Transparency Insights and information from SMT Data
TRANSPARENCY
Insights and information from SMT Data – Specialists in IT Business Intelligence
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“Don’t tell everybody everything but when you tell them something, tell the truth.” Pages 5-9
“Our customers rarely agree to pay us a percentage of our results. They think it would make us too rich too soon.” Pages 10-15
1 Specialists in IT Business Intelligence
Transparency Insights and information from SMT Data
All good news As a highly specialized IT company SMT Data moves in a world of huge corporations and financial institutions. In such companies, literally thousands of workstations and cellars filled with mainframe computers and servers create a maze no single person can navigate.
To further the complexity, the business side which
create a common language for people who speak in
needs the output from all those systems is com-
gigabytes per second and those who see the world
pletely at the mercy of the IT department which can
in millions of Euro per quarter.
make them work more or less efficiently. Their only means of control is that they most often decide the
We call it IT Business Intelligence. And in the fol-
budgets. In short: Business states the objectives,
lowing pages you’ll get a glimpse of the results it
but sets the limitations. IT provides the solutions if
can achieve: Fair distribution of IT-costs. Behavior
they can. And if they can’t, they have the language
adjustment. Enhanced processes. And huge savings
to confuse everybody.
that can be realized from day one, just to get things moving.
It’s a balance of terror, in many ways. I hope you’ll like reading about it. We intensely And then there’s us. We’re the instruments of
enjoy telling it, because it’s all good news.
diplomacy and co-existence. We sit business and IT down at the same table and establish complete transparency of the relation between them. We
Jan Vilstrup CEO, SMT Data A/S
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Insights and information from SMT Data Transparency
it business intelligence The advantages of telling the truth............................................4-9 When IT put on a necktie...............................................................10-15 Effort and effect.................................................................................16-21 Getting started..................................................................................22-23
Publisher: SMT Data A/S Harbour House Sundkrogsgade 21 DK-2100 Copenhagen Denmark
Specialists in IT Business Intelligence
Phone: +45 3962 8887 email: sales@smtdata.com Web: www.smtdata.com SMT Data is represented in : • Denmark • Sweden • Norway • Finland • Germany • Netherlands • UK • Spain • Switzerland • Austria • Belgium • Luxembourg • Estonia • Latvia • Lithuania Editor-in-chief: Jan Vilstrup Managing Editor: Hanne Eichert Written and produced by: TBWA\ Bredgade 6, 3 1260 Copenhagen K. Printed in Denmark Front page illustration: The cover is an illustration to show relationships hidden within the story of data. The visualisation tools at http://well-formed.eigenfactor.org where used to create this illustration.
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Insights and information from SMT Data Transparency
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Don’t tell everybody everything - but when you tell something, tell the truth Interview with Michael Hillerstrøm, Chief Technical Officer, JN Data, about time to market, the bad guys out there and about having been together with SMT Data from the dawn of time
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Transparency Insights and information from SMT Data
Michael Hillerstrøm receives us in his bright and
Keeping your head above water can be done in a
accomodating office in JN Data’s headquarters on
number of ways, some of them more intelligent
the outskirts of Silkeborg in central Jutland. From
than others, Michael Hillerstrøm thinks.
here and together with his department he’s responsible for the stable, secure and cost efficient
”On one hand: If it ain’t broke, don’t fix it. And in
operation of the IT systems of the partners behind
many cases, that’s true. It’s an attitude that might
JN Data – Jyske Bank, Nykredit, BEC, SDC and Bank-
not lead to much development, but you don’t
data. All of them are major players in the Danish
often go ‘oops’ with it. But these days it’s more
finance sector, and they also rely on JN Data to
about trimming things all the time and keeping
optimize their infrastructure so time-to-market
an eye on everything. And one of the things you
on new initiatives is as short as possible. Michael
keep an eye on is the price.”
Hillerstrøm explains: Of course you can put pressure on your supplier ”Our primary focus is the operation but almost as
to make him come up with the product at a lower
important is the development of the infrastruc-
price, Michael Hillerstrøm explains with a mean-
ture, so our partners can use IT as a competitive
ingful glance at SMT Data’s Country Manager,
tool against the bad guys out there.” The words
Knud Skriver, who’s following the conversation
are spoken with a smile, but behind them lies the
from the other side of the table.
realization that IT is a major consideration for this entire industry.
