- 09 October, 2012 20:29
For Thomas Salmen of Orcon, a big part of the technology leader's role is about "extracting the best out of raw materials" of the enterprise."
In Orcon's case, Salmen explains: "We have a lot of infrastructure, a lot of capability -- and turning that all into something that people actually want to buy, into something that is actually useful for external customers, is a large part of my role as a technology leader.
"Regardless of whether you are CIO or CTO, having a really good understanding of what you are selling, what your business and the end customers want, how and what you do to translate that into end customer value is the biggest thing."
These words are not just rhetoric for Salmen, who holds the conjoined role of CIO and chief technology officer at the telecommunications company.
In this video, Thomas Salmen talks about the taking on this joint role, and working with both internal and external customers.
When he was named CIO of the Year in June, the judges pointed out Salmen's "unique mix of technical capabilities combined with a strong commercial acumen and clear understanding of the benefits of solutions that delivered profits".
This valuable combination of technology and business nous is best exemplified by Orcon's Odyssey Network, which the judges noted Salmen had conceived and sold to the board of Orcon and its parent company Kordia, before it was successfully delivered by his team.
What stands out from this experience is that Salmen pitched the project, which required substantial investment, at the height of the worst economic slowdown in the past two decades.
The international transmission network is now one of the strongest financially performing areas of Orcon.
Ode to Odyssey
Salmen recalls the steps leading to the project. Until four years ago, he says, Orcon bought all of its international capacity in New Zealand from Telecom and other international carriers with a local presence.
"In 2009, we decided to kick off a process looking at extending our international network. So we started with Australia, then we put together a business case to acquire capability across the Southern Cross network."
The "phased approach" of going to Australia first meant the project was "relatively low risk", he says. "If it doesn't work out we can stop there."
But the Australian move was "really successful and not long after that we decided to go the whole way", he says, expanding the business case to North America.
"International capacity is one of the biggest individual costs of providing a broadband service," he explains. With Odyssey, "we have the basic infrastructure in place to really scale up internationally. This network infrastructure gives us scale into the future."
"You need a CIO who is willing to take on some audacious projects," says Scott Bartlett, Orcon chief executive, on the key role played by Salmen and his team. "And while it's important to be fearless when taking on these projects, it's vital that there is always a healthy respect for IT project challenges.","
Salmen joined Orcon nearly 10 years ago, "one of the first 20 or so staff".
Starting as network manager, he developed a "strong in depth background in the inner working of the company -- financial, operational and technical.
"When it comes to kind of the financial side of the business, understanding how the cost structure of the business operates," he has unparalleled knowledge.
And he says this is because "the vast majority of the costs of the business are technology costs".
Salmen says that working for a technology provider like Orcon means his focus would be different from his peers in the enterprise space.
"One of the key differences between what I do and what traditional enterprise CIO would do is that our customers are external customers to the business rather than internal customers," says Salmen. In his case, the main task is setting the company's strategic technical direction in its networks, its applications software development and its entire infrastructure.
Salmen points out Orcon is now one of the fastest growing telecommunications providers in New Zealand, with over 150,000 broadband, mobile and hosted business and residential customers. It was acquired by state-owned Kordia Group in 2007, and it has grown nearly four times since then.
His staff number 55 but the exact figure "goes up and down a bit" depending on the need. Orcon's technology staff is split into three teams: It is comprised of the software team which develops all internal apps and billing systems; the networks team which manages and builds all of Orcon's network assets including the voice network and international networks; and the systems and IT applications people who look after the company's datacentre infrastructure, storage networks, server environments and hosting platforms.
"The majority of our platforms are all customer facing, they are directly used by end customers," says Salmen.
The internal customers Salmen's teams work with are staff involved in the product, marketing and customer experience areas. "We have built the platforms and tools and systems our customer experience systems use to support."
"Almost every product that we have launched is built in some way shape or form by my teams internally," he says. "Whether it is a new broadband service or UFB fibre to the home or whether it is a hosting product."
He says the technology work is rarely outsourced. "Most of what we do, we do in-house." There are two main reasons for this.
