Evolving role of the new cio - 2013-2020

1. The next CIO
CIONET Magazine, Winter 2012-2013

2. Sharing
and
Caring
Contents
Innovation
4
6
Social media driven business
innovation
Strengthening the learning and
information culture, social media
are key differentiators for business
innovation.
Can IT innovation improve the
European economy?
The IT sector generates 25% of
European investment in innovation and development. Could it
re-launch the economy?
8 New business model turns code
into money
Technology push can drive business building and transformation
at incumbent operators.
Next CIO
10 Changing IT is defining the CIO’s
new role
As a consequence of the BYOD
phenomenon the business no
longer needs to choose internal
IT as its service provider.
12 The future CIO, innovation
leader at the top
Innovation is strategic for the
future of companies and CIOs
who lead innovation will be part
of their top management.
2
In a world where IT has become
the nervous system of business
and society, we believe that ClOs
and their teams are the new
heroes that drive change and
innovation in their organisations.
That’s why we have built CIONET,
the leading European community
of IT leaders.
It is our mission to provide CIONET
members and partners with the best
14 The next CIO will be a strategic
solution partner
The future CIO will have his seat
at the board table, participating in
business strategies and the definition of goals.
18 New CIOs, stakeholders in
customer relationships
The expansion of mobile technologies strengthens the CIO’s
impact on the end clients in the
financial sector.
20 Digital university builds on CIO
leadership
TUM was the first German university to introduce a CIO function
similar to the one in corporations.
22 The X-factor of the next CIO
The CIO is expected to talk more
about his successes in order to
keep IT attractive for future generations.
Communication
24 Don’t fear the CIO but talk with
him
In their communication with
the CIO, the CEO and the Board
should abandon their prejudices
and fears of losing control.
26 The next CIO is an excellent
communicator
Good communication is essential
for building trust between CIO,
CEO and Board.
possible platform to help them to
succeed and make the world a better place. We do this by understanding the ClOs’ needs and by fostering
their development and growth.
We believe that community and
collaboration are the heart of the
organisations and society of the
future. We are driven by the passion
and ambition of our members.
Next organisation
28 The CIO as change agent: hard
to ‘soft’ control
It is crucial that CIOs are aware
of the importance of steering
on ‘soft controls’ for a network
organisation and spend more
time on it.
30 Change through intelligent
collaboration
Real transformation comes from
giving employees a platform to
collaborate openly and exchange
knowledge, creating a social
enterprise.
32 Value-added sourcing implies
governance and reciprocity
A mature IT sourcing partnership requires the development
of human relationships between
operational teams on both sides.
News
36 CIONET Italia Award
In the latest edition of the
CIONET Italia Award, three prominent CIOs were rewarded for
their innovative achievements.
38 Lift-off for a new, vibrant
community
At its start-up meeting CIONET
Portugal put business-IT alignment,
IT-driven business innovation and
lean IT on top of its agenda.

3. The next CIO
Current technology trends, such as cloud computing, social media, mobile
computing and big data, have become key weapons for business innovation
and digital growth. They are also transforming our IT organisations and drastically changing the CIO’s role.
Innovation with IT is no longer just about implementing the latest technology.
Nowadays it’s about understanding how new technologies and trends can be
applied in the business to drive growth in a sustainable manner. That’s why, in
his new role, the CIO is a strategic partner who advises his CEO and Board on
how IT can create value for the company.
To win a seat at the Board table, the next CIO will need excellent communication skills and will need to use straightforward business language. Clear communication is essential for building trust between the CIO, the CEO and the
Board. It will help the CIO to tackle the Board’s and CEO’s prejudices and fears
of losing control over investment programs.
It is also important to keep an eye on the perception that the Board and management have of IT. Although it’s not necessarily in their nature, CIOs should
talk more about their accomplishments and achievements, Success is all about
being noticed. You get noticed by showing the goods.
What other skills are required for the next CIO? He needs to have leadership
capacities and be strong in global overview and planning. As a people manager,
he will focus on people development, design career paths and constantly work
on team building.
Hendrik Deckers
Founder and managing partner
CIONET International
Finally, the next CIO is a change leader driving the company’s transformation
projects to develop new service and revenue models and to succeed in new
markets. According to Charles Darwin’s evolutionary theory, the species that
will survive are those that are the most adaptable to change.
May the Force be with you.
3

4. Strengthening the learning and information culture,
social media are key differentiators for innovation.
Social media driven
business innovation
At the CIONET Belgium event ‘IT-driven
Business Innovation’, the keynote speakers
emphasised the power of social media.
Connecting people across borders and
functional silos, they stimulate learning and
innovation.
Jef Staes, author and authority on
learning & innovation: “Only people
who combine the available information
with passion and talent can become ‘3D
smart’.”
Jef Staes, author and authority on
learning & innovation, stressed that
social media play a key role in the
transformation process of organisations to become innovative. “We are
facing an exponentially increasing
amount of immediately available
information. This ‘global information wave’ is strongly powered by
all kinds of online and mobile media. Everybody has access to them
and anyone can add information.
Moreover the nature of information
is evolving as we see, for instance,
increasingly more video and social
networking on the Internet. All these
kinds of ‘tacit’ information exchange
can’t be found in school books that
only give ‘explicit’ information.”
From ‘2D smart’ to ‘3D smart’
Sabine Everaet, Europe Group CIO at
The Coca-Cola Company: “The richness
of the behaviour information from the
‘citizen interaction center’ enabled us to
embark in precision marketing.”
4
Event report CIONET Belgium
“In the old days society suffered from
a huge information shortage. You
went to school knowing the teacher
had more information than you. When
you later went to work, your manager
also knew more than you. If your job
performance was moderate, your
boss sent you to a training course
where they taught you how to better
carry out those things you didn’t like.
You were ‘2D smart’ without passion
hoping to retire at 50.”
But things have changed. “Following
the ‘global information wave’, information is directly accessible to everyone. So, the teacher and the manager
aren’t necessarily the smartest anymore. Only people who combine the
available information with passion and
talent can become ‘3D smarts’. They
will learn a lot faster and be able to
innovate much more rapidly.”
The skills a manager needs in the 3D
information age are no longer validated by diplomas, function descriptions and training programs. “Most of
all, he has to be a leader and talented
in casting. He should be authorised
to autonomously choose the right
people for his team instead of having
to work with people chosen by the
organisation. Otherwise he can’t be a
competent 3D manager.”

5. For innovation
we absolutely
need CIOs who
are ‘3D heroes’.
“We have to build an information
system that’s relevant to the next
generation. Children and teenagers
have constant and multiple access
to the social media. This is why they
have developed a much stronger
learning and information culture than
most organisations. So how can we
possibly become the world’s most
innovative nation if we don’t give
our collaborators access to this 3D
information?”
“For innovation we absolutely need
CIOs who are ‘3D heroes’. They profoundly understand the value of 3D
information combined with passion
and talent. They should be given the
authority to implement the new skills
and tools in their organisations”, Staes
concluded.
Social media as key
differentiator
Sabine Everaet, Europe Group CIO at
The Coca-Cola Company, explained
that innovation in IT is not just about
implementing the latest technology.
“It’s about understanding how new
technologies and trends can be applied in your business to drive growth
in a sustainable manner.”
Social media and mobile apps have
become a key differentiator for
improving Coca-Cola’s competitive
position. “In the past, we typically
supported the marketing and communications teams by centrally hosting consumer websites. We collected
consumer data at a fairly high level,
but we never actively used it.”
To make the difference, IT started
hiring people from marketing agencies. They soon indicated that the
company needed to invest in twoway, interactive connection with the
consumers. “Look for instance at
our Facebook fan page with over 50
million fans. If we wanted to exploit
that position, we needed to include
digital advertising across all channels.
Therefore, we were mandated to
build a Social Engagement Platform
supervised by a hybrid steering committee in which IT, Marketing and
Communications operate at the same
level.”
The richness of the behaviour information that we obtained revealed
opportunities for corporate communication with the consumers.
“More importantly, it also enabled
us to embark in precision marketing,
the second component of our Social
Engagement Platform.”
The concepts of social media and
online networking have also entered Coca-Cola’s internal communications. “Chatter, our internal
Facebook-alike, has played a vital
role in sharing best practices across
country borders. Another example is
the use of Spigit, a tool that supports
interacting around innovative ideas.”
“All these technologies stimulate
innovation as they smoothly connect people across borders, ignoring hierarchical and functional silos.
They take advantage of a broad and
culturally diverse base and diversity
is proven to result in more disruptive
innovations.”
‘Social media lead
to diversity which
is proven to
result in disruptive
innovations.’
The first component of the platform
relates to the consumer call center.
“Our pilot ‘citizen interaction center’
in Spain went live in 2012, using
modern communication channels like
social media. As community managers, our agents engage actively with
consumers on topics of their interest.
We were able to bring down the cost
per interaction from 9 Euro to 0.004
Euros. This was driven by the number
of interactions that increased from
7,500 contacts to 35 million social
impressions on a quar­ erly basis.”
t
CIONET Belgium Event report
5

