Gearing for transformation
In this CIO roundtable, sponsored by TechnologyOne, business leaders share the lessons learnt from the economic crisis, along with their views on the changing business applications environment.
Edited by Divina Paredes
Mark Bennett, IT director, Salvation Army New ZealandAubrey Christmas, CIO, Employers’ & Manufacturers’ Association (Northern)John Holley, CIO, Auckland Regional CouncilRoger Jones, IT manager, Auckland Regional Transport AuthorityCalum McLeod, IT strategy and architecture manager, AUT UniversityGlenn McStay, regional manager - South, TechnologyOne Campbell Such, general manager of IT, BidVestClaudia Vidal, general manager of business operations, UniServicesPeter Winquist, IT director, UnitecReturning to growthAubrey Christmas: The recession gave us the ability to say these are our core capabilities we want to keep. But we also looked at the stuff that is commoditised that we could get outside. [As] part of that we looked at software as a service, moving some things to the cloud, [and] some to a different location.Roger Jones: The recession for us was an opportunity to push the ownership of projects back on to the business. So we made the business justify why they wanted to do IT related projects and we had some ownership of deciding those business cases through for approval, rather than previously IT driving projects. So we put that back on the business to prioritise their projects. We then took the opportunity to drive as much value out of the IT core components that we could through things like virtualisation, driving better contract negotiations with members around licence costs and the scope of those licences. Peter Winquist: The recession has driven out an understanding of the need for change and that’s something that has occurred in our organisation as well. Coupled with the actual business restructuring, there’s a good understanding that we need to change the way that we do things. That has driven out a good understanding that we need to keep the system simple, unmodified as [much as] possible, which I think is going to be a huge benefit to the organisation going forward. Calum McLeod: Our enrolment now exceeds the cap the government puts on us, so it is more of a challenge of how do we continue to provide quality education to an increasing population with a restriction on the revenue, the money the government give us to run the place. One impact it did have on us is our student enrolment system. We had done a fair bit of work on selecting a replacement for an in-house built student enrolment system and that was put on hold last year. We’ve actually invested more time in developing the in-house built tool and it may become permanent now, rather than being replaced in the near future.Another thing that we have done is we no longer have a datacentre at AUT. We’ve farmed that out to somewhere else, so we hosted all of our equipment somewhere else. We are certainly heading down the virtualisation path and we’ve actually started doing software as a service as well for some of our applications. I suspect we’ll do a lot more of that as we review our core business applications. Revamping the business focusJohn Holley: When budgets are constrained, how do [we] leverage the existing investment we have? We’ve taken a very pragmatic attitude at ARC which says, we’ll put the system in as it is, unless there’s a compelling reason, we’re not going to customise. We’ll configure, but not customise. If the business wants to customise, they write the business case, IT doesn’t. We’ve gone away from having IT projects to projects that IT does on behalf of the business. Claudia Vidal: UniServices is developing a strong competency in business processes. It has process journeys deployed throughout the business and disseminated via an intranet, enabling both staff and University partners an understanding of process steps, requirements and standardised forms and templates. This is the result of significant review and refinement by the dedicated team with a focus on organisational sharing, internal customer input and tight process control. Ensuring at the same time that processes are observed but innovation and flexibility to respond to customer needs is not lost at Centre Research level. The introduction of the new financial and accounting system has given another opportunity for further process standardisation. With this recent enterprise system implementation, UniServices is now practising its revamped business processes, and some of them are still “fresh paint”, allowing for course correction when required to obtain better results, smooth handovers, and perform organisation-wide relentless process refinement. The new ERP has been live for a couple of months now and we are giving ourselves some time to bed it down. We have already found further opportunities for improvement and added automation.The ‘significant improvements to operating processes and communication processes enabling to sustain business success now and into the future’ was noted by the NZ Excellence Foundation when UniServices was chosen [this year] as the winner in the large business category for this national quality award (http://bit.ly/crzMLi). Mark Bennett: We’re not there to do the projects, we’re actually there to work with you [the business units]. That’s the view we’ve taken. We are putting in FinanceOne [system] and we’ve implemented a couple of phases. It’s not my job to run the project. I need