Magazine. Vol. 05, January, 2009.
Patrick Arlequeeuw “IT is also a business unit” 4
Koen Vermeulen “Welfare gap will swap faster than ever before” 18
Aloys Kregting “IT needs to come down from its ivory tower” 17
Boet Kreiken “The Information Manager is undervalued” 15
Editorial: The end of the IT department as we know it CIOnet Belgium’s Top Annual Event: Be the Change! Business Technology: New IT focuses on human interaction Constant evangelisation: BPM and SOA in practice A leading role: Information Management in practice The job of IT: A high-performance information culture Column: Can and will IT make a difference?
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Kalman Tiboldi “SOA approach requires a significant cultural change” 12
Welcome to CIOnet 2.0
ABOUT CIONET MAGAZINE
CIOnet Magazine is a CIOnet initiative, published quarterly and sent directly to CIOnet members and as a supplement to Data News. Produced by: Roularta Custom Media Publishing Director: Hendrik Deckers (hendrik@cionet.com) Editorial coordinator: Kurt Focquaert (kurt.focquaert@roularta.be) Photographs by: Jan Locus Printed by: Roularta Printing Advertising: Erwin Van den Brande (erwin@cionet.com)
Every sound business needs to reinvent itself every so many years. CIOnet 2.0 is here, and we’re proud about it! CIOnet 2.0 stands for more content, more discussions, a completely revamped networking site and further international expansion. The new CIOnet website is more attractive, easier to use, has more interactive forums and will bring you more rich content & discussions. Not a member yet? Then this is the right time to join the club! Are you a CIO with at least 20 people in your IT department or an IT Manager reporting to a CIO in an IT department with at least 200 people? Then send your request to join to mieke@cionet. com with your contact information. You’re welcome! Special Interest Groups More and more CIOnet SIGs are being launched. Here’s a selection of the topics that are being covered for the moment: Enterprise Architecture, Sourcing, Benchmarking, Value of IT, Innovation, Academia, etc. Members join to exchange experiences and insights and to prepare CIOnet activities and events. Make sure to join the group of your interest!
CIOnet launched in Belgium in Q4 2005, in The Netherlands in Q4 2007 and is now preparing the launch in Spain for Q2 2009. Furthermore we’re exploring to expand into the UK, Switzerland and other European countries. This brings our members more international contacts, exchange and learning! Have a great 2009! The CIOnet team wishes you and your loved ones a wonderful 2009. This year we will focus our activities on Supplier Relationships, The Value of IT in a Recession, Sourcing Partnerships, IT Architecture, Collaboration, Virtualisation and IT Enabled Business Innovation, among other topics. We look forward to your active participation. In this fifth issue of CIOnet Magazine we report on the annual events in CIOnet in The Netherlands (The Department previously known as IT) & Belgium (Be the Change). Enjoy, HENDRIK DECKERS Managing Director - CIOnet hendrik@cionet.com
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Editorial
The end of the IT department as we know it
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ur businesses need information technologies to compete but can hardly ever create sustainable competitive advantage with them. This is because the technologies are relatively easy to copy. At the same time IT incurs pain: costs, risks, switching and contracting, underperforming vendors and difficult adoption of new ways of working in our organisations, etc. As long as organisations do not mature substantially in technology adoption, CIOs can fill in this gap. The more our businesses access information, the more we need to choose what information we want to work with. Do we want to manage our p&l and balance sheets or rather the business drivers that influence them. What external information do we need for business development? I think that CIOs will increasingly get involved in this positioning of available and relevant information. If working on IT costs is all that we do, we will continuously compete with vendors, procurement departments and our colleagues from other parts of the business. Our added value lies in business strategy realisation. This will always include IT costs, but also marketing strategies to enhance e-commerce, customer lock-in through added value based on services and provision of information etc.
So the future challenges for the CIO lie in leadership and technology adoption, information positioning and strategy realisation. Classically these are the areas of the CEO. I think that modern day CIOs have more opportunities than ever to opt for that position as the next step in their careers, when they would have that ambition1. CIOnet can play a vital role in every CIO’s development, because it enables the access to new insights, exchanging experiences and the development of our profession, crossing borders of industries, businesses and academia, and of countries. WOUTER HAASLOOP WERNER
CIO Maxeda Chairman Advisory Board CIOnet The Netherlands
Note (1): On this subject the following publication appeared as the result of a cooperation between CIOnet members: Haasloop Werner, W.,Huibers, T. & T. van der Zeeuw, ‘CIO’s met ambitie’, in: Holland Management Review, no. 121, september – oktober 2008. The article is available on CIOnet.com under groups>cionet>cionet the netherlands>cio management topics (https://www.cionet.com/cgi-bin/forum.fpl?op=showarticles&id=2820565)
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CIOnet Belgium’s Top Annual Event
Be the Change!
