IDC CIO Summit Executive Cutimages.idc-cema.com/mailing/cio/idc_cio_summit_2013...CIO Summit 2013 – Delivering Business Value Executive Summary The findings of the IDC CIO Summit,

IDC CIO Summit Executive CutEvent Summary and Key Highlights

IDC CIO SummitDelivering Business Value

Ritz-Carlton Vienna, Austria

April 25 — 26, 2013

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IDC CIO Summit 2013: Delivering Business Value

Introduction

Executive Summary

ICT to Drive Business Agility

Service Delivery of the Future

The Modern Datacenter

Leveraging Your Data

Efficient IT Management

Securing the Enterprise

The Innovation Imperative – Fostering and Harnessing Innovative ICT to Drive Business Agility

Enabling the Mobile Enterprise

Key Political Indicators – CEO Priorities and Improving Relations with Business Leadership

The Role of the CIO in 2020

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INDEX

Dear IDC CIO Summit Delegate,

This document offers a summary of the IDC CIO Summit held at the Ritz Carlton Hotel, Vienna, on April 25 and 26, 2013. The aim of the document is to present to you a comprehensive overview of the topics discussed and the information delivered, from definitions of key issues of interest for today‘s CIO to sharing the experiences and views of leading European CIOs on the given topics.

Following the Executive Summary are chapters dedicated to ten major topics covered at the summit through a combination of panel discussions, CIO case studies, and vendor presentations.

The individual sections covered are:

Sessions from day one, April 25:

- ICT to Drive Business Agility - Service Delivery of the Future - The Modern Datacenter- Leveraging Your Data- Efficient IT Management- Securing the Enterprise

Sessions from day two, April 26:

- The Innovation Imperative – Fostering and Harnessing Innovative ICT to Drive Business Agility - Enabling the Mobile Enterprise - Key Political Indicators – CEO Priorities and Improving Relations with Business Leadership - The Role of the CIO in 2020

The individual chapters dedicated to the topics above are structured as follows:

- Key Findings and Conclusions- CIO Case Study- Vendor Address - Other Key Topics and Takeaways From the Panel Discussion

IDC hopes you will find this document useful. We wish you good look in delivering business value to your organization!

We look forward to seeing you at the IDC CIO Summit 2014 taking place in Vienna on April 10-11, 2014.

IDC CIO Summit 2013 Executive Cut

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CIO Summit 2013 – Delivering Business Value

Executive Summary

The findings of the IDC CIO Summit, Vienna, can be summarized in one key message: Times have again become very exciting for CIOs. The industry is undergoing major changes, marked by the emergence of four very powerful transformational forces: cloud, mobility, Big Data analytics, and social applications – forces that are radically impacting the ways in which enterprise IT is used and delivered. The fundamental role of IT, to increase company efficiency, has extended to driving business agility and into the realm of company innovation. The essence of the CIO position is changing accordingly, moving far beyond an operative role and transforming into that of a key board member who works with business leaders, manages a portfolio of IT services, and even drives innovation. While enabling business agility is already a top priority for most European CIOs, the innovation role is just being pioneered. Nevertheless, within a few years, most CIOs will take on this challenge and will develop new skills as driving innovation becomes an increasingly valuable and requested CIO competence.

The rise of email, text messaging, and private delivery services has resulted in a volume decrease of 50 billion standard mail deliveries worldwide over the past three years. In Central and Eastern Europe, electronic wire transfers and debit cards are resulting in post offices losing their role as payment facilitators. This has prompted a national postal service from a Central European country to seek new business opportunities, one of which is that of hybrid mail – a combination of authenticated email and a printing and delivery service for businesses and government. The service receives secure emails, creates a print mail, and sends them to the specified addresses. It also offers the reverse, whereby letters are digitized and sent as secure authenticated emails. Another is meter reading. Because postal workers deliver to every home and business in a given country, the national postal service is using these employees to obtain regular electricity readings for a leading electricity producer and supplier.

A few years ago, when a major European telecom operator started the implementation of a new international strategy, it quickly realized that due to organizational and cultural factors, IT was slow to support changes and that business was suffering as a result. The company thus decided to completely reorganize its IT and create a new culture of communication between IT and business. The function-based IT organization (IT silos) was left behind and reorganized along business lines to enable it to deliver end-to-end services that address individual business needs.

The digital transformation that took place in the retail sector, such as the use of interactive displays in shops and embedded chips in products such as clothing and footwear, resulted in a very strong European clothing brand realizing that IT provides untapped opportunities to innovate and potentially change the game in the retail industry. To exploit such opportunities, the company has implemented a process-based innovation model for the application of IT in business.

Take together, these endeavors encapsulate a number of the key topics addressed at the IDC CIO Summit 2013. Creating new lines of business includes stepping out of traditional technological and management comfort zones. The hybrid mail service required the previously mentioned national postal service to redefine and rejuvenate traditional services with new value created with IT. The meter-reading service required a large investment in handsets and applications. The new business strategy of the previously mentioned telecom operator required reorganization and a new mindset in its application of IT – one centered on delivering services. In the case of an apparel manufacturer, IT was called upon to contribute to the company‘s innovation. All of these developments required CIOs to work with internal business leaders to align IT with business strategies, as well as requiring attention to security and data protection.

They also illustrate how CIOs can be pulled in multiple directions at the same time. And this was one of the core propositions of the IDC CIO Summit. The evolution of technology has crashed through management ceilings to give IT a seat at the main table. As IDC Senior VP and Chief Analyst Frank Gens pointed out in his keynote address, rapid IT changes have led to the third platform, a combination of mobility, cloud, Big Data analytics, and social media, that not only facilitates business but can fundamentally alter (and has done so) the way business works and innovates. To paraphrase a refrain used by a keynote speaker from a large European telecom operator, IT is business.


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The evolution of technology elevates the position of the CIO


IT has certainly moved from a supporting role to a leading role in many organizations. Marketing stands as a case in point. CRM systems, PPC campaigns, online advertising, social media, sentiment analysis, contact databases, online shopping, and price modeling all now have starring roles in the chief marketing office (CMO)‘s tool box. Finance, too, depends on ERP accounting modules and real-time dashboards that track spending and revenues. In terms of industries, even labor-heavy verticals such as construction depend on CAD, fleet and equipment management, field communications, and software for subcontractor management. For nearly all firms, the customer, the supplier, and internal data can be structured and dissected to reveal patterns that can be used to support decision making, transform business models, and create new business value. With the use of multiple data sources, such as the Internet of things, and the emergence of the online customer communication channels and the technologies that are able to process that data in real time, information has become a key competitive asset.

The combination of technologies means IT can take the lead in helping organizations develop new products and services. As a result, CIOs are moving up the IT management value chain, from custodians through business architects (done via IT architecture) to change agents. While costs need to be proactively kept under control, as pointed out by the CIO of the largest commercial bank in the Czech Republic, IT projects often need to be big to attract the attention of top management – something essential for a project to succeed. By developing frameworks for assessing the effectiveness of IT, as advocated by the CIO of a leading manufacturer of personal care products, the CIO can make clear arguments for using shared services centers and cloud-based solutions.

The CIO also needs to assure company leaders that their approach is secure and in line with data protection and privacy regulations. Security policies, firewalls, and the physical protection of hardware are all important parts of the security strategy, as is ensuring that new technologies (such as cloud and applications that enable mobile access) are secure. Having noted this point, panelists during a security session largely agreed that security depends heavily on the user. The CIO of the central government of one of the CE countries emphasized the importance of including the user, suggesting IT security awareness be taught in schools, as re-educating people once they are older can be a formidable task.

Overall, the IDC CIO Summit proved an invaluable forum for addressing the core business, management, and leadership issues facing today‘s IT leaders.

