2. MAKING
ENTERPRISE
MOBILITY
A REALITY
Innovative mobility initiatives at Walmart,
Merck, Qatar Airways, Dr Pepper
Snapple, and other forward-looking
companies.
PAGE XX
www.straighttalkonline.com Issue Number 5
3.
4. Cover Article
Making Enterprise
MOBILITY A REALITY
Innovative mobility initiatives at Walmart, Merck, Qatar Airways, Dr Pepper Snapple,
and Montreal Transit
Straight Talking
05
Content
19
19
33
Reimagining IT
Richard Seltz, CIO and VP,
Information Technology, Chemtura
23
Seven Essentials of the Highly
Successful IT Function
Turkka Keskinen, CIO, UPM
Seven Habits of the Highly
Successful CIO
Brian Adams, CIO and Director of
Procurement, WorleyParsons
23
Running IT Like a Business . . .
at a Giant Nonprofit
Terry Bradwell, EVP and CIO, AARP
The ROI of Hard Work
Kristin Russell, former Secretary of
Technology and CIO, State of Colorado
23
Emerging Technology,
Emerging Markets
Vivek Vasudev Kamath, Executive
Director, MSD (Merck) India
5. 27
Culture Change: IT as an
Innovation Engine
Annabelle Bexiga, EVP and CIO,
TIAA-CREF
Issue Number 5
19
Shifting Gears
Timothy Heffron, Vice President,
Human Resources, and CIO, Meritor
Big Thinking Solution Spotlight
Tackling Two Big
IT Challenges
19
Reborn Digital: Reinventing
the Enterprise for the Digital Age
Steven Cardell, President, Enterprise
Services and Diversified Industries,
HCL Technologies
19
Proactive Obsolescence:
Turning ASM Costs into
Change-the-Business
Investments
Mark Hirst, Global Head, Public
Services, HCL Technologies
59
The CIO Role in the
Enterprise of the Future
Andrew McAfee, cofounder,
Initiative on the Digital Economy,
MIT Sloan School of Management
55
Failure Can Wire
Your Brain for Innovation
Michele Gallen, CEO, Shhmooze
8. MAKING
ENTERPRISE
MOBILITY
A REALITY
For all the hype surrounding enterprise mobility — the
declarations of both its benefits and its risks — most
companies are still in the early stages of implementing
mobile strategies. Here are the stories of five companies
that are turning talk into action.
Cover Article
9. Dr Pepper Snapple: A Mobility
Slingshot to Battle the Giants
When your chief rivals are Coke and Pepsi, you need all
the competitive weapons you can get.
For Tom Farrah, CIO of Dr Pepper Snapple Group,
one such weapon is enterprise mobility. In the beverage
and consumer packaged goods industry, visibility and
shelf space are crucial to success. DPSG’s decision to
provide its 2,400 account managers with iPads —
equipped with real-time account information,
promotional material, and critical sales data for every
customer — is transforming how the company competes
with rivals and is already helping to increase sales.
In just over a year, mobile technology at Dr Pepper
Snapple has shifted much of the complexity of doing
business from the customer-facing front end to the
technology-enabling back end. Gone are the outdated
print-laden binders that an account manager had to lug
into every retail outlet he visited, replaced by sleek new
iPads loaded with custom-made apps for solidifying the
crucial relationship with store managers.
In a brand-based marketplace, Dr Pepper has long
been a major force. The beverage, created in 1885 by a
Waco, Texas pharmacist, is the oldest soft drink in the
United States. Part of the Cadbury Schweppes empire
from 1995 until 2008, the Dr Pepper Snapple beverage
group was spun off into a stand-alone, publicly traded
company. The $6 billion business, which owns more
than 50 iconic trademarks, including Dr Pepper,
Snapple, Mott’s, Schweppes, and 7 Up, is sold through
retailers around the world, from Walmart to
mom-and-pop convenience stores.
The company is heavily dependent on a very mobile
sales force that is responsible for direct store delivery.
16 CIO Straight Talk
Tectonic shifts in the technology landscape are nothing
new to CIOs. If you’re not ready for familiar strategic
landmarks to disappear every few years — if you’re
uncomfortable with the maps used to plot your IT strategy
becoming irrelevant — you’re in the wrong business.
Take the emergence of mobile computing. The
confluence of laptops, smartphones, tablets, cloud
services, and high-speed broadband 3G and 4G networks
over the past decade is changing the very nature of
business. Outside the organization, mobile computing is
transforming how companies interact with customers and
prospects. Within the organization, it is allowing
companies to work smarter and faster — while raising
security risks and weakening the CIO’s control of a
company’s technology framework.
For example, the so-called consumerization of IT and
the BYOD phenomenon — you “bring your own device” to
use at work, and with it heightened expectations for
computing convenience and capabilities — represent a
massive cultural reshaping of a company’s technological
environment. CIOs who spent their careers overseeing a
monopoly in corporate IT now face competition from end
users who have already experienced the benefits of
state-of-the-art mobile consumer devices. In fact,
enterprise mobility initiatives are often driven by senior
executives with iPads who are insisting on the same
dexterity with their corporate data that they have with their
personal data.
The magnitude of the changes wrought by mobile
computing is evident in analysts’ estimates, predictions,
and assessments:
• Mobile devices now outnumber human beings, with an
estimated 7.3 billion mobile devices in the world in 2012
and just under 7 billio n people , according to Forrester
Research.
• Mobility is converging with social, cloud, and big data
forces into a “nexus that is driving disruptive changes to
IT, businesses, and society overall,” according to Gartner.
• The global enterprise mobility market will reach $140
billion by 2020, growing at an annual rate of 15%,
according to HCL Technologies.
• The number of smartphones in use is about to surpass
the number of PCs in use, according to technology analyst
Benedict Evans.
• In 2013, 56% of companies created organization-wide
mobile strategies and 47% increased investments in
mobile and wireless capabilities, according to IDC.
But being aware of and comfortable with the seismic
transformations brought on by mobile computing isn’t the
same as staying ahead of them. For all the hype
surrounding mobility these days, most companies’
initiatives are in the nascent stage, and the CIO’s role in
them isn’t always clear. Dan Bieler, an analyst with
Forrester Research, has written, “CIOs will be responsible
for introducing technology solutions that help break down
silos, boost cross-team collaboration, drive the end-to-end
customer experience, and engage more deeply with
customers. In order to succeed, CIOs must go beyond
technology enablement and support organizational and
cultural transformation.”
Given that the devil is in the details, CIO Straight Talk
reached out to a cross-section of organizations that are in
the midst of enterprise mobility efforts. Their stories offer
examples of mobility initiatives that are already resulting
in significant improvements in companies’ internal
processes and productivity, as well as in their relationships
with external customers.
10. 16 CIO Straight Talk
Account managers spend their days visiting
individual customers to take replenishment orders and
sell incremental activities such as promotions, displays,
and other sales-generating offerings. Given the
real-time, data-intensive nature of the business, these
account managers have long been prime candidates for
mobile technology. And until 2013, they (and the delivery
drivers) did indeed carry rugged Motorola handheld
devices. These devices, still used by delivery companies
like Fedex and UPS, work well enough for replenishment
order taking: An order, input at the retail location,
triggers a delivery over the next 24 to 48 hours.
But Farrah, a Cadbury veteran, had more ambitious
plans. Providing retailers with information about
incremental promotional activities turns out to be a
complex task. Typically, the account manager carried
around printed material with information on all
promotions, ads, and sales activities for the month.
Given that DPSG has 150 sales regions around the U.S.
(each of which includes dozens if not hundreds of
retailers) and that the company comprises more than 50
individual brands (each with its own pricing changes,
special promotions, and point-of-sale materials), the
task of keeping updated binders with accurate
information readily available for each account manager
had become a black hole.
“You have account teams selling to Walmart or
Target or Kroger,” Farrah says. “You have mom-and-pop
stores all over the place. Every brand has its own
marketing activity, and every retail customer has its own
account team creating different promotions and
activities. When you take all the factors into account for
our company — all the brands and how we license with
our bottlers — there are over 12 million possible
combinations of brand, bottler, and customer that need
to be communicated to and executed at the store level.”
Farrah saw that the sales binders — with their dirty,
torn pages and often out-of-date information — had to
go. “We decided to rebuild that application on an iPad,”
Farrah says. “We started by moving the order entry
application from the rugged handheld device to the iPad.
Just by redesigning that application, we learned how to
take advantage of the iPad interface, and we focused on
the user experience down to the nth detail.” The
application, built internally in IT, synchronizes all new
data automatically to the mobile device. Any new
customers, products, pricing changes, or other
information is available in less than a minute with a
touch of the screen before salespeople set out on their
routes in the morning.
The pilot program, launched in the first quarter of
2013, was an immediate hit; salespeople reported that it
cut their order-replenishment time in half.
Phase two of the pilot was to get all the additional
promotional material on the iPad. Now, when an account
manager checks his route for the day, he sees a list of that
day’s customers. When he clicks on a particular
customer, the system instantly brings up
customer-specific promotional activity, including
pricing, packaging, point-of-sales materials, and the
promotion timeline.
