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COVER STORY Building blocks of leadership After laying the foundations for the new business technology platform, Hawkins Group CIO Hannes van Zyl ponders on the next mission for ICT.

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IN BRIEF 4 New Zealand and global ICT news

OPINION 7 Describe your business impact in business terms Do not report to business executives on technical operations; instead, report on how IT operations are affecting business performance, writes Elizabeth Holden of Gartner. 8 Digital journey is a team sport So why are New Zealand organisations treating it as an ad hoc or uncoordinated goal? asks Louise Francis of IDC.

9E xiting (or untangling) the incumbent Michael Wigley shares top pointers on contract management. 10 Wizards in the workplace Waiting for four hours for a threeminute Harry Potter theme ride offers Owen McCall great lessons on working with millennials. 11 Overtaking Moore’s Law Today’s focus on the digital enterprise provides a significant opportunity to reevaluate this traditional thinking, writes Kevin Noonan of Ovum.

18 What is next after CIO? Our panel of current and former CIOs forged different career paths, but share a common thread – they carefully planned and worked hard to transition into more than just CIO. 29 A ccelerating transformation: CIO to CDO David Kennedy, who works with several companies that are in the midst of digital transformation, finds the most successful ones integrate three phases – ‘enlightenment, smelling the coffee and doing’ – into the journey.

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31 Into the digital era The keynote speakers in this year’s CIO100 event talked about CIOs taking the lead amid fast-paced changes. 34 The data science activist James Mansell is part of a small, but growing group of volunteers who are pushing for the responsible use of data to deliver social and economic value. 38 T ech analysts, diplomats and brokers Why e-Spatial CIO Matti Seikkula and principal consultant Manu have a more expansive remit than their peers. 42 Thriving in a data-intensive world Discussions on big data and analytics have shifted from piloting, to getting value from full deployments. Some lessons learned from early adopters. 47 F uture focus: Where is technology leading us? It is time to address technology driven narcissism and isolation, writes Aaron Kumove. 48 Executive index

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EDI T OR I A L VOLUME 18 | IS SUE 2 www.cio.co.nz CIO PRINT & ONLINE EDITOR: Divina Paredes

Disruption can occur in the most unlikely of places

isruption is not limited to the big industry sectors going through heavy technological change; it can happen in what seems the most unlikely of places. This is what Steve Sammartino, digital disruption guru, discussed at the ANZ CIO Forum. “In the next decade, the most high-tech device in your home will be the toilet,” he says. “It will be a mini laboratory which will measure and analyse everything you have eaten, because it is talking to your fridge. “W hen you visit the doctor and state that you are eating the recommended fruits and vegetables, the [doctor] can respond with, ‘that is not what your toilet says’.” Sammartino points out the Internet of Things is becoming a reality and underscores why enterprises need to think about industries they probably would not have cared to think about. “Cross fertilisation of industries is occurring in a data driven world,” he says. Transposing this approach to the executive suite, Sammartino likewise advises business leaders to get to know the world of startups by attending startup events. The reality is startups are disrupting traditional businesses, and are becoming the key competitors to organisations that were considered disruptors a few years ago. Companies can also fund ‘skunkworks’ or innovative projects, where staff can split their work between the business and the startup project. “That way, you get cross fertilisation of ideas, and if something turns out big, then you have a new business.” In the pages ahead you will read how CIOs and the other members of the executive team are applying various approaches to ensure they are the disruptors and not the disrupted.

PRODUCTION EDITOR: Nadia Cameron SUBEDITOR: Rebecca Merrett WRITERS: James Henderson, Owen McCall, Elizabeth Holden, Kevin Noonan, Byron Connolly, Louise Francis, Bradley de Souza, Stuart van Rij, Aaron Kumove, Michael Wigley CREATIVE: Fletcher Guinness PHOTOGRAPHY: Jason Creaghan, Tony Nyberg, Brooke Woollett

EDITORI A L A DV ISORY BOA RD A team of senior IT executives advises CIO New Zealand on its editorial direction. It is charged with reviewing each issue, critiquing content and quality, and suggesting ideas for future issues. Glenn Armishaw Development Group Manager, Toyota Financial Services Marcel van den Assum Professional Director and Independent Advisor Pieter Bakker CIO, Frucor Colin Brown GM, Integrated Design and Delivery, Spark NZ Martin Catterall ICT strategy consultant Mike Clarke CIO, SkyCity John Emerson Global CIO, Tait Communications Mike Foley Information Services Manager, Auckland Council Miles Fordyce Technology Manager, Auckland Transport Claire Govier ICT Strategy Consultant Ross Hughson CEO, Personal Information Management Channa Jayasinha Manager, Information Technology, Wellington City Council Robin Johansen Independent Consultant Russell Jones Executive General Manager – Technology and Innovation, ASB David Kennedy CIO and CISO consultant Derek Locke Business Strategy Consultant

Steven Mayo-Smith Programme Lead for the Digital and Health High Impact Programmes, NZ Trade and Enterprise Owen McCall Director and Founder, Viewfield Consulting Pat O’Connell CIO, Rank Group Dawie Olivier CIO, Westpac NZ Simon Paparone Interim CIO, Fonterra Brent Powell Director, Radlett Consulting Services Julia Raue CIO, Air New Zealand Ed Saul Partner, Pinnacle Life Andrew Siddles IT management consultant, CIO To Go Craig Soutar CIO, New Zealand Transport Agency Damian Swaffield GM, Nextspace Andries van der Westhuizen ICT Strategy Consultant Victor Vae’au CIO, New Zealand Defence Force Claudia Vidal Independent Director, Skills4Work and AMES IT Animation Group Murray Wills Managing Director, Maxsys

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IN BR IEF / STRATEGY

HOW SHAPESHIFTERS ARE AMBUSHING ‘UNSUSPECTING’ INDUSTRIES “How can we move into adjacent industries, converge into other industries using big data?” Andrew Milroy, senior vice president for ICT Asia Pacific, Frost & Sullivan, says how businesses answer this question is key to their growth and even survival through technology enabled disruption. He points out how ‘shapeshifting’ companies like Uber, Airbnb and Google use this approach as they ‘ambush unsuspecting industries’. One of the reasons Google and Facebook are able to ‘shapeshift’ into other industries is because they have so much information on their users, he says. Facebook is moving into virtual reality, communications and entertainment. Uber is moving beyond taxi services to delivery. He puts forth more questions to organisations: “W hen shapeshifters like Google and Amazon are moving into adjacent industries, how is it impacting your business? W hat are the opportunities it can create for your business? Are there ways you can improve customer experience as a result of this shift?” Spea k ing at t he 2015 Frost & Sullivan GIL (Growth Innovation and Leadership) Congress in Auckland, Milroy says, “Convergence of technology and industries will affect the way we interact with each other, with our employers and with the organisations that serve us. It will change the way we serve our stakeholders and we manage our businesses.” He points out convergence and connectivity is disrupting, transforming and collapsing industries, redefining the future of business and how executives will manage companies in the future.

4 CIO SPRING 2015

Andrew Milroy

“As connectivity continues to drive convergence, companies need to identify adjacent, periphery products and services that can be added as a part of their portfolio in the future. This will define new solutions, new customers, new partnerships and new competition,” states Milroy. FACING CONVERGENCE “We are looking at adjacent industries, and payment is closest for us,” says John Moss, chief strategy officer, MYOB, one of the speakers at the conference. He talked about how the accounting software provider is leading through this change. “People are paying using credit cards and debit all the time so a lot of money is made in that space.” The focus for MYOB is to make sure “the numbers f low appropriately” on both sides of the transaction. He says the company is looking at mobility and cloud computing and how these will impact its business model. “As we think forward, we think about online apps and mobility,” says Moss, “having automation to the point all the data gets sucked in automatically.” A trader, for instance, can take payments through their mobile app. All transactions go into the cloud, there will be no data entry and the trader is paid straight away.

John Moss

“We push information out to the business owners,” he says. “We can tell you your GST statement is due next month. There are all sorts of things we can do in terms of analytics. But the general trend is towards pushing information to our clients so they do not duplicate it.” Mi l roy mea nwh i le, poi nts out that cybersecurity is “the elephant in the room”, when it comes to IT and industry convergence. “Security is a huge, enormous scary issue with this move,” says Milroy. “W hen we do a ny t h i ng w it h technology it goes beyond bugs in your systems, there are serious implications. “We tell people before you embark on any of these projects, security has to be built into the project rather than a piece of insurance or an add on at the end.” Think of the implications of what could happen, he says. “It is not about corporate data sitting in the cloud but physical things like nuclear power stations, airplanes and cars,” says Milroy. “Think of the chaos potentially it can cost as a result of hacking into these physical things. “Infrastructure is a big issue, how do you protect it as it becomes more and more digitised?” DIVINA PAREDES

STRATEGY / IN BR IEF

DRIVE YOUR ORGANISATION TO BECOME ‘CUSTOMER OBSESSED’: FORRESTER In this age of the customer, CIOs need to think end-to-end to drive a customer obsessed organisation, says Forrester analyst Bobby Cameron in a recent report. This means traditional CIOs need to change in this age of the customer, he says. Providing reliable, cost-effective, on-time, and on-budget technology is a given in a world where technology management underpins the digital rev ita lisation and restructuring of entire industries, he states. Today’s CIOs are also being asked to enable, manage and occasionally lead digital transformation across the enterprise, he points out. The report calls on CIOs to pursue the “big picture” in order to drive digital transformation. Many of the CIO’s challenges still stem from the traditiona l, limited focus on point solutions and business unit level objectives, he says. W hile CIOs still have to deliver these, their future success will come from their ability to plan and act end-to-end on beha lf of the digita lly empowered external customer.

BOBBY CAMERON, FORRESTER:

“DRIVE AN INTEGRATED VIEW OF THE CUSTOMER, TURNING DATA INTO INSIGHTS AND INSIGHTS INTO ACTIONS – AND FOCUS THESE EFFORTS WITH OUTSIDE-IN PERFORMANCE METRICS.”

He ca l ls on CIOs to become “customer obsessed”. “Drive an integrated view of the customer, turning data into insights a nd i nsig hts i nto act ions – a nd focus these efforts with outside-in performance metrics.” He says organisations need to have an integrated view of the customer. Customers’ experience suffers when each business unit has its own view of the customer that they cannot or will not reconcile and share, he states. Customers do not understand the ins and outs of management cultures and business politics that result in incompatible sets of information about a single customer — they expect all

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parts of the organisation “to act as a single entity”. In tandem with this is the need to establish an “outside-in, customer focused performance metrics”. “To help drive your organisation to become customer obsessed, these metrics should focus on the desired business outcomes as well as your organisation’s ability to rapidly change in order to meet those outcomes. “And, like Kaplan and Norton’s origina l scorecard, your scorecard should include the tech management organisation’s health and service levels — especially as they affect the external customer,” he concludes. DIVINA PAREDES

IN BR IEF / STRATEGY

THE PATHWAY TO BECOMING CIO

or CIOs, it is important to have a leadership bench for people who can take over their role when they move to another role within the organisation or outside. At the same time, there may be mid-career IT professionals who inspire to be a CIO. The common thread linking them is where to get the training for people who want to go on a CIO career path. These are some of the drivers that led University of Auckland to offer the Strategic CIO Programme. The seven-month programme is open to 12 participants who are sponsored by their respective organisations. Darilyn Kane, executive education manager, at the University of Auckland, says before this programme, what was available for people who want to take this path was an MBA. The program is for people who want to step into a more senior role, but with a focus on the IT function, she says. Kane says most of the participants in the current program have a technical background or are in an IT function role. She says in choosing the group, she looks at what each person will contribute to the knowledge. It is also important for them to have a diverse experience because they will share that with each other. THEORY AND PRACTICE “We are focused on a practical activity that has an impact on the individual and the organisation.” As participants go through the program, they will work with an internal sponsor and identify a strategic initiative in the organisation. In the final module, they will present a business case on it. “Basically, they will present recommendations for something that will be implemented so there is some real value returned quickly within the organisation.” When they present the business case towards the end of the course, it is also

6 CIO SPRING 2015

CIOs of the future: The Strategic CIO Programme participants with Michael Myers and Cecil Chua.

practice for them when they present to their executive team. “It was important to do it this way so they can apply their learnings in their own organisations as they go along. It is really integrated to what they are doing in the business,” says Kane. Kane says each participant is also matched up with a faculty or a practitioner who will be their mentor. “The role of the mentor is to challenge them, really push their thinking around their initiatives, and really get them to think differently.” She says the university likewise brings C-suite executives to speak to the participants. These include CIOs who talk about how they got into the role and what they think the future looks like. The speakers have included David Kennedy, a digital strategy and security consultant who was former CIO of Orion Health; Jonathan Mason, former Fonterra CFO and now an independent corporate director; Tony Carer, former Foodstuffs CEO; Brett Roberts, formerly with Callaghan Innovation and now with Datacom. As to the challenge the participants say they face at work, Kane says the top one is “speed of change”. “No matter what you are doing in the business, it is speed of change,” she says, and this issue “is just huge in the IT area”.

Kane says the participants also discussed the ICT leaders’ challenge of “being across everything that is going on”. “There is the challenge around keeping your IT running but also have to be aware what is likely to be happening in the future. How can they become a really strategic part of the business as opposed to being just operational support?” She says some CIOs who have spoken to the group were frank about the nuances of the role. They tell them the CIO role is “really a challenging job, you really have got to want to do this”. “Often you only get noticed when things go wrong,” says Kane, quoting the speakers. “When things work perfectly, day to day, people don’t say anything. No one says ‘thank you very much’. As soon as emails do not go up, people start complaining.” She says the university is forming an advisory group of senior CIOs to advise on the content of the course. This group will be meeting every quarter. “We are really lucky that we have connections with people who are generous with their time and happily share openly with the group about their experience,” she says. The programme is part of the university’s goal to help build senior leadership capability for New Zealand businesses, she concludes. DIVINA PAREDES

OPINION / STRATEGY

Describe your business impact in business terms By Elizabeth Holden

everal months ago I hosted a networking dinner for a group of twelve CIOs. In attendance were CIOs from many different industries and from a variety of different areas of the public sector. To jump-start our conversation, I asked the attendees to share with the group the most critical priority they faced in the coming year. As we went around the table, some of the CIOs shared challenges with organisational changes, others with issues around moving to the cloud, and still others were working to refresh their IT strategy and governance processes. One CIO from the education sector, however, paused before answering, and then said, “We must improve our outcomes on qualifications testing scores for our students.” This CIO had clearly articulated the priority that was critical for the mission of his entire organisation, not just for the ICT organisation. The ability to raise our focus to the strategic issues facing our organisations is a common narrative in my discussions with CIOs across New Zealand and Australia. Not only do we, as ICT executives, need to enhance our skills in this area, it is also our responsibility to lead and coach the members of our teams to think and speak in the lingua franca — or common language — of our organisation. Gartner analysts remind us that we must link ICT activities to business or organisational outcomes, and we must use consistent business language to communicate the value that we bring. Since the CIO is the ultimate business relationship manager for IT, a solid understanding in terms of demand, cost, control and delivery of the business and IT’s contribution is key when engaging on both a strategic and tactical level. A CIO who speaks the language of the

business will be ideally positioned to not only translate the top-level requirements of the business to actionable IT, but also to make IT’s contribution to the business explicit against the value indicators the business uses for performance measurement. When the business is well-understood and served, the CIO stays in the loop with proactive business engagement, creating high visibility and high value. C IOs w ho a re perc eive d a s providing high value deliver reliable,

DO NOT REPORT TO BUSINESS EXECUTIVES ON TECHNICAL OPERATIONS. INSTEAD, REPORT ON HOW IT OPERATIONS ARE AFFECTING BUSINESS PERFORMANCE. high-quality, cost-effective services, and they baseline, measure and report on IT in terms of business performance. Do not report to business executives on technical operations. Instead, report on how IT operations are affecting business performance. Butch L eona rdson, a vetera n credit union executive in the US, who is credited with helping to bring technology from the backroom to the boardroom, summed it up well when he said: “A lot of CIOs think they’re customer focused, but they’re going inside out. Look at the CIO dashboard—what does it show to the board? It should be things like new sales, speed of closure, how long it takes to open and close a product. Lots of IT organisations have metrics that say we’ve got 99.99 availability,

we’re fast and so on. The plumbing is wonderful, but nobody cares.” Once CIOs prove that IT can deliver, they frame increased IT investment as an investment in improved business performance—not the result of higher business performance, but the driver. This way, they avoid the value traps. That means IT performance must be expressed in terms of the ratio of business activity to IT operational costs, or IT performance must be translated directly into relevant business performance. For example, POS terminal or call centre agent availability is more meaningful to a business executive than network availability (a technical metric). CIOs can use the following three questions both w ithin their teams and with their stakeholders to begin changing the ICT narrative to focus on business and organisational outcomes: • W hat is the potential revenue or cost impact of a given service, application or system? • How will the ICT organisation facilitate this business or organisational processes? • What is ICT’s capacity to support growth or mission outcomes for this initiative? Similar to the education CIO in the story above, who tied his mission critical outcome to the organisation’s need to improve student qualification scores, CIOs who use these questions within their teams will find themselves at the forefront of leading the change in how ICT communicates and shares information across the organisation and with their stakeholders.

ELIZABETH E. HOLDEN PH.D. (elizabeth.holden@gartner.com), IS REGIONAL VICE PRESIDENT OF GARTNER EXECUTIVE PROGRAMS FOR AUSTRALIA AND NEW ZEALAND.