to actually just work with the business because it’s the business that will use it. It’s their business processes which need to be right. The first phase was to develop the system and run it parallel to the existing implementation. However this was only done after an extensive review of our chart of accounts to ensure we would comply with international standards (internal to The Salvation Army) and with local government legislation (the Charities Act was changing at the time). Following on from this, the new system was released for use by the finance department only (it should be noted that at this time all payments were centralised for The Salvation Army and a bureau established). There was no loss of functionality to business units as the finance department still produced the same reports for us (we never had any level of access to the previous system). Finally, access to the system has been rolled out gradually to managers requiring it. This provides on demand access to all processed transactions and is beginning to remove the need for monthly budget status reports. Thoughts on ERP and other ICT projectsJohn Holley: We had actually cleaned up our ERP environment and got rid of a lot of the customisations people had. We brought much back more into in the box. You get detritus of stuff building up over time and it’s about going back and saying well, why do we do it that way? So we’ve got a very clean environment now and it makes life a lot easier.Campbell Such: The key thing for me around the ERP is that you want to make sure that you keep the things that differentiate the business, and look at where it’s more commoditised. That is the approach we’ve taken and we’ve got a number of different bits bolted onto our system, so the core system has been heavily modified and suits the business really well. Peter Winquist: We’ve had a major restructuring recently and it is ongoing and the organisation itself has been looking for business efficiencies and educational efficiencies. One of the ways that we’re actually supporting that environment is by a major upgrade of our ERP systems. Certainly, right across Unitec we’re looking at opportunities to improve support for the organisation. So items like virtualisation, power computing, software as a service, are all areas of particular focus that we are engaged in at the moment.Roger Jones: We’ve broken all our projects into small chunks. We have no big projects anymore and [those running] more than three or four months we wouldn’t run as a project. We would try and break it up into components. Claudia Vidal: Despite a recession, UniServices managed to grow 16 percent. So although all our work plans were aligned for a very hard year, we were embarking upon a huge systems replacement. When we started the project we didn’t know whether it was going to be a good year for us or not. The business case had to be very cut and clear on the benefits that it would bring and very easy to communicate to the decision makers. Our reasoning was, if there is a downturn, we must be in our best shape when the economy turns around. Heading to the cloudPeter Winquist: Organisations are starting to open up. The boundaries of organisations are starting to be very hard to actually measure. The support that you need, you’re starting to lose a sense of where it is actually going to come from in the future. Cloud technology styles are really important capabilities that we’re all starting to grapple with at this moment in time. One of the aspects around that one and I think we’re going to have to start to deal with pretty soon, is federation of identity and identity management across organisations. John Holley: You learn fast and you fail fast [in the cloud]. If you do fail, you fail quickly and you understand and you haven’t committed your organisation to a huge amount of money. But then, you also accrue benefits quickly as well. That’s that whole thing and it’s certainly working in local government. Campbell Such: For me it is around identifying the things that you want to keep close and looking out in the cloud for some of those other things that you may want to have. There’s more of a commodity where you can ramp it up and ramp it down. Where does the data reside? You don’t know where it necessarily sits and who might look at it, so that’s the way I’m approaching it. It is kind of a ‘horses for courses’ — pick the bits that work and assess them and then jump in and do it.Calum McLeod: I believe the cloud computing is all about services. It is not about technologies. It is what you require of that service that is most important obviously. We at the AUT are I think committed to the cloud as our future and it probably will be a private cloud, but we expect the service provider to provision for the DR site as well. We don’t want to be worried about the detail of provisioning DR. Roger Jones: One of the things we see [in] the potential for cloud is the scalability, especially because we’re in an organisation that’s based around events. So hence like the Rugby World Cup, they potentially have a big impact on our websites. Our website is a quarter of our business, but could we scale it up in-house to scale the Rugby World Cup overnight? We couldn’t. But with the cloud computing you can just throw more resources at it from the cloud. Putting it all togetherJohn Holley: The challenge I see for most New Zealand organisations is that bar a few, most would never meet the standards that the cloud