December 2010 issue.
COVER_Final.indd 2 07/12/2010 09:25 MICROSOFT AD2.indd 1 11/10/2010 11:05 MICROSOFT AD2.indd 2 11/10/2010 11:05 QUEST AD.indd 1 08/11/2010 14:29 QUEST AD.indd 2 08/11/2010 14:29 HP_AD.indd 1 30/11/2010 13:50 FROM THE EDITOR | 5 Easing the Euro-groan A trying 12 months for Europe has proved a painful eye-opener for many nations, but with lessons learnt, 2011 promises to be better for all. S naking wearily out the doors of numerous oﬁcinas de empleo (job centres) in cities throughout the country, it is understandable that Spain’s 4.6 million jobless can barely muster a smile at news that much of the EU is ﬁnally on the up. In a country with 20 percent unemployment, Spain’s jobless ﬁgures are almost double the EU average. In Germany – the EU’s best-performing economy – that ﬁgure is a mere 7.5 percent: the lowest unemployment rate since December 1992. Such stark imbalances between two countries that share a currency and have a longstanding afﬁnity with one another (Germans love Spain’s Majorcan beaches and weather, while Spaniards who can afford to snap up luxury Audis, BMWs and Mercedes with an almost slavish-like passion) are worrying. The European Union brought much good to Spain. This vast, hot and mountainous country had, outside of the major cities, a thirdworld infrastructure just a few years ago, but billions of EU money has transformed Spain into one of Europe’s best examples of gleaming efﬁciency, sympathetic gentriﬁcation and an energised population. But now the party feels over. The construction boom that came to characterise Spain over the past decade now lies unﬁnished in the dust; immigrants formerly welcomed with open arms are being actively encouraged (even paid) to leave and not return for at least three years, and Spain’s young and educated are looking for ways out of the country, eager to move wherever they can in order to ﬁnd work. For Spain read Greece. Or Ireland. Or even Portugal. Four of Europe’s proudest, most historic and beloved nations have suffered terribly in 2010. The beneﬁts wrought by their accession to a single currency have now turned to bedevilment and bailout. German, French and even British taxpayers have stumped up the EDITORs NOTE.indd 5 loan cash to help out their neighbours in need, much to the chagrin of many. The entire year has been an unedifying spectacle of joblessness, austerity, protests, riots, faintly concealed xenophobia and dejection. Most European countries will be happy to turn their back on 2010 and look forward to a 2011 that is more positive and hopeful. And the signs are that, ﬁnally, many nations in Europe can begin to ease their belts somewhat as the year draws to a close. Germany, the Scandinavian nations, Switzerland, France, the Netherlands and the UK have all returned to varying levels of economic growth. Lessons have hopefully been learnt and the knock-on, trickle-down effect of increased consumer conﬁdence in these nations will hopefully prove beneﬁcial for their continental neighbours. Yet there is still much to be learnt, from Berlin to Bilbao, about how to avoid another crisis of similar magnitude. The banking system, as we all know, needs a serious overhaul and better regulation. But governments and businesses throughout Europe should take this opportunity to truly assess their own practices and attitudes, and work towards a better, fairer and more rounded future for the whole of Europe. It can be done, as this Recovery Special attests. So here’s to a happy, proﬁtable and productive 2011 for all of Europe. Ian Clover Editor “People are going to have to work for longer because they are living longer. They are healthier, which makes them more expensive, so they are going to have to work a bit better.” Rachel Krys, Campaign Director at the Employers Forum on Age (P36) “When reformed offenders are locked out of industry, there is only one industry left for them to turn to – the criminal industry. Surely people would rather have reformed offenders as taxpayers themselves, rather than a burden to taxpayers?” Bobby Cummines, Chairman and Founder of UNLOCK, the National Association of Reformed Offenders (P44) 07/12/2010 13:23 NEXANS_AD.indd 1 30/11/2010 13:58 CONTENTS | 7 RECOVERY SPECIAL When I’m 65 The UK’s default retirement age is being scrapped, but how will this decision help the country’s economy out of the doldrums, and what impact will it have on employers? Ian Clover investigates. 36 Breaking the cycle With benefit claimants a drain on society, CXO looks at how ex-offenders – long excluded from the workplace – can inject fresh impetus into Europe’s ailing economies. 44 25 It’s all Greek Entrepreneurialism and the Greeks – strangers, uneasy bedfellows or the perfect partners? CXO hears from one Greek success story and discovers it’s increasingly the latter. Talking tech CXO caught up with IDC Chief Research Officer and EVP of worldwide products Crawford del Prete to talk about how cloud computing, company communication and business intelligence can help your company on the road to recovery. 52 136 Skirting with recession CXO looks at how Primark emerged from the recession as one of the most robust retail chains in Europe. 114 We can work it out The issue of sickness and absenteeism in the workplace is a thorny and expensive one, but can a new Stateside scheme encourage workers to lead healthier, more active lives, and thus increase productivity and attendance? Ian Clover reports. Contents.indd 7 08/12/2010 13:47 QURIUS_AD.indd 1 30/11/2010 13:52 CONTENTS | 9 Sectional Features 86 60 Can IT hold the secret to successful mergers? Sunil Harji, Director at KPMG, outlines how IT is the glue that will hold a successful merger together. 68 Sense and simplicity CXO spoke with Philips’ Global CIO and head of supply Maarten de Vries to discover how IT has, is and will play an increasingly decisive role in shaping the company’s future. 86 Power and responsibility Balancing great power with careful responsibility is one of the tasks facing Vattenfall Europe’s CIO Hans Rösch, as CXO discovered. 98 Supply and demand With the future of the travel industry hanging in the balance, Europcar has managed to hold its ground through constantly reviewing and evolving its technology, and the customer remains its main focus, as CXO discovered 120 104 Hops to IT CXO meets with Kenneth Egelund Schmidt, CIO of Carlsberg, to hear his thoughts on video conferencing technology, IT leadership and creating transparency in business. 120 Bringing history back to life Jane Clift, head of IS at the British Museum, explains to Lorna Davies the challenges and solutions brought by harmonising old and new in one of the largest museums in Europe. 124 Interaction in action CXO spoke with George Walker of America’s First Community Bank to discover how its unified communications tools have helped the bank take its customer service to unprecedented heights. 132 How To: Be a better public speaker Public speaking is both an art and a source of great fear and dread, so how does one master it? CXO investigates. Contents.indd 9 07/12/2010 13:36 WORLD CLASS CONSULTING From our foundation in 2000, Thought IT Limited has evolved into one of the UK’s leading independent business transformation, performance improvement, Enterprise Performance Management (EPM) and Business Intelligence (BI) software and consultancy providers, with an enviable track record of successful implementations in medium to large companies across all sectors. Focusing our energies on the Oracle Hyperion product suite, we help companies maximise the return on their IT investment through a blend of technical excellence, business knowledge, and a true sense of partnership. At Thought IT, we understand the challenges you face when thinking about upgrading your system. Do you opt for a simple migration or a complete re-build? Thought IT_AD.indd 1 Do you re-work existing features, or make a full transition to take advantage of the very latest functionality? And perhaps most importantly, how do you decide what is the best approach for you and your business? Our senior experienced consultants realise that one size does not ﬁt all – with backgrounds and experience in accounting, ﬁnance, IT and operations, we fully understand the complex issues involved from a user’s perspective – and our unique workshopbased approach ensures buy-in at all levels of the organisation To ﬁnd out how we can help you make the right decision for your business, please contact us on +44 208 952 8555 or see www.thought-it.com 30/11/2010 13:54 CONTENTS Roundtable | 11 Details 74 Data centre infrastructure, with Damien Simon of Nexans, Keith Sullivan of Corning, Lisa Brown of Active Power, William DiBella of Centric Solutions and Stefano Mozzato of Emerson Network Power. 146 Executive Interview 67 Dinesh Kotecha, Thought IT 59 Sören Moorahrend, Qurius 64 Mark Nashman, Clarity Systems 83 Jon Viggo, Thor Data Center 96 Doug Oathout, HP Ask the Expert 140 Steps to success with CPA’s Alex Malley 142 36 hours in…Bern 145 Objects of desire 146 Coming up in 2011 149 Book reviews 84 Stephanie Carullo, Bleu Marketing 92 David Lewis, Schneider Electric 118 Peter Müller, GMC Software Technology 128 Heiko Gloge, IGEL Industry Insight Damien Simon Nexans 66 Ed Wrazen, Trillium Software 102 Dick van den Dool, Draka 127 Nigel Moulton, Avaya Trouble Shooter 94 Steven Swift, Photizo Group Project Focus 130 Michel Roth, Quest Software 134 Antony Bream, Nimbus 142 Contents.indd 11 07/12/2010 14:35 EXPANDNETWORKS_AD.indd 1 30/11/2010 13:49 Legal Information The advertising and articles appearing within this publication reﬂect the opinions and attitudes of their respective authors and not necessarily those of the publisher or editors. We are not to be held accountable for unsolicited manuscripts, transparencies or photographs. All material within this magazine is ©2010 CXO. Chairman/Publisher Spencer Green Worldwide Sales Director Oliver Smart Finance Director Jamie Cantillon Content Director Kelly Grant Design Director James West Editor Ian Clover Managing Editor Ben Thompson Associate Editor Lorna Davies Contributors Nicholas Pryke, Marie Shields, Rebecca Goozee, Lucy Douglas, Sharon Stephenson Publishing Director Andrew Hobson Magazine Director Sarah Wilmott Associate Designers Dan Clayton, Tiffany Farrant, Élise Gilbert, Michael Hall, Crystal Mather, Cliff Newman, Catherine Wilson Online Editor Jana Grune Group Director Oliver Stebbings Managing Director Marc Baker Project Manager David Cook Senior Sales Executives Brett Carroll, CIO Summit Europe 2011 Eliza Gibson Sales Executives Soraya Suart, Callum 24th – 26th May 2011 Rowland, Stacey Davies Germany Production Director Lauren Heal Production Coordinators Renata Okrajni, Aimee Whitehead The CIO Summit will once again serve as an arena for senior level executives to engage in clear and focused dialogue with their peers and examine their management objectives in a relaxed and vibrant environment. VP North America Jason Green Operations Director Ben Kelly IT Director Karen Boparoy A Controlled, Professional and Focused Environment. Marketing Director John Funnell A Proven Format This inspired and professional format has been used by over 100 executives as a rewarding platform for discussion and learning. Contact the CIO team: (+44) 02920 729 432 www.ciosummiteurope.com CREDITS.indd 13 Subscription Enquiries +44 117 9214000, www.usfst.com General Enquiries email@example.com (Please put the magazine name in the subject line) Letters to the Editor firstname.lastname@example.org GDS International GDS Publishing, Queen Square House 18-21 QueenSquare, Bristol, BS1 4NH Tel: +44 117 9214000 E-mail: email@example.com 07/12/2010 13:23 UPFRONT 18 20 26 33 Upfront.indd 14 07/12/2010 15:02 Upfront.indd 15 THE BRIEF German festive spending is just the teu-tonic for Europeâ€™s economy this Christmas 15 07/12/2010 15:02 THE BRIEF 16 Upfront.indd 16 O ften derided for their frugality and thriftiness, the Germans have bucked the trend this winter by loosening their purse strings and going all out on a nationwide Christmas splurge; their biggest in six years. With unemployment in Germany at an 18-year low – as opposed to the western European average where unemployment is at a 12-year high – its citizens have decided to reward themselves this Christmas by upping their festive spending by 2.5 percent. Traditionally, Germans are among Europe’s lowest spenders at Christmas, shelling out a mere €470 per individual each year, way below the €1200 the average adult spends in Luxembourg, the €1000 spent by the average Irish adult and even the relatively modest €640 that Italians spend. These telling statistics from Deloitte LLP reﬂect the wider picture: Germany’s economy is performing far better than any other in Europe, and after a year where its inhabitants have seen their government bail out Greece and Ireland, the Germans have decided that their days of frugal savings are behind them, and will have spent €76.9 billion over November and December by the end of the year. “Germany is an island of bliss within a pessimistic Europe,” Deloitte’s head of consumer business in Germany, Peter Thormann, told Bloomberg. “I haven’t seen this level of spending for the last ten years at least.” Perhaps inspired by the 2500 outdoor German Christmas markets that sprawl across the continent each November and have come to characterise the festive season of Europe, Germany’s retailers are reporting strong growth, buoyant customer sentiment and a wanton abandonment towards treating oneself and one’s family. Deloitte ﬁnds that only Switzerland and Luxembourg are likely to show stronger growth in Christmas sales, and predicts that consumers from 19 countries in Europe will spend, on average, 2.5 percent less this Christmas than last. In business, German employees are also set for a welcome Christmas bonus. Siemens AG, one of the country’s largest employers, has announced a €310 million bonus package for its staff, while also announcing that it is bringing forward its proposed 2.7 percent pay rise. Porsche will gift €2100 each for its employees this Christmas, while chemicals ﬁrm Lanxess AG has just reinstated its year-end bonus scheme as a reward for improved sales across the board. Conversely for staff at BMW and Daimler – two of Germany’s leading luxury car makers – Christmas breaks at their German factories in Dingolﬁng and Leipzig (BMW) and Hamburg (Daimler) are being shortened in order to cope with the surging seasonal demand for new models of the BMW 5-Series and the Mercedes E- and S-cLass. With Christmas accounting for one quarter of all retail revenue throughout Europe, the festive period has traditionally been used as an accurate bellwether with 07/12/2010 15:02 “Germans have decided that their days of frugal savings are behind them, and will have spent €76.9 billion over November and December by the end of the year” which to measure consumer spending, the strength of the economy and the likelihood of future growth or stagnation. The average spend is expected to be around €593 per adult, with the Dutch spending the least per individual in Europe, at just €442. In the UK, Christmas spending will reach €737 billion according to Deloitte, which will represent a one percent increase on last year. Denmark will see the biggest drop in Xmas expenditure, with sales expected to be down by 3.2 percent on last year, while Ireland (-2 percent) and Spain (-1.2 percent) will also join the ranks of nations still in the grip of the downturn. Despite early economic indicators at the start of the year that 2010 would see almost all of Europe drag itself out of recession, a June downturn across the continent has prompted many industry watchers to view the Christmas season with a measured dose of trepidation. Deloitte’s ﬁndings, while unsurprising, reﬂect the tough nature of the past 12 months, with only Germany, Sweden, Switzerland, Luxembourg and possibly France and the UK given any cause for cheer. Online sales surge Whether it has something to do with Britain’s unpredictable weather, its packed shopping centres or the cost and stress associated with getting in and out of British city centres around Christmas, but UK shoppers will dominate the online retail space, both in terms of total expenditure (estimated at €13 billion) and as an overall percentage of Christmas sales (16.8 percent of all Christmas spending in the UK will be transacted online). Comparatively, Germans will spend just €8.2 billion online, and the French only €6.3 billion. In terms of overall share, Italians and the Spanish will spend just 1.5 percent and two percent respectively online, so maybe it is the weather, after all! Research from shopping comparison website Kelkoo shows that Cyber Monday – the day when Christmas shoppers purchase record numbers of festive gifts online – fell on Monday 29th November this year, when an estimated £11.5 billion was spent on goods. Conversely, ‘panic Saturday’ is expected to fall on December 18th, the last Saturday before Christmas, where it is the turn of the high street to experience a peak in sales as buyers raid the shelves to the tune of £764,000 per minute. The gift of giving Across Europe, two-thirds of all festive expenditure will go on gifts (62 percent), with food and drink costs trailing a distant second (26 percent of the Christmas budget), followed by travel costs (six percent) and Christmas decorations (ﬁve percent). The most popular items on people’s shopping lists remain fashion items such as clothing, footwear and accessories (fashion gifts will account for 29 percent of the festive gift budget), followed by electronic gadgets (24 percent), toys (18 percent) and cosmetics (eight percent). Europe’s big Christmas spenders Despite the UK’s smaller population and lower GDP per capita when compared to Germany (GDP in the UK averages €24,250 while Germany’s is €32,570), the country still leads the way for total Christmas expenditure. Which begs the question – do goods cost more in the UK than elsewhere on the continent, or is Christmas more of a marketing-driven behemoth in Britain than anywhere else in Europe? CXO’s money is ﬁrmly on the latter. Estimated Christmas sales for 2010 (€ billions) UK: €77.15 Germany: €76.9 France: €62.45 Italy: €44.31 Spain: €31.22 Netherlands: €12.30 Sweden: €9.57 Norway: €6.10 Denmark: €5.41 Upfront.indd 17 07/12/2010 15:02 BUSINESS STRATEGY 18 Asian Expansion T he West’s dominance of the business world is universally heralded. It is evident in the type of language we use when discussing the global markets – the East is said to be ‘growing’ when, in truth, it is re-emerging to the stature it enjoyed back when it was able to exert its inﬂuence throughout the world, many centuries before Europe had even set the wheels in motion on its Industrial Revolution. Even the term ‘the East’ is a European construct, used to denote far away lands that were to the east and far-east of the perceived centre of the enlightened world. This language has been employed as a dovish control mechanism for centuries, and as such is unlikely to be supplanted at this advanced stage by something inherently fairer or more accurate. However, Asia’s current march towards becoming the leading global economy is unprecedented, most pertinently in the way that it will shift focus from West to East; a tangible supplanting that has already encouraged thousands of companies to proactively engineer for themselves an advantageous position that will enable them to expand into the growing Asian market in the years to come. The IMF already predicts that Asia’s economy will, by 2030, be larger than the G7 and half as big as G20. Already India sends more than two thirds of its exports to markets other than Europe and the USA, and China is the biggest importer of Brazil’s exports, which are the primary natural resources that are fuelling China’s bullet-fast growth. Expanding into Asia, though, is not simply a case of ‘ﬁrst come, ﬁrst served’. The East is not waiting desperately for jaded middle managers from Europe to drop by to spread their European expertise: it has its own ideas and synergies, its own innovations and business models, its own technologies and its own ambitions. But it also has its own skills and knowledge shortages; it will make the mistakes normal for a growing economy, and it will call upon the assistance and collaboration of other markets for help. This is where the chance lies for European businesses hoping to make the most of this immense opportunity to secure for themselves a foothold in the most energised economic landscape on the planet. Businesses in Europe should not be daunted or dismissive; they must instead be ready, willing and able to adapt to change and share their ideas with their Asian counterparts, and here are ﬁve steps on how to do it. Upfront.indd 18 Export knowledge and innovation The days of the West innovating and the East delivering are ﬁrmly on the wane. Aside from Japan – routinely classiﬁed as a proxy Western country despite its geographical location – the East has traditionally adopted the role of engine room, whereas the coming shift will see it as more of a driver, as indicated by statistics published in the European Commission’s ‘The World in 2025’, which predicts that China and India will fund 20 percent of the world’s research and development by 2025. Such spending will naturally require a skills set to implement it, so innovative European companies should be looking to export their knowledge to the East now in readiness for the cutting-edge thinking that will shortly be in high demand. 07/12/2010 15:02 Study your consumer Consumer wealth will grow at an unprecedented rate in the East, which will create exceptional marketing opportunities for European companies to take advantage of. But businesses should not simply expect consumers from the East to want exactly the same product as their Western counterparts. There are huge regional and cultural differences to be taken into account, in addition to socioeconomic concerns too. A perfect example is Nokia’s 1100 handset, introduced to a grateful Indian public who love its dust-proof cover and powerful ﬂashlight – disposable incomes may be increasing to levels where the general populace is able to afford a mobile phone, but infrastructural shortcomings still abound in a market as large and diverse as India, so the ability to tailor your product to account for these will see your company succeed where others founder. Cultivate your culture Your own employees must be trained to discard their preconceptions about doing business with the East. While cut-throat, free-marketing practices and timely, formal and decisive business meetings are the order of the day in the West, Eastern businessmen and their customs can often be disarmingly different, so it pays to know who you are dealing with and the cultures of which you will need to be aware. Diligent homework, an open mind, patience and deference are all virtues that will set you in good stead in your dealings with Asian decision makers. However, do not let the scale of the possibilities force you to abandon your own business sensibilities in pursuit of the big bucks: it might well be your unique ‘European-ness’ that piqued the interest of the East in the ﬁrst place. Adjust output expectations China, India, Pakistan, Indonesia and parts of Southeast Asia will all experience massive economic growth over the next decade. This growth will be at times searing and at times stuttering, so your business must be prepared and able to respond to peaks and troughs in demand. For example, energy shortages will become common, so the region will – as the West has done – begin to place greater emphasis on securing reliable sustainable energy sources. If your company can bear this in mind when planning its future distribution and consumption patterns, it can navigate its way through what are sure to be turbulent times ahead. Upfront.indd 19 Mitigate risk In addition to power outages, there will be numerous other snagging points that Asia’s economies will have to overcome as they become diversiﬁed, wealthier and more progressive. One of these is likely to be political instability, but this should not be a reason to dissuade your business from expansion. If you can implement and entertain on-the-ground dialogue with potential business partners now, in times of stability, you will be better equipped and better informed when (or if) the political landscape goes through the wringer. This attitude need not be seen as gung-ho if risk is mitigated carefully and effectively. It will also give your business a head start in the race to root your business in the burgeoning Asian economic renaissance. 07/12/2010 15:02 NEWS IN BRIEF 20 Looking New smartfor costphones set to eat effective user at Apple’s core authentication? Go mobile with Tectia P A new batch of offerings from smartphone market leaders is expected to knock Apple’s ubiquitous behemoths from top spot. Expectation is especially high for the new Nokia N8, Blackberry torch 9800 and Windows Phone 7. Nokia has revealed that its N8 smartphone has received the largest number of pre-orders in the company’s history. The N8, previewed back in April, is Nokia’s latest ﬂagship smartphone and runs the latest edition of the company’s homegrown mobile operating system, Symbian^3. With Apple’s iPhone Operating System and Google’s Android Platform cornering the market, interest in Symbian has been waning in recent years, and many believe that the N8 represents Nokia’s ﬁnal attempt to gain ground in the smartphone market. With its recent CIO change, Nokia is seen as the rising star of the market, but a failure of any magnitude could even see the company abandon its own platform in favour of Google’s excellent Android smartphone operating system. The newly launched Blackberry Torch 9800 has been completely redesigned with a touch screen, sliding keyboard and optical trackboard. It runs on the new OS 6 with improved consumer features, including a 5.0 megapixel camera, GPS and Wi-Fi connectivity. Using Microsoft’s web portal technology, Windows Phone 7 users can edit SharePoint documents on the move, an attractive asset for any businessperson, making it another contender in the lucrative hand held devices market. Samsung and LG, however, have had a less-than successful time in the smartphone market. The company boasts a signiﬁcant one ﬁfth of the global mobile market, but less than ﬁve percent of the smartphone market, while LG’s share is even less. Upfront.indd 20 ractically everyone today owns a mobile phone. For convenience, simplicity and unbeatable functionality, why shouldn’t organisations consider providing strong authentication to online services based on the mobile phone? Providing authentication via a device that users already own offers many beneﬁts. Users can be quickly activated – in minutes instead of days or weeks; companies enjoy lower operational and maintenance costs; and stakeholders expend less effort for secure access to critical systems. Mobile authentication can take place in two ways, via an on-device application or SMS (text messaging). The former option is active and requires the end user to download an application, a procedure that may not be supported by all mobile phones. The latter method is passive, allowing any user to be quickly and easily activated. Mobile authentication is easily scalable to accommodate large numbers of users and remains the fastest authentication method to provide to remote users. Tectia MobileID is a two-factor authentication system that enhances security by requiring something that the user knows (user name and password), and something that the user has (the mobile phone). This innovative solution uses the most readily available and easy to use authentication device – the end user’s existing mobile phone – to provide a token-less solution that requires no installation of any applications, offering the easiest and fastest route to secure user two-factor authentication. Why not get on the fast track to remote user authentication today? For more information visit www.tectia.com 07/12/2010 15:03 TECTIA_AD.indd 1 30/11/2010 13:53 CEO STORY INSIDE the CEO brain 22 Brain scans could reveal who makes a good CEO, a team of scientists led by a British businessman has revealed. Sir John Madejski has undergone a series of scans at the University of Reading to try to work out if science can be applied to the study of leadership. A group of neurologists, psychologists and management at the UK university are collaborating for the study to examine the brains of chief executives and leaders in other ﬁelds such as military or voluntary organisations. Inside the scanner Sir John Madejski, an entrepreneur who owns a string of businesses and a football club, completed a series of tests, pressing a keypad to measure his brain activity. The results of this test and a number of others will be aggregated to try to draw out some lessons, the BBC reported. Madejski hopes to persuade other business tycoons to undergo similar tests. Earlier this year scientists claimed brain scans could also help people choose their career paths. Researchers used an MRI scanner to study the brains of 40 volunteers seeking career guidance. They then compared the results to the participant’s ability to do different tasks. The results, from the University of California, showed that the amount of grey matter – parts of the brain used for storing information – showed how good the volunteer was at different tasks. Using technology to examine what makes a good leader is nothing new, with organisations for many decades using psychometric testing to help choose candidates for senior positions, and to try to ﬁnd out what makes a good leader. But psychometrics is a controversial science as some critics suggest it makes claims that cannot be substantiated. Psychometric testing Psychometric testing is used by more than two thirds of medium-to-large employers on prospective graduates. However, at least 5% of graduates have admitted to cheating, with another 17% saying they would cheat if they knew how to get away with it. (Source: PRWeb UK) Upfront.indd 22 07/12/2010 15:03 Loyalty counts 15 of the 100 CEOs in Chief Executive magazine’s CEO Conference Index joined their companies directly after graduating from college. • An additional 35 started their professional careers at the company they currently lead. • Not one CEO on the list has been with more than ﬁve companies in the span of their career. • 31% have been with only one other company, 12% with two other companies, and 13% with three or more. Wise head The average age a CEO in 2009 was 52.9, nearly two years older than the average 51.0 years of age, which has held steady over the last decade. In the UK, the incoming CEO class has an average age of 48.6 years, a report by Booz & Co found. Mark Zuckerburg, the inventor of Facebook, is the world’s youngest billionaire at 26. The average age of CEOs who founded high-tech ﬁrms between 1995 and 2005 was 39, research by the Kauffman Foundation has shown. A report in USA Today said that S&P 500 companies run by the youngest CEOs have been outperforming those run by the oldest. Boards tend to hire CEOs whose age is similar to theirs, a US report in the Journal of Management and Governance demonstrates. Heads up Out of the Fortune 500, the average CEO is just under 6ft tall. Virgo-ing hardwork Virgo is the most common zodiac sign among billionaires, at 12%. (Source: Forbes in 2006) It’s a man’s world In Germany, women in Europe’s largest economy earn on average 23.2 percent less than men at CEO level. Upfront.indd 23 07/12/2010 15:03 NEWS IN BRIEF 24 Breakfast meetings make long lunches toast A OnePoll survey in the UK has revealed that morning breakfast meetings have replaced traditional lunchtime meetings as the businessperson’s preferred get-together timeslot. The survey found that 67 percent of polled workers valued breakfast meetings over lunchtime ones for the generally positive outcomes they generated, with the majority commenting that they felt much more alert in the morning. Additionally, 60 percent of those polled said that morning meetings were becoming more commonplace in the wake of the recession, as bosses try all they can in order to extract more productivity from their staff. The poll also surveyed workers on their breakfast habits in general and found that 79 percent regularly eat breakfast during the working week, claiming that in doing so they felt more alert and productive at work. More than half of those surveyed said they were more likely to arrange an early morning meeting, and a quarter admitted they have cancelled an afternoon meeting because of fears over their own levels of concentration and fatigue. Additional revelations from the 3000 workers polled in the OnePoll study include 42 percent of employees who regularly attend meetings over breakfast, 36 percent who believe it is easier to track someone down before 11am and one in 20 admitting to holding job interviews over breakfast. Upfront.indd 24 Servicing the EPM world F or over 10 years, Infratects has built a solid reputation in delivering consulting services in the Enterprise Performance Management market. Delivering and implementing tailormade Infrastructure designs to fulﬁll today’s requirements and ensuring each environment that is delivered can be maintained and supported with the skills available at our customers. For the technical implementation of their EPM environment, ING chose Infratects. “On one hand they know Oracle Hyperion software inside out; on the other they have deep technical infrastructure knowledge. They have specialised in a niche and are very good at it. Above all they have many large corporations as customers and are capable of working at our level. We have completed many projects with Infratects, always to complete satisfaction. It was therefore clear who our implementation partner would be,” said ING’s EPM Project Manager. With increased business requirements for high availability, fast close and reporting capabilities, combined with new software releases, the requirement for specialist EPM skills gets more and more demanding. Infratects has therefore seen an increased request for outsourcing the support and management aspects of its environments and for full outsourcing (hosting) over the last two years. Established with one goal in mind, Infratects always invests in talented IT architects with slightly different capabilities who are capable of designing, implementing and managing any IT infrastructure. Through understanding the technical and business requirements, Infratects continues to deliver tailor-made solutions for each customer. Delivering a hosted EPM environment needs insight into not only the IT Infrastructure or the applications used; it requires an understanding of the client and their processes. “We set Infratects a challenge; Deliver a fully functioning hosted Hyperion environment with our applications migrated into it within two weeks. They were able to achieve this with signiﬁcant performance improvements as a bonus,” remarked the CIO of the Minerals and Metals Group. Please visit www.infratects.com for more information. 07/12/2010 15:03 EPM Solutions Installations, Support, Management and Hosting â€œWithin 2 weeks Infratects delivered a hosted Hyperion environment containing our migrated applications. The significant performance improvement was a bonus.â€? CIO Minerals and Metals Group Infratects is located in The Netherlands, United Kingdom and Australia +31.88.2380800 INFRATECTS_AD.indd 1 firstname.lastname@example.org http://www.infratects.com 03/12/2010 09:19 RECOVERY SPECIAL Can something as simple and low-impact as the humble hamburger help Greece out of its economic woe? estly Greece has a ton of opportunities; Geographically it’s an unbelievable country – it’s just been so plagued by mismanagement from the government. The economic problem in Greece is almost entirely created by a government that spends ruthlessly and provides almost no services. But underlying that is a country of very hardworking people. I mean, the people that work for me work hours that I’ve never asked them to work. They just work because they like what they’re doing, because they believe in our simple goals. I think this country has a lot of untapped potential. Of course, the environment’s extremely difﬁcult right now because taxes are high and getting worse. People need something to believe in, and at Simply Burgers we’re not selling rocket ships or sending people to the moon or anything like that. We’re just ﬂipping burgers, but doing so in a way that elicits purity and an overall goal. I’ve got guys that are putting in 80-hour weeks because they like what they’re doing, and they’re working so hard to get ahead. And I didn’t see that when I was in the USA. I didn’t see that type of hard work and enthusiasm that’s not tied to getting a huge bonus at the end of the year. It might just, says Brian Karey, co-founder of Greek chain Simply Burgers and 2008 winner of the Stelios Award for Young Entrepreneur of the Year in Greece. He told CXO how simple ingredients, fresh management and a relish for hard work can go a long, long way. 26 010 was an awfully tumultuous year for Greece. The European media rounded on the country in April, when it became clear it was about to default on its deﬁcit repayments and would require a bailout from its fellow eurozone members. Not a great situation for any party involved, but the resulting sniping at Greeks’ way of life – they were derided as workshy, lazy and proﬂigate by media outlets throughout Europe – stung more than the ﬁnancial pain ever did. Greece is a proud nation, they say, where they play hard but work hard too. Brian Karey, a native Greek who was educated in the USA and returned to his homeland in 2004 to set up the Simply Burgers chain with his brother Aris, watched the situation unfold with increasing incredulity. 2 So, Brian – in your experience as an entrepreneur in Greece, how inaccurate have the reports about Greeks’ work ethic been? Greece has a long history where the best possible scenario for young people was to get into the public sector, because it was a job for life and they didn’t really have to work too hard once they got in; which is one of the reasons why we’re in such a big mess here. People have to realise that you have got to hustle and just get out there and make it happen for yourself. But I think hon- Upfront.indd 26 Obviously your knowledge of the Greek market had a bearing on your decision to start a business in Athens, but how easy was it to get things moving? A combination of things happened. I started the venture in 2004, when Greece was on a good track. The economy was growing. A lot of EU money was coming in. This was the period before the Olympics as well, so there was a lot of investment. My brother and I had a look around and decided that we wanted to do this restaurant concept that wasn’t actually based on the burger, but it was more of a grill house thing; very casual, very relaxed. We got some great initial feedback and, personally, it felt like I was combining a great opportunity with having fun, too. What we do is quite simple. We haven’t revolutionised much, but we try to do everything in its basic form and do it very, very well. So we started off saying we’re not going to turn into a typical restaurant chain that standardises its food quality by over-processing its food. We stuck with fresh ingredients, making everything in the store and basically making a burger the way we would want to eat it. So it’s just staying true to our core value, which means keeping the food real. We don’t sell healthy food. We sell very good food. But we make it with real and very high quality ingredients. Speaking of ingredients, what has been the key ingredient behind your success? The thing that has allowed us to be successful is the fact that we have a team of great guys. We started off small and the pieces have kept falling into place, so it was easy to just keep moving along, opening new stores, training new staff. And happily it seems to be working out. We are now up to 18 restaurants, and they’re going to generate about €20 million in sales this year. We have tripled in the last two years in store count, and 07/12/2010 15:03 tripled in proﬁt margins too, all thanks to the hard work of our staff. The largest networking site for online professionals, LinkedIn has made its second acquisition, a website for reviews of business service providers, ChoiceVendor Inc. The San Francisco based start-up ChoiceVendor was founded in 2008 by two former Google employees. The site provides customer reviews about accountants, call centres, payroll services and other vendors. LinkedIn did not disclose ﬁnancial terms of the deal in their statement, released September 10, 2010. $13M The deal is the second part of Linkedin’s effort to add talent and technologies from outside the company. The ﬁrst was mSpoke Inc, a recommendation technology, acquired for an undisclosed amount in August 2010. Co-founders of ChoiceVendor, Yan-David Erlich – a former product manager at Google and the creator of instant-messaging service Social.im – and Rama Ranganath – a former engineer at Google and Microsoft – will be on board with the LinkedIn team. This will add to LinkedIn’s predicted work force of 900 by the end of this LinkedIn now year. The company generates most of its revenue from advertising and has more than employee recruiting services it sells 85 million to businesses. Although the company members keeps its ﬁgures under wraps, research ﬁrm Global Silicon Valley Partners estimates LinkedIn’s 2010 revenue to reach $228 million and pegs the company’s valuation at $1.87 billion, Bloomberg reports. RECOVERY SPECIAL Such growth has attracted the attention of fellow Greek entrepreneur and easyJet founder, Stelios Haji-Ioannou, who awarded you Greece’s Young Entrepreneur of the Year Award for 2008. How has being recognised by the Stelios Foundation helped the business? Well it hasn’t changed anything from an operation perspective. We were doing what we do before we met Stelios, and we have been doing the same thing since – just getting out there and conducting smart, clean business. But what I think it has helped with is creating a positive impact on our recognition in the local market, and it has also qualiﬁed our efforts. It has really tied the team together, kind of like a big pat on the back for the good work they have done. It showed them that getting recognition from somebody like Stelios meant that we were doing stuff on a world-class level. In a wider sense, it has brought a modernised view of entrepreneurship to Greece. In general, one of the issues with Greece is that business is traditionally done by older men who smoke cigars. I mean, that’s the view of Greeks on businesspeople. Because of our very leftleaning political views as a country in general, business is often associated in a negative sense. And although many Greeks are sort of natural entrepreneurs – like small business owners and stuff like that – young entrepreneurship is something that is unusual, so awards like this help to bring a more positive spin on entrepreneurship. It will hopefully inspire young Greeks to go off on their own. So I think over time, Stelios’ efforts are going to be rather signiﬁcant. The country’s quite small, after all, so it doesn’t take much to set things in motion. LINKEDIN BUYS CHOICEVENDOR INC. 27 This news comes as LinkedIn launches a new campaign to help existing and prospective users by promoting themselves as ‘brands’ to increase employment potential. BrandYou, launched on November 16, aims to connects users across Europe with discussions from advertising and marketing experts on how better to promote themselves in the job market. The BrandYou Board is made up of Saatchi & Saatchi media and innovations director Andrzej Moyseowicz, Publicis Worldwide global planning director John Woodward, David Midgely, professor of marketing at graduate business school INSEAD, and Katie Ledger, communications coach and author. Upfront.indd 27 07/12/2010 15:45 UPFRONT 138 RECOVERY SPECIAL News eats itself 28 Sales of newspaper apps on gadgets like iPads cannibalise sales of newspapers, James Murdoch, head of News Corp’s operations in Europe and Asia has said. Murdoch said that newspapers affected include Britain’s best selling Sunday tabloid, the News of the World as well as popular titles The Wall Street Journal and The Times of London. Murdoch, son of Rupert and likely heir of the News Corp. empire, noted that the switch to iPad and other mobile reading apps has a direct effect on newspaper sales. He said that the apps were “much more directly cannibalistic” than websites, as subscribers read the apps in a manner similar to how they read traditional newspapers. News Corp. caused a stir earlier this year after closing its free websites for The Times of London, the Sunday Times, and News of the World. The British newspaper group lost “up to 90 percent of their online readership and now have 105,000 paying customers, including those who had bought the iPad and Amazon Kindle apps,” Reuters says. James Murdoch welcomed the opportunity to sell through Apple’s iTunes online store, despite the fact that Apple takes 30 percent of the publisher’s revenue. “We go to the iTunes store because it’s frictionless. They charge a percentage but the guy on the newsstand and the newsagent charge a percentage, and they don’t even merchandise it properly,” he told the Monaco Media Forum. Apple began selling its tablet computer in April 2010 and had sold 7.5 million by the end of September. Other manufacturers have responded with their own tablets but have as yet failed to outdo the iPad. Network security threat that will pose serious risks for organisation’s digital assets worldwide The good news is that this bittersweet discovery is not a new exploit or vulnerability because there are enough existing ones to be worried about – STUXNET, ZEUS,CONFICKER,SASSER etc. – you name it. The bad news is that the discovery will signiﬁcantly improve the success rate of delivering those attacks to the targets by cyber criminals and hackers. Essentially, AETs provide today’s cyber-criminals with a master key to access any vulnerable system as ERP and CRM applications and data servers by bypassing today’s network security systems without leaving any traces. As a result, companies may suffer a signiﬁcant data breach including the loss of conﬁdential corporate information. Additionally, these types of AETs could be used by organised crime and cyber terrorists to conduct illegal and damaging activities. Upfront.indd 28 Back in 2007 Stonesoft began putting more R&D effort in evasion research. There was a strong belief that the current way of building protection against evasion techniques was neither right nor sufﬁcient. The ﬁrst R&D results surprised all. They discovered that by using combined and more advanced evasions they could bypass the detection without leaving any traces. The ﬁrst question was, is this vulnerability universal? How about other security solutions from other vendors? They installed many of the leading network security devices into the very same test environment to see if the problem exists with them as well. It did. And if evasions work so effectively remaining invisible to security systems there is no question if criminals with high stakes and motivation are using them. For more information, please visit www. antievasion.com. For more information on Stonesoft’s Antievasion Ready StoneGate Solutions, please visit www.stonesoft. com. 07/12/2010 15:03 IF YOU CAN´T DETECT YOU CAN´T PROTECT. ARE YOU FIGHTING BLIND AGAINST INVISIBLE? LET´S KEEP HACKERS OUT OF BUSINESS. AT LEAST FROM YOURS. Advanced Evasion Techniques make cyber criminals and hackers invisible while attacking your digital assets in computer networks. Using AETs, over 99% of the current network security devices can be rendered ineffective and bypassed without leaving any traces. Anti-evasion ready StoneGate 5.2 Intrusion Prevention System equipped with StoneGate Management Center puts you back in charge. It offers an effective and dynamic protection even against advanced evasion techniques. For more information, visit: www.antievasion.com email@example.com www.stonesoft.com Stonesoft.indd 36 06/12/2010 14:11 Around the world in 80 days INTERNATIONAL NEWS Our guide to the last quarter’s global events – and their impact on your business. 