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OPINION / DIGITAL

Digital journey is a team sport By Louise Francis

f the third platform (social business, cloud, and big data and analytics) is the nirvana of digital opportunities then digital transformation is the journey that organisations must trek to get there. In a recent IDC survey 72 per cent of 220 New Zealand organisations said they were midway into or had already completed their digital transformation journey. This is an extraordinarily high assessment of maturity and New Zealand organisations must be congratulated on having such a positive outlook.

adequately measured and ROI is often vague. Digital transformation needs to be measured on multiple scales: Leadership, omni-experience (customer and ecosystem engagement), information management, operational models and people. Most projects only address one or two areas and that is the main reason IDC believe organisations overestimate their maturity. Thirdly too many are treating digital technolog y like an “all you can eat” smorgasbord. Resources and energy is wasted on using technology for technology’s sake, rather than a

WHERE NZ ORGANISATIONS ARE AT WITH THEIR DIGITAL TRANSFORMATION JOURNEY 60

56%

50 40 30 20 10 0

11%

NO STRATEGY – IT IS A PRODUCTIVITY TOOL

YET TO BEGIN BUT EVALUATING STRATEGY

JUST STARTED

The reality is that most organisations vastly overestimate their maturity when it comes to the adoption of technologies, and the digital transformation journey is no different. Here’s why: First, legacy infrastructure technology still accounts for at least half of most of New Zealand organisations’ ICT resources. Companies focusing on legacy identify themselves as optimisers (ICT for efficiency). Paradoxically they also have the highest opinion of their stage of the transformation journey. In contrast the pioneers of transformation (creator and opportunists) have the lowest opinion of themselves, and ironically are the best grounded in reality. Secondly, digital transformation is a team sport but most projects are still undertaken on an ad-hoc and uncoordinated basis. The results are not

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16% MIDWAY ON OUR DIGITAL TRANSFORMATION JOURNEY

ENTIRELY DIGITAL

co-ordinated or strategic approach. A classic example of this is digital marketing. Faced with a glut of digital tools, marketers have quickly accumulated a huge portfolio, many for one off campaigns. In general, no thought has been put into the long-term viability of these tools and how they could be effectively integrated into the organisation’s IT ecosystem. Therefore, while every organisation will be different, IDC gives the following advice to CIOs seeking to enrich their digital transformation journey: • A nalyse and identify your business’ DNA: Benchmark yourself against the market and implement meaningful metrics. To understand where you need to go, you need to understand where you are currently positioned. • Cast your innovation net wider: Blur the lines of your ecosystem through the

use of digital technologies and develop an innovation community, not an IT team. Employees and customers are the most obvious source for innovation but it is vastly underutilised by New Zealand CIOs. • Challenge the norms of your business model: Digital transformers are best prepared and able to adapt quickly to change. For example, processes are automated where people don’t add value. But remember: Digital transformation is not just about enhancing existing processes but changing them and creating new models. • Turn disruption into an opportunity to recreate your business: Disruption is becoming a dirty word due to its negative connotations. For digital tranformers, D stands for discovery not disruption. • E mpower at the edge through executive engagement: We all know about customer engagement but is the same amount of effort being put into executive engagement? The digitally engaged executives make a difference. They are more tolerant of risks, grasp how digital transformation adds value and actively engage with the CIO. IDC defines the digital transformation journey as “a fundamental change to business or operating models through the use of information and communications technology”. In other words, it is not what technology you use, it is how you use it that defines your digital transformation maturity. It is not an “IT project” and it is not a destination. As your ecosystem (particularly customers) evolves, the “t ra nsformat ive” elements shou ld change and that is how CIOs should set up for this journey. LOUISE FRANCIS (lfrancis@idc.com) IS IT SPENDING RESEARCH MANAGER AT IDC NEW ZEALAND.

LEGAL I.T. / OPINION

Exiting (or untangling) the incumbent By Michael Wigley

ay your IT team wants to put fixed costs have been amortised across if the contract has volume not fixed in a new outsourced solution the term. However, it’s worth looking pricing, with no commitment to buy or unified communications at the detail in the contract overall to only from that supplier. by Christmas. But one or see if the ETCs work in the way the ETC Don’t assume you can’t negotiate two contracts for the legacy clause indicates. your way out. It’s too easy to assume services to be replaced don’t expire until that you are in a weak position and that late 2016. What can be done? Do you Suppliers have every reason to set the incumbent would never agree to an have to defer the project? And does a ETCs at high prices, to lock in customers. early exit. But there’s often an angle to major controversy in the courts on early That’s where the current controversy negotiate a result that is not as costly as termination charges change things? in the courts comes in. There is an you may have thought. Don’t assume that This is a common scenario, where emerging law in Australia that ETCs will the vendor will want to play the short many businesses choose to wait for be knocked back if the money involved game and treat you like a cash cow. the legacy contracts to end, losing the is too high. In the UK, broadly the same benefits of an early implementation. But issues were heard by their highest court Can early exit be a pre-requisite for they can often move sooner. in late July with judgment due out. The participating in the RFP? In some M ic h a el Fole y, pr i nc ipa l of legal issues are controversial so we don’t cases you may be able to get existing sourcing consultancy Voco, says his know where the UK will land yet. In turn vendors to grant early termination company sees this all too often in large there will be questions as to how the UK enterprises. and Australian judgments “By and large supplier will apply in other countries SUPPLIERS SET EARLY TERMINATION relationship management such as New Zealand (http:// CHARGES AT HIGH PRICES TO LOCK is not well executed and tinyurl.com/p25km43). focuses more on operational Rega rd less of t he IN CUSTOMERS. THAT’S WHERE service level management at outcome of these cases, a THE CURRENT CONTROVERSY a pretty granular level rather close review of the words IN THE COURTS COMES IN. than viewing ICT sourcing ‘in of the contract, including the round’,” says Foley. “It’s the ETC clause, may show a rights as part of the entry ticket for the classic ‘wood for the trees’ scenario great way through. We have one client participating in the RFP. Yes, this is not playing out in strategic sourcing.” that saved ETCs totalling over $1.3 without its challenges, and there may Here are some triggers as to what million on early termination, as a result be some fine print to work through. But to consider. of a careful review of the ETC regime at the early stage of the game, with the and good negotiation (http://tinyurl. What contract documents apply? prospect of future business, the vendor’s com/mtgsaf8). Yes, it’s an obvious point, but not appetite to consider these types of As Voco’s Foley notes: “In any case, always a straightforward one. Careful options could be at an all-time high. with the current rapid evolution of ICT review of the contract is essential. services to as-a-service constructs, Don’t forget the incoming provider. Often in complex ICT situations, the the legitimacy of traditional stances Maybe the incoming provider will contract, and documents relevant to its on ETCs driven by sunk cost factors agree to pay some or all of what is owed interpretation such as emails, will extend a nd contracted term a nd volume to the legacy supplier for ending the beyond the primary contract document commitments is on the wane and contract early? It does happen. such as an MSA. Sometimes the detail enterprises should factor this into the will work for you, sometimes it won’t. dialogue with suppliers.” Don’t assume that any early For example, some services may have MICHAEL WIGLEY (michael.wigley@ termination charges (ETCs) are set slipped between the cracks of the SOWs wigleylaw.com) IS THE PRINCIPAL in stone. ETCs are one of the main ways and other order documents, leaving you OF WIGLEY + COMPANY, A LAW vendors lock in their customers. This with no fixed pricing commitments. Or FIRM SPECIALISING IN ICT. can be for good reason, particularly if a termination date may mean nothing

4 5

cio.co.nz 9

OPINION / STRATEGY

Wizards in the workplace By Owen McCall

ast July we embarked on a Time passed and we slowly edged It got me t hink ing about t hat family trip to the United forward. The children were chatting experience and how this may contrast States. I dubbed it the away to each other and to the people with our workplaces. “parks and parks” tour around them about their favourite Waiting in that queue had a really Harry Potter characters and themes, and as the first half was spent high level of perceived value for my everyone was having a great time. This in some of the famous national parks. children and no doubt to most of continued all the way to the entrance of The second half was spent in Orlando’s the people in the queue. They were Gringotts. I saw the next wait sign. One theme parks. participating in a stor y they loved hour to go! No one else seemed to notice. One of the highlights of the trip was and connected to deeply. How do you The ride had broken down. They Universal Studios, and the undoubted connect w it h what’s important to were working on it and would advise w i n ne r w a s t he Ha r r y Pot t e r your team? attractions. All of my children are Harry us as soon as new information came to Un iversa l br i l l ia nt ly ma naged Potter fans, and Universal has three light. We waited another 30 minutes. our expectations. There were regular Harr y major signs lett ing Potter attractions. u s k now how WAITING FOR FOUR HOURS FOR A THREET he queues long we wou ld were long, as we be waiting. The MINUTE HARRY POTTER THEME PARK RIDE GAVE were there during signs were ver y ME PRIME INSIGHTS ON WORKING WITH GEN Y. t he A mer ica n accu rate a nd summer holiday. when they had an We avoided most of the queues by Then finally, it was our turn to go unexpected issue, they communicated investing in Universa l’s fast pass on the ride. Four hours waiting, three clearly to us. How well do you manage system, but these were not accepted minutes on the ride and as soon as we expectations and communicate to your on the Harry Potter attractions. We got off, all the children wanted to do team, especially when things don’t planned our approach to the children’s was go again! go well? favourite ride – the Gringotts. Go early As I stood there in the queue for what Ever yone i n t hat queue w a s and make this our first ride. seemed like forever, my mind drifted t here because of choice a nd t hey We got to Universal just as the park several times to how my children – and could leave any time. People knew that was opening and we went straight to everyone in the amazing queue – were they were in control. To what extent the ride. We saw the miles and miles of incredibly ver y happy, ver y patient is your team in control of what they roped walkway where they herded the and a pleasure to be with during the do and how they do it? Do they get queues to the ride. They were empty. wait. There was no angst or drama of to choose? My heart soared – the strategy seemed any kind. Generally, we don’t do these things to have worked. Mainly young people were in the in our workplaces very well. Maybe As we joined t he back of t he queue and we tend to characterise them we need to lift our game if we want queue I looked for ward to see the as being unruly, the ‘I want it now’ bet ter engagement, com m it ment thousands of people who were before generation, difficult to manage and a nd per forma nce f rom our tea m, us. I noticed the time to wait marker impossible to lead. Yet here they were but particularly our grow ing Gen just in front of me. Three-and-a-half happily waiting for hours for a threeY members. hours ! I actua lly quite like Harr y minute ride. Potter, but I don’t like him so much I explained my amazement to my OWEN MCCALL IS AN EXPERIENCED that I wanted to stand in a queue for wife. Her response was immediate: MANAGEMENT CONSULTANT AND CIO, over three hours in 32 degree heat and “Well, what does that tell you about your AND A MEMBER OF THE EDITORIAL 90 per cent-plus humidity with three workplace then?” Ouch, but she had a ADVISORY BOARD OF CIO NEW ZEALAND. tired teenagers. point though. REACH HIM THROUGH owenmccall.com

10 CIO SPRING 2015

COST MANAGEMENT/ OPINION

Overtaking Moore’s Law By Kevin Noonan

or the past 50 years, Moore’s commodity IT, rather than technology line involving a combination of internal Law has been one of the key as a disrupter and agent for change. IT costs, the cost to the organisation, and barometers of technology In many organisations, IT managers the cost to the broader community. If we development around the have become hamstrung by Moore’s consider IT costs from this perspective, world. However, its status Law based expectations about cost the traditional accounting view of is fast diminishing as other factors containment, rather than value creation internal cost/benefit analysis needs to are set to dominate changes in the IT driven by innovation and speed to be supplemented with a broader look at landscape in the years to come. market. Bound by legacy systems, the subtle art of cost shifting. Moore’s Law is not actually a law restrictive procurement and shrinking Consider the following example at all. It could be better described as a budgets, some IT managers have turned where an old expense claiming system market forecast. Back in 1965, Gordon into reluctant gatekeepers tasked with might be up for renewal. If viewed Moore predicted that the compactness limiting the growing array of devices, through a traditional lens, the cost/ and power of technology’s underlying and the technological exuberance of benefit analysis would be pretty simple. computer chips would double every one hopeful staff. But the gatekeeper role It would consist of software costs (which to two years. Since then, Moore’s Law is a no-win position. It places IT as go up over time) and internal hardware has been used to predict the significant an arbitrator, charged with holding (which goes down over time due largely changes in the industry from mainframes back the use of technology rather than to the effect of Moore’s Law). to minicomputers, then to laptops, encouraging its use. However, the value equation changes handheld devices, and now sig n i f ic a nt ly w hen t he to the Internet of Things. For potential for cost shifting in TODAY’S FOCUS ON THE DIGITAL five decades, Moore’s Law has the digital enterprise is taken ENTERPRISE PROVIDES A SIGNIFICANT been the regular heartbeat into consideration. Relatively of change in the IT industry inexpensive mobile apps OPPORTUNITY TO RE-EVALUATE driving further development are a lready available to THIS TRADITIONAL THINKING. and miniaturisation. capture invoice information However, the problem at source, on each staff with Moore’s Law is that it can focus Fifty years ago, Gordon Moore’s member’s mobile device. This enables too much attention on the underlying now f a mou s spe e ch pre s ente d processing costs to be shifted to the staff technology and completely miss more an optimistic perspective on t he member, leaving a significant reduction significant changes that are being future of IT development. In those in the work to be performed centrally. realised through increased business early days, IT managers entered the In this particular example of cost productivity, innovation and through corporate workplace as advocates of shifting, staff members also come out as the increasing connectedness of our opportunity and change, at a time when winners through improved services and society. It is no longer as important that organisations were largely rules-based less bureaucracy. technology is getting smaller, but that and deterministic. Today, IT managers The same logic can be applied to is has entered every conceivable part of must take care not to become typecast as shadow IT, which is seen as problematic our lives. the enforcers of rules and determinism by traditional management theor y. Moore’s Law might very well live on for in a workplace that is fast becoming However, if seen through a lens of another fifty years, but there is a very good populated by technology advocates. digital cost-shifting, shadow IT is chance that hardly anyone will notice. The cost of IT is no longer just about moving costs to a part of the Today’s focus on the digital enterprise about internal hardware, software and organisation closer to the point of value provides a significant opportunity to implementation costs. Instead, it needs to creation. Moore’s Law is just one small re-evaluate this traditional thinking and to focus more on the savings opportunities part of a much larger discussion. break free from the simplistic constraints that can be realised by leveraging the KEVIN NOONAN (KEVIN.NOONAN@OVUM. of cost containment. power of many people using many COM) IS RESEARCH DIRECTOR, PUBLIC Moore’s Law has tended to focus devices. The IT cost/benefit equation SECTOR, AT OVUM too much attention on cost-cutting and can better be described as a triple bottom

cio.co.nz 11

COV ER S T ORY / STRATEGY

Building blocks of leadership

12 CIO SPRING 2015

STRATEGY / COV ER S T ORY

WHEN HANNES VAN ZYL BECAME CIO AT HAWKINS GROUP, THE STAFF WERE ‘SCREAMING FOR I.T.’ BUT AFTER LAYING THE FOUNDATIONS FOR THE NEW BUSINESS TECHNOLOGY PLATFORM, HE PONDERS ON THE NEXT MISSION FOR ICT. By Divina Paredes Photos by Tony Nyberg

CT is now the front end, centre and back end of the enterprise. No business can run without it. While this adage is a given now, most CIOs have war stories on how at one point in their career, a major goal, together with their teams, was changing the perception of ICT. That is, moving from cost centres into value providers and business partners. Hannes Van Zyl, CIO at Hawkins Group, is no stranger to this challenge. He has, however, an added advantage. In his past two CIO and IT manager roles, he has been fortunate to have the CEO making sure the ICT department achieves this goal. Van Zyl joined Hawkins Group nearly two years ago. The CEO, Geoff Hunt, recently used ICT as a model for the changes that will be happening in the months ahead. Hawkins Group is one of New Zea la nd’s la rgest privately-ow ned con st r uc t ion a nd i n f ra st r uc t u re companies, and now operates offshore in Indonesia, Papua New Guinea and Fiji. Established in 19 4 6 , t he group comprises four businesses: Construction, Infrastructure, Harker Under g r ou nd C on st r uc t ion a nd the project management arm, the Canterbury Recovery Project.

VIEW FROM THE TOP TABLE Hawkins CEO Geoff Hunt explains why he uses the ICT overhaul as a model for change management. Hunt says he went on a roadshow at the start of his term and in his

meetings told staff, “We have a strategic plan, a business plan: There are some fundamental changes I have made to move the business along. “You change the leaders in order to take the business forward,” he adds. “The people who are already there are doing things in a particular way. If you want to do it differently, you have to put new leaders in place.” Zeroing in on the company’s IT, he says the latter needed a major software and hardware platform upgrade. “I have found somebody who has done it before and who has assembled a great team around him,” he says, referring to his experience of working with Van Zyl. “We have moved at speed and we have a rea l ly good net work infrastructure,” he states on the ICT transformation of the past two years. Hunt says today, Van Zyl and his team are working on broader business problems, such as getting connectivity in remote sites in Indonesia where the company is building a geothermal plant.

‘SCREAMING FOR I.T.’ Hunt had tapped Van Zyl for the first CIO role at Hawkins. They have worked

HANNES VAN ZYL, HAWKINS:

“WE MADE A FUNDAMENTAL DECISION THAT EVERYTHING WE DO WILL BE CLOUD-BASED FIRST – DEFINITELY FIRST, IF NOT ONLY.”

together at Transfield where Van Zyl was IT manager and Hunt was CEO of Alstom, one of the companies bought by the group. At Kordia, they were CEO and CIO respectively. “What made it really easy for me was Hawkins had been underinvesting for so long, the staff were screaming for IT,” says Van Zyl. “They were quite open to any change. They said, ‘Bring it on’.” Hawkins then had two IT staff who served around 600 employees. “The only way they could survive was to lock everything down and present everything through Citrix,” says Van Zyl. This presented huge challenges for the staff who worked remotely in New Zealand and overseas. Their laptops were operating as a thin client. “You had no access to the C-drive. “Very quickly we made a fundamental decision that everything we do will be cloud-based first – definitely first, if not only,” says Van Zyl. “It is only in extreme circumstances that we are putting stuff on-premise. And that is only, if it cannot work any other way.” There were no systems for incident management, and requests were not logged. People used to email or call the IT team, says Van Zyl. He says t he next step was to implement a comprehensive Service Desk t hat incor porated incident, problem, and change management based on ITIL. They also implemented web filtering. Van Zyl says they also rebuilt the Active Directory domain. The group had

cio.co.nz 13

COV ER S T ORY / STRATEGY

GEOFF HUNT, HAWKINS:

“WE HAVE MOVED AT SPEED AND WE HAVE A REALLY GOOD NETWORK INFRASTRUCTURE.” two Active Directory domains that were not in sync. “We restructured the backup systems altogether,” he says. The systems used to be kept in a “modem closet” in a little back room. These were all relocated to the Spark data centre in Takanini in South Auckland. The building, he notes, was built by Hawkins. Van Zyl implemented Microsoft Office 365, then followed this with Lync collaboration and Enterprise Voice. This enabled the company to get rid of all its PABX systems. “Because we have implemented Lync, Hawkins staff can now do all of their office work from any where in the world, literally, where there is an Internet connection.” Va n Zyl says t his is critica lly important because Hawkins has project sites in “rather interesting places” in New Zealand and offshore. Van Zyl also implemented a software distribution platform, doing away with having everything installed manually. Procurement for both hardware and software will also be done through this system. Van Zyl says the original two IT staff are still with him but their roles have changed. The team now includes nine people including Van Zyl. They are composed of four service people: a level three engineer, an enterprise architect, an IS office administrator and a business analyst “cum Sharepoint cum CRM person”. “It is a very lean team but hugely effective at what they do,” he says. “We basically rebuilt the infrastructure from the bottom up so we had a platform that we can start impacting the business with.” The transformation is ongoing, as the team continues to work on more programs including asset management and asset tracking.