Data becomes a competitive asset

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ICT to Drive Business Agility

Moderator: Martin Canning, Group VP, IDC EMEA Consulting, IDC

Panelists:

- Europe CIO, leading European telecom operator - Global VP of IT, leading European apparel and footwear manufacturer- Global IT manager, European sports betting company- CIO, Russian aircraft engine manufacturer- EMEA product supply IT operations leader, global manufacturer of personal care and cleaning agent products- Sukhbinder Gill, chief technology officer, EMEA region, HP- Martin Niemer, Director, Enterprise CEMEA, VMware

Key Findings and Conclusions

Ensuring better alignment with business and improving agility are clearly the leading strategic priorities of today‘s CIO. The challenge of creating an IT organization that is significantly more business minded, acts as an agent of transformation, and is faster in delivering new business services cannot be underestimated. However, the experiences of the CIOs taking part in the session show that creating business-aligned IT is possible through careful consideration, a change in mindset, and perseverance. Careful consideration has primarily to do with striking the right balance between formalized processes aimed at aligning the IT organization with the way business works and informal communication between business and IT. The change in mindset must pervade from the CIO to CxOs and IT employees and beyond to encompass the entire corporate culture. It must also involve both recognition of the strategic role of IT as a business engine and the constructive, proactive, and open attitude of IT employees to the business; they must understand and fulfill the needs of the business. Creating a business-aligned IT division within the company is a lengthy transformational process – one that needs perseverance to be successful.

CIO Case Study: IT–Business AlignmentEurope CIO, Major European Telecoms Operator

Several years ago, a leading European-based telecom operator decided to create a new IT organization for its global operations, which involved undertaking a major transformation of these operations. Part of the change was to implement central governance to help the telco‘s operating companies (OpCos) in Europe build better IT departments. „We call it governance in white gloves,“ said the Europe CIO of the company (a seasoned IT leader with more than 20 years‘ experience in several industries, including media, entertainment, and FMCG), „as we are giving advice and guidance to our European OpCos on areas in which we see the need for improvement. When we started about two years ago, we clearly saw that most of the problems our affiliates were facing stemmed Directly from the areas of IT and business alignment or IT and business intimacy, as we call it.“ The core of this problem lay in how IT people communicated with the business and in understanding and providing suitable and workable solutions. The transformations implemented to achieve better alignment of IT with business were both organizational and cultural.

A major organizational step involved changing the organizational setup from a silo-based and inward-looking IT organization to an organization that operates as an internal company, with the business as the customer. Previously, the IT division was organized in domains, such as billing and CRM. But the telco‘s business was organized in a very different way, followed a different logic, and was looking for something else from IT. The new IT organization is radically different – completely business oriented, with structured fields such as mobile convergence, wholesale, and B2B. It is linked from the IT side via designated team leaders, with each team capable of delivering end-to-end solutions, from the smallest business requirements up to top-quality services delivery.


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Better alignment with business is the no.1 strategic goal for IT

Better IT and business alignment is both an organizational and a cultural issue

From an inward looking to a business facing IT organization

C-level sponsorship of such a major change was crucial. The position of the CIO was elevated to the same management level as top business management – CMO, the chief technology officer (CTO), etc. This also had an impact on the company culture, helping the employees understand and realize that IT was not a backup and support function but a business in itself. The Europe CIO concerned is a part of the telco‘s European Leadership Council and reports, via dotted line, to the group CIO and the senior VP of all European affiliates. This position not only illustrates the importance and recognition of the position but enables visibility over the business and top-level communication between IT and business, as LOB heads and CEOs of national OpCos are also on the European Leadership Council.

„All these organizational changes make a great difference, yet intimacy, or IT and business alignment, is difficult to achieve, since it is primarily a cultural, attitude issue. CIOs need to get off their high horses and get down on the floor to see how the process really works,“ added the speaker. The IT organization has to have the right perception, the openness to work together with LOBs, and it must have the right people facing the business, people able to discuss business, budgets, priorities, and investments in a flexible and constructive manner. Success lies less in the implementation of formalized processes for IT and business alignment and more in creating an environment of open attitude, pragmatism, and very intensive formal and informal communication. This is supported at the telco by special workshops to help IT leaders step out of their comfort zones and engage in conversations with LOB heads.

„The three key ingredients of success in aligning IT with business are the three Ps: pragmatism, perception, and perseverance,“ concluded the telco‘s Europe CIO.

Keynote Address: Business Agility,Sukhbinder Gill, Chief Technology Officer, EMEA Region, HP

Sukhbinder Gill, CTE for EMEA for HP, continued on the topic of IT and business alignment by emphasizing three additional underling dimensions of transformation: the changing behavior of CEOs and LOB executives, the new style of IT, and the implications for CIOs and IT shops. The behavior had to change first at the level of the user to the extent that, today, consumer IT driving enterprise IT is a given. „Ship-to-ship communication during the Gulf War was through Internet Relay Chat because it was the easiest and quickest way for ships to communicate with each other. People will use the capabilities that are available,“ stated Sukhbinder Gill in explaining the idea of change in the behavior of people when using IT in their work. What had an even greater impact and had to do with IT and business alignment was that LOB heads felt the CIO was not listening to them. Hence they stopped asking and started using the services of platform-as-a-service providers and other consumer services. They did this because they were used to them as private consumers and because these services had taken on enterprise relevance in terms of being economical and business agile. „The new style of IT and many disruptors, such as mobility, M2M, Internet of things, cloud, and real-time analytics, are on the lips of board members. If the board members are worried about these topics, CIOs should be the people worried about how to explain why they are important.“ These disruptors cannot be ignored; a company can either accentuate the positive or mitigate the negative. But the CIO cannot ignore them, as LOB heads actively use them while ignoring the security and privacy risks due to the savings and value these disruptors provide.

Sukhbinder Gill heads a team of 120 CTOs and enterprise architects, all of whom talk directly to HP‘s clients to understand business outcomes and to influence HP‘s services portfolio. The activities of the team have led to an understanding of how IT needs to relate to business to stay relevant. The examples come from a variety of industries, from pharmaceuticals to shipping containers and from aircraft engine manufacturing to leasing. A CIO of an IT vendor must have the right mindset to remain connected with and relevant to LOB executives. Understanding their business problems and business dynamics is just as central as figuring out the business value of new IT. This new style of IT management that CIOs have to pick up is characterized by new solutions and new ways of cooperation. New solutions are typically those that resolve business issues through the innovative use of mobility, cloud, and real-time analytics – often solutions that combine all three.


CIOs should not ignore disruptors

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Finding ways to solve business problems with new IT can often be achieved only with a new style of cooperation between the supplier and the client, whereby the supplier acts more as a business consultant and may invite other interested parties to contribute, such as startups and other companies interested in solving the same business issue. Another common case involves companies looking for new style IT solutions because their business success increasingly depends on access to data forecasting; thus data has become the No. 1 asset and differentiator for such companies.

The new style of IT also involves new criteria and practices around buying IT. In Western Europe, companies are expecting innovation from new investments in IT. This might not yet be the case in CEE, but the shift in terms of CIOs talking to business heads is already well underway. The business case is becoming increasingly important in IT decisions, and companies are expecting more proactive involvement from their suppliers. „Use the try-before-you-buy model,“ Mr. Gill added. „Write up the usage case; list those partners you think can help you; then approach these suppliers to see whether they have any solutions they can demonstrate.“

Other Key Topics and Takeouts from the Panel Discussion on IT–Business Alignment and Optimum Models for Delivering IT in the Organization

Agility also involves the fast evaluation and adoption of new IT solutions. The clothing manufacturer represented in the panel discussion has a take on this idea, having implemented an initiative called ‚IT of Two Speeds‘. „The third platform has arrived in our company at different levels of maturity. We are talking to consumers and have big communities out on these platforms. We collect data from them, and we have big traditional back-office IT systems that we need to maintain. We need to move, adapt, and implement rapidly in terms of the customer-facing and revenue-generating parts of IT, while the development of the back-bone systems – ERP, master data management, etcetera – has to be structured and process based,“ explained the company‘s VP of global IT. The EMEA product supply IT operations leader from a major global personal care and cleaning agent manufacturer took the idea further, stressing the importance of consciousness and the solid performance of the core standard IT functions: „Business leaders are only going to listen to innovative ideas if we convince them we can deliver on our promises. Establishing credibility starts with the basics of IT, such as the core ERP systems. We need to be very conscious of that. Part of the innovation spending needs to go towards assuring solid service transition based on service strategy.“