30 USA Private equity ﬁrm 3G Capital has bought Burger King in a deal thought to be valued at $3.26 billion (€2.55 billion). After being ﬂoated on Wall Street in 2006, the fast food chain has been the subject of a number of takeover speculations since being bought by a group of private equity ﬁrms in 2002. The group, which still owns 31 percent of Burger King shares, comprises Goldman Sachs Funds, Bain Capital and TPG Capital but has been usurped by New York-based 3G Capital, who have bought the shares at $24 a piece following a 15 percent surge in share value in September. Burger King is the second largest hamburger chain in the world after McDonalds with 12,100 global outlets, but has struggled during the economic downturn. Upfront.indd 30 Ireland Ryanair CEO and jobbing mouthpiece Michael O’Leary has caused more controversy – and skilfully claimed yet more free publicity – by calling for the abolishment of second pilots on planes in a bid to cut expenses. Talking to Bloomberg Businessweek magazine, O’Leary ﬂippantly suggested a souped-up stewardess could take over should the sole pilot suffer a heart attack. “Really, you only need one pilot. Let’s take out the second pilot. Let the bloody computer ﬂy it. If the pilot has an emergency, he rings the bell, he calls her in, she could take over.” The British Airline Pilots’ Association (BALPA) was quick to condemn O’Leary’s comments, calling them ‘unwise and unsafe’. Germany Germany’s recovery from recession was further cemented this autumn when ﬁgures from the country’s Federal Labour Ofﬁce showed that unemployment ﬁgures fell for the 14th quarter in a row, to just 3.193 million. The seasonally adjusted decline in unemployment was 17,000 which, although slightly lower than the Reuters-predicted fall of 20,000, was still far better than any other country in the Eurozone, and prompted economists to predict a surge in spending among the German population as conﬁdence in job security returned. 07/12/2010 15:45 Italy China Italy’s Finance Minister has admitted that the country needs to be more competitive if it is to improve upon its sluggish recovery rate. ‘Limitless potential’ in the Chinese market has compelled SAP AG’s co-Chief Executive Ofﬁcer, Bill McDermott, to view China as ‘a second home’ for the company keen to tap into the country’s growing appetite for management tools and business intelligence. Giulio Tremonti told the Financial Times he was conﬁdent the country’s €25 billion ﬁscal consolidation program will prove a success despite fears surrounding Silvio Berlusconi’s crisis-hit government. However, Tremonti recognised that Italy’s structural and nuclear shortcomings left the country uncompetitive economically. “The Italian economy must become more competitive,” he told the Ambrosetti Forum in Cernobbio. “The structure of our economy is good; we have the secondlargest manufacturing base in Europe after Germany, and sound banking. But we don’t have civil nuclear power.” Upfront.indd 31 Since purchasing Sybase Inc. in July for $5.8 billion, SAP has decided to focus on organic growth rather than acquisitions as it expands into the mobile application market. The company has highlighted the world’s fastest growing economy as the perfect market for its expansion. “The potential here [in China] is just thrilling,” said McDermott in an interview with Bloomberg Business. “We want to treat China like a second home, because if you look at the market, the fantasy of what we could achieve here will exceed anything that a CFO could put on a spreadsheet.” Australia Australian Prime Minister Julia Gillard ﬁnally managed to claim a second term in ofﬁce in early September on the back of securing the support of the country’s independent lawmakers, enabling Gillard to form a minority Labour government in the wake of losing her majority during the ﬁrst round of elections in the summer. However, Gillard’s grip on power is negligible at best. She has just one majority seat in parliament, and four of the ﬁve cross-bench MPs have stated they would support a stable Labour government but would not pledge support for Labour policies in general. “This parliament is going to be different and no one party has dominance over the executive or the parliament,” said independent lawmaker Rob Oakeshott to parliament house. 07/12/2010 15:45 Focusing NEWS IN BRIEF T T on international connectivity raditionally, datacentres hold a focus towards local solution development and the region they apply to. But shouldn’t borders be expanded more in the worldwide economy we’re living in today? he Amsterdam based RSN Group, with its own GYRO Center Datacentres and ReasonNet ISP (www.reasonnet.com), believes the industry should. Focusing on crossing international borders for large enterprises, they are functioning as a key specialist for European corporations with hosting and data housing needs in North and South America. Gerben Ras, CCO at the GYRO Center, is passionate about this decade long strategy. ‘The Dutch have a longstanding tradition in international trade, it’s a rewarding focus, as we manage to remove obstacles for clients that often stand in the way of productivity. All solutions are turnkey: need a private data suite in New York or Suriname tomorrow? We’re able to deliver incredibly fast. That’s pretty unique.” And it’s true, as there’s more to it than connections alone. International partnerships with other datacentres, differences in legislations and permits. The GYRO Center has worked its way through all these aspects and now holds points of presence in New York, Miami, Los Angeles, the Dutch Antilles, Suriname and other 32 stronghold locations in the U.S., the Caribbean and South America. “We’ve developed so much more than hosting and housing solutions alone,” said Director of Marketing Dennis Gerritse. “International VoIP platforms that connect immigrant markets to home markets, partnerships with peers and experts such as WebAir.com in New York City and Telesur in Suriname, our clients are more and more able to pick the low hanging fruit.” It’s the world of international trade that ﬁres this datacentre organisation. The strategy of being an Atlantic hub for large corporations is paying off. There’s a reason for tradition; sometimes it just ﬁts the need. For more information, please visit www.datacenter-amsterdam.com/welcome-to-holland If you thought computers couldn’t get much smaller, think again. A SWEET pioneering research effort by IBM scientists has revealed they FROM IBM are able to shrink the world’s most powerful supercomputer processors to the size of a sugar cube. credentials. Dr Bruno Michel, a lead researcher at the Big Blue’s Zurich labs, said that a prototype model has already been built, demonstrating a water-cooling system that could be used on supercomputers. SOLUTIONS Upfront.indd 32 Aquasar, as the machine has been dubbed, has processors stacked on top of each other being cooled by water ﬂowing between each one. IBM estimates that the device is almost 50 percent more energy-efﬁ ergy efﬁcient than the world’s leading supercomputers. rs. The reason behind such shrinkage are wholly beneﬁcial – the move would reduce these machines’ energy consumption, so – rather than producing nothing more than a mini device – IBM sugar cube computers could help reverse the insatiable energy consumption of the modern computer. Indeed, with some two percent of the world’s total energy being consumed by building and running computers and equipment, this move is more than welcome. The machine works on the idea that the cause of the energy costs of computers is the cooling g process, as computers generate a large amount ount of heat as a side effect. Until recently, the supercomputer that topped the list could do around 770 computational operations for one watt of power. Aquasar can do nearly half as much again, boasting 1.1 billion operations. According to BBC News, researchers at IBM Zurich labs made the claim, stating that a future supercomputer’s cost will not depend on expense, but its environmental Now this has been built, the next step is to shrink it. IBM predict the process could d be achieved within the next ten years. 07/12/2010 15:03 The new communication paradigm facing businesses: the art of conversation For more information, please visit www.genesyslab.com Upfront.indd 33 World domination? Facebook likes this F acebook mastermind Mark Zuckerberg has indicated yet more desire to take one step further toward world domination by introducing Facebook mobiles after it was announced that the company has now surpassed Ebay in terms of overall value. The founder of the world’s largest social network site has unveiled Facebook’s ‘Mobile Platform’, a new system that will let anyone sign up for – or log into – any mobile app using their Facebook credentials. If widely adopted this platform would extend the dominance of Facebook’s OpenID-like universal web login to the entire, rapidly growing mobile platform. Facebook Inc.’s estimated worth takes it to the number three spot in U.S. web companies. Bloomberg estimated its worth at approximately $41 billion, trumping EBay’s $39.3 billion valuation on the Nasdaq Stock Market. Amazon.com Inc takes second spot, estimated to be worth $74.4 billion, while Google Inc., is the most valuable U.S. Internet company, valued at $192.9 billion. By enabling users to post anything from their breakfast menu to honeymoon photos on their proﬁle, Facebook has attracted more than 500 million users worldwide, and is followed slavishly by a whole host of advertisers hoping to draw them in. Facebook has previously shot past other Internet giants such as Web portal Yahoo! Inc and travel site Expedia Inc. and tripled in value on New York-based SecondMarket, according to Bloomberg. UPFRONT NEWS usinesses are starting to come out of one of the worst international recessions ever experienced to ﬁnd that over 50 per cent of the world’s population is under 30-years-old and driving a shift to a new business communication paradigm. Recent product launches from Alcatel-Lucent Genesys are enabling businesses to conduct ‘conversations’ with their customers and capitalise on new revenue opportunities. As the economic backdrop starts to normalise, businesses are re-focusing their priorities from reducing costs to growing revenue. However, as Generation Y – or the Millennials – becomes a more signiﬁcant customer and employee segment, its practices and preferences have greater inﬂuence on business strategy. The increased mobility/sociability of customer communication, driven by Gen Y, is disrupting traditional business models and pulling down the walls around the ‘contact centre’ model for customer service. Organisations must leverage their entire enterprise towards the customer experience, which requires a fundamental shift in management, organisation and engagement. Social media is a highly conversational environment where individuals connect with others and contextualise their lives by sharing not only thoughts and preferences, but also experiences (eg videos) and discoveries (eg hyperlinks). These online conversations have signiﬁcant context surrounding them, which is obvious to all their peers. Businesses need to ﬁnd a way to get themselves into the position where they can identify, understand and apply context in their own conversations. Consumers come and go from conversations as they wish, but implementing that into the customer experience requires greater synchronisation across the enterprise to remember what happened minutes, hours, days or even weeks ago – and then apply it. Alcatel-Lucent Genesys is ideally positioned to help businesses achieve this, by increasing both customer and employee engagement within a dynamic enterprise. Customer engagement is clearly beneﬁcial, but realising that 80 per cent of an organisation’s knowledge exists inside the heads of its employees makes encouraging innovation and integrating them into the process essential. At its recent Dynamic Enterprise Tour event, AlcatelLucent Genesys demonstrated how businesses can conduct a continuous conversation with customers, by enabling enterprise-wide involvement. 33 07/12/2010 15:03 COMPANY INDEX Q4 2010 Intelligent invoicing: electronic invoicing that suits everybody NEWS IN BRIEF Businesses can achieve savings of up to 90 percent by switching to electronic invoicing, but what about businesses that are not ready to go digital? 34 R icoh Europe, recently recognised as a leader in Managed Print Services by analysts Gartner, has launched a service to help businesses move from paper to electronic at their own pace. Ricoh’s intelligent invoicing (i-invoicing), an outsourcing service that forms part of its Managed Document Services, takes e-invoicing a step further by including both paper and digital invoices. The end result: businesses continue to invoice in a way that suits them – via email, the web, fax, PDF, or post – while Ricoh manages the entire invoicing process, allowing them to beneﬁt from the signiﬁcant savings electronic invoicing brings. “Because i-invoicing can include a mixture of hard copy and electronic invoicing, the service makes full use of Ricoh’s strengths, both in print and IT services,” says Martin Hurley, Vice President and General Manager, Outsourcing Services, Ricoh Europe. “With Ricoh’s unparalleled experience in knowledge management, our global footprint and security credentials, customers can have the peace of mind that they are working with a trusted business partner.” Ricoh Europe already processes millions of invoices a year for its customers, including for a leading global sportswear manufacturer. Sending out 4.5 million invoices on paper each year, the manufacturer’s annual invoicing process added up to €4 million. With Ricoh i-invoicing, the target is to migrate 80 percent of invoices away from paper, resulting in an expected annual saving of €3 million. An online calculator has been created to estimate savings a business could make by switching from paper to i-invoicing – visit www.ricoh-europe. com/i-invoicing form more information. Upfront.indd 34 Active Power Avaya Bleu Marketing British Museum Carlsberg CBI Centric Solutions Clarity Systems College of Public Speaking Compuware Corning CPA Australia Draka Emerson Network Power Employers Forum on Age Europcar Expand Networks First National Bank Genesys Lab GMC Software Tech HP IDC IGEL Infratects Illuminate KPMG Nimbus Nexans Nacro Philips Photizo Group Primark Qurius Quest Software Ricoh Europe Reasonnet Schneider Electric Simply Burgers Sitel Stonesoft Tectia Thor Data Center Thought IT Trillium Software UNLOCK Vattenfall Virgin 73, 74 127 84 120 104 36 74, 77 64, 65 132 112, 113 74, 75 140 102, 103, 107, IBC 74, 80 36 98 12, 51, 136 124 33, 43 118, 119 4, 96, 97, OBC 52 128, 129 24, 25 8, 63 60 134, 135 6, 74 44 68 94, 95 138 8, 58, 59 2, 130, 131 34, 144 32, 71 89, 91, 92, 93 26 110 28, 29 20, 21 82, 83 10, 57 66, 67 44 86 114 Don’t Miss… Recovery Special (p95) Philips’ CIO Maarten De Vries (p68) Power and responsibility (p86) Hops to IT (p104) How To: Public speaking (p132) 07/12/2010 15:03 LEAD ARTICLE When I’m 65 P36 FEATURES Breaking the cycle P44 PLUS We can work it out P116 Talking tech P52 CXO 2011 RECOVERY SPECIAL A collection of reports discussing how businesses can leverage their workforce to aid Europe’s economic recovery. When i'm 65.indd 35 07/12/2010 13:30 WHEN I’M 65 When i'm 65.indd 36 07/12/2010 13:30 RECOVERY SPECIAL: WORKING PAST 65 37 As part of CXO’s Recovery Special, Ian Clover speaks with two employment experts for their thoughts on new British regulations that will scrap the default retirement age and asks: how can such a move help the economy, and what problems will it create for employers? T he Europe-wide battle against recession is currently one of the greatest threats to the stability of the continent, and it is being fought on many fronts. The issue of reducing national deficit is high on the agenda for most countries, and throughout Europe the prolongation of working life is being touted as a necessary move that will help prop up tax receipts and thus lessen the burden on stretched pension funds. One inescapable fact is that the population of Europe is ageing. People are living much longer than before, but are still retiring in their early- or mid-60s. It is a situation that has become untenable, particularly in the current economic climate, where a contracted workforce is ill-equipped to steer the Continent’s various economies through the stormy waters of high youth unemployment and a top-heavy population of retirees drawing pensions, often for 20 years or more. The Organisation for Economic Co-operation and Development (OECD) estimates that just 39 percent of Europeans between the ages of 55 and 65 currently work. Th is age bracket is even larger than the 15-24 age group; a bracket that is also suffering from high unemployment – the Statistical Office of the European Commission (Eurostat) estimates that 21.4 percent of Europe’s under-25s are currently jobless. These figures place enormous pressure on Europe’s current working-age population. The lack of jobs for youngsters is a complex issue with few quick fi xes, but governments throughout Europe believe they can at least assuage the problems caused by a capacious and burdensome retired population. In an effort to aid economic recovery and ease the weight on an increasingly constricted workforce, the UK’s Department for Work and Pensions (DWP) has set plans in motion to scrap the country’s Default Retirement Age (DRA), which currently stands at 65 for men and 60 for women, by October 2011. The DRA was introduced by the Labour government in 2006 as part of a series of employment equality regulations that have allowed employers to force their staff to retire at 65 without any need to justify their decision. Th is ruling has been welcomed by some bodies, but is seen by other campaigners as a highly principled, rather than practical, move. When i'm 65.indd 37 07/12/2010 13:49 38 RECOVERY SPECIAL: WORKING PAST 65 Rachel Krys, Campaign Director at the Employers Forum on Age (EFA), welcomes the decision. “On a purely principled level, the DRA is just wrong. It is age discrimination. It is highly unfair that individuals who, just because they hit a certain birthday, are basically sacked. They get no recourse. They cannot challenge the decision. All along, this has been a problem with the process of having a default retirement age. It is using a criteria based purely on age to make a decision on somebody’s career.” Using age as a broad-stroke bellwether of somebody’s ability to continue working has become an outmoded and anachronistic way of managing staffing levels. People throughout Europe are living longer and healthier lives. Europe-wide, the current ratio between those aged under 65 and over is 4:1, but this is predicted to drop to 3:1 in the next ten years, and 2:1 within 30 years. In the UK, the Office for National Statistics indicates there are currently 1.45 million people over the retirement age still working, a statistic that suggests those who are well enough to continue in work, choose to do so. “Lots of employers are doing very happily without the DRA,” continues Krys. “Th is proves that it is not necessary. The DRA sends the wrong message to both employers and line managers that there is a terminal point in someone’s career where they can go no further. Even within organisations that exercise the right to request to stay on past 65, the DRA still sends a very clear message that, at 65, it is a time to question your suitability to work and your When i'm 65.indd 38 appropriateness for the job.” Since the DRA was introduced, it has been challenged on a number of occasions in courts throughout the country by campaigners arguing this very suggestion. The new coalition government was quick to identify the potential benefits of scrapping the DRA, with new Employment Relations Minister Ed Davey stating in September: “With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age. We want to give individuals greater choice and are moving swift ly to end discrimination of this kind.” Krys agrees that the current regulation is one of barely disguised discrimination against older workers. “There is currently a huge responsibility on employers to manage the staff they have got. They should be constantly questioning and assessing people’s capabilities to do their job, rather than using this kind of big milestone birthday as a way of discrimination to avoid doing their own jobs properly.” The UK has one of the oldest average retirement ages in Europe, at nearly 64 for men and over 60 for women. In Poland, by contrast, it is 57 for men and 55 for women. Introduction of DRA The DRA was introduced as recently as 2006. Prior to this, there was little in the way of a formal process, and this new process was challenged almost immediately, most famously by the Heyday Challenge that argued the legality of the new regulations in 2009. Faced with such a tumultuous backdrop to the ruling, the coalition government has been more than happy to scrap it. “The new government is under enormous pressure to reduce the country’s deficit, of which 07/12/2010 13:30 RECOVERY SPECIAL: WORKING PAST 65 274,000 PEOPLE could continue in their jobs under the new rules When i'm 65.indd 39 the pension bill is a huge part. If everyone simply worked a year longer, it would knock approximately one percent off the deficit, so you’re talking about a huge benefit for society and the government if people work that little bit longer,” says Krys. John Cridland, new Director-General of the Confederation of British Industry (CBI) believes that, despite the government’s best intentions, the scrapping of the DRA addresses the wrong issues. “The government has not thought about the real-world implications of what they are proposing,” he says. “They have looked at this from a question of high principle, of fairness and equality, and with the idea of expanding the size of the labour market. I don’t have a problem with either of those approaches, but they are very macro and theoretical. “They [the government] have failed to look at this as a workplace issue, with all the implications that flow from that in terms of dealing with poor performance, retiring with dignity and management of staff and succession planning, for example.” Cridland dismisses the idea that allowing the workforce to work for longer will assist the economy as too simplistic. “I think people in the treasury have just looked at the size of the labour force and said ‘If you increase the size of the work force you can increase the rate of economic growth’…but if companies cannot change staff in a team, then customer service can deteriorate. If companies cannot bring on younger staff and give them more responsibility 39 because somebody is holding a job that they would like them to do, you get less innovation, and a whole series of individual blockages and consequences that can damage the ability of the business to perform in the way that it needs to.” Countering Cridland’s fears that extending the working lives of older employees has a negative effect upon the job prospects of the next generation of young workers, Krys argues that an experienced, committed and knowledgeable workforce, comprising a fair percentage of those beyond current retirement age, is actually a boon for companies. “The market does not operate like that. It isn’t a onein, one-out market. The types of jobs that older people are doing are not the types of jobs that young people are trying to get into. In fact,” continues Krys, “if you look at OECD figures, in countries where they have a higher labour market participation of older people, they also have lower youth unemployment. At EFA, we did some work with McDonald’s – who have increased participation of the older age group – and then analysed the impact that has had on individual teams within their organisation. We discovered that teams with a more diverse workforce were much more productive and higher scoring, and were actually creating more jobs than teams that were manned purely by people who were younger.” Figures from the UK’s Office of National Statistics back up this report. The group of workers of post-retirement age, they claim, is the only one to experience an increase in em- 07/12/2010 13:31 40 RECOVERY SPECIAL: WORKING PAST 65 ployment since the economic downturn, with a reported 84,000 additional people from this age bracket working now when compared to a year ago. However, this statistic is skewed by the fact that many of post-retirement age have had little choice but to return to work since the recession in order to make ends meet. Working past retirement Not every employee approaching the default retirement age is going to want to continue working, and under the new rules they do not have to. The greatest change is that state pensionable age is going to increase to 66. Therefore, if an individual wishes to retire at 65, they must be able to provide for themselves for 12 months before drawing a pension. “The government can get people working a little bit longer by applying a carrot and stick method,” explains Krys. “The stick is that you are not going to get your pension until you are 66. The carrot is you will not be discriminated at work just because you hit 65. It has been a brave step by the government to remove this landmark date, and it places greater onus on employers to better manage people to become more productive. We need to take responsibility and ensure everybody we are employing is delivering and producing. At the moment, if you have someone coasting towards retirement, they might be coasting for ten years. Can we really afford to carry people who are coasting? Of course not. Also, we need to increase the availability of work options for people as they reach their 50s and 60s.” It will take some time for the culture of the workplace to adapt and change, but Krys argues that the removal of preconceived notions of when somebody is ‘past it’ will help change the perception of what to expect of employees when they reach their 50s – from both an employee and employer perspective. It is human nature to wind down and ease off when the end is in sight (just think of your own attitude towards work as 5pm on a Friday approaches), but if the fi nishing line remains undrawn, productivity is more likely to persist. “Currently,” says Krys, “the DRA means that people in their 50s are viewed as pre-retirees, so often companies will not bother with employing or training them. If the perception switched to ‘they might still work for us for another 20 years’ then not only is that a huge return on investment, but it can sometimes lead to more commitment and stability than you would get out of most 20-somethings you might recruit. Th is will also send a real strong message to employees; they will feel valued.” Financial constraints have led to a gradual increase in the length of time that people want to continue working. Currently, most people retire at the point they can afford to, or perhaps health reasons force them to cut their hours or leave the workplace entirely before they would otherwise be ready. Financially, the pivotal point of retirement for most people is when their pension peaks, their mortgage and other debts are paid off, or they no longer have to subsidise their children. To some, this pivotal point comes long before they reach the age of 60. For others, it arrives much later. It is at this stage, says Krys, that most people decide to retire. “We are seeing that fewer people are getting to that position of fi nancial stability by the age of 65,” she says. “People have increasingly dependent children, larger debts, a decline in their pension levels and a decline in The beneﬁts of DRA reform The Department for Work and Pensions (DWP) has produced a lengthy white paper on the beneﬁts they believe scrapping the DRA will bring. Here are a few choice excerpts. Beneﬁts to ﬁrms The abolition of the DRA is likely to beneﬁt employers in two main areas: • Cost savings following removal of right to request procedure • Increased proﬁts resulting from increase in labour supply Savings from abolition of right to request procedure Under the current DRA legislation employers incur costs when they retire an individual and when they receive a right to request to stay beyond the retirement date. The employer is obliged to take requests seriously, although no reason need be given to the employee if the request is turned down. Where requests are not accepted there is provision for an appeal stage and ultimately recourse to an external dispute resolution mechanism, which could be an Employment Tribunal. When i'm 65.indd 40 Dialogue between employer and employee In many cases, employers and employees have constructive discussions about their retirement plans. These discussions can include consideration of an employee’s desire to change working pattern or role in the run-up to retirement. It is argued that the current right to request procedure can provide a useful trigger for these discussions as well as enabling the employer to gain information that helps with workforce planning. We want such dialogue on retirement planning and alternatives to retirement (such as part-retirement), where this is beneﬁcial to employer and employee, to continue. We are therefore seeking input from respondents on what the Government might do to support continued dialogue on retirement. Employers using retirement ages under the DRA process have two choices: They can stop using retirement ages, though they can complete any retirements where the employee has been notiﬁed before 6 April 2011 and where the retirement will be complete before 1 October 2011. The Government will provide guidance on 07/12/2010 13:31 RECOVERY SPECIAL: WORKING PAST 65 In the UK... In 2012 there will be 772,000 people aged 64 45% of 60 to 64-year-olds are currently employed 21% of these are self-employed fi nal salary pension schemes. There has also been a decline in the payouts people are receiving from private pensions and annuities. So people are opting to stay on. Not for very long – usually just for one or two years until that last fi nancial hurdle has been overcome – but this flexibility makes such a difference. It will also make a big difference to the economy to have people working up to 65 and that little bit beyond.” Krys calls for a more flexible approach to the types of working options available for those approaching the current retirement age. “If people can take a little bit of pension and also build up a bit more reserves into a new pensions scheme or their existing pension scheme and draw some salary from part-time employment, that can really meet the needs of both parties. The employer can retain the talent and the individual can boost their income to a satisfactory level – which also creates a little bit more revenue for the taxman too. Everybody’s happy.” Or are they? Who is going to suffer as a result of this more open-ended policy to retiring from work? “Tackling age discrimination is an important labour market issue, but we need to tackle it in a way that has the intended consequence, which is more work opportunities for older workers,” argues Cridland. “However, it is the unintended consequences that I am worried about.” Cridland believes the unintended consequences will be manifest in more disputes throughout the marketplace. “The last thing we should be doing is fi nding more work for lawyers, but that will be the consequence here. The DRA is achieving a positive result, because the right to request to stay on after retirement is increasing the working age [currently, employees have the ‘right to request’ to continue managing without retirement ages. They can choose to continue using a retirement age. However, when the DRA is removed, employers using retirement ages can be challenged in the courts to show that their retirement age is objectively justiﬁed. It is not easy to demonstrate that a retirement age is objectively justiﬁed, so the employer should be conﬁdent that it can be objectively justiﬁed before deciding to use a retirement age. Productivity assumptions The evidence on the productivity of older workers shows that they are no less productive than younger workers, except in a limited range of jobs. The ﬁndings from a review of the literature 41 were: • The evidence suggests that, except in a very limited range of jobs, work performance does not deteriorate with age, at least up to the age of 70. Since few people are employed beyond that age, there is virtually no evidence about work performance after the age of 70. When i'm 65.indd 41 41 working beyond 65 if they so wish]. Our CBI surveys reveal that as many as a third of employees at retirement age want to continue working in some capacity. It might be shorter hours or reduced responsibility, but they want to continue, and employers are able to accede approximately 80 percent of the time.” A healthy, happy and contented workforce comprised of both old and young workers is not something Cridland is against, but he does argue that sentimental decisions to prolong the working career of a much-loved colleague have no place in a market that is still striving vigorously to shake off the tepid torpor of recession. “There is no denying the positive side of allowing older people to continue to work,” he says. “But to accept that you have to accept that there is another side too, which is every now and again somebody wants to stay on who the boss, the customer and the colleagues know is no longer up to the job; they no longer understand it or are unable to carry out their tasks satisfactorily. Th is happens all the time, and other people are forced to carry that person’s work or get frustrated or leave, and new ideas do not get introduced. “Th is is only perhaps one in ten cases, and there are probably nine positive cases for every negative one, but the default retirement age enables businesses to say: ‘Sorry, in your particular case, it’s time you went.’” Energising the market Since the introduction of the DRA in 2006, there has been, claims Krys, a stagnation of the job market, with employers stymieing the sort of flexible working practices that enable older workers to make an informed and personal decision about when, and how, they are going to retire. One individual who has been fortunate enough to make up her own mind about her retirement is Margaret Huntley, a 73 year-old telephone operator from Yorkshire, who currently works for Nationwide in Swindon. Huntley has been employed at the company for the past 15 years and says that staying on was an easy decision to make. “I felt fit enough, which is the main thing I suppose. And Nationwide made it easy for me – they made a decision a few years back to allow people to stay on with them up to the age of 75 before the DRA was introduced.” With Nationwide’s continuing support, the decision on when to retire lies solely with Margaret; a situation that suits her perfectly. “I currently work 6.5 hours a day, three days a week, which is ideal. I believe that if people are fit enough and able to carry on with the job that they were enjoying and doing well in the fi rst place, then I think it’s up to the person themselves to decide.” Margaret cites fi nancial stability as one of the other reasons behind her decision, stating that the additional income allows her and her husband the fi nancial freedom to enjoy their retirement to the full. Older workers like Margaret who can still offer something to an employer are not the problem, argues Cridland. “You can have an older worker who is brilliantly creative, brilliantly innovative or brilliantly flexible,” he says. “But 07/12/2010 13:31 42 RECOVERY SPECIAL: WORKING PAST 65 you can also have an older worker who is dyed-in-thewool, lacking in self-awareness, slowing down…businesses would want to keep the fi rst and do something about the second. At the moment, employment law is so complicated and so difficult that to have a conversation about this is not as simple as ‘you can’t do the job’. You have to argue how maybe they can no longer do the job so well or suggest they have become a bit stale. “Employers use retirement as a way to deal with those problems, and so we are leaving employers without the ability to manage their workforce.” Managing these additional workers is not without its additional problems, and Krys is not unsympathetic to the future issues this ruling is going to cause an HR person. “But I would just throw their qualms back at them and say that the employer has to employ people, and that means managing them throughout their entire working lives,” she says. “We cannot duck it or avoid it any longer – we are not being productive enough. Therefore, organisations that have removed retirement age have put the onus back on to their line managers to actually start intervening, to start managing people proactively and to no longer be shy about managing declining performance and encouraging increased levels of performance.” Using the current DRA regulations to dodge potential work responsibilities is, believes Krys, leading to an atmosphere of age discrimination in many workplaces. She argues that HR departments are shy to the problem of tackling declining work performance among employees of any age, and simply rely on the easy get-out-clause the DRA represents. Cridland counters this claim by stating that it is not the responsibility of the employer to tidy the mess created by government action gone too far. British organisations that have scrapped the retirement age include Tesco, B&Q, HBOS, Asda, Marks & Spencer and the Co-op Group. companies use the retirement age to avoid an unpleasant row. Now, those unpleasant rows will take place, but the law is not going to facilitate that; the law is going to get in the way of it.” Fear of creating more work than is necessary is understandable. The current inflexibility of the law might well be exacerbated by the proposed open-ended nature of the new regulations, but it will also hopefully lead to greater communication between employers and staff. A more open discourse – arrived at through better performance management and the up-skilling of HR departments – will potentially result in a happier, more diverse and more productive workforce, which is no doubt the government’s intended outcome. “Th is is about increasing opportunities,” concludes Krys. “People are going to have to work for longer because they are living longer. They are healthier, which makes them more expensive, so they are going to have to work a bit better. But we need to make sure that people are working good jobs, flexible jobs and jobs that suit them, and that is why we are creating a workforce and a jobs market for this future flexibility.” ■ “Organisations that have removed retirement age have put the onus back on to their line managers to actually start intervening, to start managing people proactively and to no longer be shy about managing declining performance” “The government has swung the pendulum to the extreme with this,” he says. “If the idea is to encourage people to work longer and make it possible for them to do so, push the age of retirement up to 67, even 70. If government had decided in principle that there wasn’t going to be a default age any longer, then it should deal with the unintended consequences, and that would have made it possible for businesses to deal with issues of underperformance, which they currently tackle by using the retirement age as a proxy.” Cridland advocates changing employment law to make it easier for companies to get rid of employees who are not up to the job. “Currently, it is very difficult, and When i'm 65.indd 42 07/12/2010 13:31 GENESYS_AD.indd 1 30/11/2010 13:49 44 RECOVERY SPECIAL: EMPLOYING EX-OFFENDERS The Recovery Special looks at how exoffenders – long excluded from the workplace due to stringent employment regulations – can offer a boon for the economy, so long as they are ﬁnally given a chance by society. Ian Clover investigates. T here is no single linear policy that will drag Europe’s leading nations out of recession. Instead, countries have each embarked upon their own path toward recovery with varying degrees of success. The French have proposed increasing state pensionable age by two years in an effort to offset their deficit; the UK has earmarked similar proposals while also introducing some harsh austerity cuts in its public sector; The Spanish, Irish and Greeks have all implemented tough cuts in an attempt to eat into their deficit, and even economic powerhouse Germany – stung by heft y eurozone bailouts to its fellow members – will be introducing €7 billion worth of cuts a year until 2016 in an attempt to control its deficit, which currently stands at €65 billion. The measures being taken are merely responses to the symptoms of a struggling economy – few actually address the causes. Making individuals work for longer will offer a short-term, measurable boon for the economy, but it is hardly a measure that will get to the root of the current economic malaise that has so bedevilled Europe over the past two years. Spending cuts, too, are exactly that – measures Employing ex offenders.indd 44 taken by the government that cut into society and actively impact negatively on people’s quality of life, leading to more misery before things even begin to improve. In thrashing around for solutions, governments across the continent are acutely aware of their own PR image, and will do all they can to keep bad press to a minimum. m. So it would take a brave leader indeed to use these timess of uncertainty and shaky recovery to advocate more progressive gressive measures for ex-offenders and ex-prisoners. ly in a Public attitude towards criminals, especially downturn, tends to drift toward the conservative, with the ‘lock ‘em up’ brigade the most vociferous on the matter. atter. In nly once their eyes, law-abiding citizens come fi rst, and only their problems have been addressed should a politician ician or government even begin to countenance introducing ng measures aimed at alleviating restrictions on criminals’ liberty. Faced with such vocal public opposition, few governments will take steps to radically overhaul how a nation’s ‘criminals’ – be it prisoners or those with a criminall record – are treated. Recent calls in the UK for the prison populabate, but tion to be given the vote have sparked healthy debate, attitudes towards those who have ‘done wrong’ aree largely unyielding, and it is these rigid beliefs that are adding dding to the fi nancial woes of many European countries. British statistics on crime would appear to paint nt a very stark picture. The UK’s Ministry of Justice estimates tes that approximately 25 percent of males of working age have a criminal record. This is one quarter of the country’s potential male workforce that is either excluded from the job market or forced to dramatically restrict the types of jobs they are able to apply for. A 07/12/2010 13:58 RECOVERY SPECIAL: EMPLOYING EX-OFFENDERS 45 criminal record stays with you, making it fiendishly difficult to gain meaningful employment, even though the UK government is attempting to do all it can to get more people off benefits and into work. “These days, we have become obsessed with carrying out criminal record checks for employment purposes, despite the fact that there has never been any good evidence that ex-offenders are a problem in the workplace,” says Mervyn Barrett, Head of Resettlement Information at Nacro, a charity that works with disadvantaged people, offenders and those at risk of offending, in order to reduce crime. Nacro has recently appealed to the British government to overhaul the Rehabilitation of Offenders Act 1974, which it feels is out of date. In the eyes of the law, there are eight million adults in the UK with a criminal record, and a large majority of these individuals will fi nd it difficult to secure a job. The result? They are a burden to the taxpayer – whether they are sent to prison or are excluded from contributing to society and instead have little option but to claim benefits. “Research conducted by the Chartered Institute for Personal Development indicates that employers’ experience of employing ex-offenders have been far more positive than negative,” says Barrett. “Th is isn’t surprising because the reality is that most people with records – and we’re the cycle Employing ex offenders.indd 45 07/12/2010 13:58 46 RECOVERY SPECIAL: EMPLOYING EX-OFFENDERS talking about a very large proportion of the population – seek work for the same reasons as those without: to earn a living. Few people with criminal records have ulterior motives in seeking employment.” Public perception The public gets the government it wants, the media it wants and the political decisions it wants, most of the time. Therefore, the treatment of prisoners is a reflection of public will – prisons are where punishment comes first and rehabilitation comes second, and offenders are made to pay for their mistakes for the rest of their lives. The current job market restrictions are an extension of this. “There is this association in the minds of employers with ex-offenders and risks in terms of the workplace,” says Barrett. “The Criminal Records Bureau (CRB) needs changing. We have gone from a position 25 France has an years ago where there was absolute astonimprisonment rate ishment that we were carrying out 100,000 of 91 per 100,000 police checks a year for employment vetting and Germany has purposes. I remember thinking at the time a rate of 95 per what had gone wrong in society that neces100,000. sitated that many checks? These days, we’re carrying out millions of CRB checks a year – in 2009 it was four million. We are going to have at some point the introduction of this controversial vetting barring scheme, which will lead to millions more such checks, and if at some point the CRB introduce basic disclosure checks, we will effectively have a system of universal criminal record checks. So that means there will be no escaping from one’s criminal record.” Many will read that last sentence and think ‘well, good.’ A society that can fully vet, check and monitor its population, identifying those with a criminal record, is surely utopian? Most definitely not, argues Barrett. “Imagine all of the discrimination and social exclusion that will result from that. The reality is that there are a great deal of employers, recruitment agencies and colleges running checks – CRB checks in particular – and they will exclude anyone with anything on their CRB. As a nation, that is not something we can afford to allow to continue.” In an ideal world, nobody would have a criminal record. But the reality is that society can only function with laws, which inevitably leads to lawbreakers. As Winston Churchill noted, how that society then treats its criminals is a measure upon which it should be judged. “We are creating this large pool of unemployed people living on benefits solely because they have a criminal record,” says Barrett. So where should change come from? Barrett believes the CRB checks were initially government-driven, but their impact has been so great that society now demands that employers know all they can about one’s past. “CRB checks were very much introduced on the basis that government believed it was the best practice in terms of the recruitment of ex-offenders. It was a managerial approach to criminal record checks; it wasn’t ideologically driven at all. Employing ex offenders.indd 46 “But as a result of that top-down managerial approach,” continues Barrett, “it has led to societal change. Employers increasingly feel the need to carry out checks on the basis that if something were to go wrong, they are covered. The UK, as a society, has become very risk-averse as opposed to being risk-aware.” Cost of criminalisation Battling economic pressures and public opprobrium cannot be easy, but the British government need only look at the statistics to see that the current cost of criminalising its population is unsustainable, particularly in an economic climate where the more people working, the better. Ministry of Justice figures show that the overall cost of the criminal justice system has increased from two percent of GDP to two and a half percent in the past ten years. Th is is a higher per capita level than any other EU country, and also higher than the US. The UK leads the way in terms of its prison population too. Latest figures show that there are 84,154 people in prison in the UK, compared to just 56,279 in France (a country with a similar overall population), and even more than in Germany – a country with 20 million more people – where the prison population stands at 75,719. The average annual cost of keeping somebody in prison is £45,000 (€52,500), and government estimates calculate that the fi nancial cost to society of ex-prisoners re-offending is approximately £11 billion (€13 billion) a year. And with reconviction rates of 70 percent or more in England and Wales, it is obvious that this expensive cycle needs to be broken. Getting ex-offenders and ex-prisoners into work would appear to be the best course of action. In a survey of 1435 prisoners conducted by the Ministry of Justice, 68 percent 07/12/2010 13:58 The Diamond Project RECOVERY SPECIAL: EMPLOYING EX-OFFENDERS UNLOCK currently has plans to build a series of villages in all of the UK’s largest towns and cities that will help low-tariff offenders break their cycle of offending. Called The Diamond Project, these campuslike centres will focus on those convicted of less serious offences such as drug offences, burglary and minor assault, and will also be open to the longterm unemployed, recovering drug and drink addicts and those at risk of reoffending. said that getting a job was the most important factor in preventing them from re-offending once they leave prison. The same survey estimates that if every one of the 66,000 people released from jail in England and Wales each year had a job to go to, the government would save £300 million (€350 million). Easier said than done of course, but faced with such telling statistics, the government still appears worryingly hesitant to alter its stance on the current CRB regulations. Bobby Cummines knows all too well the struggles awaiting a recently released prisoner. As a teen, Cummines became involved in 1960s north London gang life, getting locked away for carrying a sawn-off shotgun and becoming one of the UK’s most notorious bank robbers between 1969 and 1988. After a conviction for manslaughter and a total of 13 years spent in Britain’s highest security prisons, he vowed to turn his life around. Upon his release, he worked as a volunteer helping fellow ex-offenders cope with their crimes and life on the outside, became a trained negotiator and suicide counsellor to those with mental health problems and, in 2000, set up the charity UNLOCK, the National Association of Reformed Offenders, which aims to remove the biggest barriers facing ex-offenders when they return to society. Having been an expert advisor to the UK government and House of Commons on all issues pertaining to rehabilitation and reform, Cummines agrees that it is the public’s fear and misunderstanding of those with a criminal record that is maintaining this perpetual and expensive cycle of reoffending. “We’ve worked with people who have obtained PhDs and have left crime behind. Now, when an employer sees that on a CV, they would rip your arm off to employ you, Employing ex offenders.indd 47 An environment of strict rules and varied opportunity for education would be achieved through trade workshops, a crèche and nursery, sports activities and academic classes. “The Diamond Project is aimed at low-tariff offenders – I’m talking about the people perceived as pests by society rather than hardened criminals –taking them out of detention centres, out of jails and out of community service into a centre where they can learn a trade and give them a skill, self-reliance and a future away from crime,” says Cummines. 