”But you can also try to make better use of what you already have. Or you can let something go.
“The secret is to operate IT with a
We have chosen the first two approaches in most
maximum of stability and a mini-
discussions before we enter into contracts. Of
mum of costs – and at the same time keep at the forefront of innovation.
course they need to be beneficial to both parties – but we also invest a lot of energy in looking after our own backyard. We don’t want machines
Perhaps not up where the wave
trigging over at a load level of 2-3 %. We need them
crashes but at least high enough so
going at full tilt when we’re talking VMware
that your head is above the water at
to ensure that we don’t waste cycles on doing
all times.”
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cases where we engage in long and thorough
servers. And on the host side we make every effort nothing,” says Hillerstrøm.
Insights and information from SMT Data Transparency
He continues: ”That’s exactly where SMT enters
that bang their drums in this or that respect, but
the picture. We have used different stages of this
I don’t think you can find anybody who is equally
software for more than twenty years and we have
good at both sides.”
co-developed on it along the way. For instance, what we call shadow invoicing, which is to say
Michael Hillerstrøm explains: ”Everything grew
internal settlement of various services, which we
out of the mainframe environment where a lot of
use to explain why IT costs money – but also for
the focus was on how much a transaction would
the purpose of behavior adjustment. A lot of people
cost. Remember, just a few years ago the prime
were doing stuff that was inappropriate and you can
cost was the hardware. Today, it’s the software.
track this if you follow things and have a history of
So knowing about mainframe and optimizing its
your transactions. We have used SMT accounting
cost structure also calls for insight into the way
software for this and we have been part of devel-
your applications are put together, structured and
oping it. We still use it for that purpose. But of
used. And that is one of the things SMT’s tools
course we also use the other modules for instant
make possible for us.”
overviews – so we’re not just looking at history.” We ask Michael Hillerstrøm if, according to him,
”In the old days you went out and
SMT Data is correct when they say that at present
bought a new server when the need
they are alone in the market with a through-and-
arose. But the software providers have
through IT Business Intelligence solution. ”These days I think you can find alternatives – at least for this or that detail. But I don’t think that anybody has connected mainframe and open systems like they have. I think you can find a lot of companies
also learned something about pricing. As more cores and processors have been added to the machines, more and more licenses seem to be needed.”
About JN Data JN Data is a Danish IT operation and technical data centre with facilities in various parts of Denmark. The company is responsible for creation and operation of the technological foundation for Jyske Bank, Nykredit, Nordisk Finans IT and Bankdata, all major Danish financial institutes. JN Data is a subsidiary, jointly owned by Nykredit and the Jyske Bank Group. Nordisk Finans IT and Bankdata are partners in JN Data. JN Data services around one third of the workplaces in the Danish financial sector. More than 200 banks run on its infrastructure and 43,000 PCs are connected to its network. Its customers account for half of Denmark’s total real estate financing and 35% of the bank market. In 2010, JN Data had total billings of around 1 billion Danish Kroner (App 135 million Euros) and employed 345 people.
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Transparency Insights and information from SMT Data
The CAR analysis
”But as price becomes more central to the decision process, it’s increasingly impor-
JN DaTA
bridge the gap between mainframes and open systems. In principle they can give
tant to have some monitoring software. What’s unique about SMT is that they can you the same information, no matter the environment. That leads to transparency and you can see whether it would be best to run a job on a mainframe or perhaps
Challenge JN Datas mission is to ensure competitive power for a variety of different organizations through providing operation of internal and external IT-operation that is safe, stable and efficient. On a practical level, the challenge for SMT Data was to ensure a fact-based and highly detailed cost distribution between the owners/customers.
on four smaller servers. And at the same time you can explain the cost and why, for instance, it takes four technicians to do the job. Or perhaps discover that part of the installation goes unused. There is any number of aspects and every question can be turned on its head. But SMT’s solutions will always provide you with a qualified answer. On one hand it’s not JN Data’s job to involve itself in the business development of its partners. On the other they are called for to provide support so that the application developers of each partner can produce what the businesses need. ”So what we’re offering is an insight into what’s possible with what we’ve got. But we also like to provide a view of what could be done if we went one step further. So a couple of times a year we organize a workshop with opinion-makers from the various partners. And then we ask questions like: ’what should you know?’ and
Action Installing the complete SMT Data solution and working together with JN Data to develop a cost distribution programme. To use and co-develop SMT Data’s IT Business Intelligence platform to provide complete transparency of the interaction of businessdrives and IT-initiatives.