"One is that we are still quite small and sometimes particularly in the telco space finding an outsourcing partner who is actually capable and willing to scale down can be a big challenge, at least in the core technology space. I think that is sometimes the issue."
"We find keeping things in-house is a competitive advantage for us," he adds. "It has given us a lot more control over our destiny."
Salmen is a member of the executive team, reporting directly to Bartlett. "We are delivering a tech product so having good strong representation at the executive level is pretty critical," he says. "I don't think Scott will ever want an executive team that will not include the CIO, CTO or whoever is the technology leader."
Bartlett says Salmen brings "a complete understanding of the business".
"A CEO has more comfort when the company's CIO is highly commercial, not just technical," says Bartlett. "This promotes trust and confidence and ultimately leads to tight strategic alignment on key issues."
For Bartlett, the key to a successful CEO and CIO working relationship is an organisational culture that "tolerates challenges".
"A CEO must ensure that staff have the tools and technology enablers to perform at the highest level -- and as such requires a CIO that understands this -- and actions it. It makes my job easier knowing I have a CIO who also believes in this philosophy and removes roadblocks to allow people to perform at their best.
As for what worked for him, Salmen says, "One of the most important things is keeping a very open mind about the possibilities in the business.
"I think it is a very important part for CIOs to be looking at what is out there. What customers -- internal and external -- want out of the technology business, out of their technology solutions. Being responsive to the demands of the business is what it comes down to."
A CIO who takes on this perspective can also thrive across industries. "It is totally doable," he says, on the portability of skills of ICT leaders. "It is just a matter of really understanding what customers value from your business, and start looking at ways to deliver that value and using the technology tools that you have got."
Making it into IT
Salmen left high school at 16 and went to Massey University in Auckland for a degree in computer science and electronics engineering. "I was very good at computer science and very bad at electronic engineering mainly because of the heavy duty physics and math that was involved."
"I actually enjoyed most of it but because I skipped a year in school I missed out on some of the really advanced calculus," says Salmen who got into programming by writing code when he was 12 years old.
He did not finish his university course, but instead embarked on a technology career, including technical support at Telecom Xtra and network engineering and later management, at Radionet.
He went back to university two years ago, and achieved a qualification in business studies at the University of Auckland. "I just wanted to have a tertiary qualification of some description," he says on his decision to take up general business studies. "I don't know why because I never needed one of the past," he says.
"It did help to give me get a good theoretical knowledge around some of the practical experience I picked up." His next goal is to pursue postgraduate studies in business but not in the next couple of years.
Salmen explains his family was not into technology when he was growing up. "My parents are very creative," he says. Salmen describes them as "artists" and reckons both have influenced his developing a "creative" side.
His father has a small business as a gilded cabinetmaker, and his mother is a freelance photographer. Salmen is a keen photographer and took this interest further by completing a photography course at Unitec. "I process my own film, I process my own negatives. Most of the processing I do is black and white."
His father continues to run his business in the Bay of Islands, using spreadsheets and doing all his tax returns manually. Salmen's latest project involves introducing him to cloud based accounting services.
Salmen says "change junkie" is an "absolutely fair description" of him.
"There is good change and there is bad change. A good change is where you are growing, you keep on doing new things and exciting things as we have. There have been bad changes as well, but a lot of the things we have done in the past years have been for the positive."
"If you look at the telco industry globally, [there is] this kind of uneasy dichotomy between traditional carriers. Some of them have been around for a hundred years. The telco is a large legacy established business particularly in voice, and on the other side you have the Googles, the Facebooks.
"There is kind of an uneasy alliance between the two -- how to compete, whether to encroach in each other's business."
Orcon, he says, is "more on the Google side of the equation".
"We are not the established large carrier decades of existing infrastructure and huge legacy of voice, of business pages."
"We are relatively new," he says. "I suppose we are happy to do things that carriers might see as threatening."
On the other hand, this can also work the other way. "The downside, or the challenges, is having the scale and capability to compete with the big guys particularly in New Zealand."
As to how he is dealing with the possible change of ownership for parent company Kordia, he says, "I tend to focus on the day to day role. Whatever change happens, if it happens, when it happens, I am looking forward to it."
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