Pieter Bakker, group IT director, Frucor, aptly explains the environment he and his team face ahead as they execute the organisation’s digital strategy, while working on traditional IT operations or business as usual: “The challenge is to maintain deep engagement and deliver at pace, whilst building digital capability in the IT team.”
This balancing act for CIOs is a key theme running across organisations in this year’s CIO100, our annual report on the top ICT using organisations in New Zealand. The organisational shift into the digital realm means ICT leaders are essentially in the midst of building new business models, preparing their ICT teams for an ever evolving environment, while ensuring they are in step with their business peers in implementing these initiatives.
They do not expect the pace of activities in the digital arena to slow down this year, and are preparing their teams – through upskilling and restructuring – to be able to cope with these shifts. A number of these CIOs – equipped with resources, top level support and proactive teams and co-business leaders – are thus providing the templates for other New Zealand organisations on how to thrive in the digital economy.
Who are in the 2016 CIO100 list?
Gerben Otter of Fonterra
John Bell of Fletcher Building
Johan Vendrig of Orion Health
The inside track
Organisations that made it to the list were ranked based on screens, users and turnover. Public sector agencies make up more than half of the list, composed of central government agencies, health agencies and educational institutions. The private sector is represented by agriculture, finance and insurance, IT and telecommunications providers, retail, manufacturing and transport. In terms of tenure, more than half of the CIOs interviewed this year have been in the role three years or less.
So what are some of the conditions they will factor in as they work lead through the rest of the year?
This is more than a new two-speed, hybrid operating model…It is a balance to how we deliver IT projects and services. David Habershon, Ministry of Social Development
Nearly 40 per cent of the CIOs say their ICT budgets will remain stable, with a third expecting increases by up to 10 per cent, about 9 per cent expecting up to more than 20 per cent increase and 4 per cent seeing budget increases of more than 20 per cent.
Around a fifth of CIOs (22 per cent) said their project numbers remain stable. Nearly 40 per cent of CIOs say they are gearing for a rise in project numbers by up to 10 per cent. Around 12 per cent say their project numbers will rise more than 20 per cent.
Amidst these changes, nearly half (45.5 per cent) say their staff numbers will remain the same, with less than 10 per cent expecting a smaller staff number. The rest expect to see a rise in their staff numbers with around two organisations stating the numbers will exceed more than 20 per cent.
As to what technology initiatives will drive the most IT investments in the next 12 months, the top ranked are big data/business intelligence and analytics, cloud services, application modernisation, customer experience technologies and security/ risk management.
CIOs also listed the following as their top five challenges ahead: Agility/speed of deployment, managing complexity of systems and apps, meeting the changing needs of the business, moving to two-speed IT, and leading disruptive technology enabled change.
This year notably tracks CIOs moving to the same roles in other sectors and to other executive roles.
A significant development that is clearly being watched by the local business community is Air New Zealand’s creation of the chief digital officer (CDO) role. Silicon Valley executive Avi Golan took on the role, and his portfolio includes the ICT team, along with parts of the sales, marketing and operations.
Three global CIO roles were filled: John Bell at Fletcher Building, Gerben Otter at Fonterra and Johan Vendrig at Orion Health.
Chris Trigg has left Genesis Energy and joined Southern Cross Health Society, and NZ Police CIO Stephen Crombie is now the CEO at Education Payroll Limited, with Anne Speden taking over as acting CIO. Mark Leadbetter now heads ICT at House of Travel, replacing Dave Veronese who is now a technology strategist at cloud services provider Inde NZ.
We are doing a lot of things at the same time and in parallel.Don Robertson , Healthcare of New Zealand Holdings
Waikato DHB’S Geoff King stepped up to become CIO from his role as director, development and operations. He replaced Darrin Hackett who is now GM at HIQ. Mike Clarke has left SkyCity to join KPMG’s IT advisory group, and Glen McLatchie took over the CIO role. Kevin Robinson was appointed CIO at healthAlliance, after holding the interim CIO role for four months. He stepped up to the role from manager solutions delivery, following the resignation of Claire Govier. Govier is now head of transformation, strategy and architecture at Kiwibank.