6. The IT sector generates 25% of European investment in innovation
and development. Could it re-launch the economy?
Can IT innovation improve
the European economy?
“Do you believe IT is really the salvation for our economy? What can
CIOs do to help their country’s economy grow? What will be their
future role in this?” These were the main topics of the CIONET annual
event in Spain last October.
Some 170 IT experts came together
to analyse these topics and to enjoy a
great networking day in Madrid. Many
topics surrounding the economy and
the CIO’s role were discussed: “What
do we have to focus on in the present
economic situation? Are we doing
a good job? What do we have to
change? More Innovation? Sourcing?
Cloud? Or maybe ‘not even move’? Are
we afraid?”
These and many other questions were
answered during this annual meeting.
Pilar del Castillo: “Developing knowledge and innovation in the digital area will
have a substantial impact on economic
growth and employment.”
Mona Biegstraaten, Managing Director
of CIONET Spain explains: “First of
all we heard what the European
Parliament had to say about this.” Miss
Pilar del Castillo, MEP and member of
the Research and Energy Committee
of the European Parliament, explained
their plans and future actions. “The
IT sector generates 25% of European
investment in innovation and development. As a consequence of the
dynamism of the sector, its ability to
innovate and its added value, it helps in
the development of other sectors”, she
explained.
Pilar del Castillo also talked about the
need to develop a Digital Society based
on three factors:
• mobilisation of individuals, providing
digital skills and access to appropriate speed networks and pushing
forward in privacy and security;
• developing the market with a digital
scope, basically harmonising local
laws:
• developing knowledge and innovation in the digital area.
“These three factors together will have
a substantial impact on economic
6
Event report CIONET Spain
growth and employment. They will
be the driver to help us get out of this
crisis”, she said. Some initiatives of the
European Parliament to achieve this are
the European Digital Agenda, the liberalisation of the 800 mHz band, 3G and
4G coverage and the European Cloud
Computing strategy.
CIO’s changing role
Mona Biegstraaten: “We went on with
our discussions to see how we can be
the driver for the economy. We know
that the CIO cannot start new projects, invest in innovation, grow the
business, etc. on his own. That’s why
we set up some debates between
CIOs & CEOs, CIOs & CFOs, and CIOs
& HR directors. The most important
outcome of these debates was the
fact that the CIO has to change his
role and his way of focusing on IT.”
The next speaker was a very well
known Spanish professional:
Honorato López Isla, ex-CIO and
CEO of Unión Fenosa. He really
agreed on this necessary change of
the CIO’s role and also gave some
concrete ideas to focus on. “What
does the CEO need from his CIO?

7. First of all, release him from technological decisions. You, the CIO, are
the expert in technology. The CIO
should also help the CEO with strategic decisions. Moreover the CIO is
a business partner of the organisation, not a provider. The problem and
the project are common to all parties.” López Isla continued: “The CEO
doesn’t want to pay too much for his
technological whims. Furthermore
the CIO has to lead the transformation projects and explain their value,
e.g., can they be used for international growth? The CIO also has to talk
to the CEO about ROI and Business.
What is the profit? How does it affect our P&L? Finally he has to bring
innovation to the company.”
‘The CIO is a business
partner of the organisation, not a provider.’
Profile of the future CIO
“Based on this and on other considerations put forward during the event,
the profile of the CIO of the future
has to include some crucial skills”,
says Mona Biegstraaten. “The CIO is
a leading manager with the capacities and the skills to be in the steering
committee. He has leadership skills
and is strong in planning, communication, global overview, etc. This CIO
is trained in management skills and
not only in technical ones.”
“Moreover he has a worldwide vision
and supports international growth
integrating ICT platforms, especially in
acquisition processes. He looks for opportunities in the emerging mar­ ets on
k
other continents. The CIO of the future
is also able to listen and understand the
business and to provide it with solutions.
He facilitates the contact between business and IT management levels.”
Pilar del Castillo, MEP and member of
the Research and Energy Committee of
the European Parliament: “The IT sector
helps the development of other sectors
with its dynamism and ability to innovate.”
Honorato López Isla, ex-CIO and CEO
of Unión Fenosa: “The CIO has to lead the
transformation projects and explain their
value to the CEO.”
But that’s not all. “As a people manager
he improves people development,
makes the team grow, manages expectations and designs career paths.” What
else is expected from the future CIO?
“He does not only provide IT services to
the business but also tries to package
technology to help diversify the business. He has a product manager mentality to go to the market. Finally, as a
leader in digital transformation, he is an
evangeliser and catalyst for innovation.
He gets his company closer to Cloud
Computing, Big Data, BYOD, etc.”
The event closed with the participation
of José Manuel Inchausti. He is the CIO
of Mapfre and European CIO of the year
2012. He said that the new role of the
CIO should be very strong, positive and
convincing.
“You have to believe in the fact that you
are the CEO of your area” concludes
Mona Biegstraaten. “You have the same
responsibilities and the same role as any
other CEO. You need the right skills but
more importantly, the right attitude.”
The CIO is a
leading manager
with the
capacities and
the skills to be
in the steering
committee.
CIONET Spain Event report
7

8. Technology push can drive business building and transformation
at incumbent operators.
New business model
turns code into money
When managing the transformation from a
former state-owned telecommunications
company to the customers’ first choice service provider for connected life and work,
implementing new business models is a key
challenge. Deutsche Telekom is driving this
growth with innovations from own developments, partnering, and venture activities.
The Developer Garden initiative of
Deutsche Telekom is distinct from
most other innovations, as building
this business has its roots in - and
has been driven by - the technology and IT department rather than
the business unit’s product management. How did this come about?
Technology Management within DT’s
former CTIO organisation realised that
Internet technology allows exposing
features of DT’s network and IT infrastructure to third parties using APIs
(application programming interfaces).
This exposure allows third parties to
easily leverage DT’s services in own
solutions and business processes,
generating new revenues in domains
that DT itself is not active in.
DT’s IT infrastructure handles billions
of transactions each month, creates
bills for millions of customers, and
complies with a challenging set of
regulations and laws. Hence, imple-
8
Special feature CIONET Germany
menting additional features for new
business models has been a complex,
high-effort task in the past and made
it difficult to match the speed of pure
Internet players and start-ups. Today,
the same APIs that are exposed to
third parties can be leveraged internally to implement new business
models faster and at a fraction of
previous costs. Often, time consuming changes to legacy IT systems can
be avoided.
In 2009, the CIO and CTO of DT’s
former T-Home and T-Online units set
up a team of experts to work on two
front lines. The first one consisted of
building an exposure gateway and a
developer portal, which provide external as well as internal developers with
APIs to access services such as voice
call or SMS. The second frontline was
about managing the culture shift from
encapsulating own assets from the
outside world to opening them up for
any developer worldwide. This open
development approach quickly proved
that it can be of high value for a telco,
as it already is for pure Internet players
such as Google or Twitter.
Soon, corporate strategy and the
board of management of DT drew
their attention to this new ‘enabling’
business model and made it one
central element of DT’s future business model. It was only recently that
all Developer Garden activities were
transferred from the technology and
platform department to the core
telco products business unit within
DT’s Digital Business Unit, which reports directly to the CEO of DT, René
Obermann.
Developer Garden
Developer Garden
(www.developergarden.com)
is the developer platform of
Deutsche Telekom (DT).
It enables third parties such as
software developers and IT solution providers to use a broad
range of DT and partner services
to efficiently build or enhance
applications for their business
clients and to turn code into
money.

9. Strong developer ecosystem
To fully leverage the power of working with external developers, DT’s
Developer Garden is building a strong
developer ecosystem together with
partners such as Microsoft, Intel or
Voxeo Labs, which reaches out to
more than 17 million developers
worldwide. The API portfolio now
includes services such as Telekom
Tropo (a cloud-based voice application
platform providing speech-driven IVR
(Interactive Voice Respond) services),
access to DT’s machine-to-machine
(M2M) and Entertain (IPTV) services, as
well as cross-operator in-app billing
and ID management services. Since
July 2012, it has been complemented
by the Developer Garden marketplace
for software components. Both enable
developers to turn code into money:
selling code components or earning a
revenue share when using APIs in own
applications provides them with new
sources of revenue. Furthermore, using
pre-build code components can considerably reduce effort and time-tomarket in app development projects.
‘Recently, the
Developer Garden
activities were transferred to the core
telco products business unit.’
With the marketplace for software
components as well as the cooperation with leading players in the software market, Developer Garden has
become an important offering for
software developers. It is going beyond traditional telco services, while
at the same time allowing developers
to leverage DT’s network and IT assets,
the strong customer and billing relationships and partner network, as well
as the high quality of service delivery.
More and more business customers
and enterprises count on Developer
Garden, for example, to enhance
their business processes with voice
dialogues for customers or to set up
voice mash-ups for new business
offerings. With good customer service and tailored offerings, Developer
Garden is serving the needs of professional enterprise developers. With a
wide range of activities such as free
talks, conferences and web tutorials,
run by the Developer Garden evangelists, DT is in close contact with the
developer community and can address their needs fast.
Peter Bruhn, Senior Manager at the
Digital Business Unit of Deutsche Telekom
AG and author of this article: “Learning to
communicate is now child’s play thanks to
Telekom Tropo API. Enhancing applications
with voice communication has become an
easy, low effort task.”
Deutsche Telekom
Deutsche Telekom is one of the
world’s leading integrated telecommunications companies with
almost 130 million mobile customers, 33 million fixed-network
lines and more than 17 million
broadband lines. The Group
provides products and services
for the fixed network, mobile
communications, the Internet
and IPTV for consumers, and ICT
solutions for business customers and corporate customers.
Deutsche Telekom is active in
around 50 countries, the Group
generated revenue of EUR 58.7
billion in the 2011 financial year over half of it outside Germany.
CIONET Germany Special feature
9

10. As a consequence of the BYOD phenomenon the business no
longer needs to choose internal IT as its service provider.
Changing IT is defining
the CIO’s new role
Ian Sherratt, Corporate CTO at SCC provides an
insight into how ‘Architecting Choice’ can assist
CIOs to flex into future technology challenges,
providing IT that truly defines their business.
Tablets and ever more powerful laptops are readily available on every high
street. People talk about consumerisation and the BYOD phenomenon.
What do all these developments
mean for the IT industry?
I. Sheratt: “We need think differently
about security, data and applications
and about how we deliver those to the
workforce. The fact that these devices
are not corporate devices any longer
changes our responsibility. This raft of
new devices is changing the way the
CIO has to deliver the infrastructure.
He has to think about architecting
choice, not just about delivering what
he has done before.”
What challenges do these changes
present to CIO’s?
“What would the business accept? Is
the business ok with smartphones? Do
they think facebook is acceptable in
the work place? For a CIO it’s becoming the IT that defines him. What is he
doing to make sure that the internal
staff are productive, are intuitively able
to interact with all information they
need to do a fantastic job? That really
is the challenge and the opportunity
for the CIO today.”
10
CIO view CIONET UK
How is the CIO’s role changing
exactly?
“Previously, he was the default provider of services, data and IT technology.
Now the business no longer needs
to choose internal IT as their service
provider. They may look outside IT and
could choose to adopt a cloud service
offering.”
‘Lots of CIOs are
starting to talk the
language of the
business and not the
one of technology.’
Does that mean that the CIO is
becoming an endangered species?
“Lots of CIOs are working hard to
avoid that by changing the way they
talk to the business and by changing
what they offer the users in terms of
options to access data and applications. They’re looking at everything
the market can offer and trying to
apply that to the businesses. They’re
also starting to talk the language
of the business and not the one of
technology.”
Ian Sherratt, Corporate CTO at SCC:
“The CIO has to think about architecting
choice, not just about delivering what he
has done before.”
The role of the CIO you’ve described
sounds almost like an impossible job.
Could outsourcing be the answer?
“The problem with outsourcing is that
every time you change, there’s an
incremental cost for managing that
change. As we look at the infrastructure that the CIO could have created
with wholesale outsourcing, he is now
stuck with that outsourcing model.
So, a clever CIO will look at selective
insourcing, not outsourcing. He’ll keep
the things that are important to him
and the business close to him and he’ll
look at selectively out-tasking some of
those other elements like e-mail, storage, etc. So he’ll become the service
aggregator rather than the service
provider.”
This article is based on an interview by
Robin Powell.