‚IT of Two Speeds‘ involves change at different paces for different IT functions. Resistance to change from within the IT departments represents a challenge to implementing a two-speed approach, or the more agile delivery of IT services. „We experienced and had to manage that kind of resistance even with the core IT functions,“ added the CIO of a Russian aircraft engine manufacturer. „This became an issue when we reorganized the traditional setup of development teams, testing teams, and operations teams into a service-oriented setup organized around various business services.“ A reason for the resistance is the different mindsets inherent in business and IT. While business often looks for a quick response, resulting in demand for ‚quick and dirty‘ solutions, IT prefers solid, reliable, and properly built, tried, and tested solutions. „The CIO sometimes has to accept the quick and dirty approach but consciously find a balance and keep IT intact and manageable,“ added the CIO of the telecom operator. „Compliance and quick growth of the company adds another spin to change in the case of our company,“ stated the global IT manager from a European online betting company. Taking all factors into account, the change management required to become agile becomes a risk management activity aimed at striking the right balance between cost, speed, and product.

Improving agility requires a redistribution of budget to new and innovative IT development that contributes to company revenues. „This defines the main purpose of change in the area of traditional IT nowadays,“ said Martin Niemer, director, Enterprise CEMEA, VMware. „Most of the transformation in traditional IT is aimed at efficiency and decreasing operating costs. This is less of a challenge from the technology side. We at VMware have also contributed to making it easy for companies from a technology point of view. However, it is more difficult from the people management side.“ Maintaining and operating the installed base may even distract attention and jeopardize funding.


Innovation with new IT investments

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If CIOs focus too exclusively on maintaining certain existing systems, they may fail to understand and take advantage of the fundamental changes that are taking place. IT is becoming much more of a business contributor than it has been at any time in the past. The role of the IT department is shifting from an inward-looking internal organization to a cooperative business-driven service provider. CIOs will also have to become chief innovation officers and transformation directors in order to secure or improve their relevance at the board level.

Service Delivery for the Future

Moderator: Frank Gens, Senior VP and Chief Analyst, IDC

Panelists:

- Corporate transformation leader, major Spanish bank - Global project director, European construction material manufacturer - CIO, government of a Central European country - Martin Niemer, director, Enterprise CEMEA, VMWare


Cloud has undoubtedly become a viable alternative among more traditional and more recent service delivery models. Cloud acceptance is primarily driven by two factors: the goal to achieve efficiencies and savings and LOB heads‘ need for quick solutions, for which they are already accustomed to using cloud. Furthermore, the removal of certain issues will lead to greater use of cloud services. For example, an agreement on the adoption of market standards as a prerequisite for data and workload portability would ultimately lead to broader adoption. Standards would also make data integration, including the integration of legacy apps and Web-based applications, easier. And standards are required to facilitate the move to hybrid service delivery environments, which seem to best suit the preferences of companies in the future. Data privacy/sovereignty remains a key issue to consider, as many questions around reconciliation of personal data protection with public cloud delivery have yet to be fully answered from the CIO‘s perspective. While businesses are more willing to assume some calculated risk in exchange for the savings brought by cloud, governments are still looking at cloud from a distance, as it is not yet clear how they can take advantage of cloud-related innovations. For example, from a government perspective, bring your own device (BYOD) related to mobile cloud solutions should be rephrased as ‚bring your own ID‘. The challenge is thus no longer the infrastructure and applications but rather the data and the individual. Security barriers such as a lack of unbreakable identifications, encryption in the cloud, and respect for SLAs still exist in terms of applications, but they can increasingly be overcome.

CIO Case Study: Public Cloud Implementation in the Finance Sector, Corporate Transformation Leader, Leading Spanish Bank

The decision to move some operations to the cloud stemmed from the basic management question: How can the bank become one of the most agile, innovative, and competitive companies in the finance sector?

In 2011, the bank embraced Google‘s GAE cloud services for its internally developed high-performance desktop system. To date, the organization has deployed Google‘s apps in 23 countries and migrated 95,000 employees to the cloud. For very sensitive data, the organization has deployed private cloud solutions.


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Efficiency, quick solutions and standards

Governments are more conservative

Cloud as a solution to boost agility and competitiveness

Change management around the implementation of both cloud types proved to be a real challenge because traditional change management methods did not work for this type of change. Following the practical experience gained from cloud adoption, the bank is aiming to change the mindset of employees in relation to the consumerization of IT so that IT is considered more as IT services and products than as applications and processes. As a next step, the bank is exploring new areas, such as the analysis of social networks and community management. The common learning from moving to these new solutions is the need for a strong internal „evangelist“ to change the firm‘s culture and to foster collaboration. It is not just about IT anymore; it is also about cultural change within the organization.

CIO Case Study: Public Cloud Implementation in the Manufacturing Sector, Global Project Director, European Manufacturer of Construction Materials

The company, which has operations in some 60 countries, has a strong focus on emerging territories in Asia and Africa. The first public-cloud–related initiative of the company was anti-spam, followed by filtering, and, recently, Google‘s Gmail to replace the server-based email system. Other applications from the cloud that the company uses include HR and social-application–based collaboration.

„We had the challenge of trying to operate with a very small budget; thus public cloud was a suitable choice,“ stated the global project director in reference to the main driver for turning to cloud computing. Furthermore, operating in multiple countries means the organization is disparate, making agreement and achieving internal consistency very difficult to achieve. Imposing standardization from outside was therefore a way to achieve harmonization that would not have been possible internally. Cloud solutions were deployed in several countries, including Algeria, Egypt, and Iraq.

CIO Case Study: Public Cloud Implementation in the Government Sector, CIO, the Government of a Central European Country

This case study resulted in several interesting perspectives. The speaker is a key policy architect for the federal government of a Central European country, as well as an advisor for the EU. The government has very specific concerns regarding the use of cloud, ranging from the technological and legal aspects of cloud delivery through to contractual issues. For example, for the government to embrace cloud, a long-term strategy had to be put in place on how to overcome the apparent hurdle of reconciling personal data protection with cloud delivery. The recommendation was to create a map of the conditions necessary to deploy data in the cloud. Although public cloud remains problematic, private cloud is viable as a service delivery model for the government, and government institutions are now moving many services to private cloud. The European Union is also involved in facilitating the uptake of cloud in the public sector. „The key action is to prepare standards for contracts with cloud providers. The EU is working on a set of recommendations for the use of cloud in the public sector – a sort of model contract for cloud deployments,“ said the speaker.

Vendor Address: Martin Niemer, Director, Enterprise CEMEA, VMware

„Virtualization is the basis of cloud, and the basis of cloud migration is in place, as 60% of workloads in EMEA are virtualized,“ stated Martin Niemer as he assessed the current stage of the journey to cloud computing, whereby many users have started their internal private cloud projects so as to become more cost efficient and agile in parallel with seeking ways to leverage public cloud. In addition to saving money on legacy infrastructure, Martin Niemer introduced a lesser-known driver of cloud adoption to the discussion, that of aspects of IT beyond the visibility and control of the IT department. Easy access to cloud services also puts pressure on IT from the side business because LOB heads can satisfy their IT needs via the Internet, which basically leads to competition between internal IT and cloud providers.


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Cloud for limited budgets

Government concerns

Visibility and control

Specific challenges also exist, such as the difficulty of moving back from cloud to a traditional environment and moving data from one datacenter to another. (In the latter case, the user organization at least keeps the data in-house, even though the transition occurs externally.) But the challenge is to create an efficient system that brings together the various islands of the multitenant environment – finance, HR, marketing, etcetera – yet ensures the various stakeholders receive the common IT infrastructure they need.