47 There will also be supervised education that focuses on teaching useful skills and knowledge. “We will be training people for jobs, not just qualiﬁcations. So the focus will be on engineering, architecture, computing, green energy, biometrics and sustainability – things like that; things that will add value to the country and to the individual.” England and Wales has the highest imprisonment rate in Western Europe at 147 per 100,000 of the population. 07/12/2010 13:58 48 RECOVERY SPECIAL: EMPLOYING EX-OFFENDERS but as soon as you mention ‘criminal record’, even for a low-tariff criminal offence, the prejudice comes in. It’s very much like people with mental health problems. If you have suffered a nervous breakdown or depression, as soon as it’s mentioned at HR level then people shut the door – because they are afraid of what they don’t understand” Whether it’s prejudice, fear or discrimination, aversion to employing an individual with a criminal record is not only ingrained into UK business protocol, it’s actively encouraged by the stringent measures laid out by the CRB. “Anyone can discriminate against a reformed offender – there’s no penalty for that,” says Cummines. “When these people are locked out of industry, there is only one industry left for them to turn to – the criminal industry. Surely people would rather have reformed offenders as taxpayers themselves, rather than a burden to taxpayers?” UNLOCK works to achieve equality for people with convictions and help reintegrate them into society, improving access to things like bank accounts and insurance and linking people to services such as help fi nding somewhere to live. “Th is is all basic stuff that the general populace takes for granted. Without a bank account it is pretty impossible to get employment, so Unemployed we’ve worked at convincing the banks to ex-offenders are give just basic bank accounts to serving twice as likely to prisoners on their way out, and former return to a life of offenders already on the street.” A small, crime compared positive step, but still not enough. Altering attitudes to those who ﬁnd employment after leaving jail. As part of his work with the UK government, Cummines has held conversations with lawmakers on the need for reforming the current rehabilitation act. “As advisor to the Deputy Prime Minister’s Office under John Prescott, we [Cummines and John Denham of the Select Committee] found that if a person hadn’t committed a crime within around two years of release, their risk of re-offending was the same as a regular guy on the street,” he says. “However, because this message wasn’t politically palatable, and it would have been unacceptable to the media, there was no appetite for policy change. That was 2002 and only now are we getting into serious discussions with Government about adopting policy that is based on evidence. At the moment it’s the CRB, in effect, that is keeping people in crime rather than protecting the public from crime.” Not all offenders go to prison, so ex-prisoners are in a much smaller minority than those who simply have a couple of misdemeanours on their record. However, not all ex-prisoners are murderers, molesters, drug addicts or rapists. Many have simply made one mistake in their past and wish to move on with their lives. Prison punishes them, but also attempts to rehabilitate them. A lot of hard work and expense goes in to doing so – hard work and expense that is being undermined, Barrett argues, by society’s misplaced perception. Employing ex offenders.indd 48 07/12/2010 13:58 RECOVERY SPECIAL: EMPLOYING EX-OFFENDERS “The reality is that there are a group of people coming out of prison and on probation license who have so many problems – whether it be drug addiction, mental health problems, chaotic lifestyles, low literacy levels – that they wouldn’t be able to hold down a training place, let alone a job,” says Barrett. “However, there are thousands who come out of prison who only have one problem – the problem of having to disclose their criminal record.” With 25 percent of adult males in the UK carrying a caution, a reprimand or a criminal record, Barrett argues that most people who are flagged up on the CRB system are decent, law-abiding individuals who perhaps made a mistake in their past; a past that the current system does not let them easily forget. “There’s a big self-exclusion issue here,” reveals Barrett. “A lot of people will not put themselves forward for jobs because of the shame and embarrassment about what’s on their record, and that’s often a bigger problem than discrimination ployers and local authorities are more or less conducting checks on all of their staff, whether or not the positions itself. Those people in the main are not inare exempt or not, and the CRB is turning a blind eye to clined to reoffend. They just put up with this practice. That has to stop.” things and lead excluded lives. That said, Cummines’ work with UNLOCK also continues to there are some individuals, particularly press for legislative change, as well as for more HR trainthose coming out of prison who, if they could ing designed to equip staff with the necessary knowledge get a job, that would positively impact on on how to approach an applicant who may have a criminal their likelihood of reoffending.” record. “Companies should be training staff how to ask A solution to this self-perpetuating the awkward questions. Th is would help to remove the cycle cannot be reached by policy change fear factor that exists in business and help to develop a alone. Perceptions, at an HR/employment, support system for businesses that are willing to employ government and public level have to change. people with a criminal record. I’ll say it again – that’s There needs to be better education among eight million people on the government index. What employers about what it truly means to be business can afford to exclude this section of society from rehabilitated. There needs to be less fear of, its pool of applicants?” and aversion to, criminal records. Not many, is the answer. And certainly not the UK “Education in the recruitment sector government. There is a heavy fi nancial burden placed on needs to cover things like the prevalence of taxpayers to support ex-offenders. Prison is expensive, but offending,” says Barrett. “Employers look rehabilitation is even more so if society does not accept upon offenders and ex-offenders as that tiny and allow ex-offenders to reintegrate. Jobs play a big part group of people who are in and out of prison, in breaking the cycle of re-offending, and self-reliant, when the reality is that having a criminal tax-paying, non-criminal individuals are far better for record is extremely common. Employers the economy than the current alternative. need to understand how common it is, and they need education in issues such as risk and relevance. Many cannot gauge the seriousness of some offences, because the terminology used by the legal and criminal justice system tends to sound a lot worse than the reality.” 49 The reoffending rate in the UK is 76%, compared to just 45% in Denmark. Regulation review The new UK coalition government is currently looking at the Rehabilitation of Offenders Act 1974. The last review was in 2002 and, as Cummines revealed, the recommendations made by the advisors fell on deaf ears. Barrett is adamant that change has to happen this time around. “We need legislative reform to try to cut the number of CRB checks we are doing. There are too many jobs that are exempt from the legislation, in some instances em- Employing ex offenders.indd 49 07/12/2010 13:58 iStrategy AD_B2B.indd 1 06/12/2010 14:36 EXPANDNETWORKS_AD.indd 1 30/11/2010 13:49 52 RECOVERY SPECIAL: BIG INTERVIEW TALKING Crawford del Prete, Executive Vice President of worldwide products and Chief Research Ofﬁcer at IDC, talks to CXO about the maturation of the cloud computing landscape, good business intelligence and improving company communication. T he Internet is many things to many people. For some it is a social lifeline, for others the only way to do business, meet partners, catch up with family or procrastinate at lengths previously unimaginable before the advent of websites such as YouTube and Wikipedia. But to an etymologist, the Internet is a goldmine of new and exciting (if there can ever be such a thing in etymology) discoveries, energised by the wealth of new terms, phrases and companies that are constantly being created and will be forever stored in mankind’s collective lexicon. There is Google (which originates from the term ‘googol’, a word that was coined to refer to the number represented by the digit 1 followed by 100 zeros, and a nod to the company’s desire to gather and organise seemingly infi nite streams of data); Amazon (named after the world’s most voluminous river and meant to reflect the potential for large volumes of sales in a fluid environment); Facebook (a US university term stemming from the colloquial name of the books given to new students with the intention of helping them get to know each other better) and more recently Twitter (the bird gives it away – short ‘tweets’ that are unique individual bursts of song, or in this case, thoughts, insights or inane dribblings). Crawford del Prete.indd 52 07/12/2010 13:54 : BIGINTERVIEW RECOVERY SPECIALBIG INTERVIEW 53 We have become conditioned to accept unquestioncentres. Th is distrust, believes del Prete, is the catalyst to ingly the world of the web and its millions of sites and the uncertainty that shrouds the cloud computing landcompany names all vying for our attention, yet there is scape. “Because of these security concerns, companies one Internet phrase, recently coined, that has become a start parsing their information, thinking ‘well, what bits cause of considerable consternation over the past few of information could I put out into the cloud that wouldn’t years. ‘The cloud’ is a nebulous term that is both widely put my customer data at risk but would get me a high level accepted yet forever questioned. Consumers and business of efficiency?’” people the world over only partially understand what it is The cloud’s scalability, minimal barriers to entry and how it works, in part thanks to the very image it con(low cost) and efficiency continue to override most secujures up. Cloud forerunners, including Amazon and IBM, rity concerns; a situation that has perhaps prolonged the were keen to prolong and protect this haze, believing that current imbalance between trust and use. “Th ings like their users did not really need to know how the nuts and collaboration, such as using collaboration platforms in the bolts fit together, or how the soup was made – they simply cloud for email, telepresence and for sharing certain interwanted results, service and consistent convenience. And nal documents, can be very attractive,” reveals del Prete. they got it. “So this is the kind of way that people are approaching the However, ‘the cloud’ has been received as something cloud today. Over time, as they get more comfortable, you both magical and wondrous, yet also something not to be will see the next phase, where there is an identifiable chunk trusted. And it’s a phrase that is here to stay, as immovof data that users feel comfortable putting into the cloud, able as ‘surfi ng’ the web, ‘downloading’ informaand a known group of data that people do not feel comtion and ‘logging on’. To some murky, to fortable putting into the cloud. Th is is others sprinkled with mystifying starwhy you will begin to see more of dust, the one overriding impression of these hybrid environments.” “I know of guys the cloud is one of confusion. “There The evolution of these enstill exists a level of concern over vironments will not be set in who literally squirt the cloud,” admits Crawford del stone either, believes del Prete. epoxy resin into Prete, Executive Vice Presi“As a matter of fact,” he says, their USB ports so dent of Worldwide Products, “their foundations will be very and Chief Research Officer of fluid. Th is will be a moving target that they become research giants IDC. “There for quite some time. People will unusable” is a need for quite a bit more develop different comfort levels maturation in terms of people’s whereupon more data will be shifted experiences with the cloud. When to the cloud. And then, eventually, we conduct our surveys, we fi nd that legislations will start to be rewritten as people become security and uncertainty of what data to put more comfortable with what can be done in the cloud.” into the cloud are consistently at the top of As technology evolves, comfort levels with the cloud people’s concerns.” environment are likely to increase in tandem, which brings with it its own set of potential problems. “The cloud’s A trust issue future will be driven forward by technology and comfort Experts in the cloud computing landscape might well levels, and it will be pulled back by technology and comroll their eyes at those who still exhibit concerns with the fort levels,” says del Prete. “There will be security breaches cloud. But as any quiz show aficionado knows, if you don’t where all of a sudden people will quickly lose faith in the know the answer, it doesn’t matter how ‘easy’ the question cloud, and then they will go back to it and slowly become appears. To many – from casual browsers to web-reliant more comfortable again. For perspective, when Sun Mibusiness people – the cloud remains an arcane industry, crosystems started their grid computing initiative seven littered with potential pitfalls and blind spots. “While years back, they had customers in certain vertical markets there is a universal acceptance of the benefits of the cloud, asking to be guaranteed that their data would be on fresh we are fi nding that, whether it’s government regulation or disk drives, that it never had data written on them before. the feeling that there is a risk that sensitive information is The industry has migrated from there to a situation where going to leave the organisation, the fi rst thing people start we now have companies such as salesforce.com where you to do when considering the cloud is look at what applicaare literally renting a sales force application in the cloud.” tions they can perhaps have in the cloud that will not pose Seeking security any risk to their internal governance,” says del Prete. The entire worldwide web has become a playground It is an important discussion to have. While the cloud for hackers and malcontents eager to phish, defraud and is generally considered a safe and secure place for your steal wherever and whenever they can. Policing this landinformation, consumer confidence is still some way off scape is a logistical nightmare and a continuously evolving satisfactory. In a 2010 report by the Ponemon Institute in war of attrition. Battle lines are being drawn and redrawn California, a mere 33 percent of the 1000 IT professionmany thousands of times a day, which perhaps hints at why als surveyed trusted the security of cloud-hosting data Crawford del Prete.indd 53 07/12/2010 13:54 54 RECOVERY SPECIAL: BIG INTERVIEW Crawford del Prete.indd 54 07/12/2010 14:01 : BIGINTERVIEW RECOVERY SPECIALBIG INTERVIEW “Oftentimes, things that you don’t Tweet are sometimes as important as the things that you do, because not everyone is interested in the fact that you’ve just drank your coffee or made your lunch” many millions of us are a little uncomfortable with the idea of storing our sensitive data in third party environments. “The security space is a tough problem, and it’s going to be a tough problem for quite some time,” believes del Prete. “You have many, many complex forces coming together, and some of those are very interchangeable. They are changing very dramatically because they involve people and the way people approach attacks. And people can be very, very clever. So what you fi nd is that security online – with the cloud, for the average user – will continue to evolve for quite some time, and it will not commoditise anytime soon, which is why it represents an attractive area for companies to invest in, as Intel has done with its acquisition of McAfee.” Despite Intel’s move surprising many people within the industry, del Prete is of the opinion that the company’s actions have exhibited a great deal of intelligence and foresight. “I think Intel saw an opportunity to embed McAfee’s security technology into next generation mobile chips that would be in handheld devices, mobile computers technology such as iPads and Playbooks. If this leap works, it will not only be a huge differentiation for Intel but also great news for the consumer.” The mobile nature of most next-gen devices has opened up the security perimeter of the Internet to previously unheralded outposts, an evolution that has made it even harder to police the boundaries and close any gaps in the cyberspace ring fence. Businesses reliant on the convenience of these devices are becoming more exposed to the dangers lurking out there. “We now have mobile devices that are truly becoming handheld computers,” says del Prete. “If you look at Nokia’s N900 Smartphone, it is a 32 gigabyte device. It wasn’t so long ago that 32 gigabytes was on your desktop or laptop. The company has also just announced their new operating system, with native USB support, so you will soon be able to plug a USB drive into a Nokia phone and it will recognise it as another disk drive, further increasing portability. So securing this data at the very edges is going to be an immense challenge.” Current security methods range from the incredibly ingenious to the incredibly crude. “I know of guys who literally squirt epoxy resin into their USB ports so that they become unusable,” says del Prete. “But we now have to become much smarter. We have to develop soft ware tools that allow CIOs and CIOs’ staff to effectively know what is being put out to ports, and the ability to remotely turn ports on and off. Th is is going to happen on mobile phones as well, where things like remote kills become increasingly prevalent and important. The next big hurdle is going to be securing the data that is on these truly mobile computers that are in people’s pockets. There are tools to do this, but they are not nearly sophisticated or widely deployed enough.” Business intelligence Developing and nurturing an appropriate level of IT security should form the backbone of most companies’ operations, but there is another industry sector that has Crawford del Prete.indd 55 55 received a renewed level of interest in recent years – business intelligence. “There is a huge interest right now in business intelligence strategies,” reveals del Prete. “Our research shows that between 2008 and 2012, the overall amount of company data worldwide will have grown by between 40 and 50 percent. During this same period, IT staffi ng will increase by just four percent, as will IT expenditure. “Th is means that the amount of data that is going to be created is going to far exceed the volumes of people we have in place to manage that data. Th is creates an obvious problem, but it also creates a wealth of business intelligence opportunities as people try to make sense of all the data that is out there.” Not all business intelligence is born equal, and the easy catchall phrase of ‘business intelligence’ can be easily misinterpreted and abused. Different solutions mean different things for different businesses, and it can be quite easy to adopt a solution that is completely ineffective for your company, particularly when a good business intelligence strategy can be so valuable. “We did a survey recently,” continues del Prete, “asking businesses how long their business intelligence solution would have to be out of service for in order for it to have a material negative impact on their business operations. In response, 14 percent of the respondents in 2006 said that within one hour it would have a negative material impact on their business. In 2008, that figure had increased to 26 percent, which has nearly doubled in two years.” Statistics such as these highlight just how pervasive the business intelligence industry has become in many marketplaces. “Th is really starts with companies spending money and trying to figure out how they can take advantage of their data to uncover insights into the way they work,” says del Prete. “The enlightened organisations will make the investment to create insights out of that data, while the companies that stand still will be severely hurt in this generation transition to business intelligence, because they will be left behind.” However, merely implementing a business intelligence strategy on an ad-hoc basis is not enough. There are a number of inhibitors to good business intelligence, and they must be manoeuvred through before tangible results can be grasped. “The fi rst hurdle to overcome is getting the organisation to understand the value that can be captured from their data,” says del Prete. “Th is goes hand-in-hand with asking the right questions and trying to figure out the right methodology to make sense out of your data. Th is is where good business intelligence tools become really paramount and important. At IDC we see that the areas people want to focus on are things like financial operations, executive level performance management, sales and marketing. These are the places where you really want to start with business intelligence. Before you even get to advanced analytics or text analytics you really should focus on dashboards and more simple analysis. “Even having a dashboard on your business is a good place to start,” continues del Prete. “Because right there 07/12/2010 13:55 56 RECOVERY SPECIAL: BIG INTERVIEW you can see, in one place, how sales are trending, how your revenue accretion is trending, how your bad debts or reserves for bad debts are doing, the state of your cash conversion cycle and inventory level, things like that. Pulling together all those things that people are getting from disparate parts of the organisation is the fi rst step on the journey toward business intelligence.” During a period of economic uncertainty, good business intelligence becomes even more valuable as companies strive to hit the same targets while cutting their overheads, restructuring or downsizing. “The economic downturn has encouraged companies to start thinking more closely about the data they really need to collect,” admits del Prete. “There are a number of consulting companies that do this every day for fi rms as large as IBM and Oracle for example. They do an assessment of what is the most compelling data that would have the biggest impact on their immediate business. Th is is almost always in a very simple dashboard form, and then they will go on to build a longer-term plan toward more sophisticated data and analytics, but even the simplest customer can get a huge payback by using dashboards in a more structured way.” TWITTER TIPS FOR YOUR BUSINESS • Don’t make obvious sales pitches – this will see you lose followers quicker than a ﬂatulent scientologist. • Avoid the temptation of the TwitterFeed tool that converts your company’s blog into Twitter feeds – this is likely to come across as too promotional and impersonal; try to hand-feed your followers the best snippets, links and news from your site instead. • Whether you are Tweeting from a ﬁrst person perspective or as a collective representation of your company, be chatty, be colloquial, and be conversational. But also be warned: the only thing worse than a company stringently toeing the corporate line on Twitter is a company going in completely the opposite direction, so LOLs, OMGs and LMAOs are strictly off limits. • While your followers say a lot about your company, who YOU to choose to follow is equally revealing. A well presented, informative and insightful company Twitter feed can be easily undermined if it’s an ardent follower of Britney Spears and her many guises. Instead, follow Twitterers from related companies within your industry, analysts, pundits and journalists. Communication and engagement It has been said that the more elaborate the means of communication, the less we communicate. It has also been said that communication works for those who work at it. There is little use in saying lots if you have nothing to say, but to remain mute in business can sometimes be suicidal. The web 2.0 brings a whole host of opportunities to engage with one’s fellow man and – in the business world – clients, colleagues and customers. But for every valued, slavishly followed Twitter feed, there is the lone, unheard voice whose silence can be just as powerful. In business, del Prete believes that drip-feeding careful communication into the public domain can be as invaluable to a company as a good business intelligence strategy or cloud computing campaign. “For me, Twitter fits my business very well, because I’m in the business of selling opinions and giving advice. So Twitter is something that allows me to communicate with literally hundreds of people instantaneously because it is a way to communicate your thoughts. Like anything, if you have an opinion that you would like to share, and if you have an opinion that you think others would benefit in learning from, Twitter is a fantastic tool. I make a commitment to try to check my Twitter page everyday, but I don’t always have something to say, which is probably the biggest challenge. Oftentimes, things that you don’t Tweet are sometimes as important as the things that you do, because not everyone is interested in the fact that you’ve just drank your coffee or made your lunch.” Business leaders should, believes del Prete, make an effort to get involved in some capacity. “I would recommend that leaders use something like Twitter in this way. What I try to do is direct someone to a greater piece of learning, to something I’ve seen online; something I think Crawford del Prete.indd 56 • Ask your followers questions. This can be anything from advice to feedback, thoughts and opinions. Not only does this kind of organic conversation engender greater trust in your company, but some of the answers you will receive are likely to be invaluable for your business. • The Twitter code of ethics is an ever-evolving, malleable beast. Good etiquette is extremely important and fragile, and the masses are in charge, so be careful how you promote your brand, paying particular heed to the viral nature of Twitter, and how reputations can turn sour in an instant. has an interesting point of view; something I have written that I can point people to…I would encourage other business leaders to do that. It’s part of their responsibility to set an example and to engage with new tools to help analysts see what they can achieve, which is why I do it.” One of del Prete’s greatest learning experiences from Twitter has been the realisation that interesting and insightful information is of great interest to a wide range of individuals. “I’m always amazed that there are hundreds of people that follow me – people in Japan, people in Singapore, people in Australia, people in New Zealand, Eastern Europe…they are all interested in responding and learning, and I am always learning from people who follow me and people I follow. There is always a new perspective out there.” To leaders looking to expand their own horizons, del Prete has the following advice. “Dedicate 15 minutes a day, over a cup of coffee, to just take a look to see what’s going on. Scan the Twitter headlines. You will learn a lot and expand your mind significantly.” ■ 07/12/2010 13:55 EXECUTIVE INTERVIEW | 57 Clever cogs Dinesh Kotecha explains how business intelligence strategies – properly implemented – can provide a real boost for your company. solving this requires a review, analysis and cleansing of data. For reference data, a more strategic improvement to underlying source systems may be required. Successful implementation requires good project management, implementation skills, and technical expertise. These can be acquired by training, through recruitment, or by partnering with a BI consultancy. The latter offers scope for skills transfer during the project, leaving the in-house team trained to maintain and support the system. What are the main inhibitors to good business intelligence and how can they be overcome? Dinesh Kotecha. Corporate culture dramatically impacts good BI: resistance to change, micro-managing the business, inadequate process controls and a lack of vision over the use of information. Changing this requires commitment from the top to a strategic review, requirements analysis and re-engineering of information management processes. Equally, buy-in is necessary at all levels. Technical challenges include infrastructure and connectivity, consistency in database technologies, and implementation of reference data and coding structures. Identifying these technical issues can be difficult, and resolution requires investment in technology to address the shortcomings. Understanding the role of BI is crucial. Companies typically have good business and operational knowledge, and good internal IT, but fail to leverage their corporate data to drive the business. Data quality issues are paramount. Poor reference data or incomplete and inconsistent operational data can make BI ineffective. Re- Thought IT.indd 57 How does BI help to ensure that executives get what they want, when they need it? DK. Implementing BI moves the company to using a single integrated source of accurate, consistent, relevant and timely data. The vast repository of corporate data can overwhelm executives and impair their ability to make correct decisions. Good BI will put key drivers at their fingertips, allowing them to focus on the areas that need attention. Critical information is more accessible through simple graphical tools such as traffic lights, drill-through, dashboards and cockpits. Trends can matter more than the absolute position. These tools provide comparatives, variance reporting and modelling capabilities without extensive training or investment in predesigned reports. Why do many BI implementations fail to live up to their initial promise? DK. The key failure in BI implementations is a non-strategic approach that does not address the issues raised above. Corporate culture is not changed to embrace the new, dynamic mechanism for decision-making. Time is not taken to understand the key business drivers that need to be exposed by the solution. Underlying systems are inadequate. Data quality issues are not addressed. Even if a decent BI platform is developed, users are often not trained or supported sufficiently to exploit the power at their disposal. The pervasive use of tools such as spreadsheets makes it all too easy to revert to old practices. What BI solutions can you present to companies that are maybe being forced to downsize or restructure as a result of the economic crisis? DK. Thought IT offers a complete range of products and services for cost-effective BI solutions suited to all organisations, to help them monitor and manage all aspects of corporate performance management using measures that are relevant to their business. Essbase can deliver a low-cost solution provided good disciplines are adopted for application design and managing data quality. With appropriate reporting tools, a high-performance OLAP cube provides a functionally rich BI platform that can be implemented quickly. Hyperion Enterprise offers a complete web-enabled consolidation and reporting solution especially suited to mid-market companies and departments or divisions of larger organisations. Hyperion Planning and Hyperion Financial Management are best of breed, feature-rich applications for planning, forecasting, reporting and consolidation. CXO-Cockpit provides an excellent selfserve toolset that allows executives to leverage BI value from HFM, Planning, HSF, Essbase and Enterprise. OBIEE 11g provides a common platform for producing and delivering enterprise reports, scorecards, dashboards, and ad hoc and OLAP analysis. Thought IT provides a complete service encompassing BI strategy, problem identification and resolution, project management and system implementation. With 20 years of IT systems delivery experience, Dinesh Kotecha is the founder and MD of Thought IT. After managing ﬁnance systems at Prudential Corporation and HSBC, he turned to consultancy in 1998, and has since brought his unique blend of business, ﬁnance and IT expertise to numerous organisations. 07/12/2010 14:53 QURIUS_AD.indd 1 30/11/2010 13:52 EXECUTIVE INTERVIEW | 59 Make your decisions. Conﬁdently. Sören Moorahrend from Qurius Advanced Solutions explains how business intelligence can be used to navigate through challenging economic times. In these challenging economic times and with a high degree of uncertainty in the markets, how can Business Intelligence (BI) help organisations to improve or even grow? Sören Moorahrend. Economic headwinds pose risks to most organisations. However, it is commonly known that they also give rise to opportunities. Of course, such opportunities are rare and are not easy to identify. Only those parties in the market who are able to discover them can take advantage of difficult times. BI is a way to discover opportunities. Since the use of BI is already quite widespread in organisations, most companies should be able to tackle any crisis. Obviously that is not the case, so what are they doing wrong? SM. Many people understand BI as a technical subject; a data warehouse, perhaps some cubes as well and a nice front-end – and that’s it. But that’s not what we mean by BI. At Qurius, we defi ne BI as an integral part of corporate business management. It has to be integrated into the general management processes in a mandatory way from a management perspective and should not be seen as just another IT tool. How can you integrate BI into the management processes and how does that create opportunities for companies? SM. As the biggest Microsoft System integrator in Europe, Qurius has immense know-how in integrating content into the soft ware suites for daily use. However, this is just a technical prerequisite. From a management perspective, it is important to ensure that key performance indicators (KPIs) are binding. They have to be connected to strategic action plans. So if critical values are reached, management should defi ne measures and optimisation actions, another critical factor of good risk management. Qurius.indd 59 Coming back to the second part of my previous question: how does that help organisations to create opportunities and strengthen their companies? SM. To create true opportunities, it is crucial for planning functionalities to be integrated into the BI Solution. Excellent planning is inevitably a necessity for management by exception in any case, as was mentioned above. In general, adding planning and forecasting functionalities to a BI system is the biggest quick-win possible. The ‘intelligence’ about the structure of the business contained inside the historical data is a big benefit for any planning process. It can easily be utilised in predictive analytics to generate potential future developments. This increases the accuracy of the plan, reduces the effort required to create it and streamlines the planning process itself by means of workflow functionalities. The positive effect on the planning process is immense, especially in complex distributed planning environments. Does that mean that a simple plan can prevent companies from struggling in tough times? Isn’t it more complicated than that? SM. Yes, that’s right; it’s the fi rst step towards a better understanding of future potential. What needs to be added is external market data to broaden the internal perspective. This information can be used to create different future scenarios. Monitoring daily results against those scenarios helps to identify critical developments early enough to respond. The most popular example of this is Royal Dutch Shell. By starting to work with scenarios in 1971, Shell managed to avoid the worst shocks of the oil crisis, and it actually emerged as the strongest player in the field. Th is is a good example of how to take advantage of any crisis. Shell is a familiar example of how to use scenarios, but how is this linked to BI? Furthermore, the scenario approach is usually very complex. How can it beneﬁt smaller organisations? SM. In the past this task was indeed complex and time-consuming. But today, we have the right performance BI tools available to make this process much simpler. Consequently, it is now possible to integrate long-term strategic perspectives into your BI solution. By doing so, you can create sustainable success: a healthy, profitable company that can respond quickly to changing market conditions. Sören Moorahrend is a member of the Management Board of Qurius Advanced Solutions AG, based in Hamburg, Germany. He has over 10 years of experience of business intelligence, focusing in particular on the implementation of complex planning and forecasting systems. 07/12/2010 14:52 60 MERGERS AND IT Can IT hold the secret to successful mergers? Sunil Harji, Director at KPMG, outlines how IT is the glue that will hold a successful merger together. KPMG ED.indd 60 07/12/2010 13:26 MERGERS AND IT 61 T he nascent economic recovery has set tongues wagging about the prospects of new life returning to the M&A industry. Many forecasters predict an upturn in activity as we move into 2011, driven by a spate of forced divestments and opportunities for market consolidation. Indeed, for many CXOs, one of the biggest challenges over the next year will centre around their ability to derive value from new assets or shore up the sale price of old ones. And right across the C-Suite, executives will need technology-based solutions to solve their integration and divestment challenges. But CXOs be warned: technology is a double-edged sword in the M&A battle. On the buy-side, technology will be the engine that delivers the promise of post-merger integration and drives much of the perceived value from a transaction. But approached lightly, it can also be the source of massive budget over-runs and productivity-sapping disruptions. On the sell-side, the ability to demonstrate an efficient and effective technology environment can add to the value of a sale; whereas a messy, overly complex or incomplete IT environment can easily reduce the size of the final bid by introducing extra complexity and risk. In fact, in the boom years M&A has traditionally done more to destroy value than create it; typically through a lethal mix of overpayment and an inability to extract value or deliver synergy benefits in the post-deal environment. And, somewhat justifiably, IT is often vilified as the culprit of this loss of value. But this doesn’t have to be the case: Instead, CXOs can – and must – view technology as a key component of any deal-making strategy. Technology – the glue in the value chain A significant proportion of all business processes are underpinned by technology. Whether it is interacting with customers and clients, placing orders with suppliers, managing the manufacturing process, supplying business services or administrating a workforce, one would be hard pressed to fi nd many organisations that do not rely – in a large part – on technology to achieve their day-to-day operations. In many cases, technology is often the key enabler of the asset’s core operations, fundamentally intertwined with their ability to deliver results. Merging companies, therefore, need to be able to identify and understand the key processes and supporting technologies that must be protected to help ensure a fluid integration, and maintain long-term value. While CXOs have historically focused on the people and process challenges of integration, technology considerations are increasingly being recognised as a significant and critical element to success. Which leaves many executives wondering how best to approach the technology aspects of an acquisition or divestment. In light of the pervasive nature of technology, full-scale ‘roll-outs’ may seem like a somewhat glib approach. Certainly, roll-outs promise less risk during the post-merger process, as organisations take advantage of existing experience and processes to bang their global systems into the new asset. But roll-outs also tend to ignore KPMG ED.indd 61 07/12/2010 13:26 62 MERGERS AND IT the underlying value of existing legacy systems, which have been honed to support the slightly different business process, choosing to prioritise global consistency over inherent value. Increasingly, organisations are opting for a level of integration, where the ‘best of breed’ of each technology environment is adapted and adopted throughout the business. Even so, purchasers often end up taking more of a roll-out approach in applying their enterprise systems (ERP, CRM, procurement, etc), and then spend multiples of their initial integration budgets trying to interconnect the supporting systems. Indeed, trying to reconcile legacy systems across merging companies has been compared – quite aptly – to a second marriage, with problem children on both sides. Both families have entrenched systems (some more userfriendly than others but each with strong support) as well as values and methodologies that they cling to as proof of their uniqueness and self-worth. For both the newly-weds and newly-merged, success isn’t determined by the signing of a contract, but rather by the flexibility and commitment of both parties. In some instances, CXOs may opt for a third option altogether and decide to clear the board and redesign a completely new IT environment modelled around the best aspects of the merged business. Particularly in situations where both parties are running ageing systems or in a merger-of-equals transaction, a ‘rip it up and start again’ approach allows organisations to take advantage of new technology models (such as cloud computing and shared services) to reduce complexity and cost across the business, while refocusing their technology priorities on the areas that create the most value. The devil is in the detail Regardless of the post-merger integration strategy, successful M&A almost always boils down to one key element: planning. And while many organisations have become quite adept at structuring and executing deals, few put the proper emphasis on IT as a necessary component to success. Certainly, due diligence – the process by which any prospective buyer seeks to gain a better understanding of the target business – is a necessary but often painful stage in the M&A process. Here, the need for speed, the desire to win and the fear of disclosing business-critical information come into direct conflict, leaving little time – or appetite – for a thorough analysis and understanding of the underlying (and often complex) technology environment. This would be a grave mistake. It is critical that executives have a thorough understanding of the role that technology plays in creating value within the target organisation. While it is impossible to separate the real value of an asset from the underlying technology and processes that support it, it is vitally important to understand the role that individual technologies play in value creation. Curing the post-merger hangover Equally critical to the success of M&A is the qual- KPMG ED.indd 62 ity and rigour of the post-merger integration planning. Integrating disparate systems can be an expensive and complex business, and fraught with risk. In particular, executives should pay careful attention to the hard costs of integration and factor the impact of these changes into their due diligence and feasibility studies. More than just the ‘simple’ cost of systems implementation, the integration must also focus on the training requirements, organisational changes and process redesigns that will be necessary to ensure a smooth transition and seamless integration. I recently worked on a deal involving a manufacturing organisation that, before the credit crisis, had acquired a complementary business in a new geography. Having completed only a cursory review of the existing IT systems, the purchaser misjudged the complexity of the IT integration, and spent almost six times their budget banging their global ERP system into the new division, all the while destroying value for shareholders. Earlier this year, on fi nding the market to be unprofitable, the organisation began talks with a private equity buyer who – following a thorough review of the target’s IT system – significantly reduced their offer to allow for the right-sizing of the IT for the business. From the private equity perspective, the target’s new ERP system represented additional complexity and costs that were not effective when the division was viewed as a stand-alone entity. Know your buyer’s needs Increasingly, sellers are starting to acknowledge the influence that technology can have on an asset sale, and are taking creative steps to respond and protect shareholder value. One strategy that is growing in popularity is the creation of a two-track approach. Th is recognises the fact that private equity will often want to view the value of the organisation as a ‘stand-alone’ business, whereas other corporate suitors will be more concerned about integration scenarios. The underlying technology of the asset, therefore, can be positioned in the way that is most favourable for each type of suitor, rather than a one-size-fits-all approach that may not reflect the true value of the organisation. Eyes wide open For executives, the key take-away is that IT must be viewed as a strategic component of any M&A transaction: get it wrong on the buy-side and you may end up overpaying and under-delivering; while getting it wrong on the sell-side will almost certainly reduce the sale price and, ultimately, return for shareholders. And while no company enters the M&A process consciously wanting to lose, many management teams wind up disadvantaging themselves by failing to realise that technology can be either one of the biggest enablers of value creation, or a significant hindrance. In the end, successful M&A may come down to the quality of the IT planning and the ability of non-IT executives to understand the real value and implications of technology integration. ■ Sunil Harji is a Director with KPMG’s Performance and Technology practice, where he leads the ﬁrm’s transaction related services teams. Sunil can be contacted at sunil.harji@ kpmg.co.uk. 07/12/2010 13:26 MTB AD_B2B_2010_14june 28/09/2010 14:15 Page 1 Where future leaders learn MeetTheBoss TV is incredible access to the worldâ€™s business leaders â€“ so you can learn their winning strategies and attitudes first hand JOIN NOW Find out more at www.MeetTheBoss.tv 64 | EXECUTIVE INTERVIEW Spreading the news Traditional desktop spreadsheets have been unable to match the multi-dimensional needs of the modern business, and despite there being viable alternatives on the market, many users are unwilling to think outside of the box, row or column, argues Mark Nashman. Why does the Ofﬁce of Finance rely so much on spreadsheets during the budgeting, planning and forecasting process? Mark Nashman. Spreadsheets like Microsoft’s Excel have revolutionised how businesses – especially their finance departments – operate. That’s because they give people the ability to automate calculations and quickly create financial models and reports. Yet, versatile as they are for individual productivity, spreadsheets were never designed to be a platform for repetitive, collaborative company-wide processes such as budgeting, planning and periodic reporting. What makes spreadsheets so problematic? MN. Spreadsheets have three serious problems: 1. Spreadsheets contain mistakes On their own, desktop spreadsheets are notoriously errorprone. Over the past 25 years dozens of academic and corporate studies have repeatedly confirmed this. Some of these show that even when spreadsheets are carefully audited, mistakes in data and formulas remain. Half of spreadsheet users fi nd major errors in data and formulas in the most important spreadsheets they use in their job, and that addressing these errors consumes a noticeable amount of their time. relationships or links between records and fields other than the table structure that is defi ned by the row and column headers. Th is architecture is two-dimensional, which works well for accounting tasks. Yet businesses inherently are multi-dimensional. ‘Dimensions’ are the ways in which information about business operations can be characterised. For example, people typically want to look at sales over a given time period by business division, by geographic regions, by customer, by product. Pivot tables are the main way businesses attempt to overcome the lack of dimensionality in desktop spreadsheets. These work reasonably well with a small number of dimensional views but they become increasingly unwieldy if you want to do extensive multi-dimensional analyses of the data. 2. Spreadsheets are not a good distribution platform Second, desktop spreadsheets were designed as an individual productivity tool, not as a way to support companywide processes. When used collaboratively to collect and manage data, desktop spreadsheets must be linked up and consolidated, tasks that even highly experienced spreadsheet users fi nd difficult and time-consuming. Worse, when they are used as a distribution platform for, say, budgeting and planning, dozens or even hundreds of spreadsheets are emailed across the organisation to be fi lled out and returned. The original spreadsheets may contain errors that go undetected, or those entering data or doing subsequent calculations may make mistakes, or both. In any of these cases, it’s difficult for anyone reviewing the data to spot an error. Is there a way to address these problems but still use Excel? MN. The paradox of spreadsheet use is that despite all of their shortcomings, business users overwhelmingly embrace them as their tool of choice and do not want to give them up. (“You can take my spreadsheets away when you pry them from my cold dead fi ngers” seems to sum up the attitude of many.) The source of this paradox is the extensive training and experience many people have with spreadsheets. With CLARITY 7 it’s possible to have the best of both worlds. CLARITY 7 is a single, unified corporate performance management application that integrates fi nancial budgeting, planning, consolidations, analytics, scorecards and dashboards. It offers an Excel look-and-feel so people can work comfortably in the familiar spreadsheet environment. Yet because it’s designed from the ground up for enterprise-wide use it eliminates most of the problems of spreadsheet errors and the difficulty of pulling together information from multiple sources. Spreadsheets are a handy, versatile tool. But they were not designed to do everything. Today, companies using them to perform repetitive and collaborative tasks wind up wasting time overcoming spreadsheets’ inherent shortcomings – valuable time they should be devoting to more important work. 3. Spreadsheets are an awkward reporting platform Th ird, desktop spreadsheets are an awkward reporting platform because they have a flat fi le structure. A flat fi le is one in the form of rows and columns, with no As President & Chief Technology Ofﬁcer of Clarity Systems, Mark Nashman is responsible for the development of company, product and technology strategy. Mark has driven the development of innovative solutions for the Ofﬁce of Finance and has been instrumental in creating a global organisation to deploy these solutions. Clarity Systems.indd 64 07/12/2010 13:54 Clarity Systems_AD.indd 1 30/11/2010 13:48 66 INDUSTRY INSIGHT Compliance reports – are you certain of your data quality? Information assurance helps companies avoid regulatory risks, improve revenues and cut costs, says Ed Wrazen. B asel II, Solvency II, Sarbanes-Oxley, HIPAA, environmental, health and safety, IT security, data privacy, industry regulations, audit requirements – as the governance, risk and compliance (GRC) environment becomes ever more stringent and complex, company directors need to be confident that the information they are reporting is accurate. In reality, research suggests that directors place too much trust in their company’s information; for compliance reporting and also its accuracy for management decision making and serving business operations. Take the 2010 survey of 200 business and IT executives by Forbes Insights. 