Vendors are evolving, says Lam Po-Tang at the recent CIO Summit in New Zealand. Cloud providers like Google and Amazon are consumer based businesses that happened to discover the enterprise market.
“I can rent a CPU for an hour at Amazon,” he cites. Meanwhile, legacy vendors insist on selling bundled fixed fees for their products and services.
Lam Po-Tang says as CIOs engage with these vendors, there are certain trade-offs.
“You expect certain points of give and take with these vendors,” he states. “When Google looks at me they don’t see me as CIO of Fairfax, but someone who signs the cheques for 10,000 users.”
Legacy vendors, on the other hand, “take time to understand you, go out of their way to adjust their offerings.”
He notes, however, that Google and Amazon are moving up on building these “enterprise relationship skills”.
CIO and CMO collaboration
Barfoot & Thompson CIO Simon Casey underscores the new dialogues across the C-suite, in particular the working relationship between IT and marketing.
Real estate and the virtual assets ICT deals in have historically been two very distinct kinds of business, says Casey, who was joined by the real estate group’s chief marketing officer Jennifer Lucie-Smith.
“Now we [marketing] need what you [ICT] supply,” points Lucie-Smith. When an advertisement runs, the extent of the public response is immediately obvious in web and social media statistics.
The pervasiveness of digital channels has changed the dynamics of the company’s relationship with its customer base, she says. Prospective customers are less willing to allow themselves to be sold to. “It’s now a matter of ‘give me the information, so I can compare’.”
The customer knows they have more power and can specify what they want and ask several potential suppliers which of them can satisfy the need immediately. “The only way we know about that is keeping our ear to the electronic ground,” she discloses.
The teams have become “co-creators of value for the company,” Casey says. They have relocated in the same area of the office and work on projects and solutions to business problems as collaborators rather than supplier and customer.
The speakers asked the largely ICT-specialist audience how often they spoke with marketing staff and others at the front line of business. Only three or four out of an audience of about 50 indicated that they spoke several times a day, which is normal at Barfoot and Thompson.
There are differences in outlook and ideology to overcome, shares Lucie-Smith. “We [marketing] like to make decisions immediately and get things done; and [ICT] likes to write a requirements document and take time to think about it thoroughly and scope it out.”
ICT is perhaps more conscious of the possibility of a plan going wrong. “If we run a marketing campaign and nobody likes it, we can immediately stop the ads, take down the billboards next day, and forget that it ever happened.”
Governance practices in ICT have meant it’s harder to reverse a decision without cost, “but we see that changing,” she says, with ICT becoming in some respects more agile but equally “educating” the marketing team on the constraints around the development process. Marketing is involved in a decision, for example, on whether to do a few small “quick-win” developments or devote the resources to a longer-term project.
Mobile apps have proved a boon to the company’s salespeople; it has evolved an online presence and some staff are “dabbling” in Twitter and Facebook.
Online access to the complete database of properties means anyone can promote any property, and the performance of each agent can readily be measured and exposed, encouraging everyone to improve their performance.
Innovating across platforms
Tim Occleshaw carries on the theme of innovation across platforms, this time in the public sector.
Government has set clear expectations of the whole state sector, says Occleshaw, deputy chief executive, Department of Internal Affairs, and a former CIO. “We need to do more with less; our customers are demanding robust scalable flexible ICT enabled services.”
Innovative change needs a desire to do things differently, and this will come from senior executives. This permission to act, in case of government, comes from the ministers.
ICT is one of the three areas where government had strengthened “functional leadership”, he says. Government CIO/CEO Internal Affairs, Colin MacDonald, is leading ICT. More coherence across government is the aim, he says, and delivering sustainable savings in business expenditure of at least $100 million per annum by 2017.
There are two priority areas: A one-stop shop for businesses to interact with government, with 25 percent savings in interaction costs; and making it easier for individuals to transact business with government online. The goal is to have 70 percent of transactions to be available online by 2017. The current figure is 43 percent.
We are progressively integrating ICT investment plans of all agencies; in some cases to direct agencies to use all-of-government systems, says Occleshaw.