14 CIO SPRING 2015

OUT OF SOUTH AFRICA While Van Zyl holds a very strategic CIO role, and is very much entrenched in the executive leadership team, his career ascent was the result of years of intensive education and training. He broadened his deep technica l experience with business management roles in offshore companies. Van Zyl became CIO at Hawkins Group in November 2013, following eight years in the same role at Kordia. Before this, he was IT manager at Transfield Services for four years, and service delivery manager for the same number of years at Carter Holt Harvey. His rise to CIO started in his native country South Africa, where he completed an engineering diploma at Telkom South Africa, a telecommunications company operating across the continent. It was in the late 1970s, and in those days the engineering diploma was equivalent to a BSC honours. “You do practical as well as a theoretical education, you go through all of the various components of a telco,” he states. This meant working on cables, microwaves, exchanges and radio. From there he joined a forest products company where he was assigned to work

on wide area networking. He then stepped up to the equivalent of operations manager. He had the networking, data centre and operations people reporting to him. He moved to New Zealand and worked for forest products company Carter Holt Harvey. He worked on the networking area and after 18 months was promoted to the equivalent to infrastructure manager. He was responsible for all of the network systems, systems administration and the data centres. He managed a team of 50 people. It was an international role as CHH had offices in New Zealand and Australia. After four years, he moved to Alstom which became Transfield. He was the group’s IT manager, and it was where he worked with Hunt as CEO for the first time. Through the years, even when working with the same CEO, Van Zyl observed profound changes in the CIO role. “Initially, it was purely a hardware role – just making sure you keep the infrastructure running with as little interruption as possible, with very little systems interaction. “These days it is all about maximising business performance.” Or, as he puts it, “making the boat go faster”.

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COV ER S T ORY / STRATEGY

“I do ever ything from business optimisation to running the shop as per normal to helping set policy to deciding on which location we are going to go to.” He says he and his team are lucky that at Hawkins there are not a lot of “big lumbering ships left”, referring to legacy systems, following the ICT overhaul. “It is a complete refocus of the role,” he says. “It is much more integrated with the business than ever before.” He believes the shift in the CIO focus ref lects the pervasiveness of IT in the organisation, and in his case, the confidence of the CEO in the ICT leadership. “IT is a crucia l component in delivering business outcomes, you can’t run a business these days without IT, and it is equally so in the construction industry.”

TECH EVANGELIST Van Zyl says the ICT revamp at Hawkins a lso hig h lig hted a not her role of today’s CIO. Hawk ins Group was t he f irst company in New Zealand to install Polycom’s latest videoconferencing system running Microsoft Lync. Thus, Van Zyl was asked to explain the project in a promotional video for Dimension Data, which implemented the system. “It is part of what you do as CIO,” he says. “You are the technolog y spokesperson and salesperson as well.” Being in front of a camera, however, was not a new experience for Van Zyl. When he was CEO at Kordia, Hunt started the Kordia Business School, where internal and external people presented on a raft of business topics and technology trends. Van Zyl was among the executives who recorded these presentations which were webcast across the group. His presentations ranged from new IT projects to explaining the information security policies and procedures. Hawk ins a lso sta r ted its ow n business school last year. “My role is to make sure that technology works and

16 CIO SPRING 2015

operates properly and to contribute to the content from time to time.” He contributes “varied” webcasts on leadership t hink ing, a nd new technologies that are coming up and how these can help the businesses. He agrees not all CIOs are given these opportunities, but as he explains, part of the role is to “influence” people on leadership thinking. One of his roles is also to look at a raft of new technologies. Drones and 3D printers are on top of the list. The drone will be piloted soon to be used for surveying buildings and construction sites, he states. 3D printers have the potential to have massive use as the construction i ndust r y moves to prefabr icated materials, he explains. “We will be building Lego blocks rather than having to do it all on site.” T he c ompa ny, t her efor e, i s investigating whether 3D printing is an option when people are working in a remote site.

“If you do not have a particular part you can print it right there and then,” he states. The printers can also make prototypes. “These will speed up construction but time will tell if it could be a lot more efficient.”

I.T. REACHES OUT The revamp also extends to programs involving other business units in information technology and security issues. Hawkins now has an IS user group comprised of volunteers from across the organisation. The user group is the “eyes and ears” for business technology issues on the site, says Van Zyl . “They get to know what happens in IT first and will typically be the first users of new technology and have the option to be on the pilot group for these projects.” Van Zyl also believes corporate initiatives need to be balanced with activities for the communities they work in. Some of the projects he and his team work on are programs offering training in construction for Maori and Pacific Island youth.

STRATEGY / COV ER S T ORY

“It is a different form of internship,” he says. “While they are doing the work they are getting training and from there they can go and do a proper apprenticeship.”

READ THE FINE PRINT

HANNES VAN ZYL, HAWKINS:

“WE BASICALLY REBUILT THE INFRASTRUCTURE FROM THE BOTTOM UP SO WE HAD A PLATFORM THAT WE CAN START IMPACTING THE BUSINESS WITH.”

A piece of key advice Van Zyl would like to share with CIOs is this: Review your contracts well. “As a business we are also seriously focused on growth and EBIT [Earnings Before Interest and Tax],” he says. “Typically, ICT is seen as a cost centre, so what we set out is to relook at suppliers’ and vendors’ contracts and see where we can refocus, and to be quite blunt, cut costs.” He says the review and renegotiation of the contracts in other areas will save the company a seven figure sum every year, “not a one-off”. The review, among others, led to the renegotiation of fixed line and mobile contracts, as well as with the printer provider. The company now only pays for copies printed with ‘follow me’ printing, where a print job is collected after the user has authenticated the device, and also auto deletes jobs that are not collected within a specified time. This is both for security reasons and to reduce wastage, he says. He advises looking particularly at contracts with telecommunications providers. “Make sure you have the tools so that you can monitor and manage your telco contacts properly and at any point in time you know what is happening… Don’t rely on your telco providers. They will tell you what they want you to know.”

‘EVERYTHING IS DIGITAL’ The move towards digital platforms is top of the agenda for Van Zyl and his team. He explains the group does not have a chief digital officer because for ICT, “everything for us is digital”. He states: “If you are driv ing mobility, you are driving digital.” Va n Zy l s a y s H a w k i n s i s reformulating and rewriting its policies

and procedures, “the blueprint of how we do processes”. These will all be on SharePoint and can be accessed on mobile devices. The new health and safety system will be digitised as well. “Instead of having volumes and volumes of printed manuals it will now all be electronic.” He says the company is also foraying into social media, using Facebook and LinkedIn for recruiting staff. The brand and communications team, meanwhile, is monitoring social media sites like Facebook and LinkedIn for comments that affect the company or their sector. Col laborat ion across d i f ferent groups is also on the rise, following the rollout of Yammer and Lync. “Ya mmer is in infa ncy at t he moment but construction teams are using it so they can gather information a nd d i s sem i nate i n for mat ion a lot quicker.” The company has “a very dated implementation” of CRM, which is being used in the infrastructure business. The idea is to implement the cloudbased Microsoft Dynamics CRM, says Van Zyl. The financial system is also being reviewed in the wake of the company’s international expansion. “We have been really focused last year on getting the foundations right, so we made sure the infrastructure is rock solid and that we can now connect people from literally anywhere in the world to the mother ship. “This year is more about building on the system’s profiles. “We will have team sites for every project. With the predefined structure, they can file their documentation properly and will be able to retrieve it a whole lot easier. “We are on a journey to becoming a partner in the business. I don’t think we are there yet,” he concludes. “These days we are a lot more part of the conversation than we have ever been before. And, absolutely, we contribute to the bottom line.”

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CIO? WHAT IS NEXT AFTER

SP O T L IGH T / LEADERSHIP

OUR PANEL OF CURRENT AND FORMER CIOs FORGED DIFFERENT CAREER PATHS, BUT SHARE A COMMON THREAD – THEY CAREFULLY PLANNED AND WORKED HARD TO TRANSITION INTO MORE THAN JUST CIO.

JULIA RAUE: BUILDING THE NEXT DIGITAL MILESTONE

Raue helped create a new role – the chief digital officer – who will take charge of her CIO portfolio when she leaves.

ulia Raue says it is a privilege to be holding one of the largest CIO roles in New Zealand. “I’ve never taken the role for granted,” she says. “We work incredibly hard to ensure success,” says Raue on being CIO at Air New Zealand for the past eight years. She could have continued to stay in the role as CIO at the airline, but late last year decided it is time to take her career to the “next level”. “I want to do something completely different,” says Raue, who joined Air New Zealand as a contractor in 1999, then progressed to roles including Distribution and Customer Solutions manager and General Manager Group IT Production. Raue became a director at TVNZ mid-2014, and this opportunity made her take a step back and realise how much she has experienced at Air New Zealand that 18 CIO SPRING 2015

she could share with other organisations. Raue reports to chief financial officer Rob McDonald and discussed with him in November last year her intention to wrap up her CIO role by the end of 2015. Raue then carefully prepared for this transition. She worked with the executive team to widen the IT Review to include all areas of the organisation that could influence and grow their digital presence. Air New Zealand completed the review, and one of its significant outcomes is the creation of the chief digital officer role. Raue, in essence, disrupted her CIO role – it will be integrated into the portfolio of the CDO, making it a much larger role, with a different reporting line (report to CEO Christopher Luxon). A global search is ongoing for this post. “It is a CIO-plus role,” she explains.

The CDO’s team will comprise the whole ICT team, along with parts of the sales, marketing and operations. “It has digital sales, loyalty, commercial, digital innovation and customer experience, as well as information and analytics”. “It has business as well as IT delivery components”, she says. She is currently working with McDonald on embedding the structure for the CDO whose key accountabilities include innovation to remove “customer pain points”, working with the digital channels and loyalty teams to boost revenue and loyalty, and harnessing data and analytics platforms to deliver a truly personalised experience for customers. Security is a key component as the role will be involved in protecting digital assets through an ever-evolving information security practice, she says.

LEADERSHIP/ SP O T L IGH T

“A major aspect of the role is setting the company’s digital strategy, and ensuring there is capability to deliver on this plan.” She explains the key drivers for the creation of the new C-suite role. The executive team at Air New Zealand has been giving considerable attention to the areas of innovation and digital over the past 18 months, she says. Raue worked with the executive team on having a “genuine look” at their operations and business performance. “How can we improve that, what do we want to do continuously as we grow? “We wanted to test what works today, what does not work today, and what we could do differently. That was the foundation of how we started,” she says. “What should the structure of the organisation look like and how do we not just rebuild an IT portfolio but a truly digital portfolio? What are the elements that will define and support digital? “How can we learn from the big offshore organisations like Amazon, Pinterest, Google, Spotify and Facebook? How we can we learn from those that are not necessarily traditional corporates?” Raue – who went to Silicon Valley every year to meet with key technology companies, venture capitalists and startups – set up meetings this time for the other executives. The Executive Team met with 10 of the world’s top companies in the innovation and digital space in Silicon Valley. One of the sessions included a half day meeting with venture capitalists who were given areas of focus for Air New Zealand. It was similar to a ‘speed dating’ event where the VCs had 15 minutes to pitch their products in those areas. “It was a good way of bringing to life the digital shift and opportunities to the group, the need to go on a digital journey, and the scope of the CDO.”

POINTS OF DIFFERENCE Raue smiles as she points out how her current CIO role is “very, very different”

from the first time she stepped into the post. “When I took the role, we would do one strategic change programme a year, alongside some smaller programmes at the same time. “When I reflect on my role today, our capital spend has grown three to four and instead of doing one strategic programme, we now run multiple strategic programmes each year. “This year, we currently have over 100 IT projects running,” she says. “The ICT team fully enables the goals of the organisation through ground-breaking, award winning technological innovations.” The shift was also evident in the makeup of the ICT team. “In my first year as CIO, in-house development was still a relatively new area for us, supporting a small base of online sites,” she says. Today, she says, Air NZ does a significant amount of in-house development. “Internal development now supports innovations and applications across the entire enterprise and customer experience journey,” she says. New roles support the shift in digital and include security, user design, interaction and experience, enterprise architects, data architects, business change management and advanced testing roles. Their work also encompasses information and analytics, APIs (application programming interfaces), infrastructure on demand, DevOps and continuous delivery. “When I first became CIO, we had very basic testing requirements. Now we have a full range of testing complements in terms of roles and responsibilities. We did not have UX [user experience], UI [user interface] and CX [customer experience] roles,” she explains. Air NZ had used agencies for these skills, but with its growing work on mobile and digital space, it invested in these roles, and will continue to do so.

The ICT teams are also working on more diverse technologies across the airline. Technologies that were not in the team’s original portfolio eight years ago include self-service kiosks, gate and lounge technology; mobile apps; inflight entertainment; data and analytics platforms; buy on board systems; aircraft systems including on-board the aircraft; new financial partners, systems and cards including the OneSmart online wallet and application. Raue says ICT now also works on advanced systems to support communications and staff engagement, sales, ancillary revenue, cargo, crew, finance, human resources, operations and business performance. When Raue started, she had an enterprise data warehouse, but no data analytics platform. Now, she says, “We use analytics with every single thing we do.” She says other areas where ICT at Air New Zealand will expand are security, enterprise architecture and business change management. “We continue to grow our security practice,” she states. “We have to, as trends change and the threat landscape continues to shift.”

TRADITION AND INNOVATION Raue says her experience at Air New Zealand highlights the importance of being able to trial new ways of working, without risking the stability of the corporate that is heavily reliant on technology. She says while the traditional ICT elements were needed, the airline also worked on projects that gave it opportunities to “change the future”. “We do things differently, almost like a startup,” she says. Their approach is to “ring-fence some elements and use them to try new ways of working”. “If they are really successful we can embed them into the corporate,” she states. She stresses these activities cannot be done in isolation. “You still need the cio.co.nz 19

SP O T L IGH T / LEADERSHIP

business knowledge, all of the skills and experience, but you can protect it within. The corporate rules and regulation are there for good reason. “How can you not impact the business, but at the same time protect elements and use it as a test bed?” As to keeping up with major trends in the industry and beyond, Raue says, “I continued to watch what is happening globally and locally and understand how we can push and stretch ourselves to make a difference to our customers and Air New Zealand. “I look at what others are doing but am not always too quick to jump,” she says. “I also trust my gut.” This happened when she and the team were working on their booking engine, she says. Their competitors were signing up big licensing contracts for their booking engines. She says she chose to stop signing it off to an outsourcer for two reasons: to grow Air NZ’s own online experience, and to be in control of its own destiny. “That was where we could see good opportunity for growth,” she says. “It was a lower cost platform that was getting more and more uptake.” As she notes, the online uptake was quite immature in New Zealand at that time. The booking engine platform and in-house development team enabled the launch of ‘grabaseat’, followed by other successful projects like self-check kiosks and RFID tags. She says other organisations were looking at what they did, recognising they were some years ahead. “It was a risk for us but one that we managed carefully and one that paid off.” She does not specify which of the projects she has worked on that proved to be the most challenging, but cites instead those that had the “most rewarding deliveries”. These were the airline’s move towards online booking engines, the self-check kiosks at both the domestic and international airports, and the mobile app. 20 CIO SPRING 2015

Her takeaway from this is: “What makes us successful as leaders is people – collaboration with stakeholders, partners and our own teams is vital to our success. The rest is a mix of an idea or innovation, testing it, taking it to market and watching it grow.”

NEXT IN LINE Building a leadership bench through mentoring is a key feature of Raue’s stint at Air New Zealand. “There are a number of people across the ICT community whom I have mentored, and continue to do so,” she says. Raue also mentors a number of female leaders at the airline outside of the ICT portfolio. “I’ve spoken at numerous events

She has also spoken to parents at the Manukau Institute of Technology on the opportunities that a career in ICT can offer their children. Often, she says, the parents are the ones who guide their careers. “I have also spoken at a number of organisations and conferences on what it means to be a female leader and technologist, as well as what it means to be CIO at Air New Zealand,” she says. She looks at her post-CIO role at Air New Zealand as another milestone. “It is interesting what milestones trigger what you are doing.” She says her son Ethan was aged one when she joined Air New Zealand, and he is leaving school at the end of this year. That is why she timed her departure at the year-end when her children are

JULIA RAUE, AIR NEW ZEALAND

“I would really like to become a CEO of an IT focused company that would really take a digital stand.” to continue to drive awareness and interest in an ICT career with a particular focus on encouraging women to consider this career opportunity,” she says. “When I joined the IT industry, it was very male dominated,” says Raue, who had worked at the Auckland City Council and Presbyterian Support at the start of her career. She recalls that when she attended training courses and events, the other participants assumed she was the administration person for the event. “That could be hard for some women,” she says. This personal experience has driven her to support a number of community and school projects like the Girls Innov8 and Girls Coding Camp initiatives.

off school. The whole family will then head on holiday together to Europe. While she has yet to finalise what her next career step will be, she knows what it will – and will not – entail. “I am not interested in a smaller CIO role,” she states, as she is looking for a “really large digital transformational type role”. “I would really like to become a CEO of an IT focused company that would really take a digital stand. That would excite me.” It could be another enterprise, a technology company or a startup, she says. “I will leave the airline at a really exciting time,” she says, smiling. “Air New Zealand will be into one of the largest internal transformation programs from a people’s perspective…I will see it grow, from a distance.”