’what should you wish for?’ And then we sit down and swap ideas on how to put everything to the best possible use.”
”SMT gives us deep insight and a sensible explanation for a lot of things. In turn, that gives us the opportunity to see things in a structured manner and to communicate with our customers in a way they can accept.” ”To me it is important that you should not have to tell everybody everything. But
Results An environment of common language and common truth has been established. Substantial savings in operational costs are realized. Kompass rates JN Data in the top of its industry in terms of cost control and turnover per employee.
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what you do choose to tell should always be the truth. And the more you can back up whatever you say with facts the more you can avoid the kind of discussions where everybody has a truth that is different from everybody else’s. So to me it’s extremely important to have a tool that gives us a common truth and a common way to interpret things. It’s pure gold. It makes things so much easier at meetings. And we even use it to forecast trends and tendencies as well as for our budgeting. And that has been practically spot on for the past four years.”
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Insights and information from SMT Data Transparency
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when It put on a necktie There was a time when visiting the IT department meant putting on a lab coat and trying to understand as much as possible of the tech jargon. But more and more often today, the CIO is one of the directors of the company and everybody listens while he speaks.
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• Denmark • Sweden • Norway • Finland • Germany • Netherlands • UK • Spain • Switzerland • Austria • Belgium • Luxembourg • Estonia • Latvia • Lithuania
“It was bound to happen. Today, IT is so integral to the business that having it on the same floor as finance, marketing, business development and general management is the only natural thing.” Nils Kierkegaard makes the statement and leans back in his chair as if to make room for an opposing point of view. But of course it’s hard to argue against the fact that modern banks, insurance companies, internet shops, airlines and a growing number of other businesses are little more than extensions of their IT platforms.
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“IT is where you meet the customer, create the customer experience and close the sale”, says Jan Vilstrup, summing it up. We are in Copenhagen’s north harbor, in the offices of SMT Data, a company whose relatively modest size belies the fact that it works with some of Northern Europe’s biggest companies – and has its eyes set on an international growth rate of rare
Insights and information from SMT Data Transparency
dimensions. Across the table sit Nils Kierkegaard,
get so-and-so many new customers, what will it
chairman, and Jan Vilstrup, CEO of SMT Data.
cost and how long will it take to integrate them in our IT systems? And decisions in IT – should we
Business Intelligence applied to IT
introduce this new application for claims man-
What SMT Data does can best be described as IT
agement? – affect the business. As in: if we do,
Business Intelligence, says Nils Kierkegaard who
our lead time for this particular task will change
coined the term.
and our ability to service customers will change accordingly. But without specialist tools such as
“Most major companies today use business intelli-
ours the real relation between one and the other
gence in some form. They analyse various transac-
will remain hidden.”
tions to better forecast future trends, run efficient logistics, plan marketing campaigns and do all the
Nils Kierkegaard adds: “There’s always a quid pro
other things that make up a well-run company.
quo. What the business does will make something
What lies behind is a software solution which tracks
happen in IT. And whenever IT lays an egg, it hatches
various sources of information in the company and
in the business. What we do is opening a window
presents them in an easy-to-read manner – like a
and providing complete transparency of that rela-
dashboard – so the people who run the company
tion.”
can make the necessary corrections to course and speed as they go along. And we do exactly the
The language barrier
same – but exclusively for the processes in the IT
SMT Data has heard it argued – especially from
department.”
experienced IT people – that such a transparency has always been there for anyone who would care
The core of SMT Data is a ‘Law Book’ of more than
to look for it. Business management has always
200,000 rules and policies. These rules and policies
been welcome in the IT department to discuss how
are the basis for the processing of millions of indi-
various decision alternatives would impact opera-
vidual measuring points which is integrated into
tions, they say.
the customer’s IT framework. The result is a desktop dashboard analysis, serving the CEOs as decision
“True, but the language barrier between the two
support, general insight and transparency of the
functions is a fundamental obstacle”, argues Jan
relation between IT and business.