“These guys usually have about two or three minutes
of a store manager’s time,” Farrah says. “The last thing
they want to do is say, ‘Let me walk you through this
promotion,’ then hit a button and stand there waiting for
it to download. When they synchronize their device in
the morning, it is all downloaded then and there, so even
if they are in a location without cellular service, it doesn’t
matter.”
The most daunting task for IT, Farrah notes, was
building the back-end engine that could gather and
distribute all that material. Using the company’s internal
portal, Splashnet, Farrah’s team created MySplashnet,
an intelligent personal portal for each individual in the
organization. When an account manager opens
MySplashnet, it knows who and where he is and provides
all his daily operational metrics.
Having rolled all this out far more quickly than
anticipated, Farrah wasn’t done. Each account manager
also has mobile BI (business intelligence) that is
personalized to his account. He can click on My Route
and see, through a mapping device, each store he will
visit that day. Each store’s icon is accompanied by a
balloon that opens to a box showing every brand and
package that DPSG sells to that retailer, along with
current sales, month-to-date, year-to-date, and what the
average is and ought to be. If a salesperson is behind for
the month, it tells him how many cases he needs to sell. It
also ranks the salespeople in that region so he knows
where he stands.
“The last thing they want to do is say,
‘Let me walk you through this
promotion,’ then hit a button and stand
there waiting for it to download. When
they synchronize their device in the
morning, it is all downloaded then and
there, so even if they are in a location
without cellular service, it doesn’t
matter.”
Tom Farrah, CIO, Dr Pepper Snapple Group
11. 16 CIO Straight Talk
Though sales force mobility capabilities are
becoming standard operating procedure in the industry,
Farrah believes that DPSG, in providing tailored data to
individual account managers, is ahead of rivals such as
Coke and Pepsi.
His objective for 2013 was to increase sales for the
business, and although he can’t attribute specific sales
increases to the mobility rollout, given the variety of
factors involved, the anecdotal evidence has been
gratifying. For example, the president of Farrah’s
business unit told him, “I’m not worried about
calculating the value that’s come out of this, because I see
what’s going on in my business — and there’s no question
it is helping us to grow sales.”
That’s feedback from the business side that any CIO
would welcome.
Merck: Go Fast, Be Ambitious
When Merck, the $44 billion pharmaceutical giant,
embarked on its enterprise mobility journey four years
ago, it took an unusual route. Many companies were
initiating their mobile efforts with the sales force so that
salespeople could access information in the field. But
according to Randie Schlamowitz, executive director of
Merck IT, Merck decided to emphasize the “enterprise”
in enterprise mobility and enable its entire corporate
environment holistically.
“We built a company-wide mobile network,” she
explains. “We made sure we had security in place and
that data was protected on mobile devices. We brought in
a mobile device management tool, and we were able to
track company-purchased mobile phones and, over time,
personal devices, too. We supported e-mail and calendar
and all the standard productivity capabilities.”
From there, Schlamowitz began to consider Merck’s
SAP-based ERP environment as a fertile landscape for
taking mobility further. She began with a small pilot
program. In a company the size of Merck, where many
factors — performance, usability, support, etc. — need to
be considered, pilots are essential. The initial pilot
enabled the approval of an expense report using a
Blackberry or an iPhone. After the success of that effort,
the pilot was then expanded to more than 1,000
managers across the company. It wasn’t earth-shaking,
but it was a start. “Our philosophy for enterprise mobile
applications is that we build them pretty rapidly — in
anywhere from eight to twelve weeks — and deploy them
among a small pilot user group,” Schlamowitz says. “We
get feedback to ensure that there are no issues before we
deploy the app to a broader user base.”
After its initial forays, the company began to get more
ambitious. What would it take to enhance productivity
for managers, for the sales force, and for others around
the organization? Schlamowitz’s group investigated
available mobile enterprise application platforms, or
MEAPs, and selected an SAP technology that plugged
seamlessly into the company’s SAP landscape. Her team
used this technology to rapidly enable certain key
transactions on mobile devices, primarily iPhones and
iPads, as the Blackberry, the company’s traditional
smartphone of choice, was eclipsed by rivals.
Unlike most U.S.–based companies, Merck made its
most dramatic foray into enterprise mobility off-shore,
specifically in China, an important emerging market for
the company. In that case, the sales organization was the
focus. The laptop devices they had been using were slow
and were not effectively connecting to the network.
Under Merck’s single-device strategy, China’s
3,500-member sales force all received iPads and were
initially given ten mobile capabilities, including access to
their enterprise portal, documents stored in SharePoint
(Microsoft’s web-based collaboration software), the
enterprise learning management system, and travel
expense reporting. This last capability was particularly
innovative, allowing a salesperson to quickly create an
expense report, snap a photo of a receipt, and transmit it
instantly on the iPad to the corporate back end. A process
that had taken 26 minutes through the corporate portal
was reduced to less than five minutes on an iPad. Given
the success demonstrated in China, which included a
close collaboration with business colleagues who
changed their traditional ways of working to adopt
mobility, these capabilities were ready to be deployed to
the enterprise. The team continues to develop innovative
mobile solutions across Merck and is working with
Manufacturing to leverage mobile devices and
applications to enhance productivity.
Merck’s mobile philosophy has diluted the oft-heard
refrain in corporate environments that the CIO and IT
“When we embarked on this journey, we
looked at it holistically. Organizations that
focus primarily on mobility as a sales
force enablement technology don’t
necessarily think about the broader
enterprise.”
Randie Schlamowitz,
Executive Director, Merck IT
12. 16 CIO Straight Talk
are impediments to the BYOD and mobility trend, trying
to protect their turf and control the distribution of
technology. For mobility, IT at Merck has been the visible
champion.
“When we embarked on this journey, we looked at it
holistically, Schlamowitz says. “Organizations that focus
primarily on mobility as a sales force enablement
technology don’t necessarily think about the broader
enterprise.”
Merck’s CIO at the time made it clear that “whatever
we do, we need to do it for the enterprise,” Schlamowitz
says. Clark Golestani, who has been CIO for the past two
years, has strongly supported and expanded that
philosophy. Schlamowitz says that at least 50% of the
company’s 74,000 employees around the globe
eventually will benefit from the company’s mobile
capabilities.
What are the lessons from Merck’s mobility efforts?
“Mobility is all about speed and forward momentum,”
Schlamowitz explains. “You need to approach mobility a
little bit differently in that you have to leverage the
appropriate standard development practices using a
much more aggressive timeline. It’s not just the group
that’s building the app; it’s the group that is testing the
app, it’s the group that is supporting the app, it’s the
group that’s changing the back-end systems of record.
They all need to be focused on acceleration.”
At the same time, IT leaders must be prepared for
unexpected changes in the technology landscape.
Schlamowitz says, “A decision you make today may not
be the right decision a year from now.”
Qatar Airways: Delighting Your
Passengers — and Your Employees
The marvel of flying is an exceptional example of mobile
technology — which puts an airline in a good position to
realize the potential of mobile computing. Airlines don’t
just transport passengers from one location to another;
they manage a ceaseless flow of workers, baggage, fuel,
and critical information.
Qatar Airways, the award-winning airline of the State
of Qatar, uses the latest in mobile technology —
smartphones and tablets — to change how the company
operates in the B2B, B2C, and B2E (business to
employee) areas.
“The technology challenge for the airline industry is
preparing the passenger for travel through real-time,
online solutions. Passengers increasingly want to do
more of the preparation themselves, and for them to do
so, cost-effective information dissemination mech-anisms
must be available to them,” says CIO Arasnipala
T Srinivasan, a 30-year airline technology veteran.
“Mobility has finally offered that opportunity.”
Qatar Airways has developed mobility solutions
across the entire spectrum of its business: apps for
empowering passengers and productivity- and
service-enhancing apps for the cabin and flight crews
and for a wide range of airport personnel and other
employees.
The term “mobility” was not part of the lexicon until
recently, but the basic business advantage was clear. “As
the iPad and other mobile devices became more reliable
and robust over the past four years,” Srinivasan says, “we
realized that we could provide our mobile workforce with
a high level of information capture in real time.”
Qatar Airways’ consumer apps have been welcomed
and used widely by passengers. The initial offering
allowed customers to view schedules, book a flight, check
in, and check flight status — capabilities that are now
being further enhanced.
The airline’s solutions for its mobile workforce —
cabin crew and pilots — consist of iPads that offer
real-time information to help employees discharge their
responsibilities more efficiently and effectively. Initially,
these efforts were focused on elevating the customer
experience — something Qatar Airways was already
known for — to a whole new level.
For example, when a flight is boarded and the door is
about to close, a ground operations team member
previously stepped onto the plane and handed the flight
attendant a sheet of paper listing all passengers, seat by
seat, and basic information such as special meal requests
or medical needs. Two years ago, Qatar introduced
Qruise, an app for the iPad that automatically provides
detailed passenger information to the cabin crew.
Instead of simply a name and a meal preference, the
mobile app contains a deep well of data about each
customer, especially first-class and business-class flyers,
whom the airline ensures receive unparalleled service.
Qruise is an office in the air for the cabin crew. Today,
Qatar Airways deploys around 500 iPads and iPad Minis
across its 130-aircraft fleet.
