The CIO`S

The CIO’s
New Role:
Core strategy Enabler
Cio barometer 2013
CSC IN TOUCH WITH
CURRENT TRENDS
CSC carries out a number of “barometers” every year
to analyze trends and perspectives from key roles in the
boardroom (human resources, finance, IT, procurement,
marketing and sales.) at the European or global level.
Each of these studies, carried out with the assistance of
independent survey institutions, involves the participation
of hundreds of managers from large businesses and public
administrations. The results of these studies are revealed
during high-level events, organized in different cities (Paris,
Madrid, Barcelona, Milan, Brussels, Lisbon, Washington,
D.C., etc.), and are also relayed by partners from the media
and academia (universities and elite business schools).
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INTRODUCTION
The CIO’s New Role: Core Strategy Enabler
The CIO Barometer is a survey carried out for the fifth year by
CSC in collaboration with market research institute TNS Sofres. It
is based on a quantitative analysis of the trends and outlooks for
IT directors, relying on a sample of CIOs from major European,
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29 cio insights
interviews with the experts
30. John Brisco, CIO. QBE Asia Pacific
32. Ángel Luis Cabal Cifuentes, General Director,
Information and Communications Technology. Government
North American, Brazilian, Australian and Asian companies and
of the Principality of Asturias (Spain)
public institutions.
34. Graham Curtis, Director, Information Management &
Technology, UK operations. BAE Systems PLC
36. Hessel Dikkers, CIO. Dutch Railways
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results
discover the key results of the survey
38. Michel Foulon, CIO. La Poste Group, Mail Division
40. Marcus Frantz, CIO. OMV
42. John Furlong, CIO, Group Insurance. Guardian Life
Insurance Co.
44. Wolfgang Gaertner, CIO Retail. Deutsche Bank
46. Jens Hartmann, CIO. Grundfos
48. Gerard Insall, CIO. Avis Budget Group
50. Djilali Kies, CIO. TDF Group
52. David Lister, Global CIO. National Grid
54. Jacques Marzin, Director, Department of Information
and Communication Systems (DISIC). French Government
56. Marc Probst, CIO, VP of Information Systems.
Intermountain Healthcare
58. Cathryn Riley, Chief Operations Officer. Aviva PLC
60. Thomson Thomas, CIO. HDFC LIFE
62. Doug Tracy, CIO. CSC
64. Bernd Vieten, CIO. ABB Germany
Opinions expressed by contributors are their own. Reproduction in whole or in part without written permission is strictly prohibited.
Copyright ©2013 Computer Sciences Corporation. All rights reserved.
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THE CIO BAROMETER IS
A SURVEY CARRIED OUT
FOR THE FIFTH YEAR BY
CSC, IN COLLABORATION
WITH MARKET RESEARCH
INSTITUTE TNS SOFRES.
IT IS BASED ON A
QUANTITATIVE ANALYSIS
OF THE TRENDS AND
OUTLOOK FOR IT
DIRECTORS, BASED ON
A SAMPLE OF CIOs FROM
MAJOR COMPANIES AND
PUBLIC INSTITUTIONS
AROUND THE WORLD.
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cio barometer
A global study
The CIO’s New Role: Core Strategy Enabler
Approach and methodology
Target and sample
The fifth edition of the CIO Barometer was produced in
collaboration with the TNS Sofres market research institute, and
surveyed a global sample of CIOs and IT managers working for
companies and public institutions employing more than 500
staff. These directors were interviewed regarding the position,
concerns, performance and outlook for information technology
departments.
Private and semipublic companies and public institutions:
• with a minimum of 500 employees
• located in Australia, Austria, Belgium, Brazil, Canada, China,
Denmark, France, Germany, India, Italy, Norway, Singapore, Spain,
Sweden, Switzerland, United Kingdom, United States
681 managers were interviewed on five continents and in 18
countries.
Interview method
The questionnaire was administered by the TNS Sofres market
research institute, in accordance with the CAWI method (computerassisted Web interviewing), between May and July 2013.
To cast light on the future of IT trends, the 2013 edition of the
CIO Barometer was complemented with FutureTense, a predictive
modeling infrastructure developed by CSC's Research Network.
FutureTense’s infrastructure provides the advanced analytics
needed to mine data for patterns and trends. The data is based
on CIO Barometer results from 2011 to 2013. Linear extrapolation
is used to predict responses through 2015.
These managers represent the following target positions:
•
•
•
CIO
IT director
IT manager
The sample was ultimately adjusted to guarantee representation
in relation to the population of companies employing at least
500 staff from the targeted activity sectors.
The survey results for 2011 and 2012 represent respondents from
the United States and Europe only.
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cio barometer 2013
introduction
The CIO’s New Role: Core Strategy Enabler
7
introduction
The CIO’s
New Role:
Core strategy
Enabler
Cio barometer 2013
8
The CIO Barometer is a survey based on a quantitative
analysis of the trends and outlooks for IT directors,
relying on a sample of CIOs from major European, North
American, Brazilian, Australian and Asian companies and
public institutions.
The role of the CIO, more than any other
in the C-Suite, is being dramatically
transformed. Driving this transformation
are equally disruptive changes in both
organizational strategies and IT itself.
Combined with a stubbornly challenging
global economy, these developments are
making obsolete the IT organizational
models relied on by both companies
and public agencies. Change is in the air.
Those who resist it risk obsolescence.
With the worst of the economic downturn
seemingly behind us and economies
all around the world starting to show
growth, the impacts to organizations
are only now being fully understood.
Companies and public agencies are finally
completing years of cost-cutting, layoffs
and other belt-tightening measures. At
last, business leaders are renewing their
focus on innovation and growth. They’re
searching for rapid changes that will
benefit the organization. And — given
the now-pervasive nature of IT in nearly
every organization — they expect their IT
departments to help lead these changes.
This shift is reflected in CSC’s CIO Barometer
2013 report, where more than 65 percent
of the 681 technology executives surveyed
said that IT’s contribution involves leadership
in innovation and creating value with new
technology. Nearly as many also reported
an increased involvement in the direction
of the core business strategy.
To display that level of leadership, CIOs will
need to demonstrate their relevance to the
business by enhancing business projects,
developing new offerings and becoming the
owners of the customer experience. For many
CIOs, this will involve both adopting new
and disruptive technologies and maintaining
their traditional IT services. In this way, they
will help energize the company to operate
at new levels of efficiency.
What’s more, today’s newest technologies
— including mobility, cloud computing,
customer intelligence, social media and
the greater integration of information
systems — all require levels of collaboration
between IT and other departments that
greatly exceed those of the past.
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Today’s digital disruptions go far beyond
increasing productivity to also shift entire
business models at an unprecedented
pace. Companies at the forefront of the
digital transformation — think Facebook,
Amazon, Google, Instagram and eBay —
are redefining the way people around the
world communicate, purchase goods and
services, share information, watch television,
and even socialize with their families and
friends. These trends are permeating the
business-to-business marketplace as well.
IT, once isolated in locked data centers, now
touches nearly every aspect of our lives.
CSC’s Leading Edge Forum, our global
research and thought-leadership community,
suggests these and other related forces
are reshaping the mission of enterprise IT
along three main lines:
• As a Service: As Enterprise IT improves
its vendor management skills, backoffice delivery tasks will be increasingly
delivered from outside the organization —
that is, automated by third party suppliers,
with the possible exception of the most
ingrained legacy systems.
• Consumerization: Outside of the IT
department, consumerized, largely selfservice technology will be put directly
into the hands of professional employees,
many of whom are already skilled in
business and IT.
• Repurposing: In most industries,
competitive pressures will require that
technology is built directly into new
products and services. This will require
extremely close-knit cooperation between
IT and other parts of the organization.
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Today’s consumerization trend may sound
familiar, and in a way it is similar to situations
seen by CIOs back in the 1980s, when
the change was driven by the then-new
personal computer. Today, the change is
being driven by easy-to-use social media,
the ubiquity of mobile devices and the
availability of cloud-based services. Indeed,
easier access to technology is allowing
business departments to implement IT
solutions without the direct involvement of
the IT department. Add to this the bringyour-own-device (BYOD) trend that is
connecting all sorts of devices to corporate
IT assets, and you have a pervasive situation.
Many IT-related products and services are
being procured outside the control — and
security — of the IT department.
As these changes play out, IT and its
funding will increasingly escape the control
of the enterprise IT department. Instead,
it will move directly into the hands of
business units and individual employees.
As this occurs, enterprise IT will step back
from the in-house IT development and
service-delivery activities that once were
its core capabilities. IT will spend more time
orchestrating and connecting a wide variety
of cloud-based and third-party services,
and as a result become smaller, more highly
skilled and more strategic in its focus. But
the net result of these changes should be
the reinvigoration of the IT function. The
IT department of the near future — led by
a collaborative IT executive team of CIOs,
CTOs and chief digital officers (CDOs) —
will enjoy a new and more valuable future,
leading at the front.
Information management
is no longer about simply
running an IT shop;
as most businesses and
public agencies go digital,
CIOs become enablers
of the digital journey.
This requires thought
leadership, sharp business
acumen, and a global vision
that can be shared with
the board and the business
units. It is no longer about
executing a technology
strategy, but about
leading a critical business
transformation.
Cloud Computing
Dominates CIOs’ Plans
Cloud computing, perhaps more than any
other technology, is changing the way IT and
CIOs work with the business. Cloud provides
alternative choices that often reduce cost,
increase speed, and (contrary to popular
belief) can strengthen cybersecurity. Cloud
also gives IT unprecedented flexibility in
how it provides services to the business,
employees, partners and most importantly,
customers.
CIOs can address the demands of the
business more quickly, using software as
a service (SaaS) and platform as a service
(PaaS) to accelerate in-house developed
applications. Further, cloud computing
enables the lines of business, such as
marketing or human resources, to get
what they need when IT is not responding
fast enough. This constructive tension
between the business and IT is creating
new opportunities for dialogue between the
two. Suddenly, skilled IT that is embedded
in the business, enabled by the simplicity
and availability of cloud services, becomes
a new alternative for sourcing IT.
Chief marketing officers (CMOs), for
example, are driving investments in cloudbased systems that help them nurture
and monitor sales leads, connect with
consumers and promote brands. Some
industry watchers have even predicted
that CMOs will outspend CIOs on IT before
the end of the decade. Non-IT managers
in other areas, such as HR, purchasing and
sales, are also starting to spend more on
cloud-based services. Modern CIOs will take
a more active role in partnering with the
business to protect the data, orchestrate
multiple clouds, manage costs and create
governance and policies to encourage and
manage these trends.
Of course, cloud technology also has its
fair share of costs. These include the cost
of integration with existing systems and the
cost of service management. As a result,
the net financial effect, rather than a sharp
drop in costs, is often a “smoothing” of IT
spending. In addition, organizations gain the
ability to quickly adjust their computing and
storage capacities as business needs change.
The importance of the cloud is evident in
CSC’s CIO Barometer survey. When survey
respondents were asked to select their top
IT challenges, 72 percent answered cloud
computing. This demonstrates the speed at
which this new model is being adopted and
the disruption that a pervasive new way to
provide services, such as cloud, can introduce.
While a challenge, cloud also presents very
real opportunities. Sixty-nine percent of
those surveyed cited the cloud as one of
the most significant developments in IT.
Some 70 percent of the survey respondents
say that exploiting cloud solutions is
important to improving their organizations’
operational performance. That would
explain why the same percentage says
that increased use of cloud services is a
priority for their 2014 IT budget.
IT and its funding will increasingly
escape the control of enterprise IT
and move directly into the hands
of business units and individual
employees. As this occurs, enterprise
IT will step back from the in-house
IT development and service-delivery
activities that were once its core
capabilities. IT will become smaller,
more highly skilled and more strategic
in its focus. But the net result of these
changes will be the reinvigoration of
the IT function. The IT department of
the near future — led by a collaborative
IT executive team of CIOs, CTOs and
CDOs — will enjoy a new and more
valuable future leading at the front.
Seventy percent of survey
respondents say that the
increased use of cloud
services is a priority for
their 2014 IT budget.
70%
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65%
of the executives
surveyed say
the development
of mobile
applications is now one
of IT’s major challenges.
And nearly as many cited
managing BYOD as a top
challenge.
The success of CIOs will
depend on their ability to
suggest new, profitable
business models. In fact,
in today’s economy,
innovation may be the only
sustainable advantage.
