points out that at LCM/ANMC actually there is no longer a choice: “Without ICT, there would be no more business at LCM/ANMC.” What will be the future role of the CIO? “There are many possibilities, such as Chief Innovation Officer,
Following a merger in 2007, International Car Operators (ICO) owned the RoRo terminals in the ports of Zeebrugge and Anwerp. The business strategy aiming at becoming the best RoRo terminal company in the world, the IT strategy should respond with an innovative approach. As the terminals had different IT systems, they needed to be aligned. The new IT environment should be uniform, robust and cost-efficient. It should also be agile to enable expanding business volumes. An additional objective was ‘intelligent yard and berth planning’ for minimising vehicle transport to and from ships, trains and truck locations. The IT environment should also enable the interpretation of continuous changing workflows by the
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The digital revolution can be a threat but it also offers opportunities. application software without software development (UML interpretation). Moreover it should enable end-to-end data processing, dispose of statistics and reporting tools, and include RFID and web access. In accordance with all these requirements the TOS (Terminal Operating System) was developed. This system supports all business processes and features a number of differentiators providing ‘IT disruptive power’, including: • high IT flexibility; • intelligent yard and berth planning; • eGate terminals with limited staff enabling truck drivers to fulfil administrative duties themselves; • RFID-readiness for vehicle tracking and event handling; • customer transparency thanks to a web portal allowing the customers to view the status of their orders. Alain Guillemyn, CIO at International Car Operators, concludes: “IT can make the difference between a mediocre and a best of class organisation. IT people are rational but they should also explore the creative right brainer’s world enabling out of the box thinking. Finally, they should be pioneers but stay risk-averse and define a solid business case.”
New business model Koen Vandaele, Director ICT & Digital
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Koen Vandaele, Director ICT & Digital Classifieds at Mediahuis: “Thanks to the joint-venture we can create economies of scale on our ICT investments.”
Classifieds at the newspaper publisher Mediahuis: “Increasingly more people read digital content from alternative news sources. This content is expected to be free and often it is available on mobile devices. This disruptive evolution has caused a fundamental change in our business model, with decreasing copy sales and advertising switching to online media.”
‘The winner takes it all or at least a lot of the market.’ Publishing companies are forced to also go digital but this requires huge investments, especially within ICT. “This has led to the creation of Mediahuis, a joint-venture between the publishers Concentra and Corelio. Together we can create economies of scale on our ICT investments. The digital revolution also offers a number of opportunities. The distribution cost is much lower for mobile devices than for printed copies. Another opportunity is that ‘the winner takes it all’ or at least a lot of the market.”
Digital News Media focusing on digital editorial products; ICT & Digital Classifieds focusing on infrastructure services, software engineering and application maintenance, and digital classifieds. In this new structure ICT is not only a supporting service but also a strategic business driver where we have to find a balance between stability and agility. A day without a newspaper is not an option but you have to be agile enough to respond to major events such as elections, when the content volumes peak.” What is the impact on the people? “ICT, Marketing and Product Development have to work closely together. Moreover, new job profiles appear, e.g. digital experts, social media specialists, traffic & content managers, etc. These people are hard to find, hard to keep and on-the-job-training is typical”, concludes Vandaele. This article is based on the CIONET Belgium networking event ‘IT as a Disruptive Power’ of December 2013.
What is the impact of the digital disruption on the publisher’s structures? “Our core business - publishing of editorial content - requires focus. Therefore we now have two ICT related departments:
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Organisational efficiency is closely related to the business context.
The CIO’s unique vantage point As information and knowledge are key for productivity, efficiency and competitiveness, the role of the CIO represents a unique vantage point for solving problems and driving innovation. The process of achieving efficiency in the organisation has a strict relationship with the business context. At SUMA there was the challenge of reducing daily operational costs by 5-10%. SUMA is a waste management and treatment firm, with 20 service centers and over 1,100 vehicles and 1,750 employees. Typically, organisational decisions are taken at three levels: strategic (top level), tactical (intermediate) and operational (basic level). The strategic decision here was to define objectives: cut costs by 5-10% and reduce the CO2 footprint. This was complex and hard to achieve but not very specific. The tactical level required screening and interpreting of internal information to evaluate types of services and their major components: fuel cost, distances per route, tonnes of waste collected, types of vehicles and their capacity, etc. At an operational level, well defined problems are solved. In this case, by collecting historical data from databases, it was possible for SUMA to optimise routes based on GPS pick-up points and time frames. At the same time, with this information, SUMA was
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able to adjust the type and capacity of vehicles for each route or street type and the total weight of collected waste. This resulted in a decreased CO2 footprint, a higher quality of service with reduced service time and improved efficiency, along with the main goal of cost reduction. SUMA was able to decrease its daily operational costs by 6% thanks to fuel consumption adjustments. Simultaneously, lower maintenance and damage expenses were generated from optimised routes and better vehicle choice.
‘Information and knowledge are key for success.’
The business environment in which firms operate is somewhat turbulent and very different from what we were used to. Information used to reduce uncertainty, now information updates appear to be a critical factor for success. The CIO role represents a unique vantage point for solving problems and driving innovation and efficiency across all levels of the business.
