HP CIO Summit Barcelona 2013
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HP CIO Summit Barcelona 2013

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This document provides a distillation of the Building a Better Enterprise session which took place during HP’s 2013 CIO Summit in Barcelona. Author and Financial Times columnist Ade McCormack ...

This document provides a distillation of the Building a Better Enterprise session which took place during HP’s 2013 CIO Summit in Barcelona. Author and Financial Times columnist Ade McCormack moderated the session, which provided him with a vantage point from which to view the extent to which CIOs are engaging strategically with their organisations. His observations are presented in this report.

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HP CIO Summit Barcelona 2013 HP CIO Summit Barcelona 2013 Document Transcript

  • Business white paper HP CIO Summit Barcelona 2013: 1+5+10+1 1 message, 5 stories, 10 steps, 1 thought
  • Business white paper | HP CIO Summit Barcelona 2013 "IT remains the defining change agent of our time, and we stand at the next major inflection point in our industry. This shift is being driven by trends that you all know about and are living every single day. Whether it be cloud, security, big data or mobility. The shift also changes the way technology is consumed, the way it's delivered and the way it's paid for. This shift demands what we call 'The New Style of IT', which in reality is a new style of business powered by IT." - Meg Whitman, President and CEO
  • Business white paper | HP CIO Summit Barcelona 2013 1+5+10+1 Table of contents 3 1 message from Meg Whitman 3 5 stories from CIOs who are building better enterprises  5 10 actionable insights from the subsequent discussions 7 1 final thought and summary 8 Company overviews 9 About the author This document provides a distillation of the Building a Better Enterprise session which took place during HP’s 2013 CIO Summit in Barcelona. I had the honour of moderating the session. It also provided me with a vantage point from which I could view to what extent CIOs are engaging strategically with their organisations. Ade McCormack 1 Message CEO Meg Whitman opened the CIO Summit with the core message being that in today’s volatile market place we need to build a new style of business powered by a new style of IT. Business as usual will be replaced by massive disruption to both markets and enterprises. Those that harness the evolving technology trends including the cloud, big data, mobility and security will be best placed to adapt to this new reality. 5 Stories The session was seeded by stories from both the panel and members of the audience. These are notable for their business impact and the criticality of the IT function’s involvement in their ‘happy endings’. Story 1 – P&G, Michele Hughes P&G had significant inefficiencies in respect of field sales. Sales representatives wasted circa 1 hour per person day through administrative inefficiency. Similarly time to delivery was significantly impaired. The sales representatives were ill-prepared for their store meetings with little understanding of inventory status. Plus they were unable to offer any value in respect of product and store trends. HP has delivered a suite of mobile applications to address these issues. The solution resulted in a reduced requirement for sales representatives. Those that remain are spending more time in the field and have a greater store visit velocity. Plus they are providing better value to their customers in respect of business intelligence. This story has very clear top line benefits for P&G. Story 2 – Seadrill, Richard Duplessis As a result of Seadrill moving its headquarters from Norway to the UK, Richard was asked to undertake the same process for the data center. The option of setting up a datacenter in London was just too expensive. So Richard decided to move the data center from Norway and into the Cloud. The challenge was to make this big leap in just a matter of a few months. The risk to the business of failure was colossal. Despite some early hiccups the migration was a success. This is a story in which HP has a central role as the provider of the Cloud service. And this story is not limited to back office automation. It embraces real-time analytics . This story shows how CIOs can make a quantum leap from their traditional IT setup to this new style of IT.
