The leadership imperative
“I am a CIO that never says no. I say yes, but talk about the risks,” says Steve Rubinow, CIO of FX Alliance, who delivered the closing keynote for the conference.
“I don’t care what you are asking for except breaking the law – everything else is negotiable,” says Rubinow, who moved to his current post early this year after 11 years as executive vice president and CIO of the NY Stock Exchange Euronext.
In his previous job, he presided over one of the biggest transformations at the stock exchange – when it became in essence a technology provider, offering cloud services for the finance sector. He says they made this move since they have ensured security and reliability for its systems (At the stock exchange, “You have got to be good every second, everyday,” he says.) and the systems were designed for the capital markets community. “We understand the needs of the customers.”
He says the 2008 financial crisis also boded well for the shift, as companies that would never have thought to go to the exchange and give them computing work, took on the business model. “They have to because the world changed dramatically,” he says. “Things that used to be sacred are no longer sacred.”
His presentation stands out for the range of his own experiences on managing change – a challenge ingrained in every CIO’s job.
“Very few things change in the world more than technology,” he says. “You have to be on top of it all the time,” he explains. Whether technology or business leader, he says the CIO needs to be constantly pushing people to get them out of their comfort zone, get them to take on change.
For him, it is not risk avoidance or being risk averse, but risk management. “That is a very important role of the CIO.”
He recalls a group of executives who thought just putting “innovation” in a job description is enough to get candidates fitting the bill. He asked them, “If a 20- something Steve Jobs walked into the door, how many of you would hire him?”
“They would have rejected one of the most innovative guys because he does not fit the stereotype,” he says. Innovation requires a different way of thinking, he says, it is not as easy as putting a job description.
Read part one of the special report on the CIO Summit 2012: In sync with change
A useful tool for CIOs is humour, he proffers. “I am always joking about everything,” says Rubinow. “That's the only way to cope with some of the stresses of the job.”
He ends his keynote pondering on what matters most as business technology leaders.
It is not about performance reviews or press releases about the great things you have built, says Rubinow, recalling the emails he got from people he worked with when he left the NY Stock Exchange Euronext.
They were talking about leadership qualities they appreciated from him like trust, loyalty, teamwork and integrity.
“At the end of the day, we are people working with people and the values we have with regards to our colleagues - whether people above us or below us, our peers in other industries, other companies – those are as important as technological contributions.”
Watch this highlight of Steve Rubinow's keynote at the CIO Summit:
CIOs from across a range of enterprises and industries share key lessons learned from recent and past projects.
The follies of collaboration
Collaboration tools in large enterprise is not all that it is cracked up to be, especially if collaborating is not inherent in the culture of your company, says Miles Fordyce, group technology manager at NZ Post.
Fordyce's role sees him lead technology strategy across NZ Posts various properties, including Kiwibank, Courier Post, and Localist. His 500-strong team takes care of 11,000 employees.
In 2009 NZ Post adopted Google Apps for Business as a cloud based productivity suite. The tools were to save on costs by increasing worker productivity through collaboration and lowering OPEX costs.
Things have not gone as planned.
"The whole premise of saving money has not come to fruition," says Fordyce.
"We deployed it and expected people to collaborate. We now have an environment where people work with Microsoft Office, with a small number of other people working on Google Docs."
Fordyce says staff hesitated picking up the Google products because it was so different to the traditional Microsoft Office suite they were used to.
"UI [user interface] is king. [Google] came as a shock to use, but you need to train your staff about what the changes will look like," says Fordyce.
Apart from educational and cultural problems, the Google suite also gave NZ Post technological headaches. According to Fordyce, Google Docs clashes with the company's unified communications system - which was not foreseen when scoping the collaboration tool.
There are some positive elements from the experience, says Fordyce.
Google's cloud products have matured over the last three years. The company's reach has meant many more people are used to the UI, and would be comfortable using it in an office environment.