11. What’s the point of your digital strategy?
Many companies are aware that digital is a massive opportunity but are unclear how to leverage the five disruptive technology
forces - mobility, cloud computing, social business, analytics and cyber intelligence - reshaping the marketplace. Reimagine your
place in your ecosystem, redefine your products, services and experiences, and retool to engage stakeholders more effectively.
From strategy to delivery, Deloitte Digital combines cutting-edge creative with trusted business and technology experience
to define and deliver digital solutions Make a point of visiting www.deloitte.be
© 2012 Deloitte Belgium

12. Innovation is strategic for the future of companies and
CIOs who lead innovation will be part of their top management.
The future CIO,
innovation leader at the top
The explosion of internet technology and
user tools involve the CIO in new roles because he/she must explore the new possibilities. This phenomenon leads to great opportunities for the CIO to provide solutions that
add more value and to become more deeply
involved in the business.
Federico Flórez, CIIO and Member of
the Executive Committee at Ferrovial:
“The CIO’s role has been critical in sectors such as banking and manufacturing
where IT has led to growth.“
The CIO’s role has not always been
acknowledged, but it has been fundamental for managing companies
and essential for their survival. On the
other hand, its content has been rich
and the knowhow gained has enabled
those of us who have been fortunate
enough to work as a CIO to grow and
develop professionally.
In recent years the CIO has supported
business processes with technology
and by automating functions. This
role has not been a strategic one for
the organisation and that is why the
CIO’s position has largely not been
considered as part of the top management of the company. Although,
it is true that the role of the CIO has
been a critical one for company
operations in sectors such as banking
and manufacturing.
The skills the CIO needs are based on
a strong technological component,
supported by a mature IT sector providing solutions and services, focused
12
CIO view CIONET Spain
on a limited number of technology
companies. Business in general in the
past was not embedded in a complex
macroeconomic environment, so the
IT budget increase was usually justified by a defendable business case.
This role has been existing for many
years and has been a difficult one due
to the complexity of the projects and
the growing needs of companies,
which made the cycles shorter and
more demanding. However, talent
was never lacking, as the sector has
always had sufficient capacity to
absorb growth.
Nowadays, in addition to maintaining
past functions, the CIO finds himself
in an adverse macroeconomic environment and at a time of great technological change. Moreover, companies tend to diversify and try to sell
more externally. The panorama has
changed dramatically. Now there are
solutions that are more mature and
enable processes to be outsourced to

13. Innovation and social
networking are both
phenomena which
require a completely
new way of working,
which is totally open.
Federico Flórez: “Innovation is strategic
for the future. This means that the CIO
who leads it will be part of the company’s
top management.”
companies that are experts in reducing costs and making costs variable.
Outsourcing practices are not free
from risk and failure, but are seen
as a good solution given the greater
pressure on costs. They also provide
the flexibility the company needs for
change. This requires other knowledge and different talents in companies. Furthermore, suppliers should
see themselves more as partners in
this long journey and not as mere
contractors.
Increasing IT value
In addition, business changes and the
CIO needs to understand the new
processes that have to be supported
and give him a more core value role
because technology is integrated
even more into business. The value
IT generates increases and the CIO
is requested to provide solutions that
add more value to the business. This
is a great opportunity if you know
how to adapt yourself to this new
environment.
The explosion of internet technology and user tools has led to more
opportunities, which involve the CIO
in new roles because he/she must
explore solutions, which are not be
supported in the same way (no own
infrastructure or own development).
He also has to do it within a shorter
implementation period and with less
costs. The CIO must deal with this
new complex environment because
it is not mature and requires reengineering know-how from his own
company. Users are always requesting enhancements and better tools,
which are more user friendly.
This phenomenon has occurred in
almost every sector and has led to
great opportunities for the CIO to
become more deeply involved in the
business. The language used is increasingly more straightforward and
has improved communication.
‘The CIO is requested
to provide solutions
that add more value
to the business.’
In my opinion, the CIO has evolved
and now leads innovation in this environment. This function has arisen in
an exponential way in all companies
as they want to stand out from their
competitors. This is an across the
board process, which normally has
technological support and therefore
requires management skills the CIO
has. Furthermore, innovation is strategic for the future of the company
and this means that the CIO who
leads it will be part of the company’s
top management.
Another initiative that must be taken
advantage of is the use of social networks in the company. Some shortsighted people have seen this as only
being part of the younger generation’s future, but it plays an important
role in the future of the company as
it will be a vehicle for attracting and
retaining talented professionals and
sharing knowhow and knowledge
throughout the company.
Innovation and social networking
are both phenomena which require
a completely new way of working,
which is totally open. In this environment the CIO will face difficulties that
he/she will have to manage regarding
data security and confidentiality. The
CEO’s vision and the viewpoint of
the company in which you are working are essential in this new journey
and this transition tends to be slower
among top management that is less
visionary and less open to change.
But let us make the most of this
opportunity we have at this time of
great change and let us live up to the
saying that where there is a recession,
there are opportunities.
This article was written by Federico Flórez,
Chief Information and Innovation Officer
(CIIO) and Member of the Executive
Committee at Ferrovial.
CIONET Spain CIO view
13

14. CIOs of the CIONET Italy Advisory Board say the future CIO
will have his seat at the board table.
The next CIO will be
a strategic solution partner
Trends like cloud, apps and mobility are transforming technology into
services. This evolution moves the CIO from being a technology
expert to a solution expert. The future CIO will be a strategic partner
advising the CEO on how the new IT can bring value to the company.
The role of the CIO is changing and is
becoming more and more challenging. The seventeen CIOs in the
Advisory Board of CIONET Italy give
their opinion. How are they experiencing the CIO’s changing role and what
do they think about the next CIO?
probably the key for organisations of
the future. IT will be involved in marketing, product development, logistics,
finance, human relations, collaboration, etc. So the future CIO must be
able to evaluate the opportunities of
new technologies for the business.”
ing e-mails on paper. But he/she will
also be requested to have long-term
experience to perfectly know business
processes and differentiate between
what is just trendy technology and
what can improve revenues and
efficiency.”
“Having finally left their technical
role, many of today’s CIOs meet with
company management to contribute to the improvement of business
processes”, says Maurizio Brianza,
CIO at BTicino. “The IT trends of this
decade, like mobile, social, cloud, big
data, internet of things, consumerism, etc. are transforming the business
world in terms of customer relations,
operational processes and the business model. Technological progress is
“Learn continuously, communicate
effectively, act and decide rapidly”,
says Dario Castello, CIO at Maserati
and ICT Business Development Leader
at Fiat. “The CIO’s job will become
even more challenging. The innovation pace of IT is unmatched in human
history. The CIO will always need to
know and use the latest technologies
like a geek, having a young mindset
like the millennials who will enter
companies where CxO’s are still print-
Stefano Catellani, CIO at Caprari,
believes that the next CIO is already
working in the IT departments today.
“Our companies will only have a ‘next
CIO’ if we, the CIOs of today, will be
able to imagine and shape him or her.
What is right today will still be right
tomorrow: the future CIO needs to
have client commitment enabling him
to understand the needs of the users.
Moreover he or she has to be ‘business proactive’. It is no longer enough
Maurizio Brianza
14
CIO view CIONET Italy
Dario Castello
Stefano Catellani
Donatella Paschina