95 percent agreed that strong information management is critical for business success. But 61 percent also said that their businesses suffer from flawed information. Then there’s research by industry analyst Gartner from 2009 around the costs of poor information. Conducted with 140 companies, it suggests an average loss of $8.2 million annually, with 22 per cent of the survey thinking it was closer to $20 million, and four percent put the figure as high as $100 million! Clearly, information errors are costing businesses a great deal of money. The fi ndings also suggest that directors risk signing off compliance disclosures which might be unreliable, risking prosecution. So why isn’t the quality of the information as expected? What can be done about it? Enterprise-level information comes from data collated from across multiple operational systems. In large organisations, headline revenue, cost, inventory, asset and customer information is likely aggregated from hundreds of systems. The data will have been gathered, manipulated and stored according to localised processes supporting functional requirements. Locating, verifying, extracting and matching this information will have often required manual intervention, upheaval and expense. Faced with these challenges, some companies employ teams of analysts in expensive yet unreliable attempts to weave incongruous data into something meaningful. The resulting approximations may guide executive decisions but such figures won’t do for compliance reports. Regulators seek returns that are accurate, transparent and robust. Executives can easily identify whether their business is suffering from information challenges. Perhaps it’s hard Trillium ind insight.indd 66 to obtain reports on business performance at short notice? Or maybe reconciling sales figures with product lines is difficult? Or the company might lack a consistent, accurate view of customer data? With the compliance burden on directors increasing, their requirement for fast access to reliable information must be met without compromise. That’s why companies are seeking to establish enterprise information quality assurance programmes. Such an initiative entails freeing information from functional or departmental silos, specific systems and technologies, and making it available as a reliable, cross-functional, cross-architectural enterprise resource. Often known as ‘information governance’, it involves orchestrating people, processes, technology and lines of business to secure, administer and manage organisational information and data assets in line with overall business requirements and goals. The benefits extend from enhanced compliance disclosures to better decision making. Financial control can be improved along with asset management, inventory and supply-chain management. Customer relationship management, marketing and sales all benefit from improved insight. British Telecom is one example of a completed information quality assurance initiative. Directors instigated a seven-year programme focused on improving the return on investment of data dependent processes and systems investments. Benefits exceeded $1.2 billion. Another example is British Airways, which needs to ensure commercial data reliability in support of good customer service, effective processes and decision making. The good news is that fi rms don’t have to take a ‘bigbang’ approach. Selecting a specific business area can quickly deliver dividends. The information reporting demands placed on businesses continue to grow. Organisations operating without a formal information governance policy will experience an increasing rift between the information they can muster and its fitness to support the demands they have of it. The winners will be those taking action now. Using proven methods, best practices and services, companies can run highly effective information quality assurance initiatives. ■ Ed Wrazen is vice president, product marketing at Trillium Software, a business of HarteHanks, Inc and a leading enabler of Total Data Quality solutions. He can be reached at trillium. firstname.lastname@example.org or via www.trilliumsoftware.com 07/12/2010 13:29 TRILLIUMSOFTWARE_AD.indd 2 30/11/2010 13:56 â€œPhilips is going to shift away from products to become more involved with Solutions and Services. So strategically, IT is going to play an even greater role.â€? Maarten de vries.indd 68 07/12/2010 14:52 BIG INTERVIEW W Maarten de Vries, Global CIO and head of supply at Philips, tells CXO how the company’s IT department is adopting an even greater role in shaping the innovative future of the company. Maarten de vries.indd 69 | 69 ith the brand promise of ‘sense and simplicity’ the driver behind Philips’ innovations, one could deduce that the company’s IT leader had little influence in shaping its creative direction. After all, IT is an inherently complicated, arcane industry populated by socially reclusive technophiles beavering away in strip-lit backrooms, right? Not quite. At Philips, IT plays an extremely important role in innovation, says Philips’ Chief Supply and Information Officer, Maarten de Vries. “There are three layers of IT innovation at Philips – cost innovation, process innovation and business model innovation,” says De Vries. “We link IT to Philips’ overall health and wellbeing strategy, and have defi ned a strategic framework for IT in the form of a pyramid. The bottom of the pyramid is the foundation of IT, the cost innovation, where IT works at the required service levels to implement foundational processes, such as enterprise resource planning. The second layer is what we call the enabling layer. Th is is where IT enables the Philips businesses to drive value through process improvements, so this is process innovation. And at the top layer of the pyramid – the business model innovation – is the co-creator layer, where IT plays a role in the creation of products.” Globally dominant in the sectors of consumer lifestyle, lighting and healthcare, Philips is one of the world’s most recognisable brands, drawing on its ‘sense and simplicity’ to deliver leading products that meet the varied needs of its customers. Its innovation is reflected in the 48,000 registered patents, 35,000 registered trademarks and 56,000 design rights the company owns, and it is the field of IT that enables Philips to continue to push the boundaries of design, creation and innovation. “Th rough our IT solutions we enable the improvement of customer-facing processes, marketing processes and business intelligence solutions,” says De Vries. “Moving forward, Philips is going to shift away from products to become more involved with solutions and services. So strategically, IT is going to play an even greater role at the top of the innovation pyramid, driving business innovation.” Examples put forth by De Vries include consumer lifestyle and healthcare solutions, with the IT department strategising how, when and where the next wave of Philips innovation will come from and be targeted to. “I’ve experienced favourable circumstances at Philips over the last few years in that there have been a lot of opportunities for me,” reveals De Vries. “As a global company, Philips can offer a lot of opportunities, and I have spent time in different regions, different continents and different roles, from Asia to Europe, and from finance to now working in IT and supply. So it has been important for me to be able to work outside of my comfort zone and stretch my own capabilities, and I think that has helped me tackle the functional side of IT while also meeting the innovation challenges too.” Additional challenges that De Vries has had to overcome recently have evolved around the economic crisis: something that has permeated all areas of business throughout Europe and beyond. “We launched our current IT strategy in 2008, which was before the crisis really took hold,” says De Vries. “Part of the strategic framework involves organising ourselves in a different way, analysing which parts of the business we need to strengthen, our competencies, and which parts we will outsource as a utility. So we basically had this game plan in place before the crisis, and this is still the case – the crisis isn’t a new element to our strategy, apart from perhaps speeding up some of the things we would have executed anyway.” As Chief Supply and Information Officer, De Vries is charged with juggling Philips’ IT strategy, developing advanced technologies and applications, creating useful and game-changing innovations and also managing the Philips Supply. Recently, to support Vision 2015, Philips has evolved its value chain from product supply chain to a customer value chain; a subtle shift, but one that will bring great value to the company and enable its growth strategy, as De Vries explains. “During the crisis we have basically focused on four elements in supply – cost, cash, consolidation and risk management. Cost is quite obvious: it is our focus on total cost of ownership and reducing costs together with our suppliers’ cash and looking at the payment terms we have with our supplier lines. We also work on innovations like supplier financing, leveraging our balance sheets and helping our suppliers or partners. Supplier consolidation involves growing with those suppliers which we see have a future with us, an approach that means we are clearly focused on the financial health of our supply base, enabling the team to emerge much stronger from the crisis.” Enabling business Employee engagement It is an exciting time for Philips’ IT department. The typical line toed by most CIOs is one of aligning IT with the business, of being seen as more than just a cost centre and of diversifying beyond simply ‘keeping the lights on’. Th is has been the generic rhetoric of every CIO since the global economic downturn. And while De Vries’ own stance is not markedly different, there is a greater emphasis at Philips that its IT will drive, innovate, solve and deliver, rather than simply assist the business in a secondary, reactive manner. An effective way of riding out the financial crisis is to nurture a tight working environment, one that is conducive to creativity, loyalty and synergy, with every team member feeling valued and a vital part of the company’s overall success. Philips has been able to cultivate such an environment, particularly in the IT and supply areas where De Vries has been instrumental in ensuring the company’s high standards are achieved on a daily basis. “If you have a clear strategy and set the right agenda, you can focus your organisation through good leadership,” says 07/12/2010 14:52 70 | BIG INTERVIEW Philips’ EcoVision5 side, I worked on getting both functional areas on to the agenda of the supervisory board. On a quarterly basis we have dedicated quality sessions on IT and supply with the board of management, and less frequently with the supervisory board, to make sure that our objectives are fully aligned with the members of the board. Bringing care to 500 million people “We have created a structure (Healthcare division) where the IT function is not only embedded into the three sectors of Improving the energy efﬁciency of its overall portfolio consumer lifestyle, healthcare and by 50% lighting, but is also better in the func(Lighting division) tional areas, because IT is fi nally automating processes, having linked IT to Double its collection of recycling amounts and recycled the core global processes of our company, materials which are embodied through what we call (Consumer lifestyle division) functional boards.” But how do these functional boards operate in real terms? “An example of a functional board is the sales leadership board, which consists of a chairman – the top sales leader – from each of the three sectors. IT is a member of this sales leadership board, and it has a very important role to play in terms of enabling process innovation, which includes improvements of the Philips processes, where it is linked to CRM or linked to pricing processes for example.” In 2009 Philips reviewed its sustainability strategy and decided to make sustainability an integral part of the company’s overall vision and driver for growth. Since then, the EcoVision5 project has laid down a number of goals and targets for 2015, including: Supplier sustainability De Vries. “We have a huge focus on engagement at Philips. We spend time to make sure that our leadership is engaged with the broader employees, and we have dedicated actions within IT and supply to pull together in the right direction.” One tangible measure of this approach is Philips’ ‘Leading to Win’ program, a new philosophy behind the company’s global way of managing the performance and development of all its employees.. “We look at two axes,” he says. “The fi rst axis is the ‘what’: measuring the objectives you deliver against. The other axis is the ‘how’: how you have been able to deliver on these objectives (your behaviours). The ‘how’ should be in line with the company values. Th at is a change in how we direct people because the ‘how’ and the ‘what’ are both equally as important in the performance evaluation of our employees.” It’s not just employees who benefit from the engagement practices laid down by De Vries and his team. The management leaders at Philips have been urged by Gerard Kleisterlee to work on several initiatives in order to drive the business forward, something de Vries has taken to with great vigour. “When I came in on IT, and then later on the supply Maarten de vries.indd 70 Alongside economy and engagement, the environment takes pride of place in the pantheon of Philips’ great concerns. As a market-leader in the fields of lighting, healthcare and consumer lifestyle, Philips is well placed to instigate change, and it is a responsibility that the company takes very seriously. Philips’ own research has revealed that electrical lighting accounts for 19 percent of all electricity consumption, and so the company is committed to delivering better and more affordable energy-efficient solutions to its customers. Such a strategic outlook obviously impacts upon Philips’ IT department, and it is on the issue of sustainability where de Vries has been largely instrumental. “Sustainability is at the centre of everything Philips does, and on the supplier side we have created a global team that has been set up to tackle the key challenges in this field,” says De Vries. “The team is managed out of China because much of the issues we face in supplier sustainability are related to the emerging markets, so China, India and Latin America are all important.” Linked to the EICC (Electronic Industry Citizenship Coalition), Philips shares its sustainability practices and ideas with fellow electronics companies, which includes auditing suppliers to ensure a consistent level of sustainable practice across the board. “We have an approach to help our suppliers reach the required level through auditing and collective action,” says De Vries. “If they cannot reach these required levels then we have to take action, and that might sometimes lead to delisting of a supplier, although gener- 07/12/2010 14:52 REASONNET_AD.indd 1 07/12/2010 16:58 72 | BIG INTERVIEW ally we adopt a softer approach, looking to train and advise rather than exclude.” Th is commitment from Philips extends far beyond its laboratories and HQs. The company has developed ways to reduce its environmental footprint throughout every sector of the business: in manufacturing, procurement, its products and even in the communities where the company operates. Every product introduced by Philips will have undergone rigorous testing to ensure its environmental friendliness. There is an EcoDesign process employed by Philips that identifies the environmental impact of their various products in terms of energy efficiency, hazardous substances, weight and lifetime reliability, and recyclability. Its green product sales are verified annually by an independent third party, such is the commitment of the company to prove its green credentials. IT has to work within the same rigorous parameters. With EcoVision4, Philips has, by 2012, committed to the generation of 30 percent of its total revenues from green products, doubled investment in green innovations to a cumulative €1 billion, and an improvement of its operational energy efficiency by 25 percent with a reduction of its CO2 emissions by 25 percent as well, all compared with the base year of 2007. Philips’ EcoVision4 environmental action program began in 2007 and will run through 2012, next to itsEcoVision5 program, which runs from 2010 to 2015. EcoVision5 raises the bar in Philips’ overall approach to sustainability and its ambitions throughout the company by broadening the scope of the program well beyond the way it interacts with the environment. “Additionally, there is a huge focus on collaboration and productivity where we have implemented what we call a Connect Suite in the company, with one example being Connect Meeting,” says De Vries. “So we have been rolling out high defi nition video conferencing, and at the moment we have 38 rooms live. Soon that will be 50 rooms live, allowing us to create a possibility for the people to collaborate much better and to work in virtual teams instead of travelling by air and basically consuming vast amounts of CO2. Another example is our One Printing Initiative, which is an aim to reduce printing by up to 30 percent. We also have supply chain initiatives to reduce CO2, so there are a number of initiatives going on in the IT area and the supply area to drive this.” “Th is all comes back to engagement with your employees,” says De Vries. “As part of the Connect Suite we have launched a number of collaboration tools, which is a measure that is very much linked in to two key KPIs in the company. The fi rst KPI, as mentioned, is engagement – to improve the employee engagement. Secondly, it was to improve the productivity of our employees.” Philips has recently introduced a new social media platform internally called Connect Us. Utilising a sophisticated set of tools within the suite, the Connect Us soft ware has brought together various disparate sections of the company, and united them with a single platform for collaboration and discussion. “First of all we created a speed of resolution and information in the company that was far, far higher than anything used previously,” says De Vries. “Th is was all designed to unlock the potential of the total organisation, of the total crowd, basically. Th is is similar to crowd sourcing, where you make the experts in the company visible and you connect the people to those experts – and it is something that was basically impossible before.” The resulting feedback from this initiative has been universally positive. “Previously, when an employee or a manager had a question it would sometimes take days or weeks to receive an answer,” says De Vries. “Now you have a situation where people, within the hour or maybe two, have an answer, or a referral to an appropriate person or source. We track some of these examples and share them back with the organisation to create a fertile loop of engagement around Connect Us.” And by tapping into that potential from within, Philips is better equipped than ever to achieve its aims of sustainable practice, employee engagement and constant innovation, all on the back of De Vries and his team’s insight, desire, sense and simplicity. The potential within As is the norm for a CIO of such a prominent company, De Vries’ role is increasingly hard to defi ne. If the goalposts are not being moved by external economic or market pressures, objectives and initiatives are constantly being reassessed internally by the powers that be. CIOs have long had to learn to juggle the various pressures of their role in order to remain viable, and De Vries is no different. In addition to supplier sustainability, environmental awareness and IT innovation, he has to also manage and inspire a large team; something he feels is made all the more rewarding by unlocking the knowledge that resides within the company. Maarten de vries.indd 72 07/12/2010 14:52 ACTIVEPOWER_AD.indd 1 30/11/2010 13:46 74 | ROUNDTABLE Data centres: the discussion CXO invites ﬁve leading data centre solution providers to discuss the hot topics of the industry, from delivering faster and cheaper data centres to understanding the agility and scalability required to respond to industry demand. Good data and information management is key for any business, but what is driving today’s increased pressure on companies to deliver faster and cheaper data centres? Damien Simon. The amount of data that is being processed is increasing rapidly. By 2015 the amount will double compared to 2007. There is good technology needed to cope with this demand. Think of technologies such as consolidation and virtualisation using blade servers with fast I/O ports. At the same time, economic circumstances increase the pressure on IT departments to bring down operational costs, while one cannot make any compromises on safety and security. Finally there is increasing pressure on the whole data centre industry to become more energy efficient. Keith Sullivan. The digital age is dramatically changing the way we communicate. With ever increasing expectations on speed, availability and accessibility, and the help of fastdeveloping technologies, the Net Generation is producing and consuming data at a rate exceeding the amount of data processed in all of human history within three years. To date, Moore’s law holds true – capacities of the digital technologies such as computing power, storage density, resolu- Data Centre.indd 74 tion of capturing devices, data transmission speeds double every two years. Companies strive to improve customer responsiveness. As a result, more transactions take place electronically, data centre services are now critical to virtually every business. Furthermore, transactions and success in the financial markets depend on microseconds while regulations (Sarbanes-Oxley, BASEL) require companies to keep more data available and traceable. At the same time, businesses need to be run profitably. In times of financial crisis and global competition, provisioning of digital services is not excluded from cost optimisation. Organisations look at both: investments and operational cost. Keith Sullivan started his career in ﬁbre optics in 1994 and joined Corning in January 2000. In this time he has worked in Process engineering, Development engineering, Sales, Marketing, Product Management. After two and a half years as the Sales Director for EMEA for Corning’s enterprise business, he has recently transitioned into the role of Marketing Director for EMEA. He has a wealth of experience in ﬁbre optic infrastructure, having worked with all the major European telecom providers and extensively in enterprise projects across the EMEA region. Lisa Brown. The demands and needs of the business to deliver more with less continue to increase through this tough economic climate. The challenge and drive is for faster deployment at a lower cost with a superior architecture. The data centre is a critical infrastructure for most organisations and information management is critical fuel for the success of their business. 07/12/2010 14:54 CORNING_AD.indd 1 30/11/2010 13:49 76 | ROUNDTABLE IT executives and data centre and facilities managers can no longer get away with simply growing capacity to meet demand. They are also challenged with managing the overall efficiency and effectiveness of their growing operation. Energy costs alone are anticipated to be the fastestgrowing cost in datac entres as organisations expand infrastructure capacity to meet evolving business and IT demands. The ability to fi nd ways to reduce this expense while the pure requirement for the resource is growing can be daunting. William DiBella. The principal business drivers for cheaper and faster data centres are: energy growth, power & cooling costs, increased KW requirements per square metre, need for increased floor space, cloud computing, sheer number of legacy data centres that need to be refreshed to meet today‘s as well as tomorrow’s future business and technology requirements. Data centres are evolving into a commodity; this dynamic – coupled with the pressure of achieving the data centre Holy Grail of ‘IT optimisation’ – has resulted in lowering costs, increasing efficiency and implementing newer technologies. Power consumption within the data centre increases costs and adds pressure on budgets. CIOs are being proactive in preparing for tomorrow’s problems and major issues. If they do not implement cheaper and faster data centres, they will be burdened with excessive energy costs that will impede their ability to compete. Increased automation, capacity planning, monitoring techniques, virtualisation Data Centre.indd 76 and consolidation have also contributed to faster, cheaper and efficient sites. Management’s business message will continue to be: ‘increase efficiency to deliver more for less.’ Stefano Mozzato. Performance and efficiency without compromise: briefly stated, this is the current mission of organisations. The efforts of companies to optimise their data centres are aimed at ensuring that data processing environments can meet increasing computing capacity requirements, while offering high flexibility for future architecture developments. Both of these keep the focus on energy cost reduction and on granting no risk for system availability, which is crucial to business. Many companies are looking to streamline their data centres, so what solutions do you offer that can enable them to do so? DS. Nexans offers structured cabling solutions to support dependable data centre infrastructures that meet key operational, economic, energy saving and future growth requirements. To start with future requirements, we offer fibre and copper cabling solutions that provide easy and cost efficient migration paths to higher bandwidth such as 40G and even 100Gbps. Furthermore, high-grade copper cabling systems (such as category 7A) are designed to help the energy savings initiatives of IEEE. Data centres tend to have limited floor space, which we address with high density panels, racks and cabinets. There is normally very little time available for integrators to deploy Lisa Brown leads Active Power’s marketing and sales operations units with responsibility for integrated marketing, product management, marketing communications, public relations and sales operations functions. Prior to joining Active Power, Brown spent 14 years with Broadwing Communications where she held executive positions including vice president of Marketing, Sales Operations and Customer Operations. 07/12/2010 14:54 CENTRICSOLUTIONS_AD.indd 1 30/11/2010 13:47 78 | ROUNDTABLE William DiBella founded Connectivity Technologies, served as President of AFCOM, and is currently President/CEO of Centric Solutions. He has been published in ITO America, Strategic Path, BMUS, CXO, and RFID Journal, and has appeared on MSNBC, CNBC, and TXCN. He has 30-plus years’ experience in physical layer infrastructure connectivity design. cabling. We address this with pre-manufactured and pretested cable assemblies that can be installed very quickly. KS. Cloud computing and the underlying virtualisation of servers and storage locations require flexible and capable networks. Simultaneously, energy costs drive the deployment of efficient equipment as computing power density (kiloWatts/equipment rack) has been increasing rapidly and data centre space become a scarce and expensive resource. Altogether, network cabling accounts for less than 5 percent of the overall IT infrastructure cost. Investments in legacy technology can turn initial savings into huge efforts and increased follow-up cost when time comes for system upgrades. Network infrastructure solution providers need to offer cabling systems able to accommodate the next two or three generations of transmission technology. A combination of space-saving connectivity and fast and easy deployment and use with a pay-as-you-grow ability allows scaling at minimum effort in system planning, installation and management. LB. When it comes to streamlining data centres, organisations want products and solutions that carry less risk, less cost, less space, less complexity and lower energy consumption. They also want the ability to work with just one vendor that can provide a complete turnkey solution. It comes down to convenience, value, accountability and a lower total cost of ownership (TCO). With these principles in mind, Active Power developed PowerHouse, a line of modular, containerised continuous power solutions primarily designed to support enterprise data centre applications. PowerHouse is factory-built and Data Centre.indd 78 tested for rapid deployment and can be located inside or outside your data centre. PowerHouse contains all critical power infrastructure components in one streamlined, space-saving containerised package. The system typically contains diesel generators; Active Power’s patented high efficiency flywheel UPS (uninterruptible power supply) system; switchgear; and monitoring and controls soft ware. PowerHouse operates at an extremely high energy-efficiency level and has lower service requirements and maintenance costs as compared to traditional infrastructure. The result is a significant TCO savings, up to 60 percent compared to that of a traditional infrastructure and up to 45 percent in the first year. WD. Centric Solutions’ custom infrastructure cabling connectivity products and solutions are designed and manufactured with RFID value added capabilities. Through the combination of our soft ware –‘Centricity’ – enabled RFID connectivity products, and uniquely designed RFID portal systems, the client for the first time has an end-to-end RFID automated information system. Th is solution effectively enhances your ability to manage, monitor and track assets, time stamp activity, provide instant correlation of product, location, time, and personnel for improved security and real time inventory. Additionally RFID can automate cable management documentation, ease the difficulties in locating data cables, supply readily available information on product attributes, minimise your workload through automating the management of assets and the relationships between assets resulting in a seamless path that streamlines infrastructure costs, labour, time and simplifies many of your processes. Centric Solutions’ EN Series cabinet system stream- 07/12/2010 14:54 ROUNDTABLE lines data centre space (footprint) requirements, reduces air flow obstructions from cable under the raised floor, simplifies installation time and routing of cables, and reduces cable slack management problems above and below the raised floor. Our custom designed fibre optic jumpers are smaller in diameter through the utilisation of single-body connectors. Our fibre optic trunk cables possess superior protection from our sub-unitised construction while also maintaining a small diameter. Centric’s high density front access patch panels minimises cabling installation costs and reduces the number of cabinet bays required to house fibre optic connectivity. Overall, our custom infrastructure products and solutions diminish the complexity of your processes and infrastructure topology. SM. We offer solutions that address the needs of all sizes of computing environments – from small data centres (starting with a couple of racks) up to large data centres with thousands of racks. Our expertise allows us to start with the assessment of the existing infrastructure through site survey and to address from the data centre infrastructure layer (cooling, power protection, power distribution, racks, cable management, local monitoring) up to the IT infrastructure management through the broadest offering of data centre infrastructure management (DCIM) solutions available, from brands like Avocent, Aperture and Liebert. How do you ensure your data centres remain agile and ﬂexible enough to respond to ﬂuctuating business demand? DS. Personally my fi rst message is always: you need to decide first about the design or architecture. It is a bit like designing a house: you can use the best materials you have, but if your bathroom is in the middle of your kitchen it’s useless; you really need to put things in the right place. For the design of data centres the question is: Do you go for top-of-rack, end-of-row or middle-of-the-row? Each have their plusses and minuses. Generally speaking to achieve best flexibility and agility the last two options are the better ones. These designs accommodate future changes easily and most cost effectively. The best approach is to regard infrastructure solutions as a structured cabling utility, rather than a patching system. It may cost a bit more initially but it will defi nitely pay back during its lifetime when changes to network and increased bandwidth requirements are to be implemented. Finally it is important to have the right management tools in place to monitor physicial connections in real time. That can help in planning, controlling and reporting for operational improvement. KS. New technologies often come with new requirements on the infrastructure. These requirements need to be addressed at an early stage, when standardisation is still in progress, if one wants to build a future-proof solution that last for more than one generation of networking gear. Network infrastructure solutions must enable moves, adds and changes while keeping the cabling manageable. Homogeneous media Data Centre.indd 79 infrastructure based on laser-optimised optical fibres allows an every-to-any approach to connecting network devices, keeps the physical layer flexible to create varying logical and functional network configurations and topologies, and can provide for seamless migration across generations of data transmission technologies up to 40/100 Gbit/s. LB. We deliver flexibility through a modular product approach. Our PowerHouse product line as well as our CleanSource UPS line are both modular in nature. They allow the client to grow their system in line with their needs, not spending precious capital or using valuable space before it is necessary. With many competitors, growing a system in the field may require taking operations offl ine. With Active Power, this is not the case as we can deliver and deploy additional capacity to meet growing client needs and business demands without disrupting business operations. WD. Utilisation of either public or hybrid cloud computing sources can assist you in solving the challenges that fluctuating business demands bring. Not only does cloud computing support your requirements of agility and flexibility through its pay-as-you-go business model, it also delivers added cost savings in the areas of capital expenditures of servers, energy costs, IT management, floor space, enterprise infrastructure connectivity and storage requirements. Additionally, the time frame required to install hardware and implement your clients’ business or increased workload is reduced, resulting in a faster revenue stream and improved cash flow. Focusing on scalability and capacity planning, leveraging technologies such as: virtualisation, automation and identifying qualified readily available outsource vendors are also key points to consider. Understanding the importance of personnel is critical. Establish a strong cultural environment for employees from top to bottom of your organisation to exchange ideas and review processes on a regularly scheduled basis. | 79 Stefano Mozzato, Emerson Network Power Marketing Director for Liebert Business in EMEA. He started his career in R&D, and then he took over the responsibility for the Flexible Space System business, a segment of business linked to the intelligent building. Since 2004 he has been leading the EMEA Marketing Team and since 2009 he has been given speciﬁc focus on Product Marketing for Liebert Precision Cooling Products, Data Center Solutions and on Strategic Marketing for Liebert products. SM. Emerson Network Power’s solution platform is adaptive and meets the requirements of all kinds of data centres, whatever the layout, dimensions and features of installed servers and devices. In our portfolio we have innovative solutions that can condition IT rooms only when and where necessary, with no energy waste. Environmental solutions located intrarack or directly inside server cabinets offer maximum flexibility in the construction and expansion of a data centre. The key point is that those solutions have been developed to address the needs of our long-standing customers’ installations. What are the infrastructure complexities that need to be understood in order for a company to extract a greater, more efﬁcient performance from their data centres? DS. There seems to be a natural divide between the facilities management and the IT management of data centres. 