  • Business white paper | HP CIO Summit Barcelona 2013 Story 3 – Banco Sabadell, Carles Abarca Banco Sabadell is turning adversity into opportunity. Weakness in its local market have necessitated global expansion and a strong focus on customer-centricity. Drastic regulatory change in the Spanish financial system coupled with the need to integrate multiple acquisitions into the business has added to the challenge. The IT function is a key element of this evolution. However to be an asset rather than a hindrance it needed to simplify its management structure and consolidate the infrastructure in order to be more agile. Technology is playing a key role and HP is advising, managing and helping the Bank transform its traditional IT framework into the ‘new style of IT’. The initial focus was on workplace management thus ensuring that IT provided the bank’s staff with scalable support for their needs today and tomorrow. HP played a key role by virtualizing the services and so enabling a more flexible provisioning model based on need. This model had a natural positive impact on security. The next stage is to focus on the customer experience where mobility will be key. Story 4 – BT, Howard Watson In September 2012, BT made a substantial ( over $1bn) investment in acquiring the rights to televise a substantial number of UK Premiership Football (Soccer) rights. From a position of having no television content creation and management capability, BT needed to develop an end to end live broadcasting capability in the 11 months leading up to the first UK Premiership football match in August 2013. Not only did Howard need to develop, contract and deploy the underlying systems to enable the successful launch of this service, but he needed to drive the planning and expansion of other existing BT systems to pre-empt a massive increase in BT’s customer ordering and provisioning capability. HP supported Howard’s efforts as a technology supplier in both core systems and the deployment of infrastructure to increase resiliency in a number of key areas and in providing the ongoing infrastructure management through the period of massive increased customer marketing, orders and provisioning. Through this period over 2 million customers have subscribed to the BT Sport service and BT Broadband services have achieved significant market share for new subscribers. Story 5 – SCOR, Régis Delayat The challenge was to integrate the various regional information systems resulting from acquisitions over the past 10 years; most recently US Transamerica Re and Generali Re. This required the consolidation of 12 data centers into 1 dual data center; both situated in France. HP provided a solution comprising multiple applications delivered as a service. For legacy applications and infrastructure cloud based services (IaaS and PaaS) were provided to facilitate global consolidation. This solution has had the impact of standardizing IT services. This in turn has reduced the associated IT costs and enabled tighter cost control. But this solution was much more than a ‘cost play’. It now provides a Cloud-ready technology platform to support the subsequent phases of acquisitive growth. As we can see CIOs are playing a crucial role in building better enterprises. –
  • Business white paper | HP CIO Summit Barcelona 2013 10 Steps Within the stories and the subsequent discussions lay pearls of wisdom which if adhered to provide a path from technology manager to digital leader. Here are 10 recommended areas of focus for CIOs looking to take their careers to the next level: Pre-empt increasing user expectations Byod is the tip of the iceberg. Global talent shortages will shift the power axis from employer to employee. The same is true of governments and citizens. Meeting the increasingly demanding needs of the users will be critical in attracting and retaining top talent. An example of this in action was provided by Seadrill. Offshore workers expect to have ready access to email and social media tools in order to maintain contact with friends and family. Whilst these services may have little to do with business matters, they are essential for the well-being and thus retention of the workers. Anticipating user demands rather than fighting them is the way forward. Develop a worldview that extends beyond the IT function Great CIOs have gained exposure to the workings of the enterprise beyond the IT function. At the very least it creates greater empathy with what the users are looking to achieve. At its best it enables the CIO to provide a nuanced service more attuned to the needs of the users. Both Banco Sabadell and P&G’s IT leadership have experience of being on the ‘consume side of the IT fence’. This has provided them with a greater appreciation of the role the IT function provides in the organisation as a whole. Carefully choose transformational initiatives Choosing just one or two big bets per year ensures that the CIO is not overwhelmed by too many ‘spinning plates’ where even one crash would have a significant negative impact on the organisation. This is not always a decision that is under the control of the CIO. If faced with multiple concurrent issues, CIOs are encouraged to triage them in respect of the risk to the organisation and similarly allocate resources and management time. We heard that BT manages to take big steps in respect of business growth and transformation by limiting its big bet activities to one or two per year. Offload technology management CIOs have limited mental bandwidth. That bandwidth can be consumed on technology management matters or on enterprise value enhancement opportunities. Those leaders who have outsourced some or all elements of technology management release bandwidth which can be used for proactive demand creation. There is still an overhead in ensuring that the technology partner adheres to the agreed service levels, but this requires minimal mental bandwidth in comparison to managing technology inhouse. A common theme across all the stories was that the key building better enterprises is to outsource technology management. – Build trust Trust is an important element of the CIO’s brand. To be involved in strategic decision-making the CIO needs to have the trust of the organisation’s leadership. To build trust requires a focus on the following: • Credibility – Do you understand the issues that concern the leadership? • Reliability – Do you deliver on your promises? • Intimacy – Does the leadership team seek your counsel in business matters? • Selflessness – Do you focus on what is important to the business rather than what is important to the IT department?