Mobile Technology:
connecting the world,
transforming the business
First came the mobile phone, allowing people
to carry their personal conversations with
them. Now, an even bigger transformation
has been driven by Internet-connected
smartphones and tablets. These devices
enable individual users to process,
consume, manipulate and share huge
amounts of information nearly instantly,
from almost anywhere in the world, and
often at very low cost.
Today’s smartphones may be small,
but they’re having serious and widereaching consequences for businesses
and public agencies alike. For one, new
digital ecosystems are shaking the very
foundations of how organizations should
operate. Also, disintermediation —
essentially, the elimination of “middlemen”
— is shortening the chains between
providers and consumers, disrupting
traditional business processes. (Perhaps
Microsoft founder Bill Gates foresaw this
back in 1994, when he said, “Banking
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is necessary; banks are not!”) Finally,
disruptive business models are emerging
that can redefine entire value chains.
Virtually every organization must now
rethink its current portfolio of products
and services along these lines.
Enabling customers to access products
and services using their mobile devices
and empowering employees with BYOD,
as mentioned above, are major disruptors
and management challenges for CIOs.
Which devices are to be supported? What
systems are needed for mobile identity
management, access management and
device management? And with mobile
devices so easily lost or stolen, how can
enterprise data and systems be adequately
protected against thieves, hackers and
other criminals?
In CSC’s CIO Barometer survey, respondents
show concern over these new mobile
challenges. Sixty-five percent say the
development of mobile applications is
now one of IT’s major challenges. And
nearly as many cited managing BYOD
as a top challenge.
Big Data & Analytics:
collecting, counting —
and predicting
Personal smartphones and tablets aren’t
the only devices that can be connected
to the Internet. Increasingly, industrial
devices are, too. In a trend known as the
“Internet of Things,” organizations are
connecting devices to provide a myriad of
contextual information in near real time.
For example, imagine giving your car the
ability to constantly transmit information
about itself to a preventive maintenance
diagnostic system. Instead of either waiting
for you to change its oil or, worse, breaking
down on the road, your car’s information
system could actually schedule its own
maintenance.
While developments like these are only
starting to appear on the market, research
conducted by Cisco finds there are already
some 10 billion devices connected to the
Internet — significantly more devices than
there are people on Earth. Looking ahead
only a few years, some industry watchers
predict that as many as 50 billion devices
will be Internet-connected by 2020.
All of these connected devices are also
contributing to a veritable flood of data.
And what a flood it is: Every minute of
every day, the global Internet carries more
than 200 million emails, 700,000 Google
searches, 100,000 Twitter tweets, 80,000
Facebook posts, and 510,000 comments.
Big data, often categorized by the sheer
scale and disparate sources of this data
(much of it unstructured), can help
organizations make sense of this flood of
information flowing from our new digital
channels, many of which sit outside the
traditional data center. Big data, when
paired with information analytics, can also
be used to predict likely behaviors in the
future. Analytics focuses on developing
new insights and understandings based
on prior data and new statistical models.
In fact, from a CIO’s perspective, there’s
real gold in that flood of data. The more
data that’s available, the more CIOs can
potentially glean insights, detect patterns,
create value and achieve competitive
differentiation.
No surprise, then, that in CSC’s CIO Barometer
survey, 56 percent of respondents listed
analytics and big data as one of the most
significant developments for IT. Similarly,
when asked to prioritize ways of improving
operational performance, more than 70
percent cited solutions for knowledge,
big data and information management.
Already, leading CIOs are using big data and
analytics to increase sales, identify trends
in consumer behavior, understand buying
patterns, optimize logistics processes, and
develop new products and services.
Yet big data also presents organizations
with several thorny challenges. While current
relational database systems are unable to
handle large quantities of unstructured
data, alternative databases (often based on
open source software) have proven difficult
to work with, and have even led to some
early self-admitted failures at Netflix and
elsewhere. Also, while big data can illustrate
how people behave, it cannot yet explain
why people act as they do. Similarly, big
data can today provide direction, but not
strategic recommendations. As a result of
these shortcomings, highly skilled people
are needed to interpret the results. This,
in part, has led to the emergence of a
new “data scientist” role in several large
organizations.
Data is increasingly
sourced from both
within and outside
the organization. As
we move from CRM
(customer relationship
management) to
CMR (customermanaged relationship),
customers will expect
the same experience
across all channels
of engagement. The
effective use of data
will be critical to
attracting, engaging
and retaining
customers.
56%
of respondents
listed analytics
and big data as
one of the most significant
developments for IT.
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Security:
keeping the connected enterprise safe
The disruptions we discuss above are without doubt making
both individuals and organizations not only more connected
and efficient, but also more vulnerable to cyberespionage, theft,
hacking (both mischievous and criminal) and malware attacks.
PCs and laptops were dangerous enough. But now, with the
rise of interconnected organizations, the Internet of Things,
the building of new digital ecosystems, large increases in data
volumes, and the spread of the BYOD phenomenon, exposure
risks have increased dramatically.
What’s more, the naiveté displayed by both organizations
and individuals is particularly worrisome. Even though many
large organizations have been the victims of espionage, safety
procedures are all too often viewed as blockers of ease-of-use
and productivity, rather than as the necessary tools they are.
Similarly, many Internet users access the Web without antivirus
software protection, even though online attacks have increased
over time. What’s needed, therefore, is a dramatic shift in security
policies, processes and technologies. This shift would both enable
the digital channel and protect it.
Other important security issues for CIOs, especially those
working for international organizations, relate to data flows
across national borders. Some countries state that data held by
a third party remains the client’s property, which the third party
is forbidden to share or disclose; yet others assign ownership
to the provider. Even without transnational issues, entrusting
data to a cloud specialist is a strategic decision that has large
cybersecurity implications.
These challenges were very much on the minds of the respondents
to our CIO Barometer survey. Nearly three-quarters of
respondents said that more-effective management of IT security
and cybersecurity is a priority for their 2014 IT budgets. When
asked to identify the IT department’s main contributions, more
than 60 percent cited “securing the business.” And when it
comes to major challenges facing their IT departments, nearly
80 percent cited the management of expanding IT security,
making it their top challenge.
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Asia: the same, but more
While the trends described in this
introduction are global in reach, they’re
playing themselves out differently in
different regions of the world. Asian
CIOs, in particular, responded to our
CIO Barometer survey with high levels
of enthusiasm. Their responses were
consistently above average, implying
that these CIOs view all the major items
as absolutely necessary for development,
yet with very little risk of reductions to
the IT budget.
Specifically, Asian CIOs show elevated
expectations for cybersecurity, cloud
computing, the acceleration of innovation,
involvement in their organizations’
strategies, and an increased trend toward
outsourcing. For example, while more
than 70 percent of all respondents to our
CIO Barometer survey listed “elevated IT
security” as a significant development in
IT, among Asian respondents, the rate
was nearly 85 percent.
in innovation and creating value with
technology, energizing and promoting
the applications portfolio, managing
operational processes, being involved in
the direction of the core business strategy,
and securing the business.
As goes Asia, so goes the world. Our
culture has becomes increasingly global,
and with it, so has IT and the CIO’s
mission. Globalization makes nearly all
industries global, meaning that nearly
every organization must now respond
to new and growing competition from
around the world. Technology has been
the catalyst for these massive changes.
And technology, in the hands of CIOs
and other IT leaders, will now be the
main tool organizations use to make
their way through this new and highly
connected world.
Asian CIOs show
elevated expectations
for cybersecurity,
cloud computing,
the acceleration
of innovation,
involvement in
their organizations’
strategies, and an
increased trend toward
outsourcing.
Similarly, Asian CIOs are far more optimistic
than others regarding the evolution
of the IT department’s contribution.
They responded extremely favorably
to the need for IT to serve as a driving
force of operational excellence, leading
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CIO Barometer | 2013
The 5th Annual CSC CIO Barometer captures the pulse of the business globally across
sectors ranging from banking to transportation. In early 2013, CSC polled more than 680
CIOs, asking them to identify the top trends and priorities facing them this year.
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cio barometer 2013
results
discover the key results of the survey
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Evolution of the IT Department’s Contribution
The role of CIOs within the organization is complex. On the one hand, they must continue their major role of “keeping the lights on.”
But on the other, with the emergence of cloud computing, mobility, social networks and big data, CIOs must also integrate these new
technologies and make them operationally efficient. As Figure 1 illustrates, CIOs above all want to create value through innovation. They
also want to be directly involved in their organizations’ core strategies — while keeping those organizations safe and secure.
figure 1. How is the IT department’s contribution perceived (or recognized) within
the company?
Leadership in innovation and creating
value with new technology
66%
Leadership in innovation and creating value with new technology
Involvement in the direction of the core
business strategy
64%
Involvement in the direction of the core business strategy
3,6
62%
Securing
Securingthe
the business
business
58%
A driving
forcefor
foroperational
operational excellence
excellence
A driving
force
57%
Managementofofoperational
operational processes
processes
Management
Energizing and promoting
the application portfolio
56%
Energizing and promoting the application portfolio
Predicted Trends in the Evolution of the IT Department’s Contribution
Looking into the future, CIOs expect to be increasingly involved in directing their organizations’ core strategies, and less involved
with both driving operational excellence and leading innovation. That may seem paradoxical. But it makes sense, given the
increased ability of technology-savvy managers — including chief marketing officers (CMOs) and chief digital officers (CDOs) —
to implement technology solutions without the CIO’s direct involvement. As a result, the CIO will likely become the enabler of the
core business strategy, which includes the enablement of cloud computing. CIOs will integrate the old and new technologies, while
also reconciling the ad hoc technologies already installed. In the future, business leaders will decide on and direct innovation; the
CIO will be expected to make it happen.
figure 2. Prediction: How will the IT department’s contribution be perceived (or
recognized) within the company?
90
80
70
A driving force for operational
excellence
Involvement in the direction of the
core business strategy
60
50
Leadership in innovation and creating value
with new technology
40
30
20
10
0
20
2011
2012
2013
2014
2015
cio Barometer 2013
Major Challenges for the IT Department
The managing of expanding IT security emerges as CIOs’ top challenge, and for good reason. Cloud computing, mobile technology,
social media and the growing interconnectedness of enterprises all expose organizations and their employees to increased risk
from hacking, theft, malware and other threats.
figure 3. What are the major challenges for your IT department?
Management
of expanding
security//Cybersecurity
cybersecurity
Management
of expanding
IT IT
Security
78%
76%
66%
Applicationmodernization
modernization
Application
75%
Improvement
of financial
and
operationalplanning
planning within
within IT
Improvement
of financial
and
operational
IT
Improving
relationshipswith
withclient
client and
and user
Improving
relationships
user
73%
64%
73%
Optimization
of key
IT processes
andthe
theuse
useof
ofbest
best practices
practices
Optimization
of key
IT processes
and
Harness
data
(clientand
andbusiness
business analytics)
analytics)
Harness
Bigbig
Data
(client
72%
3,6
62%
Cloud computing
computing
Cloud
Acceleratedproject
project results
results
Accelerated
72%
71%
58%
Identification
anddevelopment
development of
of key
key skills
skills
Identification
and
68%
65%
Developmentof
ofMobile
mobileapplications
applications
Development
Allowing the business to use BYOD /
g the business to use BYOD / Consumer
Technology
consumer
technologyininthe
the workspace
workspace
57%
63%
62%
Enable
business
social
multichannel
solutions
Enable
your your
business
withwith
Social
or or
Multi
Channel Solutions
Become green
green
Become
59%
56%
Three Most Costly Elements in the Overall Budget for the Previous Year
… But CIOs still expect that providing the new required levels of security is likely to be costly. As Figure 4 shows, when top IT
executives were asked to name the most expensive elements in their 2012 IT budgets, IT security was topped only by investing in
the nuts and bolts of the IT infrastructure.
figure 4. What were the most costly elements in the overall budget for the
previous year?