15. Paolo Daperno
Marco Tagliavini
to be aligned with the business, the
CIO must anticipate future needs.
Finally he or she has to be technology
driven, helping the company to get
the best out of IT.”
Multiple roles
“CIOs are increasingly being asked
to play incremental roles like chief of
information, chief of innovation and
chief of integration”, argues Donatella
Paschina, Group CIO at Ermenegildo
Zegna. “All these roles can be played
at the same time in the same company depending on the needs of the
business lines and on the expectations
of the top management. The ability
to play different roles is the real challenge to be faced, as is the capacity
to speak the different languages the
various roles require without forgetting the technological aspects of the
job. The next CIO will advise the CEO
on how the new IT can bring value to
the company.”
“The next CIO is a facilitator and
enabler of the business who’s able to
communicate, analyse, understand
and develop a helicopter view on the
business”, says Paolo Daperno, CIO
& Business Process Director at illycaffè. “He should promote collaboration with the business, contribute to
strategic planning, enable technology
and drive innovation. The CIO should
create innovative ways to better know
and serve the customers and to con-
Marcello Cordioli
nect with them. Another major challenge is to select the right sourcing in
a world of shrinking resources.”
Marco Tagliavini, Corporate IT
Manager at Georg Fischer: “Everybody
agrees that the future CIO will no
longer focus on technical issues, but
rather on improving the business processes and on providing added value
through IT. In addition to the necessary technical background, the future
CIO must have strong communication skills. As a result of the increasing
financial impact of IT on business,
he also needs solid financial skills.
Moreover, people management skills
and strong skills in business process
management are required.”
‘Proactive CIOs will
anticipate future business needs.’
Marcello Cordioli, Group CIO at
Permasteelisa, says that the pace of
changes in the economy and the business is calling for a profound change
in all the roles of organisations, including the CIO’s role. “The new rapid
changes require that a CIO is able to
implement drastic simplifications of
the infrastructure and the organisation. Only when the environment is
flexible and agile he has the time and
the capabilities to deal with the new
roles the company asks him to ful-
Enzo Bertolini
fill. They expect him to be a change
manager, a knowledge manager and a
digital expert who is aware of what the
clients are telling through the internet
channels.”
According to Enzo Bertolini, Group
CIO at Ferrero and Chairman of the
CIONET Italy Advisory Board, in the
coming years the CIO will be required
to play his role on three different
axes. “First of all, he should provide
the company with a robust back office implementation, leveraging on
a shared services platform in order
to increase efficiency and agility. He
should also be an innovator identifying the more interesting emerging
technologies and inspire the management on how these may transform the
way of doing business and improve
the ability to reach the evolving consumers. Finally, he should become a
‘change engine’ driving the company’s
transformation projects to develop
new business sectors or succeed in
new markets.”
Strategic role
The CIO is becoming a strategic
partner inside the company. “But not
everywhere, only in companies that
will use innovation for business advantage”, says Marco Gaeta, CIO at
Sirti. “Business is changing and current
trends like cloud, apps and mobility are transforming technology into
services that are available everywhere
CIONET Italy CIO view
15

16. and anytime. In other words, the CIO
is moving from being a technology
expert to a solution expert, from a
standard expert to a business expert
and from a reactive model to a proactive model.”
“It is clear that the CIO will play a new
role in the organisation of the future”,
confirms Adriano Riboni, CIO at Sanofi
Aventis Italia. “Of course it is necessary
to have implemented a solid platform
responding to all basic necessities. But
now it is time for the CIOs to become
involved in the business strategy
definition. The business is looking for
a new way of working and requires
our help. It needs to adapt its strategy
quickly and to adopt new solutions
to connect with customers. This is an
excellent opportunity for us to demonstrate that with our experience, deep
knowledge of company processes
and technical skills we can help them,
adopting new technologies and tools
with agility and flexibility.”
Davide Gindro, CIO at Avio Group,
argues that “the CIO’s role has to evolve
to help companies transform their
Marco Gaeta
business through innovation and collaboration in the inside as well as the
outside. With his/her knowledge of the
processes he/she should identify where
it is important to transform the company through tight integration between
technology and business. To drive the
change, the CIO must fully understand
the business strategy as well as internal
and external customers.”
‘The future CIO will
focus less on technical issues.’
Paolo Magnani, VP IT Life Sciences &
Healthcare Sector, Mainland Europe
at DHL Supply Chain, adds: “I am sure
a CIO of the 2020’s will manage core
business processes and will drive
company innovation. He will also be
accountable for the integration of different business models. Cloud, SaaS,
IaaS and apps have already set the path.
Now we need to be able to transform
ourselves and our resources to cope
with the new challenges. Within our
companies, we are among the few who
have a valuable expertise to do this.”
Adriano Riboni
Davide Gindro
Luigi Pignatelli, CIO at Carl Zeiss Italy:
“Over the years, the CIO has moved
from a technologist role, based on a
solid technical environment and governance rules, to an integrated business actor, requested to adapt to the
ever faster technology evolution and
to the organisation’s business needs
and goals. In this way the CIO has won
his seat at the board table, participating in business strategies and definition
of goals, bringing the technological
point of view to a more global and
integrated 360° approach of the business model. The next challenge will
be to secure and manage the tangible
and the intangible within a flexible and
heterogeneous technical ecosystem,
capitalising the huge volumes of data
as a strategic asset.”
Crisis accelerates change
“In the current situation of worldwide
economic crisis, CIOs should increase
the speed of change”, says Giovanni
Hoz, CIO at Policlinico Gemelli,
emphasising the ‘genetic mutation’
that made them become less technical
experts and increasingly closer to
business. “Everyday, enterprises
Paolo Magnani
CIOs of the 2020’s
will manage
core business
processes.
Luigi Pignatelli
16
Giovanni Hoz
CIO view CIONET Italy
Augusto Fedriani

17. are going bankrupt or dramatically
reducing their budgets. Within
this scenario, CIOs should be the
ones who find the most innovative
technological solutions, but always
aimed at corporate business objectives
and not simply responding to a sort of
‘technological libido’.”
Augusto Fedriani, Disaster Recovery
Manager at Costa Crociere, confirms:
“Technological growth combined
with the economic situation in recent years has led companies to offer
more services while saving resources.
This is pushing the CIO to become
a helmsman, holding the technical,
financial and operational rudder. He
needs to have the vision to suggest
new scenarios, remaining on the
crest of a wave of innovation.”
“Consumerism of IT and cloud computing threaten the CIO’s leadership
in technology skills”, argues Matteo
Veneziani, IT Director at Expo 2015.
“Access to services is no longer the
prerogative of the IT function. To defend his leadership the CIO must
play the role of advisor in the selection process of service outsourcing,
assuring the integration between
external and internal solutions. Within
this scenario, the CIO must always be
updated on new technology trends,
be an advisor on demand and have
deep knowledge of business processes and financial skills to demonstrate
the ROI of IT.”
The evolution theory can be summarised by this quote from Charles
Darwin: “It is not the strongest of the
species that survives, nor the most intelligent. It is the one that is the most
adaptable to change.” Ferdinando
Peretto, CIO at DiaSorin explains that
“this has to be taken into consideration to find the picture of the ‘next
CIO’. It has never been so difficult to
forecast how business and society
will develop in the coming years.
The CIO’s knowledge of the entire
business at a process level and his
methodical approach to systems and
process design create a unique ability
to help move innovation forward.”
Tackle the
economic crisis
by increasing the
speed of change.
Matteo Veneziani
Ferdinando Peretto
CIONET Italy CIO view
17

18. The expansion of mobile technologies strengthens the CIO’s
impact on the end clients in the financial sector.
New CIOs, stakeholders
in customer relationships
Within just a few years, the CIO has become a real player when it comes
to dealing with the clients of the company or administration he works for.
Now he is much closer to his client’s clients. The expansion of mobile
technologies strengthens this closeness even further.
Currently, most investments in
financial institutions directly affect the
end client’s tools. Whether it is a web
portal, a transactional website or a
mobile application, the CIO is entering a universe driven by something he
had not been familiar with so far: the
power enacted by the crowd.
“End clients’ habits have changed
drastically over the past few years and
the CIO feels this change first-hand”,
says Pascal Lanser, Country Manager
of IBM Luxembourg. “It’s now a question of being best aligned to the
company’s strategy and acting in a
time span that is totally different from
before. The CIO has gone from having to strive for a long-term vision to
something he needs to achieve in the
medium or even the short term.”
“What it means to be an insurer is
radically changing”, confirms Olivier
Vansteelandt, Member of the ExCo
and Manager IT & Organisation at AXA
Luxembourg. “We were not used to
making our systems available 24/7 and
our current processes still largely rely
on paper. But our clients and agent
networks are increasingly requiring
that our systems are made available at
all times.”
Besides the obvious challenges, other,
more strategic ones, appear, such as
the role played by IT operations. “Is
the infrastructure really a part of our
core business?”, Axa recently asked
itself. The insurance company then
proceeded to outsource commodity
functions. But outsourcing remains a
business matter before anything else.
“The CIO has left behind the traditional cycle of development consisting
of creating, assembling and producing
technological releases”, says Pascal
Denis, Managing Director of
Accenture Luxembourg. “In the current context where time to market and
Olivier Vansteelandt, Manager IT &
Organisation of AXA Luxembourg: “Our
clients and agent networks are increasingly
requiring that our systems are made available at all times.”
Bernard Lhermitte, CIO of ING
Luxembourg: “The CIO has become a true
stakeholder. If he makes bad choices, he
can actually imperil the bank’s customer
relationships.”
18
CIO view CIONET Luxembourg

19. Sylvain Momin, Head of Country
Technology Organisation at ABN Amro
Luxembourg: “For the CIO it’s a key issue
to be involved in achieving the company’s
main objectives“.
Pascal Lanser, Country Manager of IBM
Luxembourg. “It is now a question of being
best aligned to the company’s strategy and
acting in a time span that’s totally different
from before.”
Pascal Denis, Managing Director of
Accenture Luxembourg: “The CIO has left
behind the traditional cycle of development consisting of creating, assembling
and producing technological releases.”
time to value have become essential
for companies, the CIO must be able
to choose the right building blocks for
his company, distinguishing the strategic ones from the ones that can be
left aside. He has an incredible array
of solutions within his reach, including
ready-for-use solutions. He can subscribe to out-of-the-box software and
services or even have them executed
elsewhere.”
‘direct if possible, advise when needed’.
Using the same logic, we are now approaching our product distribution and
construction channels differently.”
pany’s main objectives“, confirms
Sylvain Momin, Head of Country
Technology Organisation at ABN Amro
Luxembourg. “This is a sound approach because this way he can really
focus on what matters to the bank. It
also forces his sponsors to think better
about what is truly at stake. Moreover
we set up really precise business cases
before carrying out strategic investments. Doing so, we of course demonstrate how we can reduce costs and
achieve ROI, but more and more often
it’s also about what revenues can be
generated.” Finally, Momin points out:
“By using precise business cases our
project portfolio is certainly smaller,
but it gains in precision.”
‘Today, what the CIO
does, directly affects
the end clients.’
CIO’s increasing impact
The increased intimacy in organisations between Chief Information
Officers, the Marketing department,
Finance, etc. makes it easier to identify
what can create and favour synergies.
“In keeping up with the global strategy
of improving ‘total customer experience’, the CIO is faced with multiple
and diverse strategic challenges”,
explains Bernard Lhermitte, CIO of
ING Luxembourg. “We constantly keep
the client at the centre of what we do,
which corresponds to the bank’s motto
What is the CIO’s role in this context?
“While keeping a very low IT costincome ratio, the CIO must not only
show a strong capacity to control
costs but also be aware of the latest
state-of-the-art technology. Today,
what the CIO does directly affects the
end clients. If he makes bad choices,
he can actually imperil the bank’s customer relationships. IT no longer only
facilitates these relationships but has
become a real stakeholder. That’s why
we always have to challenge ourselves
and remain ambitious.”
To achieve these goals, ING
Luxembourg recently added a new
building block to its infrastructure,
enabling the bank to address new
challenges more rapidly and to embrace new potential. “It is not only
about making a technological choice,
but also about opening up to future
challenges for the bank as well as for
the clients”, concludes Lhermitte.
“For the CIO it is a key issue to be
involved in achieving the com-
The CIO has gone
from having to
strive for a longterm vision to
something he
needs to achieve
in the medium or
even the short term.
CIONET Luxembourg CIO view
19