07/12/2010 14:54 EMERSONNETWORKPOWER_AD.indd 1 06/12/2010 14:02 ROUNDTABLE | 81 technologies such as Infiniband. Running different generations of transmission speeds or upgrading to higher speeds in the data centre requires laser optimised multimode fibre links. These fibres, known as OM3 and OM4, support legacy and emerging transmission speeds and provide for most cost effective solutions and extended reach in data centres up to 40/100Gbps. LB. Understanding total cost of ownership (TCO) is key. To achieve a low TCO, the components must be well understood and their performance easy to measure. To help enable this for continuous power infrastructure, Active Power provides a variety of tools. Prospective clients can visit our website to try out our efficiency calculator, which measures at a high level the potential implications of different infrastructure choices. For clients we are working with one-on-one, we offer an in-depth TCO consultation that incorporates the specifics of the client’s operation, environment and organisation to deliver a comparison to typical alternatives or actual existing infrastructure. For clients utilising our infrastructure, our systems offer a real time monitoring and reporting platform that provides critical performance data on the system that can easily be extracted and analysed. Or, we can seamlessly integrate into a client’s building systems platform, feeding critical data into the management platform our client has chosen. WD. The Infrastructure complexities that a company experiences will vary greatly depending on the size and age of their facility, specific business requirements, personnel experience level, management’s involvement in industry organisations and the educational conferences they attend. Generally speaking, most data centres over time will encounter the need to solve varied infrastructure complexities. They include: controlling growth in power usage, implementation of various cooling technologies, server virtualisation, cloud computing, understanding the specifics of physical layer infrastructure connectivity on migrating from 10 Gig, to 40/100 Gigabit, asset management & tracking, automated information gathering techniques and processes, capacity planning, automation to achieve increased operational efficiencies, greening and IT optimisation processes. Measuring data centre performance and efficiencies is dependent on understanding the metrics involved; many industry organisations can provide the tools needed to assist you. This sometimes adds an extra complexity to good performing data centres. This was confirmed in a study we recently conducted on “greening” data centres. We deliver tools that can help both departments to manage the physical infrastructure to plan, control and report. These tools are often used for increased security with IP traffic controls and alerts. They can also link to energy saving through power and environmental monitoring. KS. Today, data centres are divided into functional areas that often fall under different administrations. Server specialists provide computing power; storage experts various levels of memory space. Connecting everything falls into the responsibility of the networking group. Sometimes the cabling itself is even assigned to facility management. In order to leverage the potentials of a holistic network infrastructure approach, these functions and areas need to be aligned. Array fibre-based backbones provide for migration capabilities where legacy duplex fibre networks may not meet the performance specifications for skew, insertion loss and distance capabilities required in parallel optics applications like 40 and 100Gbit Ethernet and High Performance Computing Data Centre.indd 81 Damien Simon is product manager for data centres at Nexans Cabling Solutions. SM. Optimisation needs to be considered at the data centre infrastructure level, and not only at each individual technology level, such as cooling, power, monitoring etc. Virtualisation, specifically, has created a dynamically changing application environment operating on a static physical environment, exposing a critical information gap between the data centre and IT infrastructure layers and the inefficiencies that gap creates. In addition to a broad range of solutions from switchgear to power and cooling equipment, Emerson Network Power has expertise and solutions on both sides of that information gap. 07/12/2010 14:54 THORDATACENTER_AD.indd 1 30/11/2010 13:53 EXECUTIVE INTERVIEW 83 The ecological advantage In the midst of rising energy costs, Jon Viggo Gunnarsson helps his data centre customers get greener, cleaner and leaner. national organisations and movements gather and share information on environmental issues. Some geographical locations have certain advantages, obviously. The ideal data centre would be fairly new, located where the energy is clean and plentiful and from renewable resources, pollution free, and relatively close to its target markets, or with acceptable latency. Th is is not always feasible. However, data centres being designed and constructed today are much more energy efficient than those built 10 or 20 years ago. Additionally, there is a greater awareness of the environmental impact the data centre industry has on global warming, particularly in those areas that use energy made from oil, coal or gas. In the UK, businesses are waking up to the new legislation, which will impose taxes on the largest users of energy, so the pressure is increasing on the data centre industry to provide solutions. The focus is now both on Power Utilisation Efficiency (PUE) and green energy. Businesses are willing to look farther afield to fi nd the right mix, and they are expanding their horizon. New data centre locations are gaining attention and Iceland is one of those. It has clean, abundant energy from pollution-free, natural and renewable sources and stable energy prices. “Since customers eventually pay the price, we have found that they now care much more about environmental issues than before.” How does a data centre bring down energy costs? Jon Viggo. The data centre industry is continually searching for ways to improve the use of energy and cooling. No stone is left unturned. The industry is both in facility management and information technology and consequently has to look for every advantage at each decision point, from selecting building materials to choosing the optimal computer equipment with the best energy to computing power ratio. Location is vitally important, as are all the logistical aspects of the site for a proposed data centre. Climate, available energy and stability can be crucial, as well. Once those factors have been weighed and considered, the additional elements in any data centre business plan are put into place. Jon Viggo Gunnarsson is the Chief Executive Ofﬁcer at Thor Data Center in Iceland, which is considered the most eco-friendly data centre in the world today. www.thordc.com Thor Execv Int.indd 83 How can the customer know which data centre is ecologically friendly? JV. Currently, there are no classifications or certifications that data centres can apply for or present as proof of their ecological efficiency, although this might be beneficial to both the industry and customers. However, various inter- How does a country’s power infrastructure affect a data centre customer? JV. Some European countries have reached or are near to reaching the capacity of the electrical power distribution system, at least in some areas. Consequently, a data centre customer may not get all the electrical power that they might want, in order to make the most of his investment at a given location. Th is decreases efficiency and puts constraints on what kind of equipment or service can be run at that location. Therefore, customers in areas with ageing power infrastructure are increasingly looking for data centres that can provide a higher power density to their equipment, while remaining competitive on all other fronts. What is the competitive advantage of using an ecofriendly data centre? JV. Every business that is in touch with its customers makes an effort to be aware of the changes that affect its clients. The quicker they respond, the more likely they are to retain their customers and attract new ones. There is probably no single issue more predominant in this day and age than man’s effect on the environment. Conversely, the bottom line matters most for business. When these two go hand in hand, everybody wins. ■ 07/12/2010 13:29 84 | ASK THE EXPERT The ultimate change agent From balancing resources and assets to helping ensure quality of service, today’s data centre functions are the critical change agent for business transformation, says Stephanie Carullo. T oday’s enterprise operates in a highly competitive landscape shaped by new market pressures, business demands and IT challenges. The economic downturn, capital constraints, increased regulation, energy shortfalls and globalisation are shaping a new business environment. At the same time, companies are trying to cope with the increasing volume of data, devices, and technology in a new reality of constant change. Again and again, CIOs are asked to do more with less. Can you roll out new applications in days instead of months – and without deploying new physical servers or storage capacity? CIOs must compromise to increase speed and support more dynamic business process changes. Their goal: create an agile and efficient data centre that is capable of transforming the business to meet these challenges. How do you empower your organisation to embrace these shifts? Look to the data centre as the critical change agent. A unified architecture can support choice and flexibility in both technologies and partners, which in turn will help ensure investment protection. From that foundation, you can deploy IT services faster to accelerate revenue, improve profitability across the organisation, and promote new business models as often as the market demands. The ultimate goal is an open yet controlled environment that transforms the data centre from a cost centre into a competitive tool. There are four requirements for success: technology innovation, systems excellence, a solutions-oriented approach and business value. The most important element of a data centre transformation is the underlying technology that is in place across the end-to-end infrastructure. Only standards-based innovation and choice in platforms allow businesses to deliver new capabilities and enter new markets quickly. From switching and storage to computing and operating system and application networking components, you need to consolidate networks within a unified fabric, with policybased management and provisioning across the layers. A systems-based approach for consolidation and virtualisation dramatically reduces costs, simplifying management and infrastructure in the data centre. With open APIs and standards, you can improve scaling and application delivery. The result is an agile and efficient data centre that can respond immediately to changing business needs. Whether you want to build a private cloud or automate data centre operations, a holistic approach is crucial to success. Joint solutions such as the Virtual Computing Envi- Bleu marketing.indd 84 ronment (VCE) coalition’s Vblock Infrastructure Packages enable new consumption models for customers to buy the data centre services and capacity they need to grow. The combination of technology innovation, systems excellence, and solution differentiation leads to greater business value for the enterprise in the form of more choice and flexibility, a unified architecture, and improved investment protection. UK-based financial service provider Winterflood Securities offers insight into the data centre transformation process. Following the introduction of the 2007 Markets in Financial Instruments Directive (MiFID) in Europe, the company experienced a drastic increase in trading volumes, from three to four million messages a day to 250 million, with surges of up to 30,000 messages per second. Winterflood Securities needed to respond to this dramatic growth in data and adapt quickly to new market opportunities. The company decided to review its entire data centre strategy and chose a next-generation data centre platform specifically built to accelerate the virtualisation process: Cisco Data Center Business Advantage. Uniting computing, networking, storage access, and virtualisation resources in a single energy-efficient system will help Winterflood Securities reduce IT infrastructure costs and complexity, extend capital assets, and act more quickly on new business opportunities. With the data centre as the critical change agent, CIOs can enable growth, increase performance and profitability, and transform the business. The convergence of business value with IT innovation is the foundation that enables customers to achieve business advantage in the data centre. Stephanie Carullo is worldwide vice president for data centre and virtualisation sales at Cisco, Inc. She leads cross-functional global teams responsible for Cisco’s go-to-market strategy for data centre architecture. 07/12/2010 13:53 MTB AD_B2B_2010_14june 28/09/2010 14:15 Page 1 Where future leaders learn MeetTheBoss TV is incredible access to the worldâ€™s business leaders â€“ so you can learn their winning strategies and attitudes first hand JOIN NOW Find out more at www.MeetTheBoss.tv 86 EFFICIENT IT Power and responsibility Vattenfall Europe’s CIO Hans Rösch talks to Ian Clover about the challenges he faces in managing the IT department at one of Europe’s most responsible and energy suppliers. I t’s one of the most widely accepted doctrines of our age: ‘with great power comes great responsibility’, and when taken into a global context, you see that it is a social dogma that generally holds true. The president of the USA has to juggle enormous military, economic and social power with the perpetual scrutiny of the world’s media and political elite; in nature, the male lion’s superior strength comes with the caveat that it is his job to protect the pride from external threat; and the very best supercars combine breakneck speed with the most sophisticated braking mechanisms the world has ever seen. Regretfully, some people, groups and organisations exploit this tenet, wielding their power disproportionately while caring little for their overall responsibilities, and skewing the balance that nature and mankind has nurtured so well. Hans Rosch.indd 86 And when a powerful entity gets it wrong, there invariably follows a media storm – BP’s Deepwater Horizon spill being an all too-recent and disastrous case in point. But when a company consistently balances great power with careful, commendable responsibility, barely a headline is made. It is under such calm circumstances that Vattenfall, the Swedish power company, operates. The Vattenfall Group is one of the leading power companies in Europe. It is the continent’s fi ft h-largest energy provider, and its largest heat provider, producing, distributing and selling energy to more than six million European customers. With such reach and impact, the company is acutely aware of the influence it wields over customers’ consumption habits, carbon footprints and CO2 output. As a result, 07/12/2010 13:24 EFFICIENT IT 87 to predict that increasingly our business would integrate the Vattenfall Group has developed a keen sense of corpoacross the various countries and across the parts that Vatrate responsibility, and has developed an IT department tenfall has acquired over the years.” that is charged with ensuring the company’s strategic opThe “One IT Infrastructure” team identified that the erations are efficient, consolidated and as environmentally way in which people were working was going to change responsible as possible. dramatically, so they developed a set of tools that support At Vattenfall Europe (which covers the German and the creation of virtual teams, allowing people to work with Polish activites of the group), CIO Hans Rösch knows only Stockholm partners in the morning, Brussels colleagues too well the level of responsibility on his shoulders as he in the afternoon and then with teams from Hamburg and steers the company’s IT objectives through the hoops of Berlin the following day. Such a setup obviously called the group’s five strategic ambitions: to be number one for for a more sophisticated and – most of all – common IT the customer; number one for the environment; profitable infrastructure. growth; a benchmark for the industry and the employer “The infrastructure had to allow people to log into of choice. IT, as ever, is playing an instrumental role in the wireless LAN without any problems at any site,” says helping Vattenfall live up to all of its inherent and adopted Rösch. “We needed far more facilities for video conferencresponsibilities. ing, both from video conferencing rooms but also from “We have taken these five ambitions as a starting desktops which we put in place. Audio conferencing took point to developing an IT strategy map that is similar to off from almost nowhere but people would always only a balanced score card,” says Rösch. “This score card actuhire external facilities. Now we have internal servers for ally breaks down our strategic ambitions into 17 objectives. that, and virtual project rooms based on enterprise content Each of these is related to at least one of the strategic ambimanagement. Th is technology really supports our objections and, in turn, each of the 17 objectives is supported tive of seamless cooperation across borders.” by a number of initiatives or strategic projects and To further deliver enhanced efficiency tracked by KPIs so that we know we’re followand more effective consolidation, Vating our strategy. “ tenfall has also worked on centralising Turning company ambition into Vattenfall its IT infrastructure – a move that has tangible benefit for the customer has employs required patient, considered planning long been the preserve of the IT departin order to achieve the efficient perment, as Rösch explains. “For the cuspeople and is formance that is so important to the tomers, serving them breaks down into present in eight company. two IT objectives. Business and IT build “There was a decision to absolutely efficient business processes, and secondcountries make consolidation and integration a ly IT is proactively involved in developing priority before considering changing the new offerings that create competitive edge. So sourcing model,” reveals Rösch. “Now we are we’re looking both at the existing business, how to gradually looking into sourcing components from the make it as efficient as possible and what IT can do to help market, so European-wide tender on WAN services is out. that, but also looking into the future at what new offerings Another principle we have also agreed on is our staff and there are.” employee representatives will make very careful studies of One example cited by Rösch is Vattenfall’s highly pubthe market when evaluating opportunities to buy services licised engagement in E-mobility. “E-mobility is intrinsioff the cloud, for example. We’re currently looking into unically linked to IT. So if you look at the loading station, an fied communication and collaboration-like services, such electric fi lling station on the street, this is connected to the as web conferencing. We have asked the suppliers on the billing system, and we are working on the future possibilshortlist to always specify two options.” ity to actually go roaming between stations belonging to “One option would be to run the services on a Vatdifferent providers, which is a challenge.” tenfall premise, onsite in our data centres. A second option Efﬁciency with IT would be to simply supply it as a service out of the cloud In addition to serving the needs of the customer, the that we then have to interface and connect with our own IT department of Vattenfall Europe is also tasked with infrastructure. We will see which is most economic from a consolidating its own infrastructure with the aim of t otal cost of ownership perspective.” making the company as efficient internally as it projects As always with the cloud, security and data protection to be externally. is a pressing issue, and it is something that Vattenfall takes “We undertook a group-wide strategic review of invery seriously – it is their responsibility to protect the data frastructure in 2006 and realised we were faced with two of their customers, and it is a responsibility that often falls challenges,” says Rösch. “First of all, when benchmarking into the hands of the IT department. “Protection of our the total cost of the IT infrastructure, it was clearly the case customer data is something that we are very, very careful that it was over the benchmark level. So we worked towards about,” says Rösch. “It is an extremely sensitive issue in consolidation and integration to reduce the cost of the IT Germany and we are happy to say that so far we have not infrastructure, while at the same time looking forward been involved in any of the big scandals that have swept 40,000 Hans Rosch.indd 87 07/12/2010 13:24 88 EFFICIENT IT t through German industry in recent years. We’d like to kkeep it that way.” EEmissions statement Low Lo w carbon carbon b living living in Berlin Putting theory into practice, Vattenfall Europe is driving an innovative low-energy living project in Berlin. Called ‘Märkisches Viertel’ (an area of Berlin), the company has equipped 10,000 apartments with smart meters, the aim being to encourage its residents to reduce their CO2 emissions. Current average emissions per typical household amount to 40,000 tons a year. The Märkisches Viertel scheme hopes to see these households reduce this to just 17,000 tons. “This is one of the largest pilots in Germany in terms of bringing smart meters to a large number of ordinary households,” says Rösch. “For about 350 households we hooked these smart meters up to their TV using a small connector so that they have a highly visible display without the added hassle of having to ﬁt much new technology. About 800 households have decided for he advanced option of online visualization. At the high end there is the most advanced option used by a few families which allows the display and analysis of the consumption on any iPhone, or iPod touch by using a small app. The scheme has just gone live and is being tracked by a socio-scientiﬁc <http://dict.leo.org/end e?lp=ende&p=Ci4HO3kMAA&search=socioscientiﬁc&trestr=0x8004> institute (IfS Institut für Stadtforschung und Strukturpolitik GmbH) to really measure the impact it will have on regular, average people rather than previous pilots in the past, where already energy-conscious individuals volunteered. We feel that this will be more representative of the population at large.” Vattenfall has modiﬁed the district heating plant at Märkisches Viertel to make it a combined biomass plant, based on power-heat generation technology. Once these reduced energy requirements are fully modernised and measurable, the plant will help Märkisches Viertel become Germany’s largest low-energy residential development, boasting – it is hoped – a CO2-neutral energy balance. Hans Rosch.indd 88 In managing the company’s data, Rösch faces pressure to t consolidate cost at all times, while also working within the t strict parameters of data security and corporate responsibility. s However, as part of the consolidation process of Vattenfall’s V IT infrastructure, the company’s own carbon emissions e have been impressively managed and reduced too. t “Cost is a primary driver of our consolidation strategy, but b our actions have also helped cut CO2 emissions, going from f the old way of direct attached storage to storage area network n systems that have also helped the environment in a more indirect way.” Although cutting CO2 emissions was never the primary objective behind Vattenfall’s consolidation program, the eventual result was warmly welcomed by the company, not least by Rösch himself. “We have been suffering from the same problem that every business faces – data volume grows and eats up almost any savings that you make on unit price reduction year by year.” In managing surging data growth – “a permanent challenge” says Rösch – Vattenfall Europe’s IT department has undergone a rapid improvement of its data centres. “Our data centres have been adapted to reduce cost and their impact on the environment, but also to become more flexible,” says Rösch. “To date we have reached a very high degree of virtualisation: we’re currently at 45 percent and are targeting 60 percent by the end of 2011. Th is facilitates our ability to set up a new virtual system for training or testing, and improves our ability to act in cases where we have to carve out parts of the company, unbundled due to regulation, or bring things together in merger situations. We have become a lot quicker on the infrastructure side, but we are still not where we want to be. It remains an ongoing challenge.” With a company-wide announcement that the Vattenfall Group is committed to reducing its CO2 emissions by a Hans Rösch “Our data centres have been adapted to reduce cost and their impact on the environment, but also to become more flexible” 07/12/2010 13:24 SCHNEIDER_AD.indd 1 20/09/2010 09:04 90 EFFICIENT IT third and will focus on producing low-emitting energy and gas in the coming years, the pressure is on to make good on these claims and aims. Vattenfall wields great influence throughout Europe, and it is a position that Rösch and the IT department must respond to. “We have, of course, new challenges relating to the specific needs of the new forms of energy production,” he says. “We have enormous engagements in offshore wind. It is a challenge for the IT department to support the project during the planning stage, and we are piloting a new project portfolio management system with our wind business unit. Our support comes in the form of helping the developers build these wind plants more efficiently, and also in helping them stay on track in terms of timescale. Once they are up and running, there remain specific challenges with maintenance and logistics, which is another specific challenge that is being addressed by our current IT activities.” As well as aiding and assisting the creation and maintenance of Vattenfall’s impressive wind energy objectives, IT is also helping to internally lower the company’s carbon footprint. “We have come some way in consolidating the number of data centres we use, but we are also looking towards improving the power usage effectiveness at these centres,” says Rösch. “At the facility we run in Hamburg the power usage effectiveness (PUE) is 1.7, while in our Hans Rosch.indd 90 brand new facility in Amsterdam it is 1.27, which is just about the best benchmark that I am aware of.” Finally, Vattenfall Europe has also switched the focus of responsible living on to its own employees, developing an internal project that has been designed to raise energy consumption awareness with the company. “We have installed smart meters at every floor on the main office building in Hamburg, and display each floor’s energy consumption on a big screen at the entrance to the company restaurant,” concludes Rösch. “We then organised a competition to judge which floor could bring down its consumption rates the most. There was a final prize of course, but the most interesting thing was seeing how much we were able to mobilise people to really change their ways.” So, lights were turned off when rooms were not in use, PCs were powered down each evening and unnecessary printing was kept to a minimum. “If you look at the emissions of Vattenfall as a whole then this project probably didn’t have much of an impact, but it was invaluable in educating our staff about energy consumption, and it is something that we can now take to the market and help our customers implement similar projects.” With Vattenfall’s own staff leading by example, the power company of choice for millions of Europeans is shouldering even more responsibility and environmental awareness, for which it should be roundly applauded. ■ “We have come some way in consolidating the number of data centres we use, but we are also looking towards improving the power usage effectiveness at these centres” 07/12/2010 13:24 SCHNEIDER_AD.indd 2 20/09/2010 09:04 92 ASK THE EXPERT The truth about energy management Over recent years, businesses have faced an increasing amount of pressure to improve and manage energy more efﬁciently. So what are the greatest challenges facing businesses when it comes to managing energy within an organisation? O ver the past few years, businesses have been pushed more and more to manage their energy effectively to deliver carbon savings to create a sustainable future. Different legislations have been implemented to drive society towards a reduction in carbon, the most recent of which is the CRC Energy Efficiency Scheme. Even with all of the legislation, businesses are clearly still fi nding it hard to relate to carbon reduction. According to a recent study carried out by Schneider Electric – The Future of Energy Management in the UK – organisations are more concerned with saving money than tackling carbon emissions. The report suggests this is because saving money is something they can relate to, as opposed to reducing carbon which is often seen as a challenge for someone else to address. Further to this, decision makers within businesses are unconvinced by the scientific evidence regarding climate change, and it is simply not seen as an important enough influence in a business’s decision-making process. Adding to the despondency is the fact that climate change is seen as too big and too remote to be an effective driver for implementing an energy efficiency management program. “Much more needs to be done to encourage energy users to be more proactive and thorough in their approach to energy management” In addition to not relating to carbon emissions, there seems to be a general lack of awareness when it comes to policies and legislations. The report showed that only 20 percent of organisations are aware of Part L of the Building Regulations and less than half (42 percent) recognise the Energy Performance of Buildings Directive. Th is is clearly a worrying trend for the government, which has implemented these to drive carbon reduction programs and to set clear guidelines for a greener vision for the future. Perhaps the government has started to recognise this, which would offer an explanation for the renaming of the Carbon Reduction Commitment to the CRC Energy Efficiency Scheme – in an attempt to ensure businesses can relate to the desired outcome of the legislation. Schneider ATE.indd 92 An additional problem lies in the fact that many organisations don’t recognise the need to regularly improve energy management programs. While many businesses do monitor energy (in fact, 70 percent according to the report), only a quarter have an energy management program. Th is highlights that while companies are taking the initial steps towards reducing energy, the commitment is not there to follow this through. The problem can be due to resource issues or lack of knowledge and understanding of what is required to implement a strategic approach to energy efficiency. It also suggests that much more needs to be done to encourage energy users to be more proactive and thorough in their approach to energy management. Looking to the future, the report predicts that people will re-engage if cost reductions become the focus of the Government’s agenda, as opposed to concentrating on emissions. Providing concise and clear guidelines on how businesses should implement their energy management strategies should help to effectively begin the process to adopt change for the future. Perhaps businesses need to feel as though their needs are the priority, as opposed to what the Government wants, in order to engage with the drive towards a greener society. ■ David Lewis is a qualiﬁed engineer who subsequently also gained a Masters business degree and has worked at Schneider Electric since 1989. He has a broad knowledge base in electrical technology, marketing, commercial and manufacturing management, having started out working on HV applications and design. David is responsible for the marketing of the company’s energy efﬁciency offer. David has a daughter and can be found supporting his local speedway team or relaxing with watercolours. For more information, please visit www.schneider-electric.co.uk 07/12/2010 13:28 SCHNEIDER_AD.indd 3 20/09/2010 09:04 94 TROUBLE SHOOTER Fresh prints of…thin air Steven Swift explains how a considered managed print service can help your company cut costs, improve efﬁciency and lessen its environmental impact. the beneﬁts of The Question. I’ve heard about efﬁciency, oved impr ices: serv print managed reducing e whil reduced environmental impact nd 30, arou been have costs (ﬁgures mentioned rience expe my as , tical scep I’m . even 40 percent) ing. Are noth for g ethin som get r neve tells me you so how are they the beneﬁts promised real? And if achieved? real; a survey of The Answer. The benefits are very carried out by MPS postand preanies 105 comp by outsourcPhotizo Group in 2009 showed that companies es devic ing ing the management of imag oyee, a empl per €250 of g savin ge achieved an avera caused by sions emis CO2 in ction redu nt 60 perce 10 percent of printing and imaging, and freed up independent by out ed IT resources. Analysis carri sample of large a s acros IT consultants NewField assessments, ided prov they h whic for ions organisat t cost of printshowed 34 percent cost savings in direc ction in the redu nt perce ing and imaging, and a 69 es. devic number of imaging However, you are of course right that that you never get something for nothing. So how are these results achieved? The answer is found in the 69 percent reduction in the number of print devices. Most organisations have way too many printers, and most of them do not even realise the full amount. Photizo has found organisations average one imaging device for every two employees. In addition to having too many printers, many organisations also fail to manage the costs associated with using the printers. Consumables are often purchased from multiple sources, without using the organisation’s buying power, and without proper controls to avoid inventories accumulating, which can lead to wastage and write-offs. There are big differences in the cost-per-page between print devices, especially between mono and colour printing. However, many organisations fail to implement proper policies, which can encourage employees to use the most appropriate and cost-effective device for each job, and to avoid unnecessary colour printing. The NewField IT analysis showed that on average organisations that had not adopted MPS spent 5.2 cents per page printed – taking into account the cost of both the hardware and the consumables. A reasonable benchmark Photizo troubleshooter.indd 94 for a medium-to-large organisation would be 2-3 cents per page for mono output, and 8-10 cents per page for colour output. The actual cost varies according to the type and size of organisation, the number and profi le of printing devices used, and the type of printing performed. There are a number of reasons for organisations not managing their printing properly. Firstly, printing has traditionally been regarded as a Cinderella function, which is often ignored. Secondly, until recently document output was divided between printing, which was the responsibility of the IT department, and copying, which came under facilities management. Now, with the advent of networked multi-functional printers (MFPs), it is possible to move to holistic management of all document printing and imaging, and the devices used for it. A good managed print service does just that. The MPS provider begins with a thorough assessment of the organisation’s printing and imaging needs, and the current infrastructure and costs. It then agrees a strategy with the client, and based on this comes up with a transition plan to rightsize the printer fleet, rationalise and manage the purchase of consumables, and implement sensible printing policies, with tools to monitor and manage users’ behaviour. The MPS provider agrees service levels and cost targets with the client, and is then responsible for delivering these. Best of all, by moving to streamlined management of all printing and imaging, not only can significant cost savings be achieved, but substantial additional benefits may be realised, including big reductions in environmental impact and fewer calls to IT help-desks with print-associated queries. ■ Steven Swift is a senior consultant with Photizo Group and is responsible for the European market. He has over 20 years’ experience in the imaging industry with organisations like Ricoh Global Services Europe where he launched one of the ﬁrst managed print services; NewField IT, an independent consultancy providing software and services to help clients optimise document management and output, and as a vice president at Acco Brands. 07/12/2010 13:27 PHOTIZOGROUP_AD.indd 1 30/11/2010 13:52 96 | EXECUTIVE INTERVIEW Green is good Doug Oathout discusses the green challenges faced by data centre management, and outlines some sustainable and efﬁcient solutions. long-term cost, reinvestment in new programs, subsequent revenue increase. Reducing energy usage also carries with it brand equity – ‘we are on the path to sustainability’. By designing efficient servers, storage, networking, power management tools and services to help customers maximise their facilities, customers are getting more efficient without any extra effort. HP’s Proliant servers can do more work using less power: The G7 server can complete 67 times more operations per watt than 2005 models. HP 2010 Superdome consumes 30 percent less power and is four times more capable than 2003 models. Doug Oathout is vice president of marketing for Converged Infrastructure in the Enterprise Storage, Servers and Networking Worldwide Organisation at HP. His responsibilities include articulating the HP Converged Infrastructure strategy and portfolio, as well as Green IT strategy and business development. Good data and information management is key for any business, but what is driving today’s increased pressure on companies to deliver faster and cheaper data centres that are more energy-efﬁcient? Doug Oathout. Increase in information explosion is driving IT, and most data centres are trying to keep up. As newer technologies are introduced, energy efficient hardware and soft ware is much more prevalent now than in earlier versions of servers, networking and power management. The easiest solution to deliver a more energy efficient data centre would be to build a new one. But with 70 percent of IT budgets locked into operations, it’s hard to invest in the agility needed to keep up. Building a completely new data centre takes time, funding and space. Advances in more efficient servers, storage and networking help reduce both energy usage and associated operating costs. Performance optimised datacentres (PODs), slash the time required for data centre build out and reduces your current and future capital expenses by allowing you to add capacity as you need it. Our patent pending flex data centre offers a standardised, modular approach to designing and building data centres, allowing clients to replace traditional data centre designs with a flexible solution. A greener and more sustainable data centre is great for the environment, but how is it good for business? DO. Reducing cost structure frees up revenues for reinvestment in core business competencies. While reducing energy usage will certainly reduce costs, the resultant adds more – the proverbial ‘triple bottom line’: reduction in HP.indd 96 How do sustainable data centres enable a company to remain agile in its ability to respond to ﬂuctuations in the market, the effects of recessions and periods of growth? DO. Adopting hybrid cloud can help a business to focus on its core competencies – to efficiently and securely streamline processes that waste time, resources, and energy. As businesses evaluate their IT needs – and their infrastructure to support those needs – the notion of pushing commodity processes, such as email, eCommerce, to companies whose core is cloud is quite compelling. The Wynyard Data Centre is a great example of HP’s commitment to agility and environmental sustainability. Located on the coast of England’s North Sea, Wynyard takes advantage of the cool climate, using cold marine air to cool servers and other IT equipment, instead of air conditioning. In a typical year, the facility is expected to reduce energy consumption by 40 percent. What green data centre initiatives are you currently working on that will deliver greater beneﬁts for your business and your customers? DO. HP is recognised as having one of the most sustainable businesses in the world, and we share our best practices with our customers so they can maximise data centre efficiency. We developed ESAT, Environmental Sustainability Assessment Tool, a service now offered by HP. Th is will help data centres (companies) quantify how green they are, set targets, then march towards attaining those targets. HP POD and Flex Data Centres provide innovative ways for customers to manage power and energy use, and Wwe recently received a grant from the DOE to develop modular alternatively cooled data centres. Also, our data centres are LEED certified and we have helped develop smart standards for greening up data centres, including the EU Code of Conduct for DCs in EMEA. 07/12/2010 13:59 HP_AD.indd 1 30/11/2010 13:50 98 | IT INTELLIGENCE Customers drive the cars, demand drives the business, but IT drives the logistics of Europcar – the European leader in car rentals – tells Europcar CIO Kurt Deli to Lorna Davies. Don’t hold your breath, but the ever-important tourism and travel industry may be on the up. Latest figures from the World Travel & Tourism Council (WTTC) show that globally, travel and tourism’s gross domestic product is expected to have risen by two per cent by the end of 2010, compared with a forecast in January of a mere 0.5 per cent. However, the WTTC has urged caution, pointing out that this sudden growth spurt means that tourism GDP in 2011 will grow by only 2.7 percent, compared with 3.2 percent forecast in January. It has been a tough year for any industry trying to develop and integrate travel, tourism and technology into its business objectives, but renowned vehicle rental specialists Europcar is a company that has not only kept its head above water, but has even enjoyed some plain sailing during the storm. Europcar, the European leader in passenger car and light utility vehicle rentals, serves business and leisure customers throughout Europe, Africa, the Middle East, Latin America and Asia-Pacific. In 2009 the company signed 9.5 million rental contracts and in September 2008 partnered with U.S. market leader Enterprise Holdings in a strategic commercial alliance to form the world’s largest car rental network. Th is alliance, along with partnerships with easyJet, Accor and TUI, has presented Europcar with global opportunities. Europcar.indd 98 07/12/2010 13:56 IT INTELLIGENCE | 99 The unmistakable bright green, white and yellow logo of Europcar is easily recognisable and customers are aware of its European and worldwide presence. What is perhaps less well known is the importance IT plays in helping to deliver Europcar’s business objectives, such as the growing need for communication and high level of customer service and satisfaction. Kurt Deli, CIO at Europcar, explains the need to discuss strategies. “We are a company which is pretty decentralised. Basically, the strategy is discussed and decided by the group executive committee with input from our country managing directors,” he says. “While strategy is decided at the group level, implementation is executed locally with a high degree of autonomy for country management to adapt to the local business environment.” The business strategies need to be executed locally due to the differentiation between each country, with regards to the market needs. “What we see is that certain business aspects that are relevant or important in one country at one time, may only become relevant in other countries a few years later. That’s why – although we have a general strategy – its execution may depend on local business priorities,” says Deli. Employed by Europcar for eight years, Deli’s role as CIO is multi-faceted. He emphasises how instrumental IT is in deploying a chosen strategy across the group, especially due to the volume of business transactions the company executes. Europcar has almost ten million rental contracts per year, with 200,000 vehicles in its fleet on any particular day. In light of this, all business processes need to be supported by appropriate IT solutions to reach their target efficiency and, as Deli explains, if a business process is not covered by an IT system, operations immediately become ‘mission impossible’. All systems go The partnership between Europcar and Enterprise has created the world’s largest car rental network, with more than 1.2 million vehicles in 13,000 locations around the world. Owned by the French investment company Eurazeo, Europcar also operates the National and Alamo brands in Europe, the Middle East and Africa. Deli welcomes this growth. “We are now a truly global company, and getting the right IT services at the right time in the right place and using the right technology is a constant challenge,” he says. “I use three words to summarise it: Greenway, anytime, anywhere. Delivering to the challenge requires knowledge, high skills and dedication from all our staff and from our service providers.” The importance of a good IT system that is relevant to the business cannot be underestimated, and Deli is keen to talk about Greenway. Greenway is Europcar’s specifically tailored proprietary system that covers all aspects of the company’s operational business: from customer management, reservations and rental operations to billing and fleet management. “With Greenway, we have the best system in the industry for the territory we cover,” boasts Deli. “It gives us a competitive advantage, and the objective now is to secure and expand this advantage even further. We are Europcar.indd 99 continuously looking for new ways to improve Greenway, to further enhance its support of the business.” The technology works hand-in-hand with the business, and if the IT system were to be underperforming, this would have an immediate, negative impact on Europcar’s operations. Deli explains that IT is key to business survival. “If the system is not there, then we don’t take any reservations, we don’t know where our cars are, and we have customers queuing in the rental stations. We have seen that our business only survives for a limited amount of time without our IT system. The system is core to our operations. It is also core to the development of new services and new products that we deliver to our customers, whether it’s business or leisure customers.” These customers take precedence over other business components at Europcar and, with both leisure and corporate clients making use of the rental services, IT plays a key role. Deli states that IT and technology are vital to enable Europcar to innovate the customer experience, putting the company in a position to “create the unique value that customers notice – and that is making them come back to us and not to our competitors.” He continues: “This is valid for both leisure and corporate customers, for whom seamless communications at the systems level is really crucial. Creating that unique value for the customer through the use of technology and IT is one of the important development priorities for the future.” WeDeliver, the UK home delivery service launched by Europcar in 2009, offers free delivery and collection within a two-hour time frame. Further enhancing the accessibility and convenience for customers, this service ensures Europcar pips its competitors to the post as most car rental companies have customer pick up from the rental location or a designated area. IT at Europcar must work diligently in order to keep up with these new innovations and the demands that come with them. Europcar was founded in Paris in 1949 Rising to the challenge It has been a challenging year for the industry and the travel and tourism sector will struggle to recover to pre-downturn demand levels and profitability until 2016, a recent industry report by World Travel Market discovered. According to the report, more than half in the industry (52 percent) believe the global downturn is one of the biggest issues facing the travel and tourism sector, and it will continue to be so for the next five years. In the face of the global economic crisis Europcar have streamlined across the board. “The economic crisis has had a major impact on our business,” says Deli. “Our operations have been streamlined and adapted to cater to lower demand for car rental services. We have less visibility on our future reservations portfolio, so there is a greater need for flexibility and responsiveness.” Due to this reduction in demand, employment across Europe has been affected. The company has decided not to cut its investment in IT, however. As Deli explains, “On the contrary, we have decided to further increase our IT investments. Of course, we have been asked to lower our costs, 07/12/2010 13:57 100 | IT INTELLIGENCE but these optimisations have been re-invested in project activities. By doing this, we have been preparing for the future, when the economy takes off again.” By continuously looking to improve Greenway, Europcar ensures its IT system better supports the ever-changing business. “What we see year after year is that the resources to implement those changes are limited,” says Deli. “So it’s all about picking the right ideas at the right time, and transforming them efficiently into new IT capabilities.” In recent years, IT has played a significant role in the external growth of the company. “Our IT has shown that we are capable of taking on very ambitious challenges. Europcar is the market leader in Europe by far. We took over the EMEA operations of National and Alamo, and we have been busy with the integration of these acquisitions and a number of others in recent years,” says Deli. The IT systems have grown and developed to cope with the change. Deli explains that new business processes have been introduced to allow for “organic growth in a new area.” As CIO of Europcar, Kurt Deli has to face these new, evolving developments and challenges on a daily basis. Communication is a key element in managing technology in a company as large as Europcar, especially in the current climate. Deli understands that this requires efficient and effective communications, not only in the upper echelons of the company, but throughout. “It’s important at all layers of the company. The IT governance model that we introduced ensures that the right ideas are identified, qualified, and prioritised.” Europcar have put in place dedicated business relationship managers whose mission is to ensure the company gets the best possible trade-off between business expectations and IT capabilities and resources. Europcar: green by nature For a company that hires cars by the million each year, Europcar is acutely aware of the potential impact the company’s business has on the environment. With its global reach and worldleading position comes great responsibility, and so Europcar does all it can – and more – to be as environmentally friendly as possible. Offsetting carbon emissions Europcar has partnered with ClimateCare to offer every customer the chance to offset their CO2 emissions by funding sustainability energy projects that are equal to the value of their intended journey and rental agreement. Green vehicles As mentioned by Deli, Europcar is also committed to ensuring its ﬂeet is well-stocked with the latest range of greener vehicles, including hybrid cars, ﬂexifuel cars and those with the lowest CO2 emissions. All corporate passenger vehicles in the Europcar ﬂeet have an average age of four months and emissions of 154g/km CO2. Racing ahead So what does the future hold for the development of Europcar’s IT system and expanding technology? As the customer is the main focus for the company, the key will be creating new services to optimise the customer experience. Communication between the customer, the car and the company will be, Deli says, “the future of our industry.” With the ever increasing traffic congestion in Europe’s capitals and the environmental burden this creates, Europcar expects that alternative mobility solutions will significantly gain importance, and, “Europcar intends to be a leading player in this field” says Deli. These mobility solutions require extensive and innovative use of technology in order to facilitate the high level of communication Europcar wants. Deli suggests having cars interacting directly with customers and IT systems, to generate flexible mobility solutions that are adapted to the individual needs of Europcar.indd 100 each customer. “I think it’s all about the triangle integrating our customers communicating directly with our cars and with our IT system, to generate new solutions satisfying the needs of our customers,” Deli says. “I think that the communicating car will play a central role in the evolution of technology, or even the revolution of technology.” One way in which the company is tailoring its technology to customer needs is with its newly launched website. The revamped site is more user friendly, designed to further enhance the customer’s reservation experience. Working with Fortune Cookie – Europcar’s London-based e-commerce partner since 2008 – the company has developed a simplified three-step booking system integrating technological innovations, such as automatically adapting to customers’ needs by memorising previous entries and displaying on the first page only the most frequently used elements. Customers can also now choose their car not only based on price or size, but also based on CO2 emissions. Future clientele will seek out this energy-efficient approach, and Europcar is spearheading this movement within the industry. The company opened its fi rst ‘environmental agency’ in Paris in 1999, and in 2008 it was the fi rst company in Europe to have its ‘Environmental Charter’ Europcar is the ﬁrst company in Europe to have its Environmental Charter certiﬁed by Bureau Veritars 07/12/2010 13:57 IT INTELLIGENCE – which formalises its commitments in favour of sustainable development – certified by Bureau Veritas. In 2010, Europcar won the World Travel Award for ‘World’s Greenest Transport Solution’ for the second time. The company has a dedicated eco-friendly section of its website, further pursuing its green initiatives by giving maximum visibility to its eco-friendly cars and so encouraging consumers to choose a greener car when making reservations. The ecofriendly fleet of cars includes vehicles with CO2 emissions of less than 140g/km and models equipped with alternative engines (hybrid or electric) or that are compatible with biofuels, bioethanol and natural gas. Europcar is furthering its environmental approach and is currently gearing up for the international launch of Daimler’s car2go in the spring of next year. A fleet of 300 two-seater Smart cars is due to hit the streets of central Hamburg by March 2011. The new mobility concept will allow those who have joined the scheme to simply turn up, get into one of the cars and drive off whenever and to wherever they choose. Recently premiered at the Motor Show in Paris, the newgeneration Smarts incorporate innovative features such as a solar roof capable of charging the vehicle’s battery, looking after the electrics and making sure the interior temperature is always controlled. There is also an advanced car-sharing telematics system. Bigger picture A report by the World Travel Market has shown that the booking of holidays on mobile phones and other new technologies will be the biggest consumer trend to impact on the travel and tourism industry in the future and Europcar intend to keep up. In autumn of 2009 they launched a new mobile phone reservation service for online booking from any web-enabled phone. This was the first of many developments to further Europcar’s commitment to making car hire a simpler, more accessible and stress-free experience. This mobile experience is further enhanced with the Europcar app, available on both iPhone and iPad. The smooth ergonomics and clear presentation – showing added extras such as baby seats or GPS – make the reservation process faster and more dynamic. The company has also announced an application for Samsung Wave smartphones, offering a number of easy-to-use, practical features, including a location finder that finds the nearest Europcar branch worldwide and the ‘tachometer’, allowing Wave users to get their current driving speed by GPS, again adding to the user experience and Europcar mobile services. Spreading its technology innovation internationally, the company announced deployment of a Microsoft “Surface” table with state-of-the-art, 30-inch, touchscreen technology at Terminal five at Heathrow airport, London in July 2010. Travellers to and from the UK can now experience the first touch screen of its kind for any car hire company, allowing consumers to plan their trip. The interactive table and unique soft ware is designed specifically for Europcar customers, giving a virtual guide to their location, allowing them to draw routes using highly detailed maps provided Europcar.indd 101 by search engine Bing. Customers are able to zoom in on locations, flip between screens and mark out areas of interest. Itineraries can also be tailored to tastes, picking out castles and museums for history buffs, or a tour of vineyards for oenophiles, all of which can be added to the itinerary and sent to their smartphones, via Bluetooth or wireless, or simply printed off. These Surface tables are expected to appear across Europe in the coming months. By ensuring discussion of each new idea or challenge is spread through to group level and tailoring execution of strategy to individual country needs, Europcar’s technology can continue to develop. With a huge volume of vehicles to be covered by operations, the company is constantly striving to improve its IT system, which can itself have an impact on the business. Clients continue to be the core priority despite overcoming obstacles during the economic crisis. With new solutions to improve the customer experience, an innovative environmental approach and continually evolving technology ideas, challenges can be overcome. And with a worldwide, ever-expanding market, Europcar is taking a holistic approach to its IT and technology innovations to gain ubiquity in the rental transport market. Its cornucopia of fresh, progressive ideas enable the company to stay one step ahead and gain trust and respect from both consumers and industry leaders. | 101 EUROPCAR IN NUMBERS Europcar has a presence in approx. 