IT is facing a major challenge. A new interpretation for the role of the IT department and the function of the CIO is being forced upon us.
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Peter Hinssen, chairman of Porthus: “The CIO needs to get rid of the old fire-fighting image of IT. He has to be Batman, rather than Robin.”
e have reached the end of an era”, asserts Peter Hinssen, chairman of Porthus. “We’ve been through twenty years of EDP and then twenty years of IT. Which now brings us to a pivotal moment. Because shortly we will have ‘the department formerly known as IT’.” The fact that there is a need for a resurgence of some kind can be seen from the increasing numbers of people bobbing up on the business side of operations who are IT savvy – and who want to encourage IT to change. All of which is providing us with a number of challenges that should not be underestimated. “The time for silos has passed”, says Hinssen. “These days, IT needs to be made up of granular, reusable components. Which is very different to what it used to be. We are moving away from well-organised, vertical silos that only had to be available from 9 to 5, to thousands of small components that have to be on standby 24/7.
Business also wants strong, dependable solutions that are also extremely flexible. Which is not so easy to achieve.” There is also a change in the pipeline for the way the IT department is staffed. In past decades, the majority of IT people have been technical. When a company is looking to convert its IT department from a purely executive unit to a more innovative one, it creates a need for different types of IT people. “You can only achieve change in IT by successfully changing the people and the culture”, continues Hinssen. “People’s brains are one-half rational and one-half creative. It’s the same in IT. You need to have people who combine business and IT, who can think with both sides of their brain.” There are plenty of other points of interest involved, too. Companies will have to review their communication and marketing on IT, as well as their architecture and governance. Which will give a fresh interpretation to the role of the CIO. “Just as the CFO has evolved from a simple bookkeeper to a key figure in the way the company is managed, so the CIO has to be able to change. He has to get rid of the old fire-fighting image of IT. He has to be Batman, rather than Robin.” Put another way: the department formerly known as IT needs a leader formerly known as the CIO. Someone who can lead an IT revival, instead of merely contenting himself with IT survival. Back to basics The more the world changes – and the customer’s needs along with it – the more it is up to IT to find an appropriate way of providing support. “In
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the old days, the bank was only open for five hours a day”, says Pieter Ketting, Senior Vice President at Rabobank. “And customers came along to one of our branches to conduct their business. These days, they can bank online round the clock. So obviously there is greater pressure on IT as a result.” Which led to the development of the Rabo Unplugged project. “Like the performers who come to play on MTV Unplugged, we went looking for the core, for the foundations of what we do.” In practical terms, it means that the IT staff at Rabobank have been given more responsibility about the way they arrange their job. The bank judges its staff by output – and does so regardless of the time or place where the job is done. So someone who wants to arrive at the office later in the morning is allowed to do so as long as he or she then goes on working in the evening at home. Which means the CIO needs to implement what is known as ‘servant-leadership’. Some people perform less well in this new environment. Others are inclined to work to an unhealthy degree, because they are afraid of being given a negative assessment. “Good guidance and supervision is required”, states Ketting. “But more than anything else, the CIO has to have the courage to trust his staff. Only then will he receive trust in return.” To support this new policy, Rabobank has redesigned its offices. Gone are the fixed workstations, replaced by areas that promote good cooperation between staff. “We facilitate employees where we can. Everyone is given a laptop and a PDA so that they can work regardless of time or place.” Rabobank takes this line a good deal further: an office where there was once space for 60 traditional fulltime equivalents is now sufficient for the bank as a working environment for 100 full-time equivalents. A new role for IT During the 1980s and 1990s, Procter & Gamble grew significantly, resulting in an extensive portfolio
of strong brands. But because this growth was generating little in the way of economies of scale, the company decided to make radical changes to its internal structure. This had an enormous impact on the position of IT. “Since then, Procter & Gamble has been made up of various worldwide business units”, says Patrick Arlequeeuw, VP Global Business Services. “IT is also a business unit, with three service centres and three data centres worldwide, including one in Brussels.” At the same time, Procter & Gamble embarked on major partnerships with HP (IT infrastructure), IBM (HR services) and Jones Lang LaSalle (facilities management). “Each one was a specialist in its particular field, giving us the speed, flexibility and innovation we wanted.” Taking these measures also meant that P&G could also run the IT department as a genuine business unit (see box). “We keep a close eye on the earnings and overheads of the service we provide, and just like any other business unit, we juxtapose profit and loss. We make every effort to learn from the P&G business units, especially taking full advantage of their experience in winning with consumers (for GBS = users).”