Robinson reports to CEO Myles Ward, who took over the helm at healthAlliance in November, following three years as chief technology officer at Inland Revenue Department.
The new IRD CIO is Gary Baird, former head of enterprise infrastructure architecture and business services at ANZ Bank. Mark Denvir is acting head of information services at Auckland Council following resignation of Mike Foley. Other interim CIO roles are held by Nick Kumarich at NZME and Barry Thurston at the Order of St John.
Kevin Adamson has left the University of Waikato, with Eion Hall taking on his role. Hall is former CIO of the Hamilton City Council.
CFO Selina Omundsen now heads the ICT department at Datacom. Alistair James is acting CIO at Massey University, following the departure of Clive Martis, who held the role for over six years. Murray Thomson, deputy CIO at Department of Corrections, is also acting CIO after Jon Cumming resigned to become chief digital officer at ACT.
Mike Edginton took over the CIO role at the Department of Conservation, replacing Ashley Mudford, who is now the principal advisor, secretariat lead, at the Department of Internal Affairs. Jason MacDonald left Kristin School as director of ICT services after 11 years, and Nigel Wilkinson, director of business services, took over the ICT portfolio. AgResearch also has a new CIO, Michael Sheehan.
More than half of ICT leaders interviewed this year report to the CEO, managing director or equivalent roles, while another 23 per cent report to the CFO or equivalent heads offi nance. The third most common reporting line is to the chief operating officer (13 per cent), while three report to the executive board.
At least two of the CIOs this year have a dual reporting line. Glen Willoughby of Downer reportsto the Downer Group corporate services GM and Downer NZ CFO. Jonathan Iles of Carter Holt Harvey reports to the CIO of Rank Group and the CEO of Carter Holt Harvey.
Being at the nexus of current technology changes – social, mobile, cloud, analytics, Internet of Things – retailers face an exciting challenge of keeping pace with customer expectations while continuing to deliver 24x7x365 reliability and service. Simon Kennedy, The Warehouse Group.
A group of CIO100 ICT executives report leading multinational teams – from trans-Tasman, Pacific wide, to regional and across continents.
These include ICT leaders of Harcourts, Fletcher, Fonterra, Hallenstein Glasson, Fisher Paykel Healthcare, Mainfreight, Opus, Beca, Kordia, the Salvation Army, Hawkins Group, Fulton Hogan, Tait Communications, and from the publicsector, the Ministry of Foreign Affairs and Trade, the Ministry of Business, Innovation and Employment, and the Department of Internal Affairs.
Johan Vendrig of Orion Health explains the nuances of working with a global team: “We have to get the organisation to the next level by providing some standardisation and better integration of enterprise resource planning processes. This drives efficiency and it ensures that process improvements can be scaled out quickly. Investment in improved communication tools is critical to make it easy for staff to collaborate across the globe both internally and with customers.”
Mike Pilkington of the Ministry of Foreign Affairs and Trade says collaboration and communications technologies are critical for the ministry’s 1390 staff based in the head office in Wellington and in 59 diplomatic missions in 50 countries around the world.
Hannes van Zyl of Hawkins Group leads a team of 13, with some based in their overseas offices or assigned to work side by side with customers, design teams and construction partners on projects locally and offshore.
Some of the company’s projects take place in locations that are sparsely populated and with minimum, if ever, telecommunications facilities. He says the mobility contract implemented in the past year delivered massive gains, with Skye for Business and Office 365 allowing teams to work from anywhere at any time.
Agile by default
Without a doubt, the uptake of digital technologies – from collaboration technology, analytics, cloud services – are prompting the organisations to change their business models.
For CIOs, it means adopting new mindsets and structure to operate at various speeds. David Habershon and his team at the Ministry of Social Development are in the midst of a ‘Simplification Programme’ that will transform service delivery and transactional services at the agency.