Vilstrup. “IT people talk in gigabytes per second and business people talk in millions of Euro per quarter.
Transparency is a window to value
And both are quite correct in assuming that they
“Transparency is what it’s all about”, says Jan Vil-
look at things from the right angle, because from
strup. ”Everybody knows that decisions about the
the point of view of the job they are tasked with,
business – should we run this marketing campaign
they do. But today’s businesses and the IT systems
or not? – affect IT. As in: If we run the campaign and
that support them are far too complicated for anyone
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Transparency Insights and information from SMT Data
From complexity...
...through transparency...
person or department to have a full overview over
should be defined in the broadest possible terms.
them. Without specialists tools that is simply im-
“Of course value is about money. But how the com-
possible.
pany chooses to leverage the insight it gets from the new-found transparency – that’s totally up to
“Our solution introduces a common language that both parties can readily understand and in which they can easily express the most complicated issues so that the other party can understand them, too. This creates
the company. It may choose to look for savings, and our tool is incomparable for that, as our case with Danske Bank (pages 16-21) illustrates. But it may also, for instance in periods of growth, choose to use it to optimize processes towards more efficient delivery and shorter time to market. Or it may look for benefits from a human resource angle – or any combination of a number of advantages.”
a unified version of the absolute truth
Works both ways for outsourcing
about what’s happening in the inner
And then there’s a whole different angle – namely
workings of the company. And the value of everybody adhering to the
the benefit that comes from being able to negotiate the best possible contract if one chooses to outsource IT.
sametruth and acting upon it without
“Many companies seek the savings that are easily
prejudice is immense.”
picked up when you choose to outsource. It does, however often turn sour in just a year or two, be-
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Value is what you make of it
cause the very decision to outsource has a tendency
Nils and Jan both hasten to add that value here
to rob a company of the expertise to negotiate
Insights and information from SMT Data Transparency
...to action!
sound IT deals. With our solution – and perhaps one
out any real competition in so far as we have inven-
of our senior people as your consultant at the nego-
ted this niche ourselves and none of the solution
tiating table – you can actually reach outsourcing
providers in the business intelligence community
deals that are long-term beneficial to both parties.”
has been able to emulate it yet. But it is also the biggest obstacle we have to overcome”, says Nils
At the same time, more and more outsourcing provid-
Kierkegaard.
ers have come to accept SMT Data’s input as a strategic benefit. They use the transparency the solutions pro-
“When you’re a specialist company alone in a market
vides to tailor their own products towards even great-
it means that you have to educate the customers all
er customer satisfaction and competitive strength.
by yourself. Frankly, as business sides and IT departments both grew within companies, complication
A strength and an obstacle
rose to staggering heights. Many companies came
SMT Data has been in business for more than two
to accept that there were grey areas of interaction
decades and enjoys long-standing relationships with
between IT and business which would never be
a number of customers in the Nordic countries. Now
fully charted. We don’t accept that. And we spend
thetimehascomeforinternationalexpansionand the
every waking hour of the day trying to persuade
company has established bridgeheads in the Ger-
customer’s that they, too, shouldn’t accept that. It is
man, UK, Benelux and Spanish markets. The three-year
possible to know it all. And when you do, the boost
objective is to close deals with major players in each
it brings to your competitive power is quite over-
of these markets and to make SMT Data’s solutions
whelming.”
the industry standard for transparency of the relation between IT and business. “The reason we can do this is simple – we are with-
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Effort and effect Niels Simanis is a cost hunter for Danske Bank, one of the largest banking groups in the Nordic countries. He leads a task force of less than ten experts at finding needles in haystacks – and since 2004 they have facilitated savings of more than 150 million Euros.
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Transparency Insights and information from SMT Data
About Danske Bank Danske Bank is Denmark’s largest bank. It has 2.2 million private customers and services a significant part of the private, institutional and public sector in Denmark. It also has banking activities in Sweden, Norway, Finland, Ireland and Luxembourg. Danske Bank has more than 300 branches, six agricultural centres and 1,000 ATM’s across the country. The bank employs 6,000 people in Denmark and it is a part of the Danske Bank Group, which employs 22,000 people in 15 countries.