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DAVID SPAZIANI: ON MIDDLE GROUND

David Spaziani has worked in a global technology company, CIO of a government agency, and now rounds up his experience as an executive partner at Gartner.

oing to the ‘dark side’ is used to describe CIOs joining a technology vendor. So what do you call the move from CIO to analyst? “It is not going one side or the other, it is going into the middle,” says David Spaziani, who joined analyst firm Gartner four years ago. “What I saw from being on the vendor side and on the customer side, there was a gulf, sometimes a misunderstanding and miscommunication between the two. “For me, this was an opportunity to help bridge that gulf, of finding a way to bring the two sides together,” says Spaziani, who is executive partner at Gartner Executive Programs, working with CIOs and other C-level executives on both sides of the Tasman. He says this role makes full use of his 28-year experience in ICT. Spaziani was CIO of the Department of Internal Affairs in 2006 to 2010. He had also worked as program manager for the Ministry of Economic Development (now part of the Ministry of Business, Innovation and Employment). Before joining government, he worked at EDS (now part of HP), Unisys and Kodak, and as a research programmer at Melbourne University. Upon leaving DIA, Spaziani “stepped back” and assessed his career. He then worked as an independent consultant and “virtual CIO” to small organisations, before taking on the role at Gartner. “You really get to look at what are genuinely the big issues for a CIO or for an organisation without having the day to day operational issues to worry about,” he says on his current role.

“You need to be clear and current about what you will offer them,” he says. “The challenge is to make sure you sort out the vast information around you, turn it into something that makes sense, and not bombard them with more information to sort through.” As for the unexpected side of his role, he says, “I learned more about the softer side of organisations and people interaction than technical… how people communicate, the relationship dynamics people have with their manager or within an organisation.” He says focusing on these ‘softer skills’ is important as they are key elements to whatever issues the organisation faces. He finds himself using this quote from Roman emperor Marcus Aurelius when discussing the ‘softer skills’ of organisations. “Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.” “If it was good enough for a Roman emperor, it is good enough for you and me,” says Spaziani. “He had

appreciation of the breadth and depth of issues people may want to talk to you about, I would not be able to help very much, I would not be able to really listen. “It is more than consulting,” he says. “Consulting is more about being a generalist and then providing management answers. You need to understand the technical environment as well. “You need to have a look at the architecture and say, ‘This program plan and objective is going to fail,’ for example. You need the background to be able to do that. “I would relate their situation to not just what our research says, or what other people are doing, but when you tried it yourself you will be able to tell those stories too.” Spaziani says his current work schedule is very different from his days as CIO. He works closely with around 20 Gartner clients on both sides of the

DAVID SPAZIANI, GARTNER:

“You need to be on your game at all times.” to deal with politics and above all organisations, and with organisational dynamics that are far more tricky than anything we have to deal with.” ‘Listening’ is a skill he developed as a CIO that he finds useful now but clarifies “it has got to be knowledgeable and critical listening”. Having worked on a raft of projects with major technology components is something he brings to the role. “If I did not understand the domain and did not have an

Tasman. “It really varies week to week because it depends on the priorities of the organisation,” he says. He discusses various work programs and particular issues, and sometimes helps in the interview for a replacement CIO. Other times he helps a CIO prepare for a presentation to the board or an industry conference. “This work has helped me learn all the things that a CIO should be doing, and what they should be doing differently,” he says. cio.co.nz 21

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HOW TO BUILD A ‘PORTFOLIO CAREER’

Getting to the C-level is not always the end goal, and more CIOs are charting their own career roadmap, says Oliver Hawkley of Kerridge & Partners.

liver Hawkley says the biggest trend this year that Kerridge & Partners has observed for CIOs is the rise in companies requesting for board members who come from the technology landscape. More particularly, they are looking for candidates with an understanding of cloud computing, its risks and the security implications, he says. He is not surprised he is seeing this trend, as SMEs, charitable organisations and corporate boards are cognisant they “need to bolster their expertise within the technology landscape”. He says the rise of digital platforms is linked to this demand. “It is giving CIOs a very real option in their careers to seek a board appointment with a variety of organisations. “More importantly, CIOs have an opening into the world of governance, and they can provide real value to the company they are advising.” He says a CIO has to factor in the unique challenges each organisation will face. “Take a look at the individual organisations, how long they have been around, what is the three to five year strategy? Historically, how have they utilised the skills of other board members? How do they intend on utilising your skills? What are the expectations and interactions between the board and the CEO?” He says CIOs moving to CEO roles are not as common as those coming from the more traditional routes of other c-suite 22 CIO SPRING 2015

backgrounds. But he believes more opportunities are opening up for CIOs with CEO aspirations. He says some of the companies he is working with now are looking for CEOs with a “strong understanding of technology” and this is an exciting time for CIOs in their careers. “Increasingly, the expectation is not just strong people, financial and operational leadership skills for CEO candidates,” he states. “The leadership angle has to encompass technology, and specifically understanding technology as an enabler of disruptive business strategy.”

SUCCESSION PLANNING He says part of a CIO’s career plan should include preparing the next person who will step up into their role, as this displays wider corporate responsibility and strong leadership ability. He says this type of mentoring and coaching is critical to the CIO role and is strategically important to the wider business. “It is important in the career of the CIO to think about: What talent is emerging behind me? Who is going to take over the reins when I leave the organisation? How can I leave a positive legacy once I have moved onto my next position?”

OLIVER HAWKLEY, KERRIDGE & PARTNERS:

Part of a CIO’s career plan should include preparing the next person who will step up into their role.

He says it is interesting to note how ASB and Air New Zealand, which have both had a CEO who was a former CIO, Sir Ralph Norris, are known for their strength in technology and innovation. “It is no coincidence these organisations are now performing so well. “I predict in the next 10 years, there will be more and more CEOs that will come from a technology background,” says Hawkley.

For CIOs who have ambitions of being a chief executive, he suggests seeking roles that are part of the executive team rather than reporting indirectly through another c-suite position. He says several CIOs he has recently met with have embarked upon a “portfolio type” career after leaving their CIO role. They have enjoyed developing a wider skill set and working with several companies from a

LEADERSHIP/ SP O T L IGH T

PHIL BRIMACOMBE:

MASTERING THE FLOW

The head of corporate services at NorthTec is an example of how CIOs can transition to different sectors and posts in the executive suite.

consulting position. They are also exposed to wider industries which helps them develop business strategies, he states. “It is different working within a role on a permanent basis to the role of consultant working with a business team,” he says. “You are often in a position of privilege where they open up challenges they are facing without expectations of people leadership or ‘business as usual’ tasks. You add that highly useful third person external advice, and are able to step back and see the impact of your advice to the organisation. “I have seen a trend where some CIOs will do this for 12 months or up to two years, then move back to working in the more traditional permanent executive team role,” says Hawkley. “These experiences, in the long term, gear them up to better fulfil other roles at the executive table.” He says what makes the CIO role exciting is that getting to the c-level is no longer the end goal. “You don’t necessarily have to or are expected to go from CIO to CIO role, you are able to lead a portfolio career and then return to the Executive with more nimble business skills.” He says the rather confronting reality is that most people today will be working later in life than our predecessors. “Things are going to change not only in technology, but also the demands on skill sets,” he states. Everyone’s role will change. “Whether you are an accountant, a plumber, a policeman or a CIO, your role is going to be different as a result of technology in tomorrow’s world.”

hil Brimacombe has basic, if direct, advice for CIOs looking for broader executive roles: “The most important thing is to stop thinking of yourself as the IT person and think of yourself as a senior business executive who is contributing across the board, and you just happen to have the IT portfolio.” The head of corporate services at NorthTec in Whangarei says that if your colleagues see you are contributing to all parts of the business rather than just restricting yourself to IT matters, then they are far more likely to see you as a possible candidate for broader roles. It is a dictum Brimacombe has certainly applied to his own career. From a project manager role, Brimacombe has moved to IS and IT manager to CIO, principal consultant and director IT strategy, policy and planning. This pathway cuts across sectors – retail (Progressive Enterprises), finance (HSBC) health (healthAlliance and Counties Manukau District Health Board and Waitemata District Health Board) and education (University of Auckland and NorthTec). He was also a senior consultant with Techspace. In his current role, he is responsible for leading and managing multidisciplinary teams that provide services to NorthTec, the largest tertiary education provider in the Northland. These include finance, assets and facilities and information technology, so the IT director reports to him. While he traversed different sectors, he is clear on one thing: “You

need to stay with an organisation long enough to demonstrate that you are a success at an organisation. “I was eight years in retail, eight years in banking and 12 years in public health,” he cites. He was director of IT strategy, policy and planning at the University of Auckland for three years, when he moved to NorthTec, “When I am recruiting, I look for a balance, that variety of sectors, and also a track record, that people have stayed in the place and have not flitted on [to another job] after a short period of time. “If you put in a solid number of years and you are still in a senior role, then you must be doing something right and delivering what is required.” He believes CIOs can acquire a raft of skills to be able to work across sectors and higher roles. He says this was proven by Sir Ralph Norris, who moved from CIO to CEO at ASB Bank, and later on to chief executive at Air New Zealand and at ASB’s parent bank Commonwealth Bank in Australia. He also cites the case of Garth Biggs, who was CIO at Progressive Enterprises and Air New Zealand and then become chief executive of Gen-i (now Spark Digital). Biggs is now a professional director and business consultant. Brimacombe was an IT director when he completed a master’s in business administration. He believes having this qualification was a big factor when he got his first CIO role. “The MBA opened my eyes to all the different aspects of business and of organisations. It gave me a broad understanding cio.co.nz 23

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ROB LIVINGSTONE:

TAKING THE NEXT STEP

“I make sure that anyone or any organisation that crosses my path is better off after interacting with me,” says Rob Livingstone, of his IT advisory and mentoring practice.

PHIL BRIMACOMBE, NORTHTEC:

“Think of yourself as a senior business executive who is contributing across the board, and you just happen to have the IT portfolio.”

of how organisations work.” His MBA was mainly on finance, which helped him when he stepped up to C-level roles. “As a CIO, I was responsible for multimillion dollar budgets and operational and capital,” he states. “I worked at a very senior level reporting to the chief executive and being a member of senior management teams. Therefore, I was sitting around the table where strategies and strategic decisions were made and being involved in discussions around running the business right across the board. And of course, having to provide IT services for all parts of the organisation. “That means you have to have a good understanding of how the organisation works. “You are not a technician anymore,” he concludes. “That is why being a CIO helps you move on to these broader business roles later on.”

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ob Livingstone was CIO at Ricoh in Australia when he started thinking what he would do next. He talked to a number of people he trusted to get their perspective on the matter. The biggest advice, he says, came from another executive who told him: “One cannot assume by having a fantastic job, doing a great job where you are now, is a guarantee of a long-term career, that your long-term career prospects will continue to flourish.” “That set me focusing very clearly on the next 10 to 15 years of my professional life,” says Livingstone, who now runs an IT advisory and mentoring practice in Sydney. Livingstone is a fellow at Faculty of Engineering and Information Technology at the University of Technology Sydney, where his focus is on areas of leadership, strategy and innovation at the Master of Business in Information Technology Program. He is also a book author, and his latest book, Direction through Disruption is a “guide to career resilience during rapid technology and workplace change”. “I started my own advisory practice with a very simple business proposition,” he says, “maximum value in the shortest possible time”. “I make sure anyone or any organisation that crosses my path is better off after interacting with me.” He says he distilled actionable business strategies around this “high level concept”. He now works with clients across the C-suite and from various sectors. He also runs a CIO Mentor Program, working with CIOs “that are thriving, coping, declining and everything in between”.

These CIOs recognise the environment they are working in is changing quite dramatically, he says. “Essentially, one has to treat what they are doing as a form of running their own business. “Part of the role involves ensuring their clients, their customers, which is their employer, understand the value of what they are getting from both themselves as a manager/executive as well as what they deliver to the business. “In other words, what is their value to the organisation as an influencer, as someone who can offer insights, who can incubate innovation, and lead the discussions of peer executives to where the organisation can go? “A visionary, entrepreneurial leader would not be running a legacy structured 1980s management style department.” Thus, he says, the aim of the CIO he works with is to influence the organisation to “the potential of a well-run dynamic future focused IT division that can actually help drive the business, not just be a cost centre or delivering services”. “It is a future facing discussion.”

ROB LIVINGSTONE:

“One cannot assume by having a fantastic job, doing a great job where you are now, is a guarantee of a long-term career.”

LEADERSHIP/ SP O T L IGH T

CHIP FELTON: DRIVEN BY DATA

Chip Felton moved from New York to Nelson, and now works with organisations across New Zealand on business intelligence programmes.

hip Felton is cognisant his career trajectory to CIO was not typical. Felton, who is originally from the United States, started as a social worker, doing direct counselling work with clients, while finishing his master’s degree in social work. He rose to senior deputy commissioner and CIO at the New York State Office of Mental Health. Seven years ago, he moved to New Zealand and is now a principal consultant at Montage, providing business intelligence consulting services to organisations across New Zealand. Now based in Nelson, Felton relates how this multifaceted background is a great backdrop for his current role. “Social work has always been helpful in understanding people and how to deal with organisational issues,” he states. As CIO, he developed a good appreciation of, particularly for large organisations that have large IT departments, the issues those departments face. “When I was a CIO, a lot of what I was doing was trying to mediate between different groups, whether it would be a software vendor and internal business people or our IT staff. There is a lot of that, and those skills come very useful and they still do. They help me understand what they are doing, with organisational dynamics at play.” He found himself drawn to data driven research as he progressed through different roles. “I began to get more interested in the management side of social work, how to organise and deliver a wide range of healthcare services,” he explains. “Then I got interested in research, what is the proof that any of these [services] work?”

While completing his masters, he worked as a data analyst for a faculty member who needed help with analysing some of the data collected for a study. “That gave me an opportunity to learn a variety of statistical techniques and also what was available from the standpoint of data analysis software.” He then worked as evaluation researcher at the New York State Office of Mental Health. He analysed data from a variety of research studies and

“Our agency was responsible for working with federal government and administering the crisis counselling programme of the public health sector. “We were able to leverage our data platform to have that programme very data driven,” he says. “One of the things was we had to make sure we were reaching all the different ethnic communities in New York. “We used our data warehouse platform as well as data logs to track the services. We were able to monitor the services

CHIP FELTON, MONTAGE:

The things we do include everything from development of data warehouse, data preparation work, and working with customers enabling them to use the technologies for decision-making.” evaluated whether a mental health service might be working or not. This was in the early 1990s, and he recalls being surrounded by much bigger sets of data from various operational systems that people use. “Who’s got the services? How much do they cost? We began to get interested on how to mine those things.” This work led to a role in a new part of the organisation that was focused specifically on trying to leverage data, he says. The goal was to make the Office of Mental Health “more outcomes-oriented, more data driven”. He got involved in the overall management at the agency. We were using data more and more for decision-making.” He was doing this role when the September 11, 2001 terrorist attacks happened.

provided to ensure all the effort was targeted to people who really needed it.” The CIO left, and he took over the role for nearly six years. He also started a master’s programme in computer science at DePaul University through an online learning program. His computer science degree focused on software engineering and machine learning, and how to capitalise on it for BI function.

TURNING POINT He and his wife went to New Zealand for a vacation and “fell in love with the country”. Back in the United States, “We started to think about what it would be like to move over there, pack up and try something different,” he says. “We embarked on a midlife adventure.” cio.co.nz 25

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ROSS HUGHSON: In his first year in New Zealand, he completed his master’s degree in computer science. He also worked on BI-related projects, based on referrals from recruitment agencies. He was then offered the full-time role at Montage. “The things we do include everything from development of data warehouse, data preparation work, and working with customers enabling them to use the technologies for decision-making,” says Felton. He also has his own specialty in the BI space, focusing on data visualisation. When asked for his views on preparing for a post-CIO role, Felton says the CIO can draw skills from taking on a more broad role. “The skills required for the role range from leadership and persuasion management, to the ability to instinctively identify what are among the million technical trends you have to deal with, and distil which ones that are really important,” he states. “And then, build a balance of projects to prioritise those.” The CIO also has to figure out how to develop personnel and effectively negotiate resources, he states. “Any given CIO is better at and enjoys some of those areas than others.” Thus a CIO’s next role depends on his/her previous background before and what things he/she was most interested in while being CIO. “That is the biggest determinant where somebody could go post-CIO,” he says. In his case, he was most interested in using data for decisionmaking, and his current work allows him to work in this space. He says an emerging pathway for CIOs is chief data officer. “The notion that increasingly the organisation’s data assets and their ability to leverage those are as important as anything else to maintain competitiveness, and formally establishing a role needing that function potentially could be a great path for a CIO.” 26 CIO SPRING 2015

INTO THE STARTUP WORLD

The former CIO of Inland Revenue Department and Westpac NZ is now immersed in the world of business incubators, venture capitalists and crowdfunding.

ive years ago, Hughson opted to take a less trodden pathway for CIOs – to create a start-up business, having worked part-time as a business strategy consultant and independent Director while building his own company. At that time, he had already left the CIO role at Inland Revenue Department, which he held for five years, and before that, taking the same role at Westpac NZ for two years. Previously he was CIO for AXA (formally National Mutual). His entrepreneurial foray has been through a company called Personal Information Management (PIM). This company initially created myINFOSAFE, a digital vault application that people can download to their PC to help them organise and protect their personal Information. In 2012, his company prototyped a cloud-based service that sits between organisations and individuals, to aid the control and integrity of personal data exchange. The compay called this a Digital Vault, where people can control and manage their own personal information, and was one of the early iterations of a ‘personal cloud.’ Two years ago, he says, PIM realised the importance of identity to its Digital Vault service. During a trip to Silicon Valley, he and his business partner Aaron Stewart, met the owners of Edentiti, a major online identity verification company in Australasia. PIM became the New Zealand reseller of Edentiti’s greenID service, and Edentiti agreed to sell PIM’s services across the Tasman. PIM launched the greenID service in New Zealand in November 2014 and now has many customers using this service including New

Zealand Post, and Air New Zealand (through partners REVV). One of the major banks will go live with this service before the yearend. In a nutshell, Hughson explains how the greenID service works: “When an organisation needs to verify your identity online (e.g. when you are signing up for a bank product like a credit card) the bank will call our verification service. Banks need to do this to comply with the Anti Money Laundering legislation or to check if someone is misrepresenting a person’s identity.” GreenID will check the customer information against ‘authoritative’ databases. These include the passports database of the Department of Internal Affairs, the birth registry, citizenship file, and the Automobile Association for access to drivers’ licenses, and the Companies Office and Land Information New Zealand. In the past, the customer would have to go to the bank and show these documents. “We can enable that to happen remotely,” he says. “Through our process, we can ask the person to provide a bit more information about themselves, and we can verify the details they are giving are correct,” says Hughson. “Subject to the business rules we agree with that business, we can verify that person through our process. “We check a number of points, and basically we can come up to say, yes, this person has been verified or not.” Biometric checking services, based around mobile technology, will be added to greenID by the end of the year. Based on the learnings from both the Digital Vault and electronic identity verification, PIM has also developed a new service, code named KnowMe.