The challenge is to maintain deep engagement and deliver at pace, whilst building digital capability in the IT team.Pieter Bakker, Frucor
He says the IT team is using this major programme to develop a stronger digital capability across the organisation. “This is more than a new two-speed, hybrid operating model,” explains Habershon.
“It is a balance to how we deliver IT projects and services. This will be a new strength area that will see us able to take best advantage of both the ‘Agile by default’ process of project delivery, as well as ensuring enterprise stability for our core systems. This way of working will not only make IT better, it will support business change in the wider Ministry.”
Fletcher Building has established a Digital Innovation Lab, which enables business units to work on smaller, digital projects. Many of the apps developed in the lab can be reused across business units, achieving further ROI. The lab also provides examples of how to run rapid, Agile and value delivering projects. The Innovation Lab has delivered a number of customer centric applications that are driving business growth, says Fletcher Building’s John Bell.
The shift towards building teams that can respond faster to business demands using cloud based services and Agile methodologies is a central theme in the CIO100 ICT departments. “We have got almost two ways of operations now in terms of project delivery,” says Joshua Bankers of Fonterra.
He says every project has a business case that needs sign off. “But for the ‘high speed lane’, we have a cut down version which still ticks all the boxes from a governance perspective, but is [delivered] a lot quicker to market.”
“We are doing a lot of things at the same time and in parallel,” is how Don Robertson of Healthcare of New Zealand Holdings, describes his work environment.
In past years our digital focus was delivery of new system features and designs. Now our digital focus is meeting customer expectations and delivering a great customer experience.Simon Casey, Barfoot Thompson
Robertson says a team of developers and business people are currently working on two Agile projects.
“One project delivered a solution to track and enable the payment of travel time for 3,500 staff implemented within a two-month period, while the other is building a central data repository enabling data standardisation and quality improvements ready for migration to the new ERP. This will continue on to build a data warehouse for BI,” says Robertson.
Victor Vae’au of NZ Defence Force says moving to multi-speed IT calls for striking a balance. There needs to be a careful assessment of “what you can do very very quickly and fail/succeed fast, versus what should take time through a full spec’d delivery lifecycle”, says Vae’au. “You have got to be very clear about what falls into one speed, and what falls into the other speed, and don’t get one mistaken for the other.”
Cloud based technologies are having a greater impact than ever on speed of change.
John Emerson, global CIO at Tait Communications, says the company’s move to the cloud has further cemented the ICT team’s role as a strategic partner across all business units. “As a result of moving to the cloud, just over 50 per cent of IT staff are involved in delivery of products and services to Tait customers.
“We are providing leadership to other parts of Tait – including RD, products and services – as the cloud is becoming the global delivery platform of choice,” says Emerson.
The role is 25 per cent IT, 75 per cent change management. Don’t be tricked into thinking that it is any other way.Deane Johns, Co-op Money
A consistent focus
CIOs interviewed underscore that success in moving towards more digital platforms hinge on how they will make use of the data produced and how these can be transposed to better customer services, improved products and other insights that places them above competitors. In the case of public sector agencies, data is being used to provide better services to citizens.
“Being at the nexus of current technology changes – social, mobile, cloud, analytics, Internet of Things – retailers face an exciting challenge of keeping pace with customer expectations while continuing to deliver 24x7x365 reliability and service,” says Simon Kennedy, CIO at the Warehouse Group.
Liz Gosling of AUT says while working on a recent project the team looked at global and local organisations that did “web experience really well”: Air New Zealand because of its customised, personalised easy to navigate website; Marks and Spencers in the UK for providing pop up information to users on items they may be interested in; and Amazon, whose recommendation engine also provides a similar experience for users.
AUT CIO Liz Gosling
Deane Johns of Co-op Money sums it up best on what it means to be a CIO today: “The role is 25 per cent IT, 75 per cent change management. Don’t be tricked into thinking that it is any other way.”
