Suncorp's information chief has been promoted to a broader business role this year. He talks to Paul Smith about his new challenges, giving back to the community and the importance of company culture.
By the strictest possible criteria, Suncorp's highly regarded technology chief, Jeff Smith, should no longer be happy to wear the laurel as Australia's private sector CIO of the Year.
But he rightfully takes the plaudits after his achievements in the high-profile CIO role earned him a promotion to a position akin to a chief executive in recent months.
The former Telstra chief information officer now sports the title of CEO of shared business services, but retains ultimate responsibility for technology strategy. As well as IT, anything within the organisation that is not unique to one of Suncorp's lines of business now falls under Smith's domain.
This includes real estate, procurement and shared HR services among other areas. It is a broader role similar to the expanded portfolios taken by other leading chief information officers, such as Commonwealth Bank of Australia's Michael Harte and Centrelink's John Wadeson in recent years.
Smith's division is run as a separate business, in a structure known as a non-operating holding company. He says the disciplines of a good, modern CIO prove ideal for general business leadership.
Running shared services also gives top information chiefs such as Smith the chance to develop the kind of skills that will take them even higher up the corporate ladder.
"I think it is a role other CIOs should be aspiring to do," Smith says.
"I have to run it as a business and we have to be more than just commercially viable, we have to really measure ourselves as if we are a separate company.
"Most CIOs would have op-ex plans, but we have to worry about capital management and working capital, so it is a great experience for me and the next couple of years will give me some skills I didn't have before."
The concept of shared services has taken a bit of a battering in 2010, particularly up in Queensland where Smith is based.
Earlier this year the Queensland government's shared services division, CorpTech, was publicly held accountable for a state-wide payroll system bungle that left many health workers without pay, or with incorrect pay, for much of the first half of the year.
Smith says that rather than simply saying the shared services concept is flawed, a business implementing it the right way will have the desired results.
These would include economies of scale with greatly improved bargaining power when buying certain services.
"I think you have to have a common thread to make shared services work," Smith says. "If you just aggregate a bunch of disparate services and let them operate independently then there is no value in doing it. Some organisations do that and just group a few areas together so they can call it shared services.
"I think there was some scepticism about what kind of synergies made sense, but we have taken best practices from different areas of the business and moved them into other areas.
"We found a tremendous benefit as we brought real estate in when we used skills from our procurement areas to aggregate suppliers, for example."
But the shared services role doesn't mean the technology strategy has become any less challenging at Suncorp.
In recent times Smith has finished the enormous task of integrating the technology operations of the Promina business that Suncorp acquired in 2007.
The company is now midway through a wide-ranging rationalisation of its key technology systems.
The strategy, dubbed "building blocks", was initially flagged by Suncorp's chief executive, Patrick Snowball, in May.
It will involve the insurer targeting a minimum 3 per cent improvement in ¬margins during the next two years, from measures including a single pricing and claims engine.
The program is intended to result in annualised savings of $235 million by 2013.
Since Smith's ascension to shared services, long-standing Suncorp technology executive Paul Cameron has been promoted to the position of head of enterprise services to run the infrastructure and back office applications.
Former Perpetual chief operating officer Matt Pancino has also been hired to run application services.
This has helped take some of the load off Smith, he says, so that he can direct strategy while also focusing on his expanding portfolio.
As if the work within Suncorp wasn't enough, our CIO of the Year judges were also particularly impressed by work Smith has committed to, which benefits the tech industry at large.
He was instrumental in setting up the Agile Academy, which is run in conjunction with training organisations and universities, to teach the Agile software development methodology.
"I think it is important for us to have a real healthy IT industry," Smith says.
"We launched the Agile Academy here and we contributed our content and built 25 courses for it and we have essentially open sourced that to the industry.
"We often hear that Australia is too small, that we can't do things here and that there will be tons of outsourcing, but that all happens if you can't create value.
"This is about true thought leadership, where we can create value and for the first time in 30 years the industry has a fundamentally different way of designing and building business solutions."
Running long-term technology programs and corporate change initiatives has left Smith well equipped to expand his CIO role into wider business leadership, and formulate philosophies about how successful organisations should run.
When asked if he would like to try his hand in a major CEO role in the near future, he doesn't shy away from admitting his ambition. He believes that possessing the skills that lead people under you to work in the right way is one of the crucial facets of a good leader.
"I am getting plenty of CEO practice now and it is really enjoyable." Smith says.
"I've learned the only unique thing a company has is culture, anything else you can copy. You can copy a product, or everybody can buy an Oracle database or financial system or SAP. What they can't buy is your culture."
Public sector CIO of the Year: John Wadeson, Department of Human Services
Australia has one of the most complex social welfare systems in the world, but also one of the most advanced, technologically. The IT guru behind much of it, including Centrelink and Medicare, talks to Julian Bajkowski.
The average Australian family would never have heard of John Wadeson, but that doesn't mean he doesn't care passionately about their welfare.
As deputy secretary of information and communications technology infrastructure at the recently reformed federal Department of Human Services – which encompasses agencies such as Centrelink and Medicare – he's the man who makes sure more than $100 billion a year finds its way into the accounts of millions of clients who would be left stranded without it.