At the same time, he says, the public-service model, of individual chief-executive accountability for the programmes, projects and operations of each agency will not be broken. But sometimes the GCIO will have “right of way.”
He notes that individual ICT operational strategies lead to fragmentation. Imagine an integrated ecosystem; we need to shift from being agency-centric to customer-centric, says Occleshaw. “Agencies are moving towards the goals, but each at their own pace; we need more coordination.”
Government is developing common architectures and standards, but uptake is variable. We need to look at what functions are specific to particular agencies and which are commodity functions. Agencies will be assembling systems from standard components rather than developing them, he explains.
We have to ensure leaders and decision makers are more aware of what ICT can do, and learn from bad examples like Novopay.
At the same time, he adds that more assurance of security and privacy is needed. “We have had some regrettable incidents.
“We need to provide clarity about what is unique to an agency and what isn’t. Infrastructure as a service should be used extensively, there is no reason for agencies to do their own infrastructure separately.”
This new thinking is permeating the layers of government.
Two speakers from major agencies from the public and private sector: Craig Soutar at New Zealand Transport Agency (NZTA) and Craig Sims (ANZ Bank) share their experiences in rolling out major business technology programmes.
Craig Soutar, CIO at the New Zealand Transport Agency, proudly relates how the agency steered a key business transformation initiative “around some big potholes”.
Soutar talked about the registry system modernisation or BCP, of all the registers around drivers’ licenses, motor vehicle licensing, road user charges, and safety checks, including WoFs and CoFs (warrant of fitness and certificate of fitness). The outcomes, which made the audience cheer twice, for Soutar and his co-presentor Dean Thompson, head of the NZTA programme, was delivering the project at a cost of $8.2 million. The anticipated project cost was over $70 million (read cover story on Craig Soutar as CIO of the Year 2013 on page 10).
Craig Sims, chief operating officer of ANZ, shares an insider’s account into one of the biggest technology mergers in the country — ANZ and National Bank.
It was a very complex project. In one weekend, the merger involved moving $46 billion, equivalent to a third of the country’s GDP, into the new systems. “We didn’t lose a cent.”
The ‘simplification programme’ as the merger was called, included 37,000 test rips, more than 130,000 training hours, decommissioning of 91 applications, four ‘dress rehearsals’, and 2.4 million letters to customers, with 26,000 variations of that product letter. He adds that the banks were dealing with converting massive data. “We made sure it was clean as possible.”
He says it is important for projects to be broken into “little bite sized chunks”.
Sims played a video of the lead-up to the merger, culminating in the point when he pushed the button indicating the point the merged system will go live.
“Know what success looks like,” he stresses as a top tip for undertaking major business technology programmes. Make sure everyone knows their role in the outcome, and to use ‘tried and true approaches.”
Keep the scope as “tight as possible” and have very strong project governance.
Reinventing the business model
Miles Fordyce shares the experience of New Zealand Post on “reinventing the business model”. An organisation focused chiefly on delivering paper is standing on a burning platform, he discloses. “We have units like Kiwibank and Express Couriers that are doing well, but our organisation is still structured to support a level of mail revenue that’s fast declining,” says Fordyce, group manager technology at the post. He says the organisation is undergoing technology and service transformation, and started 18 months ago, when he joined it. The change starts with network as a service and infrastructure as a service, looking at commercial arrangements and interaction with the vendors. We hope to be one of the leaders in New Zealand on IaaS and NaaS, he states.
At the same time, the IT organisation is focusing on the things that are important to its operation. “We have a business that’s transforming itself and we have to continue to support them,” Fordyce says. He likens the process to “replacing the engine and fuselage of an airliner in flight”.
As a government organisation, the Post is able to use the government IaaS through Datacom. “It’s a major move, but it’s reached time for action. Our costs will be [in variables]; we’re already experiencing the shift from capex to opex.”
“We’re shifting the way we procure services to a pay-as-you-go consumption-based service, rather than a service that’s based on procuring [the services of] a number of full-time-equivalent [staff]. We’re interested to see how that will change our relationship with our key suppliers,” he adds.
In business transformation space, we’re a trusted brand with a nationwide presence, says Fordyce. “But how do we change what we do, and how does technology help you do that,” he asks.