LEADERSHIP/ SP O T L IGH T

“In our original digital vault, you can store all your personal information, from contacts to passwords, to credit cards and other information about your finances,” he states. “But for you to interact with others, you really need to be sure who people are.” With the first version of KnowMe, users will be able to manage details for all their personal, work and organisational contacts – updating everyone at once from one place. Different profiles will help manage different relationships, roles, and contexts. A KnowMe user can text you to invite you to connect via KnowMe. If you have not got the app, you can download it and establish your own details.

equity crowdfunding platform, Snowball Effect, in the near future. The PIM startup has now grown into a team of 10 people, prompting them to move to bigger quarters in Wellington in September. Hughson says his experience on both sides of the business technology sphere – vendor (IBM) and customer – gave him the insights that spurred him to start PIM. “I have learned much about the value of information to organisations,” he says. “But in the information age, individuals need to understand the value of their information. There is a need for technologies that

change of details can ultimately go straight to their CRM system. “Would you like a live customer database as opposed to a static one? When I was a CIO using such a service would have made huge economic sense.” He says there is a cost for a company having to manage returns of their letters or messages. There are estimates it can reach up to $20 per addressee if you add the time and management to fix that, and post it to a new address or update the database. “Our business model is when an organisation gets an update of an address to their system, we get a small amount. And for that, individuals

ROSS HUGHSON, PERSONAL INFORMATION MANAGEMENT:

“There is a need for technologies that help individuals manage, organise and protect the avalanche of information they have to deal with in the age of big data and the Internet of Things.” “We then do what we call a ‘swap’”, says Hughson, and both parties will share their profiles. If you change your phone number or email address, the contacts are updated so it becomes a live contacts database, he states. Further services will be added or become evident within KnowMe over time, including integration with greenID. This will result in the user having a powerful tool to help them manage their personal information and their online identity. The free app (soon to be formally named) can be downloaded from the New Zealand App store. PIM is a fast growing startup that was incubated in Wellington’s Creative HQ, which has a 5 per cent shareholding. PIM has attracted a number of local investors into the business and is now getting international interest as well, says Hughson. PIM is also planning to raise funds through New Zealand’s leading

help individuals manage, organise and protect the avalanche of information they have to deal with in the age of big data and connected devices, the Internet of Things. “We are focused on finding new ways for people to manage their personal information,” he says, on PIM. He says the next step is to connect the KnowMe service with organisations, so they can get real time updates from their customers as their contact details change. From the customer’s point of view, this is real customer centricity – where organisational systems treat the customer as the source of truth. It’s not like that today, but Hughson thinks KnowMe will change this: “Today when you change your job, email address or your phone number, or your physical address, you have to tell everyone about the change.” But when companies use KnowMe to connect to their customers, the

get a tool to start controlling the interface with the people and organisations they deal with, in a secure and trusted way,” he says. “The success of the app will be dependent on the number of users, and organisations that sign up,” he explains. “A number of organisations have already signed up for the service, and as users swap details with each other, the number of users will grow. When it gets to the stage where an organisation requires use of the service for updating contact information, we will know the service has been fully understood and accepted by the market. “I believe that people undervalue their own information,” he explains on what drove him to create the app. “Today, they are very used to giving it away to the likes of Facebook and Google. Facebook and Google make money out of it. “Here is a system for you to start managing your own data and getting cio.co.nz 27

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value from your personal information. You are actually controlling it. KnowMe also basically becomes your digital identity over time and you control that as well. “We are getting it going here, and we are then going to take it to the world,” he says. He says New Zealand is a great place to do this project, which was also the opinion of some of the Silicon Valley specialists he has connected with in this area. “It would be difficult to get this up and running in the United States. But in New Zealand, you can get one or two organisations on board – a telco and one bank, for instance – and suddenly for New Zealanders, it will become the default way of managing your personal information.”

GOING BACK TO HIS ROOTS Hughson says he has not met a lot of former CIOs who have gone the same route. The closest one would be Scott Houston, former CTO of Weta Digital. Houston built GreenButton (acquired by Microsoft last year), which provides data processing services on demand, based on his experience from working on the Lord of the Rings film where filmmakers needed bursts of processing power at certain times of production. They have known each other for many years and Houston allowed Hughson to use his Silicon Valley apartment as his base when he was meeting his contacts in related areas in San Francisco. According to the 2015 State of the CIO report, New Zealand and global CIOs have similar aspirations for the next three to five years; 45 per cent see themselves continuing in the same role. Only 6 per cent see themselves becoming an entrepreneur, more specifically, leading a startup. For New Zealand respondents, this figure dips lower, 2 per cent. “I am part of that 2 per cent,” says Hughson. Hughson says when he was working in the corporate sector, 28 CIO SPRING 2015

at the back of his mind he had wanted to run his own business. “I have always had that in my blood,” he says. His parents and many of his siblings ran their own businesses. The family traces its roots to the Shetland Islands where their descendants migrated from around 135 years ago. They settled in Taranaki where they ran retail businesses. “I ended up in the corporate world because I enjoyed it and I got a lot from it. But deep down, I was saying I wanted to make it happen, run my own business.” The idea for PIM came when he was with IRD, and had in fact started the first versions of it when he was still in central government. He thought, “If I don’t leave now, I will never do it.” So he just went out and started the company. At that point, he says, his children were fairly grown up and he was in a comfortable financial position. “I could choose what I wanted to do and not have to say I have to keep on working in another company.” He is cognisant the path he took is not applicable to all CIOs. “It is a matter of knowing what you want to do with your career. If you are happy doing what you are doing, like staying as a CIO, do it. If you are not, then make changes.”

MENTORS MATTER When he was a CIO at AXA, Hughson was mentored by Sir Ralph Norris. Norris was then CEO of ASB, and though they only met a few times, their conversations always stayed with him. “He said, ‘If you can do the CIO job well, you can probably do any other job in the business. There is so much you have to do in that CIO role that gives you really good skills to go on doing other things… if you want to,’” he quotes Norris. “I also asked him how he moved from CIO to CEO. He explained a lot of it [was] he just took on extra responsibility and kept on doing a good job. So they kept giving him more.”

Hughson is likewise frank about putting the hard yards in building a startup. “If you are not passionate and committed, it will not work. “I had to do a range of consulting activities to keep the funding going,” he says on the early years of his post-CIO career. Today, he says, he spends 80 per cent on the business, and 20 per cent on directorship roles in technology companies like Optimation. He has also been doing Gateway Reviews for some government agencies. “The skills needed by entrepreneurs are different from that of the corporate world,” he explains. “As a CIO you are generally dealing with internal bureaucracy and big vendors and not entrepreneurs.” He says as CIO of IRD and Westpac, he was on the global customer council for Unisys, Novell and SAP. “I got to see and connect with a lot of vendors on the global stage, and got to see a lot about how these organisations run.” The startup world presented a learning curve. “I have never created a product before,” he explains. “My skills are primarily management, governance and strategy.” He credits Creative HQ and the “fantastic network of entrepreneurs in Wellington” for easing his introduction to the world of startups and incubators. “The thing that stood out to me was we should not be scared of doing stuff like this from New Zealand,” he says. “It is one of those opportunities where we can diversify our economy. The likes of Rod Drury (founder of Xero) and Vaughan Russell (founder of Vend), these are the people doing a great job, and we should be having a lot more of these organisations that result in more jobs and contribution to growth in the New Zealand economy.” Companies like these also do not impact the environment, he states. “They sell weightless goods that are easily delivered to the rest of the world and yet supported locally.”

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ACCELERATING TRANSFORMATION: CIO TO CDO

DAVID KENNEDY, who works with several companies that are in the midst of digital transformation, finds the most successful ones integrate three phases – ‘enlightenment, smelling the coffee and doing’ – into the journey.

s the IT market continues to mature we will see a fundamental shift in the way we identify our leaders. Just as the medical profession has divided the capability of doctors into specialisations, the IT industry will have to refocus to better enable a company to succeed. Increasing the focus on certain aspects of information and technology will increase the ability of the company to succeed in today’s market. The CIO will be split into several roles: chief technology officer, chief digital officer, chief cloud officer, chief marketing officer and perhaps even a CComO (chief communications officer). Never before has communication and collaboration (including information partnerships) been so tightly coupled with success. And so, everyone is talking about his or her digital strategy and digital transformation. So what exactly does it mean? Let’s get something straight from the get go: Digital transformation means different things to different companies. Digital transformation is a programme of work to deliver the business strategy via technology-based solutions. I am currently working with several companies that are deep in their digital transformation. They have a variety of business goals that include: • Creating internal incubators to combat the threat of market eradiation and potential disruption. • Increasing customer stickiness through a deeper understanding of customer behaviours. • Linking technology and marketing to increase revenue. • Gaining a holistic view of potential disruptions to the business from

new technologies and competitors. •E xposing APIs to allow external collaboration on information and systems. •D iversifying the products and services through the use of technology, sometimes automated processes to reduce cost. • I ncreasing the interoperability of internal systems and reducing OPEX to make them hum. They all have the same fundamental attribute – increasing customer value through better use of information. For example, knowing that a customer has just switched to a pre-pay monthly cell phone account could indicate he/she is looking to move providers. This activity could trigger a notification to marketing that can offer a simple six-month free Internet-based streaming subscription service to reduce the flight risk. The cost could be counter balanced by sharing demographic/usage information with the streaming provider to help improve their service. This would be a very small investment for the telco and deliver customer stickiness. I have noticed a number of common mistakes from companies that are discussing “going digital”. 1. N ot having a clearly defined, agreed strategy based on a solid business case to include: • Goals, focused activities, to keep the company on track. You would be surprised at the number of companies that are “wandering” into a digital transformation. • Research to fully understand the customer/competitor relationship. This will allow you to increase value in the quickest time.

• Measureable benefits allow you to monitor and know where and when to exert more energy to succeed. • Exit strategies. When a predefined fiscal envelope has been expelled without the realising the benefits. After all, not all ideas are successful. 2. Trying to do too much. It is important to start small and potentially fail fast than go big and fail spectacularly. 3. Misunderstanding the importance of cultural change. Some people do not want to change and can derail your efforts completely and eradicate any value that was initially thought to be achievable. 4. Thinking that a digital strategy will make a company unique in the market (ie.“Everyone is taking about it”). 5. Not truly understanding the benefits to sharing information with other companies and other digital channels that are available to the company. So if you have completed your business case and concluded that you need to increase the use of technology/ information across your organisation to increase customer value, what is next? Creating a good digital strategy takes three main phases.

PHASE ONE: ENLIGHTENMENT

First we need to understand our business strategy and how a digital strategy will better enable the delivery of the business strategy. Identify the business goals and the barriers to their success. Can improved information usage and technology improve the potential to succeed in delivering the business goals? If so, then you need a digital strategy. List out the business goals and what technologies enable each one of them. cio.co.nz 29

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PHASE TWO: SMELLING THE COFFEE • Take a moment to stop, look and listen to your competition. Understanding the competition will better equip you for the journey. • Look for potential partners to enable both your strategies. The future holds many more “information partnerships” to increase customer value. • Spend time with customers to understand what they really want. Create a customer engagement feedback loop to continually assess your progress. • Review the linkage between the technology and marketing roadmaps. • Internally champion how new products and services align to the business goals. • Understand the company’s ability to assimilate change. Do we need to make strategic hires or make organisational changes in order to empower the company to change? Create a timeline for delivery of the digital enhancements.

PHASE THREE: THE DOING Create a set of short processes to: • Identify an improvement opportunity. This could be a new product, system/information enhancement or new capability or partnership. • Quantify the opportunity. 30 CIO SPRING 2015

“Without an internal incubator you run the risk of being blindsided by someone who will disrupt your business models.” • Provide the ability to quickly resource the opportunity. • Ensure progress reporting is in place to manage the benefits realisation. • Test the cultural change impact. • Create a channel to go public with the ideas that work and fail fast those that are not delivering.

BLINDSIDE DEFENCE

must embrace continuous change/ improvement concepts and integrate their own internal disruptions to meet the changing market conditions. One last piece of advice: Do not forget decommissioning costs. These can seriously erode your financial benefits that are described in the business case and make you look silly if you overlook them.

The best digital strategies, in my opinion, are realised outside of the normal business processes. This entails creating an internal incubator to disrupt your own business models. Without an internal incubator you run the risk of being blindsided by someone who will disrupt your business models. Some benefits of internal incubators are they are usually cheap and easy to set up, they are able to find and deliver real value in a fraction of the time and cost of full size projects, and they can be a great motivational tool to include staff in real innovation outside their daily tasks. Disruption, just as change, is constant. To survive, companies

David Kennedy (David.Kennedy.NZ@ Gmail.com) has embarked on his own career transformation. For more than 20 years, he worked as a CIO/ CISO in public and private sector organisations across the globe before working as an independent business strategy consultant. These days, he works with management teams and board members on their strategies regarding “going digital”. He has an MBA from The University of Edinburgh and is on the faculty of the CIO Executive Program at the University of Auckland. The latter, he says, allows him to mentor the next generation of business technology leaders.

CIO10 0 EVENT/ SP O T L IGH T

Into the digital era THE KEYNOTE SPEAKERS IN THIS YEAR’S CIO100 EVENT – CARL POWELL OF FLETCHER BUILDING AND VICTOR VAE’AU OF THE NEW ZEALAND DEFENCE FORCE – TALKED ABOUT CIOs TAKING THE LEAD AMID FAST-PACED CHANGES. By Divina Paredes

“

he CIO holds the most strategic role in the enterprise today, with the exception of the CEO,” said Carl Powell of Fletcher Building. Focusing on the imperative of preparing for a digital future, Powell said digital technology is one of the strongest value drivers businesses have at their disposal. “If you, as a CIO, are not leading digital, then you are

CLOCKWISE: Steve Griffin of Unisys, David Spaziani of Gartner, Carl Powell and Victor Vae’au

eroding your role,” said Powell. (Powell left Fletcher Building in August and Deloitte Consulting senior partner John Bell takes up the role in November). “Digital roles and activities, such as the chief digital officer, shadow IT and ‘everyone’s IT’ will happen around you.” Powell said Fletcher Building has a group chief digital officer, who reports to the CIO. “I view the CDO as a catalyst for

change role,” he stated. The CDO’s role is to “champion, innovate and educate the business in the digital cause”. At the same time, he highlights the need for CIOs to focus on the metrics that matter. While efficiency metrics such as network availability and cost per ticket are important, value metrics, such as IT expense per employee, matter more. Powell spoke at the CIO100, a forum presenting the results

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of the annual report ( CIO100 ) on the top ICT using organisations in New Zealand. The forum was also held for the first time this year in Wellington. Victor Vae’au, CIO of the New Zealand Defence Force, was the keynote speaker at the event held in Wellington. He talked about how he and his team are on a continuous mission of managing information as a strategic aspect of the organisation, and how they are providing a modern platform to enable the Defence Force to deliver on its mission critical goals. Vae’au said he did not develop

achieve this: five-year plan (the Joint Amphibious Task Force for the short and near term), 10-year plan (Enhanced Combat Capability for the mid-term), and 25-year plan (the Integrated Defence Force long term). “It is the long game when you are orchestrating ICT amongst the business changes at the Defence Force,” he stated. “You cannot talk about capabilities and ICT without linking it all to Future35.”

‘KEEPING THE LIGHTS ON’ GLOBALLY “This is our keeping the lights on,” said Vae’au, pointing to a slide presentation. What was on screen

VICTOR VAE’AU, NZ DEFENCE FORCE:

“IT IS IMPORTANT NOT TO BE DISTRACTED BY THE FAD OF THE DAY, AND FORGETTING WHAT IS IMPORTANT FOR YOUR BUSINESS.”

a separate, specific ICT strategy for the New Zealand Defence Force – he developed an ICT remediation approach based on Defence’s Future35, the framework for change in the Defence Force in the next 25 years. For Vae’au, who has been CIO at the New Zealand Defence Force (NZDF) for nearly five years, this approach was deliberate to ensure business alignment and risk management. “We are dealing with the complexity of culture, environment and a multitude of interfaces,” said Vae’au. “The Future35 is not a technological conversation,” he said. “It is our roadmap, it is our shared goal and our reference point; why we are here doing what we do.” The plan stated by 2035, NZDF will be a fully integrated force. It provides three frameworks to

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was a map of the world, with distinct markers across continents to show the operations his teams support every day, all year. It is a complex environment with overseas deployments, allied engagements, humanitarian aid and disaster relief activity. Vae’au described the challenging ‘destinations’ Defence Force operates in and the additional complexity these add to ICT. Across Defence Force capability portfolio, there are more than 50 projects with major ICT components and an ERP program which includes information digitalisation, he stated. At the same time he was tasked, like all other CIOs, with three major challenges around ICT: efficiency (optimise ICT costs), effectiveness (provide the right tools for the right job at the right time), and resilience and security (continued provision of operational activities).