The Modern Datacenter

Moderator: Tom Meyer, Group VP, European Systems and Infrastructure Solutions, IDC

Panelists:

- Head of European datacenters, European bank - CIO, financial clearinghouse from Central Europe- Ewald Gloeckl, director, Austria, Poland, Turkey, and Eastern Europe, NetApp

Key Findings Conclusions

For many organizations, the datacenter is a central component of the business; it is the environment that hosts the majority of IT systems. This critical infrastructure is being reshaped by virtualization. Among the key issues pertaining to the modern datacenter are those of capacity management, interoperability, disaster recovery, compliance, and energy efficiency.

CIOs should be open to technological innovations but also take a critical approach to them. Maintaining a balance between open-mindedness and conservatism in relation to IT infrastructure may be challenging for the CIO, but, in the long term, it will prove vital to the health of the internal IT organization.

Various factors are to be considered when deciding whether to use the services of an external datacenter or to maintain the company‘s datacenter. The latter no longer appears to have any advantages over the datacenter services of third-party providers, but compliance still forces many companies in various industries to maintain their own datacenters.

CIO Case Study: Cross-Border Datacenter Consolidation, Head of European Datacenters at a European bank

The bank represented in the session made several acquisitions in various CEE countries and consequently acquired various datacenters with different infrastructures. Compliance with regulations led to datacenter investments and, ultimately, to cross-border datacenter consolidation and the building of a completely new datacenter in a Central European country to serve a number of the bank‘s European operations. Many changes in the IT industry, and thus in the IT infrastructures of various companies, are driven by hype. A particular technology rapidly becomes trendy, which is why you must subject it to scrutiny and retain clear vision. This is also valid in the case of datacenter consolidation, when many technologies need to be assessed to be able to decide which should be employed in the new datacenter. „You have to decide what to believe and what not to believe,“ stated the bank‘s head of European datacenters. With virtualization, it was easy to see its advantages right from the start. Virtualization saves money and diminishes many business risks. „It‘s a big blessing, but you still need to watch out.“ It is essential to have control over the number of your virtual environments to manage your licensing costs.


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Visibility and control

Careful assessment of tech options

CIO Case Study: CIO, Financial Clearinghouse from Central Europe

The clearing¬¬house has two datacenters, one of which is operated by the clearinghouse itself, while the other is hosted and operated by an independent provider. Both datacenters have identical infrastructures. The company‘s journey to virtualization enabled the organization to decrease the number of physical machines to one-third, to implement 20 new business services, and to achieve an overall IT infrastructure reduction of 30–40%. Virtualization helped the clearinghouse to migrate applications in very quick fashion and ensure high availability, which is extremely important in the finance industry.

„It is always important to ask yourself, ‚what do you get for your money?‘ With virtualization, the answer is more traffic, faster services, faster recovery, and unrivaled high availability,“ concluded the CIO of the organization.

Vendor Address: Ewald Gloeckl, Director Austria, Poland, Turkey, Eastern Europe, NetApp

Half measures and half actions in virtualization prevent companies from reaping the full advantages of the technology. Information management and storage utilization are often less in focus but are significant parts of the cost equation CIOs should have in mind. Ewald Gloeckly raised the question: „How much money are you spending on storing duplicated data and non-critical data on expensive storage platforms?“ A proper data management and storage management system may help reduce the storage in use by up to 50%.

Leveraging Your Data

Moderator: Alys Woodward, Research Director, European Business Analytics, Enterprise Collaboration and Social Solutions, IDC

Panelists:

- Global VP of IT, leading European apparel and footwear manufacturer- CIO, mobile operator from Russia- Dario Wiser, EMEA Technology Director, Big Data and Analytics, Oracle


Big Data analytics represents a technology area that has been around for a while. However, major changes and innovations over the past few years have led to a new generation of functionality and features of these technologies, and are opening new paths that are enabling companies to deal with increasing volumes of ever-changing data types, both structured and unstructured.

As Alys Woodward, the moderator of this panel discussion, stated, „The technological transformation and the new technologies available now for managing Big Data analytics help us move forward and remove the limits from the last decade.“ The second major conclusion of the panel discussion was that Big Data analytics is about the value that companies can obtain through the real-time analysis of a variety of information sources, with one of the panelists suggesting that the 3Vs (volume, velocity, and variety) of Big Data analytics could even be complemented with another V for ‚value‘.

The third commonly agreed new challenge to address relates to the need to establish a stronger link between technology and business, which will slowly transform the traditional data warehouse into a hybrid warehouse in which structured and unstructured data coexists, with the final purpose of deriving greater business value from this data.


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Consolidate the infrastructure

Virtualization requires a comprehensive approach

New paths to deliver value through analytics

CIO Case Study: Global VP of IT, Leading European Apparel and Footwear Manufacturer

The company, a leading sports apparel and footwear manufacturer, has been using Big Data and business analytics tools for more than 10 years. „Retail stores are the first and most important vehicle to reach the company‘s customers; therefore, being close to them and understanding their experiences is crucial,“ stated the company‘s global VP of IT in explaining the business drivers behind using business analytics. However, with the explosion of social media, new channels have opened up, and customers now have a new platform through which to share their experiences, thoughts, and opinions of the company‘s products. In addition, new marketing tools based on social media are now available, enabling organizations to reach out to a larger pool of customers.

The company started to look at the opportunities offered through social media a few years ago, and used it for several purposes, such as tracking online marketing campaign results, segmenting customers, and learning more about customers‘ experiences, likes and dislikes, and so on.

These new initiatives necessitated dealing with more diverse and unstructured sources of rapidly produced information. Consuming this large data in real time and making the best business decisions based on it became of paramount importance, but it also brought new challenges in terms of data storage and analysis.

CIO Case Study: CIO, Mobile Operator from Russia

The company was the first to offer a high-speed wireless network based on Mobile WiMAX in Russia. „As a telecommunications company we have to deal with a large installed base of customers whose attraction and retention is crucial for the company‘s future operations. Therefore, managing complaints in real time and improving customer service are musts for the company,“ stated the telco‘s CIO.

The telco has started to use Big Data analytics tools to process, virtually in real time, hundreds of reports generated from its large datacenter. Before deploying these technologies, only 5 reports out of 200 on average were really useful for business purposes. „After the deployment, the processing time improved substantially, and the company was able to analyze a high volume of data in real time and to improve the quality of the data relevant for business purposes,“ stated the CIO.

Vendor Address: Dario Wiser, EMEA Technology Director, Big Data Analytics, Oracle

A provider of Big Data analytics tools for various businesses, Dario Wiser of Oracle set the scene for an open discussion by describing some of the typical situations he encounters while talking to clients about Big Data and the value of related technologies. The first and most common reaction from a newly approached organization is quickly to state: „No, Big Data is nothing for me; my data is not big.“ When discussions go deeper, it usually turns out that the major obstacle to large-scale deployments of Big Data technologies is a lack of understanding of the real business benefits that can be derived from such investments. As an Oracle customer said, „There is a missing link with business. Business doesn’t understand why data from Twitter should be integrated in the company‘s warehouse.“


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More diverse data sources

Understanding the business benefits

Real time data processing

Other Key Topics and Takeaways from the Panel Discussion

The panel members agreed that the emergence of new channels and data sources is leading to transformations in many industries – transformations marked by a brand-new data environment, increased complexity and variety, and new business value derived from deploying tools and technologies to fully manage, disseminate, and analyze these new information resources.

Two of the emerging technology pillars, mobility and social media, represent new communication, marketing, sales, and customer care channels and ultimately new data generators. Big Data analytics tools employed in this context may provide various benefits, such as a better understanding of clients, faster response to market, client retention, new business, and product generation.