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Pieter Ketting, Senior Vice President at Rabobank: “The CIO has to have the courage to trust his staff. Only then will he receive trust in return.”
According to Arlequeeuw, there are more than enough examples of the way in which IT makes a positive contribution to P&G’s business. “Virtualisation is one of them”, he says. “Using new collaboration technology, international teams can work together on the mock-ups for new packaging.” The pampers.com website is another example. The site has become known as one of the biggest online communities for young mothers. “You have >
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there was too much focus on technology”, states Leandro Herrero, CEO of the organisation architects, The Chalfont Project, and the author of ‘Viral Change’. “All too often, companies expect staff behaviour more or less to change of its own accord, which of course is never the case. But also because the type of behaviour that we want from our employees does not correspond with the type of behaviour that we reward.” (see box) Managers believe that large-scale initiatives, with the involvement of all management levels and plenty of support through communication, will automatically lead to change. That is what is called the tsunami approach: simply flood everything and hope that the change will have happened when the floodwaters recede. > to look at the website as part of the way we
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Leandro Herrero, author of ‘Viral Change’: “Viral change is like a viral infection: it involves a small change to a small group of people, which then starts gradually spreading.”
approach consumers. We still run our campaigns in the traditional mass media, but at the same time we use these sorts of initiatives to make one-to-one connections with consumers.” Standardising IT across the various business units is a major driving force within Global Business Services and the aim is to rapidly drive the percentage of standardisation up, dramatically simplifying our processes and significantly enhancing our efficiency. “We see standardisation as a major opportunity and our approach to it is very deliberate. It’s about creating the right foundation for growth.”
Running IT like a business • watching the pricing & cost of IT, just like the business watches profit & loss • watching IT service adoption, just like the business watches market share • watching IT service management, just like business watches brand management • watching total user experience, just like the business watches consumer benefits PICTURE
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Patrick Arlequeeuw, VP Global Business Services at Procter & Gamble: “In the time ahead, standardising IT will generate more for Procter & Gamble than any product initiative.”
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Viral change The case of Procter & Gamble demonstrates that management by default no longer works today. However, the other side of the coin is that people are naturally averse to change. “When change management projects fail, it’s often because there was no clear strategy behind it, or because
The disadvantage of this approach is that as time goes by, more and more resources are required: a bigger tsunami is needed each time, resulting in less and less change. Standing squarely opposite to that is the concept of viral change. “Compare it to the spreading of some biological infection”, says Herrero. “It’s about a small change, in a small group of people, in a small network, which then starts gradually spreading.” If the company wants more teamwork in its processes, the thing to do is first make the idea fashionable with a small group of employees, who then infect their co-workers. The change then spreads slowly through the entire company. “Change is about infecting people.” The best results happen when a business blends traditional and viral change.
Why change lags behind The discrepancy between desired behaviour and rewarded behaviour. Behaviour that we want from our employees: • entrepreneurship • teamwork • helicopter view Behaviour that we reward: • safe decisions • individual results (bonuses) • focus
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New IT focuses on human interaction
Business Technology CIOnet held its annual event in the Netherlands on 7th October – The end of the IT department as we know it. Jan Baan, the founder of Cordys and Baan Corporation and also the owner of Vanenburg Castle in Putten hosted this CIOnet event. Tom Kok chaired a very fine day with apart from Jan Baan, Arjan van Dijk (CIO Ymere) and Andy Mulholland (Global CTO Capgemini) as speakers.
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Andy Mulholland, Capgemini CTO: “We’re introducing Business Technology, instead of Information Technology.”