”If we didn’t have SMT’s software, we’d have had to
it for 10 million Euros? No, we don’t. Do we want it
spend a whole lot of time and effort in gathering
for 5 million? Still, no. How about 100,000? Yeah,
that knowledge in other ways.”
we’ll take it for 100,000 Euros. OK, so far so good. And that’s exactly where SMT has contributed to
Niels Simanis’ life is a constant balance between
making the cost side of things very clear to us, so
effort and effect. It doesn’t take long to identify an
we know what we’re looking at. It gives us a valu-
effort – but accurately estimating its effect takes
able sharpness to our focus when it comes to costs.
some systems.
It makes it easy to achieve an overview of the best potential for savings.
”You don’t get far in an organization
Niels Simanis’ department was founded in 2004
such as Danske Bank if you’re not able
for means and methods the limitations were few.
to very precisely describe what you want to do, what the results will be,
and tasked with finding and minimizing costs. As But the challenge was clear: To overcome a steep learning curve and meet great expectations as far as results were concerned. And to be able to fully
and what costs will be incurred.”
document everything they did.
Niels Simanis uses his hands to visualize a given
”You have to be able to describe an effort and its
effort.
effect very accurately. Otherwise, it is very hard to get a management like ours to approve anything at
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”Here’s something we could do and which would
all. But that’s where SMT’s software makes it pos-
lead to more effectiveness”, he says. ”Do we want
sible for us to paint a scenario with the overview
Insights and information from SMT Data Transparency
that’s asked for. We’d never be able to do that if we
to have in place systems to tell us if our systems are
didn’t know the costs. So in this way, SMT’s product
running as they should or not. You may have heard
has been – and is – an enabler of cost reductions.
about fighter planes that have in-built instability
And we’re talking quite a lot of money. In the years
to their aerodynamic characteristics. They have to
this department has been operative we have saved
be, in order for the planes to be able to withstand
Danske Bank more than 150 million Euros.”
all kinds of stress in combat. And then you add computers that can compensate for the pilot’s in-
In Danske Bank an economic boom – such as Den-
put. Only without the computers the pilot is not
mark had for the first two-three years of Niels
able to fly the plane. That’s what you see in modern
Simanis’ time with this department – goes fine
IT systems – they are so complicated that we don’t
hand in hand with a cost savings mindset. The
know their normal mode of operation. And when
bank has no trouble rationalizing sizable invest-
we don’t know that it’s a question of are we run-
ments in, for example, acquisitions of other banks,
ning the systems – or vice versa.”
while at the same time operating under a strategy that calls for cost savings wherever possible.
Danske Bank runs app. 100,000 transactions per day – with upwards of six billion calls to databases. The
”Solving our task has called for the development of
bank has programs that are called 75,000 times per
some pretty sophisticated processes”, Niels Simanis
second, creating the occasional chaos, Niels Simanis
says. ”First we looked at systems. Then we looked
concedes.
at programs. Now we have dug ourselves all the way down to looking at what the compiler of the programs is doing – and we’re starting to look at
”When an event occurs that makes
what can be done about the hardware. So we go
the system stop – just for a second –
everywhere to find optimizations. We have found
it means we have backlog of several
ways to write programs more efficiently and learn how that affects the processes within the machines.”
thousand transactions when the sys-
Even though the efforts to get inside the very fabric
tems starts up again. And even if it only
of the system are important a lot of resources are reserved for them, they have natural limitations, Simanis explains: “We have to admit our systems are so complex that we can’t juggle them around in our heads. We need
means that some people have to log on to their online net bank again, that’s not the kind of service the bank wishes its customers to experience.”
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Transparency Insights and information from SMT Data
The CAR analysis
Danske bank Challenge To establish and run a special task force for cost detection, elimination and prevention.
Action The task force combines a full SMT Data solution with serious in-house capabilities. New solutions are developed and added continuously.
”We constantly seek what we call normal state of operation. And I don’t believe that’s something you can achieve by hard work alone. Putting your shoulder to the grindstone doesn’t do the trick. We have to step back – far back – from the detail to get the overview. An example is neural networks which we have been working on since 2005. This year we have made our first delivery in the shape of a tool we can give to our developers and which relates to the fact that we need to be able to handle 10 megabyte metric data per second and still be in control.”