He says there are genuine savings to be made using cloud-based collaboration tools, but it needs to be based on a foundation of collaboration within the business. "Collaboration is about culture, and not technology. Don't take it on to save money, because that's coming at it from the wrong angle.”
The lowdown on enterprise mobility
BYOD (Bring your own device) is a headache. This is how Winston Fong and many of his IT contemporaries feel, but Fong says in this environment the practice is becoming more and more common among staff and almost expected at an executive level.
Fong’s advice to CIOs is to simplify the system by limiting the number of supported devices. At Fisher & Paykel Healthcare employees are offered a laptop and smartphone, or tablet and smartphone, to make management easier and keep costs down. “Three’s a crowd,” says Fong.
Fong says independent auditors have conducted checks on Fisher Paykel Healthcare’s data to see what needs to be locked down, and what can be made available on a less strict network.
Employees have tiered access to data on Fisher Paykel Healthcare’s network depending on the device they are using. Devices brought from home use a separate wi-fi, but can access documents using an internal WebDav and Exchange ActiveSync.
Corporate devices have the same functionalities, but are hosted on a more secure network and run mobile device management (MDM) software, as well as the Box enterprise file locker.
Fong says virtual desktops for tablet were trialed at Fisher Paykel Healthcare, but employees did not adapt to the mouse-based Windows operating system running on touch devices.
Fong says benefits of adopting a BYOD policy include cost savings and improved sales processes, along with increased application utilisation and productivity. “The users are passionate about these devices. There is still a population that is not so interested and thinks business needs to provide the devices so we have to face that challenge as well,” he adds.
Mobile commerce is a focus for Super Cheap Auto, part of the Super Retail Group, which owns six other outdoors and sports retail companies. With over 10,000 staff, 560 stores, and annual earnings of A$1.8 billion, the group has come a long way from its beginnings as a mail order car parts business. “We are a brick and mortar business that’s moving more and more online," says GM of information services, Alan Hesketh.
Hesketh joined Super Retail in 2010, after serving as deputy director of information for the Ministry of Health in New Zealand.
For Super Retail, Hesketh says the focus is on marrying increasing online sales with positive in store experiences. Initiatives like Super Cheap Auto’s Click and Collect system, which lets users buy online and pick up at their nearest retail location, are heralding great success he says.
Super Retail’s subsidiaries all have mobile websites capable of taking purchase orders. APIs connect each site to the SAP-based shared operating system, which includes a single code base running the point of sale and customer rewards systems.
Hesketh says Super Retail is exploring app-based touch points to sell and market towards customers, but sees the app model as restrictive.
He highlights shortcomings with apps on different platforms: Apple’s iOS controls takes a 30 percent cut of any purchases made through a device, Android is a fragmented platform to develop on, and Windows Phone 7 still does not have a large enough user base to develop for.
He adds that requiring the customer to download and install an app is a barrier to serendipitous sales. “A website allows us to handle just in time interactions. It doesn’t rely on our customers taking the time to download our app. If it’s available on the website in a simple way, I don’t know why we’d need an app,” says Hesketh.
He does have some caveats however. Hesketh says HTML5 technology is still limited in how it interacts with the host operating system. More advanced functions such as using the phone camera, or accelerometer are not easily accessible. Caching information for offline use is limited to a small amount of data. Hesketh recommends native apps for purposes beyond simple ecommerce solutions, which require richer and more interactive media.
Customers are increasingly making purchasing decisions ahead of going to the stores by researching and taking advice through their social network connections, says Hesketh. In response to this, Super Retail is conducting sentiment analysis on social networks, blogs, and forums of their brands.
Hesketh says this identifies influencers and sources of product recommendations for Super Retail’s marketing promotions. “Most organisations use this kind of technology for risk mitigation instead of brand building, I think that’s a wasted opportunity,” he says.
The transformation conundrum
Transformation projects are rippling through New Zealand, led in part by government projects to achieve efficiency and cut costs through technology. These initiatives need to be supported with change management to be successful, or risk being counter productive says Bruce Tinsley CIO of Opus International Consultants.