IT production costs
IT production
costs
34%
66%34%
Data storage
Data
storage
Cybersecurity
IT securitycosts
costs
Cybersecurity
andand
IT security
31%
28%
outsourced
services
CloudCloud
and and
outsourced
services
25%
Employee
salaries
Employee
salaries
3,6
62%
24%
Projects
Projects
Licenses
Licences
Deployment
supportcosts
costs
Deployment
andand
support
Network
telecomcosts
costs
Network
andand
telecom
22%
22%
57%
19%
Applications:
ongoing
maintenance
Applications
ongoing
maintenance
Applications:
corrective
and regulatory
maintenance
Applications
corrective
and regulatory
maintenance
23%
58%
56%
17%
59%
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Emerging Challenges for the CIO: Cloud Over All
While IT security will never decrease in importance, CIOs will be able to secure their IT infrastructures satisfactorily. When that happens, they
will turn their attention to new processes and road maps, which they can now work on within a secure environment. As an innovation trend and
technological challenge, cloud computing will eclipse security, as shown in Figure 5. Security does not vanish from the CIO agenda, of course.
On the contrary, security remains inextricably bound up in all IT projects, and this is raising those projects’ costs. CIOs are aware of these new
costs, and many are now trying to bring them under control. Doing so will enable CIOs to implement new infrastructure-optimizing technologies.
figure 5. Prediction: What will be the major challenges for your IT department in
the years to come?
100
Become green
80
Identification and development of key skills
Improving relationships with client and user
60
Cloud computing
Network and IT security
Optimization of key IT processes and the
use of best practices (CMMI, ITIL, Cobit…)
40
20
0
2011
2012
2013
2014
2015
Significant Developments in the IT Department
When asked about significant developments, CIOs rank security and cloud computing high. As CIOs examine their applications
portfolios, they see the need to rationalize not only the sprawl of legacy applications, but also the sprawl of cloud applications.
That includes the ad hoc cloud applications implemented by business managers without IT’s involvement.
figure 6. What are the most significant developments in your IT department?
71%
Elevated
IT security
/ cybersecurityexpectations
expectation
Elevated
IT Security
/ Cybersecurity
69%
Cloud computing
computing
Cloud
58%
Acceleration
Acceleration of
of innovation
innovation
56%
Analytics
Data
Analyticsand
and Big
big data
55%
Involvement in the company's strategy
Involvement in the company's strategy
54%
Increased trend toward
outsourcing
(infrastructure,
ard outsourcing (infrastructure,
applications,
business
processes)
applications, business processes)
Reduction
departmentbudgets
budgets and
and staff
Reduction
ofof
ITITdepartment
staff
22
38%
cio Barometer 2013
Maturity of the Management of the Software Portfolio
CIOs are realistic about their portfolio-rationalization capabilities and processes. Figure 7 shows their perception of how mature
their organizations are when it comes to managing their software portfolio. Most CIOs have at least given some thought to
optimizing their applications portfolio, and just over half are actually doing something about it.
figure 7. How mature is your company in terms of managing its applications
portfolio?
No dedicated processes or
practices in place
Partial implementation, geared toward
rationalizing the applications portfolio
Consistent focus on the optimization
of the applications portfolio
Priorities for Improving Operational Performance
Building skill levels among their staff is a top priority for many CIOs. Nearly three-quarters of CIOs say they are fully involved in
raising the level of their staffs’ IT skills.
figure 8. What are your priorities for improving operational performance?
74%
Increasing
the
levelofofinternal
internalskills
skills
Increasing
the
level
73%
Definition
governance
the
efficiencyplan
plan
Definition
andand
governance
ofof
the
ITITefficiency
72%
Solutions
for knowledge,
data
and
informationmanagement
management
Solutions
for knowledge,
bigbig
data
and
information
71%
Exploitingcloud
cloudsolutions
solutions
Exploiting
69%
Introduction
of operational
solutionsand
and/or
/orERP
ERP
Introduction
of operational
solutions
Optimization
the
sourcingstrategy
strategy
Optimization
ofof
the
sourcing
68%
Adoption
of managed
security services
Adoption
of Managed
Security-Services
67%
Development
of partnerships
withkey
keysuppliers
suppliers
Development
of partnerships
with
66%
Institutionalization
of processes
developmentand
andproduction
production
Institutionalization
of processes
forfor
development
66%
Management/appropriation ofofapplications
by other
departments
Management/appropriation
applications
by other
depart
Outsourcing
of roles,
applications,infrastructures
infrastructures
Outsourcing
of roles,
applications,
64%
60%
23
Priorities for Optimizing Costs Within the IT Budget for 2014
To increase the level of internal skills, many CIOs plan to invest in improved productivity and efficiency. They also plan to invest in
security management and the cloud.
figure 9. What are your priorities in terms of optimizing costs for the IT budget in
the coming year?
74%
Improvement
Improvementin
inproductivity
productivityand
and efficiency
efficiency
74%
More effective management of security
Security // cybersecurity
Cybersecurity
70%
Increased
Increaseduse
useof
ofcloud
cloud services
services
Management
Managementof
ofthe
theportolio
portolioof
ofrequests
requestsand
andprojects
projects
69%
Reduction in cost of application maintenance and
Reduction in cost of application maintenance rationalization of infrastructure
rationalization of infrastructure
69%
68%
Institutionalization
Institutionalizationof
ofIT
ITproduction
productionand
andrationalization
rationalizationof
ofinfrastructure
infrastructure
67%
Reduction
Reductionin
inlead
leadtimes
timesfor
forimplementation
implementation
64%
Sharing
SharingIT
ITproject
projectfunding
fundingwith
withthe
therelevant
relevantbusiness
businessfunction
function
54%
Increased
Increaseduse
useof
ofoutsourcing
outsourcing
Priorities for Improving Operational Performance into 2015
By 2015, the definition and governance of the IT efficiency plan will continue to be a high priority for CIOs. This comes partially
in anticipation of the way cloud computing will drive shifts in the business model, types of service agreements and continued
application rationalization. Looking ahead, we can anticipate an even higher priority for big data within the next two years. Why
the delay? Two reasons: Cloud computing is still taking precedence, and qualified candidates for data scientist and data analytics
jobs are still hard to find.
figure 10. Prediction: What will be the CIOs' priorities for improving operational
performance?
70
60
Definition and governance of the IT efficiency plan
50
Increasing the level of internal skills
40
Introduction of operational solutions and/or ERP
30
Introduction of solutions for knowledge, big data
and information
20
10
0
24
2011
2012
2013
2014
2015
cio Barometer 2013
The East: Significant Developments in the IT Department
There are clear regional differences among the outlooks of CIOs. In addition, there are mature and emerging regions. Asia is
an example of an emerging region; its legacy infrastructures are not as mature or well established as those in mature regions.
Yet Asian CIOs understand the significance of cloud and big data to their businesses and are embracing the challenge. By
comparison, Australian CIOs are far more risk-averse. That’s not to say they don’t understand the impact of new technologies;
they do, but they’re also taking an approach that’s far more cautious. The gaps between Asian and Australian CIOs can be seen
most clearly in big data, where there is a gap of nearly 45 percent, and cloud computing, where the gap exceeds 35 percent.
figure 11. Significant developments in the IT department
Elevated IT security / cybersecurity expectations
AUSTRALIA
100
ASIA
80
Increased trend toward
outsourcing (infrastructure,
applications, business processes)
60
AVERAGE
Cloud computing
40
NOTE: Lines indicate
developments cited
as most significant, in
increments of 20%
20
0
Involvement in the
company's strategy
Acceleration of innovation
Analytics and big data
The West: Significant Developments in the IT Department
In the West, North American CIOs have more enthusiasm for the cloud and big data. European CIOs trend below average, but not quite as
conservatively as Australia. Brazilian CIOs are showing enthusiasm for innovation and getting involved in their organizations’ strategies.
figure 12. Significant developments in the IT department
Elevated IT security / cybersecurity expectations
EUROPE
100
NORTH AMERICA
80
Increased trend toward
outsourcing (infrastructure,
applications, business processes)
BRAZIL
AVERAGE
60
Cloud computing
40
20
NOTE: Lines indicate
developments cited
as most significant, in
increments of 20%
0
Involvement in the
company's strategy
Acceleration of innovation
Analytics and big data
25
The East: Evolution of an IT Department's Contribution
How has the IT department evolved within the organization? Asian CIOs again exceed the averages, especially in innovation
leadership and involvement in the core strategy. Australian CIOs again fall far below average, except in innovation leadership and
creating value with new technology; as Figure 13 shows, they believe they have made strides in innovation. Yet they fall far below
average in cloud and big data, raising the question of whether they are innovating in areas not captured by our survey.
figure 13. Evolution of an IT Department's Contribution
A driving force for operational excellence
AUSTRALIA
100
ASIA
80
60
Securing the business
40
20
AVERAGE
Leadership in
innovation
and creating value
with new
technology
NOTE: Lines indicate
developments cited
as most significant, in
increments of 20%
0
Involvement in the direction
of the core business strategy
Emergizing and promoting
the applications portfolio
Management of operational processes
The West: Evolution of an IT Department's Contribution
What are the main contributions of IT in the West? As Figure 14 shows, North American CIOs truly believe the IT department
should contribute to innovation leadership and operational excellence. European CIOs, by comparison, fall far below the average
in driving for operational excellence and the management of operational processes. And Brazilian CIOs are working a little harder
than the others to energize and promote their applications portfolios; otherwise, they track very closely to the average.
figure 14. Evolution of an IT Department's Contribution
A driving force for operational excellence
EUROPE
100
NORTH AMERICA
80
60
Securing the business
40
20
BRAZIL
Leadership in
innovation
and creating value
with new
technology
0
Involvement in the direction
of the core business strategy
Emergizing and promoting
the applications portfolio
Management of operational processes
26
AVERAGE
NOTE: Lines indicate
developments cited
as most significant, in
increments of 20%
cio Barometer 2013
Significant Developments in IT by Region
All CIOs show elevated expectations for significant developments in cybersecurity, cloud computing, the acceleration of
innovation, and big data. Asian CIOs show especially elevated expectations for cybersecurity, cloud computing, the acceleration
of innovation, involvement in their organizations’ strategies, and an increased trend toward outsourcing. In fact, Asian CIOs
exceed the expectations of CIOs elsewhere in every survey category except one: reduction of the IT budget and staff. They are
also topped by Brazilian CIOs in the category of innovation acceleration.
figure 15. What are the most significant developments in your IT department?
Elevated IT security /
cybersecurity expectations
Europe 62%
North America 72%
Brazil 63%
Australia 56%
Asia 83%
Average 71%
Analytics and big data
Europe 34%
North America 63%
Brazil 44%
Australia 34%
Asia 78%
Average 56%
Cloud computing
Europe 55%
North America 76%
Brazil 75%
Australia 43%
Asia 79%
Average 69%
Involvement in the
company's strategy
Europe 41%
North America 54%
Brazil 66%
Australia 41%
Asia 74%
Average 55%
Acceleration of innovation
Europe 53%
North America 58%
Brazil 69%
Australia 36%
Asia 66%
Average 58%
Increased trend toward
outsourcing
Europe 48%
North America 52%
Brazil 51%
Australia 44%
Asia 69%
Average 54%
Reduction of IT department
budgets and staff
Europe 35%
North America 43%
Brazil 28%
Australia 43%
Asia 34%
Average 38%
27
28
cio barometer 2013
cio insights
interviews with the experts
29
John Brisco
CIO. QBE Asia Pacific
"The demand for innovation
and differentiation within
technology will grow along
with the need to take advantage
of social media and customer
analytics."
30
cio insights
John Brisco is CIO for QBE Asia Pacific, a property and casualty insurance
company. HE is responsible for more than 200 resources across 16 countries
in the region. His group maintains ownership of all IT infrastructure in the
region and is responsible for the delivery of all business transformation and
technology projects. BRISCO also has executive responsibility for monitoring
and evaluation of acquisition delivery in the region.
What are IT's primary challenges
in your segment of the insurance
industry?
In the property and casualty segment, one
of the biggest challenges facing companies
is the modernization of technology. Many
companies operate a variety of legacy
systems that are hard to change and that
create financial and operational bottlenecks.
The complexity of those systems has arisen
from customizations and extensions made
over time, but also as a result of the way
companies have grown in this space. Many
have grown by acquisition. They've tried
to retrofit the add-on businesses into the
core systems, making those systems even
more complex. As development teams and
business knowledge get older and people
start to leave the organization, [those
systems] become harder and harder to
maintain, which makes it more costly to
keep up. It's a vicious cycle that a number
of insurers are faced with. However, there
is a path forward. There are solutions you
can deploy which have been proven to
work. They're not cheap. But in time, the
cost of business as usual will eclipse the
expense of replacing those systems, if it
hasn't already.