Results Since its inception in 2004 the task force has realized savings of around 150 million Euros. Danske Bank’s developers use SMT tools to regulate behavior and comply with budgets. A new spirit of commonality and cooperation now exists between Software developers and IT-operation.
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”It is vital to understand that you cannot manually control a large IT system. We have to build systems to watch the systems. And that’s exactly where there is a tremendous growth potential for SMT. I am in contact with a major European supplier to the German banking industry. They run 50,000 cash machines and 65,000 branch offices. They’re huge – twelve times our size. And they want to learn from us how we have put up golems around our costs. We have arranged a workshop to learn from one another. Obviously we also have a lot to learn from them, for
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instance how to present and implement new solutions in a complex system.”
Transparency Insights and information from SMT Data
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Getting started Integrating a full SMT Data solution is a daunting, but rewarding task – but there’s a way to get started that produces immediate results and opens the way for deeper immersion with a clear view of the advantages about to be realized. Welcome to the SMT Starter Kit. “We see each new customer as a golden opportu-
caution ourselves not to be satisfied with them
nity. There’s always a treasure which can be found
and risk losing the wider perspective.”
quickly and which, when delivered to the management, proves that working with us was a wise decision in the first place.” For this interview Nils Kierkegaard and Jan Vilstrup are joined by Tony Franck, SMT’s front man for
The three men from SMT Data assert that even though a Health Check rarely costs more that 30-40,000 Euros, they
product marketing. It’s Tony who paints the picture
regularly result in savings that are
of SMT as treasure seekers on behalf of the cusomer.
measured in millions. But even that is
Nils adds:
not good enough for them.
“Tony is referring to the procedure we call the
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Health Check. It’s a way to get started by looking
“We need more,” Jan Vilstrup states. “Our vision is
at the data flow in a company and making the
to change the way companies work by giving them
most obvious suggestions as to what could be
full transparency of the relation between IT and
made more efficient rapidly. In most cases there
business. That’s an ongoing process and something
are some very easy pickings to be had some-
far too valuable to let it be obscured by a quick fix
times even so easy and so ripe that we must
that just adds a million or two to the bottom line.”
Insights and information from SMT Data Transparency
That’s why, Tony Franck explains, SMT Data employs a second tool to support the customer in his decision to go all in for a full scale cooperation.
“We call it the Proof of Value, and in reality it’s a piece of consulting that allows us to fully comprehend the customers organization and put enough of it through our system that we can tell him with a very high degree of certainty what he will get out of us in the long term.” It’s not, the three point out, just an SMT Data light, but a program onto itself. It can be completed in less than one month and SMT Data is to back its results with a payment-by-result remuneration plan, if the customer so desires. “We call it the SMT Starter Kit, because it consists of two elements – the Health Check and the Proof of Value – and together they put you on the road to a new and more efficient future. But we also considered the name The Miracle Ingredient – because that’s actually what it is”, says Nils Kierkegaard. “It documents how the customer can save millions and millions on improved efficiency through transparency in the relation between how he runs his IT and what happens in his market place. And it more than pays for itself, practically from day one. That’s pretty miraculous, don’t you think?”
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IT Business Intelligence What’s in it for you? IT Business Intelligence is a clear and transparent window to the value of knowing exactly how IT affects business and vice versa – and basing important decisions on that knowledge. Value, in this case, can translate into many things, depending on the priorities of the company – and of course different functions have different viewpoints. Use your smartphone’s code reader to scan the either of the codes at the bottom of this page. It will take you to a page that’s written especially for you – if you’r the CIO, the CFO or the CEO of your company. And of course you’re welcome to sneak a peek at what we’re saying to the other two. They are probably curious, too…
Scan the code and get the view from the top. A huge part of the total budget of the company goes to IT - here’s your chance to get full transparency of its value.
Scan the code and get the technical nittygritty on how the most advanced tools for transparency, overview and insight can make your voice heard at the top level of your company.
Scan the code and experience example after example of easy pickings and fast savings. Still not convinced? Remuneration by results is one of the options...
Specialists in IT Business Intelligence
CEO
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