“Change management is key in transformation projects. It isn’t completed until well after the project is rolled out,” says Tinsley.
Tinsley relays the story of the Malaysian government’s 2001 all-of-government document management system deployment, designed to reduce productivity loss from inefficient workflows. At the time, the initiative was one of the largest e-government projects in history and would have meant a substantial change in the way the Malaysian government operated on a day to day basis.
However, the Malaysian government’s change management partner had completed its contract before the project rollout. Tinsley was brought on board and he set up multiple training events and workshops, attended by around 600 staff. A regular newsletter kept the staff up to date with the progress of the project, and informed them when training was available. Language was a barrier in this case, but made easier with the help of translators.
“Communication with all stakeholders is the most critical of all change activities,” says Tinsley.
Balancing business agility with governance
The only constant is change of pace is increasing, says Russell Jones, ASB chief operations officer.
Transposing this insight to the finance sector, he says, there is increasing competition from competitors like Facebook, Amazon, Apple and Google in what was traditionally a space dominated by banks.
People need banking, not banks, says Russell, quoting former ASB Bank CEO Ralph Norris. “We have to adapt, move faster and meet customer expectation.”
“Increasingly our customers expect us to interact with them where they want and when they want,” says Jones. He cites mobile banking is the fastest growing method of making transactions with the bank. It took Eftpos more than 25 years to get up to 150,000,000 transactions per year at ASB. The same figure was reached by mobile banking in less than six, he says.
“The challenge for us is to balance the need to innovate and attract customers, with security and governance.”
Jones says the company has tried several ways to address this issue over the last five years, but does not believe there is a single magic equation to balancing the two requirements. However he is adamant that the basics need to be ticked off first. Executive level project sponsorship, project manager competence, and investment planning are all critical starting points.
At ASB projects worth over $250,000 all require executive sponsorship and sign off, and Jones says he invests in project management certification.
“By far the biggest factor in the outcome of a project is the competency of its project manager,” says Jones.
More data, more opportunities
Craig Columbus, CIO of legal firm Russell McVeagh, echoes the message of keynote speakers Tim Campos of Facebook and Paul Strong of VMware about the opportunity that comes with data.
“You do not have to be the size of Facebook, or a young startup company to take advantage of big data,” says Columbus. “If we understand the data we have better than our competitors, we will stay on top.”
Russell McVeagh – a 149-year old law firm – now has 140 TB of data, including 1.4 million active documents, 4 million emails, and most importantly for its bottom line, over 300 GB of timesheets and billing data. As the law firm only deals with large corporate or government cases, Columbus says estimating bills for customers before work begins is difficult. Using mostly outsourced data analysts and tools, Columbus says the firm has been able to make nearly accurate quotes to their customers based on information from previous client work, partner and associate information, and information on opposing councils,. “This is still a work in process. We simply hope to reduce our inaccuracies in estimation,” says Columbus. “But it does show you don’t need to be the size of Facebook. Just think outside the box.”
Response, recovery and resilience
Alma Hong, CIO of the New Zealand Fire Service shares how her team tackled one of the biggest business continuity incidents in the country – the impact of the Christchurch earthquakes.
Within the first few hours of the February 22 earthquakes in Christchurch, the New Zealand Fire Service’s command central had received over 900 phone calls. In the next 12 hours over 400 firefighters, police, and urban search and rescue officers were on the scene with the help of Alma Hong and her ICTS team at the NZ Fire Service.
In her role as CIO, Hong oversaw the IT and emergency radio systems, spatial intelligence programmes, and stressed business as usual work like managing rostering and deployment systems.
Hong’s advice for disaster planning is to make sure communication with the rest of the organisation is set up before a crisis. “Our role is to make sure we communicate with our colleagues. There is hardly anything going on that we’re not aware of.”
She highlights the need to prioritise mission critical work. “When you’re designing something you have to look at the bigger picture,” says Hong.
