Interview with a global CIO: Gerben Otter of Fonterra
- 01 May, 2017 07:00
Gerben Otter was studying law, when he worked with the legal division of a computer company in the Netherlands.
"The company was introducing a new computer system and I was asked to guide it," says Otter, the CIO at dairy giant Fonterra since March last year.
He never got back to law.
Otter says his succeeding IT roles were commercial in focus, including salesperson, then director for services and business unit director responsible for sales and marketing.
In the next 12 years, Otter cemented a career as an executive in various technology companies in the Netherlands.
Before Fonterra, Otter was with FrieslandCampina, the Dutch dairy co-operative.
For three years he led SUMMIT, FrieslandCampina's largest business transformation programme. SUMMIT implemented a single SAP instance worldwide, globally standardising and harmonising all business processes. He stepped up to this role after being CIO at the Dutch dairy group for nearly two years.
His previous roles include Group CIO at GrandVision NV and CIO of adidas Group, which he held for nine years.
Otter was director of systems integration services at Unisys, when he was offered his first CIO role.
The company was adidas, requiring him to move from the Netherlands to the headquarters of the sportswear manufacturer in Germany.
Thus Otter’s first CIO role already had a global scope.
When he joined adidas, he told the chief operating officer who eventually became CEO, about the massive task at hand: "We need to globalise the IT functions."
Otter noted how the company then had different systems in its offices across the globe.
“Over time, we centralised it and transformed it into an international working environment,” says Otter, but with a strong concentration of knowledge and systems in Germany.
When he left adidas, he was leading an ICT team of more than a thousand people. Around 60 per cent of the team was based in Germany and the rest across the globe.
In 2011, when he was with FrieslandCampina, Otter rang his counterpart at Fonterra, Chris Barendregt, now a partner with PwC New Zealand.
“It was a peer discussion and exchange of ideas,” says Otter, who had no inkling then he would one day take over the Fonterra post.
For Otter, this practice of calling the CIO of a competing company or in the same industry is not new.
He first started it at adidas.
When he told his boss about his plan, the latter asked in disbelief: “Are you really planning to talk to Nike?”
“Yes,” said Otter.
In their premises? Otter nodded.
“Go ahead, no problem,” he was told, “but I assume they don’t want to talk to you.”
His boss was surprised when the CIO at Nike said yes, and invited Otter to the company's headquarters in Oregon, US.
“We had to be very careful because we are strong competitors,” says Otter. They agreed the discussion was off the record and did not include new product development.
They talked about spending levels, how to manage challenges in getting approval for projects, project management strategies and how to prioritise investments, like retail solutions and big data.
He also had a similar discussion with the CIO at Danish dairy cooperative Arla.
“Absolutely,” he says, when asked whether he recommends other CIOs do the same thing.
Next: Gerben Otter talks about Fonterra's global IS strategy, insights from Silicon Valley and the best route to CIO
The move to Aotearoa
Otter was on vacation in Greece with his wife when he got a call from a headhunter, who asked him whether he was interested in working for Fonterra.
A few weeks later, he flew to New Zealand for interviews. When he got the job, he says Fonterra arranged for an external consultant to brief him on the work culture in New Zealand.
“As a global CIO, you work with different cultures,” he explains on the importance of this orientation. “Whether you work out of Germany or New Zealand, you have to adapt your style wherever you are.”
He has 320 team members in New Zealand, with 140 based overseas. Otter regularly flies to the company's major markets in Asia, Latin America and North America for meetings, and more frequently to Australia.
Last year, he and three members of his team went to Palo Alto in California and attended design thinking workshops organised by SAP.
Being CIO at Fonterra is special, he says.
Fonterra is not only one of New Zealand’s biggest companies, but also the world’s largest global milk processor, exporting 95 per cent of its production.
The economic, social, political and environmental footprint of Fonterra’s operations is felt throughout New Zealand, he states.
Last year, the Fonterra executive team approved the company's global IS strategy called ‘Direction of Travel’.
The three-year strategy focuses on three streams: Digital, cloud and dual core, or the consolidation of its global ERP.
The three streams focus on nine areas with 40 outcomes.
Digital, for instance, includes providing digital services for farmers, including analytics. The cloud stream covers cloud technologies for finance, procurement and HR. Dual-core covers the consolidation of its ERP system in all markets in Asia and Latin America.
"We have seven ERP systems that we aim to reduce to two, and long term, into one," he states.
The IS team has scheduled the programmes under the “Direction of Travel’ to be delivered in “six month buckets”. They regularly meet with the other business units, to check on developments that could require changes in the different programmes.
“We have a flexible and hectic schedule, and disruptive, sometimes, in terms of new products and different approaches to things,” says Otter.
Otter has nine direct reports and his own innovation team.
The IS team works closely with the Disrupt Team, composed of members from different units of Fonterra.
He is co-chairing the Technology Innovation approach of Fonterra, together with Judith Swales, who is chief operating officer for innovation across the group.
This provides sponsorship, oversight and governance for Fonterra’s technology innovation activities.
It will look into projects around mobile internet, automation of knowledge work, Internet of Things, advanced robotics, autonomous vehicles, next-generation genomics, big data analytics, 3D printing and blockchain.
The Technology Innovation approach links neatly with the digital programme of Fonterra, he says, as technology can help operations across Fonterra, from integrated business planning to agile delivery for consumer products.
The Internet of Things, for instance, can have a lot of applications in manufacturing and also down on the farm. Digital is also creating a platform for farmers where they can have one interface with Fonterra as stakeholders, suppliers and customers.
He says this is exemplified by Agrigate, the online tool Fonterra created with LIC, which compiles the data farmers need to make fast and smart decisions.
“We can improve that, add more functionality so farmers can use it to benchmark their own production with other farmers.”
We have seven ERP systems that we aim to reduce to two, and long term, into one
Path to CIO
A message he imparts to his team is the need to be business oriented, always.
When working with business units, “We don’t talk about technology, we talk about our projects.”
He believes that a good career route to CIO is through project and programme management.
I tell them, “IS leadership is built on credibility. You say, ‘This is what I am going to deliver and you deliver it.’ That is how you build the [IS] brand.”
It is the same for the CIO, he states.
“When you are appointed to the role, everybody is curious. You have to earn your place at the table, and people will start seeing you as a business partner.”
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