20. TUM was the first German university to introduce
a CIO function similar to the one in corporations.
Digital university
builds on CIO leadership
Higher education is being challenged to adapt
its operational model. Universities used to be
research and teaching centres for a specific geographical area, but today leading universities
operate globally hosting students from different
social backgrounds from all over the world.
Without a doubt, Information
Technology has also become a key
success factor for universities. IT
leaders from higher educational
institutions are confronted with
the same challenges as their peers
in the corporate world: Cloud, Big
Data, Consumerisation of IT - all
these buzz words, which aim to
describe the impact of new emerging technologies and trends, are also
top on the list of issues for CIOs of
universities.
IT@TUM
Information Technology is omnipresent at TUM (Technische Universität
München). It is among the leading universities in Europe and the
world. The 2012 Academic Ranking
of World Universities (ShanghaiRanking) recently ranked TUM again
as Germany’s best university. More
than 32,000 students and 9,300
employees work and study in one of
the three major TUM campus sites in
and near Munich.
20
CIO view CIONET Germany
In 2001, TUM was the first German
university to introduce a CIO function
similar to the role implemented in
corporations, including direct reporting to the president. Together with
the CIO role, a new IT governance
structure was established and a new
IT strategy was defined under the leitmotif ‘building the digital university’.
The main task of the CIO position is
to optimise existing processes in a
mainly decentralised ICT environment
and improve the effectiveness of IT in
research and teaching at TUM, while
optimising costs at the same time. To
achieve this, three major focus areas
where defined:
• Infrastructure: networking, e-mail,
storage, internet portal, identity management and system administration;
• Campus Management: management of all administrative systems
(personnel, finance, student administration and student organisation);
• Research & Teaching: e-learning,
web services and library services.
Lessons learned
• Communication and collaboration with stakeholders is crucial.
• Gain new personnel with the
help of business units, e.g.
through shared employment.
• Stick to decisions made: don’t
re-discuss everything.
• Keep it simple: complexity is
great for wine, not for IT.
• The CIO needs strong backing
from the CEO and the Board.
• New structures are about real
people, not only about what is
on paper.
• Be your own critical customer.

21. For all centrally managed IT activities,
a service catalogue has been defined,
which offers standardised IT services
to all TUM students and staff. Major
achievements of this approach have
been the creation of 24/7 IT services,
a significant reduction of redundant
IT infrastructure, new IT services by
usage of external service providers
and a very strong focus on communicating about IT deliverables.
The CIO’s changing role
at TUM
In 2011, Hans Pongratz was elected
as TUM’s youngest ever Senior Vice
President and CIO. Having been a
student at TUM, he is a Master of
Computer Science and has worked
in TUM’s IT Department as a research
fellow since 2005, in which period he
has supported the implementation
of the new IT infrastructure program
called IntegraTUM, the e-learning
platform elecTUM as well as the new
campus management system CM@
TUM.
Since the introduction of the new IT
governance structure and the related
IT strategy at TUM, the approach of IT
leadership has evolved from a rather
restrictive top-down model to a
system of collaboration between the
CIO and the Information Officers of
the operational units, as well as with
other TUM stakeholders (students and
non-teaching staff).
Hans Pongratz defines his CIO role
as being a moderator, facilitator and
catalyst who connects his vision on
IT with the needs and requirements
of his clients from all parts of TUM. “It
is about how we can effectively and
efficiently work together in order to
achieve our common goal of making everything at TUM better”, says
Pongratz. “The IT function has to
become more flexible and customer
centric and IT staff need to constantly
communicate and interact with the
users.”
In this context it is quite interesting to
learn how Mr Pongratz implemented
an unusual approach ensuring that
the message IT wants to communicate is understood by its clients.
He hired a non-IT person for the IT
communication role: actually the lady
has a PhD in archaeology. Doing so,
Prongratz followed this simple rule:
“If she doesn’t understand what IT
tries to communicate, it will not be
communicated.”
‘IT leadership at TUM
has evolved from a
rather restrictive topdown model to a collaboration system.‘
He is a strong believer of leading by
example. Therefore he decided to not
only focus on his strategic CIO role
by maintaining his personal responsibility for the campus management
system. “It takes a lot of extra time
to fulfill this dual task, but it is time
well spent as this approach keeps me
grounded with the daily challenges of
operational IT management”, argues
Pongratz, adding that this is very
positively received and gives additional credibility to his role as CIO.
In a mainly decentralised environment, which exists in most universities, collaboration is essential. At
TUM the main vehicle for IT related
collaboration is the CIO/IO Board, in
which all 13 faculties are represented
under Hans Pongratz’ leadership. The
board’s task is to define and drive
major IT projects in order to execute
the overall IT strategy.
velop processes and find solutions to
support the further decentralisation
of research and teaching activities.
Besides, increasingly more research
projects are driven by cross-functional teams to drive and stimulate
innovation at TUM. IT needs to provide these research teams with tools
and processes that enable them to
optimise their research activities by
sharing information on a 24/7 basis.
Looking at the current situation, Hans
Pongratz concludes: “The vision of
where we want to go with IT at TUM
is clear. However, we have to realise
that things tend to move slowly.” In
his role as TUM’s CIO he will make
sure to move forward to success
together with his IT Board, enabling
TUM to continue on its way of building a digital university.
Hans Pongratz, Senior Vice President
and CIO at the Technische Universität
München: “The CIO’s role is being a
moderator, facilitator and catalyst who
connects his vision on IT with the needs
and requirements of his clients.”
A view into the future
Major challenges lie ahead for the
IT role. As TUM continues to operate more and more globally and
partnerships around the globe are
initiated, the IT function has to de-
CIONET Germany CIO view
21

22. The CIO is expected to talk more about his successes
in order to keep IT attractive for future generations.
The X-factor
of the next CIO
One of the greatest challenges the future CIO
faces is the predicted lack of IT experts. It is therefore important to keep an eye on what perception
the outside world has of IT. Although it is not in
their nature, CIOs should try to talk more about
their successes, because those who exude success will also be regarded as successful by others.
Paul Piebinga, CIO of Enexis: “The
increasingly complex data set leads to the
expectation that CIOs will increasingly
influence the business strategy”.
Nils Fonstad, Associate Director of eLab,
part of INSEAD: “Which type of CIO are
you actually and what drives you: technology, business processes or customers?”
22
“Each generation gets the CIO it
deserves” was the theme of CIOneXt,
the last annual event organised by
CIONET Netherlands in Amsterdam.
During the meeting various speakers
from different backgrounds tackled
the question: “What is the role of the
CIO of the future?” This discussion is
still topical and is about a wide range
of subjects and questions: “How to
deal with the influence of new technologies like cloud and mobile? What
about the governance of an increasingly complex infrastructure and data
set leading to the expectation that
CIOs are increasingly influencing the
business strategy to pursue? How do
we deal with innovation within the
organisation?”
On top of this, the CIO is a line manager of the ICT department. How is
this role changing? Which skills does
a CIO need? Will his department still
exist in the future? If so, how can we
keep it attractive for future employees
Event report CIONET Netherlands
for whom we have to focus on more
diversity due to the predicted lack of
IT experts?
More women
Led by the day’s chairman Paul
Piebinga, CIO of Enexis, the participants listened to the speakers, but also
contributed in the form of lively discussions. Because women are often
sidelined, especially in more senior and
executive positions, two successful
women were present in this discussion:
Wouke Lam, former IT manager HR
systems at Shell and now responsible
for the diversity policy of the national
government at the Ministry of Foreign
Affairs, and Dr Julie Beardsell, Board
Member of the Academic Council,
Dean of Academic Standards and
Professor of Digital Strategy at UGSMvMonarch Business School Switzerland.
Julie Beardsell cooperates with
CIONET to draw attention to the appeal of European Commissioner Neelie
Kroes to aim for more women in IT.