“You can’t plan for everything so don’t sweat too much about dotting the I’s, but make sure your plan gets your people in a ready mindset to go out there and work on what is most important.”
The changing government ICT landscape
Another keynote speaker, Denise McDonagh, C-Cloud Programme Director and director of Home Office IT in the UK, reveals the business drive behind change in public sector IT.
She says 80 percent of government IT was delivered by six major suppliers at unacceptably high costs. “We spent approximately 17.8 billion pounds in 2011 to 2012. That’s something like educating three million in secondary schools. It’s quite a lot of money. We need to spend that money better,” she says. This was also at a time of a tough economic landscape. “We need to deliver faster, cheaper services,” she says.
She says the government is now moving to what we call “digital by default” “The move is to put it completely online. You shouldn’t just take an existing process and put it online. You really need to look at how to simplify the process or change it so that it meets the sort of technologies you’re looking at.”
We have a created a government digital service, she says. The big challenge ahead is cultural behaviour. “This is not about technology. It’s about how we move from customer to commodity, which is a difficult concept for some people.”
Sidebar: Busting security myths
When Eran Feigenbaum asks CIOs how they feel about their IT security, he says they usually respond like this: “They tell me they all sleep like babies. Every two hours they wake up and cry.”
Feigenbaum, the director of enterprise security for Google, says CIOs and IT teams at Fortune 500 companies are consumed with managing security patches to Windows-based enterprise environments. He cites a Microsoft figure which says it 25 to 60 days for most IT teams to deploy the latest security patch.
Feigenbaum, who spoke at a breakfast forum at the CIO Summit, says this is time CIOs are wasting not innovating and growing their business. “We’re working on economies of scale here. Most companies do not have the bandwidth for security innovation,” says Feigenbaum.
One method Google employs to protect user information is to disaggregate critical data across multiple server locations. Feigenbaum says best practice for cloud providers is to have multiple datacentres.
The closest Google datacentre to New Zealand is in Singapore, the same for Microsoft’s Office 365. This leaves cloud options on Google out of reach for organisations which are sensitive to their data being hosted overseas. Highly regulated industries like government, finance, and health are “laggards” in cloud adoption because of the lack of localised datacentres, says Feigenbaum, who would not confirm if Google plans to build a datacentre in New Zealand. Sim Ahmed
CIO Summit 2012 Speakers:
Owen McCall, director, Viewfield Consulting
Robin Johansen, CIO, Beca
Frank Gens, senior vice president and chief analyst, IDC
Paul Strong, CTO global field and customer initiatives, VMware
Rohan MacMahon, strategy director, Crown Fibre Holdings
Alan Hesketh, general manager group information services, Super Retail Group
Miles Fordyce, group technology manager, New Zealand Post Group
Ralph Chivers, CEO, Institute of Directors
Michael Stiassny, independent director
Sam Knowles, chairman, Xero
John Deane, CTO, PwC
Julia Raue, CIO, Air New Zealand
Hon. Steve Maharey, vice-chancellor, Massey University
Michael Myers, HOD, Department of Information Systems and Operations Management
Ron Hooton, CEO, ProCare Health
John Holley, general manager operations, Visible Results
Johan Vendrig, general manager information services, healthAlliance
Tim Campos, CIO, Facebook
Nigel Bailey, technology director, Fairfax NZ
Neil Cowie, CEO, Pumpkin Patch
Denise McDonagh, director of Home Office IT, UK Government
Winston Fong, vice president ICT, Fisher & Paykel Healthcare
Russell Jones, COO, ASB
Craig Columbus, CIO, Russell McVeagh
Alma Hong, CIO, New Zealand Fire Service
Steve Rubinow, CIO, FX Alliance
George Eby Mathew, digital media specialist, Infosys
Eran Feigenbaum, director enterprise security, Google
Bruce Tinsley, CIO, Opus International
Divina Paredes (@divinap) is editor of CIO New Zealand.
Sim Ahmed (@simantics) is a reporter for CIO New Zealand.
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