Qatar Airways is also rolling out the iPad to its 2,000
pilots, giving them a single device for all flight-related
information. The company created an app called Qloud
that will ultimately become an EFB (electronic flight bag)
approved by the FAA as an integral Class 1 flight
instrument. With it, pilots can, for example, check in for
the flight, observe schedules and weather conditions at
destination airports, meet the flight’s crew, and even
obtain details on hotels where they will be staying in the
cities they will be flying to.
“The idea is to remove as much paper and
documentation as we can from the flight deck,”
Srinivasan says, “which not only leads to better decision
making for the pilots, because they have the data at home
or anywhere in the world, but also reduces weight on
flights and enables data preservation.”
Airport operations have also benefited immensely
from mobility solutions. For example, Qatar’s dispatch
functions — the so-called “red caps” who are accountable
for on-time departures — have a prodigious task in a
fluid environment. On a given shift, a red cap is
responsible for multiple flights and must move around
the airport overseeing many activities: baggage loading
and unloading, fueling, following the status of
13. 16 CIO Straight Talk
“The idea is to remove as much paper
and documentation as we can from the
flight deck, which not only leads to better
decision making for the pilots, because
they have the data at home or anywhere
in the world, but also reduces weight on
flights and enables data preservation.”
passengers, and staying abreast of maintenance on the
planes. In the past, this person was armed with a
walkie-talkie and loads of paper.
Today, all the information on every aspect of every
flight is updated in real time on Galaxy Tab tablets, and
the red cap receives alerts when there’s a problem. “Now,
it’s really management by exception as opposed to
management by calling and sharing and handling finite
pieces of paper that become irrelevant in five minutes
because the status has changed,” Srinivasan says.
To enhance productivity and employee self-service,
Qatar Airways has developed a Corporate App Store that
allows employees to download apps onto their personal
devices. The Souq app, which provides details of
corporate discounts, is popular with employees. Apps
like Staff Check-in and MyGems allow employees to
check in seamlessly, receive corporate messages, and
view personal information while on the move.
“It’s critical to note that Qatar Airways is a 24/7
operation,” Srinivasan says. “The airline’s home and hub
at Hamad International Airport is always open. This
adds a whole other dimension to our operations. The
mobile technology must be able to support this.”
“Though it hasn’t been an easy task,” he says, “it has
been a huge delight making mobile technology
applications that take flight.”
Walmart: An Adaptable App That
Changes with Customer Needs
Three years ago, Walmart launched a mobile app that
fundamentally changed the way the company does
business. The application looks like a typical e-commerce
app on a user’s smartphone — most of the time.
But when a customer enters a Walmart store, the app
morphs into something very different. Using the location
of customers who activate the in-store feature, the app
provides promotions, prices, and other information
specific to the store where they are shopping — for
example, the exact location of an item on the customer’s
shopping list or the price of the item in that particular
store.
At a time when some retail chains were blocking
customers’ in-store Internet access — to prevent them
from pricing and checking out a physical item and then
purchasing it from an online competitor — Walmart’s
Store Mode encouraged people to use their phones while
roaming the aisles. Of course, the app also made it easy to
order an item at Walmart.com if it was not available in
the store.
Although in-store apps are now relatively common
among large retailers, Walmart was the first chain to roll
one out nationally.
What led to this new twist on the mobile app? And
does Walmart’s approach to developing the app hold
mobility lessons for other companies, whatever the
industry?
“It sounds trite, but when we think about innovation,
we truly do so with the customer in mind,” says Gibu
Thomas, Senior Vice President of Mobile and Digital at
Walmart. A mobile app, he says, provides “an
opportunity to get the right information to the customer
at the right time.”
Indeed, Thomas says, his team saw smartphones as
having the potential to create a consistent connection
with customers. The devices could close the gaps in a
fragmented series of interactions that for the most part
had been limited to a customer’s engagements with
salespeople in the store and with Walmart’s website
when a customer happened to be on a computer at home
or work.
The problem with the smartphone, though, was the
size of the screen, which would have to accommodate not
only the features available on the large-screen desktop
site but also additional in-store features.
As is often the case, what seemed at first like a
constraint actually presented new possibilities. “We said
to ourselves, ‘Wait a second. This actually isn’t a
constraint. Or it’s one we can make an advantage,
because this smartphone can provide us with context on
where the customer is,’” Thomas explains. “Instead of
providing on the screen a menu of all the features of the
app, which the customer may or may not care about, we
decided to offer a contextual experience that’s tailored to
where the customer is.”
“The simplest way to figure out if a customer was in a
store or not was ‘geo-fencing’ every one of our stores,” he
says. “Because of the location capability of the device, we
were able to trigger the knowledge that you’re in the
store. And the app interface would automatically
Arasnipala T Srinivasan, CIO, Qatar Airways
14. 16 CIO Straight Talk
transform itself to display capabilities that only matter to
you when you’re there.” The broader set of capabilities
that customers wouldn’t care much about when they
were in the store would still be available on the app; they
just wouldn’t clutter up the screen.
This move was driven by an empathetic
understanding of what kind of experience would work for
customers. What does Thomas think might have resulted
if he and his team, in developing the mobile app, had
strayed from their focus on customer needs?
They might have tried to emulate the mobile apps of
competitors, particularly pure-play e-commerce retailers
like Amazon. But that would have been a distraction
from Walmart’s strategy of capitalizing on the hybrid
business opportunity that exists at “the intersection of
digital and physical” — a strategy fully realized in the
Store Mode app.
Or they might have tried to pursue the amazing
marketing opportunity that connected customers
represent by sending lots of messages. “But bombarding
customers with messages in the hope that they will buy
more isn’t going to work, because customers are smart
and they have alternatives,” Thomas says.
They might even have tried to do right by the
customer, offering the full array of capabilities that the
smartphone enabled. “We could have said, ‘Whether the
customer is in the store or not, we want to give him
access to all of these capabilities. So let’s jam the screen
with as many small buttons as possible.’ But customers
would end up so confused and overwhelmed that they
wouldn’t use the app. Or they’d see a capability on their
screen — say, the Scan & Go feature, which allows them
to scan their items with their phone as they shop and
then breeze through checkout — wonder what it was, try
it at home, and then say, ‘Why did you show me this if I’m
not in a store?’”
This empathy for what a customer feels and
experiences has resulted in a wildly successful app, one
that offers not just convenience but engagement.
Walmart doesn’t give exact figures, but reports are
that millions of people have downloaded the app. More
than 50% of traffic to Walmart.com now comes from
mobile devices. Nearly 85% of smartphone users — about
half of Walmart customers in the U.S. and the U.K. own a
smartphone — use their phone while shopping in a store.
According to Walmart’s own internal research,
customers with the app make up to two more shopping
trips to Walmart stores and spend nearly 40% more each
month – an indication that keeping the focus on
customers — whether they be Walmart’s shoppers or the
employee users of mobile devices in your organization —
is key to the success of a mobility initiative.
Société de transport de Montréal:
Turning Mobility into Revenue
Public transit, so often ridiculed and scorned by harried
passengers, may seem to be an unlikely source of digital
innovation. But the Montreal transit system — Société de
transport de Montréal, or STM — is leveraging mobile
computing and the system’s vast customer base to
generate significant new streams of revenue.
STM is the fourth largest public transportation
system in North America, with 1.5 million daily riders,
who account for more than 400 million trips per year on
the city’s 250 bus lines and through its 68 subway
stations. Fully 65% of the residents of this cosmopolitan,
dual-language city are regular riders who have embraced
the clean and efficient system as a preferred method of
transportation.
To increase ridership and offset the 13% who
abandon the system each year because they move away,
change jobs, or die, STM focuses not only on improving
service but also on enhancing the customer experience in
innovative ways. As part of that effort, STM has offered
mobile solutions to its customers for more than five
years, starting with notifications of bus and subway
delays on riders’ mobile devices.
But recently, STM decided to get serious about
mobility and launched an ambitious loyalty program for
its riders using mobile technology developed with SAP.
Unveiled in late 2013, the Merci ( Thank You) program is
the first such rewards program offered by a public transit
system, and it is already paying big dividends.
Merci is a mobile app that provides STM riders with
not only a steady flow of information but also special
offers from local retailers and event venues. The
information is pumped out to iPhones, iPads, and
Android devices in real time and is geo-located so that it
is targeted at individuals on the basis of their current
location.
“Instead of providing on the screen a
menu of all the features of the app,
which the customer may or may not
care about, we decided to offer a
contextual experience that’s tailored
to where the customer is.”
Gibu Thomas, Senior Vice President of
Mobile and Digital, Walmart
15. 16 CIO Straight Talk
“We send you things that are extremely relevant to
you because we’ve asked you what you like,” says Pierre
Bourbonniere, STM’s chief marketing officer. “We send
you things that are relevant to you based on where you
are located. If you are at the corner of Mount Royal and
Ste. Catherine streets, we will send offers from the local
shops, restaurants, bars, and events that are happening
now, today.”
“This loyalty program doesn’t give points,” he adds.
“It is based on instant gratification.”
The program also takes into account frequency of
use, so the most loyal and high-usage customers are
offered better deals, such as free tickets to an opera or
ballet, while those who use the system less often might be
offered a 50% discount.
STM views the Merci program as a major success,
with more than 50% of Opus card holders signing up.