23. European CIO of the Year Pieter
Schoehuijs of Akzo Nobel told those
present about the radical transformation his company has undergone, and
how IT supports the business strategy.
IT is the driving force behind business process management at Akzo
Nobel. To achieve this position a lot
of work has to be done, including
the reduction of no less than 4,000
server-based applications that are
used throughout the organisation. As
an example he took the sub-project
where a hundred ERP applications are
being reduced to no more than six.
For over three years two systems have
been shut down every month. In total
this project will last for seven years.
‘Each generation gets
the CIO it deserves.’
Healthy curiosity
He shared four lessons with the CIOs
present. The first one is successfully
organising by using the right structure and the right people. One of the
greatest challenges he faced was
actively making use of talent for the
whole organisation. The second lesson is to assume responsibility as an IT
department. IT is perfectly positioned
to be involved in everything. “Make
use of this, and show healthy curiosity”, he said.
The third lesson is being proactive. If
someone else comes up with an idea,
the CIO is too late. If you don’t do it
yourself, others will and you can only
join in. This marginalises IT. The fourth
and final lesson is about celebrating
the success. “Keep it lively, as IT is
always people-oriented.”
with the personal development of the
CIO, especially the image he or she
has. For instance, he demonstrated
that authenticity is particularly important for image, referring to examples
from the music industry.
Nils Fonstad, Associate Director of
eLab, part of INSEAD in Paris, started
a discussion with the CIOs present
about the question of which type of
CIO they actually are, and what drives
them: technology, business processes
or customers? Tineke Netelenbos
then spoke of her work as a Digital
Champion for the Dutch government.
She mainly appealed for the incorporation of IT in education, expressing
harsh criticism about the solo effort of
the Ministry of Education, which has
not joined coordinating IT initiatives.
She also shared the letter she sent to
the people who were at that moment
charged with forming a new Dutch
government with recommendations
for IT policy in the Netherlands, including a Minister of ICT.
Image and perception
Finally, Henkjan Smits, known as a
member of the jury in talent shows
on television, held a mirror up to the
faces of the CIOs in his presentation
‘The X-factor of the CIO’. He dealt
‘Keep it lively, as IT
is always peopleoriented.’
“It is also important to keep an eye on
what you stand for and what perception the outside world has of you”,
he explained. Following on from the
lessons of Pieter Schoehuijs, Smits
incited all CIOs present to exude
success, as it is by definition not in
the nature of CIOs to talk about their
successes. “After all, those who exude
success will also be regarded as successful by others”, he concluded.
This article was written by Marco van der
Hoeven. The photos were taken by Paul
Teixeira.
Tineke Netelenbos, Digital Champion, appeals for the incorporation of IT in education.
She has given recommendations for IT policy
in the Netherlands, including a Minister of ICT.
Henkjan Smits, tv presenter, producer,
talent scout and coach: ““It is important to
keep an eye on what you stand for and what
perception the outside world has of you.”
Due to the
predicted lack
of IT experts the
CIOs will have to
focus on more
diversity.
CIONET Netherlands Event report
23

24. In their communication with the CIO, the CEO and the Board
should abandon their prejudices and fears of losing control.
Don’t fear the CIO
but talk with him
CIONET Belgium hosted the IT Governance seminar ‘Communicating
with the CEO & Board’ in Brussels. The speakers agreed that the CIO’s
communication should be as transparent as possible in order to
improve trust.
Yves Danneels, CIO of Landbouw­
krediet/Crédit Agricole (LBK/CAB)
talked about ‘Communicating with
the CEO & Board on high impact
programs’. He explained his communication approach by means of
the Centea acquisition case. Centea,
a medium sized Belgian bank, had
its ICT fully managed by its former
mother company KBC. Its products
were similar to those of LBK/CAB but
the number of products and transactions was twice as high. The goal
was to merge both banks into a new
one, to be called Crelan, by 30 June
2013.
supplier. But in this case a lot of trust
was involved, so it was important to
be transparent and show all options
as objectively as possible.”
Prior to the acquisition decision, ICT
identified 4 options for the future IT
platform, amongst which are adapting the existing IT landscape, and
even full outsourcing of all Crelan’s
IT to KBC. “The latter was not an option, mainly because our main competitor would become our sole IT
After further analysis and having
challenged its internal vision by external consultants, ICT proposed to
adapt the existing platform and leave
Centea on the current KBC platform until migration in June 2013.
This plan was finally adopted by the
Board.
24
Event report CIONET Belgium
ICT also wanted to make sure that all
possibilities were clearly understood
by the board. This was achieved by
carrying out a SWOT analysis for
each option, including the thoughts
of the CEO, the Board and the
shareholders. “To do this you have
to know the strong and the weaker
points of your ICT and understand
the perception factors such as fears
and prejudices.”
Define a communication
framework
Following this, Lázaro Campos, the
former CEO of S.W.I.F.T., presented
on ‘CIO’s communication with CEO
and Board’. First he explained that the
CIO’s role has strongly evolved.
“He was used to missions such as
delivering IT-centric change and
aligning IT with business strategies. But nowadays expectations are
much higher. The CIO has to keep
the entire business running without
interruptions, drive business transformation and enable business innovation, avoiding disturbing normal
operations.“
Drivers for this evolution are cloud
computing and virtualisation leading to more complex organisations
with, for instance, development and
call centers outsourced to various
foreign countries. It is a challenge
to integrate all these geographically

25. Yves Danneels, CIO of Landbouwkrediet/Crédit Agricole: “In the Centea
merger case a lot of trust was involved,
so it was important to show all options as
objectively as possible.”
Lázaro Campos, the former CEO of
S.W.I.F.T.: “The CIO should define a framework for control and completeness. This
will reassure the Board that an investment
is not infinite.”
André Vanden Camp, CIO at AXA:
“The CEO should empower IT within its
scope by delivering a clear CIO mission
statement including key metrics and cost
targets.”
spread processes. “The evolution is
also pushed by the increasing cyber
warfare which will militarise IT discipline, and by BYOD, leading to a loss
of control over IT assets.”
best practices on CEO and CIO
relationships.
ment and keeping IT high on the
agenda.” And finally, the CEO should
empower IT within its scope “by
delivering a clear CIO mission statement including key metrics and cost
targets, and by enabling IT to decide
on IT-related matters such as sourcing, architecture and security.”
Within this context the CIO’s communication with the Board and CEO
becomes increasingly important. But
how much information detail should
the CIO give them? “The truth, nothing but the truth”, stresses Campos.
“You could start with a high level
heads up in advance and discuss the
details later.”
In his communication the CIO should
also define a framework for control
and completeness indicating the outlines of a project. “This will reassure
the Board that an investment is not
infinite. It will take away the fears of
losing control and create more trust.
External references and benchmarks
will further increase this trust. Finally,
in the CIO’s communication there
should always be a clear link to the
business.”
Being on the same
wavelength
André Vanden Camp, CIO at AXA,
continued with his presentation
‘What the CEO & Board expect from
the CIO’, pointing out some of the
First of all the CIO should create
value for the business. “He should
understand current and future business needs, enhance critical business
processes and ensure transparency.”
Secondly, he should deliver high
quality. “This means focusing on
quality criteria. IT solutions should be
agile, flexible, reusable, scalable and
reliable.” Finally the CIO has to keep
costs under control. “This is essentially a matter of focussing on critical
business processes and delivering
bold cost reductions on less critical IT
capabilities.”
“Being on the same wavelength is not
always an easy matter”, concluded
Vanden Camp.
The IT Governance series of seminars have
been taking place since 2005 in partnership with ISACA.
‘The truth, noth­ng
i
but the truth’
In return the CIO may also look at
what he can expect from the CEO.
“The CEO should deliver a long term
business strategy to translate into the
IT landscape. On a short to mid term
he should provide strategic axes to
prioritise IT delivery. He should also
provide IT with the means to deliver.
These are the budgets for running,
evolving and transforming IT. Other
means are: ensuring that all IT requests pass through the IT depart-
Being on the
same wavelength
is not always an
easy matter.
CIONET Belgium Event report
25

26. Good communication is essential for building trust
between CIO, CEO and Board
The next CIO,
an excellent communicator
‘Shared understanding’ will enhance the alignment between business and
IT dramatically. The next CIO should therefore have excellent communication skills using business language that is less technical than before.
At CIONET Belgium’s IT Governance
Summit ‘Communicating with CEO
and Board’, Erik Guldentops, Lecturer
at University of Antwerp Management
School, presented the first results of
his research on this theme. The research was based on a CIONET online
survey, a number of face-to-face
interviews and a literature study.
During the face-to-face interviews
a number of CIOs of mainly large
organisations across various sectors
revealed that what really matters is the
CIO’s access to the Board and executive management. They pointed at the
importance of informal communication establishing mutual trust between the management and the CIO.
“Obviously the CIO’s communication
skills are therefore becoming more
important”, added Guldentops
The interviews also identified a few
emerging practices, such as:
• the ‘kitchen table’ concept where
executive management including
the CIO share one large office as if
sitting at home chatting together
around the kitchen table;
• a monthly informal luncheon meeting between CIO and top management where IT and other matters are
discussed in an informal manner.
26
Research CIONET International
Open agenda
The results of the online survey revealed the importance of an open
agenda during meetings with Board
and executives. If the meeting with
the CEO is an open discussion forum,
CIOs experience it as more useful and
even more pleasant. If the meeting
strictly sticks to the agenda, it is still
useful but the CIO will have to deal
with the stress. “But if it is difficult to
bring up subjects in those discussions,
the stress remains but usefulness goes
down”, said Guldentops.
Erik Guldentops, Lecturer at the
Antwerp Management School, Advisor to
the Board of the IT Governance Institute
and past Inspector-General at SWIFT: “If
the meeting with the CEO is an open
discussion forum, CIOs experience it as
more useful and more pleasant.”
Another outcome of the online survey
concerned the difference between
reporting on risk versus communicating about risk. CIOs and CEOs don’t
consider the topic ‘management of
IT related risks’ as a top priority when
asked for their top 3 discussion topics. However when probing with more
closed questions, it turns out to be
the most frequently and most deeply
discussed subject. They don’t seem
to like this topic but they have to deal
with it due to regulations. But then
what do they prefer to talk about? The
survey results indicate that typical CEO
priorities are business status, followed
by cost/budget and innovation. Typical
CIO priorities are solution delivery,
service delivery and cost/budget
concerns.
The survey also pointed to the need
for a balance between discussing
strategic objectives and daily performance. In companies with low IT
maturity in terms of board attention
to IT, everyday performance is more
on the agenda. The talks in companies with a higher IT maturity are
more about strategic objectives. But in
organisations where IT maturity is very
high, there is a perfect balance in the
communication about objectives and
performance.