“ nnovation is with us all the time”, Capgemini CTO, Andy Mulholland, told his audience. “How many of you had ever heard of a CIO, or even the term ‘IT’ before 1992? There were computer managers, of course, so things have moved on quite a lot since then – and they continue to change today”, he said. The front end of businesses is looking for new ways to make money in new markets, but how can you change a business model? Mulholland
approached the issue by first asking: “Who is the decision-maker and what is the basis for the decision?” Most businesses start off in a situation that is focused on the business itself, as well as on containing costs. After that, they will want to move in a direction that is more technology-driven and focused on value, rather than cost. “Today, we are very much focused on transactions – a situation that is cost-driven through IT department functions”, said Mulholland. “Business and IT may be ‘aligned’, but in fact are different entities.” He believes that businesses need to focus more on situations that are interaction-based. ‘Interaction’ as in ‘interaction with the customer’. New businesses are value-driven by enterprise business objectives, where business and IT are ‘converged’ into a single entity. Lots of money Mulholland gave the example of threadless.com, a website where shoppers can buy T-shirts. The owners make lots of money. And why? Because they create interaction with customers. At threadless.com, the customers can design the T-shirt themselves. They can also rate the designs and leave comments at the site. “It’s an ideal business model”, said Mulholland. “They don’t have a design department, they don’t do sales, they don’t do marketing. And above all, all of their customers are in one big CRM application – the website itself.” A more traditional example is Scion.com, a brand owned by Toyota. Scion.com sells cars. You can
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choose a car at the website and add the options you want to it. Toyota just manufactures the basic car and the dealers then assemble the options of your choice locally. Mulholland: “It is the Web 2.0 community in cars. Again, it’s all about interaction. It is a whole new business model, focused around a different customer. The Scion is the car for a younger generation, for kids who don’t want to drive their parents’ Toyota. We’re introducing Business Technology, instead of Information Technology.” Business Technology He showed his audience a sheet with three expressions, all dating from 2006: ‘Web 2.0’, launched by Tim O’Reilly, ‘Enterprise 2.0’ from Professor Andrew McAfee, and ‘Business Technology’ by Forrester. Mulholland also showed us how they are related. Web 2.0 and Enterprise 2.0 evolve into ‘Business Technology’, which stands for “the combination of a new group of technologies, with new business capabilities that are used in a wholly different manner to IT, and create value to external business opportunities”, he said. Because the focus is on the business model, it’s called Business Technology, and not Information Technology. Mulholland also showed the four-layer ‘Business and Technology Architecture Governance’ model. On the bottom layer we see the more traditional IT environment, which Mulholland calls ‘Comply’. Above that there is an ‘Organise’ layer of shared core processes that connect to transactional IT applications below and support the layer above, providing the capability to ‘Differentiate’. SOA plays an important role in the Organise layer. The top layer is ‘Personalise’, which gives individuals the ability to choose their ‘experience’ in how they wish to ‘Interact’ and ‘Collaborate’. Wrapping up, Mulholland said the pace of change
is accelerating, with markets, trading conditions and competition all increasingly demanding ‘innovative’ responses. In this, the role of the CIO is changing, with focus on enabling new business activities, instead of trying to run a business for less cost. The CIO needs to be the identifier of the capabilities that new technologies can bring to business. Slaves of King Data Centre “The CIOs of today are the Slaves of King Data Centre. Very often they are afraid to innovate.” Jan Baan, CEO of Cordys, speaking for a room full of CIOs, was certainly not afraid of his audience, and didn’t hold back. In his presentation, one of the keywords was ‘Business’. As Baan stated, the world is shifting from ‘Data-Centric’ to ‘Business Process-Centric’, and as the Internet became the computer, BPM became the software. According to Baan, there is nothing wrong with traditional ERP software. It is software that connected the internal departments of the enterprise in the 1990s, and should be kept in place today. “We have to move from ERP with onpremises data to BPM as a service delivered on demand”, he said. “The old IT doesn’t matter. It is about handling the transactions we have used over the first 50 years. The new IT, BPM, is all about helping people to get their work done. The new IT will embrace ‘human interaction management’, which is centred around interaction between people, not interaction between computers”, Baan told his audience. “For this, we don’t need programmers. No more ‘spaghetti code’. What we need are ‘composers’, close to the end user, or maybe even the end users themselves. They will use standard solutions and make connections. We are better off using standard solutions. If that is not possible, we should think about changing the process instead.” And, of course, >
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> Baan’s vision can be made reality with Cordys
software. Cordys adds a layer from a SOA Grid on top of the traditional ERP systems. Then, on top of that, comes a ‘Multi-Tenant SaaS Deployment Framework’. And above that, there is the BPM layer, with which the ‘composer’ can do his job. According to Baan, the cycle of change in the lower layers of his model, at the infrastructure and software level, is between six to ten years. The Cordys layer in between makes it possible to change a lot more quickly, fundamentally altering the way businesses innovate their business operations. “Yes, it is possible to start this small”, Baan responded to a question from the audience. “You need to start by fixing things where they hurt most. The times of the ‘big bangs’ are over. And remember, no more programming.” PICTURE
Jan Baan, CEO of Cordys: “The new IT will embrace ‘human interaction management’, which is centred around interaction between people, not interaction between computers.”
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Too much fear To the question of what CIOs would then have to do, Baan answered, “wherever I go, I prefer talking to the business managers. In this room [referring to the CIOs], there is too much fear about ‘adding something new yet again’. I think a part of the problem lies with the CIOs themselves. And the real answer is web services. You don’t
dare. ‘There is no money for this’, you say, but you don’t know the real ‘value proposition’. Then you take little steps at a time. Yes, that really is possible.” “Leave anything that is good in place, without changing it. Keep the big ERP systems. Respect the existing components and make changes by making connections.”