The program has had a positive effect on their behavior.
According to Bourbonniere, 24% of riders using Merci
increased their use of public transit; 57% discovered new
destinations by public transit, either shopping or event
related; 43% are using public transit for new reasons,
other than, say, getting to work or school; and 47% are
taking a friend along.
But the Merci program has done more than
strengthen customer loyalty. It has also proven to be a
potent source of non-fare revenue for STM. Partners in
the program provide the rewards at no charge to STM.
Indeed, they pay an entry fee to be part of the program
and additional fees for usage. Bourbonniere estimates
that the program will generate $15 million in revenue for
STM over its first three years and then blossom into an
annual $50 million bonanza after that.
“If you are at the corner of Mount
Royal and Ste. Catherine streets, we
will send offers from the local
shops, restaurants, bars, and events
that are happening now, today.”
Pierre Bourbonniere, Chief Marketing Officer,
STM
So what can we learn from the experiences of these
companies? How can mobility – one of the quartet
of concepts that comprise the “SMAC stack”
(Social, Mobility, Analytics, Cloud) and a
front-of-mind area of interest for CIOs – actually
create value for companies?
A few themes emerge from these stories:
• Mobility has the potential to transform and
streamline existing business practices, such as
account management, sales, and marketing,
leading not only to significant productivity gains
but also increased revenue streams. In fact,
mobility initiatives themselves can become
lucrative sources of revenue.
• Mobility initiatives require forward momentum
in order to bring the organization along.
• Coordinated pilot programs can help ensure the
rapid and successful rollout of such initiatives.
• Corporate-wide mobility governance teams,
overseen by IT but including business unit
representatives, can smooth the path for
enterprise mobility initiatives.
• Although BYOD is a much-cited element of
enterprise mobility, CIOs needn’t officially
sanction BYOD in order to implement successful
mobility initiatives.
• Security remains perhaps the most significant
challenge for CIOs seeking to embrace enterprise
mobility.
Although there are no fool-proof prescriptions
here, heeding the lessons these companies offer
may make a difference for an organization trying to
make enterprise mobility a reality.
16. HIGHLIGHTS FROM ISSUE NUMBER 4
7 Things CIOs Are
Doing to Get Ahead in the DIGITAL ECONOMY
PLUS:
Experience Talks | The End of IT Innovation | The CIO’s Choice | Other Voices
ALSO IN THE ISSUE:
Straight Talking:
Actionable insights from CIOs of Consumers Energy, Covance, SAP Americas, Vanguard Health
Systems, and other forward-looking companies
View from the Technology Blogosphere:
Robert Scoble on The “Age of Context”
Points of View:
New-Age Outsourcing: Five outsourcing advisors describe emerging models
Go to: magazine.straighttalkonline.com/issue4
17. www.straigthttalkonline.com Issue Number Straight Talking
The Colorado State Capitol, located in Denver, was constructed in the 1890s from Colorado white granite, with a
gold-plated dome that commemorates the Colorado Gold Rush of 1859. Today, the state is a growing center for
high-technology companies.
13 CIO Straight Talk
18. www.straigthttalkonline.com Issue Number 5
Successfully tackling an IT problem of enormous complexity on a
massive scale isn’t easy but can yield tremendous benefits — in
this case, making a difference in the lives of hundreds of thousands
of Colorado citizens.
20 CIO Straight Talk
The ROI of Hard Work
Kristin D. Russell
POSITION: Former Secretary of Technology and Chief Information
Officer
COMPANY: State of Colorado
WORKS FROM: Denver, Colorado
PROFESSIONAL BACKGROUND: In February 2011, Kristin
Russell was appointed by Colorado Governor Hickenlooper to
serve as the state’s Secretary of Technology and Chief
Information Officer. In those roles, which she held until May
2014, she led IT economic development for the state, promoted
Colorado as a location for technology companies, and oversaw
all information systems statewide. Prior to joining the
Governor’s Office, Russell was the Vice President of Global IT
Service Operations at Oracle, where she was responsible for all
data centers and computing operations worldwide. She also
served as the Vice President of Global IT Operations for Sun
Microsystems, where she led the team that provisioned IT
solutions and services to Sun’s extended enterprise, supporting
more than 40,000 Sun employees and partners around the
globe. Russell has also held roles in customer management,
statistical process control analysis, and training and
development at Citigroup and Southern Pacific Transportation
Lines. She was named the public sector and nonprofit CIO of the
year in 2013 by the Denver Business Journal and a Top 10
Breakaway Leader by the Global CIO Executive Summit. In June
2014, Russell became a Director with Deloitte Consulting.
EDUCATION: BA, University of Colorado; Colorado Executive
Development in Residence program
PERSONAL PASSIONS: Family, fitness, and food
19. 16 CIO Straight Talk
Recently, I decided to leave my job as Secretary of
Technology and Chief Information Officer for the
Colorado Governor’s Office of Information Technology
to join Deloitte Consulting. While most people don’t
question my return to the private sector, I do get asked
quite frequently why I ever decided to leave a successful
career in the private sector to work in the public sector in
the first place.
The truth is that I certainly wasn’t looking to make
that move when I got the call from Colorado Governor
John Hickenlooper’s transition team, in early 2011. I was
on my way back from Tokyo when a fellow tech leader
who was helping the Governor recruit the state’s new
dual CIO and Secretary of Technology called me. He told
me about the position — I would be responsible for all the
technology systems across the executive branch. I would
be on the Governor’s cabinet, and I would lead the state’s
IT economic development strategy. I would be known as
Madame Secretary.
I politely told him, “I don’t do public sector, I don’t
know what a cabinet is, I don’t want to be a secretary, and
I never want to be called madame!”
I have to admit, however, that I was intrigued. Like
many of you, I had heard the stories about government
waste, bureaucracy, and politics, not to mention the
significant pay cut. Still, I thought I’d go ahead and meet
with the Governor and his team to hear what they had to
say. After that, my plan was to shut them down.
Governor Hickenlooper’s first question was, “Why do
you want this job?” Knowing that I didn’t, I turned the
question around and asked him, “Governor, if you were
me, why would you consider this job?”
He leaned across the desk and said, “It’s about
meaningful work.” He pulled out a collection of poems
and began to read “To Be of Use” by Marge Piercy. {See
the sidebar}
It moved me. I thought about what it would be like to
do really meaningful work. I suddenly went from “Why
would I want to take this job?” to “How can I not?”
Whether at Oracle or Sun Microsystems or Citigroup,
I’ve taken jobs for three reasons: to work with great
people, to learn, and to help.
Becoming the CIO of the state of Colorado met all
three criteria in a big way.
Fixing the Broken Pieces
In a public-sector role, you’re in the spotlight. You
typically have two phones, one for personal use and the
other for work, your e-mail is subject to open review by
anyone upon request, and your every move is publicly
scrutinized. In a private company, you go in for a
performance review in front of your peers and your boss.
Here, you sit before a legislative committee and
everything you say is streamed to millions of people.
It’s an adjustment — and one that began right away
for me. Within five minutes of the announcement of my
appointment, I got a call from a reporter at the Denver
Post. He had been covering the problems plaguing the
Colorado Benefits Management System, or CBMS, for
more than seven years. The first words out of his mouth
were, “How are you going to fix it?”
It was a huge problem. Back in 2004, state leaders
wanted to consolidate the multiple systems supporting
state benefits and welfare programs into one massive
system in order to help citizens quickly and easily
determine their eligibility for more than 100 programs. It
was a great idea aimed at helping the state’s most
vulnerable population. But the project was doomed from
the start. It didn’t receive adequate funding. Four
I thought I’d go ahead and meet with
the Governor and his team to hear
what they had to say. After that, my
plan was to shut them down.
Colorado Gov. John Hickenlooper convinced...
...Kristin Russell to do a stint in public service, as head of
the Office of Information Technology, where her...
...first big challenge was sorting out the problems of the
Colorado Benefits Management System.
20. pilot counties deemed the new system unworkable. Yet it
went live anyway.
CBMS’s troubles continued, and the state was forced
to pay millions of dollars in sanctions to the federal
government for food stamp overpayments. In 2010, just
six months before I joined, the system collapsed under
increased loads because of the recession and was down
for 15 hours in a single month. Inside the government,
CBMS was known as “C and B, Our Mess.” A federal audit
of the system in 2011 cited serious problems that could
have resulted in a loss of federal funding. Numerous legal
cases had been brought against state agencies, and
Colorado settled a lawsuit brought by an advocacy group
over benefit delays and wrongful denials of benefits that
affected nearly one quarter of a million enrollees. The
system was a matter of life and death for many Colorado
residents.
I knew I could be of use. I wanted to make sure that
CBMS was no longer a four-letter word. But, as Marge
Piercy’s poem had said, that meant I had to “strain in the
mud and the muck to move things forward,” to “do what
has to be done, again and again.”
Technology Problems Are People Problems
The first committee meeting I attended was hostile.
There had been a series of promises and attempts under
two separate administrations to fix CBMS, but nothing
had worked. People told me nothing ever would.