By any measure, Australia has one of the most complex social welfare systems in the world, but it's also one of the most technologically sophisticated.
At a time when banks and telecommunications companies still struggle with online access and account portability, DHS has forged links with agencies such as the Australian Taxation Office, and they are ¬quietly cutting away the pile of forms – often demanding the same information – that people need to fill in to access the money and services they are entitled to.
It's a simple transaction that former chief bureaucrat Peter Shergold once described as the missing element of ¬government services going online.
"People go on about how they don't see the gains of IT, but governments have taken the pay-off as complexity," Wadeson says. "If you look at the reviews of the tax and welfare systems, what you see are more rules. There has been a huge pay-off. It's given government all of these policy alternatives they otherwise would not have had."
Senior public servants and political minders who have dealt with Wadeson describe him as a plain-speaking communicator who cuts straight through the often impenetrable jargon of government and computing to spell out the benefits and risks of technology projects.
One recurring theme is that he is able to relate the experience of a customer back to staff with disarming pragmatism. Another is that he always spells out why technology capability should be at the forefront of modern service delivery rather than an afterthought.
"In IT we are the doers. We cop a heap of criticism because we always push the boundaries," Wadeson says. "So when people say IT is an enabler, in government it's [actually] a big part of the delivery system."
To emphasise the front-line aspect, he notes BHP's OneSAP project that provides a single software platform across the company. "It's brilliant, but it doesn't pull stuff out of the ground. When we talk about the frontline at Centrelink [we] mean the ¬people who do the coding as well."
The idea that technology has a strategic role rather than merely being a facet of operations has not always sat comfortably with those tasked with cutting budgets, including Peter Gershon, who was hired by former finance minister Lindsay Tanner to run a rule over Canberra's IT spending.
A big vindication for Wadeson has been his persistent argument behind closed doors that far more needs to be done in relation to addressing dwindling data ¬centre capacity in the federal market to head off potentially ugly consequences.
Even though the sleeper issue was not canvassed in the initial scope of the ¬Gershon review, it nonetheless found its way into the list of key recommendations delivered by the efficiency expert and ¬ultimately resulted in a new consolidated procurement strategy that now spans the breadth of the federal government.
In his final report of August 2008, ¬Gershon estimated that costs to the taxpayer of $1 billion over 10 to 15 years could be avoided through co-ordinated data centre capacity purchasing.
After years of running Centrelink's IT self-managed systems successfully without the assistance of big-bang outsourcers, Wadeson has now been tasked with ensuring that Medicare and the Child Support Agency are placed on a similar footing.
The work is an essential component of establishing a more structured, cohesive base to allow policy changes to be delivered in a rapid and responsive manner.
"Government has got faster and faster and more complex," Wadeson says.
"[Outcomes are] required more quickly. The days are gone when you could say, 'look it will take me at least 12 months to gear up to do this'."
Many of the changes require new forms to be completed and interactions with Centrelink and other agencies to become more frequent, especially where benefit payments are indexed against income or workforce participation.
To this end, Wadeson argues that online service delivery is increasingly becoming the norm so that people do not have to come into an office in person to submit information that can be required on a fortnightly basis or when someone's income changes.
One strategy has been to pioneer the use of voice biometrics, to authenticate customers using interactive voice response systems to lodge information.
Centrelink's voice biometrics deployment has proved so successful its lead has been followed in the financial services ¬sector by institutions such as the National Australia Bank.
Similarly, authenticating staff who access Centrelink's highly controlled ¬systems has also generated a standout solution in the form of a smartcard standard known as PLAID.
Based on a contactless smartcard, the solution allows staff physical access to the areas they require by both opening doors and enabling them to rapidly log into their computers.
But what sets PLAID apart from similar technologies is that Centrelink has had its internal standard tested and security certified by the Department of Defence.
It has been made available to other government agencies and private sector organisations with similar needs.
On the efficiency side, Centrelink has pushed through document scanning on a massive scale so that paper forms become available as images and data as they arrive by mail into the organisation.
The pay-off is that staff, including 4000 call centre operators, can access the documents they need when talking to ¬clients so that a transaction can be completed with a single phone call.
"It's a disruptive change," Wadeson says frankly of the scanning technology.
But delivering changes that negate the need to wait in a queue – physical or electronic – is the kind of disruption many Australians would argue the bureaucracy needs most.
New CIO of the Year: Phil Gray, Veolia Environmental Services
Veolia Environmental Services brought in a new chief information officer in 2009 to steady the ship. He talks to Brian Corrigan about the step up to the top job, rebuilding confidence and planning for the future.
When Phil Gray joined Veolia Environmental Services in December 2009, it would be fair to say the company had experienced a year to forget from an information technology perspective.
Attempts to physically move its data centre operations from an outsourcing arrangement with Queensland government-owned Citec in Brisbane, which had decided it was no longer in the business of providing external services, to a hosted facility in Sydney had not gone well.