Furthermore, apart from the direct contribution of Big Data analytics to client generation and client retention, and subsequently increasing revenues and profits, these technologies can help companies both reduce operational costs and increase revenues. One example presented was the approach of an aircraft engine manufacturer to reducing maintenance costs and increasing the operating hours of their aircraft engines, which has had a direct impact on the revenues of the company. This was achieved by using sensors on various engine components to transmit real-time information on engine and component performance. The analysis of this data helped set up new prediction algorithms for potential failures and malfunctions and to create more efficient and pro-active maintenance practices. The company thus increased the utilization and the flying hours of its engines. In addition, mechanics can now avoid long routine maintenance operations and can address issues that arise more precisely and faster.

Regardless of all the business advantages it offers, Big Data analytics represents a capital-intensive IT investment. A company must therefore conduct thorough ROI analysis prior to proceeding with such investments, carefully balancing the short-term investments with the long-run benefits.


12

Industry transformation creates a new data environment

Efficient IT Management

Moderator: David McNally, IDC Executive Advisor, Former CIO, Ahold

Panelists:

- IO, oil distribution company from the Czech Republic - CIO, leading commercial bank from the Czech Republic- CIO, international insurance company - Head of European datacenters, European bank - EMEA product supply IT operations leader, global manufacturer of personal care and cleaning agent products


To achieve efficient IT management, a program of corporate change has to be applied. This affects the IT department and all other departments within an organization. Users must learn that IT costs; it is not a free service that the company provides. IT processes are important to improving efficiency within the IT department. The CIO must lead this initiative by talking to both customers and departments in the company. Only by adding effective processes can IT costs be reduced significantly.

CIO Case Study: How to Reduce IT Costs by 15% in One Year, CIO, Leading Commercial Bank from the Czech Republic

Efficiency is an important topic in IT management, especially when a financial crisis hits both traditional functions in the enterprise and the IT department. IT is central to banks‘ business, as back-office processes depend on IT and front-office activities are increasingly running online. It is therefore very important to have successful and powerful IT in place. Traditionally, 20% of the overall cost of a bank went on its IT. Due to the financial crisis, which hit banks first, it was necessary to reduce these costs and make IT more efficient. The CIO also stated that financial institutions are often not that good at controlling IT spending. In the case of the Czech bank, one reason for this lay with the heavily decentralized character of the organization. Every department had the possibility to spend on IT. The IT department was sure that the high costs for IT would become an issue with the board of directors at some point. Finally, when the board decided to address the problem, the IT department took the lead and acquired the support of top management for a project involving both the centralization of IT and a significant cut in IT infrastructure and related costs – a project to be implemented during 2012–2014. In order to minimize resistance from LOB heads, IT had to handle the process in a transparent way and manage it as a multi-year program with several stages. A key to success has been the formulation of the project team, which consists of the best IT managers in the organization – managers capable of achieving the controversial goal of significantly decreasing IT costs. „Make it Big! If it isn‘t big, you don’t get the top management‘s attention. If top management pays no attention, you will not succeed,“ the CIO concluded.


Corporate change

13

Involvement of key IT personnel

Other Key Topics and Takeouts from the Panel Discussion

The CIO from a Greece-based insurance company addressed another problem in IT management: communication with IT vendors. The challenge of the insurance company was to improve IT project management. The CIO had to talk to all stakeholders, including partners, external clients, and internal users. To improve IT management, the company implemented a flexible and open group framework for business process management. The company initially started with just a few people and a small number of projects so as to pilot a project management framework, and then gradually expanded it to cover all projects and the entire IT division.

The representative of the global manufacturer of personal care and cleaning agent products raised the topic of IT portfolio management. First, the company split portfolio management into two domains, the first being the actual services and solutions and the second being the delivery of the first. A scoring system based on four dimensions was introduced to measure the performance of each domain. The first dimension is the value, which includes financial metrics. The second dimension is operational excellence, including quality of service (QoS) and overall project management success. The third dimension includes subjective factors such as user responses to the project. The fourth dimension, IT efficiency, is a measurement of the qualitative and quantitative output of the IT department.

Increasing IT efficiency at a Czech oil product distributor was achieved through measuring and recharging IT costs in parallel with increasing service delivery levels. „We started distributing all of our internal costs to clients by moving the IT department to a shared services center,“ explained the CIO of the company. The company also reduced costs by switching to commodity hardware and implementing software appliances that support their business processes and cases. Costs can now be measured and distributed easily to departments and even to named users. Previously, users thought that repairing a computer cost nothing. Now that costs are distributed, users have come to understand the costs of all lines of business.

During the panel discussion, the head of European datacenters of a bank raised the topic of lean management. The key challenge encountered was changing the mindset of employees. „You have to implement the concept of leanness – have people work as efficiently as possible and keep human resources to a minimum. Ensure lean processes and a lean organization will follow,“ he stated. The support of top management was not enough; IT managers had to instruct and nurture middle managers so as to change the ways in which they work on a daily basis. IT managers had to convince the middle managers to achieve the organization‘s IT goals, since middle managers were ultimately responsible for driving change throughout the organization.


Business Process Management for IT departments

IT as shared services center

14

Securing the Enterprise

Moderator: Robert Farish, VP and Regional Managing Director, CIS, IDC EMEA

Panelists:

- Unit head, IT security systems, international non-governmental agency for energy - Head of unit, national security authority of a Central European country- CIO, government of a Central European country - David Klusáček, regional director, Eastern Europe and Greece, Check Point


The major security risks to which organizations are exposed are continually evolving, and CIOs need to stay tuned to the changes. The predominant security risks on which organizations‘ CIOs need to focus nowadays are: hidden security threats, risky Web 2.0 applications, and data loss incidents. To avoid risks, CIOs cannot afford to rely on a reactive approach; they must implement a proactive strategy that includes user education and awareness.

Vendor Address: David Klusáček, Regional Director, Eastern Europe and Greece, Check Point

Every year, Check Point publishes its Security Report, which provides insights into the network security incidents that occurred in organizations worldwide. Most importantly, the report provides security recommendations on how organizations can protect themselves against such threats.

Mr. Klusáček summarized the three major security risks to which organizations are exposed as:

• Hidden Security Threats: From crimeware to hacking, cyberattacks will continue to evolve, impacting organizations of all sizes. Mr. Kluseacek told the CIO Summit delegates that 63% of organizations were infected with bots, and more than half were infected with new malware at least once a day.

• Risky Web 2.0 Applications: According to Mr. Klusaček, Web 2.0 applications are also very problematic, as they provide criminal hackers with options to penetrate corporate networks. Check Point research found 91% of organizations use applications with potential security risks.• Data Loss Incidents: Corporate information is more accessible and transferable today than ever before, leading to a greater risk of data loss or leakage. More than half of the organizations Check Point investigated had at least one potential data loss incident.

„Everybody should have these three points in mind when talking about security,“ David Klusáček stated in summary during this breakout session.


15

Evolving security risks

CIO Case Study: Government and EU Approaches to Cybersecurity, CIO, Government of a Central European Country

The speaker approached the topic of security from a different viewpoint. In his opinion, it is necessary that companies, even states, have a certain strategy to ward off security threats: „It is most important to raise awareness of security issues and to ensure we do not over-regulate security-related areas. We can see it with the phenomenon of spam. We have proper regulations to avoid spam, but nobody is obeying the rules. That‘s why I think security really needs collaboration with and awareness among relevant stakeholders. What is really important is IT-security education; kids have to learn that in school because it is so hard – nearly impossible in fact – to reeducate users.“

The CIO further elaborated on the governmental viewpoints of the topic and the national security strategy of his government. This strategy is about the protection of the country‘s most important infrastructure systems within the utility, telecom, finance, transport, and healthcare sectors.

„Reactive strategies like cyber defense actions are important components, but they can only work when supported by proactive elements, which most times are much more efficient,“ the CIO concluded.