I went out to several counties myself and sat down
with people to understand their experiences. They would
hit a button and go to lunch, hoping the system would be
working by the time they got back. I hired a CTO, also
from the private sector, to take a deep dive into the
29 CIO Straight Talk
It’s easy when there are problems
with big IT projects in the public
sector to point the finger at the
vendor. We didn’t do that.
bottlenecks. There was also no governance around the
system. The agencies, departments, and counties that
used it were fighting.
I always say, “Technology is simple. People are hard.”
My job was to demonstrate that we understood what the
problem was and that we could fix it.
We needed to bring everyone to the table to make the
tough decisions about what we were going to do. We
created an executive steering committee for CBMS,
which was made up of the Executive Directors of the
agencies, representatives from the Governor’s Office,
county leaders, and me. We set up structured processes
for how often we would meet and how we would make
decisions. We drew pictures to show everyone exactly
why the system wasn’t working and what we could do
about it. The joint budget committee stuck its neck out to
give us funding. And we created our first 18-month plan,
focused largely on turning around the failed system. We
set up data and metrics of what success would look like.
Every quarter we reported back on what we had
accomplished and what our next steps would be.
Increasingly, companies recognize the value that a CIO can
bring beyond delivering and managing enterprise systems.
Some take on additional responsibilities in, for example, HR,
digital marketing, operations, or strategy.
In the state of Colorado, I wasn’t just the CIO. I was also
the Secretary of Technology. Governor Hickenlooper clearly
sees technology as a huge driver of economic growth, today
and in the future, for the state of Colorado. We’re creating a
public-private ecosystem that enables entrepreneurship and
innovation to grow naturally. Our goal is to change how the
state looks at itself and how technology companies and
professionals look at the state.
As the CIO, it’s a natural fit. A few years ago, I started the
IT Economic Development advisory council, which has
executive members from across Colorado’s technology
community. We discuss what it’s like to manage a technology
organization in Colorado and what we are doing to improve
Colorado as a place to do business.
We also reach out to Colorado’s technology companies to
thank them for their business and commitment to the state.
Colorado’s a great place to attract talent. It draws in people
because of its natural beauty, entrepreneurial spirit, and
business-friendly climate. We like to say that Colorado is a
place where you can live, work, and play. Politically speaking,
we’re a third Independent, a third Democrat, and a third
Republican. That requires a collaborative environment that
translates to trust and stability for businesses long term.
We’ve had more than 17,000 new tech job
announcements since we started. We’re doing amazingly
well with the start-up community by bolstering our
epicenters for entrepreneurship. Boulder has the most
start-ups per capita of any city in the country, according to a
study by the Kauffman Foundation and the Engine research
group, with Fort Collins-Loveland in second position, Denver
sixth, and Colorado Springs ninth.
As much as my CIO role fueled my position as Secretary
of Technology, the benefits also flowed the other way. As a
result of being out among leading technology companies, I
was very aware of what was going on and what cool new
projects and solutions were coming to market. That kept my
eyes open as I helped shape the technology strategy for the
state.
The Benefits of a Dual CIO Role
21. Colorado Governor John Hickenlooper’s efforts
to convince Kristin Russell to be the state’s
Secretary of Technology and Chief Information
Officer included reading her this poem.
To Be of Use
By Marge Piercy
The people I love the best
jump into work head first
without dallying in the shallows
and swim off with sure strokes almost out of sight.
They seem to become natives of that element,
the black sleek heads of seals
bouncing like half-submerged balls.
I love people who harness themselves, an ox to a
heavy cart,
who pull like water buffalo, with massive patience,
who strain in the mud and the muck to move things
forward,
who do what has to be done, again and again.
I want to be with people who submerge
in the task, who go into the fields to harvest
and work in a row and pass the bags along,
who stand in the line and haul in their places,
who are not parlor generals and field deserters
but move in a common rhythm
when the food must come in or the fire be put out.
The work of the world is common as mud.
Botched, it smears the hands, crumbles to dust.
But the thing worth doing well done
has a shape that satisfies, clean and evident.
Greek amphoras for wine or oil,
Hopi vases that held corn, are put in museums
but you know they were made to be used.
The pitcher cries for water to carry
and a person for work that is real.
we had accomplished and what our next steps would be.
It’s easy when there are problems with big IT projects
in the public sector to point the finger at the vendor. We
didn’t do that. Instead we worked closely with people at
the vendor to restructure the relationship, to give them
more accountability and a stake in the outcome. I think it
helped that I came from the private sector and could
understand their frustration about not being able to talk
with people who understood what they were trying to do.
Things started to turn around.
It was a lot of listening, communicating, setting
expectations, being transparent, and following through.
It’s basic stuff, but sometimes it doesn’t happen.
A Foundation for the Future
By the time I left, we were meeting standard timelines to
determine benefits eligibility approximately 90% of the
time. More than 95% of CBMS transactions were
happening in less than four seconds; our original goal
was 80%. We also reduced help desk tickets by 35% and
improved system performance by 30%.
Those are great numbers. But the thing that made us
most proud was seeing the actual results — the residents
of Colorado getting the benefits they so desperately
needed.
It was a lot of listening,
communicating, setting expectations,
being transparent, and following
through. It’s basic stuff, but
sometimes it doesn’t happen.
And the CBMS project created a solid foundation,
both from a technology and a governance point of view.
We took the governance structure created for this project
and expanded it for use with all major IT projects, and we
moved on to our next 18-month plan. The first plan
focused 85% of our investment on fixing what was
broken. In our most recent budget request, we inverted
that: 88% of the budget is for new projects, such as
PEAK, an online portal that enables Coloradans to apply,
update, and check on the status of any type of benefit
online, with anytime, anywhere, any-device access.
Colorado also was one of a handful of states that
successfully implemented the Affordable Care Act on
time and without a hitch. The work we did with CBMS
ensured our success in this historic effort.
25 CIO Straight Talk 16 CIO Straight Talk
22. Every time I take a job, I have a 90-day plan. I write
an epitaph for what I want to have accomplished when I
leave. In my Colorado position, I wanted to create an IT
organization that the state could be proud of, that would
deliver critical services to the citizens of Colorado. I’ve
done lots of systems implementations — big, important
enterprise systems for huge companies. But I’d never
done anything like this. Yes, it was truly meaningful
work.
The Takeaways
• Public-sector roles can be uniquely
challenging: As a public official, your
every move is scrutinized, your
“performance reviews” might take
place before a legislative committee,
and you are apt to inherit — and be
expected to solve — high-profile
messes.
• Technology is simple. People are hard.
Solving problems that affect hundreds
of thousands of citizens requires
listening to their needs and to the
experiences of the people trying to
implement the technology, and then
instituting a rigorous process for
tackling the issue and defining
success.
• It‘s easy when there are problems with
big public-sector IT projects to point
the finger at the vendor. It’s more
helpful to work closely with people at
the vendor to restructure the
relationship, to give them more
accountability and a stake in the
outcome.
The ROI
Under Russell’s leadership, the State of Colorado’s
Office of Information Technology…
• Upgraded and transformed the Colorado Benefits
Management System into a reliable and trustworthy
system
• Consolidated more than 15 disparate e-mail
systems into a single, cloud-based collaboration
system for the entire executive branch
• Took the lead in the nation’s first multi-state
cloud-based unemployment insurance solution
(WYCAN)
• Launched the Colorado Information Marketplace
— the state’s first open, data sharing marketplace
promoting government transparency, economic
development, business intelligence, and analytics
• Began modernizing a 23-year-old financial and
accounting system that handles in excess of $35
billion in annual expenditures and revenue
25 CIO Straight Talk 16 CIO Straight Talk
23. Straight Talking
AARP (formerly the American Association for Retired Persons) is a U.S.–based nonprofit, nonpartisan
organization with more than 37 million members devoted to improving the lives of people over the age of
50. AARP’s TEK (technology, education, and knowledge) events, like the one pictured here, offer free,
user-friendly training to older individuals who want to enrich their lives through new technologies.
23 CIO Straight Talk
24. When it comes to IT’s potential, a nonprofit organization is no
different from a business. At AARP, IT employees turned
themselves from technologists into strategic leaders, transforming
their department into a source of value for AARP members.
24 CIO Straight Talk
Running IT Like a Business . . .
at a Giant Nonprofit
POSITION: Executive Vice President and Chief Information Officer
COMPANY: AARP
WORKS FROM: Washington, DC
PROFESSIONAL BACKGROUND: Terry Bradwell, the Executive
Vice President and Chief Information Officer at AARP, is
responsible for managing a $100 million annual budget that
supports all AARP stakeholders, including members,
volunteers, advocates, donors, external business partners,
and internal staff. He previously served as AARP’s Vice
President of Application Services Management. Prior to
joining AARP, Bradwell was a principal for IBM’s Media and
Entertainment practice, with a primary focus on turning
around troubled IT projects and corporate change
management initiatives. While at IBM, he successfully led the
turnaround efforts of AARP’s first integrated membership
management system (Konnex) and established the framework
for AARP’s Chief Information Officer role.
EDUCATION: BS, Florida A&M University
PERSONAL PASSIONS : Family time, travel, playing piano
Hollis “Terry” Bradwell III
TBradwell@aarp.org
25. Many people assume that nonprofit organizations like
AARP don’t have to run like a business. But even though
the focus of a nonprofit is the social mission, you’re still
in the business of delivering on the aspects of that
mission. There are operations to run, services to deliver,
customers to satisfy, a bottom line to meet. You’re in the
business of doing good, but it’s
still a business.