  • Business white paper | HP CIO Summit Barcelona 2013 Trust takes time to nurture. However every act carried out by the CIO and every member of staff either enhances or dampens the overall trust levels. Thus boosting trust needs to be ‘front of mind’ for everybody in the IT function. Seadrill highlighted that a healthy sign of intimacy is when the CEO is seeking the CIO’s time to discuss strategic business issues rather than operational IT matters. In the case of Banco Sabadell, the business has always had tremendous faith in the role of new technology in driving business success. Their leadership recognise the correlation between their success and IT. The IT function maintains that trust by protecting the business from the technology details and taking charge of the innovation process. A fanatical obsession with operational excellence All efforts to build trust with the leadership team will amount to naught if the fundamental IT services are not being delivered. One can forget being the Chief Innovation Officer when the CFO thinks the title Chief Phablet Fixer Officer is more appropriate. P&G highlighted that the path to being strategically relevant is paved with a fanatical obsession with operational excellence. So a smooth running ‘factory’ must be considered as ‘table stakes’ if the CIO is to become a genuine business leader. SCOR similarly recognises that it needs to focus on operational excellence to provide it with the flexibility and scalability to embrace both organic and inorganic growth. They have focused on creating a globalised set of IT processes and systems to ensure they have the technology platform needed to achieve their business aspirations. Focus on value rather than cost management In the absence of making a value case, the IT function will be judged on cost. Typically most organisational leaders do not understand why their enterprise IT service cannot be run like an app store with pricing to match. In fairness this is inevitably a model that IT functions will migrate towards if only to provide a consumerised skin over the underlying complexity. Nonetheless an exclusive focus on cost will ultimately reduce IT to a back office service that has no role to play in transforming the organisation. So CIOs need to focus on business value. Aligning IT projects and services with the strategic KPIs of the organisation is required. This is a sure fire way to maximise the strategic relevance of the IT function to the leadership team. By embracing more of the business change and process work, rather than the purely digital piece, the IT function is providing more value to the organisation than just technology management. This approach comes across in all the stories told. Seadrill sees the value of the CIO emerging not from technology management but from being the organisation’s change leader. It was also highlighted that the CIO has an intimate understanding of the organisation from a process point of view, perhaps one that is even better than the CEO. This should be harnessed and applied to delivering greater business value. Apply IT best practice to the business Of course the IT function does many things well. But one area where the IT function is well equipped to advise the business is in the area of programme management. The disciplines and practices that have evolved over the decades in respect of large scale IT projects can equally be applied to business transformation programmes. This is a practice embraced by Seadrill. Another area where the business can benefit from the IT function’s capability is in respect of agile development. Iterative prototyping and regular feedback is now being applied as part of the increasingly popular Lean Start-up model. To explain, the Lean Start-up is a model whereby rather than conducting extensive market research prior to for example a project launch, a minimum viable product is released into the market at the earliest opportunity. Real market feedback will determine whether the prototype is modified, enhanced or abandoned. –
  • – Business white paper | HP CIO Summit Barcelona 2013 Both agile and programme management provide opportunities for the IT function to provide business advisory services. Be service oriented Avoid burdening the business users and leadership with IT implementation issues. They do not need to hear about the ‘how’; so focus on the ‘what’ and most importantly use the language of the business rather than the jargon of the IT industry. To maintain the attention of the leadership in particular CIOs are encourage to align support with the strategic imperatives of the organisation. Certainly couching issues in respect of profitability, assets, risk, governance and even prison will ensure the CIO is listened to. P&G’s approach of organising the IT function’s structure to reflect that of the business and to have service managers focused on user adoption is true service orientation. Develop the brand This was more implied by the panel than explicitly stated. Using business terminology and focusing on outcomes rather than tech management were stated examples of good practice in creating a positive experience and setting expectations in respect of the IT function’s role. This is brand management in practice. Brand management is not well understood within the IT function. A five star hotel with a one star reception is a one star hotel in the eyes of the customer. So service management is a critical element of developing the IT function’s and thus the CIO’s brand. Security is an example of where good intentions damage the brand. Many CIOs are used to controlling the IT environment within which the users operate. Users increasingly find this constrictive and so refer to the CIO as the CI’No’. Many CIOs will for example argue that using a personal device compromises security and so ban their use. However if the users, rightly or wrongly, perceive that the IT function is simply attempting to cling to the power they have previously enjoyed it will cause deep damage the IT function’s brand. So in discussion with the leadership the CIO has to establish what the organisation is prepared to accept when weighing up user demands with the associated benefits, risks and cost. Developing the IT function’s brand requires a focus on what is best for all stakeholders. Summary Having also attended last year’s Summit, my sensation is that HP is becoming increasingly capable in its ability to help CIOs build a better enterprise. This year was laden with businessenhancing stories of how HP is actually helping CIOs to build better businesses though capitalising on how technology is evolving. The fact that the event became immediately oversubscribed is an indication that CIOs recognise that HP is evolving from important supplier to strategic partner. The CIOs in attendance appeared to be less concerned about HP’s strategic direction (as per last year) and more interested in how HP can help them become strategically relevant to their organisation. It is apparent that HP’s leaders have embraced customer-centricity. This was reflected in their visibility and accessibility during this memorable event. A final thought: Perhaps the most important message for CIOs, which was implied but not stated, is that job number one is to focus on the condition of their organisation’s customers (more so than the users). Because at the end of the day the extent to which customers perceive that they are receiving value for their custom is highly correlated to the overall sustainability of the organisation. CIOs that operate with this mind-set will invariably play a critical role in building better enterprises and consequently have the complete attention and support of their organisation’s leadership team.