How has QBE's view of IT and its
role changed over the years?
There has been a fundamental, generational
change in the company that has injected a
new focus and vision. Technology is no longer
a bit player; it is much more integrated into
the business. When I first joined QBE, the IT
function was seen as something necessary
to keep the lights on, and a costly expense.
Over the past few years, our leadership
across our five different regions has come
to recognize the role of technology in our
growth story, that it meets the demands
and maximizes the customer experience.
We're challenging ourselves to ask questions
such as: “How can this investment add
value in multiple regions, not just solve a
problem in one area?” or, “Will this solution
help differentiate us in the marketplace?”
We're asking those questions and more
for any major investment. Governance
has evolved, too. We've created a number
of roles that link business and IT to make
sure there's a connection and correlation
between our technology solutions and
business growth. People in those roles also
make sure we're coordinating our plans
across all the regions we serve so we can
maximize the investments we're making.
Regions can't just run off and make any
investment they want.
What business initiatives does
QBE have planned for the next
year or two, and how is IT
supporting those plans?
In Asia Pacific, our vision is to be the leading
e-business and digital provider in this region.
We're making heavy investments in the
delivery of a new e-business platform. This is
a must-have in what has become the fastestgrowing region in the industry. Customers
expect to have information about their
insurance at their fingertips, and we need
to have the platform in place to make that
information available. QBE has historically
been a leader in specialty lines of insurance
such as marine and construction. We're
making significant investments in those
lines to answer increased demand from a
variety of brokers and agents, especially in
the marine, cargo and pleasure craft spaces.
Another key investment is a global ambition
to achieve world-class operational excellence.
Consequently, our regional IT teams are
working closely to leverage and improve our
existing platforms for workflow, imaging and
business process management. Operational
efficiency is now a "no brainer" within the
industry; however, the objective of this
exercise is to ensure that efficiency also
improves our overall customer experience
— faster, stable and more-automated
processes linked to e-business platforms
help achieve such an objective. Across the
group, there continues to be a focus on cost
efficiencies in our infrastructure, so we're
likely to seek more global infrastructure
synergies as well as reducing complexity
in our larger regions, such as our North
American business.
How has your role as CIO
evolved in your time at QBE?
I first came in to reduce costs, which
we accomplished. Now the group I lead
is intimately involved with the strategic
direction of the business and expected to
be the delivery unit of that strategy in terms
of delivery of the project and technology
change. That's a turnaround from a time
when the IT group wasn't completely
trusted to deliver on its plans. Now we are
the primary group responsible for making
those plans happen. Furthermore, I expect
the role of IT will continue to evolve in our
organization. The demand for innovation
and differentiation within technology will
grow along with the need to take advantage
of social media and customer analytics —
we have a clear vision of "Made Possible by
QBE" and IT will play a key role in helping the
QBE Group continue to achieve and exceed
our customer, shareholder and community’s
expectations in everything we do.
31
ángel luis cabal
cifuentes
General Director, Information and Communications Technology.
Government of the Principality of Asturias (Spain)
"Centralized Technology
Infrastructure Management
Improves Organizations’
Productivity and Efficiency."
32
cio insights
To make the most of its financial resources, the Spanish Principality
of Asturias’ ICT Department pools common services using ERP solutions
that address financial and human resources management needs in a
comprehensive way.
What are the main challenges
the principality of Asturias’ ICT
department faces in 2013?
What technologies and
platforms are important for
your strategy?
You have to look at the general economic
situation, as it will define the setting in which
we operate. To be sure, cost-containment
policies and meeting the public deficit target
mean that our government has limited
financial resources, and IT departments
are no exception to that. We have less
money to invest, but I think we should see
an opportunity in every crisis. So now is a
great time to get a return on and consolidate
a number of projects and investments we
had put in place in previous years.
Given the diversity of institutions and
organizations that make up the public
sector in our region, we need a range of
technologies to ensure quality public service.
To this end, we have chosen enterprise
resource planning (ERP) solutions that
address financial and human resources
management needs in a comprehensive
way. We are also exploring new trends,
such as cloud storage and management
systems, which bring us quality services
with controlled budgets and expenditures,
since the cost is associated with the actual
use of the solutions.
What specific measures has your
department taken to support
business growth?
For some time, the government of the
Principality of Asturias has had a policy
of pooling common ICT services. The
reason is obvious: economies of scale in
the allocation of resources and centralized
technology infrastructure management
enable the organization to enhance its
productivity and efficiency. So we have set
up a single data processing center and a
single support center for the entire regional
public sector technology organization,
including health and education. Plus, we
have set up a developmental framework
and some common working methods. This
policy has allowed us to offer the same
service quality with fewer resources.
put in place a regional structure that will
enable harmonious development. Finally,
a large technology project is linked to the
startup of the new University Hospital of
Asturias, which will mean we can give
technological support to healthcare and
provide our region with quality health
resources.
What are your priorities for the
coming year?
We are going to focus on three main
aspects. First, and in line with European
Union measures, we will drive e-government
services with special emphasis on the reuse
of data through interoperable services and
citizen folders [remote access to municipal
services] in an environment of transparency
in management. Second, we want to allocate
resources efficiently so as to renovate and
upgrade our infrastructure in both data
processing center systems and workstations.
Third, we are committed to stepping up
the IT support that the government of
the Principality of Asturias gives to local
councils to bridge the digital divide and
33
Graham Curtis
Director, Information Management & Technology, U.K. operations
BAE Systems PLC
"To get IT right, at the right price,
and in a way that makes the
business function properly and
efficiently — all of that is very
important."
34
cio insights
Graham Curtis is the IM&T Director for the U.K. operations of U.K.-based
BAE Systems, a defense, aerospace and security company with more than
88.000 employees working from Australia, India, Saudi Arabia, the United
Kingdom and the United States. Last year, BAE’s sales totaled £17.8 billion
(approximately$27.6 billion). Curtis is also a member of the company’s Office of
the CIO, which leads the IM&T function.
How does IT function at
BAE Systems? Primarily as a
support group, a competitive
differentiator, or somewhere
in between?
At BAE Systems, information management
and technology (IM&T) is at the higher
end of the spectrum; it’s viewed as a
differentiator, and more so than at most
other businesses. Also, we work in a
complex, highly regulated marketplace,
one that has idiosyncrasies you don’t see
in many other industries. As a defense
contractor, we take on very large,
complex government contracts. So we
have to be compliant across a number of
dimensions, including security, information
assurance, engineering standards and
safety. We also have to be cognizant of
our marketplace, in particular both U.K.
government information strategies and
other information strategies in the wider
defense business.
Sounds complex ...
It is. And if your information management
systems are not functioning correctly,
you’re driving quite a lot of unnecessary
and unwelcome costs. You will also end
up with an inefficient business, either
in IT or manual workarounds. So to get
information management right, at the
right price, and in a way that makes the
business function properly and efficiently
— all of that is very important. If you get
it wrong in this marketplace, you will be
uncompetitive.
As you mentioned, BAE Systems
is subject to government
regulations and rules. Yet it’s
also a multinational company.
How do you collaborate
globally without breaching
international rules and
regulations?
With some challenges! Our business is
subject to stringent government and
intergovernment rules. So we have to work
within sovereign security agreements,
as well as with international trading and
export regulations. International contracts
require setting up an information system
with some reach-back into other sovereign
states that must respect these rules.
In addition, we collaborate with other
defense companies; again, often across
international boundaries. It’s quite complex.
We meet this challenge by having a strong
information-awareness culture, a strong
technical-security culture, and a strong
and well-respected set of processes.
Is the role of the CIO changing at
BAE Systems?
The role of the CIO has never been constant.
It varies by which country you’re in, which
industry, even which decade. However,
I would say that the role of the CIO is
changing here, in that the issues we’re
dealing with in terms of technology are
more sophisticated and complex. Demand
for sophisticated social devices is also
coming in through the “back door” via our
employees. As consumer IT encroaches
on and breaches the enterprise, that
puts pressure on the internal information
management function to respond. The
response should be to embrace these new
technologies while respecting the rules of
information assurance, cost justification
and business benefit. It can present a
headache, but that makes it interesting.
Earlier, you mentioned that one
big issue for BAE Systems is cost.
How are you managing IT costs?
We’re more complex than many other
businesses, because we actually provide
information management and technology
to our customers as well as consume it. BAE
Systems has a considerable cybercapability
and supporting-information capabilities.
We also provide military platforms, such
as jets and submarines, that contain
considerable amounts of IT. But we also
have our internal investments in IM&T to
help our top-line growth and take out
cost. In addition, we have maintenance
budgets, essentially for keeping the lights
on and staying compliant. So we focus
on coordinating these various activities
to ensure value for money for our own
consumption of IT services and to support
the growth of the IT services capabilities.
Top priorities for the next 12 to
18 months?
First, to continue to manage our costs, which
includes optimizing our service-delivery
model. We need to really understand the
cloud, whether that’s public or private.
Another priority would be embracing
mobile communications. We want to
give our people greater flexibility, and to
improve their experience working with BAE
Systems so they are more effective and
supported, and thus feel more fulfilled.
35
Hessel Dikkers
CIO. Dutch Railways
"IT has a direct bearing on
the success of the business
because so much depends on
information."
36
cio insights
Dutch Railways’ heritage can be traced back to 1837. From its inception, the
company has played a key role in the Netherlands’ mobility and its economic
progress. In the past decade, the company has grown its bus and rail
transport in other European countries through its subsidiary Abellio. CIO
Hessel Dikkers explains how the company's IT function supports the railway
and its changing customer expectations.
What is the major driver of
change in your business?
The strongest driver of change for IT in
the business is the expectation of our
customers. Now that they are enabled
with smartphones and tablets, there is
a very strong push from customers for
more information to better manage their
travels. If there are problems with the
schedule, customers want to be notified.
They want real-time updates.
How does that influence the
role of IT in the business?
In the past, the IT department looked
inward. We were concerned about things
like the desktop environment. Today we
understand that IT has a direct bearing
on the success of the business because
so much depends on information, from
driving trains and maintaining schedules
to communicating that to our customers.
The IT department is managing a number
of programs that are directed specifically at
improving the business. To begin with, we
want to standardize the underlying layers
of our infrastructure. We also need to make
investments in our network. That's another
clear trend we see, and that demand is
being driven by our customers. There is
strong demand for Wi-Fi connectivity in
the trains and in the stations.
Finally, we are implementing a smart cardbased system. All of these improvements
are a strong foundation that will help us
build new services and products for our
customers.
How will the smart card system
improve the experience for
customers?
We are implementing an electronic
ticketing system. In the Netherlands,
that will work across all transportation
companies. We are adding to the value
of that card by adding new conveniences
for our riders. For example, you'll be able
to use the card for payment at shops in
our stations. You can rent a bicycle, or
use it for a taxi ride for the trip from the
station to your destination. The card will
enable our customers to use one payment
mechanism from end to end in our system.
We are also replacing the Rail Pocket
system. This is a technology built into
a dedicated device that is used by our
drivers and conductors. It provides them
with a lot of information about where
they have to go, the timetable, and any
delays. It is also used to check customer
smart cards. In the next generation of this
system, we plan to replace the dedicated
devices with an app that will run on a
smartphone. That will bring a lot of new
functionality to our employees and will
also make it possible to offer new apps
for our customers. Everyone will have
access to the same information.
We are also excited about the prospect
of implementing analytics to understand
the data we are collecting through our
smart cards. In the past, our customers
bought paper tickets. What did that tell
us about them? Nothing. We didn't know
who was buying the tickets, or whether
they were frequent riders.
The smart card system will give us a
much better picture of our customers,
how they use our system and what is
important to them. We will be able to
identify patterns in ridership that will help
us decide how to allocate our resources
more effectively. And we will be able to
change our current offerings based on
the actions of our customers. Between
the smart card system, infrastructure
investments, sharing information with
customers and the use of analytics, we
will have a lot of new, useful services to
offer to our customers.
What are your priorities for the
next 18 months?
In addition to smart cards, we're making
significant investments in intelligence
for our logistics department. If there are
disruptions in service, we can restore
train service to a normal schedule more
quickly. And like many companies, we are
also reducing the complexity and cost of
our IT infrastructure.
37
Michel Foulon
CIO. La Poste group, Mail Division (French postal service)
"By combining our physical and
digital networks, La Poste Mail
will become more and more a
local service distributor."