CIO: from TCO to New Business Activities What we learnt from the presentations made by Andy Mulholland and Jan Baan is that the world around us is changing faster and faster. Markets, trading conditions and competition all increasingly demand ‘innovative’ responses. Where in the past CIOs were busy driving TCO down, they will now have to focus on enabling new business activities. Businesses will have to adapt to a faster pace of change, and one way to do this is to become more focused on transactions with the customer. IT will have to adapt equally. Business and IT have to ‘converge’ into a single entity. This means that the focus is on the business instead of the technology – Business Technology instead of Information Technology. The more traditional layer of infrastructure and basic applications and systems, such as ERP, will remain in place. Between the customer or user demanding interaction, and these ‘old’ systems, a whole new layer has to be created, or more layers that can facilitate the ability to deliver a more interaction-based, real-time system, that can adapt to fast changes. SOA will play a role here and for that to happen, Jan Baan says we do not need programmers, but ‘composers’ as he calls them, who connect systems with standard components. In the near future, the CIO will become the person who identifies the capabilities that new technologies can bring to business. According to Baan, CIOs in general are afraid of this way of thinking. He says that CIOs do not recognise the ‘value proposition’.
ICT GETS MORE FANS EVERY DAY Even if you can’t see ICT, you probably appreciate what it does. From your secured workspace to public transport to ATM transactions, everything these days is enabled by ICT. What if people started to realize this?
www.getronics.be
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BPM and SOA in practice
Constant evangelisation Some years ago, market researchers were predicting a golden future for the combination of Business Process Management (BPM) and Service-Oriented Architecture (SOA). Four specialists talk about their experiences for CIOnet.
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Marc Kerremans, Research Director at Gartner Research: “BPM and SOA require a valuecentric approach.”
OA is the application architecture in which data and business logic act as modular services. BPM is a set of management techniques that provides an efficient way of enhancing business processes. SOA and BPM usually have the same objectives: providing businesses with systems that deal with change smoothly and flexibly. “Companies that focus on SOA alone often don’t get any further than a static version of the concept”, says Marc Kerremans, Research Director at Gartner Research. “That is not enough when it comes to developing an agile and adaptable company.” It would also appear that there are still not many practical and reusable services that really do generate added value. “The market has not made as much progress with SOA as we had hoped a few years ago. BPM is the same, leading to limited results. So in
fact it is better to combine SOA and BPM with each other. BPM gives SOA the granularity it needs, while SOA makes BPM easier to implement. All of which naturally raises the question of what type of results progressive companies can really expect to achieve by combining BPM and SOA. “A lot depends on the way the combination is put together”, says Mr Kerremans. “Sometimes a project is more IT-driven, while at others it’s business driving the project.” In either case, approaching BPM and SOA together seems to be the essential element. “It certainly requires a value-centric approach”, he continues. “The ultimate aim is to generate better results with less effort.” It is also important for the company to succeed in identifying opportunities and then grouping BPM and SOA projects with the aim of achieving synergy. To do that, the company has to adjust the methods it uses, along with the governance that goes with them. Ongoing process of change Over the years, TVH has built up a great deal of experience with SOA. The Waregem-based business supplies fork-lift trucks and spare parts. “We define SOA in a very different way”, states Kalman Tiboldi, CIO of TVH. “Everything revolves around added value. We operate as a genuine service company in which IT is the driving force behind our innovation.” TVH opted for a highly componentised SOA and always sets out from the point of view of a practical need in terms of business or end users. What are called business process innovators examine and analyse every
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suggestion. “Last year, we implemented 4,700 changes – it’s a never-ending process.” In terms of SOA, TVH was without doubt an early adopter. “We started working with e-commerce in 1994”, he says. “Back then, in 1999, we made the deliberate choice to go with the one-stop-shop model. We took our conventional ERP system apart so that we could divide everything up into components and disconnect business logic from the user interface.” The first genuine SOA projects followed in 2003. TVH is currently working on expanding its use of SOA further. Central to its aims is the Enterprise Service Bus, which calls up the appropriate services, depending on the type of job: it might be a customer placing an order via e-commerce, processing the order in the warehouse, and so on. TVH’s approach enables customers to place orders via a range of channels. They get to see the correct pricing information in real-time and processing the order then runs as smoothly as possible. “Naturally the entire approach requires a significant cultural and organisation change”, explains Mr Tiboldi. “Without the support of management, we wouldn’t have been able to extract any real added value for the business.” The role of the CIO also plays a major part. He keeps his distance from the bits and bytes and has to focus more on the business-related aspects. “The great thing is that our approach generates a clearly visible contribution towards the company’s success. That in turn leads to more appreciation, as well as greater risks and responsibility.” SOA is a lengthy process, with the cultural change within the company representing the biggest challenge. Technology alone is not enough. Success depends to a large extent on cooperation between business and IT. “Personally, I don’t consider SOA as anything new”, continues Mr Tiboldi. “It’s first and foremost a method for implementing IT in the correct, structured way.”