This article was written by João Patrão, IT Director at SUMA.
João Patrão: “Information used to reduce uncertainty, now information updates appear to be a critical factor for success.”
CIO role This successful example of SUMA can easily be translated to other industries. Cost reductions and efficiency improvements are very frequently closely related to innovative IT solutions, where the role of the CIO, as a creative person with good IT insight, is imperative.
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Can new business models save independent high-quality media?
Digital disruption: old vs. new media Since the advent of internet, the media hasn’t stopped experiencing digital disruption. News content is consumed more than ever but the return to the producers is a tiny part of what it was in the past. Can new business models reverse this situation? In the past, the consumer was accustomed to paying for information or news, the media sector had a major market share of the total advertising revenues and the consumer could only access news in set places or at set times (buying a newspaper in the street or seeing a TV newscast....). Today, the consumer essentially assumes information is for free and wants to access it anywhere, anytime, in any circumstances, using any device. In addition, sometimes the consumer also wants to be part of the story, interacting with the producers, even considering him/herself as being one of their peers. However, the equation is not that simple: the gathering of information and investigation to produce specific news stories and guaranteeing their availability in any format and device is not for free in terms of costs. In fact, to have good journalists and hence high-quality journalism implies having adequate settings, training, tools, working conditions and resources to support costs.
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Declining sales On the revenue side, the sales of newspapers and other media are reducing every day in terms of number of copies sold and value, even when digital subscriptions and other sales are taken into account. And media advertising is now much reduced compared to the past (except for TV), because digital ads payments are very fragmented through a wide range of websites, portals, blogs, mobile apps etc. Even if ads are focused on digital media channels, the unit prices and market value are considerably lower now.
In fact, we face a very paradoxical world. News content is consumed more than ever but the return to the producers is a tiny part of what it was in the past, not even enough to cover the costs.
New business models Over recent years, a trial to reverse this situation has been taking place. New business models are emerging, especially in the mobile apps world, such as premium, freemium and other sales strategies. Will they be able to save the independent high-quality media? This article was written by Paulo Nogueira dos Santos, CIO at Lusa - Agência de Notícias.
Paulo Nogueira dos Santos: “Good media are essential for any democracy being independent from political parties, governments, major economic groups, religions etc.”
The issue is that good media are essential for any democracy being independent from political parties, governments, major economic groups, religions etc. We are living a vicious circle for media platforms: costs are continuously being cut which, in the end, has a negative impact on the quality of the products. Inferior quality and volume will reduce sales even more…
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The cloud allows new and more efficient forms of collaboration.
The quiet revolution Joe Baguley, CTO at VMware EMEA, says the cloud is leading to an underlying digital disruption in terms of business operations and wider society. When it comes to emerging technologies, there is one phrase that has drawn more controversy than others: cloud computing. These two words have created countless debates, caused numerous arguments in IT departments, and – more often than we care to admit – left many socalled experts in the industry deeply confused. For the most part, cloud computing has so far been used to speed up and reduce the costs of existing processes. Such progress leads me to recall a phrase attributed to automotive pioneer Henry Ford: “If I had asked my customers what they wanted, they would have said a faster horse.” But now, as use of the cloud within business matures, we are beginning to see the full potential of on-demand IT to transform organisational models and working practices. We are moving into an era of economic development that will be shaped by the use of consumer IT in new and exciting combinations. Our continuing journey in this direction is being shaped by several key themes: the need for flexible IT
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infrastructure, the emergence of big data analytics, and the increased use of mobile devices. But how can we use this combination of key themes to help our organisations, not only improve, but to transform their internal processes?
Vital role Just as email rendered the memo obsolete, cloud computing is set to change the way we do business, offering a competitive advantage to organisations bold enough to think outside the accepted way of operating. Cloud is playing a vital role in ensuring employees are kept in constant contact. Working practices have been transformed as the cloud allows new and more efficient forms of collaboration. On-demand technology is no longer a nice-to-have, but is a critical part of any organisation’s infrastructure. We see increasingly more businesses relying on mobile devices, as the era of office-based working slowly draws to a close. The combination of mobile and cloud is so important to workers that more than a third would leave their jobs if they could not use their portable devices for work purposes. The cloud is also affecting lives
without people knowing. From helping to improve healthcare standards and educational learning, to reducing carbon footprints and cutting IT bills, on-demand IT is impacting all aspects of everyday life. And current cloud applications are just the tip of the iceberg. Cloud computing continues to mature and will have a role in some of the key trends, expected to shape the future of IT, from wearable computing, to the internet of things and on to interest around the evolution of smart cities. The cloud can do so much more than simply speed up or reduce the cost of technology for businesses. In short, it can totally transform IT.
This article is based on an interview by Mark Samuels with Joe Baguley, CTO at VMware EMEA. Joe Baguley: “More than a third of the workers would leave their jobs if they could not use their portable devices for work purposes.”
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10 & 11 June 2014 - Brussels
DIGITAL LEADERSHIP IN A VUCA WORLD
• Interactive workshops by industry experts European CIO of the Year Awards presented by Neelie Kroes Keynotes by industry leaders: Peter Hinssen, Robert D. Austin, David Upton Gala dinner • Register at www.ciocity.com
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