Next: Key areas to navigate and lead through the digital era
Top 10 trends of 2016
1 TAKING THE LEAD IN THE ORGANISATION’S DIGITAL FUTURE CIOs are leading the shift to become digital organisations. They are doing this as a chief digital officer, as a CIO-plus, or a GM of IT. Their role in the move towards digitalisaton ranges from leading the team that is defining the digital strategy, to leading and executing the programme.
2 THE CIO ROLE IS FLEXIBLE AND ALWAYS CHANGING The redoubtable task of leading ICT teams in major enterprises has provided CIOs with the experience to take on other executive roles. Two CIOs profiled in 2015 are now CEOs. CIOs are also taking on another CIO role but in an entirely different sector of market.
3 SHIFTING GEARS TOWARDS BIMODAL I.T. CIO100 organisations – whether in the public, private or not-for-profit arena – are taking on this approach of ensuring they have the ability and the structure to work simultaneously on the traditional IT portfolio and innovative projects that are meant to be delivered faster.
4 PREPARE TO WORK ON DIVERSE PROJECTS More than ever, CIOs and their teams are working with other departments, external partners, startups and even competitors on a range of business technology projects. Programmes of work range from ERP applications to working on mobile apps, and moving newer technologies like 3D printing and drones beyond pilot to actual business use.
5 LINE OF INSIGHT This year’s research found business intelligence and analytics topping the technology initiatives that will drive the most ICT investments this year. The goal to become more insight driven is cited by CIOs in both government and private sectors.
The Ministry of Social Development says improving the quality and consistency of data collected will help the Ministry to better understand clients’ needs and the results it wants to achieve, and measure the effectiveness of services over time. Nigel Rickerby, CIO of Silver Fern Farms, says the continued focus on business intelligence and analytics will help the organisation deliver actionable business insights in order to stay on top of a challenging global market.
In addition to our standardisation agenda we recognise the rising exposure to security compromise.Selina Omundsen, Datacom
6 THE NEW TALENT MIX CIO100 ICT leaders are ensuring their teams are prepared for the digital environment. Thus they are restructuring and upskilling their teams to incorporate a range of skills in DevOps, Agile and Lean methodologies, as well as in technologies around customer and user experience.
7 A SHARPER CUSTOMER FOCUS Many CIOs this year are investing in customer experience technologies and ensuring simplicity is ingrained in processes for both staff and customers.
For Chris Reid, general manager of IT at Hallenstein Glasson, agility and speed in deploying different business technology projects across the group is key, but so is adopting a very customer centric approach to the task ahead. CIO of Barfoot Thompson Simon Casey notes, “In past years our digital focus was delivery of new system features and designs. Now our digital focus is meeting customer expectations and delivering a great customer experience.”
8 TAKING CARE OF BUSINESS CIOs this year talk about how their focus has been shifting towards business development. Co-op Money NZ’s Deane Johns says this is one of the greatest shifts he has seen in the CIO role over the past few years. “You think more in terms of business growth, it is almost like, ‘How do we operate as a business?’ We have got our valued existing members and customers who we have built this capacity for. How do we expand a bit more to better leverage use of this capability for the benefit of our credit union shareholders?”
9 INCUBATING INNOVATION CIO100 organisations are leading the way in setting up innovation labs, or building cross functional teams that will work on projects using emerging technologies. They tap startups to work with their teams on these projects. The viable projects transcend the pilot stage.
10 CYBERSECURITY: THE EVERGREEN, EVOLVING CONCERN Cybersecurity continues to be a critical concern as the organisations transition to digital businesses. “In addition to our standardisation agenda we recognise the rising exposure to security compromise,” notes Datacom CFO Selina Omundsen. At Orion Health, the IT team is helping roll out the Security Operations Centre that will provide real time security monitoring of those parts of the network that can access personal health information. Kordia is now also providing cybersecurity services and has seen an unprecedented growth in demand for services in this area.
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