Gartner: CIOs and the board More CIOs are being appointed to the board or are tasked to present regularly to this group as a member of the technology committee. The featured analyst speakers this year Denildo Albuquerque and David Spaziani of Gartner, who are both former CIOs - shared pointers for working with the board and the executive team. Albuquerque and Spaziani said there is no prescribed formula on how best CIOs deal with and influence company boards. Board composition varies across industries and organisation size, which also means different business technology challenges. But both agree the CIO should start honing their skills for these interactions as these will increasingly be part of their remit. Their overall advice: “To succeed in their board interactions, CIOs must build board-level acumen, prepare extensively for each board interaction, excel in each board meeting and continue their influence into the future.” The key is to discuss the tactical and strategic topics the board is interested in, said Albuquerque. These include capability, accountability, risk, agility, customer expectation in a digital world, business performance and investment alignment. Spaziani, on the other hand, noted that when talking about IT-related investments, CIOs need to analyse these against three valuable criteria: topline growth, bottom-line savings, and risk management. “Talk less about technology and more about the business,” said Albuquerque, “and what you can do to influence bottom line results.” A topic that is of growing interest to organisation boards is digital, he stated, which includes “what the competitors are doing, how digital is going to contribute to exceeding customer expectations, how it will enable competitive advantage… and very importantly what is the risk of doing nothing”. But while building one’s credibility is important, nothing will matter if CIOs and their teams do not do two things right, said Spaziani. The CIOs and their teams must be able to provide stable and resilient systems and infrastructures, and understand the organisation’s security strategy and architecture in terms of protecting the company from cyberattacks. The latter can severely cripple the organisation’s reputation and cause financial loss, which is a primary concern for the boards.

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“We try to be nimble enough, and make tactical technological decisions but where there’s a strong strategic outcome – strategy is good, but delivery is king, he said. “It is important not to be distracted by the fad of the day, and forgetting what is important for your business,” he said. “Transition is a statement, transformation is a journey.” Security is a core focus across all of Defence’s projects. “It is a risk based discussion and we really need to be smarter in how we approach those because the traditional threats are not the norm anymore. “The Internet of Things and the cybersecurity around it is important as geography now is irrelevant when it comes to the new warfighting domain,” he said. “We must be cognisant that the bad guy is agnostic of any hierarchy. Information security is a cultural and organisational issue – not a technical one. Every major breach in the world has confirmed this,” he said.

the top trend this year – how companies are confronting the escalating security threat. He said how organisations leverage security across trends like cloud and mobilit y w ill define how they will benefit from changes in the business technology environment. He underscored the need to change the views on how organisations view cybersecurity. “We have to now assume there is a level of compromise in our organisation.” He pointed out the latest Cisco Security Capabilities Benchmark Study found 91 per cent of organisations have an executive with direct responsibility for security. But he stated the security leadership in networked organisations need to ascend higher – to the boardroom. Boards need to start asking tough questions about security controls, including how quickly the enterprise can detect and remediate any compromise, he said.

CARL POWELL, FLETCHER BUILDING:

“IF YOU, AS A CIO, ARE NOT LEADING DIGITAL, THEN YOU ARE ERODING YOUR ROLE.”

“As a community, we have a responsibility around having that courageous conversation [on security]. “The question is, what are you going to be? Is it just as the adviser? “In my view, you just have to be the best conductor because all of these things…are intertwined and interconnected.”

JOHN-PAUL SIKKING: THE FUTURE OF CYBERSECURITY John-Paul Sik king, head of security at Cisco, talked about

CIOs need to be prepared to answer these questions from the board including: “What else should we know?”

STEVE GRIFFIN: THE CIO’S BI-MODAL INNOVATION AGENDA “The future is not what it used to be; the world is changing fast,” said Steve Griffin, New Zealand country manager for Unisys. He pointed to a quote he found on theemergingfuture.com from Rupert Murdoch: “Big will not

beat small anymore. It will be the fast beating the slow!” Un is y s pred ict s i n f ive years the world will be 32 times more technologically advanced than before, and in 10 years it w ill be 1000 times more technologically advanced. Organisations, however, may not be prepared to operate in this fast paced environment, said Griffin. Some questions they need to ask include: “What does this mea n for our business a nd our organisations? W hat does this mean for IT leaders going forward? What is our competition doing in an environment which is 1000 times more technologically advanced than we are today? W hat w i l l t he cit i zens be demanding if they are 1000 times more technologically advanced than today?” He believes the next role of the CIO is “to establish an environment that enables the organisation to capitalise on the rate of technology change”. To this, he espouses a bimodal environment. One will be around critica l applications, critica l infrastructure, and the other side will be web interfaces where organisations have to be a lot more agile. “As you go t hroug h t he i n novat ion cont i nuu m, you need to be able to operate on the right hand side, on the quick fail safe, without impacting mission critical systems on the left. “There will still be the pursuit of perfection, zero risk and majority of us will have to be in an environment where we have to be quick and fail safe,” he said. Cisco, Unisys and Datacom are the sponsors of the 2015 CIO100 events in Auckland and Wellington. Read more at www.cio.co.nz.

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The data science activist JAMES MANSELL IS PART OF A SMALL, BUT GROWING GROUP OF VOLUNTEERS WHO ARE PUSHING FOR THE RESPONSIBLE USE OF DATA TO DELIVER SOCIAL AND ECONOMIC VALUE. WHAT MOTIVATED HIM TO IMMERSE HIMSELF IN THIS ROLE? By Divina Paredes

ata is now hailed as the new oil. Its utilisation ca n help spu r t he development of startups whose values have ballooned to billions of dollars, or uplift the bottom lines of established corporates even during tough times. For James Mansell, data represents something else – using it responsibly to deliver both social and economic gains. “I am a philosopher by training with a full-time job as data science activist,” says Mansell, smiling. The latter is an advocacy role Mansell took on, first when he was working in government , and continues as an independent adviser through the consultancy Noos which he founded last year. “I try and focus the government on being evidence-based and outcomes focused and I will talk to anybody who wants to push that agenda along,” he says. “It does not matter whether they are left, right or green.” Mansell is part of a growing volunteer group taking on this advocacy, doing it from the corridors of government, through to not-for-profit organisations, and forums that reach both public agencies and enterprises. In 2010, Mansell, as director of innovation and strategy at the Ministry of Social Development (MSD), pushed for increased use of shared data as part of the program to reform the welfare system. This included using advanced analytics for segmentation and risk profiling and using real time experiments or campaigns to measure return on investment on government funding for these programs.

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Mansell completed an honours degree in philosophy from the Victoria University in Wellington. In 2011, Mansell was awarded the public sector’s Leadership Development Centre fellowship for his work with the MSD. He used this scholarship to complete an adaptive leadership course at Harvard University. He also attended an executive negotiation workshop ‘Bargaining for Advantage’ at The Wharton School of University of Pennsylvania and completed a course on strategy and leadership at the Centre for Creative Leadership in Colorado. In 2013 he was appointed to the New Zealand Data Futures Forum, an independent think tank commissioned to consider how to build a safe and high trust data sharing ecosystem within New Zealand to drive value for citizens, the economy and improve government

“THERE IS NOTHING IN PRINCIPLE STOPPING THE SOCIAL SECTOR ‘UBER-ING’ BIG GOVERNMENT.” JAMES MANSELL, NOOS

services. The forum is chaired by former Treasury Secretary and World Bank executive director John Whitehead. Through his own consultancy, Noos, Mansell has worked with the likes of the Department of Human Services in Melbourne where he reviewed the agency’s analytics capability, work-shopped options to move towards outcomes focused in child protection. Leaving a full-time government role over a year ago has allowed him to work on this goal with more organisations. He works with central government agencies, including the Inland Revenue Department, Ministry of Education, Treasury, MSD and New Zealand Productivity Commission. He is currently on the board of Te Pūnaha Matatini, t he Centre of Research Excellence (CoRE) dedicated to the study of how to transform complex data into knowledge. Mansell traces the root of his data science advocacy to 2004, when he joined the Child, Youth and Family Services (now part of MSD). He was told to read some cases to familiarise himself with child protection. He ended up reading three cases. The last case was about a child living in the West Coast who was sexually abused at age two by his stepfather. Child Youth and Family were notified and the abuser was removed. The mother was grateful. But then this young boy was abused again, this time by a cousin. Again, CYF intervened and sent the cousin packing. This happened twice more with different sexual predators. In social work jargon, this is a severe case of ‘non-protective parenting’, he states. Then the boy himself exhibited

ANALYTICS / SP O T L IGH T

harmful sexual behaviour when he started school. The case history stopped about then, at aged 12. There were also notes from a social worker who queried on what they could do for this boy without sufficient funding to help the family with care or to rehabilitate this kid. “I read his case and that was enough,” says Mansell. “It was too traumatising.” He thought how the boy had been let down by “a broken system”. “It is not that the CYF was broken, the whole system is broken,” he states. “There are really good people on the frontline who are trying to help,” he explains. But the way they were allocating budget, and what they were accountable for were getting in the way. “The whole system is working against them doing a good job to some extent.” “It is heartbreaking to see money being wasted, to see things getting in the way of good intentions. At that point, I wanted to help.” This begun a journey to see what could be done, he says. Mansell ultimately ended up advocating the use of shared data and the use of analytics to help the social sector focus on outcomes and in particular, longer-term outcomes.

MEET MARC SMITH Advocating for increased use of shared data and analytics to drive value is not easy. “A lot of people try and fail to get it used. It’s a big shift to practice and the operating model for government – not merely tacking on some data science. To drive change I learnt (after four years of failure to make progress) that one thing is try to ‘add heat’ to remove complacency within government and the state sector.” When Mansell was with the MSD, he spoke at various forums locally and globally, and one of the cases he always brought up was that of Marc Smith. Marc Smith (not his real name) is an actual person. Joining up the data from services he received from various government agencies reveals a life of physical and emotional trauma: He was found by CYF to have behavioural difficulties at three years of age and by age five was found to have been sexually abused. The cycle of physical and sexual abuse went on, and moved into youth offending and increasingly long periods away from parents in the care of the state. In spite of this, he progressed at school to finish with subjects at NCEA level 2. This is no mean feat given this background, says Mansell.

Advocates and allies: James Mansell, data science activist, CIO David Habershon and manager data warehouse Mike O’Neil from the Ministry of Social Development

Ma r c s t a r te d r e c ei v i ng t he unemployment benefit at age 18. “You can see the pathway of being abused several times. Of course, he had a bigger chance of offending.” When he added Corrections data, he found that Smith had started offending as a young adult. “I use this kind of example to raise challenging questions for the state sector,” says Mansell. “People in various services like child protection services, Work and Income and Corrections were all accountable for little pieces of the puzzle, but no one was accountable for Marc Smith.” “Marc is not a lone. There are thousands of people in New Zealand who has this kind of profile,” he says. “The top few thousand New Zealanders with a similar profile to Marc Smith have on average over $300,000 invested and still [result in] very poor social outcomes – long-term unemployment and offending. Most of this investment is late and by that time improving outcomes is very costly and of limited success.” This was the idea of MSD CEO Brendan Boyle, he says. “It is putting a burning bridge in front of ministers and agencies. ‘Hey, look, here are 10,000 people. They cost us $5 billion dollars. They cross all of our agencies. What are we going to do about them because they are going through a pathway like Marc Smith?’” He asks whether Marc Smith’s life would have turned out differently if only a few thousand dollars was spent earlier when he was aged eight or nine, and not when he was aged 25 and a long-term recidivist offender. “Do we want to keep paying for prison or spend money early on to have a better outcome? “But although traditional research promotes early intervention, governments do not do long-term investment very well. Without shared data and the use of analytics to make people accountable and provide the KPIs and tools for longer term pathways, it is hard to focus the social sector systemically on value. “Why are we not systematically aggregating data to force (and support)

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the government to see the full picture to make better social investment decisions?” He says this is not achievable unless government can track people across services. “We can also use shared data to question which services work. “Marc Smith is my way of telling the story of those first cases I read – of that 12-year old. But by tracking educational and justice sector outcomes as an adult it also finished the story by tracking the social and fiscal cost of poor early investment.” He says the current system actually works for some people, but people like Marc Smith can fall into the gaps. It should work for everybody, not just the ‘average’ person. Mansell cites the Ministry of Social Development is using operational analytics and joined up data to understand who their clients are and how to achieve better outcomes earlier. “We are starting to make progress,” he states.

LIFELINE “We invested heavily in a integrated client view which is where the data is joined up,” he states. Initial attempts to get funding and formal support through the policy group failed. “I have consistently found that policy folk are slowest to get it or accept the change because most of them are at risk of being disintermediated by big data.” Mansell credits MSD CIO David Habershon, manager data warehouse Mike O’Neil and chief data Scientist Kip Marks for taking a punt and helping with the integration of data systems that allowed him to join information from across MSD and across agencies in the social sector. “They gave me a lifeline,” he states. “We needed to build that stuff to get ready for welfare reform and they pitched in to get it done. “There was a lot of opposition within MSD because it is such a radically different way to look at your business. They took some risks on behalf of a good idea when they did not have to,” says Mansell. “They got behind me and we

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Kip Marks, chief data scientist at Ministry of Social Development

had skunk works going on, they built the data and integrated that with the analytics and bought some of the new tools which was what we need.” He says MSD CEO Brendan Boyle also supported the initiative. “It got even better because Brendan was a breath of fresh air in MSD and understands this kind of change deeply, so he is a great champion. It’s good to work for a CEO deeply committed to public value and not merely managing risk for ministers. “This kind of work requires some champions to succeed,” says Mansell. He cites that Social Services Minister Paul Bennett and Finance Minister Bi l l Eng l ish a lso suppor ted t he initiative, with both speaking in forums highlighting the importance of analytics at the government top table. “I learn a lot from them. I think it is because they talk to people out in New Zealand every day. We sometimes forget they probably talk to more real new Zealanders in a year than your average data scientist or policy wonk does in a career. They stop us getting too abstract!” Mansell says work on the project continues as analytics is continuing to be integrated into the ministry’s operating model. “Analytics disrupts the status quo,” he explains. “It is not just a technical problem. “We have been building predictive models for 20 years but no one used them until people were building this capability in support of a new kind of business model. That’s really when it gets used.” The role of technology is to create a

smart closed loop learning system, as part of a customer needs and outcomes centred business model, he says. “That is very different and requires a very different channel strategy, a different kind of funding, and development of data structures. “Yes, we were trying to build a new way of looking at data, a longitudinal view of data. But it is all about the about the government being more targeted, a bit more evidence based about where to target investment and accountable for the short and longer term outcomes. It’s about adding value through social spending. “At the moment what people are accountable for is doing something fast or cheaply, and you are just cost shifting into the future.” What makes sense for MSD makes sense for the social sector as a whole. The real value of this approach is in applying it above the servicing level to make better investment decisions across health, justice, education and social development, he says. This idea came off the back of identifying limitations in investment approach in MSD, he states. “MSD is really only optimising investment across a narrow service offering. “Many times welfare beneficiaries need better health or education or child protection services, not better CV writing courses. So some of the case management investment in Work and Income should be moved elsewhere – re-invested. This wasn’t a popular view inside Work and Income.” So, in 2012, he pitched the idea of a Whole of Government Analytics at the centre of government to drive structural shift in the way government investment is managed. This means building accountability and budget allocation around needs and outcomes on the basis of an independent (system level) understanding of pathways across services. This has led to the creation of an advanced analytics function at the centre of government (Treasury). In addition, significant new funding was also received to expand the role of

ANALYTICS / SP O T L IGH T

the ‘Integrated Data Infrastructure’ managed by Statistics New Zealand and enable remote access for a wider range of users. Organisations like Motu now have much better access to integrated case level government data to do research with, he says. Mansell and New Zealand Data Alliance members are currently working with ministers and Treasury to apply a whole-of-sector view of the social system. This information will be used to shift to population based funding and accountability for outcomes. Elements of these are now being trialled for the 2016 Budget. “It is about being smarter about where you target,” he says. “Everybody who uses the service gets a better service there is less wastage, everybody wins …except service providers whose services are low value. “The goal is to make everyone accountable for outcomes so that they start to be innovative about having to solve the problem, how to avoid bad outcomes.”

source community members, researchers, NGOs and social service providers. The central government will be involved, but as one voice among the many members of the sector, he explains. The paper argues that ownership and control of sector data by citizens and frontline providers, kept at arms-length from the state, will increase confidence, trust and the level of innovation in the social sector. “I shudder to think what the centre of government will do if it has unfettered use of personal citizen data. The government cannot be both gate keeper and user of social sector data. To do so invites a monopoly and so stagnation and I think, a drift to more coercive uses of citizen data.”

ADVOCACY AND RISKS What keeps him up at night now are the risks attached to all of these. Along with the big benefits of using shared data to improve outcomes, come big risks. This is deeply personal information and needs to be handled sensitively, he states. He is working with ministers and senior officials on both sides of the Tasman on how state agencies can safely use data to focus on outcomes and innovation. This, he says, including advocat ing for t he right k ind of national data ecosystems, is needed for responsible use of data science and data sharing. One kind of solution is promoted through a document called Handing Back the Commons (2015). This report, commissioned by the New Zealand Productivity Commission, recommends the formation of a Social Data Commons. The data commons is collectively owned by the social sector composed of open

Last year, he founded the New Zealand Data Alliance, a volunteer group of data scientists providing independent, non-commercia l and non-partisan advice to community leaders on the responsible use of data to improve outcomes for New Zealanders. So far their work has included advising senior ministers and not-for-profits. He says a lot of the New Zealand Data Alliance’s work is unpaid, like work with NGOs who often ring Data Alliance members for advice. “I think the focus now is to move outwards. We have probably pushed the centre of government as far as is possible.” “We are doing that for free because we want to give them non-commercial advice and empower them with their own data. The real benefits of big data for Maori, for marginalised groups, for researchers, for innovators on the front line are huge.”