38
cio insights
Confronted with a decreasing use of the postal service, the Mail division, one
of the four arms of La Poste Group (the French postal service), is reinventing
itself. Using as a model Facteo, the mobile solution already used by 10,000
postal carriers, the CIO has taken the leap and chosen innovation as the way
forward for the branch.
What have been your biggest
challenges in 2013?
For us, two topics have dominated this
year: mobility, with the launch of Facteo,
our smartphone for postal carriers; and
the Internet, where we worked with digital
management to bring the group’s services
together under a unified digital banner.
These two projects are emblematic of the
strategic willpower generated by La Poste
to reinvent itself for the digital age. In
particular, technology will help the postal
department, which is facing a decrease
in its traditional activities, transform itself
by using and promoting our biggest
asset: 90,000 postmen and postwomen
who serve the country every day, whose
commitment creates unparalleled trust in
the community and powerful customer
relationships. By combining our physical
and digital networks, La Poste’s postal
department will become more and more
a local service distributor.
How has the role of the CIO been
adapted to play a pivotal role
in this major transformation of
the industry?
The CIO is a member of the postal
department’s strategic council, directly
contributing to the reinvention of our
activities. We’ve also implemented an
organizational system based on skills and
services centers (SSC) for each part of
the industry. The SSC directors participate
in industry management committees,
enabling them to naturally integrate new
technologies and strategies and remove
the fundamental barrier between the
top and bottom tiers. On the ground,
developments take place in cooperation
with our users in a flexible way, enabling us
to build applications that are truly useful to
the general public. Finally, the CIO directs
innovation and is jointly responsible for
this with the industrial and marketing
management staff.
How do you stimulate new
innovation?
To promote the development of new ideas,
we rely on highly dynamic, multifaceted
creative workshops, and a production
team is then tasked with giving a physical
form to the concepts for approval. The
cloud, virtualization and a rapid response
unit for all of our small-scale projects
are other tools we use to keep moving
forward. Facteo was created using this
process in only six months. But after that,
it’s all about deployment. For Facteo,
this meant equipping 90,000 users with
a smartphone fitted with professional
and personal applications. This is why
innovation is worthless if you don’t have
the quality and performance to back it
up, and why we use such a cross-sector
approach.
What are your priorities for the
next 18 months?
Our main concern is to continue the
group’s transformation. This is an
exciting yet daunting task, for which it is
crucial to be able to build on work we’ve
already completed. This is why I consider
architectural and town planning work
especially important: This is the foundation
on which we can build, capitalize on our
investments, progress rapidly and guide
our diverse teams through the dynamics
of the company’s transformation.
39
Marcus Frantz
CIO. OMV
"Cloud computing is a basic
requirement to mobilize our
business processes."
40
cio insights
Marcus Frantz, CIO of OMV, considers IT not a business differentiator but
a business-support function. That said, the IT of the integrated oil and gas
company seems to be a lot nearer to the business than some of those IT
departments that claim to be differentiators.
Does your company consider IT a
supporting or a differentiating
function?
It is definitely a supporting function for
our core businesses, which are oil and
gas. In our industry IT normally does not
suit as a differentiator. We are focused on
optimizing the business processes, and
our main target is to design them to be
as efficient as possible.
What are the core processes,
and can you give us an example
for efficient support?
We are organized in different divisions.
One is exploration and production (E&P),
focusing on oil and gas. In this line we
center on digitizing the processes and
mobilizing the business. The main point in
the upstream business is to optimize the oil
extraction quota per employee. Therefore,
we try to implement the appropriate sensors
so we can have current production data
at all times. With that, we can anticipate
bottlenecks or imminent disruptions and
avoid them by sending in maintenance
crews or by taking other precautionary
actions. The other important focus for
IT in the upstream area is to mobilize
the business, for instance in facilitating
remote collaboration.
when a sales agent enters a filling station,
he can instantly look up its status and
product sales. Another important topic here
is smooth integration and deintegration.
Facing a challenging business development,
IT has to make sure that our IT architecture
and landscape stays flexible enough to
integrate new processes, applications or
services, and vice versa if necessary.
Which technologies and
platforms are important for
OMV? Do you have a priority?
Which topics do you prioritize
in your IT strategy?
You don’t like the term big
data? But would you be able to
produce any oil or gas without
your seismic and topological
data?
The vision of OMV Group’s IT Strategy
2017 is: ”Living integration in a smarter
organization.” Living integration means
that we aim for seamless integration of the
different business divisions, including the
integration of data. Smarter organization
refers to the manner we implement and
use technology, services and platforms.
With this strategy, we want to achieve
three goals: The first is to enable business
strategies; the second is to strengthen user
productivity; and the third is to enhance
IT efficiency and effectiveness.
Which are the main challenges
for IT in the coming year?
To cut costs, we are consolidating the
number of vendors we work with. The
security in general.
On what does IT focus in the
other lines of business?
Have you done anything with
cloud computing?
The second line of business at OMV is
refining and marketing, and here we are
working hard to mobilize the business
processes. For example, we ensure that
our field service personnel have mobile
access to the information needed for
maintenance duties in refineries, pipelines
or any other of our facilities in the field. We
also mobilize data for our salespeople. So,
Yes, for quite a long time now. Cloud
computing is one of the basic requirements
for mobilizing our business processes. As
part of our infrastructure strategy, dubbed
“beyond commodity,” we set guidelines
to put a private cloud into effect. Today
we are very close to full orchestration of
a private cloud. Our next aim is to provide
our services anytime and anywhere.
Cloud and mobile technologies are very
important for us. We at OMV Group
IT don’t talk about big data. We call it
information analytics, because we center
on extracting information from our data.
Sure, we produce loads of data, and we
analyze and interpret it extensively. Indeed,
information analytics is one of our core
topics since E&P has been dealing with
“a huge amount of data”, and we are
continuously working on improvement so
we can handle it efficiently and resourcefully.
Our definition of big data is an OMVspecific one. The current information
and communications technology (ICT)
trend, big data, supports us in finding
new possibilities mid- and long-term in
a different environment. The future starts
now, since we continuously face a more
digitalized society and economy.
41
John Furlong
CIO, group insurance. Guardian Life Insurance Co.
"Almost everything we’re
doing in terms of extension
of capabilities is delivered
via SaaS."
42
cio insights
Founded more than 150 years ago, Guardian Life is a mutual insurance company
owned by its policyholders. With more than 8,000 employees, New York-based
Guardian offers life, group and disability insurance, as well as retirement
and investment products. Those businesses brought total revenue of $7.97
billion in Guardian’s fiscal 2012. Looking ahead, Guardian is expanding beyond
its traditional stronghold in the small-business market. As part of this
expansion strategy, the insurer recently hired new IT executives, including an
executive CIO in August, and John Furlong, CIO of the group insurance business,
who joined Guardian in late 2012.
What’s the role of IT within
Guardian?
Historically, IT was often perceived primarily
as a support function. But in the last three
years, IT is being viewed more and more
as a way to add competitive edge to the
corporation. That’s because there’s been a
real focus within the organization on growth
and new markets. And a tremendous amount
of technology is required to serve the new
markets. For instance, we’re selling through
both private and public exchanges. The
private exchanges are being set up by broker
communities to create an online buying
experience for our products — particularly
our voluntary products — and the public
exchanges represent all emerging buying
channels for our core group customers.
Technology is the enabler for both.
How are these business changes
changing the way Guardian IT
operates?
It really stresses a lot of new capabilities
that differ from the core capabilities that
have been in existence for a while. For
example, instead of almost all the business
happening on our own properties, we
now need to be able to deal with the new
exchanges. So we’re working directly with
third-party portals, using Web services as
the primary interface. Also, we are selling
not just Guardian Group products, but also
other products from other subdivisions of
Guardian. So that changes the whole way
we bill and market the products, sometimes
in partnership with other carriers.
Last year, when you joined
Guardian, what did senior
management tell you they were
looking for in a CIO?
Someone who would help chart the
course of technology to allow them to
enter into these new markets. In group
insurance, Guardian has always been very
strong in the small end of the market;
that is, businesses with fewer than 500
employees. At that level, almost all the
sales are on Guardian properties, and
these sales are very dependent on the
carriers for everything. But as you move
into midsize companies — those with 500
to about 4,000 employees — then it’s not
a single payment to a single carrier, but
a multipayer sale. The premium is not
always paid by the customer, and the
diversity — that is, what the customer is
looking for — is much higher. So the whole
business arrangement gets more complex.
Thinking of your overall IT
strategy, how important is cloud
technology?
Almost everything we’re doing in terms of
extension of capabilities is delivered via
SaaS [Software as a Service] or similar
capabilities. So there’s a tremendous
amount of integration of SaaS, which we
view as essentially the cloud implementation
of delivery of a service. In addition, in
some of our legacy applications, we’re
looking for the flexibility to use the cloud
infrastructure level for deployment and
resiliency. For example, when it comes to
stability, I want to increase the availability
of a certain set of applications, and there
are interdependencies between multiple
things on a single layer of my architecture.
I wouldn’t want to replicate that level in
my architecture, because it would cost me
$15 million or $18 million; but I can move
certain applications into a cloud and get
the separation, the isolation I’m looking
for, at a much lower price.
How about mobile technology?
What’s your overall strategy?
We’ve introduced a series of mobile
applications, and we’ve been pleasantly
surprised by the uptake rate. The
applications we put out were simple. For
example, suppose someone covered by
group insurance wants to find a dentist
who’s in-network. So we have a mobile
app that tells you where your nearest
dentists are and the preferred rates. It’s a
very simple application, but we’ve seen a
very, very high take-up. That’s both taken
traffic away from our more traditional Web
applications, where these applications were
always available, and lowered our costs
with regard to print, which is the other
way this information had been distributed.
Looking ahead, the next generation of
mobile will rationalize more complex
applications and how they’re delivered
between mobile applications and the
Web. That’s the work we’re doing now.
43
Wolfgang Gaertner
CIO retail. Deutsche Bank
"IT IS A KEY Pillar of Deutsche
Bank’s 'Strategy 2015+'."
44
cio insights
Wolfgang Gaertner is absolutely convinced that IT has a deep impact on
Deutsche Bank’s revenue and cost base. Besides keeping the right balance
between cost cutting and investment, he considers regulation to be one of
the major challenges.
Is the IT department at Deutsche
Bank looked upon as a business
support function or as a
differentiator with direct
impact on business?
Absolutely differentiating. In a bank, IT is
at the core of business and indispensable
to meet the increasing requirements of
our clients each and every day. Moreover,
without IT, further development would
not be possible. When Deutsche Bank
announced its “strategy 2015+” program
last September, it became very clear that
IT plays an integral role in our business
transformation.
Can you give an example to
clearly show the role of IT?
One example is the transformation of
our retail business, our so-called “Project
Magellan.” In this program, we are replacing
Deutsche Bank’s legacy core banking
systems by SAP standard software while
at the same time integrating Postbank,
one of Germany’s largest banks for private
customers, on the very same platform.
This clearly is a major IT initiative, but
it also has a huge impact on business
organization and processes, i.e., it’s a real
business transformation project.
How does IT directly support
business growth?
Our sales, campaign and customer
management systems as well as other
sales support tools are helping to increase
revenue in all European countries. The
new modules we implemented in Italy,
Poland and Spain actually show the
positive impact of IT tools on sales results,
i.e., the business performance. Besides
supporting growth, we are reducing the
cost base with our cost-cutting endeavors.
Operational excellence is part of our
overall strategy 2015+. The bank aspires
to achieve annual savings of 4.5 billion
euros by 2015, investing approximately
4 billion euros to get there — and, as you
can imagine, this is impossible without IT.
On the one side, we are cutting the client
IT cost; on the other side, we are helping
the business functions reduce their cost
by automating and streamlining their
processes even further.
What are the most important
challenges IT is facing in the
coming months?
It is a big challenge to keep the balance
between cost cutting and gaining
efficiency on the one hand, and investing in
transformation on the other hand. We are
committed to supporting the transformation
of the bank as a whole, and simultaneously
we have to be more efficient in our daily
work and processes. This is what I call
a “good challenge.” The bank is heavily
investing in IT, which is a very clear and
positive statement about the standing
and significance of IT at Deutsche Bank.