150 countries The company is at 230 airports in Europe Since the alliance with Enterprise Holdings, Europcar now has 13,000 stations They employ 7000 people around the world Greenway System At the forefront of technology, the Greenway system lies at the heart of Europcar’s competitive edge. Developed continuously since its launch in 1994, this unique platform has become the interface for managing all of the company’s activities – from reservation management to sales, marketing, billing and insurance, as well as ﬂeet management and maintenance. Thanks to Greenway, Europcar is able to handle on average: • 38,000 reservations per day • Over 30,000 check-ins and checkouts daily • As many as 6500 users simultaneously connected at any hour of the day or night. With Greenway, Europcar manages the business of its subsidiaries in 11 countries and reservations for its franchise network around the world. The system ensures the rapid integration of Group acquisitions and accompanies its development in new regions, such as Australia and New Zealand. Greenway is capable of integrating new business processes to successfully steer the business of new entities while responding to the Group’s needs. 07/12/2010 13:57 102 | INDUSTRY INSIGHT Small high speed network communities are beautiful As broadband infrastructure climbs up the political agenda, the idea that a ﬁbre-to-the-home (FTTH) project needs to be nationwide can be misleading. Smaller community projects – often self-ﬁnanced by the communities themselves – are mushrooming, supported by software tools with a wealth of networking wisdom, argues Dick van den Dool. A recent report by the OECD makes a compelling argument for public investment in next generation networks. The authors of the report argue that just a 0.5 to 1.5 percent improvement in public services and utilities – electricity, transportation, transport and health (sectors that represent 25 percent of the economy) – would justify investments in fibre optic networks. High capacity data networks, enabled by fibre infrastructure, stimulate innovation in the same way that rail and electricity networks drove the boom periods of previous eras. Already, fast Internet is the delivery system for a wide range of media, music and video industries and services. This argument isn’t lost at local authority level. With public services budgets under economic pressure across Europe, the issue is not simply how social communities can be run more effectively, but how public expenditures can be used for future growth. European policy makers get it; national regulators too, but amidst the political posturing the benefits of simply getting up and doing it are gaining interest. That’s why it’s refreshing to see small communities taking initiatives. In most countries, the fibre backbones are already in place – it’s just a question of plugging in. This bottom-up approach was initiated a few years ago in rural Finland, taking the initiative to motivate citizens to finance and construct their own local fibre installations. In the UK, where broadband discussion occurs at national level, Draka was refreshingly surprised when participating in an FTTH infrastructure roadshow around the West Country, the North and Northern Ireland, to see that the spirit of taking ownership is gaining traction. Draka Draka.indd 102 participated by presenting its intelligent soft ware tools, integrating GIS technology that eases the burden of putting in fibre optic networks, especially for inexperienced, smaller communities. One example shown was the recent FTTH network of Berkel & Rodenrijs, a small township close to Rotterdam in the western Netherlands. This former municipality has a population of 23,000 and covers an area of 18.91 km2, of which 0.29 km2 consists of canals and waterways. There, they completed a successful fibre rollout to 6000 homes, with ease and cost-accountability, using Draka design tools. The Netherlands (with the highest worldwide Broadband penetration and GDP per capita according to the OECD) illustrates how big project experience can help small-scale projects. Draka’s soft ware development started at a time before the Internet. Self-supporting project teams designed, planned and built huge copper telecoms networks, connecting more than one million households in Africa and Asia. Th is was always done with a minimum of human resources. Back then, we created not just electronic designs but also the first digital street maps, and the soft ware has since evolved. It makes it easy for inexperienced community planners to face complex questions: what is the best network concept for your area? PON or P2P? How much fibre do I need? What kind of splitter types do I install? A design suite removes this complexity. In most cases the incumbent will already have soft ware in place to operate the network. Now with our Interface Module we are able to transfer all relevant network data for a newly built network from the soft ware to the incumbent in a very specific customisable format without any rework or manual intervention. Most local authorities have excellent engineers. The soft ware can be used by a single person or for group projects, allowing designer engineers, planners or project managers working on different parts of the project to work simultaneously. Inexperience in building a fibre infrastructure need no longer be an excuse for a local authority not to take its digital future into its own hands, to construct a connected community with diverse, rich services for its citizens. From research conducted by the University of Eindhoven, not only public services, businesses and educational facilities benefit from such an enhanced infrastructure, but socially challenged groups may gain too. Dick van den Dool, Software Suite Director at Draka Communications, has seen the evolution of a unique suite of software tools. Originally developed as part of the project control process for constructing massive copper infrastructures in third world countries, they are now an integral part of building advanced ﬁbre-to-the-home networks. 07/12/2010 13:55 Draka_ADS.indd 1 30/11/2010 13:49 HOPS TO IT Carlsberg.indd 104 07/12/2010 13:53 IT INNOVATION | 105 arlsberg CIO Kenneth Egelund Schmidt talks to Ian Clover about his company’s use of video conferencing technology, his strategies for diversifying the IT department and the everpressing need for transparency in business. F or a company that sells upwards of 12 billion litres of beer a year, you could be forgiven for believing that the importance of Carlsberg’s IT infrastructure lay some way down its list of pressing priorities. The company is, after all, one of the most instantly recognisable brands in the world, the largest brewer in Northern and Eastern Europe and the fourth largest on earth. Its logo adorns football shirts; its beer taps parade proudly and invitingly atop bars across the globe; its innovative selfpour mini kegs are the discerning party thrower’s choice for sophisticated take-home drinking; and the satisfyingly unmistakeable ‘hiss’ that emanates from its canned beers (and plastic bottle varieties) when chilled and then opened on a hot day has come to shape the soundtrack and atmosphere of summer music festivals more than any band has managed to, ever. Its advertising has been ingenious, inventive, evocative and playful. Carlsberg is a beer of fun, friendship and frivolity. Taken at face value, Carlsberg is the company we all run to on a Friday afternoon, when tools have been downed and time is one’s own. It is always there, reassuringly extensive and probably the best friend in the world. It will Carlsberg.indd 105 never let you down. But it is also an organisation that is as smoothly run as its produce is to enjoy; its ubiquity built upon a management team possessing whip-sharp business sense; its brands and growth a result of intensive market research and inspired acquisitions. None of the benefits the average Carlsberg consumer enjoys would be possible without the dedication and hard work of its back room team, of which the IT department is something of an unheralded heavyweight. As with any large organisation, the role played by the IT department is instrumental in shaping Carlsberg’s ability to diversify, grow and maintain its position as a global leader, which is why Kenneth Egelund Schmidt, Carlsberg’s CIO, is a figurehead who is acutely aware of the responsibility his department shoulders on a daily basis. Th is responsibility is manifest in the various pressures he feels to deliver leaner, more efficient IT in order to assist Carlsberg in its increasingly expansive logistical efforts. “In recent months, there has been a drive to streamline and digitise Carlsberg’s IT process in order to create transparency in our cost of processing,” says Schmidt, who is keen to emphasise just how important transparency is for 07/12/2010 13:54 106 | IT INNOVATION his department. “This might sound like a simple task, but actually being able to cost what it takes to conduct a task or run a process is an important part of Carlsberg’s IT strategy, not to mention the overall strength of the business.” Streamlining IT Schmidt has been at the helm of Carlsberg’s specially created Carlsberg IT subsidiary for the past two years. During his time there, he has been instrumental in overhauling the company’s IT infrastructure in order to bring it in line with the key deliverables that other departments under the Carlsberg umbrella – such as its ever-innovative marketing department and its enterprising business development sector – must adhere to. “One part of my job is based around what I call ‘making a fast business case’, because in my role I see a lot of projects that are quite complex; projects that take a lot of time to implement and develop before we see any of the payback,” says Schmidt. “So for me, to be able to streamline a process, to say ‘let’s go for 50 percent of the potential savings, but then have a much faster project’, and then evaluate and maybe take 20 percent later on, is a better way of working.” In a company as large as Carlsberg, if a certain department can advertise its credentials and promote its own worth, it can create for itself a settled and conducive working environment in which it is afforded time and funds to streamline and test its own business objectives. “In some of Carlsberg.indd 106 our projects, we have removed some of the complexity by being less ambitious,” reveals Schmidt. “Within the Carlsberg system, as we drive more and more for compliance in processing and reporting, this ability we have to utilise a process gives us more control, which is an argument we use to supplement our business case. So, our internal audit is a really great exercise to follow in this case. Internally, we have decided that we have an ambition to make the IT department a leading example of good business processes within the company of Carlsberg.” In order to achieve this, Schmidt has proactively nurtured an atmosphere of pride and acclaim within his department, concluding that, if his own team will not champion the work they do, who else will? “We develop our processes and then we tell the company about it, to serve as an example that can be carried within another domain.” Schmidt has also worked hard to redefine not only how Carlsberg’s IT department is viewed from within the company, but also its key deliverables, too. “I have totally changed the organisation in IT at Carlsberg, and one of the key points has been the appointment of a senior manager who is actually responsible for processes. “So he’s driving the end-to-end processes across IT. And that means he is actually quite powerful, especially when compared with the old system we had where domains and silos where commonplace. Now, he can make sure that we have continuous improvements, measurements and communication throughout.” Carlsberg brands include Holsten, Tuborg, Kronenbourg and Grimbergen Video conferencing One tangible performance delivered by Carlsberg’s IT department was seen during the drama that unfolded when the Icelandic ash cloud grounded pretty much all of Europe’s planes during a fraught couple of weeks towards the end of April 2010. Businessmen throughout the continent were grounded, with Carlsberg’s no exception. Companies from Ireland to Italy had little option but to seek other 07/12/2010 13:54 Draka_ADS.indd 2 30/11/2010 13:49 108 | IT INNOVATION transport or business arrangements, with a number of the more innovative enterprises adopting or utilising technology to help them overcome the logistical issues they were now faced with. “Like anybody else, we couldn’t travel, but we still had a lot of important business to conduct,” admits Schmidt. “It was a huge inconvenience for us, but we were able to deploy and utilise soft ware to overcome this. First of all, we made a site where all equipment was available for everybody, and in parallel with that we implemented an office communications server from Microsoft. Th is was one stream of our response to the ash cloud; the other was video conferencing technology that enabled us to conduct meetings which otherwise would have been cancelled.” Carlsberg’s video conferencing capabilities are not, however, wholly reliant on ash clouds, tube strikes or other forms of transport upheaval to prove their worth. “While the ash cloud was something of a catalyst for our video conferencing technology, we have begun employing it in more general usage. We have OCS conferencing capabilities that initially had only a medium penetration within the company – despite the technological ability we had in both video conferencing and office communications servers, and the widespread understanding that it could save us a lot of time, there was still this strange hurdle to acceptance.” But since a fair proportion of Carlsberg employees were forced to utilise video conferencing technology during the volcanic ash cloud, there has been, admits Schmidt, something of an upsurge in interest. “Once you’ve used it once, it becomes so easy and normal, and utilisation of this technology saves the business a lot of time and money. So what we are really looking into now is how we can remove these initial barriers for utilisation, looking into finding out what it takes to make people confident with using the technology.” A reluctance to embrace new-fangled technologies is nothing groundbreaking. Even the most confident, self-assured jet setting business delegate can be reduced to a mute, fumbling, obsequious wreck when faced with something as seemingly arcane and fiddly as video conferencing units. Culturally, too, Schmidt has identified an aversion to adapting to this technology. “It is sometimes strange, because even when we have a technician on call who can deal extremely quickly with any problems that arise, there is still some aversion to video conferencing technology. I suppose there remains a level of education and exposure to the technology that has to happen before it becomes widely accepted.” Schmidt is keen to encourage greater adoption and utilisation of video conferencing technology within Carlsberg because he sees the vast wealth of benefits and savings it brings. “Lack of time is a constant issue in business, and video conferencing technology tackles this directly. So instead of planning to meet up two weeks in advance to look into discussing an issue, video conferencing allows us to say ‘well we can hook up, share the presentation, discuss it and make a decision, and we can do this tonight.’ So it is this speed of decision that is actually driving adoption of video conferencing.” Cost reduction is a major offshoot of this, too, believes Schmidt. “For some of my team across Carlsberg.indd 108 Europe, we are using video conferencing technology intensively, and that now means the amount of time we spend in a plane is drastically reduced, bringing with it immense savings in both cost and time.” Restructured and agile It is a perpetual challenge a CIO or IT director faces – how to cut costs, improve the business and ensure the IT department is seen as something more than just a cost centre. Today, there is at least a greater understanding of the role IT plays in ensuring a company’s objectives are met, but for some CIOs, the struggle to prove their department’s worth is a continuous one. “I don’t actually see a problem with being seen as a cost centre,” says Schmidt. “Because in the end, we are part of the same strategy within Carlsberg. However, we do have a duty to be perceived as an efficient part of the business, and that is something completely different. We are faced with a demand to be efficient, to be fast, and to be agile.” In response to such demands, Schmidt admits that he has often asked his IT department to think and work beyond its comfort zone. “Maybe I’ve been quite ambitious in what we do, but we actually spend a lot of time discussing the necessity of shared processes and end-to-end processes, supporting a pan-European and sometimes global objectives, so we have required global end-to-end processes. And this is a huge task, and something that brings me back around to that simple word of ‘transparency’. “Transparency,” continues Schmidt, “is actually twofold. It is transparency in our business, in our data, in our performance. Because basically, we come from a very local set up, and within a small snapshot, we have moved into this shared business model where our top management want transparency in everything. It is a major, major challenge “There is still some aversion to video conferencing technology. I suppose there remains a level of education and exposure to the technology that has to happen before it becomes widely accepted” 07/12/2010 13:54 IT INNOVATION | 109 for us to achieve this, because what I am asked to deliver is transparency within IT costs as a consequence of how the business is behaving.” In such a demanding environment, Schmidt has to make doubly sure that every cost the IT department brings to the Carlsberg business model is quantifiable and accountable. “Just a few years back, cost was just allocated,” he says. “Now, like a lot of other people who have to put in a service catalogue with prices on the different services – and then depending on how IT services are actually consumed, pay for it – The IT department has to not only go from local to global, but it also has to build an entire business system within IT to support that. And that is a huge, huge task.” As a response to these pressures, Schmidt has developed a pan-European SAP system that can support both the local and the glocal markets, covering everything from finances to sales execution and marketing. “We have been extremely ambitious with our pan-European implementation of this SAP system,” says Schmidt. “Th is drive we have for transparency means putting everything in the shared platform, and we have been asked to accelerate that roll out [originally planned for 2014] simply because we need the platform sooner.” Diversifying the IT dept Expansion, delivery, and diversity – all challenges that Schmidt has had to face and overcome in the past 18 months as Carlsberg has continued to grow and expand at an unprecedented rate. In 2008 the group acquired British drinks company Scottish and Newcastle in a joint venture with Heineken: a move that brought a greater range of products to the Carlsberg portfolio but also a wider IT network across separate departments spread throughout Europe. Such growth brought with it the potential for a number of logistical headaches, and Schmidt has had to develop and refi ne the company’s IT department in order to cope with such a range of demands. “We looked at cloud computing; all of the pros and cons and, to be quite honest, have not yet found a compelling case for adopting a cloud-based model just yet,” says Schmidt. “What I’m actually doing is watching it mature, particularly in terms of the contracts and cost models involved. It does interest me, particularly the ability it offers you to scale up and down, but we actually haven’t identified any major applications where we need that capability.” Despite his reservations on cloud computing, Schmidt has given plenty of thought into how he hopes to diversify Carlsberg’s IT department in the future, in order to better deliver and drive the company’s business needs. “In my world, the IT department would consist of two parts,” says Schmidt. “The first is a run part, and then another part I call ‘growth and optimise.’ The run part is what I call the ‘boilerman’ – just making sure the lights are on. The other part is simply supporting the business and taking the cost out of doing business and, quite ambitiously I guess, perhaps sometimes providing business opportunities.” Some aspects of Schmidt’s vision have even already been formulated. “What I am doing within Carlsberg IT is Carlsberg.indd 109 07/12/2010 13:54 SITEL_AD.indd 1 30/11/2010 13:53 IT INNOVATION Along with MasterCard’s ‘priceless’ g’s campaign, Carlsberg’s n the ‘probably the best in world’ advertisements nts have captured the er public’s imagination more than any other o over the past decade. CXO pays tribute to some of the most memorable… Football For the English, the ‘Carlsberg don’t do pub b teams’ advert is the best loved of all, bringing ging together the great and the good of English h footballing past and pitting them against a real, bogstandard Sunday pub team. The resulting demolition handed anded out by the old timers is only bettered by the sight of them em all enjoying a post-match pint in the pub of their vanquished hed foe, accompanied by the infamous ‘probably the best pub team in the world’ blurb. BBQs Shamelessly aimed at men of a certain age e with an aversion to vegetables, Carlsberg’ss version of the perfect barbecue goes like this: reassuringly ordinary-looking guy approaches the barbecue and is presented with a succulent breast of chicken, three plump sausages, two huge hamburgers and a ‘salad’ consisting of a sprig of parsley, all the while clasping a chilled bottle of Carlsberg. Roll that tagline… Nightclubs Complimentary bouncers; beautiful girls insisting on no small talk, just dancing; obliging DJs happy to turn the music down for you when you order a drink at the bar (Carlsberg, naturally), and a legion of taxis waiting for you as you depart, sheltered from the rain by those ever-helpful bouncers – Carlsberg’s version of the best nightclub in the world is not without its faults (he does leave alone, after all), but it looks pretty good. Banks In what is now time-honoured Carlsberg fashion, an unassuming protagonist enters a sleek, futuristic bank, is ushered into the friendly bank manager’s ofﬁce where he is offered a plush sh seat and a chilled pint by the roller-skating and beautifull assistant before asking for a loan of €50,000. The bank manager instead writes out €75,000 and offers the simple ple erg proviso for him to ‘pay it back whenever you can’. Carlsberg doesn’t run a bank you see, but if it did… Carlsberg.indd 111 | 111 splitting the IT department into two focus areas which are closely interlinked but their focus is split. There are also two different budgets: the run part should be reduced to become more efficient. The other part will make sure that we can support any upcoming project. This is where we should optimise based upon the business case, not absolute spending. This drives a logical sweet spot for IT within project and portfolio management. We are also building competencies within change management and training, simply to make sure that we actually harvest the value of the systems, not just by enabling the business, but actually making sure we achieve the desired impact.” Carefully considered, cost-focused and impact-driven IT implementation procedures are driving Carlsberg’s business objectives, with Schmidt at the controls and a dedicated, ambitious team forming a capable and efficient engine room. Despite the recent recession, Carlsberg has continued to grow, and the company’s IT department has had to adapt to this expanding environment. “Looking back three years,” concludes Schmidt, “there were a lot of projects being conducted. Right now, although we still have a huge activity level, we are so much more focused on the two prongs of cost and benefit. We found, for example, that when rolling out the shared platform the demand for infrastructure was even more apparent that ever before. Additionally, we still have a high level of expenditure, but it is again much more focused than before. Transparency in decision-making will be the main focus for us moving into 2011, and in order to do this we will focus on platforms. In terms of cost-reduction, I am still working on our commitment to retire our legacy systems, and then it is my fi rm belief that the IT department can make a huge effort in becoming more active in developing and implementing new business processes and models, which is actually the whole point behind a lot of the things we’re doing with IT.” Transforming the IT department from a reactive, cumbersome department into a flexible, agile and proactive arm of the business is Schmidt’s ultimate aim. “What I really like about Carlsberg is the fact that there is an extremely open dialogue between departments. So if you stand up and take the initiative, something happens. But again, it is important because once we have the platforms in place, we need to actually extract the value from them. And I think IT is obliged to really be proactive and show that the possibilities it brings are actually beyond and can surpass the capabilities the business as a whole thinks it can deliver.” 07/12/2010 13:54 112 EXECUTIVE INTERVIEW A polished performance Bob Paul discusses how to get the most out of application performance management. What are the main factors driving organistions to adopt application performance management (APM) disciplines? Bob Paul. We are in the midst of a revolutionary change in how we interact with customers using technology. Our customers and users are increasingly mobile and may be distributed across the globe. These customers use an incredible variety of devices, operating systems and browsers to interact with our business. Applications themselves are becoming increasingly collaborative and complex. And technologies such as virtualisation and cloud computing promise dramatic cost and agility benefits to organisations. These are all exciting changes but they have significant implications to IT. Which industries particularly need APM, and why? BP. Any industry relying on applications to underpin critical business processes needs APM. Today, this spans businesses of varying scale, sector and maturity. Certain markets like travel and tourism, retail and gambling/ gaming have undergone a tremendous transformation from being traditional call centre and branch operations to the having majority of their business conducted online. What are the major challenges of managing and optimising customer-facing, internet-delivered applications? BP. One of the biggest challenges is that applications are increasingly ‘borderless’, meaning that the application is no longer fully contained within the data centre. The application delivery chain now extends from the traditional back-end infrastructure out onto the internet, with pieces delivered from third-party providers such as content delivery networks (CDNs) or cloud service providers, using ISPs and wireless carriers to deliver that content to a wide variety of devices. The only place where these borderless applications come together as a whole is at the user’s access device, resulting in only partial control of this complex application delivery chain. If performance deteriorates in any one of these dependencies, the quality of service your application delivers is impacted and your brand reputation suffers. Another challenge is managing browser diversity and the increasing number of devices used to access the internet. For example, popular new browsers like Internet Compuware ed.indd 112 Explorer 8 and Google Chrome handle dynamic content differently, multiplying the risk of performance and compatibility issues for web pages and transactions. Testing web and mobile compatibility for every browser type, version, operating system and mobile device is time consuming and can be prohibitively expensive, but failing to do so results in lost customers and irreparable brand and revenue damage. How should organisations implement comprehensive APM? BP. Achieving comprehensive APM maturity in a short timeframe is possible, especially if a proven stepwise approach is adopted, where people, process and tooling are evolved at a manageable pace. The fi rst step is to gain visibility of the end-user application experience so you can become proactive in identifying and quantifying performance issues before they incur major business impact. The second is to extend visibility deeper, tracing the user’s transaction through the complete application delivery chain (desktop through data centre) to achieve rapid fault determination and recovery. The third step is to deliver high levels of business and IT alignment through correlating and reporting application performance and business KPIs through real time role-relevant dashboards. With this structured approach, and the right tools, you can see benefits fast. Please describe how Compuware’s APM solutions have helped organisations recently. BP. The only way to effectively manage today’s ‘borderless applications’ is through an end-to-end approach that encompasses both the enterprise and the internet. Compuware provides the only solution that spans this entire application delivery chain from a single, unified dashboard. Our customers include 46 of the top 50 Fortune 500 companies and 12 of the top 20 most visited US websites. Transaction time reductions of over 50 percent and downtime reductions of similar magnitude are not unusual. Th is improvement often drives a significant increase in new website visitors being converted into financially transacting customers. These typical returns are realised in a short space of time and deliver a quantifi able impact to business, but the long-term rewards are most noticeably the preservation of our customers’ brand and reputation. “The only way to effectively manage today’s ‘borderless applications’ is through an end-to-end approach that encompasses both the enterprise and the internet” Bob Paul has served as President and COO of Compuware Corporation since 2008. In this position he has re-engineered the company’s strategy, positioning Compuware for a strong future. Previously, Paul was CEO of Covisint, now a Compuware subsidiary, which represents one of the fastest growing SaaS/PaaS solutions in the market. 07/12/2010 13:21 Compuware_AD.indd 1 30/11/2010 13:48 114 RECOVERY SPECIAL: PERFORMANCE MANAGEMENT WE CAN Virgin Health Miles ed.indd 114 07/12/2010 13:30 RECOVERY SPECIAL: PERFORMANCE MANAGEMENT 115 With sickness and absenteeism costing businesses billions of euros each year, Ian Clover looks at an innovative Stateside scheme that has incentivised thousands of employees to get active, ﬁtter and more productive in the workplace. W e all know the facts. We have all heard the horror stories. Inactivity, sedentary lifestyles and bad diets are eviscerating the populations of the western world, causing chronic diseases, shortening life spans and drastically altering behavioural patterns. Obesity and ill health caused by the lifestyle choices of individuals were previously issues to be dealt with solely by that person, their immediate family and their GP. If a person chose to saunter, waddle or puff their way through life, fi ne; that was their prerogative. But now, the situation has become so problematic and universal that it has begun to negatively impact upon the lives of the majority. In Europe, national healthcare services are stretched to breaking point throughout the continent due to increased occurrences of preventable diseases such as hypertension, diabetes, heart disease and many forms of cancer. In the USA, health insurance programs – the majority provided by an individual’s employer – are becoming ever more expensive and restrictive. Th is epidemic of the west has become a responsibility for us all, from the individual themselves right up to politicians and medical and industry leaders. Virgin Health Miles ed.indd 115 Sickness and absenteeism from work cost businesses billions of euros every year. In the UK, a study by Hewitt Associates estimates that sickness costs British companies more than £1000 (€1200) per employee a year, while absenteeism adds an additional £662 (€870) per employee. If you factor in the unquantifiable indirect costs of lower productivity, replacement recruitment and other issues, these figures can increase by as much as 60 percent. Poor employee health is an expensive issue throughout Europe and the USA. But while most companies in Europe do little to monitor, address or rectify the situation – largely because of the free or subsidised provision of universal healthcare throughout the continent – a pioneering scheme in the States is tackling the issue of staff ill-health head on. Virgin HealthMiles provides incentivised employee health programs for companies eager to get a handle on the collective health, and consequential productivity, of their staff. The company has devised a Pay-for-Prevention model that measures the physical activity and healthy lifestyle changes of participants, and then devises a number of rewards for the employee, closely collaborating with the employers to ensure the incentives are in the best interests of both parties. So, workers on the scheme could earn days off work, cash prizes or contributions to their pension plans by simply signing up, working out and getting fit. “What we’re doing is very straightforward,” says Sean Forbes, President of Virgin HealthMiles. “We’re creating a good drive discount for healthcare and it came about in a pretty straightforward manner. We recognised that there was a disease that was exploding across the developed world: obesity, and all of the chronic diseases that came with it, like diabetes, heart disease and a lot of forms of cancer, not to mention the precursors to those diseases like hyperlipidemia and hypertension.” According to the Milken Institute, obesity in the workplace has begun to account for 75 percent of all corporate healthcare spending, amounting to approximately $1 trillion (€730 billion) in lost employee productivity. The idea behind Virgin HealthMiles is to make it easier for both employees and employers to reach a happy medium; a medium that encourages personal fitness and involvement, allied to corporate reward and, hopefully, resulting in better work performance, fewer sick days and a reduction in unspecified absenteeism. “Richard Branson is probably the world’s pioneer social entrepreneur, and our thesis was that Virgin could bring the funds together to go where all the collective wellness programs of the past three decades have failed to go,” says Forbes. Investment has been instrumental in getting 07/12/2010 13:30 116 RECOVERY SPECIAL: PERFORMANCE MANAGEMENT the scheme off the ground, but it is not just fi nancial incentives that have been the drivers behind corporate and worker participation. “There are three factors behind the success of Virgin HealthMiles, and one of those is certainly the lure of the dollars,” says Forbes. “But it’s also the fun factor, and the trust too. We currently have approximately 650,000 people on the program, and we spend a lot of time talking to the ones who have been on it for some time now because we see renewal rates that are in the high 90-percents.” Engagement and incentive Very few people would choose a life that is threatened by health concerns, blighted by shortness of breath and subject to the castigation and social stigma that comes with being obese. Yet millions make the daily lifestyle choices that set them sleepwalking down this path almost absent-mindedly; whether they lack the will power, the motivation or the confidence to affect change, there exists this ticking time bomb of an obesity problem throughout the western world. Forbes has recognised why people perennially try – and fail – to lose weight, get fit, and change the habits of a lifetime. “Engagement has been the number one reason why other wellness programs have failed,” he says. “People try to get excited about having a gym membership for the fi rst few weeks after their New Year’s resolution, and then we all know what happens. So we have recognised a way that keeps people engaged in the scheme.” By aligning the workplace with one’s own personal health, Virgin HealthMiles has been able to elicit not only a greater take-up in participants to its health schemes, but more regular participation too. The Pay-for-Prevention model treads the well-worn path of professional relationships, mining that same vein that dictates that colleagues work for, rather than against, one another, and fostering a healthy level of camaraderie and competition among the participants. From a corporate perspective, such positive and quantifiable participation is invaluable. “The CFO of a company that is involved in the Virgin HealthMiles scheme can, for the first time, inspect what they expect around the health of their workforce,” says Forbes. “So we take some simple measurements of employee activity, and then once a month some biometric measurements, blood pressure, weight and body fat, and we put this information together in the form of reports to employers that can be used in an anonymous format. The employer then dishes out the reward, which can be a cash reward, premium discounts, days off or HSA (Health Savings Account) contributions.” Virgin HealthMiles enters into a discussion with the employer in order to work out what type of reward they would like to bestow for each type of behaviour. These ‘qualifiers’ are flexible; equipping the employer with the ability to accurately assess how well their staff is performing, and how best to reward this good performance. All of this is achieved through the utilisation of some simple but effective technology that enables accurate reporting, recording and feedback. Virgin Health Miles ed.indd 116 “One of the most important parts of the program is a family of activity and biometric measurement devices that we use,” says Forbes. “From an employee’s point of view, they get three things when they sign up to a program. They get an activity measurement device, which is an accelerometer the size of a one-euro coin; they get access to a personalised website that shows how much activity they have done over the days, weeks, months and year and what that is worth them in terms of money, days off work or HSA contributions; and they get a social network, that looks a lot like Facebook.” While the accelerometer might sound very much like some frightfully futuristic ‘stick’ with which participants are beaten in order to attain better health and fitness, the personalised website and social network act very much as the ‘carrots’. There is a tangible sense of reward and progress viewable on the website, while the social network acts much like a cyber-version of the obligatory cheering, clapping crowd that lines the course of marathons the world over – offering encouragement to those in the race. Th is cooperation, this sense of achievement and belonging is, cites Forbes, one of the key drivers behind the success of these programs. “The social network is right there on the homepage. Users are also taken there automatically whenever they plug in any of our devices. The site allows them to engage with other HealthMiles members, typically in competition but also in chat communication, feedback and banter. This all happens virally, and when we talk to the users for feedback, they all say that the thing that keeps them coming back to the program are the social connections they are making.” Most communications are initially made within the boundaries of a single company, but can quickly expand externally, as Forbes explains. “There are no barriers with the scheme – there’s nothing keeping a HealthMiles member from, say, the American Diabetes Association from reaching out to somebody from a bank. And they do. Typically, individuals initiate competitions between themselves, or even form teams. So then, during the Olympics and the last World Cup, teams began forming around their favourite countries, with cross-company competition occurring organically.” Beneﬁts to business So far, so good for the employees. Coupling personal achievement with fi nancial or career reward is a masterstroke, while the sense of belonging and social interaction forged by the competitive nature of the programs has been the key driver behind Virgin HealthMiles’ impressive renewal rates. But what of the companies that get involved? How difficult, time-consuming and rewarding is participation? How does the technology employed make it easier for companies to quantify investment, risk and return? “The social component is facilitated by our technology – both the hardware and the soft ware – in bringing people together around this unifying goal of positive behaviour change related to activity and biometrics,” says Forbes. ABOUT VIRGIN HEALTHMILES Virgin HealthMiles provides employee health programs that pay people to get active. The company’s Pay-for-Prevention approach, based on physical activity and healthy lifestyle change, attracts an average of 60 percent of employees who participate, which helps organisations reduce medical costs and improve employee productivity and satisfaction. The program is offered by employers, government entities, and insurers. Over 120 industry leaders representing more than 600,000 employees across the U.S., including American Diabetes Association, Intuit, MWV, OhioHealth, Ochsner Health System, Protective Life, SunGard, SunTrust, and Timberland have selected Virgin HealthMiles’ program for their employees. Members are rewarded for getting approximately 30 minutes of moderate activity ﬁve days per week. That is the same amount of activity the CDC recommends adults get in order to reap long-term health beneﬁts such as a signiﬁcantly reduced chance of developing type 2 diabetes. 