Searching for rework Since the market was deregulated in 1998, there have been fundamental changes to the telecoms landscape. At Belgacom, the acquisitions of Proximus and Telindus were two major milestones. The Belgacom Group was much changed as a result, which naturally had consequences for IT. “Business was demanding faster and faster solutions for increasingly complex needs”, says Yves Biver, EAI Domain Manager at Belgacom. “At the same time we had to be responsible for IT integration between Belgacom’s various sites and subsidiaries. All of which soon resulted in demand that was far greater than the available supply of IT resources.” In-house research shows that thirty per cent of IT development and fifty per cent of IT testing at Belgacom takes place based on the need for integration. “It is not feasible to develop totally new systems to replace the legacy environment”, he asserts. “And we also realised that rework can sometimes be as much as thirty per cent of development costs.” So Belgacom went looking for a solution that could provide a higher level of reuse. “Rework means a shorter time-to-market, lower maintenance costs and better quality of the solutions we provide.”
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Kalman Tiboldi, CIO at TVH: “SOA is the best method for implementing IT in the right, structured way.”
To be able to achieve practical rework, Belgacom developed a combination of SOA and BPM. “Initially, it was a purely technical SOA project”, explains Mr Biver. “Then, as time went by, we shifted the emphasis to business.” Belgacom implemented a combination of SOA and BPM fully for the first time when developing products >
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Yves Biver, EAI Domain Manager at Belgacom: “These days using SOA and BPM still requires constant evangelisation.”
> for Belgacom’s VoIP offering. That provided a
foundation that could be used effectively afterwards. When working on other projects, rework has enabled the company to achieve up to thirtyfive per cent lower development and maintenance costs, plus a time-to-market that is twenty per cent shorter than a totally new development process. “Of course you have to start by putting in the effort for the initial development”, he says. “But once you’ve done that, things soon become very interesting. And once the results are visible, it also becomes easier to defend SOA and BPM with management. Of course it helps to opt for the correct functional approach – and don’t forget the appropriate support. These days, using SOA and BPM still requires constant evangelisation.”
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Peter Strickx, CTO at Fedict: “Rework cut the time needed for an application to be used by notaries to just six weeks, instead of nine months.”
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More than just technology The government is also convinced about SOA and BPM. “It is absolutely essential for the Federal Government to improve the service it provides, not only through SOA, but also with BPM”,
asserts Peter Strickx, CTO at Fedict (Federal Government Department ICT). “As far as we are concerned, SOA is the best architecture for a nimble-footed business. But above all, SOA is a design approach, not a plug-and-play technology. To achieve good architecture, you have to work with good, solid service design.” The work that Fedict is doing on SOA fits in with its projects on e-government, a programme aimed at being able to provide citizens with more services that offer greater efficiency. “It’s an issue that goes beyond technology alone”, states Mr Strickx. “A sexy front-end isn’t much use if there’s no reliable back-end to keep things from capsizing.” To tackle this problem, Fedict has outlined a roadmap for SOA and has already achieved some major building blocks, such as the FedMAN network, the middleware for UME (Universal Message Engine) and the Federal Government portal site. “Before 2001, everything was based on point-to-point connections”, he says. “Our first job was to develop message-oriented middleware so that we could reuse data.” A next step was the development of the Federal Service Bus (FSB), which is an integrated set of SOA services, based on a common SOA backbone. “The service bus disconnects everything, including the service invocations which otherwise usually remain directly linked to the service interfaces.” As the lifecycle of the FSB platform is rolled out, it is important that sufficient attention is paid to the distribution of roles and the responsibilities that go with them. “All of the parties involved have to know clearly who is accountable or responsible, as well as who needs to be consulted and who is to be informed.” Fedict has since set up guidelines for the services and those organisations that want to develop new services. Management and the final decision about the expansion of the SOA catalogue remains the responsibility of Fedict. “Rework delivers better solutions and a shorter time-to-market”, reiterates Peter Strickx. “For example, an application has been developed for notaries that enables them to see whether a person wanting to set up a new business or company has outstanding tax or other debts. Eighty per cent of the documents and information required were already in the FSB. So the development time for the application didn’t take nine months, but just six weeks.”