And at AARP, it’s a
multifaceted business. Our
mission is to equip Americans to
age with dignity and purpose.
That covers a broad spectrum of
services — health care,
entertainment, employment,
long-term care, technology. We
tackle each of those and more,
and that makes us a very large
and very complex business.
I’ve been with AARP since I
AARP TEK is one of the
most exciting programs
to come out of AARP in
recent years. And it
came from IT.
fell in love with its mission 12
years ago. But when I became
CIO, in 2011, I saw the
opportunity to turn around the
technology organization. The IT
department had been very tactical in its approach,
delivering systems as needed with no real long-term
strategy. Our infrastructure had grown organically over
the years. And while organic growth works, it’s not
efficient, and it’s very costly.
I want IT to run — and think — like a business. We
run operations. We have customers. We provide services.
We have a bottom line. You might think we don’t have
competition. But we have that, too. If we’re not quick or
agile enough, our customers will turn elsewhere for their
IT needs. We’re no different than any other company. I
wanted to provide more value to AARP and become
much more efficient in delivering our products and
services to the organization.
People First
Whenever you make significant change in a technology
organization, you have to consider people, process, and
technology. A lot of IT leaders start with process. But I
always start with people. People are your most valuable
assets. Nothing happens without them. I can say that I
want to run IT like a business until I’m blue in the face,
but it’s not going to happen until I have these folks on
board and a new culture embedded in the organization.
I began this transformation with my leadership team.
I needed to make sure we were all on the same page.
Then we could set the right tone with the rest of the
organization.
But that’s not as simple as it sounds. We have always
had a lot of great people in this organization. But when
you’ve been doing the same things the same way for
many years, you get comfortable with it. When you try to
change that, it’s difficult. The default may be to push
back or stand still. We spent a lot of time working with
25 CIO Straight Talk
our leadership team to make sure we all embraced
common values and beliefs from a business and
technology perspective. Some of my team came through
that process, and others did not. It had nothing to do
with their capabilities or skills. Where we were trying to
go strategically just wasn’t the right cultural fit for
everyone.
Although it wasn’t easy, it
helped facilitate some of the
other transformational changes
we needed to make. Once you
set a new course with the right
leadership, it propagates to the
rest of the staff. Change is still
hard, but you have a “coalition
of the willing” working on
creating the right strategy for
technology, figuring out the
best processes, and aligning
with the business.
My direct reports and I
became less like technologists
and more like leaders of what is
essentially a $150 million
business. Technology is what
we do, but it’s not who we are. We are like a start-up with
customers to serve, partners to integrate, and services
that need to be relevant to our customers. And since
we’re now running IT like a business, we need some of
the same non-tech skills any company does. For
example, I hired a marketing and PR professional. It is a
thankless job. We rarely get attention unless something
goes wrong. So our IT marketing manager finds
opportunities to promote IT’s value.
Strategic Sourcing
Once we had the people in place, we made an assessment
of all our technology and services to determine which
were providing value and which were not. It was a long,
hard look at our own environment. We uncovered areas
that were working where we could double down and
deliver more. We discovered opportunities to tackle
issues that customers had been unhappy with for years.
Over the past three years, we’ve decoupled more than a
decade’s worth of systems and processes that we had
amassed and, in many cases, replaced them with new
technology and processes that are more suited for our
long-term strategy.
We have taken a similar approach to our outsourcing
portfolio. We had been doing quite a bit of outsourcing.
But just as our technology infrastructure grew
organically over the years, so did our outsourcing. There
was no long-term focus.
We took a step back and created an outsourcing
strategy. We narrowed our partners down from more
than 30 IT suppliers to just a handful of service providers
that could do meaningful and purposeful work for us, not
just handle our spot needs. We get to leverage their
26. mature processes and the investments they’ve made.
And, as a result, our service delivery improves and our
costs go down.
As a result of that shift in sourcing strategy, the skill
sets we need have changed. We no longer need to have
capabilities like development and systems support
in-house, but we do need experienced vendor managers
and business solution architects.
Today, we have four primary partners: HCL for
application support services, IBM for ERP maintenance,
CSC for cloud computing, and Ciber for project
management and analytics. It’s all work that we could
certainly do for ourselves. But if we did, it would mean
spending 80% of our time supporting day-to-day
operations and only 20% planning for the future. I
wanted to flip that. Our partners are doing very
important work that we couldn’t afford to provide. And I
can take the money that I save and invest it in even
higher value work. We can spend our time working
closely with the business to plan for the future.
IT Takes Center Stage
Having those partners to rely on has freed up our IT
organization to identify areas of the business where we
can bring new and innovative services to the table in
order to enhance the value of AARP’s mission — in ways
that even the business hadn’t considered before.
In the past, we were viewed by the rest of the
organization as strictly an operational group behind the
scenes. But I want IT up on that stage. We can deliver
more value than just CRM or ERP or ECM. We can
25 CIO Straight Talk
deliver value to our membership at large.
A great example of that is our AARP TEK Pavilion
initiative. TEK stands for technology, education, and
knowledge, and the program offers free, hands-on
training to seniors who want to learn how to use
consumer electronics, computers, and social media to
enrich their lives.
Today, 20% of Americans have yet to get online —
and half of those folks are age 65 or older. Yet being
online is an imperative in the 21st century, whether
you’re trying to rent a movie or do your banking. We saw
an opportunity within IT to create a program to educate
our members about technology. We worked with our
major vendors, including Microsoft and AT&T, to
provide us with sponsorships, equipment, and
storefronts for the nationwide program that we are
launching in 60 markets this year.
The program has elevated IT’s status and gotten us
out of the back room as we’ve engaged with every major
function within the organization, from marketing to
membership, to get the AARP TEK program off the
ground. It’s one of the most exciting programs to come
out of AARP in recent years. And it came from IT.
Now that we’ve done a lot of the heavy lifting
regarding the IT transformation, the goal is to make sure
that what we do has business impact, whether it’s new
capabilities we’re rolling out like single sign-on or the
effort we’re making to provide 100% systems access via
mobile devices.
We’ve set the stage. All the players are here. The
curtains are open. It’s show time.
• Running IT like a business, instead of a
support function, requires a shift in
mind-set: IT has customers and a bottom
line. It also has competition. To remain
relevant to customers, IT needs some of the
same non-tech skills any company does,
such as PR and marketing professionals
who can find opportunities to promote IT’s
value.
• Any leader transforming a technology
organization must consider people,
process, and technology. A lot of IT leaders
start with process. But no new process will
be effective unless the people are all on the
same page.
• Left to develop organically, an outsourcing
portfolio may lack a long-term focus.
Instead of turning to outsourcing partners
on an ad hoc basis, as needs arise,
companies should be thinking in terms of an
outsourcing strategy, choosing partners
with processes and skill sets that can
support strategic goals.
The Takeaways
27. Straight Talking
Headquartered in North Sydney, Australia, WorleyParsons is a global provider of professional services to the
resources and energy sectors, including the design, engineering, and operation of offshore oil and gas production
platforms, such as the Bayu Undan facility in the Timor Sea (pictured here). The company has 166 offices in 43
countries.
13 CIO Straight Talk
28. Being a CIO today requires a whole new set of skills and traits. Here’s a
starter list from a CIO with an unusual perspective on the job.
20 CIO Straight Talk
Seven Habits of the
Highly Successful CIO
Brian Adams
POSITION: Chief Information Officer and Director of Procurement
COMPANY: WorleyParsons
WORKS FROM: Perth, Australia
PROFESSIONAL BACKGROUND: Brian Adams is in his eighth
year with WorleyParsons, where he is the Global CIO and
Director of Procurement. Previously, he was the CFO for
Australia and New Zealand, having joined the company as the
Director of Strategy and Development for that region. Adams
has spent over 20 years in senior international roles with
well-known companies, such as Caterpillar and Ernst & Young.
His career spans Australia, Africa, Asia, and Europe. Adams is a
Fellow of the Council of Guildford Grammar School and is a
graduate of the Australian Institute of Company Directors.
PERSONAL PASSIONS: Snow skiing, saltwater fishing,
motorcycles (he once rode a British Royal Enfield, made in
India, back to England from a work assignment in Calcutta),
raising money for Future Hope (www.futurehope.net)
Brian.Adams@WorleyParsons.com
29. A wise man once said to me, “Brian, there are only two
types of people in the world: the maintainers and the
changers.” I’ve always chosen to be a changer.
Most of my career steps have reflected my desire to
round out gaps in functional and operational expertise.
I’ve had marketing, services, manufacturing, and finance
roles. I’ve worked at companies ranging from Caterpillar
to a mining consultancy to Ernst & Young.
But when I talk about myself as a changer, I don’t just
mean in my career moves. I’ve also actively sought roles
that provide fantastic change management challenges.
When I joined WorleyParsons eight years ago, I first
managed strategy and development for the Australia and
New Zealand region and then I led the regional finance
group as the regional CFO.
In that position, I was forever poking sharp sticks at
the IT function, not because they weren’t doing a good
job, but because they were not
engaged with the business.