“We wa nt to g ive t hem noncommercial advice because you often get advice from big software vendors, and they are always trying to make some money on sales. There are cheap options to get started.” If GPs, schools and other social sector players can take control of their own data then they will have a powerful platform to challenge the hegemony at the centre of government, he says. “There is nothing in principle stopping the social sector ‘Uber-ing’ (disintermediating) big government. The result would be a much safer, less fragmented, more innovation and a more powerful provider network.” He admits being seen as a “lightning rod” when he was advocating all this from inside government. “I was not popular. I did as much I could do, so I felt it was time to move on. “The more you get involved in this stuff you start to realise several things. That ‘I don’t necessarily have all the answers’, sometimes you can get too caught up in your own mission and importance. Fortunately, since I am outside the state sector, I am now allowed to meet at talk to some awesome New Zealanders who provide a support network and keep my hubris in check. “So much of this is about asking the right questions rather than thinking you have the right answers. This is very new and letting go means enabling other people to ask questions and innovate. I think I am learning (slowly!) that you get more back by letting go.” He says this work is being continued by a lot of people in both government and private sectors. “The Data Alliance members are in the analytics and big data space, but a lot of them are entrepreneurs, pushing things along in their respective organisations.” “Most of us have kids and we just want to make New Zealand a better place” he says, on what drives him in the role. “This is one way to do it.”

cio.co.nz 37

SP O T L IGH T / STRATEGY

Tech analysts, diplomats and brokers E-SPATIAL CIO MATTI SEIKKULA AND PRINCIPAL CONSULTANT MANU KING HAVE A MORE EXPANSIVE REMIT THAN THEIR PEERS. HOW THEY MELD THEIR TECHNICAL AND BUSINESS PROWESS IS KEY TO THE SUCCESS OF THE SPATIAL SYSTEMS COMPANY. By Divina Paredes

38 CIO SPRING 2015

“

ook, I have been offered this solution, and something does not feel right about it,” the client says. “I know we have our own Geographic Information System, cannot our own GIS do this? Can you help me clarify this, do a gap analysis?” Getting these types of requests from their customers is not uncommon for Matti Seikkula, CIO, and Manu King, principal consultant, at e-Spatial. The Wellington-based company provides management, consulting and technical services on spatial technologies. Interest in these technologies has heightened in recent years as organisations realise the value of utilising insights from location intelligence. Seikkula and King work with both government and enterprise customers. But they also need to partner with the vendors they assess for their clients. “It is a very delicate line,” says Seikkula, citing the request of this particular client. At the same time, this particular client knows we will make independent decisions, says King. “We have the trust and partnerships with the vendors, and they appreciate that. “People know we are not going to be saying wrong things about their products, and they are actually keen to show us what it does so their customers get the best possible use. They know we are not there to try to sell a product. “They just want the advice, they want the outside in [view] because they are too busy doing what they need to do internally. They know the external world is changing and they want to keep abreast of what is going on,” King says. “We are analysts,” says Seikkula, “in the pure business side.” Both Seikkula and King have extensive experience in spatial technology but their current roles demand them to develop a business partnership model with clients. Seikkula explains that e-Spatial has architects across the board. One of them works purely on ESRI, the dominant spatial vendor in NZ, and the rest work with the other providers and the open source community.

STRATEGY/ SP O T L IGH T

King was brought in purely as a business architect, says Seikkula. “We bring very much that outside in view,” says King. “We are completely independent, we have the flexibility of saying to the customer, ‘What do you want to use spatial for?’ “Some of our customers have been using GIS for a long time,” says King. “They want to do an audit to make sure they are getting that return on investment, and are able to meet future demands.” For instance, a lot of government agencies are transforming their operating environments to be more client focused, he says, so the question is: What do they need to do in the spatial space to become client focused? “I align their spatial investment to their strategic and aspirational visions, and then work with Matti and the rest of the team to identify the detailed steps required.” They then discuss this with the client: “This is where you want to be, this is what you need to be thinking about and this is where you need to invest further. “We give them a sanity check,” says King. Seikkula says customers often pay for things they do not have to, as there is already a lot of open spatial data. “But people don’t know what it is, where you get it from, how you can use it.” There are also customers who just want access to the tools but do not want to invest in geospatial infrastructure, he says. “We discuss what they are doing now, what they need to do to comply,” says Seikkula. “Can they actually start sharing [data] with other agencies within their sectors or even outside their sectors?”

BUILDING THE STRATEGIC MINDSET In order to meet the demands of both their customers and the vendors they work with, e-Spatial divided the teams into three ‘legs’: data, development and strategic advisory. Seikkula explains that their development team differs from their enterprise counterparts. “Our development team are experts in spatial integration,” he says. They do the mapping component for their customers and integration partners such as Datacom. “Their skills are taking on any product

MANU KING, E-SPATIAL:

“WE ARE COMPLETELY INDEPENDENT, WE HAVE THE FLEXIBILITY OF SAYING TO THE CUSTOMER, ‘WHAT DO YOU WANT TO USE SPATIAL FOR?’”

or any environment you have, and then figuring out how to bring the mapping component things into it (e.g. BI, CRM, SharePoint).” Seikkula and King both belong to the strategy team, which was formed two years ago, and work extensively with customers at a mid to senior level. Seikkula explains: “The customer might already have spatial in depth but they want to know whether they are using it to the best capability, or whether they are using the right software for their particular needs or using it everywhere they can.” Are they obtaining full business value? Or, the company may be undergoing rapid change and would like to know whether they will be able to use their investment three to five years from now.

SPATIAL IS NOT SPECIAL Seikkula and King do not believe that “spatial should be treated as special”. This message, however, is not favoured by some players in the spatial arena. “If we step back historically,” says King, “our industry has been very good at siloing themselves.” It used to be, “If you need to spatialise data, you need to give it to us and we will spatialise it for you in our GIS. “The trend nowadays is to leave the data where it is and spatialise it there... and then present it,” says King. “We provide a lot of advice of how to do that.” With some of their clients, they act as SMEs or subject matter experts. These organisations include government agencies. cio.co.nz 39

SP O T L IGH T / STRATEGY

King says sometimes he is the only external person who sits on these teams as they do not have a spatial champion internally. Seikkula says they are also commissioned to do a gap analysis of two or more spatial products the organisation has in mind. When they do these reports, they have to muster the skills of a diplomat. “We have to remain neutral,” says King. “We are a team, and we bring different strengths. We challenge each other as to what the actual issues are with the customer.” King says they also look at the cultural side of the organisation. “A lot of the time, for example, the GIS team has been there for 10 years but they have not engaged well with the other business units. “We see spatial as very much mainstream and very much an enabler of all other datasets, but it cannot be an enabler if people do not know about it,” explains King. “We want to help change that.” “Our strength is partnering,” says Seikkula. “Spatial on its own is not a solution, it is part of many business solutions/systems. “Spatial may only be 15 to 20 per cent of the solution. That is what we focus on.” For instance, an organisation may want to introduce mapping in its enterprise management system. This means they have to partner with an enterprise asset management vendor and understand their interface. “We just need to understand the interface we need to interact with and then we create the components that feed into that. Because of that, we have partnerships with most major vendors,” says Seikkula. These include Microsoft, Oracle, IBM, Google, SAP, SAS, Cognos, and SYL. Seikkula says they frequently/regularly meet with their customers to show them the new things happening in the spatial arena, and some of the newer technologies that will impact their respective industries. They have also started an enterprise architect forum which meets every quarter. Seikkula says this is the reason why their team members attend major conferences across the globe, and share their insights with the organisations they work with. “Our philosophy is not to fight over 40 CIO SPRING 2015

MATTI SEIKKULA, E-SPATIAL:

“A VENDOR WILL SAY, ‘WE HAVE 3D SOFTWARE, THAT IS WHAT YOU NEED.’ WE SAY NO, IT ACTUALLY COMES BACK TO HOW YOU COLLECT, STORE AND MANAGE THE DATA.”

this small piece of pie, but to grow the pie, get more people aware,” says King. “If the senior leadership team says ‘we have an aspiration to have 3D data’, we know the pros and cons of what they need to implement. “A vendor will say, ‘We have 3D software that is what you need.’ We say no, it actually comes back to data, and how you collect the data how you store and manage the data.”

CAREER PROVENANCE Seikkula and King slid into their current roles after a raft of technical posts in spatial information technologies and the wider ICT space. King joined e-Spatial as principal consultant four years ago, but has been working in the spatial space for 25 years, in central government and commercial organisations. Before this, he was business intelligence and geospatial manager at NZ Transport Agency and spatial data manager at Transit New Zealand. He started as a survey draftsman, and progressed to GIS manager at NZ Transit. This was before the merger of the different government agencies that led to the NZ Transport Agency. “I was never really a techie per se, I always had a strategic mindset and I look at technology and say what is the value of it,” says King. “When I am told that ‘we have got a cool toy’, I say, ‘So what?’ Without the use, it is just a toy.” Seikkula, on the other hand, has a “pure IT” background. He started working with computers and writing his first program at aged nine, in his native Finland.

STRATEGY/ SP O T L IGH T

He has a master’s degree in computer sciences form Joensuu University in Finland, and has minor degrees on mathematics, statistics and economics. He has over 26 years’ experience in systems design, software development, architecture and data modelling. For the past 18 years he has specialised on geospatial integration. After working in IT for three years, a friend had asked him to join him in New Zealand. This was in QED where he worked as the development manager. After three years, he joined Critchlow. This was in 1996, and the company was looking for an IT manager. “That was my entry into the geospatial space.” After two years, he and one of the directors, Simon Jellie, now CEO of e-Spatial, formed the company. “We could see the world was changing and there was a need to start looking at the integration side of things, with data and integration as a service and what you can do with it.” Seikkula is essentially the CIO and co-founder. “I was a CIO by name,” he says jestingly. There were three of them at first and they had to do a lot of the work. “We had the most exciting time,” he says. It is the same level of excitement he feels now in the spatial industry, he says. “The whole world is changing, it is such a different world now,” he says. “You have to react quickly, you have to push organisations to become proactive.” He says Simon Jellie, the CEO, had this vision years ago of getting all the agencies to be working together to deliver better information services. He says the government is now pushing for working this way across its different agencies. e-Spatial, for instance, was involved in designing the Property Data Management Framework that was identified as necessary to enable access to property data by different agencies following the 2010 to 2011 earthquakes in Christchurch. Seikkula explains one of the problems following the events were the data silos in different agencies. “The datasets were totally separate so when you are looking at them you could not link together what was going on.”

King says having this integrated view was important, for instance, for emergency services, insurance and EQC. They worked with Land Information New Zealand and the Canterbury Earthquake Recovery Authority to build the framework. “It was essentially a mechanism to link all these data sets together.” The first phase involved modelling the data and creating a proof of concept database. The second one is for data providers to have the mechanisms to put the data into the system. The third part is the creation of a hub which can be “interrogated” about the entities attached to it. The first part has been completed, so that when other organisations are thinking of developing their own framework, they will use this instead. “It is a federated model so instead of everyone doing their own thing, we have created the model to be used. “Otherwise, they will create their own [data] silo and it’s back to square one.” This project, they say, stands out for them as the framework has the potential to be used nationally to enable property data to be accessed from multiple viewpoints – something that has not been possible to date. During the interview, their enthusiasm for their work was palpable. Seikkula says he read about a test on whether one was fit for the role, and which applies to him. “If you win in a lotto tomorrow, will you still continue the work that you do? As long as you say yes, maybe take a few months long holiday, but you love your work so much that you will continue to doing it as if nothing happened, then things are good.” “We both feel like that,” says King. cio.co.nz 41

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Thriving in a data-intensive world

DISCUSSIONS ON BIG DATA AND ANALYTICS HAVE SHIFTED FROM PILOTING, TO GETTING VALUE FROM FULL DEPLOYMENTS. HERE ARE SOME LESSONS FROM EARLY ADOPTERS. By Divina Paredes

“

e are now in the age of the ‘New Know’, innovation powered by analytics,” says author and futurist Thornton May. Early this year, May interviewed more than 100 CIOs across Europe, North America and Asia Pacific on their views on the characteristics of the modern IT organisation and where the CIO role is heading. “What came out on top was that treating data as an asset defines the modern IT organisation,” says May, who conducted the research as president of FutureScapes Advisor. “Having a facility with, and being supportive of analytics, and creating a culture around it is the element of success for the future,” says May. He says each executive interviewed was asked if they had an official endpoint to their organisation’s digital journey. Fifty-seven per cent said they had one, and of these 85 per cent stated their endpoint involved mastering analytics. May says in this environment, speed is the second most important element defining the modern IT organisation.

42 CIO SPRING 2015

As he states in the report published by SAS, IT is being pushed towards ever shorter delivery times and asked to deliver things a lot faster. “The modern IT organisation cannot be perceived as being slow, or as being behind. “Being slow is a career death for the CIO and very bad for the reputation of the IT organisation.” The shift towards digital augurs well for the CIO role. “In a world that has gone totally digital, it is all about data, information content and knowledge,” he says. The person responsible for this, the CIO, is going to be more important. Stereotypes persist around the role, as CIOs are being told to learn how to talk to the business, he says. Yet the CIOs he has worked with do not fit this mould. “They understand the business better than the business,” he states. CIO New Zealand talks to business leaders who embody this approach.

SAFETRAC: PRECISION TARGETING Dr Ross Patterson, a partner at Minter Ellison Rudd Watts, recalls how he got into building a startup in 1998. He had moved to the Sydney office of the law firm and discovered Standards

Australia had launched the Australian Standard on compliance programs. The Standard required that a compliance program be integrated into day-to-day operating procedures, that all components had to be systematically recorded and there will be adequate internal reporting, monitoring and assessment systems. One of Minter Ellison Rudd Watts’ clients asked the law firm to prepare a practices compliance training program, which was to be delivered as what was called in those days computer based training or CBT. What the company had in mind then were CD-ROMs. Patterson recalls how in the initial meeting with the developer, the latter suggested: “Why not use the Internet? The CD is going to be obsolete and the Internet is the future.” That led the law firm to develop Safetrac, an online legal training, management and reporting system. Safetrac was launched in July of 1999, an 18-month production that Patterson first thought would only take half a year. Patterson says one of the challenges then was convincing anyone that something online

BUSINESS INTELLIGENCE / IN DEP T H

ROSS PATTERSON, MINTER ELLISON RUDD WATTS:

“IT IS LIKE REPLACING A SHOTGUN WITH A PRECISION PISTOL. YOU CAN FOCUS ON THE AREA THAT IS OF REAL RISK TO THE ORGANISATION.” was reliable and trustworthy, as it was a new technology then. Fast forward to 15 years and he says the learning development systems online are now widely accepted. “The whole nature of interactive training has developed so that the new courses look nothing like the old paper-based models they have adopted through the years.” By the time he left in 2007, the courses the company offered had grown to 36. Safetrac was also used by 56 companies ranging from small, medium and large and across a variety of sectors from financial services to local councils. When Patterson returned to the law firm last year, he noted the benefits the Australian clients were getting from Safetrac were not available to New Zealanders. So New Zealand courses were developed to be delivered over the Safetrac platform. Apart from providing core compliance courses, the New Zealand courses now include specialist courses like directors duties (general principles and listed companies), anti-bribery and corruption, and business ethics. Safetrac also produces bespoke compliance training courses on topics such as code of conduct and induction processes. One of the big challenges when the firm started the program was the huge investment in time to develop it. “You have got to create a cultural change of lawyers doing work that is actually creating a product that will generate revenue in the future but is not going to be this month. “You had to convince the lawyers this new model will work.” There was a general counsel who liked delivering face to face

courses around Australia. But, as Patterson points out, “The real value of Safetrac is in the analytics and the back-end reporting which face to face does not give you. “At best, you have a piece of paper that someone ticked that they attended the session. With a bit of luck that might be on file,” he says on the paper based recording system. “So the scenario I used to paint for the general counsel is this: Assume your CEO is on the phone. He said he has just heard there is a story about to be published about some employee of the company having done something he should not have. “Could the general counsel give him the details of that person’s training so that he can tell the press who are waiting for comment that this person has been fully trained in this thing? With Safetrac, the general counsel could access the records and email them to the CEO during the course of the conversation.” Without those records, he says, staff have to flounder around and say, “I am sure we did some training somehow.” Or, there is the classic response, “We are about to do the training next month.” With an online program, however, all components are systematically recorded and there will be adequate internal reporting, monitoring and assessment, he says. “I always call the training the employee sees as the front end, and the back end is all of the analytics and the reports delivered to the counsel. “You just can’t do those things manually, it can only be done by an online system.” Patterson says one of the interesting things that came out of Safetrac is that a number of companies do it not only for legal compliance training but for

their own internal code of conduct policies and Internet policies. “They were able to find out from the reports they got where their policies were unclear, where people clearly did not understand them, because of the questions they asked. You can fix them in that sort of continuous feedback loop. “You get reports that show the pass mark for each question in the test so you can identify people having real problems understanding this issue. And this is when you do your face to face training in relation to that specific element which has been identified as being a problem. “I used to say it is like replacing a shotgun with a precision pistol,” he says. “You can focus on the area that is of real risk to the organisation. The data shows which ones need face to face training. “This is really just the beginning of being able to offer clients a whole range of different services in a much more cost effective way outside of the traditional [process]. “That is the power of the big data and analytics,” he concludes. “But you have got to get the data recorded. If it is not recorded in the way that you could use it, then you don’t get to first base.”