It is our declared objective to support the
bank’s strategy 2015+ and to deliver what
we have promised to achieve. Another
big challenge we are facing is regulation.
We have to cope with the increasing
speed and extent with which laws and
regulations are being changed and created
in the many countries we do business in.
A good-quality data management system
is really helpful for addressing regulation
requirements because most of compliance
is about reporting and data. The better
organized your data is, the easier it is to
provide the requested information.
New technologies such as cloud
computing and Software as a
Service encourage “shadow IT.”
How do you handle that?
I don’t see this trend in our bank. Against
the backdrop of tight regulations within
our organization, shadow IT cannot be
accepted alongside any productive IT
system. Shadow IT will be prevented from
the start if the CIO continuously monitors
the actual needs of the business lines
and reacts accordingly, because shadow
IT is always an indicator of a certain
lack of flexibility in the IT department.
Insufficient IT services that do not meet
business requirements entail “homemade”
IT workarounds by the business lines.
Which new technologies are
important for you?
In-memory computing will really have
a big impact on our ability to carry
out different analyses in the future. We
are also experimenting with graphics
processing units and how they can help
us gain speed in our retail infrastructures
or compute complex algorithms. Actually,
we are scanning all IT trends and assessing
whether and/or when they might be useful
for us as a bank. However, no matter how
good your new technology is, in the end
people must be positive and convinced of
the advantages to work with it. Motivated
staff makes all the difference.
45
Jens Hartmann
CIO. Grundfos
"We need to have the change
capabilities fully in our
control, so that we can change
our priorities due to where the
new business opportunities are."
46
cio insights
Bjerringbro, Denmark — the home town of Grundfos — is certainly small, with
a population of only about 7,500. But there’s nothing small about Grundfos.
The 60-year-old company is the world’s largest supplier of pumps, producing
more than 16 million of them a year: pumps for water, for heating and air
conditioning, for sewage and other waste, and for industry. Grundfos also
makes submersible motors and related products. Nearly 18,000 employees
work from offices in more than 55 countries, and total revenue last year
exceeded €3.03 billion (approximately US$4 billion). Jens Hartmann, the
company’s CIO and a member of its information services (IS) directors team,
oversees a staff of approximately 600 people.
What’s the role of IS at
Grundfos?
Most IT departments are moving toward
the value side, moving further into value
generation, and we’re on that journey as
well. We have succeeded in now getting
to a strategic position within the company,
where we are part of the actual business
strategy. In this strategy, IT has a role to
play as a driver of technology utilization
in our processes, and in our products and
services — but also to be a value-driver,
not just a commodity.
How is that role fulfilled on a
daily, weekly, monthly basis?
We have three strategic IT themes. First
is ERP, and that’s a commodity where we
are very strong and very much in control.
No surprises, really. The second theme is
the adaptive or collaborative processes
and platforms, which are social business,
knowledge-sharing, collaboration, email,
calendars, Web conferences and more. This
is an area where we expect much more
innovation; the potential is higher, too. The
third theme is what we call “information as
a product.” We can not only sell pumps,
but also information collected by those
pumps. For example, a pump can gather
information on how many liters of water, oil
or whatever it is moving; that is, how efficient
is the pump? We can also measure — due to
vibrations in the pump — when the pump
is likely to break, so that we can repair or
replace it. Perhaps we could even combine
this data with other information, such as
weather forecasts, to predict a number of
things. That’s all data I’m talking about, and
we can also sell that information. As the
biggest pump producer in the world, we
have the highest installed base of pumps
with a capability of collecting information
around the world that is huge. In fact, this
“information as a product” business could
potentially be even bigger than our pump
business.
With IT at Grundfos delivering
higher value, how does that
affect the CIO’s role? Is that
changing, too?
As CIO, you are business focused, and
that is your first priority. How can IT move
the business beyond where it would have
gone with normal development? Another
important aspect is being able to go into
that dialogue with the business. It’s a
balance. You are a very, very important
part of all areas; you’re the nerve string for
their success. But you have to be humble.
If you try to take over and be the smart
guy, it’ll be short term.
Grundfos has a big global
presence. From an IT perspective,
how do you manage that?
As recently as a few years ago, we were
very localized in something like 120
countries. But over the last three years,
we have moved to a global organization
with just a handful of centers. That has
been done with a huge focus on building
processes and developing global, rather
than local, competence. It means we now
have one architecture team instead of
seven developments of the same solution.
So that has been a huge journey, from a
lot of local IT departments to one global
information services organization that is
responsible for architecture and solutions.
This is having another effect: Our most
recent employee-motivation study shows
significant improvement in our IS employees’
motivation, loyalty and satisfaction. I
think our employees see this as a huge
opportunity — and as a super development
that invites them to make a difference on
a whole different level. At the same time,
the IS staff has doubled over the last three
years, from about 300 to 600 people.
Unlike many other companies,
Grundfos has centralized IT,
with very little outsourcing.
What’s the strategy?
Actually, that is changing. From an operational
point of view, there is quite a bit that we
don’t host ourselves. For example, we will
be hosting our collaboration platform on
a Microsoft cloud. But from a businessdevelopment point of view, we still have
our own business consultants, developers
and so on. We believe we need to have the
change capabilities fully in our control, so
that we can change our priorities due to
where the new business opportunities are.
With an outside setup, we don’t feel that
we would have that flexibility.
47
Gerard Insall
CIO. Avis Budget Group
"Anything you do to build a
loyal customer is going to
require some IT activity at every
contact point."
48
cio insights
Gerard Insall, CIO of Avis Budget Group, has touched all aspects of IT in
his more than 25 years with the company. He has served as the company's
CIO for the past five years. In addition to traditional IT responsibilities,
Insall provides global oversight for IT infrastructure and applications
in all business units.
How has the role of IT evolved
at Avis Budget, and what
challenges do you face in
meeting your objectives?
We've reached an inflection point in our
industry that is driven by technology.
IT is at the forefront of all the aspects
of differentiation and strategies. IT is
necessary to enable most, if not all, of the
long-term objectives of our company. We
established formal corporate objectives a
few years ago, and if I look at them year
over year, there's not one that IT didn't
play a critical role in enabling, and it was
a stakeholder in most.
One of the biggest challenges is finding
enough subject matter experts to run our
initiatives concurrently. That's an issue that
goes beyond IT; it affects business units as
well. We have a very flexible staffing model
with some great outsourcing relationships
and formal governance processes. That
allows us to handle the ups and downs of
the business better than most, but when
it comes to business-area subject matter
experts, there are only a few of those
around in each of the business areas.
What factors have influenced
your company's view of IT
as a strategic asset and
differentiator?
I think as we went through the recession
in 2008 and as everyone tried to reduce
their expenses to survive, they realized
they couldn't do so without some type
of IT change. When you're looking to
transform your costs, IT is such a big part
of the equation, with so much required
automation, and business processes that
are so reliant on the systems. IT was an
integral part of the company's survival.
During a recovery, you're in an investment
mode, trying to differentiate yourself
from the competition. IT plays a big role
in supporting the strategic initiatives that
differentiate us. IT is also an integral part
of key initiatives that drive a considerable
amount of incremental profit. That's very
much driven by systems that do more
data modeling and use more analytics.
What technology offers
the most opportunity to
differentiate your company?
We see big potential in telematics. We're
very focused on that. We bought Zipcar for
its capabilities in telematics as well as its
business processes and how it goes about
creating a certain customer experience.
We'll be looking at how we can implement
such capability in every car, in the most
effective manner and then find the best
ways to make operations at our manned
locations as efficient as possible. We'll
consider how we integrate that capability
to create the best self-service model for
our customers.
of the customer in one data source; we've
implemented a lot of data modeling to
establish customer lifetime value. We've
segmented our 40 million customers
worldwide by a number of tendencies.
All of this and our campaign management
system are integrated with the systems
that our customers use directly or that
are used with customers, such as our
reservation system or customer-service
system. The campaign management
system might create a pop-up for an
agent that says, "Offer this customer a
discount" because [the customer] meets
some type of criterion, or a pop-up might
offer a discount or upsell on a car class to
an online customer making a reservation
on our website.
We built the data store and have integrated
it with all our touch points to enable us to
set up campaigns to use what we know
about the customers to better target
what we're selling, how we treat them,
what offers we give to them — all working
together to improve customer loyalty
when they have a choice.
Customer loyalty is a critical
success factor in your
industry. How does IT help
increase customer loyalty?
Anything you do to build a loyal customer
is going to require some IT activity at
every contact point.
We're just finishing a four-year, multimillion
dollar CRM [customer relationship
management] program. That capability
now allows our marketing department
to support campaigns that build loyalty.
We've implemented a 360-degree view
49
Djilali Kies
CIO. TDF Group
"It is up to us to share our
resources. This is one of the key
factors to high quality and a
truly competitive business."
50
cio insights
Previously a French radio and television broadcaster, in just a few years
TDF Group has become a shared network and infrastructure operator. Now a
core part of the industry, the CIO has led the way.
As TDF’s CIO, how have you
repositioned yourself to
meet an industry that relies
more and more on digital
technology?
Even recently, the CIO played nothing
more than a supporting role. Now, with
almost all of our activities turning digital,
the game has changed. More and more,
the CIO contributes to products and can
even become a supplier, and as a “business
enabler,” we have gradually become
a central part of the organization. By
melding our role with that of the process
improvement managers and that of the
industry directors, we are now firmly
positioned in the very heart of the industry.
Now, CIOs are process catalysts and take
an active role in all our developments, both
for processes and products. Especially,
we ensure full technical and architectural
coherence for our products and resource
optimization.
What has been the main
challenge for you as your
role within the company has
changed?
is one of the key factors to high quality
and a truly competitive business. But if
we don’t want to see a return to ICT silos,
the CIO must earn his or her legitimacy,
and to do this we must transform how
we work.
Where is the main focus of this
transformation?
Over the past two years, we have been
intensely reviewing our processes and
our production methods. The strategy
of this transformation, supported by the
management staff, is aligned with that of
the company: focusing on investments
that can make us stand out from the
competition and leave the rest. This means
outsourcing certain tools or functions “as
a service” and redirecting our investments
toward new skills and strategic products.
From now on, we offer our resources and
services in a coherent service catalog,
integrated personally by us, enabling
us to spread the load and optimize
our costs. There are still aspects of this
transformation to be finalized, but today,
the CIO is almost totally “on demand,”
lean and industrialized.
What are your main achievements
in 2013?
Alongside the transformation and
modernization of our range of applications,
we are leading key industry projects,
such as the implementation of a network
repository that will support our remote
management processes (configuration
management database or CMDB) and
the development of new IS functions that
will support the launch of new products,
including a new ultra-high speed network
and smart services delivered through this
new network. These projects highlight
the progress of our design department,
which is now focused on research and
development (R&D) surveys, and our role
in solutions innovation and architecture.
However, we still need to consolidate this
position, and to achieve this, we need to
consistently demonstrate how valuable
we are.
Our challenge is to make our contributions
visible to everybody else. It is much
more difficult to quantify the value of
information and communications technology
[ICT] in a product or a service than to
quantify an increase in productivity with
a piece of business software. And yet,
with Software as a Service [SaaS] and
digital products everywhere you look,
everybody is tempted to just choose their
own solutions. Confronted with this, our
key advantages are our know-how and
multifaceted approach. When we choose
a development technology, for example,
we make sure that it can be adapted to
a large part of our services and projects.
It is up to us to share our resources. This
51
David Lister
global CIO. National Grid
"It’s a time of great innovation,
a time of great experimentation,
and a time of fantastic
productivity."
52
cio insights
As the name states, National Grid owns and manages grids that deliver
natural gas and electricity to millions of customers. The company was
started in the 1980s, the result of the U.K. government’s privatization of
utilities. Later, National Grid expanded into the northeastern United States
through a series of acquisitions. For the company’s most recent fiscal year,
profits came to nearly £2.3 billion (approximately $3.6 billion) on revenue of
some £14.4 billion (approximately $22.3 billion). David Lister has been National
Grid’s CIO since early 2009.
What’s the role of IT at National
Grid?
Information technology is intrinsic to what
we do as a business. We supply energy to
electric/gas distribution and transmission
systems. That energy would not flow without
the real-time control systems that allow us to
balance supply and demand, manage pressure,
and manage the energy flow as a whole. So
technology is fundamentally embedded within
our organization. We don’t think of it as being
something that’s separate from the business,
or something that’s just a business support
function; it’s fundamentally embedded into
what we do as an organization. As a regulated
business, we’re incentivized constantly to
think about new, smarter and better ways of
delivering value to our customers, regulators,
shareholders and stakeholders. We’re constantly
on the search for new ways of doing things
and new ways of exploiting technology to
help people do their jobs better.