They were like maintainers. If
there’s one thing that has
become apparent to me from
my years outside IT looking in,
it is that IT must be an
organization of changers. The
enterprise of the 21st century
— an era that is (as they say in
the military) “VUCA”: volatile,
uncertain, changing, and
ambiguous — requires an
innovative, strategic, and
business-aligned IT function.
Our CEO at the time agreed.
And he turned me from
poacher into gamekeeper,
giving me my first CIO role.
I believe this varied
If there’s one thing that
has become apparent to
me from my years outside
IT looking in, it is that IT
must be an organization of
changers.
background provides me with an interesting perspective
on the capabilities that a CIO needs in order to succeed in
this new world. We are at a tipping point, and the
traditional CIO has to change to meet the demands of the
business. If that doesn’t happen, there’s going to be a lot
of turnover in the position. As I’ve settled in to this latest
leadership challenge, I’ve put together a list of the skills
and traits I believe are critical for CIOs leading IT
organizations today.
1. Take a Walk on the Non-IT Side
I’ve had a long career outside the walls of IT, which has
proven invaluable in my current CIO role. All too often, a
CIO will have worked his or her way to the top of what
was traditionally a technical function, without a
well-rounded knowledge of the business and with little
ability to comprehend the complexity of how an
organization works. I believe that any IT leader who can
spend significant time in non-technology roles will
benefit.
Giving promising IT folks the opportunity to rotate in
and out of IT to instill that understanding of the business
21 CIO Straight Talk
is a great idea. In fact, such rotations are a great idea for
employees in any central business-enabling function,
whether IT or finance or HR. In reality, however, it can
be difficult to implement. Taking a purely technical
professional and finding him or her a role in finance or
HR or procurement or manufacturing might not work.
Once you get to the more senior levels of the IT
organization, it’s a bit easier.
But a few progressive companies, like my former
employer, Caterpillar, are showing how this can work.
They do a fantastic job of moving people throughout
various functions so that when they get to the executive
level they understand how all the parts come together.
That’s what a CEO wants in a CIO. That’s what a CEO
wants in any strategic executive. If you’re too
functionally specific, you won’t last long. A CIO who’s
spent 20 years in IT probably isn’t capable of having a
conversation about anything
other than IT.
2. Be Business Curious
A CIO who’s a changer, not a
maintainer, needs the
intellectual curiosity that leads
him or her to question how the
business works. He or she needs
the desire to understand what
makes the business tick — even
more than what makes IT tick.
Where is the money made?
Where is the money lost? Where
are sales made? Where are sales
lost? What makes employees
more productive? What makes
employees less productive?
Those are the questions that
should be top-of-mind — not, how do I optimize my
storage?
I meet CIOs who get turned on by technology but not
by the business. That doesn’t work if you want to be a
business-aligned CIO.
3. Speak English
Traditionally, the successful CIO was a technical expert. I
am not. And I am happy to raise my hand and say, “I have
no idea what that means. Can you explain it to me in
layman’s terms?” There is no greater Jedi mind trick for
making someone fall asleep than to talk about servers,
storage, or — God forbid — network uptime. Unless you
can translate the tech speak into the language of the
business, being a technical expert can be a hindrance to a
CIO today. Yes, you need a fundamental understanding
of technology so some IT guy or vendor doesn’t pull the
wool over your eyes. But a successful CIO will talk in
terms of what IT can do for the business to enable it or
differentiate it or come up with differentiated product
solutions. Companies today don’t need a CIO who’s a
chief infrastructure officer. They need a CIO who’s a chief
30. All too often, a CIO will have
worked his or her way to the top
of what was traditionally a
technical function, without a
well-rounded knowledge of the
business and with little ability to
comprehend the complexity of
how an organization works. I
believe that any IT leader who
can spend significant time in
non-technology roles will
26 CIO Straight Talk
innovation officer. They don’t care how you’re going to
configure your servers to optimize your networks. They
care about your ability to bring about change.
4. Have the Courage of Your Convictions
There are still plenty of organizations that assume a CIO
or IT manager ought to just do what he or she is told to
do. But the new CIO must resist being put inside that
order-taking box. It takes a fairly strong character to
confront and overcome some of the pushback you get
from the business without alienating them. It’s
absolutely necessary.
When banks asked customers if they’d like ATMs,
they said, “Hell no!” When Apple asked customers if
they’d like an iPad-sized tablet, they couldn’t see the
value in it. But banks built the ATMs. Apple developed
the iPad. And the rest is history.
A CIO needs to do that sometimes — push past
resistance to introduce systems or processes that they are
convinced will have value to the business. I recently
introduced a new communication and collaboration
platform. When I talked to people about it, their eyes
glazed over. They didn’t want an internal social network.
But we pushed ahead, and now it’s widely used, creating
fantastic value for the business.
5. Learn Your Financial ABCs
Traits like the desire to understand how the business
works or to stand up for the value of IT may be somewhat
innate. You either have them or you don’t. There are
other equally valuable skills that take a bit more effort to
acquire. Having a solid financial understanding falls into
the latter category.
You must be able to create a compelling business case
for anything you want to do. Modern CIOs have to be
commercially savvy about return on investment or they
will continue to struggle to convey the value of
technology. If you aren’t commercially and financially
savvy, IT will never be considered a strategic
differentiator in the business. It will be thought of as just
another budget item to manage.
6. Get to Know the Other Functions
Clearly, it’s important to build strong relationships with
the CEO and COO, whose support you will need for your
initiatives. But it’s also critical to have good relationships
with all corporate functions. Going beyond just
delivering what the function traditionally wants is what
we all need to aim for. When talking to Finance, don’t
just think of the systems that you need to deliver for
accountants; think of how you can help Finance provide
valuable commercial insight that will help the business
make better decisions. When talking to HR, don’t just
think of the traditional systems of compensation and
benefits; think of what you can do as CIO to make
employees not only more productive but happier in
benefit.
carrying out their work, thereby helping recruitment and
retention. When talking to the CMO, help him or her
figure out how to gain access to new markets and
demographics using social tools, instead of just
supporting the corporate web site.
7. Think Strategy First
Many CIOs and IT leaders are smart tactical problem
solvers. But a CIO today needs to be capable of having a
high-level, strategic conversation about where the
company is going. It makes sense for a CIO to be part of
the CEO’s strategic growth team. After all, in today’s
digital enterprises, there is a strategy piece in everything
that IT does. Technology is a critical component to the
long-term strategy of the organization.
Many CIOs can’t have that conversation; they’re not
even invited to that conversation. They’re incapable of
discussing how to raise market share or how to adjust
pricing strategies or how to target a new market. A recent
survey by Harvard Business Review and Dell found that
75% of CEOs think strategic CIO involvement is key to
business success and that companies in which the CEO
and the CIO are aligned outperform organizations
lacking that alignment by a 2:1 differential.
This research indicates that less than a third of CEOs
think their CIOs are “above average.” And of that group,
only 40% think their CIO is knowledgeable enough about
31. 26 CIO Straight Talk
the business to provide true strategic differentiation.
(http://innovatebusinessit.com/research-what-does-th
e-c-suite-think-about-your-future/)
Today’s CIOs must bring value to the strategy
discussion and align IT’s budget and strategy to the
business strategy. They must be comfortable
approaching the CMO to talk about how IT can help
target a new demographic, perhaps sparking a whole
series of conversations around apps, social media, digital
advertising, and all of those things that the CIO would
otherwise never be party to. CIOs who ask the right
questions get engaged in more value-adding
conversations with the business.
Get to know your peers on the business side. Learn how
to think and talk as they do. If possible, become one of
them for a while. Understand how what you do fits into
the organization’s overall business strategy.
At the same time, know that you are the technology
expert. Don’t be afraid to champion a great idea that may
not initially make sense to them.
Your adoption of behaviors such as these will help the
IT function become something much more than a cost
center — and help you become a key member of the
CEO’s decision-making team.
• CIOs today need to be “changers” rather
than “maintainers.” They need to engage
with the business, participate in the
high-level strategic conversation about
where the company is going, and then help
the company get there.
• A CIO who has spent 20 eyars in IT probably
won’t be able to play a broader strategic
role. It’s imperative to spend time in a
variety of non-technical roles, to be curious
about
what makes the business tick, and to know
how to talk about technology in layman’s
terms to other functional executives.
• Plenty of organizations still assume that the
CIO is the person who takes technology
orders. But to align IT with the business,
the CIO must resist that role and be
prepared to make a business case for
technologies whose strategic value the
non-tech people don’t yet understand.
The Takeaways
***
33. Straight Talking
UPM, a global bio and forest products company based in Helsinki, focuses on creating value from renewable and
recyclable materials. UPM’s wood-based biofuel is compatible with all diesel engines, meets EU and U.S. diesel
standards, and can be distributed through existing gas stations.
13 CIO Straight Talk
34. Creating and running an effective IT organization is no easy task.
Here are some principles that go beyond the well-worn prescriptions
for success and offer new ways to think about this critical leadership
challenge.