07/12/2010 13:30 RECOVERY SPECIAL: PERFORMANCE MANAGEMENT 117 WHO WOULD HAVE THOUGHT THAT DOING SO LITTLE COULD COST SO MUCH? • According to the Center for Disease Control (CDC), inactivity drives 40% of the cost of lifestyle-related chronic diseases. • Treating and paying for preventable chronic diseases accounts for 75% of all business healthcare costs in the U.S. • In the UK, the total cost of sickness and absenteeism to business is £20 billion. • In Ireland, absenteeism costs employers €563 million a year. • Obesity in Europe accounts for 7% of all healthcare spend. • Peninsula Employment estimate that 17% of all sick days are not genuine. • Employers typically see a return of €3 for every €1 they invest in employee health initiatives. • A recent survey from National Business Group on Health found that two out of three workers whose employers offer ﬁnancial incentives say it has motivated them to try healthier lifestyles. “For the company, we can get them up and running with 70 percent participation rates very quickly. Th is is incredibly important, because CFOs want to manage their population costs down, and if you do not have a large threat for the population using something that is beneficial, then you’re not going to see a large impact.” With the majority of employees now equipped with their own smartphone, they are always connected to the Internet and, as a result, more likely to engage in and be Virgin Health Miles ed.indd 117 a attracted by the social component of Virgin HealthMiles. Additionally, there is a growing desire among the popuA llations of Europe and the USA to get fitter and healthier. How, then, is this desire and accessibility transferred into H iincreased productivity and better performance in the workplace? w “Many businesses in the U.S. are reaching a tipping point,” says Forbes. “As self-insured businesses they are p paying their employees’ claims costs. Those claims costs p aassociated with preventable chronic disease have been iincreasing at double-digit rates for the last 12 years. So tthis has become the largest unmanaged portion of their iincome statement. There are other portions that are equally llarge, but these are generally associated with their sales fforce, which they have been managing for years. But there has never been a way for companies to get independent, h tthird party validated data about something that drove so much cost and had such a large impact on profitability as m eemployee welfare. So we have seen a really big take up in sself-insured employers wanting to figure out how they can gget a measure on something that has traditionally been unmeasured.” u Virgin HealthMiles provides its companies with rreal-time data on what is happening, and also instigates conversations between the CFO and a dedicated Virgin account manager to discuss where the improvement areas lie for their population. Th is analysis and feedback is then translated into the company to provide more incentives for its employees to strive for. “Th is is a very active conversation,” admits Forbes. “We have a real-time reporting facility that we use inside of Virgin HealthMiles to keep track of our clients, so that we reach out to them proactively when we see, typically, certain departments or certain demographics heading towards risk areas, or not keeping up with what we see is either the pace of the rest of the company, or the industry benchmark.” How the company then acts upon this information is a decision taken collaboratively with Virgin. Under the Pay-for-Prevention model, an employer can accurately work with its employees to assess where each individual needs to align its objectives with next year’s healthcare plan, and how to attribute a suitable reward parameter. “People can receive up to $2500 a year for doing the right thing,” says Forbes. “CFOs have the option of making that a zero impact to their income statement by balancing it against premium increases for people who either elected not to participate, or didn’t push their activity and biometrics in the right direction.” Extending such a business model into Europe is Forbes’ next aim, a region where, he admits, businesses and healthcare policies are set up in a manner quite different to those in the U.S. “Clearly, the U.S. has got its own, very defi ned way of doing things, especially in terms of reward schemes and self-insured companies,” concludes Forbes. “But you cannot lose sight of that $1 trillion worth of lost productivity. Businesses in Europe are going to be interested in hearing more about that, and how to – excuse the pun – eat into it.” ■ 07/12/2010 13:30 118 ASK THE EXPERT Getting personal A properly implemented personalisation strategy can help your business to improve on every front, says Peter Müller. Q. My bottom line is my priority – how can personalisation help that? Peter Müller. Let’s take this one step at a time. First of all, what do we mean by personalisation? Currently it’s used as a kind of ‘catch-all’ generalisation that covers everything from a document with a simple name and address to the most highly tailored communication, created using a host of different data sources – and everything in between. True personalisation, as enabled by current soft ware and data handling technology, encompasses every customer contact point and all media – print, electronic and phone – in an integrated whole. It forms the backbone of a modern CCM strategy and it covers not only the way someone is addressed but the content of a communication, the timing and also the channel – print, electronic, text or phone. It is a highly personal, totally relevant and timely conversation with each customer showing a business is aware of customer preferences. And it works. In fact it works so well, and has proved so costeffective, that it remains one of the biggest growth areas in marketing communications globally. Personalisation, properly implemented, will not only help to retain customers and improve customer loyalty, it also has the potential to increase revenue and reduce costs. Holding on Every business relies on its customers; and keeping them is key. It makes sense to begin looking at improving revenue from those businesses or individuals about whom we know quite a lot already and with whom we have an existing relationship. Improved personalisation helps this in two ways: it demonstrates that a business knows and cares about a customer and remembers their preferences. It shows that it will act on information the customer supplied and is sensitive to issues that matter to them. Feeling valued is vital if a customer is not to simply shop around for a better deal every time. Staying put is easier for them too. Secondly it enables a business to add value by crossselling and upselling by using this relevant information to select appropriate offers or marketing messages. Current technology means that whether a business speaks to one or a thousand individuals, each item of correspondence or collection of messages or offers can be different. It’s an efficient way of making more with what you’ve got. The fully automated systems that enable this to happen will also feed the results back and help to improve future GMC ATE.indd 118 communications, improving marketing techniques and honing the CCM strategy. It also enables businesses to try new marketing techniques – like transpromo – where relevant personalised marketing messages are cleverly combined with transactional information on statements or bills instead of in loose inserts. Transactional materials are almost always read and thus relevant personalised messages incorporated in them stand a much higher chance of also being read, bringing higher response rates for your business’s products and services. That’s why this is becoming a favoured technique by some of the world’s fi nancial institutions where the results have been so significant that some report response rates have more than tripled from earlier, traditional direct mail campaigns. “Personalisation, properly implemented, will not only help to retain customers and improve customer loyalty, it also has the potential to increase revenue and reduce costs” Reducing costs There are cost and efficiency savings associated with personalisation too. Time to market with personalised documents can now be days rather than weeks or months; new techniques can quickly and easily be trialled and design and marketing, sales and creative personnel can be fully hands on at every stage without having to go through IT departments fi rst. The whole process is automatically managed by the controlling soft ware. Th is makes for more visually imaginative and impactful marketing material. Print costs come down as customers opt for electronic communications and full colour digital printing on plain paper, cutting stationery expenses, while postal optimisation features mean postage is reduced, too. All this doesn’t mean higher IT costs either – today’s automated personalisation solutions are totally accessible to most staff, freeing up expensive IT time. So personalisation assists the bottom line by helping you retain customers and grow revenue from them as well as providing a highly cost-efficient marketing tool. ■ Peter Müller is President of European Operations for GMC Software Technology, directing all activities for EMEA, the Indian Peninsula and Mexico. Before joining GMC, Peter spent 12 years at Gartner, the world’s leading information technology research and advisory company, where he successfully developed the Swiss Sales ofﬁce as Managing Director. 07/12/2010 13:24 GMCSoftwareTech_AD.indd 1 30/11/2010 13:50 120 TECHNOLOGY SPOTLIGHT BRINGING HISTORY KCAB TO LIFE Integrating and developing technology within any institution can be a challenge, but what happens when the building you’re working with is 250 years old and holds more than seven million objects? CXO found out when it spoke to Jane Clift, head of IS at the British Museum. T he British Museum is a fascinating place. A national institution boasting one of the largest collections of artefacts in the world, this freeentry museum is housed in a 250 year-old building and is a treasure trove of Egyptian and Greek antiquities; a collection that is amongst the largest and best known in the world. Jane Clift is the head of information systems (IS) at the British Museum (BM), a job role that carries a fair weight of responsibility. Museums, by their very nature, compel the visitor to consider the past, to wallow in history and look back in time. Hence, very few of us would have ever visited a museum and wondered how modern technology plays its part in making the experience more enjoyable and user-friendly. Clift understands the challenges she faces in her role, and explains that despite the smooth interfaces enjoyed by the public, there is a lot of work, planning and forethought that goes on behind the scenes. “We have a very specialist piece of soft ware called Merlin, which is our collections database. It was originally purchased from a company but has been heavily tailored to meet our requirements,” says Clift. The Merlin package was installed to the BM in 2000. Keeping this development going and evolving poses further technical challenges, as the applications have to be specific to the museum’s requirements and the huge volume of its diverse contents. “ Th is collections database is now very complex and sophisticated,” says Clift . “We have a collections information scientist specifically dedicated to it. There is a very wide range of users of our systems as well; our science and conservation department is probably one of the largest in the UK and they, as with the users, have specialist needs.” As well as collections departments, there are exhibitions departments who produce permanent and temporary exhibitions and func- Jane Clift - British Museum.indd 120 tions, from educational to corporate. Clift understands the need for a tailor-made approach to technology for such events. “Making sure that everyone’s getting most of what they need can be quite challenging.” The Collection Online (COL) was fi rst in use at the BM in 2007. The project was to make available on the British Museum website the collection database of over 1.8 million records. The records are presented directly from the collection database (Merlin) with no re-writing, making them accessible for a general audience. With the exception of price and valuation, all fields are displayed for users, including storage locations in general, private addresses and internal administrative fields. The project has spun over three years in an effort to add as many high-quality images to records by scanning existing stock of transparencies and by using new digital photography; also to add catalogue text by means of Optical Character Reader (OCR). There are several types of search available: Basic (default), Advanced, Museum number and provenance and Publication reference. COL is updated weekly from the Merlin database, and the public are invited to comment on records by e-mail. The site has been a success, with latest figures showing 13.6 percent of visitors to the BM site using COL (2,419,956 visits to the BM site, 328,507 of these used COL, in May 2009). Ideas like this are changing all the time and, as Clift explains, it will be an ongoing process. “We have millions and millions of objects that reside here at the British Museum and some go out on loan, so we also have a lot of images of objects. It’s a really big challenge how we manage those images and also that each year the amount expands. Video is becoming important as well, so there are more obstacles to overcome.” Infrastructural impositions The building in which the BM is located poses a multitude of difficulties in terms of tech- 07/12/2010 13:25 TECHNOLOGY SPOTLIGHT 121 Jane Clift - British Museum.indd 121 07/12/2010 13:25 122 TECHNOLOGY SPOTLIGHT nology integration and development. The majority of the building was built in 1852, designed by architect Sir Robert Smirke, and its age calls for a more sensitive approach to technology, rather than bombarding it with wires, cameras and cables. Clift explains the path taken to reach a harmonised goal. “The building is listed and obviously very large. Nevertheless, we have an extensive data network in place. We do have to be sensitive to the listed status of the building and obviously some wires are not allowed. We work closely with the museum’s architects to obtain permission and discuss the best way to install any IT equipment in listed areas of the building. I would say that there are more hoops to jump through than there would be in a modern building, but we have overcome many of the issues.” Clift understands that for a large institution with so many visitors, there is an expectation of quality and modern services, such as wireless Internet. “Our wireless network is quite small at the moment, whereas I think there is a high expectation for wireless to be widely available in public spaces. What I think is most important is to – given the age of the building – make sure technology fits in with the aesthetics. The key here is to enhance the experience, not to distract from it,” says Clift. Although a challenging part of behind the scenes work at the British Museum, the juxtaposition of old and new is one of the things that helps augment the visitor experience. “I think our Great Court is an example of where our technologies work very well,” says Clift. “In that room there are two very attractive screens, immediately to your right and left as you go in. The screens are from a sponsorship deal with Samsung and are very modern, but I think they sit well and really add to the experience of going into the Great Court.” These large screens are part of the Samsung Discovery Centre that provides a technology hub for children and young people, presenting an opportunity for them to learn and interact with the museum’s vast collection. Jane Clift - British Museum.indd 122 In 2009 the museum took another step towards engaging with worldwide visitors by launching its multimedia guide. The guide is available in ten languages (English, Korean, Arabic, French, German, Italian, Japanese, Mandarin, Russian, and Spanish) and is one of the most comprehensive of any museum multimedia guide. Additionally, the museum has also launched a children’s guide for 5-11 year-olds, an audio guide and a British sign language guide, integrated with video elements. The museum online With the rise of Internet usage, many museums have become increasingly aware of their ‘online visitors’. The BM has recognised this with its COL and extensive website. New images on COL are being made available at the rate of 2000 per week. The museum is also making use of online facilities for its six million annual ‘physical’ visitors, with streamlined ticketing services and facilities to help them plan their visit. For many of the entrants the trip is a once in a lifetime opportunity and, as Clift explains, the museum takes this into consideration when implementing technology. “We try to use technology to make the experience as enjoyable as possible,” she says. “The information screens are another example of how we’re trying to help people, so when they come into the museum, they can quickly orientate themselves to what’s on that day and so on.” The online collections database opens up new opportunities for integration with other museums. Clift is positive about this development. “I think that is a huge step forward. At the moment that information is available as a webpage but we have another project that’s in the early stages involving Symantec Web Technologies. We’re testing it out at the moment but we’re basically trying to take all our collections’ data and make it available in a machine-readable form online. This would mean that if there’s another organisation out there, another museum, gallery, or university that’s interested in our data they could, with our permission, intersect with that data. For example, if they [a museum] had a collection of mummies and they wanted to compare it with our collection, this would allow them to do so more easily. Whereas at the moment, this is done in a fairly manualintensive way.” Partnership UK The British Museum describes its Partnership UK as ‘The largest network of any national museum that comprises 17 major partner museums in Scotland, Wales, Northern Ireland and the nine governmental regions of England, including London. Collaborative activities, programmes and loans are undertaken with many more museums and organisations around the UK, in addition to the major partners. Over the last two years the British Museum has lent nearly 5000 objects to 300 UK venues – the Museum is, literally, a lending library for the whole of the UK and beyond.’ 07/12/2010 13:25 TECHNOLOGY SPOTLIGHT 123 The museum ﬁrst opened in 1759 under the name Montague House Th is ease of access would improve relations and make way for collaboration between institutions. If research goes well, the British Museum would effectively have a museum on the web, available worldwide. Clift believes that this is something perhaps a lot of museums are beginning to look at, but states “the BM has got there a little bit earlier than some.” This idea of shared services is already in practice at the museum, with heads of IS at many of the national museums and galleries meeting on a regular basis. The meetings open up a forum for discussion of what shared services they can operate between each other. In the last meeting, Clift says, the issue of shared services featured high on the agenda. “We have identified the services we currently do share, areas that are of interest to us in the short-to-medium term and then areas which will be of interest in the long term.” Areas such as cloud computing, for example, which, Clift explains, would help “reduce costs, improve services and speed of delivery of service.” Some joint ventures the BM has already participated in include training, workshops and visits. These, according to Clift, have been pretty successful. “The added benefit is that colleagues from different museums get to network with each other,” she says. “Many of the museums have hosted site visits or workshops of various technical aspects where they have particular expertise.” The BM hosted a workshop on DCI as they were ‘further ahead’ than other museums, and is also hoping to host a workshop of process and modelling. “We hope to do that in the near future. We are also briefing each other on our procurements so we can do joint procurement in the future to bring down costs,” says Clift. Working with other museums provides an insight into how fellow institutions are organised, but Clift explains she’s not so influenced by them. “Each museum is quite different; our collection is a particular type of collection, so what we use has to be different to say, the Maritime Museum or the Science Museum. I think it’s really important that the technology supports the interpretation of the collection. I am actually quite influenced by the travel and leisure industry as a lot of what we do is about how you give information to people and also how you create ease of access.” To enhance this ease, the BM has implemented a ‘fast-track’ scheme for members of the museum using enhanced technology, making it easier for them to get tickets for the museum exhibitions. Planning for the future Despite the technological expansion and development at the BM, the economic climate has not passed museums and art galleries by. The Department for Culture, Media and Sport (DCMS) has announced cuts of 15 percent for all national museums, after having its budget cut from £1.4 billion (€1.65 billion) to £1.1 billion (€1.3 billion) over the next four years. The Arts Council’s budget was cut by almost 30 percent. The 26.6 percent cut will reduce the current grant of £449 million (€530 million) to £349 million (€412 million) by 2014. National Museums will take a cut of 15 percent but will remain free for visitors, and the government will allow Jane Clift - British Museum.indd 123 them to access their reserves to a total of £143 million (€169 million) over the next four years. Neil MacGregor, the director at the British Museum said at the time: “We are pleased that Jeremy Hunt [the secretary of state for culture] and Ed Vaizey [shadow minister for culture] have recognised the unique role museums play in the world today and reaffi rmed their support of free admission. We are also particularly encouraged that they have reconfi rmed the government’s support of the British Museum’s planned new World Conservation and Exhibition Centre, a crucial investment in the British Museum’s future ability to work across the UK and the world.” This has been a focus for the technology teams at BM, as Clift explains. “We’ve already identified and delivered a lot of operational efficiencies in the realm of our IS department. We’ve clamped down on Blackberrys and are looking at telephone call charges. We’ve done some consolidation Telco infrastructure and we’re doing printed consolidation at the moment. These are fairly obvious operational initiatives and our IS staff are very analytical and process-orientated, so they tend to be good at spotting operational efficiencies. When I asked for some suggestions I got a very long list, of which I’m working my way through and turning into a more formal action plan. “One area that we think is very promising is process modelling. A member of the department brought it in and pioneered the production of it, so we see that having huge potential.” Clift explains that the BM team try to deport commercial activities of the museum to increase revenue generation. “We’ve done a lot of work to integrate the membership and the ticketing systems, and also fundraising is very important now so we’re trying to provide support to our development function if they have proposals where there is an IT element.” The museum recently received a grant from the Melon Foundation to enable the first stage of investment into the publishing of the collection using Symantec Web Technology. Clift says that saving costs is not something they take lightly. “We’ve diversified quite a lot; we’re certainly not complacent at all about the current economic situation.” With an expanding collection of millions of fascinating artefacts, housed in a British institution, enhancing technology while saving money could seem a daunting task. Jane Clift reveals that often, it is the innovative ideas of the staff that provide sources for helping towards reducing the national deficit. The changes have, and will be, planned and strategic while the museum continues to build and develop its income generation through philanthropy and commercial enterprise. Clift concludes by emphasising the need for IT departments to take an intuitive approach to become more commercially viable. “I think what’s important to remember is not to just focus on technology, but to focus on what technology can do for your business. You must always do what is helpful or enabling in some way, rather than because it is interesting to you.” ■ For more information on the British Museum, visit www.britishmuseum.org 07/12/2010 13:25 124 UNIFIED COMMUNICATIONS INTERACTION IN ACTION UniďŹ ed communications are an extensive set of tools that can enable a business to reach and surpass its customer service objectives, and they are easier to use and implement than you might think, as CXO discovered. UNIFIED COMMS.indd 124 07/12/2010 13:29 UNIFIED COMMUNICATIONS 125 S Reports by computerworld. com attribute the growing adoption rates of uniﬁed communications solutions to better return on investment – what was once an IT luxury is now viewed as a technical necessity. UNIFIED COMMS.indd 125 hort of handing out free money, complimentary head massages and interest-free, noquestions-asked loans, there is not much a bank can do to make its customers completely happy. They can be made content, accepting, and even occasionally pleasantly surprised by the level of service they receive, but in terms of pure and unadulterated happiness, banks sadly inhabit a bracket that will forever be fi led under ‘mistrust’ in an individual’s mental compartmentalisation of things ‘good’ and ‘bad’. Th is situation is testing enough, but banks also have to employ a team of staff that is ready and willing to face this flak on a daily basis yet remain steadfastly calm, positive and helpful throughout; a task made all the more difficult in light of the global economic crisis that has shaken the banking world like an ornithophobic let loose in a parrot store. The fragile road to recovery is littered with pitfalls and potholes, but the fi nancial world must start somewhere, and restoring confidence with the wider banking population is most defi nitely one of the fi rst steps. But where, and how, to start? Customers no longer blindly trust their bank, but they still, by and large, need to use them. Hence, a bank would be well advised to adopt and utilise the latest technology in order to recover that most basic form of customer satisfaction – great service. George Walker, SVP and CIO of First Community Bank, was quick to recognise that his customers wanted, fi rst and foremost, clear, accurate and swift service from their bank, and identified a unified communications soft ware platform that would enable the bank to deliver and surpass its customers’ demands, while also equipping its staff with the tools necessary to hit these previously unscaled heights. “We are a community bank, so one of the things we do well is what I like to call relationship banking,” begins Walker. “We know our customers and they know us, so to be able to provide our banking staff with the tools that enable them to receive customer communications no matter where they are is ideal. These communication streams are delivered in an extremely simple way, because the last thing our staff want to do is learn how to sign on to five different systems and be required to remember a bunch of passwords and logins. For them, it is a one-stop shop for service and communications.” Th is one-stop shop is reflected in the level of customer service the bank is now able to offer since it adopted a unified communications soft ware platform. To the uninitiated, unified communications is a platform that integrates all of the systems that a banker might already be using (such as email, telephone, video call etc.) and enables these systems to work together in a real time fashion. So staff at the bank can connect seamlessly to their customers regardless of their location. As long as they are in possession of one of the integrated platforms for end use, staff are connected and able to communicate. In addition, a unified communications platform will come with an interactive directory, which enables staff to access it and locate a fellow member of staff, engage in a voice call, a video call, a text messaging session or even a discussion on a social media-type platform, thus drastically increasing the channels of communication a banker has with not only the customer, but also with fellow members of staff. “Aside from our staff being able to communicate with our customers better,” enthuses Walker, “one of the other things that we have worked on is enabling more real-time communications with those who bank online or conduct mobile banking. One of the things that we found is, for some of our higher-risk customers, instant alerts to our team about customer transactions have really made their job much easier. For example, if somebody has sent in a big wire transfer and it is outside of their normal pattern of transactions, in the old days you had to call around to try to get hold of them, but now we send them instant alerts and they call us right back.” Th is is just one example of how unified communications is able to reconnect the customer with the bank, and slowly erode the walls of distrust that were erected during the credit crunch of 2008. Since incorporating unified communications into First Community Bank, Walker has seen a reduction in business latency and less reliance on the dependency and availability of a certain device or medium. “Our staff are now much more mobile,” says Walker. “Almost all of our bankers now have Smartphones and with them they can be anywhere, at any time, and are able to conduct almost any form of banking. They have access to almost everything that they have access to when they are in the office.” A personal service But it is not just the ability of the bank’s staff to work from home or remote locations that yields the greatest benefit for the customer; it is the fact that First Community Bank can make good on its promise to deliver a more personal service, empowered by the unified communications tools they now have in place. “One of our key business models is that we provide a better service than the larger banks do,” explains Walker. “One of the reasons that we are able to do this is because we have such a unified set of communication tools, and they allow us to analyse our contact centre in order to optimise staffing levels. So if waiting time is too long, we can identify and respond. In the past, the only way we could have known this is if a customer complained.” The contact centre at First Community Bank has now been transformed. Callers are dealt with much more swiftly, and many are even given the option of immediate call back. If a caller to the bank leaves a voicemail, the bank’s response is also much faster and more accurate than ever before. “Th is is perhaps one of the most obvious benefits to our customers,” says Walker. “When an account holder calls the bank and leaves a voicemail, we can get back to them much quicker than before, because that voicemail 07/12/2010 13:29 126 UNIFIED COMMUNICATIONS doesn’t get lost, our bankers no longer forget their voicemail password. Th is all equates to a much greater service for our customers.” A complete unified communications system will incorporate the ability for users to automate the processes behind setting up things like conference calls, video and web conferences, and pretty much all other types of communication in a much quicker, easier and controlled manner. Such technology enables staff members to maintain and enhance customer connections, quickly identify problems and issues, respond to them, and collaborate in real-time with fellow staff members in order to ensure that all tasks are resolved in a satisfactorily fashion. “We have some pretty cool technology here that not only serves the customer but also helps to attract and retain “Our unified communication tools allow us to analyse our contact centre in order to optimise staffing levels. So if waiting time is too long, we can identify and respond. In the past, the only way we could have known this is if a customer complained” people to the bank,” says Walker. “They fi nd that when they come to work for the bank we are able to provide them with the tools they need in order to be successful and good at what they do. They are able to service our customers in the best manner possible, and this ensures that they want to keep on working here.” Second nature There would be little point incorporating a complete unified communications system into a bank’s technology architecture if the soft ware itself proved too difficult to master. For George Walker, the tools’ ease of use and intuitiveness were one of the main drivers behind his decision to adopt the soft ware for the bank. “They were all very simple to learn. There was very little training involved. It would have defeated the purpose completely if the staff found the soft ware hard to master, so there are very few barriers to adoption.” From a cost perspective, unified communications tools are obviously not free to implement, but Walker argues that cost savings are relative to the actual real time savings a bank can make in terms of efficiency, productivity, staff retention and customer satisfaction. “As far as cost savings go, I’m not sure if there have been a lot of hard-dollar savings. I think there have been a lot of timesavings though, for sure. Our staff members have been able to access their messages and their email and everything else much easier, so I think our unified set of communications have allowed everyone to be more productive than they were before.” The future of banking will naturally feel its way along a number of evolutionary paths. Mobile banking is still UNIFIED COMMS.indd 126 How uniﬁed communications works Instant Messenger PC to PC Internet Roaming IP Voice Conferencing Phone to Phone Phone to PC OC Global Network OC User CPE Call Forwarding Voice Mail / Missed Call PC to Phone Fax to PC SMS in/out and notification pushing the boundaries of possibilities. Social media platforms are making their fi rst, tentative forays into the fi nancial world. Collaboration tools and unified communications are part of this natural process of evolution, so it is up to the banks themselves to decide which methods are going to work best for their own needs. “For us, I think it has just been a natural evolution of service,” concludes Walker. “I can remember when we just had voicemail, then it became email that was driving service. They were two completely separate things and now, I really believe that the access to customer communication and the ability for staff to collaborate in an increasingly efficient way will be huge for the banking world. As banking becomes more and more electronic, I believe that banks of all sizes are going to need these kinds of tools and technologies otherwise they are not going to be able to keep up.” Banking is indeed more electronic than ever before, and it is in this context that banks have to begin to think and operate. Customers are becoming more and more tech-savvy, so maintaining customer connections is, ostensibly, easier than ever. However, expectations of service have increased in line with technology, and customers now expect service quickly, accurately, and whenever they want it. If a bank can adopt unified communications capability, it can not only augment and improve its service to its customers, but it can also make the job of the bankers and tellers a great deal easier. ■ With growth comes choice: there is very little consistency in the types of uniﬁed communications solutions being chosen, with each company throughout the world opting for something that works for them. 07/12/2010 13:29 INDUSTRY INSIGHT | 127 Collaboration, the ‘Big Society’ and a new way of doing business Recent advances in collaboration technology can bring about big changes in the way organisations communicate both internally and externally – and the timing couldn’t be any better, says Nigel Moulton. C ollaboration is a term that is often overcomplicated, so let’s keep things simple. What we are referring to is the technology that pulls together all the communication methods that people use today – including email, instant messaging, voice, video and social media – to help them work together more effectively. The question is: why should the detail of how people communicate in their day-to-day operations matter to the board? A recent news story helps make the discussion relevant. Francis Maude, the Minister for the Cabinet office in the UK Government, announced that he is investigating the idea of giving public sector workers the right to set-up co-operatives within their departments and effectively run services themselves. It is an extension of the UK Government’s Big Society idea, which aims to take authority away from politicians and give it back to communities and other stakeholders. For Maude’s idea to be a success, it will require motivation and goodwill from employees. But more than that, I believe it will also require a new approach to the way communications are organised within the proposed ‘cooperative’ style structures – and specifically an approach that inspires greater creativity and collaboration. Fortunately, this is one of those times when developments in technology are meeting new expectations and requirements. Recent advancement in unified communications, led by the new Avaya Flare Experience platform, are delivering groundbreaking, next-generation workspaces that deliver a compelling unified collaboration experience. Flare, for example, breaks down the barriers between today’s communications tools through a unique user interface, offering quick and easy access to tools like high defi nition desktop video, social media, multimedia conferencing, directories, IM and contextual history all in one place. In short, this kind of unified solution is no longer a ‘nice to have’: it is absolutely vital to the facilitation of new ways of working. This was something identified in recent years by business strategist and author Professor Richard Scase, who argued in his Global Remix book that we are already seeing the breakup of traditional workplace structures and the growth of a new, collaborative ‘café culture’ in its place. “Businesses have to encourage flexible, remote and other working practices that are appropriate to colleagues, according to their individual preferences and needs,” says Scase. “But, alongside this provision, corporations have to redesign Avaya.indd 127 their workplaces as cafés to encourage the exchange of ideas and informal collaboration in the development of projects, products and services.” Scase also makes the point frequently in his book that these restructured workplaces need to be extended to include virtual workspaces that encourage companies to leverage their global talent to maximum effect. And Scase’s overall argument is that if large organisations don’t follow this path, focused on creativity and collaboration, they risk losing their best people to smaller and more entrepreneurial organisations that offer greater freedom and flexibility. Speaking as someone in the communications industry, the conclusion I draw from this is that we need to focus on the application of collaboration technology today as a way of fostering innovation – allowing companies to react more quickly to changes in the market, and capitalise on new opportunities as they arise. It is also important to remember that collaboration has a significant role to play in improving customer service in the digital age. Give customers a good experience in today’s market – with all other things such as pricing and features remaining equal – and they will stay loyal for the long term. But give them a bad experience, and the news will quickly spread far and wide through online social networks. So as well as using collaboration tools internally to improve communication, the most forward-thinking businesses are also transforming their customer service operations into multimedia ‘interaction’ centres – allowing customers to contact them through whichever form of media they choose. Unified communications is the technology that is enabling organisations to fight these battles on all fronts, bringing forward a new spirit of collaboration that is not only vital to commercial success, but is attuned to the way working and social cultures are changing. More than ever, the time to start thinking about adoption is now. For more information, please visit: www.avaya.com/ﬂare. Nigel Moulton is Director, Product & Solutions Marketing, EMEA at Avaya. He has over 20 years of experience in the Telecommunications and Internet industries, having previously held senior marketing and technology roles at D-Link, Cisco Systems and 3Com. With his team, Moulton is responsible for all aspects of product and solution marketing across all of the Business Units in Avaya. 07/12/2010 13:53 128 | ASK THE EXPERT Extending the life of the desktop Heiko Gloge, Managing Director and Partner at IGEL Technology, talks about an increasingly popular conversion desktop strategy for businesses to consider. I n economically troubled times, many companies tend to put off upgrading their IT systems, instead giving priority to IT projects designed to increase the efficiency of what they already have. The concept of converting older desktop PCs into thin clients, and as a result standardising them, combines both of these approaches by simultaneously safeguarding your IT investment – readying it for IT developments such as virtualisation and cloud computing – while cutting your IT costs. According to analyst group Gartner, assuming a typical service life of three to four years, then there are some 280 million standalone workstation PCs now due for replacement in the business world. By converting these PCs to thin clients, using IGEL’s Universal Desktop Converter soft ware, for example, businesses can defer a replacement cost of 400 Euro per device (per year) for another two to four years, take advantage of lower running costs and prepare for a move to virtual or cloud computing. To upgrade third party hardware into IGEL Universal Desktops, customers simply plug in and boot the fi rmware from a USB token, memory stick, CD or convert over the network from a central location. The IGEL Universal Firmware is then installed automatically on to their system. Proof that it is truly worthwhile to deploy a centralised IT infrastructure and convert existing desktop devices into thin clients can be found in the economic analysis of Germany’s renowned Fraunhofer Institute. Compared to unmanaged PCs linked in a client/server network, they found that the total cost of ownership (TCO) of an SBC/thin client architecture can be up to 70 percent less. However, this calculation is based on the use of real thin clients, not converted PCs. If, as an interim step, legacy PCs are converted into thin clients, the costs of installing the replacement system results in initial savings of 90 percent because the thin client conversion soft ware costs about one tenth of the purchase price of a standard business-grade PC. In addition, the management and support times are cut by just under 70 percent due to centralised management, the elimination of the need to separately (re)install soft ware and subsequent soft ware patches on each and every PC, and a drop in the user assistance required. With the IGEL Universal Management Suite (UMS), which comes bundled with Universal Desktop Converter soft ware, IT administrators also have a powerful and IGEL.indd 128 scalable management tool that they can use to economically and easily manage their desktops from a remote location and in a group-based manner. Whenever an occasional update is required for the thin client operating system, it can be conveniently scheduled to remotely self-install. The deployment time and cost is dramatically reduced. The gradual migration via thin client soft ware permits an economical transition to a more secured, sustainable and efficient desktop infrastructure. When the converted end-user devices eventually reach the end of their service life, they are gradually replaced by ‘real’ IGEL thin clients, whose own service life is usually six years and more. Compared to a PC-based infrastructure, this two-stage ‘thin’ approach can double the length of hardware investment cycles, not to mention the energy savings that can have a major effect on bottom lines with up to a 75 percent reduction in power costs. And with a standardised, centrally managed desktop, the business is ideally suited to make further savings by outsourcing its desktop infrastructure if desired. After starting with Melchers in 1988, Heiko Gloge was made General Manager of its NetCom division, which in 2001 became IGEL Technology GmbH, where he serves today as Managing Director and Partner. Heiko was one of the founders of the European Thin Client Forum and is currently a main board member of the BITKOM, the German IT industry association. 07/12/2010 14:00 IGEL_AD.indd 1 30/11/2010 13:51 130 | PROJECT FOCUS Security and conﬁdence: virtually guaranteed Desktop virtualisation meets complex security standards and tight budget at Lancashire Constabulary, says Michel Roth. L ancashire Constabulary is responsible for policing the county of Lancashire, with its population of 1.5 million, in Northwest England. Its IT goal is to support frontline policing by delivering appropriate technology to its 5000 officers and support staff. Secure access to IT systems is provided using two different security classifications: restricted and confidential – the latter being the most controlled. Driven by new legislation governing nationwide sharing of information, the force needed to segregate the restricted and confidential networks, and also enable users to switch easily from one network to the other. A virtualised desktop infrastructure (VDI) approach was chosen to address the force’s challenges, because it was scalable and would meet security requirements. Plus, it was cost-effective since physical desktop hardware would not need to be replaced. An off-the-shelf VDI product was selected by the force, but its native connection broker did not meet security standards to segregate the restricted and confidential networks. An alternative broker was required to manage, secure and provision Lancashire Constabulary’s virtual desktop environments as well as brokering connections. Quest vWork- QUEST.indd 130 space was selected because it was the only broker capable of meeting the force’s security requirements to segregate the restricted and confidential networks. Lancashire Constabulary was then forced to reconsider its entire approach because the vendor of the other parts of the VDI solution drastically increased its price. “We had already established that vWorkspace was the only broker solution that could meet our security requirements. It was therefore a huge relief that its flexibility to work with different hypervisors didn’t narrow our choice of VDI, especially as we were already constrained by a tight budget,” explained Colin Fitzsimons, senior systems engineer at Lancashire Constabulary. “Without the Quest solution, we would have been forced to consider other approaches, which would have impacted our deadline and budget, potentially jeopardising this project.” A Microsoft Hyper-V approach was subsequently chosen, and Lancashire Constabulary was selected to join Microsoft’s Windows Server 2008 R2 Early Adopters programme, which helped to keep the force’s desktop virtualisation project within budget. With the full VDI solution implemented, Lancashire Constabulary’s desktop virtualisation management solution delivers the levels of security required to comply with UK government regulations. “vWorkspace enables us to segregate our confidential and restricted networks, which ensures our systems meet security standards,” said Fitzsimons. “Based on our Active Directory, we can control exactly who has access to what.” Lancashire Constabulary’s VDI management solution generated time savings during the implementation and continues to do so during the ongoing management of the VDI, minimising impact on the users. “When we rolled out the VDI solution, we were able to set-up desktops overnight,” said Fitzsimons. “We can quickly and easily provision different images on desktops in a matter of hours, implement new applications overnight, and roll-out patches immediately.” In addition, the management of Lancashire Constabulary’s VDI environment has been simplified. “The Quest solution provides our IT staff with the ability to manage VDI sessions, Remote Desktop Services (RDS), and virtualised application servers – all from one interface,” said Fitzsimons. To sum up, Fitzsimons added that “the success of this desktop virtualisation project has enabled Lancashire Constabulary to save money and meet complex security requirements. Th is ultimately helps police officers work more effectively, to spend more time on the front line.” Customer: Lancashire Constabulary Industry: Police force Challenge: Desktop virtualisation management with complex security requirements Solution: Quest vWorkspace Beneﬁts: Police ofﬁcers and support staff can work more efﬁciently; meet complex security standards within tight budgetary and time constraints; minimise impact on the users; simplifwy management of VDI environment Michel Roth – Microsoft MVP - Remote Desktop Services. Michel Roth has over 10 years of experience working with application and desktop delivery technologies. He currently fulﬁlls the role of Principal Product Architect in the Desktop Virtualisation Group of Quest Software. Michel’s specialisation is in desktop virtualisation. Michel has spoken at many industry conferences, including Microsoft TechEd, BriForum and Pubforum, and is a frequent author for sites such as MSTerminalServices.org and BrianMadden.com. In his spare time he maintains the website Thincomputing.net. 07/12/2010 14:52 QUESTSOFTWARE_AD.indd 1 03/12/2010 09:20 132 HOW TO: PUBLIC SPEAKING HOW TO: BE A BETTER PUBLIC SPEAKER Public Speaking: The two little words that can ﬁll even the most experienced industry leader with dread. But why are we so afraid of speaking in front of people, and what can we do to combat the nerves? Lorna Davies spoke to public speaking expert Michael Ronayne for his top tips and discovered that the best speakers are very often the shy ones. 1 BE PREPARED But not too much. Making sure you have exactly what you need and have learnt your material helps to ease nerves, but don’t follow the ostensibly easier option of reading from text: If you can’t learn it, take a few note cards or hints to help the words flow. 2 KEEP IT SIMPLE “You will forgive a speaker anything: bad diction, squeaky voice, poor eye contact; but you will not forgive poor structure,” says Ronayne. “So the key thing is to have a very clear, simple structure.” You should not over complicate – your speech should be more soap opera than crime drama. He added: “With a soap opera like Coronation Street, you can disappear out of the country for two years, come back, and you pick up what’s going on in a minute and a half. Whereas, with something like Agatha Christie, if you go out of the room or the phone rings for a moment, there’s no point in seeing the rest of the series, because you’ve missed an important clue.” PUBLIC SPEAKING.indd 132 M aking a speech in public is something most of us have to face at some point during our career. Although for some the experience may be daunting, it is a valuable and important career tool. Michael Ronayne, director of the UK’s College of Public Speaking, explains that often, if your content is good, it is how you deliver it that can make all the difference. Statistics show that glossophobia – mankind’s fear of public speaking – is right up there with the fear of death or snakes. So where does this fear come from? Michael Ronayne believes that the phobia is most likely formed during our childhood. “We grow up with phrases like, ‘stop showing off; stop drawing attention to yourself; be quiet; sit in the corner; don’t cause any trouble’. And we hear that message so often we learn to believe that being quiet is good, while drawing attention to yourself is bad.” As a result, when someone asks you to speak in public, it is essentially telling you to do the opposite of what you have been conditioned to do. With advice from Ronayne, who as six times’ UK National Public Speaking finalist and two times’ winner qualifies to comment, CXO has compiled a ‘How To’ guide to public speaking. 