Are you doing this all yourself?
Or are you working with service
providers and outsourcing
vendors?
We clearly don’t have the resources and
capabilities to do everything we would
like to do ourselves. We don’t invest
anything like what our partners invest,
in terms of research and development
and technology innovation. We find that
the sweet spot is actually about bringing
the right partners together and creating
a collaborative ecosystem. Outsourcing
per se isn’t necessarily a core strategy; it’s
actually about how you pool capabilities
and organizations, and then orchestrate
them in a way that delivers the value you’re
seeking, quickly and effectively.
You have some major IT projects
under way, don’t you?
National Grid has operations in
both the United States and the
United Kingdom — an unusual
setup for a utilities provider.
From an IT perspective, how do
you manage this?
Yes, we have a very broad range of technology
investments under way, ranging from operational
efficiency and operational innovation, to
helping our colleagues in the field be more
effective. For example, we’re working to
develop a new transmission control system
to help manage the introduction of greater
volumes of renewable energy. At the same
time, we’re building new systems and processes
to support the reform of the U.K. electricity
market, which will facilitate the replacement of
the U.K.’s aging energy infrastructure and help
us meet forecast increases in energy usage.
The way that technology — and, for that
matter, most multinational global businesses
— is organized, is that you try to seek
the perfect balance between local focus,
jurisdictional focus and meeting the needs
of customers in a specific market. And all
while trying to leverage the strength of
the organization as a whole. So in IT, we
try to focus closely on the needs of our
customers and regulators in the particular
markets that they operate in, whether that’s
the United States or the United Kingdom,
Boston or London.
You’ve enjoyed a great deal of
experience as a CIO. How do you
see the role changing today?
I’ve gone through many revolutionary
phases in technology over the last 25
years. Yet to my mind, the current wave
of change and evolution and revolution is
more interesting and more exciting. That’s
because of the technologies and capabilities
that are now available to deploy, based on
the collective consumerization of IT and
on the basis of a new, more ubiquitous
communications infrastructure. These
allow you to do so many more things. This
basically means that IT leadership needs
to have innovation, open-mindedness and
creativity at its heart. If you’ve got that,
that’s the core thing. But if you’re trying
to control things and lock things down,
that’s a very difficult job in today’s business
world. So it’s about being adaptive, about
being able to use these technologies as
your customers require.
What are your top priorities
for the next 12 to 18 months?
We have several key priorities that involve
technology. The important question is,
How do we exploit the kind of flexibility
and agility that comes through cloud
infrastructure — the ability to use that
change to standardize, to virtualize, and
to create greater unit value through that
kind of platform? The big opportunities
are also about how you give the right
tools to your colleagues, consumers and
customers. It’s a time of great innovation,
a time of great experimentation, and a
time of fantastic productivity.
53
Jacques Marzin
Director, Department of Information and Communication
Systems (DISIC). French Government
"Every big company must
face up to the question of
modernization, but none of
them have the size and scope
of activities of a national
administration."
54
cio insights
Placed under the authority of the Prime Minister, the Interministerial
Department of Information and Communication Systems (DISIC) is responsible
in France for organizing the interministerial sharing of information
systems and defining an overall strategy for developing information and
communication systems within government. Jacques Marzin (“the French
state CIO”) took over as director in November 2012.
What is the DISIC’s role?
The DISIC is affiliated with a group CIO. This
is a mission CIO whose role is to provide
impulse, framework and a coherent plan.
We work on an interministerial level to
create governmental ICT development
strategies: simplifying public services for
citizens and companies, rationalizing and
mutualizing resources, innovating. We
are also responsible for governmental
databases, such as the RGI (general
repository for interoperability) or the RGS
(the general security database drawn up
by the French government). Furthermore,
we lead operations that affect shared
infrastructures, including the government’s
interministerial network (RIE). We also
play a role in large-scale project security.
Although we don’t intervene in ministries’
purchasing procedures, we do suggest
government and boundary redirection and
highlight the possibilities for mutualization.
Against a backdrop of budgetary austerity,
our goal is to optimize the use of the state’s
ICT tools and resources to improve the
experience for the users.
What is at stake in terms of
national ICT?
How will you approach such a
challenge?
First and foremost, we need to build the
governmental ICT system. If we want
to provide a seamless public service, it
needs to be built in a way that allows
different administrations to operate
together. We can no longer be satisfied
to simply offer up juxtaposed systems
that we try to mash together. We need to
rebuild it from the start, and work on the
architecture, the processes, the security, the
standardization of technical components,
the data. Secondly, we must find ways to
govern and manage that let us continue
to modernize within the very specific
context of public administration: a very
large heritage, a considerable workforce,
major financial and operational risks,
serious judicial constraints. How can we
enable agents and users to benefit rapidly
from the latest technological innovations
without destabilizing the whole system?
Every big company must face up to this
question, but none of them have the
size and scope of activities of a national
administration.
For me, the answer lies in an overhaul
of the role of ICT, including methods,
project management and production.
Over the course of the next 18 months,
we are going to focus primarily on our
human resources, since the areas most
sensitive to ICT systems are those that will
modernize our ministries from the inside
out. Our agents are in the best place to
understand and appreciate the diversity
and the complexity of the government’s
ICT systems, but we need to focus our
energy on design. To achieve this, the
best way is to detect, open up and use
our skills. Currently, we are working with
project directors, and these people will
be the key to success. Using our methods,
good working practices, mutual evolution
and awareness of the hierarchy, we hope
that we can put our resources to the best
possible use. It’s not just equipment and
hardware that we need to mutualize, but
also the various professions and working
practices.
55
Marc Probst
CIO, VP of Information Systems. Intermountain Healthcare
"Healthcare needs some
interesting answers, and
technology is going to play a
role in that."
56
cio insights
Intermountain Healthcare, recognized as a leader in transforming healthcare
through high quality and sustainable costs, is a nonprofit health system of 22
hospitals in the United States, about 1,000 physicians, a broad range of clinics
and services, and health insurance plans that serve the needs of Utah and
Idaho residents. Marc Probst, Intermountain Healthcare chief information
officer and vice president of information systems (IS), explains how he
encourages innovation in healthcare in the face of transformation in the
industry. He also addresses being both accessible and secure.
How are you encouraging
transformation at
Intermountain?
We're encouraging it from multiple levels.
Intermountain Healthcare has always been
innovative and has had that distinction for
30 years. But in the past, that innovation
has been around data — data management
and building electronic medical records.
Realizing that things are changing, we've
opened the Healthcare Transformation Lab,
which focuses 100 percent on innovative
technology, drawing either from our own
IS department, our nurses and physicians,
or even from some of our partners, such
as CSC. Healthcare needs some interesting
answers, and technology is going to play
a role in that. So we encourage it across
the organization, play it up and encourage
our teams to share their ideas.
Is it possible to be both
accessible and secure and, if so,
how are you accomplishing that?
Increased security doesn't have to mean
increased hassle. Many times it does, but I
don't think it has to. We're approaching it
holistically — everything from governance,
and security and privacy to the technologies
and policies and procedures that have
to be in place. There are steps we'll have
to take, tools we'll have to put in place
and actions we'll have to ask our end
users to take, but we can minimize the
adverse impacts. You have to approach
this in a very holistic manner and invest
enough in it. Security is an area in which
you could be penny-wise and really, really
pound-foolish.
What technologies do you
believe will help address large
healthcare challenges, such as
managing a population’s health?
No one technology will be a silver bullet.
For telehealth, we’re looking for any new
ability that can increase the volume of
care clinicians can provide so they are
more proactive and constant — not by
office visits, but by more touchpoints
through technology.
For managing a population’s health and
better predicting where or whether illness
will occur, certainly analytics will help. Our
ability to harmonize the data coming from
various devices with data we generate
through our relationship with the patient,
combined with the knowledge that we
gain about different care patterns and
protocols — to be able to bring all that
together through analytics is where the
magic’s going to occur.
What could the vendor
community do to help healthcare
providers meet challenges, such
as those created by the Health
Information Technology for
Economic and Clinical Health
Act?
If they could focus on anything, it would
be plug-and-play, or how we can take
the most appropriate software or piece
of technology and have it work in our
environment of providing healthcare.
The industry has been working on this
forever. For example, we have way too
many standards, so therefore we don’t
have one standard. I'm not incredibly
bullish that this will occur. In fact, I think
the government will have to play a pretty
key role to make that happen.
What do you see as your key
challenges for the next year?
Cost reduction will be a key challenge,
and getting more cost out of IS will
be a key focus. Security will remain a
challenge, too. I would rather my data
centers go completely dark than have a
data breach. That's a huge statement in
healthcare because people can't provide
care without these systems. But that's the
kind of focus that we need to have on our
privacy and security.
57
Cathryn Riley
COO. Aviva PLC
"IT really does play a role in
how we grow shareholder and
stakeholder value."
58
cio insights
As chief operations officer of Aviva, Cathryn Riley has responsibility for the
groupwide life, general and health insurer’s IT, business change and shared
services. Riley has since early 2012 played a key role in London-based Aviva’s
massive business repositioning. The project aims to improve Aviva’s financial
health and profitability, reduce costs and bureaucracy, and make the
organization less complex.
As Aviva repositions its overall
business, what role is IT playing?
IT has always been central and critical
to the business, and now it’s absolutely
critical to Aviva’s transformation across
a number of fronts. IT is a contributor in
terms of cost and efficiency, certainly in
terms of the outcomes for the business,
and ultimately for our customers because
of the services and the quality of things
they receive — and the speed at which
they get them. Then, of course, there’s
growth. Things that we do in IT, whether
on the digital front or to support product
deployment and services, fuel our growth.
So IT really does play a role in how we
grow shareholder and stakeholder value.
Traditionally IT has been very much a
support function. But that is changing.
For example, about three years ago, I was
appointed to the executive committee. The
company recognized that not having the
voice of technology at the top strategic
table really wasn’t acceptable. So now,
having that influence in strategic debates
has certainly been a driver of change.
That’s allowed us to say, “Join up IT across
the whole of Aviva and have much more
influence and impact on the business
outcomes.”
As part of this overall
business transformation, are
you making changes to the IT
organization as well?
Actually, the IT transformation probably
started a little bit before the business
transformation; but yes, there’s been a
fundamental transformation in the way
IT operates, how it performs and how it
contributes to the business. Our own IT
transformation will help with the business
transformation and simplification. Aviva
used to operate on a federal basis, with
each country operating independently.
Then we moved to a regional structure,
and IT mirrored that. We ended up with
a very fragmented and complicated IT
infrastructure and architecture. So the
first thing was to sort out the past, that
is, our legacy systems. A fundamental
issue for insurance companies is the large
number of legacy systems and platforms,
and the complexity inherent in that. So
simplifying and decommissioning [them]
is very fundamental to increasing our
speed, agility and cost position.
The second thing was: How do we manage
today differently? Again, that’s about
improving our service, getting our costs
down, managing the spend on IT differently.
And recognizing that IT is really part of
the capital-allocation process, making sure
we’re adhering to common architectural
principles and design, and so forth.
Third and fourth were: How do we modernize
and digitize, to create an IT estate that
is fit for the future? And how do we gain
access to capabilities, both internal and
external? What does our sourcing supply
need to be? What are the core capabilities
we need going forward? And what kinds
of technical capabilities will we need?
When all that is done, how will
IT at Aviva differ from what
you have today?
efficient IT organization. We’re looking
for upper-quartile performance against
our peers as our benchmarking reference
point. We’re also looking for service that’s
not only fit for today, but absolutely fit
for the digital world we now look into.
Certainly, we want speed and agility to
market to be competitive advantages for
us. And we want to be the best place to
work for our employees.
Cloud computing is having
a profound effect on IT
management. At Aviva, too?
Very much so. As we’re becoming much
more demand-led, we need more of a
variable cost space. So for us, that mostly
means the private cloud. While we will
probably never lose our dependency
on bricks and mortar, we do foresee a
landscape that is part public cloud, part
private cloud and part data center.
How about the threat of
"shadow IT"? Is that an issue
for you?