He points to Wilton’s treatise on reframing innovation. “Fail fast if you’re going to fail; failure means you’re trying. Hopefully we’ll pull off some of these initiatives.”
One of these is RealMe, which will enable the New Zealand public to obtain a digital identity that they can use to interact with government and non-government organisations. This will simplify working with government and financial institutions with a validated identity. “We’re still working on the exact business models, but our geographical dispersal will give us advantage.”
The other is a new service YouPost, essentially a digital mailbox. All the digital information you’re using to transact with government, utilities, financial organisations can be in one place, explains Fordyce. If you’re moving house, for example, you can access the items of information you need for those transactions all in the same place. A single repository for bills from multiple organisations. You can just mark them ‘pay on the due date’ and it’ll be done automatically.
We know a lot about people in New Zealand: the challenge is, what can we do with that information? There are currently privacy restrictions on what we can do with it, but why should we think up ideas for how to use our data? We could wrap it in some APIs and crowdsource the applications that go around that, notes Fordyce.
He posts another question: Is NZ Post a logistics business or an information business? We’ve had arguments either way from within the business. “We have the opportunity to become a very strong information business. We see data as king. The data we’ve got is spread across many parts of our business. We will consolidate it into a single repository — in that form it can be more easily monetised.”
Technology to fight poverty
Chris Vein provides the perspective of a global CIO using technology to tackle underdevelopment.
“We go where private sector does not want to go,” says Vein, chief innovation officer for global information and communications technology development World Bank. Prior to this, he was the deputy chief technology officer at the White House under President Obama.
According to Vein, international global development and how ICT in the form of connections, transformation, and innovation, is making a huge difference around the world. The key message for his role and that of development agencies is this: There will never be enough money, technology, or people to solve the problems we’re asked to solve, so our approach is to build platforms that help others solve the problems.The bank also gleans lessons from the private sector. The private sector knows that understanding customer needs is key, governments don’t do that very well, he states.
“Technology is just the tool to solve problems, he says. “We talked to local people and their leaders, created a system diagram and user profiles, developed, prototyped, took it back to the people and asked them to suggest improvements.”
A lesson from this is to open government data and let other people do useful things with it.
The World Bank also draws lessons from Silicon Valley, holding ‘hackathons’ to generate ideas. Not just a shiny app comes out of it, but improvement in understanding the problem, says Vein. A winning entry from a recent hackathon, for instance, was a game to teach children to wash their hands properly.
Technology is also changing — and aiding — the understanding of some concepts. Poverty used to be about scarcity, he says; now it is about targeting and effective distribution.
In Uganda, farmers get harvesting through SMS to map where banana wilt disease (which has a major effect on the economy) is occurring. Government gets the information without usual cumbersome government-style procedures.
They can now target preventative measures; most simply teaching the farmers to sterilise tools that are moved from one plant to another to avoid spread of the disease.
“As a result I believe we will save Uganda from financial collapse,” shares Vein.
The CIO Summit 2013 Speakers:
Crawford Del Prete, chief research officer, IDC
Paul Strong, chief technology officer – global field, VMware
Craig Soutar, CIO, NZ Transport Agency
Dean Thompson, PMO manager, NZ Transport Agency
Simon Casey, CIO, Barfoot & Thompson
Jennifer Lucie-Smith, marketing manager, Barfoot & Thompson
Stephen Whiteside, CIO, The University of Auckland
Kevin Angland, CIO, IAG New Zealand
Dave Fellows, CTO, Green Button
Thomas Salmen, CTO, Kordia New Zealand
Naomi Ferguson, commissioner and CEO, Inland Revenue
Barry Vryenhoek, CEO, healthAlliance
Greg Lowe, group CEO, Beca
Peter Nevin, CIO, Genea
Dr. Peter Wilton, senior lecturer, University of California
Andrew Lam-Po-Tang, chief information and technology officer, Fairfax Media
Craig Sims, chief operating officer, ANZ
Tim Occleshaw, deputy CEO, Department of Internal Affairs
Miles Fordyce, group manager technology, NZ Post
Chris Vein, chief innovation officer for global information and communications technology development, World Bank
Colin MacDonald, NZ Government CIO
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