TRADE ME: A CULTURAL SHIFT Being a “very open and transparent business” is important in building an organisation that values data and using it to make decisions, says Dave Wasley, head of platform and operations at Trade Me. “One of the things we have here is: Try stuff and if you fail, that is fine. Learn from it, but keep on doing things, keep innovating. “And by putting the power of that data in people’s hands they can see those failures and successes really quickly and try something different and keep moving.” He recalls that when Trade Me started, then CEO Sam Morgan ran a spreadsheet every morning, plugging data to analyse what has happened the night before. They still continue to run this spreadsheet, but Trade Me also cio.co.nz 43

IN DEP T H / BUSINESS INTELLIGENCE

actively uses a raft of business intelligence and analytics tools. He says they are dealing with big data sets, and getting access to it in real time and making it easier for the users is very important. “The data is up on the screen on the walls,” says Wasley. “If you have dashboards that are available and publicly visible, then you can make everyone data literate. “People ask more questions, the more stuff you put in front,” adds Wasley. From a management point of view, Wasley says he uses the insights for performance uptime and weekly reports. “I don’t need to jump into spreadsheets, I just push a few buttons and I get a report. That provides me a high level view of performance, of how our operations are working.” In the payments part of the business, for instance, there are dedicated dashboards with the metrics that are important to this particular team. “They can see transactions going through our payments platform in real time, they know any errors that are showing, to what gateways that traffic is going through. “In a business like ours that makes systems changes numerous times in a day, they get visibility under the hood about what is happening. Suhel Mangera, chief data analyst at Trade Me, says right from get go the company has been data driven and interested in making decisions based on what is happening on actual facts. “One of the key messages to CEOs, CIOs and CTOs is you have got to establish a culture that makes the whole organisation data driven.” Mangera says the BI team has in the last 18 months been building an “amazing” data warehouse. “It is an ongoing process,” he explains. “Our core driver there is one source of the truth that holds as much of the data that we need to understand how the business is performing. “We are exposing those with web dashboards and making that easily 44 CIO SPRING 2015

available pretty much to anyone that wants to get a look at the data. “We have weekly KPIs that run off that and anyone can jump off the dashboards and have a look at how the business is performing right now.” Wasley says it is interesting how the developers, business analysts and test team access data all the time to make decisions on what they are building and how they are building it. “We don’t have that responsibility of that data within one, two or three people who then make a decision and tell people what to do. We empower our people to use the tool and use the data that is around them, so that they are able to make decisions quickly and try stuff.” Mangera says the developers, for instance, were quickly able to see which version of the page was actually converting more people into terms of shopping cart completion, as well as getting more items added to a cart. “We made a decision within three to four days after releasing it and they did not have to cut code or rely on an analyst to get those numbers and get those insights.” Having the right people is key when working on business intelligence tools, says Wasley. “You can throw tools at people, you can have big data warehouses but if you don’t have people that are inquisitive and are interested in data, then you are never going to get value out of it. “From the beginning, we ask people to be inquisitive,” he adds. “You want to ask questions and not just accept that is how it is and understand it, and make decisions based on facts.” Mangera says, “If you would do a priority list, I would say, people, data and technology – in that order.” “You will need amazing people that love working with data, telling great stories out of that data to business users. Wasley says some good questions to ask staff are: Why did you make that decision? Can you

show me how these things have changed? Why is that better? “If they say it will make the site go faster, or it is going to convert (buyers) better, we say, where is the evidence?”

THE HEART FOUNDATION: 360-DEGREE VIEW OF THE CUSTOMER Shaun Williams joined The Heart Foundation as its first information services manager nearly two years ago. Before this, the charity did not have a formalised IT structure, he says. The charity saw technology as a way to expand its reach, and get its message out to more people. One of the first things Williams noticed was the organisation had a lot of information flows coming from different touch points and sources. Yet its internal systems were collecting information from only a few of the data sources. The first thing the organisation did was understand the different touch points with the goal of achieving a single view of the customer, Williams says. He says The Heart Foundation wanted to bring together a customer centric view of these interactions, and chose the CRM system for this. This is being integrated with its separate fund raising system to make sure there’s a record for every individual The Heart Foundation interacts with. This provides the organisation with a clear understanding of the customer and the best marketing database it could have. The charity worked with Microsoft and Adaptable Solution to merge these datasets into a single Dynamics CRM system. One discovery The Heart Foundation made from its merged datasets is that its customers wear different hats of have different personas. Williams says the charity “sort of knows” this is happening but could not easily prove it before. Once all those integration points come together, the charity can see if five different entries in its websites, for

BUSINESS INTELLIGENCE / IN DEP T H

instance, belong to one person who could both be a doctor, a parent and a donor. “The holy grail in regards to analytics is to get a real 360 view of the customer,” he states. Williams reflects on what worked for the charity: “Firstly, start off with

an hour or two window, then it is not on top of people’s minds anymore.” With the mobile program running, “You are getting more time to see more teachers and schools while on the road and cut down on the double handling of data,” he says.

“We are in the same boat; we are trying to reach the audience, we are trying to grow the game, improve our image.” On the event side, Tennis Australia is tapping into social analytics to help engage more with fans on and off site.

DAVE WASLEY, TRADE MER:

“BY PUTTING THE POWER OF THAT DATA IN PEOPLE’S HANDS THEY CAN SEE THOSE FAILURES AND SUCCESSES REALLY QUICKLY AND TRY SOMETHING DIFFERENT AND KEEP INNOVATING.”

mapping the lay of the land and getting a real good understanding of what are the touch points that your customers interact with you? “Then do an assessment – which are of value, which ones are you integrating? That would open up a bit of insight into where you can gain information towards that single view of the customer. “Now that we have all this information, how do we start making it fly?” Williams says mobility is the next frontier for The Heart Foundation. For their next project, he is getting regional staff members fully equipped with mobility devices. When they are out interacting with public schools and early childhood centres, they can see the different hats the people they are interact with are wearing, and provide a more tailored experience, he says. The staff can show them The Heart Foundation’s projects right on their mobile devices and sign up members and donors immediately. Before, they used to take down notes, bring these back to the office and then acted on them, he says. “What we find with the testing, people are more likely to sign up and start using their programs immediately if you cut that transaction time down. “If you leave it open and say that we are going to get back to you, you leave

TENNIS AUSTRALIA: BUILDING PARTNERSHIPS This is the environment in which Tennis Australia operates: “We are a small to medium organisation, with 200-plus people, for 11 months of the year. One month of the year, during the Tennis Open, we become a global enterprise, with 8000 people,” says Samir Mahir, who was CIO of the organisation for four years. Before joining Tennis Australia in 2011, Samir worked at IBM with its Events Team, and was also director of information technology at the United States Tennis Association. Mahir, now working as a digital strategy and consultant, shares how analytics literally changed the game for the organisation, both on and off court. He says the organisation started leveraging analytics by sharing data with fans and patrons. It has since then been used to grow participation in the game, which is Tennis Australia’s core mission. “We thought, we are doing such a great job in the event, we want to do this the whole year round,” he says. Mahir says talking about what other sports organisations are doing with analytics helped make the business case. An example would be comparing how a major league baseball team is leveraging data to improve ticket or merchandise sales.

There is a lot of interesting, good or bad surprises that come from the data, Mahir says. The key is how you transform and get insights out of the data to benefit you and improve certain things. “In our case it is how to engage better with our fans and improve customer experience. “We just found out that in fact, we have lot of loyal customers or people who come every year, and have been for the past 20 years, with their families. They bought the same seats over and over. You need to find a way to provide better services to these people.” He says the fastest growing channel during the event from a social engagement perspective was Instagram, not Twitter. “People love taking photos, so we put in some activity selfie pods so people can take their photos and share them.” He says he had to find a way to reach people even if they don’t come into the games. IBM CrowdTracker and the Australian Open digital platforms (ie web, mobile and apps) are hosted on IBM cloud. The cloud, like the digital platforms it supports, combines analytics, mobile and social technologies to create and manage the most engaging and reliable experience for fans across platforms. cio.co.nz 45

IN DEP T H / BUSINESS INTELLIGENCE

SHAUN WILLIAMS, THE HEART FOUNDATION:

“THE HOLY GRAIL IN REGARDS TO ANALYTICS IS TO GET A REAL 360 VIEW OF THE CUSTOMER.”

Barry Devlin: ‘Be fully transparent about intended use of data’ Barry Devlin, founder of 9sight Consulting, says companies need to pay more attention to transparency when it comes to using data. What is happening is that the likes of Google and Facebook are sucking huge amounts of data and using it to drive their own businesses, says Devlin, one of the pioneers of big data research, and now a business intelligence and big data industry analyst. “It has become commonplace and people think it is normal, and yet it is not.” The analytics of human sourced information can drive serious breaches, he warns. He cites the fallout – including suicides – following the leak of data from the extramarital dating site Ashley Madison. He says de-anonymisation of data

they agreed to those uses of data, both current and anticipated? Another area that should be front of mind is security. “Security is the foundation,” he states. “If data is accessed either legally or not legally, what are the implications for privacy?” He says these issues around privacy and security are among the things CIOs need to discuss with the CEO and the board. “What would happen if this data leaked? What would happen if it was stolen? What would be the implications for the business? “Organisations need to be careful about the personal data they collect,” he points out. “Do they actually really need to go to that level of detail? Does it justify the extra costs of making it secure and putting

BARRY DEVLIN, 9SIGHT CONSULTING:

“Just because you can collect the data does not mean you should use it.” is another issue. He cites the case of anonymised medical data being released for research but then ethical hackers showed that data can be de-anonymised very simply by cross correlating it with other data sources. “Businesses today have to start thinking about data and their storage and use of data in the same way banks protect our financial data,” he states. “Privacy issues should be at the forefront of all organisations,” he stresses. “What is it that you are trying to achieve? Do you understand potential future uses? If you get data from a client, customer or consumer, have

46 CIO SPRING 2015

extra control around who accesses it?” He says organisations need to decide the ethics of data usage. “Take steps to ensure information privacy. Just because you can collect the data does not mean you should use it. “What are the potential negative implications of having particular data about people? Don’t collect it unless you understand them. “Avoid data from dubious data broker sources, who may have collected personal data without explicit permission,” he advises. Above all, “be fully transparent about the intended use of data.”

“Last year we had over 17 million unique visitors to the website, and there was a 91 per cent increase in mobile site views,” he states. Predictive analytics allowed Tennis Australia to plan for capacity based on the conversations on social media or actual statistics on the server and on the website. This year, it launched IBM Crowd Tracker application to learn how the crowd is moving from one gate to another. For the first time this year, Tennis Australia introduced IBM Watson as a layer on top of the predictive analytics to optimise all the loads in its infrastructure. On the year round side, he says Tennis Australia invested in a data warehouse as it used to have several disparate systems. “The analytics initiative allowed us to think about better integrating our systems, and put together a digital strategy to make sure we reach out to all types of audiences,” says Mahir. “The key is to provide real time information,” he says. “We have several stores, and a store manager may want to know how the inventory is doing in real time. “Analytics helps you do that and that is part of the continuous improvement for the event.”

KEY ADVICE “You need the support of the CEO, the executive leadership,” says Mahir. “Without that, you can try whatever you want. You could probably manage to do certain things but not go through a huge transformation. “The interesting thing we learned is you can’t address these efforts with just minimal resources. If you want to do a good job, you need to invest in people with right skill sets,” says Mahir. Mahir compares this approach to a successful doubles team. “In order to be successful, you need to practice, prepare and plan and then get along very well. If you see doubles players during the match, they communicate between points and services. How do you plan the next point just before, during and after?”

STRATEGY / F U T UR E F OCUS

Where is technology leading us? IT IS TIME TO ADDRESS TECHNOLOGY DRIVEN NARCISSISM AND ISOLATION. By Aaron Kumove

ometimes seemingly innocuous events stick in your head and become markers for a larger train of thought to develop from. For me that happened in 1995 when I was leading the build of an online bank for one of Canada’s largest banks. We were in a meeting with some people from the bank and the guy who was the business owner of this project at the bank in the middle of the meeting pulled out his new laptop to show off the newly released Windows 95 operating system. In doing so, he completely derailed the meeting and given that he was my client I could only prod him gently rather than tell him in no uncertain terms to stop wasting all of our time. As he was demonstrating Windows 95, the meeting room phone rang for him and he started to have another conversation at the same time as demoing Windows 95 to us. Then his cell phone rang which he answered while still holding the other phone to his other ear and showing off Windows 95. To say that this was absurdly funny would be an understatement, but it also got me thinking about how we use technology, or rather perhaps how it uses us. This guy was a slave to technology rather than a user in command of it. Over the years since then, this is something I have thought a lot about. The implications of technology invading and pre-empting human behaviour have, I think, become more profound. It seems to me that in many ways we are becoming event driven cogs in a system of technology driven interruptions. The first example of this was when the telephone proliferated. Who can say that when they hear the phone ring that they don’t stop whatever they are doing to answer it most of the time? Then we had

I SEE AMAZING TOOLS FOR COMMUNICATION THAT OFTEN ISOLATE RATHER THAN BRING PEOPLE TOGETHER. email and the same thing happened. The sound of a new email arriving caused us to interrupt what ever we were doing to check it. Then we all got mobile phones and guess what? We started interrupting whatever we were doing when we heard a new text message come in. And more recently we have social networking. God forbid that we miss seeing someone’s latest post! So it seems to be that in many ways we behave at the behest of these amazing technologies, always feeling we have to respond whenever they call us. But who is calling the shots? It can’t be us if we are always feeling we have to respond to some technology driven interruptions, can it? Who then is in control? I will deal with this in a later column, but there is another aspect to technology driven human behaviour I find concerning that I want to address now. I will call it technology driven narcissism and isolation. It seems to me that in many ways these fantastic technologies that are designed to promote communication have in many ways the effect of isolating us and making us more focused on ourselves and less so on the world around us and in interacting with it. I recently saw a couple in a café inside a movie theatre sitting facing each other each playing with their

cell phones with not a word said between them for half an hour as I observed from the next table. They were in their own worlds oblivious to each other waiting for show time. We have all seen similar instances many times, I’m sure, of people in group situations or activities busy with their phones ignoring the group around them. The focus seems to be ‘me’ and not ‘we’. We see this same focus demonstrated sometimes in an obsession with Facebook posting as an amplifier for ‘me’. How about selfie sticks? I must take a photo of ‘me’ and god forbid that I should have to interact with another human being to ask them to take a picture for me? All of these behaviours stem from the same thing what I saw over 20 years ago in a meeting at the bank. I see people not in command of technology but often being commanded by it. I see amazing tools for communication that often isolate rather than bring people together. I will develop these thoughts further in future columns. AARON KUMOVE (akumove@ horizonconsulting.co.nz) IS THE MANAGING DIRECTOR OF HORIZON CONSULTING. HE IS A FORMER CIO AT NEW ZEALAND POST AND AT THE MINISTRY OF EDUCATION.

cio.co.nz 47

Executive index

Victor Vaeâ&#x20AC;&#x2122;au CIO New Zealand Defence Force

John Holley Head of ICT Manukau Institute of Technology

Denildo Albuquerque Phil Brimacombe Bobby Cameron Barry Devlin Chip Felton Steve Griffin Oliver Hawkley John Holley Ross Hughson Geoff Hunt Darilyn Kane David Kennedy Manu King Rob Livingstone Samir Mahir Suhel Mangera James Mansell Thornton May Andrew Milroy John Moss Ross Patterson Carl Powell Julia Raue Matti Seikkula John-Paul Sikking David Spaziani Hannes van Zyl Victor Vaeâ&#x20AC;&#x2122;au James Walls Dave Wasley Shaun Williams

Delivering the most senior IT director opinions: At least 32 senior IT professionals quoted in this issue including:

Executive Partner, Gartner Executive Programs.................................................................................................31 Head of corporate services, NorthTec................................................................................................................ 18 Analyst, Forrester..................................................................................................................................................5 Founder of 9sight Consulting..............................................................................................................................42 Principal consultant, Montage........................................................................................................................... 18 Country manager, Unisys New Zealand............................................................................................................. 31 Principal consultant, Kerridge & Partners......................................................................................................... 18 Head of ICT, Manukau Institute of Technology ..................................................................................................31 CEO, Personal Information Management........................................................................................................... 18 CEO, Hawkins Group.......................................................................................................................................... 12 Executive Education manager, University of Auckland Business School............................................................ 6 CIO and CISO consultant............................................................................................................................. 29, 31 Principal consultant, e-Spatial.......................................................................................................................... 38 Fellow, Faculty of Engineering and Information Technology, University of Technology Sydney......................... 18 Digital strategy consultant.................................................................................................................................42 Chief data analyst, Trade Me..............................................................................................................................42 Founder, New Zealand Data Alliance..................................................................................................................34 Futurist and president, FutureScapes Advisor...................................................................................................42 Senior vice president for ICT Asia Pacific, Frost & Sullivan................................................................................ 4 Chief strategy officer, MYOB............................................................................................................................... 4 Partner, Minter Ellison Rudd Watts................................................................................................................... 42 Former CIO, Fletcher Building.............................................................................................................................31 CIO, Air New Zealand..........................................................................................................................................18 CIO, e-Spatial.....................................................................................................................................................38 Security specialist, Cisco....................................................................................................................................31 Executive partner, Gartner Executive Programs................................................................................................ 18 CIO, Hawkins Group........................................................................................................................................... 12 CIO, New Zealand Defence Force....................................................................................................................... 31 Chief technology officer, Dimension Data......................................................................................................... 31 Head of platform and operations at Trade Me....................................................................................................42 Information services manager, The Heart Foundation.......................................................................................42

COMPANIES Air New Zealand............................................................18 Cisco.............................................................................31 Dimension Data............................................................31 e-Spatial...................................................................... 38 Fletcher Building ..........................................................31 Forrester.........................................................................5 Frost & Sullivan .............................................................4 FutureScapes Advisor ..................................................42

48 CIO SPRING 2015

Gartner Executive Programs ........................................31 Hawkins Group .............................................................12 The Heart Foundation ...................................................42 Kerridge & Partners .....................................................18 Manukau Institute of Technology .................................31 Minter Ellison Rudd Watts.............................................42 Montage........................................................................18 MYOB .............................................................................4

9sight Consulting ..................................................42 New Zealand Data Alliance ......................................... 34 New Zealand Defence Force ......................................31 NorthTec .......................................................................18 Personal Information Management ..............................18 Trade Me ......................................................................42 Unisys New Zealand .....................................................31 University of Auckland Business School ........................6