27. What really matters
is not the reporting
line but the CIO’s
access to the Board
and executive
management.
Another finding of the survey was the
CIO’s apparent budgetary freedom
in companies with high IT maturity.
The more the IT strategy is integrated
with the business strategy, the more
budgetary freedom the IT department
seems to have. ‘Seems’, because the
numbers were so high that there is
doubt about the survey respondents’
understanding of the term ‘budgetary
freedom’.
Key communication difficulties
A literature study with the assistance
of Solvay Business School students
analysed academic articles and
professional references. It was immediately striking that a lot is written
about the CIO’s reporting line and
not much about CIO communication.
Nevertheless the study showed that
CIOs face difficulties in their communication and summarised them in 6
key issues:
• insufficient clarity about the CIO’s
role leading to inappropriate or
insufficient communication;
• lack of CIOs’ business knowledge,
which prevents them from getting
completely involved in the discussions;
• lack of board members’ and executives’ IT knowledge;
• the use of an inadequate language
i.e. computer scientist language
instead of business language;
• lack of assertiveness: CIOs have to
fully seize the opportunity to participate in developing the business
strategy;
• reporting structure: the CIO should be
close enough to the CEO to be able
to promote his or her vision for IT.
‘Top managers
should understand
the real capacity of
IT to avoid underestimation as well as
overestimation.’
Good communication
principles
One of the most important findings
from the literature study is that access
to Board and executive is more important than the CIO’s reporting line.
Another is that many articles advise to
create committees at different levels
that will be charged to translate the
needs of all stakeholders and will improve the coordination between the IT
department and the other departments
of the company.
The study also revealed that many
point out the need to create a ‘shared
understanding’ by the CIO and the top
management team. This will have
a dramatic impact on the strategic
alignment between business and IT.
To make this work, some of the issues
addressed above need to be tackled:
CIOs need to improve their business
knowledge, CIOs need to talk a less
technical language, and board members and executives need to have a
better understanding of IT.
Another advice from the academic
research is about ‘managed expectations’. CIOs need to proactively create
opportunities for the top management
to learn about the real IT capabilities
and capacity to support to business
strategy. This is necessary to avoid
underestimation as well as overestimation, but also to enable convergence
of IT and business goals.
Communication framework
Finally the literature study listed a
number of good practices promoted
by experts and by COBIT 4.1 that
relate to the communications issue.
Nevertheless the authors explained
that it is difficult to develop a unique
framework for the CIOs’ communication, due to the huge variation
of company structures. ”However, it
seems clear that a well set-up framework for the CIO’s communication has
a positive impact on the company and
hence has to be developed seriously”,
concluded the authors.
CIONET International Research
27

28. It is crucial that CIOs are aware of the importance of steering on
‘soft controls’ for a network organisation and spend more time on it.
The CIO as Change Agent:
hard to ‘soft’ control
Because of the rise of SaaS, cloud computing,
big data, BYOD and cybercrime, competences
such as networking, collaboration and orchestration are becoming crucial for the IT department.
As a preparation for my guest lectureship at the Vrije Univeristeit of
Amsterdam, in spring 2012 I interviewed more than 45 CIOs in The
Netherlands about how they are
coping with these challenges. Is their
main focus on steering on the ‘hard
controls’ (objectively measurable
KPI’s) or are they more steering on
the so called ‘soft controls’ with instruments to influence the behaviour
of people such as management ‘tone
at the top’, performance evaluations,
training programs and maintaining
established policies and procedures?
‘The role of the CIO is
being the change agent
for the IT department of
the future.’
The research reveals that the large
majority of the CIOs interviewed (93%)
is convinced of the importance and
necessity of soft controls. Almost all
CIOs stated that the qualities of their
IT staff are decisive for the success
of their IT organization. By contrast,
however, only a relatively small per-
28
Research CIONET Netherlands
Gerko Baarslag, the author of this
article, studied sociology and is currently
CIO at ONVZ Health Insurance and also
guest lecturer at the Vrije Universiteit of
Amsterdam on the topic ‘soft controls’.
centage of CIOs (36%) stated that they
are effectively applying soft controls.
The reason is that the IT world is
mainly ‘inhabited’ by people with a
‘Beta’ background; dominated by
the idea of y = ax + b. In the current
complex environment of organisations
this linear way of thinking is less effective. Despite how well your IT strategy
and IT annual plan is defined, it does
not automatically mean that your IT
employees and other stakeholders
embrace the plan and act in accordance with your ideas in practice. This
also requires other more soft skills and
qualities like marketing of your ideas,
motivating employees, steering on
desired behaviour, etc.
So, it is crucial that CIOs are aware
of the importance of steering on soft
controls and spend more time on it.
These controls are required for monitoring that the IT department is effectively developing the right core competencies for a network organisation.
The role of the CIO in this is being the
change agent for the IT department of
the future.
A psychology or sociology study
is not a pre-condition for this role.
There are enough practical change
management courses and books (e.g
Kotter) available and a good HR department should also be able to support the CIOs in this change process.
Dialogue and an exchange of views
with your peers or with colleagues
from other disciplines could also help
you to get more insight in this subject. But, at the end it is the CIO who
should be in front of the troops. The
question that CIOs should ask themselves: how much of your time are
you able and willing to spend on your
role as change agent and steering on
soft controls?

29. Divert your focus from
ICT management to
ICT business enablement
But how do you balance
control versus flexibility?
Your business changes ever more rapidly and your ICT department has to keep pace with all
these changes. You are looking for business solutions empowered by ICT. Your ICT department
should be able to spend more time focusing on the core processes of the organisation instead
of managing the ICT systems.
Grip of KPN gives your company complete ICT flexibility with your ICT department in the control
room. From the Grip appstore we offer cloud applications you can easily scale up and down for
the various user groups within your organisation. By means of single-sign-on your co-workers
have access to all applications (cloud and non-cloud). Any time, anywhere, no matter which type
of device and operating system they use. Grip offers great advantages to your ICT department:
for example, in cases of recruitment or dismissal all the user’s applications can be activated or
blocked by a simple push of a button.
KPN acts as a single vendor for the complete Grip application platform. This enables us to create
one management dashboard, one contract, one invoice and act as one support desk for all
applications. All applications are pay-per-use. There is a shift from Capex to Opex as you do not
have to invest in complex ICT infrastructures. Grip of KPN helps you free yourself from daily
ICT management while keeping balance between control and costs. Giving your ICT department
the opportunity to divert the focus from ICT management to business enablement.
For more information visit: kpn.com/grip

30. Real transformation comes from giving employees a platform to
collaborate and exchange knowledge in a social enterprise.
Change through
intelligent collaboration
The smart, digital organisation is much more
than just a company that uses business intelligence tools. Over coffee near his office in
the City of London, Jardine Lloyd Thompson
(JLT) group CIO Ian Cohen outlines how he
has tweaked corporate systems and worker
behaviour to create a social enterprise.
Cohen describes the transformative
work he is undertaking at the global
insurance specialist as “interesting
stuff’ and not normally the kind of
thing you expect to see from a tradition broking firm”. Cohen is creating a
platform for interaction and conversation that brings together existing technologies in order to give employees a
new way to collaborate.
We set about
helping our colleagues visualise
what a socially
enabled JLT
might look like
30
CIO view CIONET UK
Communication must be a key priority for all CIOs. CIO Connect’s Annual
Conference at the beginning of last
October demonstrated how IT leaders
must take advantage of digital change
and lead the business, through innovation, to a brighter future. Cohen is
one such leader.
He has already spent a year-or-so
working on the programme, including
between six to nine months selling the
concept to the board. “Now we’re out
there making it real”, he says. As well
as the UK, Cohen has recently been
spreading the message of transforma-
tion in-person to JLT’s operations in
Latin America and Southeast Asia.
Spin the question around
Work on the programme dates back
to early conversations with JLT group
chief executive Dominic Burke. Keen
to understand the potential impact
of digital technology, Burke charged
Cohen with setting out a potential
route forwards for the business. “I
started working on a board paper, as
one often does, but soon started to
think we were asking the wrong question”, says Cohen.
“The change wasn’t about a technological agenda”, he says. “We already
had all the technology. This was not
a question about what JLT was going
to do, it was about what JLT wanted
to be.” Cohen says his decision to spin
the question around, and to consider
the wider business strategy rather than
just technology implementation, was
certainly unusual. “Few IT leaders get
that opportunity”, he says.

31. “If you can be clear about what you
are and what you want your company
to be, then you do can do things including through the use of technology - to make that reality happen. Too
many companies run around doing
things, such as kicking off projects and
programmes, in the hope of becoming something else. If you want to be
something interesting, you have to
decide to do things differently.”
“We set about helping our colleagues
visualise what a socially enabled JLT
might look like”, he says. JLT worked
with a specialist digital agency, which
analysed the traditional broking process and distilled the working day into
a series of scenarios and personas
from which systems could be designed. This is a program that touches
every part of the business in all countries and all regions.
JLT wanted to be a global, collaborative and knowledge-led organisation.
“The core or our strategy is all about
putting our clients first and bringing
the very best of JLT to every single
relationship we have”, says Cohen,
who says the transformation was a
challenge as knowledge tended to be
siloed and disconnected.
“Success in driving the creation of the
social enterprise is all about managing expectations. Be clear about what
will take weeks rather than months,
as well as what will inevitably still take
months and always make the conversation commercial and outcomedriven. CIOs must be able to have
commercial conversations with the
board about the art of the possible.
Get those conversations right and the
c-suite team will support your ideas.”
“We’re thinking Santiago to Sydney;
wherever you touch JLT, you should
be getting the same experience from
people who understand your business
needs”, says Cohen. “That means a
global conversation where information and insight just flows naturally.”
Interestingly, the project involves very
little development work or genuinely
new technology.
‘The transformation
was a challenge as
knowledge tended
to be siloed and
disconnected.’
In his attempts to make the organisation more collaborative, Cohen says
he had already implemented steps
towards creating a social enterprise.
“Most organisations that want to be
collaborative are already thinking how
to exploit social technologies inside
and outside their organisations, but
not many are from our sector”, he
says.
Building the social enterprise
For JLT, the social enterprise approach, says Cohen, is about harnessing and focussing the knowledge and
expertise from across a geographically
diverse organisation. But the term
itself means little to insurance brokers.
So, Cohen started talking about the
project internally to prove the potential benefits of a social enterprise.
“Most companies already have all the
technology they need in order to
create a social enterprise”, says Cohen.
JLT drew on already-in-use Salesforce
technology, existing publishing and
collaboration tools from Microsoft,
and one genuinely new data visualisation system form QlikView.
“The most important activities in
change programmes involve defining
a vision and helping people prepare
for the journey”, says Cohen, who says
the firm turned Salesforce Chatter,
without any great fanfare, and used
the platform as a social pilot.
Ian Cohen, CIO at JLT group: “I’ve seen
global, regional and local conversations
about opportunities and innovation that
would have been impossible without
Chatter.”
“We turned Chatter on and listened.
Some early conversations were banal;
others were more structured, but over
time it has developed into a powerful
business platform for sharing information and generating ideas. I’ve seen
global, regional and local conversations about opportunities and innovation that would have been impossible
without Chatter”, says Cohen.
CIONET UK CIO view
31