The head of a unit for computer security systems in an international non-governmental agency for energy also pointed out that it is not enough to react when something has already happened: „I‘ll give you an example: All managers love cloud computing because it is cheap, but, regarding security, they have no awareness. It is always the same; first something has to happen, and then companies try to react and protect.“

The director of the national security authority of a Central European country agreed: „Cloud is not suitable for Government. We have to protect data under the law of the country, and if you had an American supplier, you would have an American contract. And an American contract for very sensitive data from my country is simply not possible.“

„The negative financial effects on the economy from hacking are greater than the negative effects from drugs,“ the director of the national security authority declared. Hence, dedicated regulations on cybercrimes should be adopted in all countries, just as will soon happen in his country. The speaker also told the audience to beware of so-called sleepers: „Sometimes, very well-educated employees in very good positions in the company work for the competition, and you never know. We have seen that several times, and it is reality and not fiction.“

„The biggest danger comes from inside.“ Mr. Klusáček, from Check Point, replied that everything can be protected when a company has the right multilayer strategy. However, the governmental CIO sitting on the panel again tried to explain that a multilayer strategy alone does not work and that the user himself needs to be aware and responsible.

Finally, the representative of the international non-governmental agency for energy closed a lively discussion with another important point: „Whether the danger comes from within or without does not matter; enemies behave in the same way, and the intention is the same. It is important that all data is classified and that agreement is reached on what to protect and what not to protect.“


16

Personal awareness and responsibilities

Proactive measures

Classified Data

The threat from within


17

www.idc-cema.com

IDC’s IT Executive Programs

Why IDC IT Executive Programs

IDC‘s IT Executive Programs consists of a family of research programs intended to help today‘s time-constrained IT executives make more effective technology decisions.

The program offers accurate and timely fact-based research and programs that will assist IT executives in mitigating technology risks, maximizing the effectiveness of IT investments, identifying and capitalizing on new opportunities, and bringing forth solutions that are aligned with the organization‘s business objectives.

The IDC IT Executive Program offers:

• Flexible options for a program that is right for you• Easy analyst access• A CIO Advisor• Peer group through the CIO Executive Council

IDC’s CIO Agenda Practice

Why IDC‘s CIO Agenda

IDC‘s CIO Agenda research program recognizes that an IT executive‘s time is better spent engaging the business around IT than managing day-to-day IT operations.

CIO Agenda supports IT executives in creatinga business-based IT organization by providing strategies, best practices, frameworks, and advice around the most important issues on a CIO‘s agenda:

• Emerging IT Strategies• Case Studies on IT Transformations• Peer Benchmarking on Best Practices• IT Performance Metrics• IT Spending Surveys

The Innovation Imperative: How Can the CIO Foster Innovation and Harness Innovation Happening Outside of the Traditional IT Department?

Moderator: David McNally, IDC executive advisor, former CIO, Ahold

Panelists:

- CIO, representative and wholesaler of car manufacturer, Greece - Global VP of IT, leading European apparel and footwear manufacturer - CIO, national postal service of a CE country


Many industries, from automotive to retail to postal services, are undergoing major transformations involving new sales channels, new communication channels with customers, the digitization of products and services, and, ultimately, new business models. Innovation has become an imperative for companies that want to stay competitive, and IT has a key role to play, since most of the transformation has to do with digitization in one way or another. The most advanced companies in this regard have already started to implement flexible but formalized processes to involve IT in innovation and to foster better communication between business and IT. The foundation for a new innovation wave driven by IT has been laid in automation, enterprise systems, and IT architecture that enable companies to free up resources for new initiatives and move forward rapidly with innovation. This process is interlinked with, and partially driven by, the rise of the third generation of IT, which centers on mobility, social media, Big Data analytics, and cloud computing. The consumerization of IT is also driving the innovative application of IT in the improvement of all aspects of business.

CIO Case Study: Institutionalizing Innovation at a Clothing Manufacturere, Global VP of IT, Leading European Apparel and Footwear Manufacturer

Five years ago, the IT organization of the company was just like any other well-performing IT organization – internally focused, process driven, and technology and service oriented. The annual Executive Survey that is conducted to measure the satisfaction of the business with IT revealed high satisfaction with performance around projects and services but room for improvement around speed and, in particular, innovation. „The business wanted us to step up our game in terms of innovation and become proactive and real partners,“ explained the company‘s global VP of IT. The change in expectations in terms of the business was natural, as IT was increasingly involved in customer-facing processes. „IT was in contact with the consumer; we were present with solutions in retail, on social media, in ecommerce,“ continued the VP. The IT leaders quickly realized that this change offered a tremendous opportunity. With the digitization of the products through the use of chips in footwear and clothing, new avenues have opened up for new products and services around the company‘s core products, and such opportunities will only increase.

One of the key aims of extending the role of IT to drive innovation was to get IT employees interested and involved and to harness their talent. The company decided to implement a process open to all 1,000+ IT employees around the world via an intranet portal. Employees were encouraged to formulate IT-driven innovation ideas on this site, which were then submitted to voting on the site. The top-ranking ideas were taken further, through various stages – further development, an evaluation of the business value, and, finally, prototyping. The response to the initiative was beyond expectations. The ideas formulated pertained to three main topics: consumer-facing innovations, integration with wholesale customers, and the efficiency of internal processes.


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Innovation as an imperative IT to play a key role

Digitization yields innovation opportunities

Process and involvement

One example brought to life through this process was that of interactive shopping windows placed in store-front displays that can be used for shopping purposes even when the stores are closed. „Interesting but not game changing; we need to raise the stakes,“ the VP recalled of the management team‘s evaluation. However, the successes of some of the ideas generated resulted in the top management of the company driving the project‘s further development. The ideas submitted helped top management identify the most active and innovative individuals – in short, to identify valuable human resources. When developing their ideas, these innovative and driven individuals had obviously talked to the various stakeholders within the company, such as the business innovation team and the marketing department, and to suppliers. The company offered new roles to these IT innovators, enabling them to collaborate with other departments but also making them accountable for the activated projects, in addition to encouraging them to innovate further.


„The postal industry is also going through a major transformation cycle driven by the digital age. Traditional postal services are shrinking, and we need to drive new revenue streams from digital services,“ exclaimed the CIO of a postal service company from CE. He went on to say that the top management now regards the IT division as a key source of innovative business ideas for the successful alignment of the postal service with the new realities of the market.

The process starts with the collection of ideas. IT managers from middle management upward are encouraged to generate new ideas, which are then evaluated by a committee. Those selected are taken forward. IT plays a double role: to propose potential new digital services and to offer IT solutions to enable such services. In most cases, these services utilize third-platform technologies. An example of such a service that has been launched is a hybrid mail service, which combines secure and authenticated electronic and printed mail. The service receives secure emails, creates print mails, usually in large volumes, and sends them to the specified addresses. It also offers the reverse, whereby letters are digitized and sent as secure authenticated emails. The service has been very successful among large enterprises since it was launched two years ago, and a new version is now being launched specifically targeted at the government sector. Other areas of collaboration between business and IT also warrant attention, such as closer cooperation with marketing and with external partners. For example, within the organization of the clothing and footwear manufacturer, the marketing department is very powerful and communicates with all manner of non-IT providers – agencies for creative work around campaigns, online presence, and so on. The marketing department did not traditionally regard the IT division as an innovation partner due to the IT division‘s slow reaction time, lack of business-minded approach, and a general lack of cooperation. Nevertheless, the IT department‘s management decided it would be beneficial to cooperate more closely with the marketing team. An opening arose due to security incidents resulting from collaboration with agencies. Such incidents created an entry point for the IT division to work more closely with marketing. IT management took the opportunity to create a dedicated team formed of younger and more business-minded IT people to work with the marketing team and learn about its needs and way of thinking. The company is very active in offering support to key suppliers by solving some of their business issues for them. Increasingly, the manufacturer is open to consulting with small, flexible, and creative suppliers of IT and business services when looking for new solutions.