3 4 DON’T APOLOGISE It is understandable to think that the audience is against you, but it is important to remember that they want you to succeed, they want you to be interesting, stimulating, informative and entertaining so they can gain information. A natural nervous reaction is to apologise for nerves or a problem: more often than not the audience won’t notice, so don’t worry. MICHAEL RONAYNE After studying English Literature at York University, England, Michael Ronayne quickly became used to the limelight, spending four years at the Franz Liszt music academy in Germany. He is described as having ‘natural ability for public speaking, enabling his success in sales and coaching’. He is also an author of many public speaking articles. BREATHE It may seem obvious, but when people are tense, their breathing can become shallow and tight, making their words hard to follow. Ronayne explains that relaxing can be tricky. “From a purely physical point of view, if you’re about to speak then obviously relaxing is easier said then done. But deep breathing consciously can really help.” When your breath becomes shallow it can also affect the pitch of your voice, and it is harder for people to listen to a higher pitched voice so try to use your deeper register when speaking. A useful tip is to greet the audience, to warm up your voice, and then count to three before beginning. 5 THE THREE Cs Clarity, Concision and Confidence: Three words that are vital to remember when both putting together and performing a speech. “Most business people are busy; they don’t want to be working out and scratching their heads all the time. They want it delivered to them clearly,” says Ronayne. So if you’ve got the three Cs, you’re 90 percent there. 07/12/2010 13:27 HOW TO: PUBLIC SPEAKING 133 6 PRACTICE MAKES PERFECT “Good speakers practice,” says Ronayne. “And that mustn’t be underestimated.” There is often a misconception that some people can and some can’t, but, adds Ronayne, “Speaking is something natural. We all do it. We’ve been doing it since we were around a year old,” and that is what you need to remember. 9 10 FROM THE HEART JUST DO IT Obviously more experienced, naturally overt business leaders will be more comfortable with speaking in public. But as Ronayne explains, they are not always the best speakers. “Often the greatest communicators are actually often very shy. They don’t particularly enjoy being up there, so they’re going to be as clear and as concise and get it over with as quickly as possible – these speakers are effective in an economical way.” It is also important to be as sincere as possible, he adds. “Often the best speakers are either from a political point of view, in a context within history, or they are just normal, ordinary people who are coming across as regular people who speak genuinely from the heart, and who can communicate directly with other people.” It may sound simple, but a lot of the initial fear is actually getting up and doing it. “The fear of public speaking is, as with most phobias, irrational. For many people, just getting up and getting through it is actually the fi rst big step. Once up there, they realise actually it’s not that bad,” explains Ronayne. 7 TALK TO A FRIEND The key is to take your focus off you; so projecting it on to the audience will help. Ronayne suggests asking yourself questions. “People worry about themselves. You have to fi rstly take the eyes off yourself and think about your audience. How can you help them? What are you saying that is going to be of use to them? And maybe imagine you’re talking to a friend.” Famously great orators like Barack Obama and Tony Blair seem to have got all these things right. Britain’s new coalition deputy Prime Minister Nick Clegg’s confident speaking is arguably one of the reasons he has come so prominently to the fore in recent months. Ronayne explains that there may well be some businesspeople out there as good as the more well known speakers, but he reserved some respect for the Deputy Prime Minister, stating: “Nick Clegg, I would say, is a wonderful technical speaker. It is very difficult for politicians these days because there is such analysis, and so the key thing to being a good speaker is to be a natural.” 8 BARE NECESSITIES An age-old public speaking tip is to imagine the audience in their underwear. While this may be a slightly unorthodox method, visualising the audience beforehand can enhance your presenting style. “Imagine how it is going to be,” says Ronayne. “Picture what it should sound like. Picture the applause; hear the applause you’re going to get. Talk to yourself; tell yourself it’s going to go well. Tell yourself that what you’ve got to say is worth listening to. Tell yourself that the audience is going to be engaged by what you’re saying, and you’re about 95 percent of the way there already.” AND FINALLY... It is important to remember that even the most seasoned public speakers make mistakes; it is their ability to learn from them that sets them apart. A good tip is to greet the audience as they arrive: speaking to people you have met is much less daunting than presenting to a group of strangers. PUBLIC SPEAKING.indd 133 07/12/2010 13:27 134 PROJECT FOCUS Process improvement drives GRC success How Nimbus helps banking and insurance clients achieve transparency and employee engagement for governance, risk controls and compliance success, reveals Antony Bream. W hen ING SW Europe started a Compliance Maturity Program it turned to Nimbus for guidance on business process optimisation. Having evaluated compliance operation changes imposed by MiFID regulations, it became apparent that an eightfold increase in capacity was needed. ING and Nimbus ran a process defi nition workshop with several compliance officers. As a result ING obtained a complete end-to-end view of the processes in question and were able to identify many opportunities for process optimisation and elimination of manual procedures. The next step was to build the required automation. Capacity issues within IT forced ING to outsource development and hosting. Nimbus’ hosted soft ware-as-a-service capability was selected so that no soft ware needed to be installed on ING’s infrastructure. A technical specification was built from the process content, which after a couple of reviews with ING was handed to the development team who started work straight away. Within three months the capacity increase was achieved. The application has been rolled-out across the whole SWE region in 2009, and in 2010 is rolling-out internationally. Further compliance automation projects have been similarly developed and delivered by Nimbus for ING, including fi nancial instrument trade approvals, insider registration, gift and entertainment registration and outside positions registration. Further modules are being added including Contract Insider, Services Insider and Document Registration. As a consequence of the success enjoyed by ING, Nimbus has packaged the applications as the ‘Nimbus Compliance Suite’ to make them available to other clients. “Nimbus Control provided a process view which greatly facilitated the definition of requirements between compliance specialists and developers” Erik Werson, Program Director – SWE Compliance Maturity Program, ING Managing risk In another example, Nimbus has been working with this international investment bank on a risk and controls project for 18 months. Following an FSA audit the bank decided to establish a global, consistent GRC framework, Nimbus Project Focus.indd 134 CUSTOMER: ING – South West Europe CHALLENGE: Achieve MiFID compliance and an eightfold increase in trade request approvals, whilst reducing processing costs and improving control and reporting. SOLUTION: Business process standardisation across local compliance teams, substantial process automation eliminating manual steps and e-mail. Used Nimbus Control for process improvement and Nimbus Compliance Suite for automation. BENEFITS: Eight-fold increase in trade request compliance transactions, cost per transaction down from €16 to less than €3. Compliance ofﬁcers now able to concentrate on value-adding tasks. Obtained real-time compliance reporting. which transcended traditionally siloed, product-aligned departments. The historic approach to managing risk and controls through spreadsheets had not provided the required oversight. The bank adopted Nimbus Control to create a transparent business process model, together with a consistent risks and controls framework. Th is is being deployed to all required employees via a Microsoft SharePoint portal, which integrates processes, risk, controls and KPIs. Interaction is driven through Nimbus Control’s ‘Action Management’ module which helps push personalised workflow tasks to users, such as attestations, risk control self certifications, reminders and escalations. In addition to soft ware, Nimbus provided a global professional services team, working across three global hubs to help capture over 4000 processes in four months, and established a Centre of Excellence to ensure the content is consistent and kept up-to-date. The result: One source of the truth for business processes, risks, controls, KPIs and associated tasks. Transparency from global overview down to operating departments and individual control instances. Consistent data capture, reporting and behaviour by all risk and control officers, irrespective of department or region. Clear understanding of how risks, controls and compliance obligations interlink and how they impact the bank’s operations. Easier audit, with evidence of consistent data, consistent management control and stakeholder engagement. ■ Antony Bream is Global Head of Nimbus’ Financial Services Practice and has spearheaded its growth since 2004. Bream’s recent customer engagements include RBS, RBC, Northern Trust, HSBC, Man Group and ING. 07/12/2010 13:26 NIMBUS_AD.indd 1 30/11/2010 13:51 EXPANDNETWORKS_AD.indd 1 30/11/2010 13:49 Details. Steps to success CEO Leadership tips P140 T R AV E L 36 hours in... Bern P142 | GADGETS Gadgets The best of 2010 P145 | BOOKS Agenda Coming up in 2011 P146 | LEISURE Photo ﬁnish Ireland’s woe P152 | EVENTS Skirting with recession Primark has somehow gone from downmarket clothing store to market-deﬁning brand, all in the space of a few years. CXO investigates what drove this peculiar retail success story. Back Section.indd 137 07/12/2010 16:49 RECOVERY SPECIAL 138 A Saturday afternoon stroll along any typical UK high street will expose you to widespread uniformity no matter which part of the country you are in. There’s the ubiquitous group of darkly dressed emo kids peering pastily from behind angular haircuts; painfully self-aware teenage girls trying to look both disinterested and fashion conscious at once; ‘hip’ young men wearing clothing so effete and striking you wonder whether there was a ‘dress code memo’ you missed somewhere; old couples shufﬂing slowly towards Marks & Spencer without realising their pensions would stretch that much further in the aptly-named Poundstretcher; individuals of all shapes and sizes devouring Greggs pasties and sandwiches with all the voracious elegance of a pigeon pecking at a soggy chip (also a common sight), and the omnipresent Primark shopping bag being sported by young and old, man and woman, fashion victim and fashion eschewer. Come rain or shine, Primark’s recognisable brownpaper bags have become as much a symbol of modern Britain as Tesco Express, sickly mass-produced cider and a dilettante attitude to everything from football to rock bands and made-for-TV politicians. The company’s rise and reinvention has been one of the key success stories of post-recession Britain. Primark has skilfully ridden the economic downturn, defying the retail gloom of the past two years to post massive proﬁts and growth. The chain, which is owned by Associated British Foods (ABF), has posted sales increases of 15 percent year-on-year for the third quarter of 2010, thanks to its increasingly dominant share of the British market and its recent successful ventures into Spain, where it has just opened a tremendously well-received store in the expat stronghold of the Costa Blanca, taking the chain’s total number of worldwide outlets to 198. But how did Primark become quite so recessionproof? Prior to the economic downturn, Primark belonged on the bottom tier of UK high street chains, battling with the likes of Peacocks and B-Wise for the custom of lower-end consumers, dealing solely in budget garments and cheap fashions. Then, almost out of nowhere, Primark leapt from the concrete inner malls of city centre back streets into the consciousness of almost every consumer in the UK. Did they simply deal with the downturn better than any other retailer, or was it something more sophisticated than that? “Clearly Primark’s success started before the economic downturn,” says Stephen Cheliotis, Chairman of the UK Superbrands Group. “The brand was in a pretty good position before the gloom, so their success is not solely down to the economic crisis. I think the reality is that, after the excesses of the 90s and the early noughties – after all the borrowing and spending – there was a broad shift in attitude towards having a good time and aspiring to have nice brands. So we saw a mixing of high-end and low-end brands, where people in the UK would carry a £500 (€580) Burberry bag but quite happily mix that with a £12 (€14) t-shirt from Zara or Topshop. I think the attitude of shopping around but still having high fashion became more prevalent in the UK earlier than other markets, which is where Primark has capitalised. They have beneﬁtted from simply being caught up in the market movement that followed this trend. The fact that you have Zara, Topshop and H&M doing really well, gaining recognition for quality, diversity and fashionability of their ranges, has simply trickled down to the next level, which is a level Primark inhabits.” Word of mouth With Primark soon able to position themselves as ‘fast fashion’ retailers that could outdo the likes of Topshop on price (Primark quite readily admit to stealing fashion trends from other high street stores and takes pride in having their version on the shelves a few weeks later at a vastly reduced price), there has been little need for traditional advertising. The chain has little-to-no PR output, relying on favourable word-of-mouth marketing to spread its appeal. Well, that and the all-pervading paper bags plastered with their name. “I don’t think they are entirely word of mouth,” admits Cheliotis. “In terms of PR they are actually pretty clever. They are quite reactive. People start talking about them and then journalists start writing about them, and then more people talk about them. It is, for Primark, a virtuous circle that needs a decent amount of word-of-mouth to kick-start it. This is where their PR people have been clever, and there are a number of other things they Back Section.indd 138 07/12/2010 15:28 beneﬁt from, such as the little nicknames people have given them, such as ‘Primarni’.” Such word-of-mouth association spreads like wildﬁre in the retail world, and Primark has cleverly engineered and manipulated the trend for throwaway, one-off garments by providing the produce which supports a concept that has its roots elsewhere – online. “Word of mouth advertising is becoming more sophisticated thanks to the rise of social networking,” says Cheliotis. “So while it’s hard to say whether there has been more word-of-mouth chatter about Primark, it has certainly been more important and decisive. People have always recommended brands. It’s nothing new, just a numbers game, and the advent of social media has enabled word-of-mouth to become more powerful, which is something Primark has beneﬁtted from.” With a consumer’s latest ‘Primarni’ purchase proudly posted and chatted about on Facebook, the chain is reaping the rewards. Despite the faux-negative connotations of the phrase, ‘Primarni’ (a mashup of Primark and Armani – two brands at completely opposite ends of the fashion runway) denotes an inexpensive but loveable item, something that might be short-lived and throwaway, but enjoyed despite, or perhaps because of, this. Traditional word-of-mouth mediums – meeting for coffee and chatting about one’s latest purchase – still exist, and are a realm where Primark’s products are again a topical talking point, empowering the customer with a feeling of achievement in snapping up a bargain that is also considered to be at the height of fashion. “People are fashion conscious the world over, but they also like a good bargain,” says Cheliotis. “Primark is taking the high-end global fashions and copying them, pumping them out through their various channels and making them accessible to the masses. This is the key driver behind their growth.” Primark in numbers European expansion What started as a uniquely British (well, Irish – Primark originally began as Penneys of Dublin, a name it still uses in Ireland) movement has now expanded to various parts of Europe, delivering affordable fast fashions to a continent still suffering under the shroud of recession. As you would expect, the brand’s expansion to the continent is doing well. “Primark is experiencing success in Europe because the propositions are the same,” explains Cheliotis. “The products are the same, their retail look is pretty much the same, all their dimensions are the same. It is not losing sight of what it is trying to offer, it is simply expanding internationally, focusing similar target groups as it has done in the UK. “The pick-and-mixing of fashions is now big business in Spain, France and Germany for example, and while there will be operational challenges for the brand, there are also more opportunities for them to develop more ambitious marketing programmes, so long as they can deliver as quickly as they grow.” One of Primark’s key drivers has been its ability to quickly respond to the ﬁckle changes in the fashion world and Back Section.indd 139 1969 – year the ﬁrst Penneys store opened in Dublin 198 stores worldwide 162 stores in the UK 38 stores in Ireland 15 stores in Spain 27,500 employees €2.7 billion: revenue in 2009 84,000 square feet: size of the largest Primark store in the world, in Liverpool, UK have their own budget versions of the latest trends on the market within weeks of the original. This tactic, believes Cheliotis, could ﬁnd itself stretched as the company grows. “If the distribution process is unable to keep pace, if Primark cannot be as nimble across Europe as it has been in the UK, it could struggle. If they become too cumbersome in their processes, that could become an issue, because what they are probably doing is sourcing the same styles as normal and just shifting them internationally. They probably do not yet have the scale, scope or time to tailor their output for each individual market. “Once they are at that stage, then they can start thinking about segmenting the market by country, but at the moment,” concludes Cheliotis, “there is plenty of opportunity and relevant targets for Primark to aim for without having to develop a more sophisticated strategy.” Having ridden a trend, spotted and exploited a gap in the market and beneﬁtted from the serendipitous timing of the economic downturn, Primark’s simple, cheap and cheerful approach to fashion now faces its next challenge. But few would bet against the retailer getting it spot on yet again, so expect to continue catching sight of those big brown bags being marched up and down Britain’s – and Europe’s – high streets by happy, contented and – for a few weeks at least – highly fashionable shoppers for some time yet. 07/12/2010 15:28 Steps to success LEADERSHIP Maintaining a personal touch, adapting traditional business practices and inviting your staff on daily 5.30am walks – just some of CPA Australia CEO Alex Malley’s strategies for delivering effective leadership in business, he tells CXO. Traditional approaches to management have to evolve and adapt to enable greater assessment of the intangible assets of your business. 140 If you look at the reporting of business in ﬁnancial reports, and the way in which they are managed, there still exist elements of managing an organisation as if they had an abundance of tangible assets. So in the past, the majority of assets and resources in a business were tangible. These days, often some 70 percent of the business’s resources are intangible assets, and yet we still manage organisations from those traditional paradigms as if we will report on our reporting assets. But in fact our knowledge and our brand – our intangibles – are our strength, yet we don’t manage or report on them effectively, so it is really that the changing paradigm is about saying organisations these days have a great level of intangibility in their resource, and we need to access knowledge within our business and share it both at a cost level and at a free level. It is important to identify the key relationships within your organisation. Managing your business is all about navigating a simpler approach to the makeup of the organisation. Every generation is convinced that it is the most dynamic and most relevant of all generations, so we allow ourselves to get carried away by our own important moments in time. I think one of the things that we need to constantly be looking at, no matter the pace of the world, is keeping the business model as simple as possible. That’s almost become a challenge in itself, whereas perhaps when the world started, simplicity was what it was built on. So I think navigating simplicity in organisations is a priority for a CEO. To do that, your personal communication with your staff and your key stakeholders becomes paramount, because if you have personal communication with your key stakeholders and your staff, you get a good sense of how they’re coping and how they’re dealing with the issues that you engage with them on, which enables you to have your own ﬁlter. Back Section.indd 140 One of the things I advocate is for a CEO to go through their organisation and measure the key relationships that have been managed at staff level. This allows you to map your organisation against the stakeholders that you build your business around. And when you do that for the ﬁrst time, what you tend to ﬁnd is that the organisation isn’t really aligned to its stakeholders as well as it could be. Most CEOs will ﬁnd that you have some levels of your staff who have very strong relationships. So strong, in fact, that they can be considered dangerous to your business because should that staff member leave, those set of relationships are lost. So what you have to do is map your organisation staff to its stakeholder groups. Make sure there’s a balance of relationships, because businesses these days poach people because of their relationships and quite often not because of their skills. The recent economic downturn has made it more important than ever for companies to be innovative and focused. In the great success stories, the strength of a business in any market is the ability to maintain a strong focus. This is something that has been lost and has created some of the issues in the global ﬁnancial crisis: organisations 07/12/2010 15:29 were good at one or two key things and then decided that they could do a whole lot of other things just as well. So they diversiﬁed beyond having core skills, and then when the market took a downturn, they were not in the appropriate shape or form to manage it. If you look at the human cycle at an individual or business level, businesses start tightly. They have focus and energy. And as they grow and succeed, the management and the human factors become more concerned about the size of someone’s ofﬁce when they get promoted as opposed to the core business, for example. Then before you know it you’re building this natural fat in the organisation, so at the time the market turns you get into a risk position. The shortest distance between two points is a key innovation called efﬁciency, and this is achieved by focusing on the two or three key things that the business can do well, and are mapping your relationships against those core factors. Direct communication and accountability throughout all channels of your organisation is key. At CPA, we have opportunities for staff to engage with each other through various software tools that we use. There is opportunity for people to speak to far more senior people in the organisation and share their knowledge. In terms of my role, whenever we communicate with anyone externally, at the base of the email is a note to say that central to our proposition is the fact we have a valuable and meritocratic service. They can access the CEO at anytime in relation to that service and he is the contact point, so that everything we do is looped around ensuring that if something doesn’t work for us and we haven’t done the right thing, then there is a direct accountability back to me. Despite great strides in technology, personal communication still has an extremely important role to play in business. We have various periods during the year and through various quarters where we’ll have communication with the staff via a top-down and bottom-up approach. We are a large organisation in a range of countries and I am a great believer in personal communication, so I will sometimes write to the organisation and share my emotions about how we are going or what product we have produced and how it looks. Also, I walk every day of my life, and I invite my staff, whatever country I am in, to walk with me in the morning. This is always a 5:30am start, so there are people who avail themselves of that, and that brings an equality and a uniquely equal conversation that can take place. I have actually affected some quite dramatic change from people who have come for walks with me who are nowhere near who I would meet in my day-to-day activities. Quite honestly what I ﬁnd interesting is that when you do something that is in my view just a human interaction, such as taking a morning walk with colleagues, these days people call it ‘unique’. I’m ﬁnding that my approach Back Section.indd 141 to life has never changed; I’m personal in the manner in which I deal with people. And no matter what level of software exists in the world or the dimensions of my business, that’s what I seek to do whenever I can, this type of personal engagement. If people know that of their CEO, even if you don’t get to speak to everyone, there’s a sense of respect and appreciation for the fact that that’s your approach, particularly if that’s who you genuinely are. The business world would ﬂow better if people were more honest and open with their thoughts. If I could change one aspect of the business world it would be that people openly share their personal emotions and their personal views about their business and be very honest about where the business could be strengthened. The connection between the CEO and the staff is, I think, key. I see that quite often people are guarded in what they have to say. They litigate their views because they are concerned about implications either externally or internally. I think we have reached such an impasse on that front that those who actually speak openly have a decided comparative advantage. When you look at politics these days, you look at governments like in the UK now and Australia where you’ve got minority governments, people are protesting. They want people to be straight with them. They want them to tell them exactly what the scenario is and what they are going to do about it. Being who you are and following your instincts will set you in better stead in the long run. I’ve built my career on a personal sense of following my instincts. I’m very strong in speaking to my executive staff that the most valuable thing you can bring to your personal life or to your business life is instinct, and to rely on it and test it. In a world where there is a lot of sophisticated educational programming, that can sometimes detract from a person’s instinct. I believe a person should only do what they are passionate about. The ﬁrst address I gave to my staff was to say to them that as a human being I’ve never sought to do anything I wasn’t passionate about, and I would never expect them to do that either. I would like them to consider that in their decision as to where they work and how they go about it. Also, I have always had a wide view on things, with a capacity to open the minds of an organisation to perhaps a broader level than when I arrived, and I have found that they have become integral habits of my life. Wherever I go, whether I like it or not, they are the implications I bring to the organisation. But probably the most fundamental of all is that you really have to be who you are. You have to be yourself. I think it is very temping in your career to position yourself and almost become someone else in the process of trying to achieve your goals, and that’s a really dangerous issue. 07/12/2010 15:29 TIME: +1HR GMT | CURRENCY: SWISS FRANC | LANGUAGE: GERMAN & FRENCH | POPULATION: 123,000 TRAVEL 36 hours in... Bern 142 O rrlo Ove ooke ok o k db by y Switze Sw Swi tze ze erla rlla and’ nd’s othe othe ther, mo mor m o e famous amo mouss cit cities ci ies,, ie CX CXO XO disco diissco d overrs that over att Ber e n is a hiidde d n gem de den gem em off mou mo o nta ntaininn-fre fre resh re sh h air air, ir, swee epin ping vist isttas,, c rrmi ch cha rm ming g fa fai airyt ai ry y ale a street str ee e s and nd a sta tan and da ard off liv liv ving in up there th here er wi w th h the e ve ery y besst. About A Hollywood dream-making machine could do no better: Bern is one of the most beautiful old-world cities you will ever lay your eyes on. From the fresh and fast ﬂowing waters of the River Aare that wraps around the huddled, slate-roofed centre of the old town, to the charming low bridges that hop, skip and jump across the water into the green-canopied outskirts that are punctured intermittently by church spires from a time gone by, right through to the dazzling hills that rise and rise until, on the horizon, snow-capped mountains of the Bernese Alps add a jagged edge to the sweeping, Disney-esque foreground; this city will take your breath away. Which is a shame, because the air you are breathing is some of the cleanest and most recuperative in the world. Back Section.indd 142 Getting around The uneven nature of Bern makes getting around the city a little more difﬁcult than rat-racing commuters might like but, if you are visiting for leisure and pleasure only, the rapidly undulating height differences are rather delightful. Cycling is popular, and bike hire is free so long as you return your cycle (deposit approx €20) within the allotted timescale. The city is small enough to walk around, but if you are in a hurry the clean, connected and efﬁcient tram, bus and S-Bahn system will take you where you need to go with the minimum of fuss or expense. The city also boasts the second shortest funicular railway line in Europe, which takes you up to the Bundeshaus from the Marzili quarter. Bern airport is located outside the city and deals in European ﬂights, but international travel is likely to come via Geneva, which shares a high-speed rail link with Bern. 07/12/2010 15:29 Relax Pitched in the heart of the Alps, places of relaxation are extremely easy to come by in Bern. Just outside the city centre the Bernese Alps are a haven for hikers, swimmers, skiers and picnickers, where the dazzling scenery seems torn straight from the pages of a fairytale book. Places of outstanding beauty include Lake Oeschinen and the Lauterbrunnen Valley, both of which are popular with tourists. Within the tight conﬁnes of the city, the River Aare is open for swimming, delivering clean and warmish waters that refresh and invigorate in equal measure, so feel free to strip off and dive in at any one of the many designated swimming areas dotted along the riverbank. Sleep Hotel Bellevue Palace Bern You will sleep like royalty at the Hotel Bellevue Palace Bern, which is a ﬁve-star palace of decadence, art nouveau architecture, luxury and top class service. It is located immediately beside the city’s Bundeshaus and so is right in the very heart of the (admittedly sleepy) action, whether you are there for business or pleasure. Views across the River Aare and towards the mountains draw the eye, as do the opulent interiors that are suffused with rich materials throughout and augmented by superb facilities and the ﬁnest service you could ever hope to expect. Hotel Goldener Schussel The oldest guesthouse in Bern, the three-star Hotel Goldener Schussel is a charming, comfortable and modern establishment that delivers a homely welcome, friendly service and a tangible air of elegance that is evident in the luxurious rooms, crisp and clean public areas and affable attitude of the staff. The hotel is ideally situated for shopping and sightseeing thanks to its unbeatable location in the heart of Bern’s beautiful old town. Eat Tourist Tips • There is an outer cycle path that takes you right around the entire outskirts of the city and is traversable in a couple of hours – a great way to work off all that cheese and chocolate! • The various chocolate shops are beautifully laid out and incredibly enticing, so be sure to leave room in your suitcase so you can take some of the good stuff back home to grateful friends, family and colleagues • The hills and mountains around the city are fantastically beautiful and less daunting to climb than you might think, so try to make time to scale a peak or two See There is an apartment in Bern that will forever be associated with one Albert Einstein, for it was here where he worked out his theory of relativity. Today, it is a popular tourist attraction (Albert Einstein House) and is located on Kramgasse 49 in the heart of the medieval centre. The centre itself is a UNESCO World Heritage Site and is a delight to stroll around any time of the day thanks to its beautiful architecture, cobbled pavements, tight streets and breathtaking views of the river and the distant mountains. Major attractions include the Zytglogge medieval clock tower, the 15th Century Gothic cathedral, the Rosengarten (Garden of Roses) and the city’s array of covered shopping promenades selling everything from high-end designer clothing to traditional chocolate produce. Back Section.indd 143 Swiss cuisine does not tend to feature regularly on international menus, but it has certainly made its mark over the years, particularly in the form of tacky fondue sets that are often hunted down and dusted off for special dining occasions the world over. In Bern, the two dominant local inﬂuences – German and Italian – combine to characterise a cuisine that is rich, hearty and tasty. Local specialities include the Bernerplatte, which is a hefty dish of sauerkraut, grilled pork, bacon and sausages served with boiled potatoes; and the Berner Rosti, a pan-fried delight of bacon, butter, onions and shredded potatoes. One of the ﬁnest local restaurants is the Zum Zahringer that is located right in the centre of the city and boasts a contemporary décor and fancy price tags, while a more informal and inexpensive option is the family-run Harmonie, which serves classic Gruyere in a traditionally rustic Swiss setting. 07/12/2010 15:29 Ricoh_AD.indd 1 30/11/2010 13:52 Technology for today’s executive Windows Phone 7 Windows Phone 7 is Microsoft’s latest attempt to gain precedence in the lucrative smartphone market. Its sleek look and vivid, engaging interface mean it’s deﬁnitely in the running for the top spot. The start screen has ‘live tiles’ letting users see real-time content directly. This way, you can create a tile of a friend and view their latest pictures or posts. There’s a tile for your own picture as well, making the WP7 that much fancier. Logitech K750 Logit Logitech’s latest groundbreaking offering is the world’s ﬁrst solar-powered wireless keyboard. The device holds an internal power cell with twin solar panels that can last for up to three months without solar exposure. GADGETS There is no portable hot spot functionality or free satellite navigation, but the contacts information is intergrated with social networks like no other handset. All in all, Microsofts new offering is chic, intuitive and clever, and deserves its place in the smartphone market. 145 The portable K750 charges with natural or indoor lights and is granted a 15 year degradation-free lifespan in energy consumption. The keyboard is a meagre 7.5mm thick and has concave, incured keys for comfort, so you can look good while saving the planet. ASUS Wireless Mouse Look, no buttons! Although digital mice are nothing new, ASUS have produced a contemporary design with their new 2.4GHz WX-DL and have joined the touch revolution. This spaceship-like device boasts of touch sensitive controls and an impressive 1200dpi laser to ensure accuracy. The mouse also has media controls on its surface, such as play, pause etc to enhance usability. The attractive design is arguably similar to other offerings, such as Apple’s ‘pucks’, but ASUS have gone a step further and offered it in metallic silver. The WX-DL is compatible with windows systems from 2000 to Windows 7 and has a reliable wireless connectivity. Viewsonic ViewPad 10 Although it is hard to imagine a device taking the iPad’s tablet top spot, Viewsonic are giving it a good go. The new ViewPad 10 stands out from its counterparts thanks mainly to its dual operating systems (Windows 7 and Android) that enables users to pick and choose which one they want to use. The ViewPad 10 will also have a 1.66GHz Intel Atom processor, 16GB of storage (with microSD card slot for more e storage), 1GB of RAM, 1024 x 600 pixel resolution display and the Home Premium version of Windows 7.. The older sibling of the smaller, more phone-like ViewPad 7, the ViewPad 10 looks like so many other gadgets on the market at the moment in terms of design. However, the aluminum back and matt black front do give the 275 x 170mm pad a quality feel. Viewsonic envisage the tablet being used for business purposes, as shown in the inclusion of Windows 7, and suggest the 1.3MP webcam to be employed as a video conferencing tool. Back Section.indd 145 07/12/2010 15:29 Coming up… AGENDA Jan. 28-30 Kiruna Snow Festival Participating teams of the annual Kiruna Snow Festival in Sweden put on a sparkling display, carving artistically rendered pieces out of a three-by-three metre cube of snow. Kiruna, in the north of Sweden, plays host to an assortment of events for the festival; from skiing and ice-skating competitions, reindeer and dog sled races to parties and feasts held in giant igloos after dark. The snow sculpting is the main event of the ﬁve-day programme, with the gravity defying pieces – more artistic sculptures than smiley snowmen – gradually taking shape throughout. Feb. 5 146 Berlin Six Day Race Stamina is put to the test for the participants of Berlin’s Six Day Race challenge, testing their skill and endurance at the city’s Velodrom. Thousands of spectators come to watch the pedal power at work with a combination of nail-biting races, a varied show program, entertainment and top cuisine. Held here annually since 1909, the event is located in Landsberger Allee in the east of the city and has 18 teams competing in time trials, motor-paced races, chases and sprints. Back Section.indd 146 Six Nations Championship Jan. 27-Feb. 1 Fans will be treated to a tantalising ﬁnale of the Six Nations with Grand Slam holders France taking on Wales at Stade de France. The England team will then travel to the newly named Aviva Stadium to take on Ireland, and Scotland will be keen to avenge their 16-12 defeat when they play Italy. Founded in 1883, the RBS Six Nations is an annual tournament that pits the best rugby players from England, Ireland, Wales, Scotland, France and Italy against each other. Originally contested by the so-called Home Nations, France joined the competition in 1910, with Italy joining in 2000. Six Nations tickets always sell out quickly, especially with such longstanding rivalries being played out. 07/12/2010 15:29 Milan Fashion Week Barcelona Marathon First ran in 1977, the Barcelona Marathon now sees the city inundated with runners from all over the world. The course begins and ends at Avenida Maria Christina, allowing participants to take in the city’s famous architecture, coastline and Arc de Triomf. Runners are treated to a ‘Pasta Party’ the day before the race, ensuring they’re stocked up on carbohydrates for the 42km slog. Feb.23-Mar. 1 Apr. 30 Mar. 6 Kicked off by New York in February, Milan hosts its own Fashion Week twice a year. This show will include collections for Autumn/Winter 2011 by top names such as Chanel, Giorgio Armani and Roberto Cavalli as well as up-and-coming new designers. Recently extended to include an increasing number of catwalk shows, Milan Fashion Week reinforces the city’s importance in the global fashion industry. Queens Day This huge street and canal-boat dance party in Amsterdam, Netherlands is a unique night and day carnival-like event, held on April 30 each year and during the night before (Queen’s Night). The party atmosphere is combined with a street market spreading across the city and attracts thousands of visitors, its popularity growing each year. The 50-year old event sees the centre of the city ﬁlled with a celebrating crowd adorned with orange wigs and regalia, reﬂecting the country’s vibrant national colour. Pirates of the Caribbean: On Stranger Tides The latest installment from the popular Pirates of the Caribbean franchise has lost Keira Knightley and Orlando Bloom but gained Penelope Cruz as the daughter of Blackbeard. Johnny Depp is back for the fourth ﬁlm in the sequel from Walt Disney Pictures. The ﬁrst ﬁlm pulled in $654 million (€477 million) worldwide. The sequel did even better – its $1.06 billion worldwide made it the highest-grossing ﬁlm of 2006. A third ﬁlm in 2007 brought in $961 million. Back Section.indd 147 May. 20 07/12/2010 15:30 Your World. COVERED From the people you hire to the products you sell, if you’re in business, we’ve got it covered... cxo Technology leadership is merging with strategic and financial leadership, and senior management is being called into a partnership for the future. CXO brings together a range of voices with one shared vision: to develop a strategy that considers business needs and technology’s role in moving your company forward. Find out more: www.cxo.eu.com 150 www.bme.eu.com eu.com cataloguepage_CXO17.indd 150 Next Generation Pharmaceutical Business Management Approximately 50% of new drug development fails in the late stages of phase 3 – while the cost of getting a drug to market continues to rise. NGP is written by pharmaceutical experts from the discovery, technology, business, outsourcing, and manufacturing sectors. Available for: EU, US What business processes work? What are the proven, successful strategies for taking advantage of domestic and international markets? Business Management is about real, daily management challenges. It is a targeted blend of leadership and learning for key decision-makers in government and private enterprise. Available for: EU, US, MENA Find out more: www.ngpharma.eu.com Find out more: www.bme.eu.com Financial Services Technology Infrastructure Providing for its customer’s needs and demands is the goal of financial institutions now more than ever. But it is a tricky remit to fulfill. Your customers want it all – security, cost-efficiency, speed, added functionality and, most of all, convenience. Can it be done? Read FST to find out… Available for: EU, US Infrastructure provides insight on how developers can achieve critical objectives by integrating leadingedge solutions across their operations – helping them to make informed decisions about technology and operations solutions for all of their areas of responsibility. Available for: EU, US, MENA Find out more: www.fsteurope.com Find out more: www.euinfrastructure.com 07/12/2010 13:21 On the shelf Learn Like A Leader: Today’s Top Leaders Share Their Learning Journeys Edited by Marshall Goldsmith Learn Like A Leader brings together the remarkable stories of how great leaders seize the opportunity again and again, providing an intimate look at how the very best have overcome adversity to reach the pinnacle of their business. By Marc Benioff The cloud computing landscape is denser and more populated than ever before, thanks in no small part to the role played by salesforce.com’s revolutionising of the software industry at the turn of the Millennium. In Behind the Cloud, author Marc Benioff uncovers the story and strategies behind salesforce.com’s meteoric rise to the apex of the software industry, candidly outlining how business leaders can innovate better, grow faster and stand out from an increasingly competitive crowd in order to achieve lasting success. CXO says: This step-by-step handbook takes an extremely granulated approach to business management, covering everything from ‘dream big’ to ‘reducing start-up costs’ and so proves an engaging and enlightening read. CXO says: Great air travel material, this fascinating book is crammed full with insightful stories from successful leaders, each with their own funny tales, heartwarming achievements and sage advice. IN REVIEW Behind the Cloud: The salesforce. com playbook This collection of anecdotes, manifestos, speeches and motivational insights covers everything from leading by example, teaching, delegating, spotting and shaping future stars and nurturing proﬁtable partnerships. 149 Beyond Redemption: The First Ever History Of Sales Promotion By Colin Lloyd & Ken Spedding Dealing with the history of sales promotion, Beyond Redemption takes us on a journey from the Bible to the present day, providing an insider’s views on how a powerful but uncoordinated marketing tool coalesced into a very large professional business. The book aims to educate, amuse and inform, and features a number of examples of sales promotion from down the years. It is about the people who built the business, the way in which promotions work and an example of the good, the bad and the ugly of sales promotion. CXO says:: The playful prose of the book, intended no doubt to add a sense of fun to proceedings, can sometimes detract from the underlying message, but do not let this distract you from a well-researched book that lifts the lid on a marketing technique that has become so commonplace and effective. Back Section.indd 149 07/12/2010 15:30 QUEST AD.indd 1 08/11/2010 14:29 QUEST AD.indd 2 08/11/2010 14:29 Photo ﬁnish PHOTO FINISH The full scale of Ireland’s stumbling economy is encapsulated by the sight of hundreds of unﬁnished properties – funded during the unprecedented boom years that characterised the ‘Celtic Tiger’ at the turn of the millennium – at a housing estate in Rathkeale, County Limerick. During the downturn, Ireland’s deﬁcit has risen to 32 percent of its GDP, with the country recently accepting emergency European bailout money to the tune of €15 billion. Emigration among Ireland’s young population is expected to have increased by 81 percent by the end of 2010 when compared to 2006 (according to Ireland’s Central Statistics Ofﬁce), the peak of a phenomenon that saw the Irish return in their droves, attracted back by ‘The Motherland’s’ then-strong economy. 152 Back Section.indd 152 07/12/2010 16:49 Draka_ADS.indd 1 30/11/2010 13:49 HP_AD.indd 1 30/11/2010 13:50