No. In fact, you could almost say the
reverse. We’re bringing much greater
central control over IT. Not that we’ve
centralized everything, but we certainly
have instigated a lot more control. In the
past, our fragmented, decentralized model
was inefficient and slow; it was actually an
impediment to the business. So now we’re
standardizing, consolidating and simplifying
to drive efficiency and effectiveness. As
part of that, we have very tight processes
in place that prevent shadow IT.
We see the outcomes of those four phases
as being a much more cost-effective and
59
Thomson Thomas
CIO. HDFC LIFE
"Meeting customer expectations
is the next biggest challenge."
60
cio insights
HDFC Life is one of India's leading life insurance providers. It has a presence in
more than 960 cities and a network of 450-plus branches that covers more than
960 cities/towns in India. The company maintains multiple distribution channels,
including agents, bank assurance partners, a direct channel, brokers and an
online channel. Thomson Thomas has been with HDFC Life since 2001.
What challenges do you think
are unique to the insurance
industry?
Frankly, I have changed my mind on what is
most challenging to the industry. There are
multiple challenges we are facing at this point,
starting with the regulatory environment:
too many regulations that need to be
implemented in a very short time. Meeting
customer expectations is the next biggest
challenge we face today. Customers come
to us expecting the same level of flexibility,
ease, availability and response that they have
across industries, and we need to effect
changes across the insurance value chain
to meet these expectations. Technology
traditionally has been used to automate
the back office and increase efficiencies.
This is a continuous process and will always
provide opportunities for improvement.
Now, the addition based on the above two
challenges is the requirement to be more
agile/flexible to respond to the changes in
the business environment.
How has the company's
perspective on IT evolved over
the years?
I think the company has always viewed
technology as a crucial aspect of the
business. We started out with a lot of focus
around the back office. In the past three
years, we've transitioned from automating
the back-office functions such as core
operations, HR, finance and accounting,
and material-management processes to
applications that have more impact on
our sales, channel partners and customers.
In all of our recent investments, we have
looked ahead to consider what kind of
requirements we might need to support,
and we are currently building a strong
foundation to serve those needs. Most
of the projects we have planned, such as
expanding the operation and building the
business, have a significant IT component
now. There are many projects running now
to transform the business and also refresh
components of the infrastructure. These
include implementing a CRM, rules engine,
business process management tool, and
an enterprise data warehouse with richer
analytical tools. Capabilities being built
will also be accessible on mobile devices
such as smartphones and tablets. There
are also a number of initiatives dealing with
information security, such as mobile device
and access management, information rights
management, data-leakage prevention at
network and host layers, and user-access
management running simultaneously.
Taking on that many projects
simultaneously must be a
challenge. How does your group
manage it?
It's really like setting up a new company
almost, except we have an existing business
going on that we need to serve and many
transactions to process. So we have to strike
the right balance between the transformation
projects and business as usual. We are in
a period of weak growth in the market, so
we are taking the time now to make these
investments. Once the markets bounce
back, we will be on track to be the topmost
life insurance company in India. We have
moved some of our experienced hands
across levels to the transformation project,
and a similar set of experienced personnel
from the business teams have also been
assigned. Of course there are challenges
here, but I have [the backing] of the entire
management team, which is supporting
and reviewing this project.
Of the trends that are hot
right now in IT, which are most
important to your company?
I would say a trend like cloud computing is
least important and mobility is the highest.
Big data and social would be between
those. We already have a lot of data about
our customers, so adding social to that will
make it more valuable. Mobile devices are
growing at a rapid pace in India and so are the
number of users now on social media. These
two are quite disruptive, and we are already
working on these. Data-driven decision
making at every customer touchpoint is an
objective we intend to achieve as part of our
transformation program. Cloud computing
isn't an option yet because of the regulatory
restrictions on hosting customer data on
infrastructure outside of India. Of course,
we are working on creating our own private
cloud and looking at internal efficiencies that
we can achieve using cloud offerings. Our
infrastructure refresh is also being designed
in a manner to support BYOD.
How has the role of CIO changed
over time in your company?
I'm not sure it has changed all that much. We
have been focused on technology since the
inception of the company in 2000. We have
always pursued projects with the intention
of improving the business or better serving
customers and to differentiate ourselves in
the marketplace, so from that perspective,
IT has always played a strategic role. The
current regulatory changes leave us with
only few areas to differentiate in the market,
and technology is one such area. Hence
technology at HDFC Life is being looked at
as a strategic lever to help across areas such
as revenue addition, increased efficiency,
cost reduction, and unique customer and
distributor experience.
61
doug tracy
CIO. csc
"At CSC, IT and the CIO definitely
have a seat at the table."
62
cio insights
Doug Tracy, CIO at CSC, talks about representing the voice of his customers
and operating in a globally connected world. He also speaks to a universal
appetite for innovation in the face of transformation and a quest for
solutions focused on governing IT.
As the CIO of a global IT
products and services company,
how does your role compare
with CIOs in other organizations
and industries?
Just like other CIOs, I’m being asked by
my CEO to do everything a company needs
to accomplish in any transformation — drive
down costs, convert more capital expense
to operating expense, and gain flexibility
for both upturns and downturns. We’re
also looking for ways to drive innovation.
That should sound familiar to all CIOs.
But my role at CSC is unique, because
we need to demonstrate the use of our
products and services. As an IT products
and services company, CSC should be using
the latest and greatest. Yet we haven't
always demonstrated our expertise as
effectively as we could.
What steps is CSC taking to
change that?
We’ve reorganized the internal IT function
to align with CSC’s new operating model.
We’ve renamed the function “business
technology,” or BT, and we have only
planning, architecture and management
capability within this group. Delivery
of IT services and products is now the
responsibility of the same CSC business
units that deliver to our external customers.
We’ve also implemented a concept called
“Customer Zero,” where we pilot new
services and products internally before we
roll them out to customers. This is highly
motivating, as we get to work with the
latest technologies and IT management
techniques. We also work through the
challenges of new services or products,
so that our early-adopter customers
have the best possible experience with
new CSC market offerings. Both BT &
Customer Zero show our customers that
we recognize the changing role of the CIO,
and that we believe our own products are
innovative and cost effective.
Does CSC's IT function influence
the company's business
strategy?
At CSC, IT and the CIO definitely have a
seat at the table. We enable the company
to operate more efficiently. In almost all
cases, operational efficiencies are heavily
reliant on IT. So, by understanding CSC’s
business challenges, priorities and the
like, IT can bring better ideas.
Also, my role represents the voice of
our key customers. We often sell with or
through a customer’s CIO. I can help bring
that customer’s perspective to the table.
When someone in the organization talks
about a new market offering or how to
approach a CIO, I can say, "Well, if I were
sitting on this side of the table as a CIO,
here's how I would react to that message."
That kind of perspective helps us focus
on the issues our customers need.
Which technology trends are
most important to CSC? Cloud?
Big data? Mobility?
All of the above, and not just because
we sell them! They help us achieve very
important business objectives.
Cloud-based computing helps CIOs achieve
something they've always wanted: a flexible
IT service that is reliable and able to scale
up and down with the business. You don't
have to think about it. You can concentrate
on how to drive growth, innovate, get rid
of fixed costs, rationalize applications,
and other key issues. Essentially, all our
new applications are going into the cloud.
Big data is also important as we look to
understand the rapidly changing technology
market and how CSC is performing there.
There is a dramatic increase in the number
of data sources, and our decision-makers
have a hunger to understand information
from multiple sources very quickly.
Another example is mobility. We're in a
globally connected world, which means
people need to work with others in
different time zones. Also, people want
the flexibility to work when and where
they like, so they can balance the demands
of work and personal responsibilities.
Because people use consumer IT devices
in their daily lives, allowing them to use
their devices is important.
How does a company as large as
CSC sustain innovation?
There are a couple of ways. First, innovation
must be spread throughout the organization.
We don't relegate innovation to a group
that works in a back room somewhere.
That's why our Customer Zero program
is so important. It gives us the platform
to try innovative things, make sure they
work, and then incorporate what we've
learned into our offerings.
Our acquisition of Infochimps demonstrates
our willingness to incorporate new ideas
that refresh our way of thinking. We also
have a deep level of internal expertise that
we can tap for new ideas. For example,
IT has a close relationship with our CTO,
Dan Hushon. Dan's always advocating
new things to try, which leads me, as CIO,
to ask, “How can we deploy that across a
global enterprise — quickly, yet without
causing chaos?” There's a beneficial pushpull relationship.
63
Bernd Vieten
CIO. ABB Germany
"Cloud is a strong antivenom
against shadow IT."
64
cio insights
Bernd Vieten is the CIO of ABB Germany, a multinational corporation operating
in robotics and mainly in the power and automation technology areas. The
company employs 145,000 people and operates in approximately 100 countries.
Vieten is following a “cloud first” strategy and is committed to quickly giving
its departments what they need. In return he expects sensitive handling of
the company’s intellectual assets. Other topics on his agenda in the coming
months are mobility, collaboration and security.
At ABB, is IT considered a
supporting function or a
business differentiator?
We play both roles. We are differentiators
because IT technology helps in building new
business. On the other hand, we support
the business. For instance, we automate
and digitize business processes or make
them more efficient. And sometimes we
act as agents provocateurs, who try to
drag the business out of its comfort zone
and suggest, for example, pilot projects
to show new ways of doing things.
Can you give us an example?
in our robotics business, we offer our
customers social software to address our
support people as well as an international
user community. In this way they can
easily and personally contact the people
who solve their day-to-day challenges.
For both parties this approach is easier,
faster and more efficient.
supports growth indirectly is easy access
to our knowledge base for all of our
field service staff. We grant access with
various mobile devices such as laptops,
smartphones, tablets and soon, perhaps,
smart glasses. Our goal here is to give the
onsite service person online access not
only to the documents but also to the
experts inside our company, regardless
of where they are at that moment.
What are your priorities for
the next 12 to 18 months?
We will strongly focus on mobility. We
will sharpen the mobile strategy and take
care of areas we hadn't considered before.
Besides that, we are building a strategy for
sourcing cloud services. And last but not
least, we will adopt our IT infrastructure
for Office 365.
What tangible steps does your
IT take to support growth?
Will all enterprise
applications develop similarly
to mobile apps — in terms of
ease of use, modularization
and separation of front end
and back end?
ABB wants to grow faster than the market.
We try to achieve that by focusing on our
service business. IT helps, for example, to
get the most out of our installed base.
We use the data and information we have
to address our existing customers with
additional service offerings or proposals
for new projects. Another example consists
of our various sales information systems
in the different business units. We will
interlock them tightly to maximize our
sales opportunities across the different
lines of business. Another example that
i think that will be true in many areas of
enterprise IT. From a user perspective, it is
very disappointing when you are provided
with a cool smartphone or tablet but still
have to work with old school enterprise
applications that don't live up to the
usability expectations employees have
today. That's why I think it is inevitable
that enterprise application front ends
follow the example of mobile apps. And
what we see in mobile apps today is not
the end of it. Just think about controlling
machines or applications with gestures.
The first devices that are able to do that
are already on the market. And the use
cases for this — for instance in design,
maintenance or operation — are indeed
many.
Does ABB have a cloud
strategy?
Yes, and it is spelled cloud first. When we
need new applications or services, we
will always consider first sourcing it from
the cloud. Only if that's not possible will
we think about on-premises. The second
question would be: Make or buy? This will
be decided by assessing the criticality
of the service we need. But the general
direction will be buy.
Don't you fear a steep rise in
shadow IT?
No. I think our cloud first strategy is a strong
antivenom against shadow IT. As long as
we source what the departments need,
there is no reason for shadow IT anymore.
We are committed to giving them what
they need. In return, we expect that the
departments know where the company's
assets are, for instance in intellectual
property, and that they don't mess with
[those assets] in unsolicited uploading
data to public clouds.
65
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from the survey on the topics of cloud computing, IT security, big data, mobility,
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66
cio barometer 2013
The CIO’s New Role:
Core Strategy Enabler
67
CSC
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About CSC
CSC is a global leader in next-generation IT services and solutions. The Company’s mission is to
enable superior returns on our clients’ technology investments through best-in-class industry
solutions, domain expertise and global scale. For more information, visit us at www.csc.com.
Designed and produced by CSC’s South and West Europe Region Marketing & Communications department.
© 2013 CSC. All rights reserved.