Case study
Information Management at KLM and Procter & Gamble
A leading role End of last year CIOnet held a meeting on the topic of ‘Information Management’. Boet Kreiken, the CIO at KLM, and Remco Brouwer from Procter & Gamble, gave their views on the subject.
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he way Boet Kreiken sees it, an airline performs an essential function for most companies. “Their staff are always having to fly off somewhere or other”, he says. He also believes that information technology is a core competence for KLM. “Not a core business as such, but a core competence. IT is a strategic weapon. Information plays a leading role as a dominant source of power in our civilisation. That certainly applies to airlines: we all buy the same aircraft, but it is the information and the brand associated with those planes that make all the difference. And the processes we use.” Leading figure The Information Manager – KLM has 400 of them – is “someone who creates the link between the business bosses and IT”, says Kreiken. It is also a really tough job. “They are either given great credit, or are abused or forgotten. The essence of the Information Manager’s job is decision-making.” What does KLM expect of an Information Manager? They have to be up-to-date with all kinds of developments, such as software as a service, grid computing, virtualisation, SOA, Wikis, web analytics, biometrics, telepresence and semantic web. But more important still is the business side. Kreiken again: “A good Information Manager is one that knows the business. They have to know the business’s customers, and even the customers of the business’s customers. Because they also know their IT. What we have learnt very clearly and consider to be very important is that there is a distinction between the ‘what’ and the ‘how’. The Information Manager defines what the business wants and the people in IT define how
to get it. They have to work together to see what is technically possible and what needs there are for it within the business. That also means that it is becoming harder and harder to write a business case, because of the speed with which technology is advancing. In the old days, a business case could last for years.”
PICTURE
Boet Kreiken, CIO at KLM: “Information Managers need to take initiative. They need to be leaders, not followers.”
They also have to be able to work well with the CIO and the Enterprise Architect. “And Information Managers need to take initiative”, says Kreiken. “They need to be leaders, not followers.” Innovation and continuity Kreiken believes that the Information Manager is undervalued. “What Information Managers do is often viewed as not being a profession as such”, he says. “But in fact, a top Information Manager is a skilled trapeze artist swinging from high up in the company’s big-top, very much capable of becoming the ringmaster. They know the business inside out. They delineate what the company >
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Case study
PICTURE
Remco Brouwer, Initiative Delivery Manager at Procter & Gamble: “IDS is now an integral part of each business team at P&G and plays a major role in all the decisionmaking within the company.”
> systems should be, they know all about working
with other people, about economics and IT. In a word, it can be a very interesting career pathway.” According to Kreiken, Information Managers have a major role to play in innovation, as well as putting their stamp on continuity. “They are also expected to help push down the cost per unit for their businesses. But dependency on IT is getting bigger all the time. If something doesn’t work in IT, the cost can be enormous. Which means that Information Managers have to keep thinking carefully about the company’s continuity.” Scale and speed Procter & Gamble, active in the fast-moving consumer goods industry, is a company with 138,000 employees and a turnover of 83.5 billion dollars. It has over 300 brands in 160 countries and has locations in more than 80 countries. “We have 24 brands that generate sales in excess of a billion dollars each year”, says Remco Brouwer, Initiative Delivery Manager at Procter & Gamble. According to Brouwer, the consumer is pivotal at Procter & Gamble and everything is based on scale and speed. “In such an environment, IT cannot just be about delivering technologies, it needs to serve as a business partner providing solutions that really count.” Procter & Gamble has grown strongly in recent decades. That growth has meant major changes and ultimately resulted in the company’s IT being reorganised. “Between 1985 and 1999 we went into 55 new markets, with 86 new countries taking
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our products”, says Brouwer. “We had traditional IT operations in every country, often with their own systems. The IT departments were also paid by the local business organisations, which determined what happened locally. But with the support of the CEO, a plan was put together to enable IT to play a more strategic role. IT and core business services were amalgamated, after which more emphasis was put on solutions and less on technology. The back-office was totally centralised and that led to ‘Global Business Services’ (GBS), a single organisation responsible not only for supporting the entire back-office function but also for driving innovation together with the business. By creating one ‘GBS’ we positioned ourselves to win.” New name for IT “Our core competence is not managing a network or installing servers, so the next logical step was to establish outsourcing relationships with partners who were leaders in their field. That ended up in the establishment of three partnerships: with HP, with IBM and with Jones Lang Lasalle. Where this became an understandable move, according to Brouwer, was demonstrated with the integration of Gillette in 2005, with an acquisition cost of $57Bn. “At the time, our partners were able to put 750 extra people to work on our account within two weeks so that the systems could be integrated in just 15 months. This was the largest and fastest integration ever in our company’s history. With 1.2 billion dollars of synergy savings at stake, every day counted. Without our partners it would probably have taken three or four years to integrate Gillette. Their capacity gave us the flexibility we needed to flex up and deliver for the business.” “P&G retained Information Managers to manage the interface between the back-office and technology. On top, following the outsourcing, the IT department was deliberately given another name. “We’re now called ‘Information Decisions and Solutions’. IDS instead of IT. It enables us to give the right name to the work we do, because it is no longer just IT. IDS is now an integral part of each business team at P&G and plays a major role in all the decision-making within the company.”