host does provide. So people talk about security [issues] but I say, when did you actually last do a proper full on security audit, penetration test of your own environment?The big one for me, I think, is around SOA [service oriented architecture]. I don’t need people to deliver applications and everything else. I hope for the Auckland Council, one of the criteria for selection will be, does it met SOA standards? Because then if I want to do stuff innovatively off the core solution, I don’t need someone else to write it. I can actually just click on to it, so for us SAP [the council’s ERP system] has a full SOA implementation.We’ve done some stuff around implementation using open source tools to talk to SAP and because it is SOA, we can actually deal with SAP as a system at a very granular [level] and we don’t have to worry about the rest of it. We can actually do some smart stuff, but then we can actually deliver stuff to the web. So we’ve got all the power of this huge ERP — it is a big mother ship, but I don’t need to engage with the mother ship. I’ll just go on to the portal I need to connect it to and I can pull out stuff and I can use it and so on. One of the issues the cloud is coming to is the integration. How do you integrate the different data sources? I have a feeling that SOA is going to start to raise its head again, as I think people start to grapple with it and understand it. Some of the big vendors like Oracle, SAP and IBM have actually recommitted to it because they know you can’t actually deliver a solution that’s going to work with everyone. So give them [the users] the toolbox and let them go over, be imaginative and use it in ways that you never considered it could have been used.Mark Bennett: We’re one of the more geographically diverse organisations — from Invercargill to Kaitaia as well as Fiji, Tonga. For me, accessibility is key. Mobility is a large factor, but it’s collaboration that I need. So I really need to figure out how we can determine standards for interchange and sharing. So if you pick on like a Word document, we need to have it in a format that I can not only edit but everyone else [can]. But also I can share immediately with someone in Invercargill and I can have someone from Fiji and we can be working on it together. So for me, the big driver at the moment is looking at being completely technology agnostic and being able to say all we care about is that it’s delivered via this format, because then you know that regardless of what [technology tools, on premise and cloud-based] you’re using you’ll be able to share and collaborate with us. We use a lot of Lotus software which delivers some of this functionality already. As the price and performance of internet connections improves (here in NZ and also Fiji & Tonga) we’re able to do more via the cloud. When it comes to the cloud we like the knowledge it is actually a server in our building. This provides us with additional assurance and better visibility of what is and isn’t accessing (and can and can’t access) our systems and data. It also means we are in control of software releases and updates. All of this means we have additional control to provision services where and when they are needed. The new order at workCalum McLeod: Yes, [students] do certainly make good use of social networking. So of course that is putting a fair demand on the infrastructure and that is an evolution that is happening all the time. We’ve got to now start to encompass that technology within our systems to enable them to do what they do, providing the environment for learning, rather than being directed learning, and giving them the tools to do the learning at their own pace, their own way. Roger Jones: When the Auckland Council website went live, within three-quarters of an hour there was a lot of comments about that site on Twitter. Where else are you going to get that feedback in that sort of timely fashion?Mark Bennett: The other side is, you don’t have a choice whether you’re on it or not because people talk about you [on social media sites] it is my belief that every organisation needs to determine what they will or won’t do with social media. Most organisations are being talked about in those spaces so a decision has to be made if there will be any response. It isn’t so much about using it for marketing or raising product awareness, it is about understanding that it is a forum where people are talking about you in a very public manner. John Holley: Senior managers want to be able to control this discourse. When you start to open up social networking across the thing from Twitter to Facebook to whatever else is — you actually can’t control it. You rely on the communities to be self-moderating. When they’re used to being in control of these facilities it’s a different level of engagement and for us, for our customers, that is the ratepayers of Auckland, to suddenly be out there, you’re much more exposed and there’s nowhere to hide. So a lot of people are not comfortable with that and that’s the challenge and it’s a different way. There’s an immediacy that people expect if you work in the digital environment. It’s a significant cultural thing. As a CIO, I have to do it because how can I talk to people about social media, if I’m not doing those sorts of things? I’m not doing a lot of it but I’m engaged because if we can’t bridge the divide in the organisations, who the hell can?
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