Third-platform technologies are ideal for generating innovative ideas. In the case of the clothing manufacturer, lots of ideas are being evaluated around applying new and interesting third-platform technologies in retail stores. Smartphones are a natural choice for such ideas, as they can be utilized for direct in-store (and close-to-store) communication with shoppers. For the wholesaler of a car manufacturer, mobile technologies also offer great opportunities, with smartphones acting as I/O devices able to increase the software functionality of motor vehicles and the information generated and managed by them. Mobility and social media represent the two emerging solutions with most potential for the postal services company. Mobile solutions already represent a platform that supports new services, such as the collection and conveyance of data from meters for utilities read by postal delivery employees. Social media will probably have relevance as a platform for internal collaboration. Cloud is also under consideration and is attracting a lot of attention from senior business managers in the organization.


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The double role of IT

Enabling the Mobile Enterprise

Moderator: Andy Hicks, Research Manager, Communications IDC CEMA

Panelists:

- CIO, rail transportation from a CE country- CIO, mobile operator from Russia - CIO, retail company from Slovakia- John Harris, general manager of engineering, Computer Products Solutions, Panasonic - Dominic Schmidt-Rieche, Airwatch- David Angwin, global field channel marketing, Dell Cloud Client Computing


Of the conclusions reached on the CIO Summit‘s ‚Enabling the Mobile Enterprise‘ panel, perhaps the most important was this: Mobility is no longer just for employees. Many of the new projects that panelists are seeing relate to enabling mobile interaction with their customers, and therefore much of their innovation budget is also being allocated to this area.

Customer mobility, of course, differs in significant ways from employee mobility. For one thing, CIOs have little control over their target install base: Any device with an Internet connection might be accessing content, and, even if a client-facing application is written for a specific mobile OS, it must work on a wide variety of versions and devices.

Increasingly though, CIOs are finding that if an application works well for consumers, it may also suit the needs of employees. One Central European rail transportation company has realized, for example, that employees are using the organization‘s consumer applications in their work. The CIO is even considering moving some enterprise functions from bulky handheld devices to employees‘ own smartphones.

A related conclusion: Consumerization is about more than the BYOD paradigm. Consumer applications are now leading mobile innovation, and employees expect a user experience that matches what they get from their personal devices and the applications they run on them. Panelists agreed that a good user experience is essential to the adoption of any mobile solution and that user testing of devices and applications is essential to gaining user buy-in.


When designing a mobile solution, panelists also noted that more user communities exist than one might assume, and they recommended polling the human resources department, the finance department, data privacy officers, and so on for requirements and/or suggestions.

On a related note, panelists advocated looking at ways to use mobile devices as consumer touch points. One example is moving both in-stock and point-of-sale information to employees‘ devices, rather than relying on a traditional cash desk.User education is still necessary in some areas. A country-level CIO of a European grocery chain noted that many different companies are conducting trials of nearfield communications and educating the market in his country. As a result, consumer uptake of his own solution was much higher than he had expected. Whenever possible, CIOs should try to take advantage of partners and ecosystem synergies to drive adoption, whether within their own organizations or among the broader public.


20

Mobility turning towards the customers

Reaching beyond BYOD

Ecosystem synergies and adoption

One factor working in favor of employee adoption is that mobile devices still have a cool factor. Two panelists advised taking advantage of this cool factor: If the company provides a new tablet or smartphone to its employees, they will be more excited about using the new solution and thus about any related changes in their business processes and goals. This cool factor can also work as a form of advertising: One communication services provider sends its employees to work in parks and cafes once a month to demonstrate that the mobile office is not only possible but fun.

On the technical side, panelists agreed that no one technical approach worked in every situation. In an ideal world, it would be easy to implement a thin-client approach across every device and rely on the cloud to provide data and capabilities at the point of need. Of course, the world is not ideal, and the panelists strongly recommended planning on inconsistent connectivity, which in turn leads to thicker clients that enable offline working. These clients should be customized in terms of capabilities: A laptop application will look and work differently from one on a tablet, which in turn will look different from one on a smartphone. While many backend systems to support these clients will be the same, the user experience and capabilities must be customized for each device type.

In terms of best practices, panelists advocated serving mobile employees and customers from centralized systems and a central data repository so that all parties have access to the most current data. A centralized approach also cuts down on management complexity. On the connectivity side, while 4G and WiFi connectivity can enable a remote desktop approach to mobile work, panelists recommended using cloud-based solutions due to their better scalability and fault tolerance.

In the field, device capabilities are still an issue. One representative of a device manufacturer recommended paying careful attention to, as a minimum, battery life, temperature sensitivity, vibration sensitivity, protection against water, dust, and electrical surges, and ability to charge remotely. Even a car on a hot summer day can present a difficult environment for many devices.

Conversely, office environments often have mobile devices that are hardly ever mobile. One panelist recommended mapping the device environment to identify cases in which a less expensive and more robust desktops would fit the bill.

Security and compliance are always issues for mobile work. The panelists agreed on the necessity of remote wipe and lock capabilities for enterprise devices. In the near future, electronic signature recording will become far more robust, making a record of the actual signature rather than the low-resolution squiggles we see today.

Finally, all participants agreed that the rate of change in this area will remain high and that any mobility solution should be designed to support a shifting device mix and additional usage cases. Even as soon as a year after launch, mobility solutions can be asked to support uses that were unheard of when the mobility solutions were being designed.

Key Political Indicators – CEO Priorities and How to Improve Relations with Business Leadership and Increase the Influence of IT Within the Organization

Moderator: Danny Thorniley, President, DT-Global Business Consulting

Panelists:

- CIO, commercial bank form the Czech Republic - Representative of a Central European CIO association


21

Rapid change


Companies talk about ‚the new normal‘, but contrary to this many CEOs and board members act as if it were ‚the old normal‘. They want high growth rates, huge profits, big market shares, and immediate revenues right here, right now. That is the old normal. Companies will not grow by 5–7% in developed markets within the next three to five years; the ‚normal‘ growth in developed markets is now 1–2%. in emerging markets, CEOs want 10–20% growth, but they will be lucky to gain 5–7%, and this includes fast-growing countries like China. The cake is no longer getting bigger, so CEOs should apply best practices to succeed in today’s world. The most important thing for them should be to build sustainable long-term relationships with customers and business partners. These long-term relationships are highly valued in many regions, particularly in CEE. Cutting costs too deeply may damage relations with clients and partners and destroy staff loyalty. Unfortunately, 80–90% of CEOs put short-term measures before long-term strategies.

CIOs need to understand the entire business context and the volatile economic environment of their organizations. Due to the recession, the roles of many functions in companies are changing, including the role of the CIO. Some CEOs are open to innovation and have an understanding of IT functions within their respective organizations – a positive situation for the CIOs concerned. However, many CEOs focus on short-term bottom-line goals, in which case, implementing well-structured and efficient IT services, complete with clearly defined KPIs, is the route to take.

CIO Case Study: CIO, a Commercial Bank from the Czech Republic

Building trust in the CIO–CEO relationship can be a long and difficult journey. Big differences exist between CIOs and CEOs in terms of values, vocabulary, and general mindset. But, when a CEO and a CIO reach a point at which they can understand one another, they are able to discuss each particular topic. At the beginning of the journey, the distance between the CEO and the CIO is huge. At the end, it is clear that the CEO is like everyone else, with a family, kids, and personal problems – he/she has a number of issues. Certain matters are clearly under control, but, very often, many issues are not understood or under full control. To reach the CEO‘s level, it is necessary to make things simple. Most of all, a CEO expects IT to provide stable operations, since this guarantees solid relations with clients. In the banking sector, IT accounts for 90% of the communication process with clients through CRM, call center, and ecommerce platforms. Thus IT does not support the business; IT is the business. So the number-one requirement of the CEO is that IT is available and meets clients‘ expectations. Requirement number two is that IT must support various projects and must help generate revenue, mitigate risks, and reduce costs, as well as assist in implementing new regulations; 60–80% of a bank’s costs are in some way related to IT. The average CEO is interested in approximately 10% of IT projects – namely, those that have a critical impact on the bank‘s business. The CEO always wants to make sure that IT does everything possible to support the increase of internal efficiency. IT is responsible for 20% of internal costs. The CEO does not believe in benchmarks because they are easy to manipulate. Consequently, cost-saving programs become the CEO‘s top priority.