20 CIO Straight Talk
Seven Essentials of the Highly
Successful IT Function
Turkka Keskinen
POSITION: Chief Information Officer
COMPANY: UPM
WORKS FROM: Helsinki
PROFESSIONAL BACKGROUND: Turkka Keskinen has been the
CIO of UPM since October 2008. He has held a variety of roles
during his long career with the company, most of them in
finance and control. Before becoming CIO, Keskinen was a
Senior Vice President for Financial Services and Business
Control. In that position, he transformed Finance and Control
from a function based in the business units to a global function.
He also served as controller and as a member of a divisional
management team, and from 1999 to 2002 he led a global SAP
program for UPM. In 2010 he was recognized as the IT People
Director of the year in Finland, and in 2012 he was awarded the
CIO of the year in Finland.
EDUCATION: Master’s degree in finance and business
administration, University of Tampere
PERSONAL PASSIONS: Tennis and all sports, family,
motorbiking, and reading popular science
turkka.keskinen@upm.com
35. In the past, our IT organization
delivered 60% to 65% of what
the business expected and so
ended up disappointing users.
Today we are delivering 90% or
95% of what is expected. We
didn’t change anything about
our delivery, but we did change
how we managed expectations.
Let’s put it bluntly: It doesn’t matter what IT thinks
about IT. What matters is what the business thinks about
IT. In fact, business perception becomes IT reality.
Several years ago, after I had been in the CIO role for
a couple of years, I set out to create a list of the principles
— you might even call them philosophies — that I believe
define a successful information technology organization
in the eyes of the business.
I brought a special perspective to this task, because I
had come to my CIO position from the business side,
where I was a customer of IT. In fact, most of my career
at UPM, a global bio and forest industry company based
in Finland, has been in finance and internal controls.
As I compiled my list, I tried to prioritize the items,
putting the most crucial principle first, and so on. The
version offered here isn’t comprehensive. But these are
my top seven defining characteristics of a successful IT
function , all of which we in UPM’s IT function try to live
daily.
1. Run IT Like a Business
To do this, you have to know the business that IT is in.
That means understanding the roles of IT’s owners and
IT’s customers. The owners, whether it’s the CEO or
CFO, may view IT as a cost center to manage. The
customers are looking to IT for technology solutions that
will meet the business’s needs and strategies.
Those two groups, however, have to be in sync.
Otherwise, the customers may be seeking solutions that
the owners aren’t willing to fund. Both groups need to be
sitting at the same table, literally, or you will end up not
pleasing either one.
At UPM, we created an IT steering committee with
representatives of all businesses and functions — IT’s
customers — that meets six times a year and with the
company’s executive committee two times a year. I don’t
lead either committee. I can, however, guide the two
groups as they together prioritize investments. But —
and this is crucial — IT’s owners and customers must
make the final decisions. This process makes the owners
and customers accountable for IT, even though they
don’t deliver it.
2. Think Service First
IT must understand its customers — not just the senior
business “buyers” of a system but also the end users of
that system, who may number in the thousands. Too
many IT organizations are isolated from end users. And
what those users want is friendly, empathetic,
person-to-person service — particularly of the “how do I
use this” kind. Of course, excellent IT service is based on
excellent IT service processes. But people deliver it.
As for the higher-level “it’s not working” service
requests, listen carefully to what your customer is saying.
Never say no, but reserve the right to resolve the issue the
way you think is best. Of paramount importance: Deliver
as agreed upon — with a smile and without excuses. It’s
easier to do that if you don’t overpromise. In the past, our
21 CIO Straight Talk
IT organization delivered 60% to 65% of what the
business expected and so ended up disappointing users.
Today we are delivering 90% or 95% of what is expected.
We didn’t change anything about our delivery, but we did
change how we managed expectations.
3. Empower Your People
IT is made up very smart people. To get the best
performance, you need to strike the right balance
between directing them and setting them free. I like to
say you need to be tough on targets and easy on people.
IT professionals aren’t afraid of a challenge, but they
don’t want to suffer under oppressive and unnecessary
hierarchies. I believe in giving people the flexibility they
need to deliver and then rewarding them for results.
Not everyone is comfortable with that level of
empowerment at the start. If someone comes into my
office with a problem, I will coach him or her through
taking on the accountability for solving it. They leave
with an idea of how they might do that.
4. Keep IT Simple
One of the biggest problems for the IT organization is
that its native language isn’t understood by business.
Another related problem is complexity, which is a killer
not just for IT’s interaction with the business but also for
the development and management of IT’s operations. It’s
imperative to make IT simple for the business to
understand and for the IT organization to run.
I make sure my team members understand that using
technology jargon and acronyms doesn’t make them look
like the smartest person in the room. Explaining
something in a way that everyone can understand does
make them look smart. Don’t throw out terms like
36. “middleware” that mean nothing outside of IT. Use
metaphors to explain technical concepts. For example,
you might say that middleware is like the plumbing that
connects the water supply to a house.
It’s equally important to simplify expectations and
decision-making processes. If the business perceives IT
as complicated, it is complicated. Perception is reality.
You must manage that.
5. Do the Right Things
If you want to serve the business, the business must
determine and prioritize the IT portfolio, including only
those projects that create value for the business. But let’s
be honest; business people are not technologists. Nor
should they have to be.
IT’s role is to help the business determine its
technology needs and justify them to IT’s “owners.” At
UPM, we have made templates that help define the
components of a technology proposal one by one. The
templates create a clear structure not simply for the
proposal but for how the IT is developed. So when
business people come to the IT steering and executive
committees, they are presenting their requests in a
standard format.
This makes it easier for the business to take
ownership of the IT prioritization process.
6. Do the Things Right
Just as a successful IT organization enables the business
to prioritize its own IT portfolio, it must also involve the
business in implementation.
Here at UPM, we nominate a top-level project
chairman for the steering team, who represents the
business or function benefitting from the project. On the
IT side, we nominate only the most skilled project
managers, and they report directly to the project
chairman. By appointing a project chairman from the
business side, the projects become true collaborations
between IT and business. That ensures that business
benefits are driving the project.
A rigorous project management process is also
necessary. Perhaps most important, you must pay
attention to the people running the project. A successful
IT shop takes care of its project teams through all phases
of development and implementation.
7. Mirror the Business
IT leaders have preached the importance of business
alignment for years. But how do you achieve that?
Typically, a company has an organizational structure and
IT has its own, different structure. I have found that it’s
far more effective to model IT’s structure after the
business.
That is what we’ve done at UPM. There’s an IT group
that works with global business process owners, another
with local business managers, another with end users,
another with portfolio and project management, and
21 CIO Straight Talk
others linked to strategy, sourcing, and other support
functions. We involve the business in any key
nominations within those groups and make sure to rotate
people through them.
But perhaps “mirroring the business” sounds too
passive. What we in fact are trying to do is zipper
together the IT and the business organizations. We want
our efforts so aligned — intermeshed, even — that the gap
that exists in so many companies is closed and our work
and goals are shared.
***
As I said, these are not the only guiding philosophies of a
successful IT function. For example, I believe you need to
manage and lead your suppliers — instead of letting them
manage and lead you — while treating them like
members of your own team. You must create an
enterprise architecture road map — one that includes not
only processes, technology, and applications but also
data — without feeling the need to follow it slavishly. You
need an explicit agreement with business about security
levels. And so on.
But an IT organization able to embody these seven
concepts , as we have tried to do at UPM, will have in
place the basic elements to ensure effectiveness and
success.
The Takeaways
• It doesn’t matter what IT thinks about
IT. What matters is what the business
thinks about IT. It’s useful to think in
terms of IT’s owners and IT’s
customers. The owners may think of
IT as a cost center. The customers are
looking for business solutions. The
two groups need to be in sync.
• IT needs to be simple for the business
to understand and for the IT
organization to run. If the business
perceives IT as complicated, it is
complicated.
• A successful IT organization enables
the business to prioritize its own IT
portfolio. It also involves the business
in implementation.
37. Straight Talking
Chemtura, based in Middlebury, Connecticut, is a global specialty chemicals manufacturer whose products
are sold in more than 100 countries. The company serves major industries, including transportation,
energy, and electronics.
23 CIO Straight Talk
38. When Richard Seltz joined Chemtura, he seized the opportunity
not just to facilitate the company’s strategic divestitures but also to
rethink the way IT operated.
24 CIO Straight Talk
Reimagining IT
POSITION: CIO and Vice President, Information Technology
COMPANY: Chemtura
WORKS FROM: Philadelphia, Pennsylvania
PROFESSIONAL BACKGROUND: Richard Seltz joined
Chemtura in 2011 and became the CIO in 2012. In that role, he
has transformed the organization to reduce costs while
seeking to improve customer satisfaction and service levels.
Previously, Seltz was the global business leader for the
transportation adhesives business at Rohm and Haas (now
Dow Chemical). Prior to joining the chemicals industry, Seltz
was a Vice President and cofounder of GeoStrategy
Consulting, where he focused on growth strategy and
operational reengineering with Fortune 200 clients. His
consulting career also included positions at CSC Index, Viant,
and EDS. served as a U.S. Peace Corps volunteer and
cofounded the first English-language newspaper in Bosnia.
EDUCATION: BSBA, University of Florida; MBA, the Wharton
School of the University of Pennsylvania
PERSONAL PASSIONS : Travel to off-the-beaten-path places
and keeping up with my two boys
Richard Seltz
Richard .Seltz @chemtura.com