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RENE VAN ZUNDERT – CIO DHL SUPPLY CHAIN BENELUX René van Zundert IT Head of EMEA Technology Sector & CIO Benelux, DHL Supply Chain
Business Transformation
IT Enterprise Value Creation
CIO Forum
IT & Operations Transformation
Introduction
“IT is just a cost center … and we spend far too much on it.”
“I have no clue on what they do … but definitely not something which helps us doing business.”
“The IT folks don’t have a clue about our business.”
This is what I heard when starting in the new role …
“They position themselves as if they were another company.” MANY PEOPLE AND
THEORIES TALK ABOUT
BUSINESS & IT ALIGNMENT
“As IT we are not aligned enough to the business.”
2. VALUE OF IT IN A DIFFERENT PERSPECTIVE
OK, but …
Has anyone ever heard of
„Business & Finance alignment‟?
… or
„Business & HR alignment‟?
Alignment defined?
„IT doing things in the same way as Business?‟
GARTNER WHITE PAPER “STOP TALKING ABOUT IT AND BUSINESS” SUGGESTS THAT IT NEEDS TO STOP ASKING HOW “WE ALIGN BETTER WITH THE BUSINESS” AND START UNDERSTANDING THE “GOALS AND OBJECTIVES OF THE BUSINESS” THEY ARE PART OF.
1. TALKING ABOUT BUSINESS & IT ALIGNMENT … STOP talking about Business & IT alignment.
“US and THEM”
2. VALUE OF IT IN A DIFFERENT PERSPECTIVE 1. GET THE BASICS RIGHT
• 38% IT cost reduction from 32.5mE in 2008 to 20.2mE in 2012.
• 45% FTE reduction from 130 FTE in 2008 to 72 FTE in 2011.
• Business partner index improved from 5.6 in 2008 to 7.4 in 2011.
• Strong increase in employee satisfaction results, particularly on
Strategy, EOS follow-up and Communication.
• Migration of 1600+ users to 1 central service desk, clean up of
mailboxes, harmonisation of 3 mailsystems to 1.
• Operations stability increased: #high-prio incidents reduced >50%
with quicker recovery times to >95% of SLA. #calls decreased >60%.
• Realisation of full IT cost transparency and introduction of new IT
cost allocation model.
• >60% reduction of # applications (600 to 210).
• >50% reduction of # suppliers (211 to 102).
• Globally first in bringing DHL high-end supply chain solution
successfully live.
2. VALUE OF IT IN A DIFFERENT PERSPECTIVE 2. BE IN THE BUSINESS
ENSURE IT IS CONTINUOUSLY INVOLVED IN ALL CRITICAL PROCESSES AND ACTIVITIES ALONG THE VALUE CHAIN.
• Senior Infomation Mgt in Finance and HR MTs
• Senior Information Mgt in all Business Unit MTs
• IT SLMs connected to Ops mgt
• (IT) Architecture in Solutions Design
• Integrated Project Mgt and Ops Implementation under CIO supervision
2. VALUE OF IT IN A DIFFERENT PERSPECTIVE
STRATEGY for IT
BU
SIN
ESS S
TR
AT
EG
Y
= Primary motive for IT initiative = Secondary motive for IT initiative
Em
bed p
rof. p
roje
ct c
apab
ility
Del
iver
RaPid
s + P
roje
cts
EO
S follo
w-u
p (eve
nts
, w
ebexs
)
Exe
cute
Mot
iv8 +
ID
Ps
Exe
cute
Com
munic
atio
n &
Eve
nt ca
lendar
Con
trib
ute to
Go-G
reen
Qlik
view
2D
barc
ode
Enga
ge w
cus
tom
ers
Follo
w-u
p o
n B
PS
+B
PI
……
……
Enha
nce
allo
catio
n m
odel
Dev
elo
p o
rg s
trength
(F4F)
Stream
line
IT o
rgan
isatio
n
Business objectives
Improve customer intimacy
Customer Retention
Increase pipeline / hit ratio
Implement key customers / insource
……
Embed
state-of-the-art Delivery
(Strengthened
IT Capability)
EOS: People
Development
(Strengthened
IT Capability)
Innovation
(Sector focus
& Innovation)
Customer & Business
Ptnr Relationship Mgt:
Value of IT
Investment of Choice Employer of Choice
Provider
of Choice
Investment of ChoiceInvestment of Choice Employer of Choice
Provider
of Choice
Investment of Choice
Financials / budget(Simplification &
Cost reduction)
Improve customer intimacy
Customer retention
Increase pipeline hit ratio
Implement customer operations / insource capability
…………
3. “YOUR CUSTOMER = MY CUSTOMER”
ALL OBJECTIVES SHOULD BE COMMON OBJECTIVES, MEANING EACH IT COMPONENT IS LINKED TO AT LEAST 1 OVERALL BUSINESS COMPONENT.
2. VALUE OF IT IN A DIFFERENT PERSPECTIVE Inspired by Ndugu Chancler – Drums on „Billy Jean‟
Drummer
or
Musician?
2. VALUE OF IT IN A DIFFERENT PERSPECTIVE TALKING ABOUT ALIGNMENT …
Act as a business leader, focusing on IT.
Act as an IT leader, delivering IT services to the business.
BE PART OF THE BUSINESS
René van Zundert [email protected]
Project Name IRR Payback NPV ($M)
Revenue
Gross
Margin
Increase
Gross
Expense
Reduction
Operating
Expense
Reduction
Working
Capital
Expense
Reduction
Project 1 58.400$ -$ -$ -$
Project 2 -$ 113.100$ -$ -$
Project 3 -$ 6.288$ 2.695$ -$
Project 4 10.146$ -$ -$ -$
Project 5 12.950$ -$ -$ -$
Project 6 -$ -$ -$ -$
Project 7 8.000$ -$ -$ -$
Project 8 -$ -$ 1.764$ -$
Project 9 0.857$ 50.889$ 138.879$ 13.972$
Project 10 -$ 0.630$ 1.058$ -$
Project 11 -$ -$ -$ -$
Project 12 -$ -$ -$ -$
Project 13 -$ -$ -$ -$
Project 14 -$ -$ 0.450$ -$
Project 15
Project 16 -$ -$ -$ -$
Project 17 -$ -$ -$ -$ Guad PBX -$ -$ -$ -$
90.353$ 170.907$ 144.846$ 13.972$
Financial MetricsProjects
P&L Business Impact
(2008-2014)
Subtotal
Total P&L Benefits $420m
Source: Sam Coursen, CIO, Freescale Semiconductor (hypothetical example)
2. VALUE OF IT IN A DIFFERENT PERSPECTIVE 3. “YOUR CUSTOMER = MY CUSTOMER”
ALL IT INVESTMENTS ARE DIRECTLY LINKED TO THE P&L.