Column
A high-performance information culture
The job of IT When an IT need arises in a company, it’s the job of the IT department to come up with a suitable solution for that requirement. As a result, getting the technical side of the problem on track often constitutes a major challenge in its own right. But the process doesn’t stop there.
I
T also has to ensure that the company’s employees actually use the solution in the way that is going to be most effective. It is the job of IT to help build a high-performance information culture, in which the technology used makes a tangible contribution to the results of the entire company. But the way the IT department needs to go about engaging useful dialogue with the people who actually use the systems and applications is not always obvious. Ordinary users and the more enthusiastic and knowledgeable IT staff should view one another as equal partners. IT needs to come down from its ivory tower and dare to present its vulnerable side – which is certainly a pretty frightening prospect! But it is a step that IT has to take if it is to be credible within the company. It is not good enough simply to question users from a distance about the way they use the applications. No, IT must be able to rely on honest, far-ranging feedback. Taking this approach means that the IT department also has to develop an additional skill. It has to go beyond the purely technical aspect of a project and look at it from a user’s point of view. Trouble is, putting itself in the user’s shoes is not always something that is a natural part of the IT department’s skills set. Its primary job, of course, is to come up with appropriate solutions and then implement and adjust them to suit. IT also has to support the perception of the business at every level of the organisation: from the board of directors right down to the end user.
As CIO, it is my job to explain to the board and the management layer underneath about how IT provides the company with added value. At a management level, we involve Business Information Managers, who find themselves acting as the interface between IT and business. They understand the needs of the business they work in, but at the same time know the extent to which the business can rely on IT to operate properly. The IT department also provides communication on an operating level, enabling end users to be given a ‘tip of the day’ that helps them extract greater benefit from the IT applications they use on a day-to-day basis. Only by working like this can we gradually work our way towards achieving a genuine high-performance information culture.
PICTURE
Aloys Kregting, CIO at DSM, is the author of this article.
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Column
Can and will IT make a difference?
Y
es, but… In an era where technology is evolving at the speed it is, it would be an illusion to think IT will not change our life thoroughly and make a difference. However, there are certain aspects that we will need to manage differently in the future to make sure we benefit from this evolution in order to let our economy flourish: Foster Innovation: enhancing the current business model through technology is not going to make the difference, you only get an edge over competition when you do something that others don’t have or can’t do. Experimenting and accepting that not everything will succeed is the key message. Stimulate adoption: adoption is crucial to value and welfare. Adoption cycles are getting shorter and shorter. But what is even more interesting is that the adoption of new technology and the evolution of a country seem to go hand in hand. Create blended technological and business know-how: we should invest enough in people with technological skills and with good business acumen. Only out of the interaction of technological insight and business astuteness innovative ideas are born. We don’t lack people with general business background but people with good technological skills, however, are getting scarcer in the Western world. In a global economy where offshoring technological skills has become common practice, we need to create opportunities for people not only to develop their business skills but also their technical skills in order to avoid that the disconnect between the business ideas and the technical capability to design technological solutions grows. We should be able to envision what technology could do but also how this could be done. Only by a good understanding of both and creativity, new value will be generated. Although we’re living in a flat world, technological or knowledge transfer is primarily done through social and human networks. More and more technological skills are formed in the Eastern world, while in Europe and North America it stays flat or decreases. As a consequence, adoption of newer technologies and new business models will be evolving faster and on a larger scale in the Eastern world. As adoption and economic evolution go together, the welfare gap will swap, faster than ever before in history.
KOEN VERMEULEN
IT Director Telindus, Billing & Wholesale Belgacom Group Koen Vermeulen passes the baton to Ludo Vandervelden, Senior Vice President Accounting, Finance and Business Services at Toyota Motor Europe. Theme: what should a CIO do when the CFO decides to cut the budget.
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