The first cost-efficiency program started by the bank, in 2012, was to reduce total year-on-year costs by 15%. The second program was the ‚Lean Program‘, aimed at increasing the efficiency of the delivery of all application services. In order to achieve this goal, a set of KPIs was defined: project on time, project on budget, and time to market. The CEO and CIO agreed to the strict definitions of the KPIs, target values for the KPIs, and a transition target for the year. After this decision had been taken, the CIO prepared a plan for the entire IT organization. So now, at top-level staff meetings, the CIO presents the values of the respective KPIs. The CEO expects the CIO to present SLA fulfillment to all business unit leaders. This KPI approach demonstrates, in a very simple way, whether or not the internal IT organization has fulfilled business expectations. It has brought to an end comments such as, ‚I like it‘ and ‚I don’t like it‘, since its quantitative value shows the extent to which new processes have fulfilled business requirements.


22

Sustainable relationships

Differences between CIO and CEO

CIO Case Study: Representative of a Central European CIO Association

„There are many practical aspects of team spirit and leadership when talking about cooperation within a group of C-level executives,“ exclaimed the representative of a Central European CIO association, himself a former consultant to CIOs and CEOs. A good team spirit among top management and an environment that encourages open discussion in which you can freely talk to your boss and to the CFO and CEO are key success factors in a company’s long-term strategy. Unfortunately, in many companies, an attitude of economizing on the truth is still common among top-level managers. Receiving and providing feedback should be a continuous process, not just a one-time incident during an employee‘s annual appraisal session. These are the most important HR aspects of the CEO-CIO relationship.

In the real world, enterprise IT architecture models are quite complex, often consisting of thousands of applications. The only way to efficiently communicate such complex environments to the business is to provide simple explanations of them – explanations that are understandable for everyone, including the CEO and business heads. Both technical and business employees like plans and strategies to be visualized in a straightforward manner; a graph or diagram of the solution to a problem goes a long way to conveying what is needed.

Many companies have organizational silos. Creating an IT platform on which various units can communicate, actually understand one another, and, finally, cooperate is critical to the success of the organization. Various analytical tools are available relating to business processes and problems that can help IT architects in the design process.


The panelists agreed that the key to more efficient usage of IT within an organization is for business unit leaders and top management to understand the ongoing changes in the business environment and the evolving role of IT within that environment. This new reality must be understood and accepted by both sides. In many cases, especially in industries that are heavily dependent on technology, such as banking, IT is no longer just a back-office department; IT provides tools and means for all lines of business to run the business.

It is crucial for both sides to make an effort and learn the languages of the opposite side, despite different perceptions of the business. This will help establish a long-term relationship from which the whole organization will profit. Additionally, it is worth preparing indicators – SLAs and KPIs – to make it clear to both IT and business what the expectations are and how they are to be met.

Finally, this should not be a discussion between just the CEO and the CIO; for complete success, the involvement of the various business units, the CFO, HR managers, and the COO is a must.


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Practical aspects of cooperation

The Role of the CIO in 2020

Moderator: David McNally, IDC Executive Advisor, Former CIO, Ahold

Panelists:

- Rrepresentative of a global executive search company- Europe CIO, European telecom operator- CIO, Slovakian retailer- Herbert Rastbichler, vice president and managing director of Central and Eastern Europe, HP


This session of the IDC CIO Summit demonstrated how the role of the present-day CIO will transform into that of a business service manager. Further down the line, the role may develop yet more, with the CIO taking on responsibility for innovation in the company.

A number of factors have emerged in the past few years that have contributed to the transformation of the role of the CIO. First, business units are becoming increasingly disaffected with IT departments that are inflexible and apparently unresponsive to their needs. Second, all processes in the organization have an IT dimension, since companies have become heavily dependent on IT. Finally, CIOs have become central to corporate understanding of what IT has to offer in large international organizations.

The general attitude of the company to the IT department, whereby IT employees are viewed as technology people with no sense of the business, is often a barrier to the alignment of IT with business, and it damages both the IT department and the company as a whole. Furthermore, non-IT employees often still have entrenched attitudes on the key skills of the CIO; the HR department is often particularly guilty of demanding deep technical knowledge on all IT levels, from a junior IT employee up to the CIO. To improve the situation, the function of the IT director needs to be clearly separated from that of the CIO, since the forms of dialog between the IT director and the CIO on one side and the business unit heads on the other are very different; whereas the IT director focuses on operational excellence (and hence is inclined to say „no“ to disruptive ideas), the CIO should focus on innovation (which is, by definition, disruptive).

Keynote Address: Shifting Roles as We Move to the Third Platform, David McNally, IDC Executive Advisor, former CIO, Ahold

IDC foresees the position of the CIO transforming from one primarily defined by technical knowledge and experience to one primarily related to managing and delivering business services. Later, the role will further develop into that of chief innovation officer. This essentially means a transition from what David McNally terms ‚the engineer, build, and run‘ model to the executive responsible for a portfolio of services, implying that the underlying technology behind how these services are delivered is no longer a key aspect of the role.What we will witness is an increasing drive to build clarity around processes. For example, ERP implementations often necessitate organizational changes in companies.

The emergence of the third platform will also imply changes in the role of the CIO. With mobility, cloud, and social applications, IT architectures are now extended beyond the boundaries of the enterprise. Progressive companies have found approaches to managing these mixed environments (internal, cloud, and external). The third platform also means more third-party services and the need for organizations and CIOs to adjust to greater use of such services. Ultimately, it means greater management of services portfolios and the agility of the portfolio itself to offer business agility.

The CIO will have to face new challenges and learn new skills. Cloud, for example, will need knowledge on drafting specific contracts, complete with SLAs, guarantees around data protection and location, and so on. The emergence of mobility will lead to new app-development organizations. Large application-development projects will be fewer and farther between, and the focus on incremental development and the integration of third-party apps into existing environments will be greater.


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Transformation of the CIO role

Managing mixed environments


„The perspective of the IT department tends to be a little longer term than that of some other business units, such as marketing,“ stated the CIO of a telecom operator. To bridge that difference, there must be a strategic plan with which both business and IT can align. The relationship between the CMO and the CIO is increasingly strategic, as marketing is becoming far more data driven; it is also becoming far more IT related, with apps developed for marketing purposes, for example.

Herbert Rastbichler continued with the idea of the different perspectives that the LOB managers and the CIO may have: „Business units are often not particularly satisfied with the support they receive from the IT department and thus decide to go it alone and start working with suppliers directly.“ A good practice for changing the attitudes of business and IT employees alike is to have them temporarily work in various positions within the company so as to gain experience and fresh perspectives – a practice that changes the status quo.

Operational excellence and innovation tend to be incompatible, as one needs stability and the other is disruptive. This dichotomy can be reduced or avoided through organizational changes. „The CIO should encourage innovative projects and should not avoid selecting disruptive ideas. On the operational side, however, when new ideas reach the operational stage and compatibility, compliance and security concerns cannot be ignored. In this respect, the IT department must remain more conservative,“ stated the CIO of the Slovak operations of an international retail company during the discussion.

The Europe CIO of the telco represented on the panel also sees a problem with the skills sets that are currently required when companies are selecting CIOs: „Today, 90% of the requirements for CIOs are still technical.“ HR departments typically reinforce this attitude and the related stereotype. If the recruitment materials specify a CIO with a strong business background as opposed to a strong IT background, HR employees will probably not get the idea or will not support it.

Another important attribute of a successful CIO capable of the transition to becoming a business services manager is awareness and understanding of the cultural differences between the different countries and regions in which the organization operates and of the challenges these differences present. This, perhaps, applies more to the CIO than to any other senior position.


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Strategic plan to bridge different perspectives of IT and business

Organizational change to reduce dichotomy

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Documents

IDC CIO Summit Executive Cutimages.idc-cema.com/mailing/cio/idc_cio_summit_2013...CIO Summit 2013 – Delivering Business Value Executive Summary The findings of the IDC CIO Summit,