  • Business white paper | HP CIO Summit Barcelona 2013 Company overviews Here you will find short descriptions of the organisations that provided their stories at the Building a Better Enterprise event. P&G Proctor and Gamble is an American multinational consumer goods company headquartered in downtown Cincinnati, Ohio, United States. Its products include pet foods, cleaning agents, and personal care products. In 2012, P&G recorded $83.68 billion in sales. Fortune magazine awarded P&G a top spot on its list of "Global Top Companies for Leaders", and ranked the company at fifteenth place of the "World's Most Admired Companies" list. Chief Executive Magazine named P&G the best overall company for leadership development in its list of the "40 Best Companies for Leaders". Seadrill Seadrill is an offshore drilling company domiciled in Bermuda and managed from Norway by Seadrill Management AS. Seadrill has operations in countries that include Angola, Brunei, the Republic of Congo, Indonesia, Malaysia, Nigeria, Norway, Thailand, Brazil and the United Kingdom among others. The company operates Semi-submersibles, Jack ups and Drillships. The company is listed on Oslo Stock Exchange and the New York Stock Exchange. Operational headquarters is situated in London, United Kingdom. Seadrill Management AS was originally situated in Stavanger, but after a vote to move in 2012, it is from late 2013 situated in London. Other major company locations are found in Singapore, Houston and Aberdeen. John Fredriksen has a major ownership in the company. Banco Sabadell Banco Sabadell is the fourth-largest banking group funded by private Spanish capital. It includes several banks, brands, subsidiary and holding companies spanning the whole range of financial business. Specialising in commercial banking, it has a significant penetration in the company and medium and high level private customer market. It has a network of 1,387 offices employing a total of 10,699 staff. It is quoted on the Madrid Stock Market (SAB) and forms part of the IBEX 35 index. BT BT Group plc, trading as BT, is a British multinational telecommunications services company with head offices in London, Great Britain. It is one of the largest telecommunications services companies in the world and has operations in over 170 countries. Through its BT Global Services division it is a major supplier of telecoms services to corporate and government customers worldwide. Its BT Retail division is one of the largest suppliers of telephony, broadband and subscription television services in GB, with over 18 million customers. BT has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalisation of approximately £29 billion as of 11th November 2013 the 19th-largest of any company with a primary listing on the London Stock Exchange. It has a secondary listing on the New York Stock Exchange. SCOR Scor SE is a French-based group of financial services companies, primarily focused on reinsurance. The main companies of the group include Scor Global P&C, which provides property and casualty reinsurance, Scor Global Life, which provides life reinsurance, and Scor Global Investments, an asset management company. –
  • Business white paper | HP CIO Summit Barcelona 2013 More about HP Discover hp.com/discover The firm became the world's fifth-largest reinsurer with the CHF 3.4 billion acquisition of Swiss peer Converium in 2007. The firm's shares are listed on Euronext Paris and form part of the CAC Next 20 index. In 2007, Scor de-listed itself from the New York Stock Exchange. On 1 October 2013, SCOR finalised the acquisition of Generali U.S. and became U.S. Life reinsurance market leader. About the author Ade McCormack is an author, market commentator and advisor on digital leadership. He is an opinion columnist at the Financial Times, advising business leaders on IT issues. According to former Harvard Business Review editor, Nick Carr, “Ade McCormack sounds a much-needed clarion call for IT to "grow up" and become a mature business function.” Ade has lectured on digital leadership at MIT Sloan School of Management on their MBA programme. As well as his column in the Financial Times he has a column in CIO Magazine advising IT leaders on their changing roles. He is also a judge on the CIO 100 awards. Ade’s perspectives can also be found on the Business Value Exchange and The Digital Strategist blog.  – Sign up for updates hp.com/go/getupdated © Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein. Trademark acknowledgements if needed. January 2014 This is an HP Indigo digital print.