32. A mature IT sourcing partnership requires the development
of human relationships between operational teams on both sides.
Value-added sourcing implies
governance and reciprocity
In their outsourcing strategy many CIOs
evolved from simple externalised service
management towards ‘collaborative innovation’ relationhips with their IT suppliers.
Governance and reciprocal performance
evaluation support the client in his search for
mature and value-added outsourcing.
In partnership with Deloitte and
INSEAD, CIONET France recently
organised a round table conference
concerning the theme of IT supplier
relationships, focusing on the relationship between management and
contract renegotiation.
Nils Fonstad, Associate Director at
INSEAD eLab: “The implementation of
a strategic partnership with IT service
providers became an important value
creation lever for many companies and an
optimisation opportunity for the service
provided to users.”
32
Event report CIONET France
The first keynote speaker was Nils
Fonstad, Associate Director at INSEAD
eLab. He pointed out that “the partial
externalisation of some IT services
is a phenomenon that commenced
several decades ago. But the decision taken by Eastman Kodak in 1989,
which consisted of externalising its
whole IT function, was regarded by
a majority of people as a revolution.
The implementation of a strategic
partnership with IT service providers
became an important value creation
lever for many companies and an optimisation opportunity for the service
provided to users.”
Relationship maturity levels
Not surprisingly, this theme has been
the focus of numerous recent studies.
Thus, a maturity analysis of the relationship between CIOs and IT providers has been carried out by Leslie P.
Willcocks and Mary C. Lacity. Their
2012 study called ‘The new IT
Outsourcing Landscape’ presents the
four main phases of a relationship between an organisation and its partners.
The initial phase consists of simple
‘contract administration’. The next
step is a cost-driven ‘contract management’ relationship. In the more
mature phase of ‘relationship management’, contract renegotiation and
switching suppliers are possible. The
focus is based on costs as well as on
quality. The highest maturity level is
called ‘collaborative innovation’ and is
aimed at innovation and value creation. Along with the increase of their
internal maturity, CIOs tend to raise
the value level outsourced to their
providers.

33. HR requirements
The success of provider relationship management lies in the capacity of
teams from both sides to act rapidly and in a coordinated way thanks to:
• Human relationships development between operational teams
throughout the contract execution which represent a predominant factor in the capacity to solve issues and dysfunctions
• Positive behaviour from both sides’ teams, including ‘virtuous way-out
possibilities’ in case of unexpected events
• High involvement from top management enabling arbitration beyond
operational constraints.
The round table participants confirmed that their objectives evolved
from simple externalised service
management towards the search for
generating an added value relationship. The discussions also led them to
tackling different issues linked to these
degrees of maturity: “How to develop
a mature relationship (phase 3 - relationship management)? What are the
conditions for implementing a collaborative relationship (phase 4 - collaborative innovation)? Which contractual
mechanisms have to be integrated in
the contract renegotiation?”
‘Governance guarantees the sharing
of common objectives between the IT
department and the
supplier.’
Governance and performance
management
How can IT departments strengthen
their relationships with the partners?
Numerous round table participants
confirmed that they reached a high
maturity level in their outsourcing relationships. A number of them evolved
their supplier relationship from phase
2 (contract management) to phase 3
(relationship management).
They pointed to the importance of of
a proper definition and implementation of governance instances, bringing together stakeholders at different levels: operational governance,
strategic governance and sponsoring.
The implementation of governance
guarantees the right interactions
between the various stakeholders and
the sharing of common objectives.
Both parties have
to secure their
critical resources.
Remaining on good terms with the
teams represents a key factor in the
client-supplier management relationship. The round table conference
participants also underlined the necessary change management which
has to be implemented within the IT
department to ensure that internal
teams join in and evolve.
Key success factors
Beside governance, the implementation of performance management and
contract management indicators was
also considered as crucial for a mature relationship. But these indicators,
though necessary, are not always sufficient. In a case of drift simple weekly
dashboard monitoring is not enough.
The success of provider relationship
management lies in the capacity of
teams from both sides to act rapidly
and in a coordinated way.
The development of human relationships between operational teams
throughout the contract execution
represents a predominant factor
in the capacity to solve issues and
dysfunctions. In case of unexpected
events, positive behaviour from both
sides, including ‘virtuous way-out
possibilities’, is another important
factor, as well as top management
involvement permitting arbitration
beyond operational constraints.
The step to a value-generating collaborative innovation relationship represented an objective targeted by most
of the round table conference participants. But this was considered as the
toughest stage to implement. Several
prerequisites for the implementation
of a collaborative and long-lasting
relationship were identified.
First of all, a relatively high maturity
level regarding their internal organisation and functioning is required
from both sides. Thus, the client as
well as the supplier needs to have
their IT and business processes under
control in order to implement a
mature client-supplier relationship.
Controlling the financial environment
in which both parties operate and
respecting common objectives (OPEX
for the CIO and margin for the supplier) is another requirement.
CIONET France Event report
33

34. The emphasis
on collaboration
should not
negatively
impact each
stakeholder’s
responsibilities.
Both parties also have to protect their
key resources. Contractual ‘key role’
clauses can be defined to secure
critical resources. Beside contractual
mechanisms, participants confirmed
the importance of allocated resources and notably the critical role of the
global service management.
Reciprocity in performance evaluation
• Sharing of common performance objectives between parties. Examples:
cost reduction objectives, global daily rate, number of incidents, etc.
• Evaluation of IT department team’s performance by the supplier in order
to identify possible dysfunction and to help the client in his quest for
maturity
• Performance evaluation tools implemented in parallel with penalty
clauses applied in case of underachievement and a bonus system for
high performance.
evaluating the supplier unilaterally.
But suppliers can also evaluate the
IT department team’s performance
to identify any possible dysfunction
and to help the client in his quest
for maturity. Common performance
objectives can be shared between
parties in an optimisation and innovation approach. The evaluation tools
of partner performance should be
implemented in parallel with penalty
clauses to be applied in case of underachievement and a bonus system
in case of high performance.
Another success factor is the implementation within the IT department of a vendor management unit
in charge of the strategic supplier
management. This unit should collaborate closely with the purchasing
and the legal department. Such teams
facilitate service management, problem analysis and the identification
of resolution plans. They are also in
charge of the implementation of an
agile contractual structure.
‘A vendor
management unit
facilitates service
management.’
Beyond these prerequisites, the
round table participants brought
up another important key factor
for success. They believe that there
should be reciprocity in the performance evaluation. Usually, only IT is
The round table conference participants also pointed out several sources of value creation in the ‘collaborative innovation’ phase:
• the implementation of project
management ‘academies’ and the
34
Event report CIONET France
access to expertise centres and labs
to develop competencies;
• the organisation of innovation
seminars increasing new initiative
identification and deployment.
An important message of the round
table was that, in order to protect the
relationship, the emphasis on collaboration should not negatively impact
each stakeholder’s responsibilities.
Adaptation clauses
Participants acknowledged that the
contract is a mandatory tool for
sourcing management. Contractual
mechanisms are the basic foundation
of the client-supplier relationship,
which relies on clear commitments
regarding services, objectives and
results. More specifically, the contractual mechanisms can facilitate the
renegotiation process and anticipate
to potential problems, e.g. differences
in service quality, changes in the project scope or price evolutions.

35. The global sourcing learning curve 1989-2011
Client
outsourcing
maturity
Phase 4:
Collaborative
innovation
Phase 3:
Relationship
management
Phase 2:
Contract
management
Phase 1:
Contract
administration
Focus on
value-added
Relationships mature
May renegotiate,
switch suppliers
Focus on costs, quality
First relationships Focus on
costs
Hype and fear
Time/Value
Source: INSEAD eLab 2012, based on research by Leslie P. Willcocks, Mary C. Lacity and Edgar A. Whitley.
The round table also listed a number
of adaptation clauses: ‘alignment
clause’, ‘benchmarking clause’, ‘first
refusal clause’, ‘most favoured customer clause’, etc. When they are
defined in the initial contract, they are
a strong tool to analyse and evaluate the value and performance of the
delivered services.
Special attention was paid to the
‘hardship clause’ which allows the
stakeholders to renegotiate the
contract if unforeseen circumstances
occur, for example due to economic
or technological events. In the case
of an unforeseen unbalance in the
contract, both parties agree to renegotiate to protect the contractual
relationship.
These clauses allow for protection of
the equilibrium of the contract, taking the interests of both parties into
account. The drawback is that tomorrow’s equilibrium may be different
from today’s. The hardship clause
may allow one of the stakeholders to
request a change to a contract which
may not be very beneficial for the
other party.
There is therefore a danger of failure
when the stakeholders try to reach a
new agreement to balance an existing contract. To avoid this, an option
may be to anticipate a ‘recourse to
third parties’. This third party can be
designated by both parties or by a
judge in case of disagreement.
‘Contractual mechanisms are mandatory
tools for sourcing
management’
‘prorogation clause’ and the ‘renewal clause’. In case of ‘prorogation’ the contract is renewed in its
present state. In case of ‘renewal’
there will be a new contract with new
commitments.
In both cases, things have to be
clearly defined. The clauses have to
be very explicit and describe what
event may trigger the mechanism,
which are the circumstances and
terms of the renegotiation, and what
are the consequences of a failure in
the renegotiation process.
This report was written by Deloitte, in
collaboration with INSEAD and CIONET
France.
Clauses for the future
Clauses for the future were also
discussed at the round table conference. They are defined to organise
and structure the renegotiation stage.
There are two possible clauses: the
CIONET France Event report
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