System failures associated with the move caused ongoing outages, which sometimes took days to fix and left the company's executives without access to critical business systems for lengthy periods of time. Performance issues hampered the business for months and it was decided that what the IT department needed was fresh leadership.
"We needed to fix the issues, reset the customer experience and retake a seat at the executive table because we had lost credibility," Gray says. "We run our call centres, accounts payable and receivable, and customer ordering through SAP. When you lose that environment you can't take orders, you can't process them and you can't put them out to operators or bill them. It's an all-encompassing problem.
"You revert to manual processes but we all know that manual processes are a lot less efficient. It made life incredibly difficult for all of our users."
December is a busy time for Veolia's senior management team because the company reports its financial results on a calendar year. After taking the technology hot seat, Gray's first order of business was to introduce some sense of stability so that results could be finalised and audits passed. That in itself was an achievement given the events of recent months but once reporting season was successfully navigated, attentions turned to the elephant in the room.
"We held multiple sessions with internal and external IT stakeholders to determine what the root cause of the [data centre] problem was," Gray says. "There's no point treating the symptoms, you have to find the underlying issue.
"We looked at culture, capability, team structure, leadership and all of the technical stuff around the data centre and the applications."
Gray is tight-lipped about the cause of the problems but says the key to fixing it was making sure there was a capable team, appropriately supported with clear definitions of what needed to be done to deliver on the promises that were made to management.
A three-year IT strategy has been locked in with the executive team, complete with budget forecasts, and a core team has been established following a period of high turnover that included a couple of rounds of staff changes.
Everybody in the tech team now has a development plan, Gray says, and a number of people are working in acting roles that give them further opportunity to grow. "It has been a difficult process for a team that wasn't used to changes in prior years but in the end we have brought in skills to help us deliver," he says.
"We didn't have the skills in-house to do remote management of our completely virtualised and complex platform so we've had to bolster the team with core infrastructure skills. We have put the team we wanted in place early on so that they can learn on the journey."
Gray and his team have now completed the technology transformation program and are well ahead of targets in terms of improving system performance and restoring customer satisfaction levels.
This has included major infrastructure and application upgrades, which were scheduled for completion by the end of November this year.
Once that is completed, Gray will leave Veolia three months ahead of schedule and responsibility for its information technology will fall back under chief financial officer Cameron Leckie with four managers – infrastructure, applications, project delivery and service desk – reporting directly to him.
The process of identifying the next CIO is still ongoing but Gray is confident he leaves Veolia in a strong position.
"We have a couple of excellent internal candidates and have recruited two more IT leaders from the broader community ¬during the past couple of months," he says.
"We have a leadership team that can step up to replace me and there's probably enough bench strength for the next two CIOs."
The IT team will pause for breath, while the company goes through its end-of-year reporting season, before making sure that the major technology changes that have been carried out during the past 12 months are fully operational and totally sustainable.
Gray started his career in IT as a legal counsel with global outsourcing giant CSC almost 15 years ago ahead of moving to Qantas in 1998 as an IT lawyer.
He spent almost a decade at the Flying Kangaroo in various roles including the management of relationships with IBM and airline application services specialist Amadeus. The last 18 months of his time at Qantas were served as the general manager of its managed services practice before he left in late 2007 to set up his own consulting business.
He did an interim CIO role at financial and professional services firm Jones Lang LaSalle, leaving after a 15-month stint of troubleshooting and hiring a successor.
Once he officially hands over, Gray intends to spend some time reacquainting himself with his family before starting to look for the next opportunity.
In making the transition to CIO, Gray says one of the biggest challenges for anybody is adapting to the corporate culture and getting executive buy-in for the plans that you put together.
Key to getting that senior executive support at Veolia has been restructuring the IT steering committee. He also advises would-be chief information officers that the step up is a major change in focus from technology to leadership.
"Your role becomes much more about stakeholder management, setting expectations and creating strategy," he says. "There's a whole lot less about the technology. To me that has been the greatest learning through my career.
"People have this expectation that you're very technically literate – which you have to be – but in the end the expectation is that you're a better leader than a technologist."
The winners were selected by the MIS editorial team in consultation with a panel of judges including analysts, recruiters and industry executives.
Fiona Balfour, former CIO, Qantas and Telstra
Richard Constantine, CIO, Swinburne University of Technology
Andy Cross, managing director, Ambition Technology
Adrian Di Marco, executive chairman, TechnologyOne
Tim Ebbeck, president ANZ, SAP
Gerard Florian, chief technology officer, Dimension Data
Paul Harapin, vice-president ANZ, VMware
Mike James, director of general business, IBM
Christopher Johnson, CIO, Parsons Brinckerhoff
Bernie Kelly, general manager public sector ANZ, Dell
Gail Pemberton-Burke, senior consultant, Korn/Ferry International
Linda Price, group vice-president Asia-Pacific, Gartner
Paul Rush, partner, Robertson Search
Brenton Smith, vice-president ANZ, CA
Tom Stianos, CEO, SMS Management & Technology
David Webster, president ANZ, EMC
Read more at MIS Australia.
To comment on this article, please email the editor.
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