Making concrete decisions: Stevenson Group CEO Mark Franklin

Stevenson Group has been part of the New Zealand economy for more than 100 years. It started in South Auckland as a family business, with the founders using “picks and shovels, a few wheelbarrows and a Model-T Ford” to work on sewerage and piping systems for the burgeoning population of Auckland.

The group remains a private, 100 per cent owned family business, but whose operations now span mining, quarrying, concrete, engineering, agriculture and property in both the North and South Islands.

Mark Franklin became its CEO four years ago, following a series of executive roles in a raft of industries – including Vector, TZ1 and IBM.

CIO New Zealand recently asked him for his insights on how business technologies have made a difference to the Stevenson Group.

How the business-technology environment has changed in the past four years

Mark Franklin: When I first started here, we had 23 companies so everybody needed an investment, everybody wanted money to do stuff. I said here are some things that are more important than others because I am balancing the things I can do for the core business with things the shareholders want, where I can grow, where I can’t grow. There is always going to be people who are unhappy.

When I first got here, it was an amalgam of lots of different systems, processes, companies and things like that. What we have moved through to is just a couple of core businesses. We had to do what I call short-term expenditures – little bits of middleware. How do we get things talking to each other, making sure the networks work properly, integrating mobile applications? So it’s just things to make people’s lives a little better. But all the time we make sure we have an eye on the longer term.

I asked (CIO and Group IT Transformation Manager) Andries van der Westhuizen to draw a map of exactly what our system looks like – all of the spreadsheets of server stuff, all middleware – so we can see how complex it is. We then went through exactly what we are aiming for, and then had a plan. We moved from five domains into one to get efficiencies.

I have done this in every job, and it is interesting. We don’t sort of address all of the legacy that we have got at any particular time.

I used to run Vector, a big public utility company, so we had big IT systems. You are always having big IT discussions like, ‘Are you going to do SAP implementation or an Oracle implementation. How do you integrate mobile phones and iPads to [corporate systems]?’

In a private company like Stevenson Group which is a bit smaller, you are going through lots of change all the time and you are not necessarily making incredibly sophisticated IT decisions. I might say to my people, listen, with your part of the business we will have a discussion on ERP. Discussions are a lot more targeted to suit the situation and strategy.

The conversation is not around whether we need to get another ERP system and customer interaction and asset management system. The question is, with your part of the business what do you actually need? The focus is first on the business need and then the system to support the business need. Because, I am not going to invest in a sophisticated system if you are not going to use it.

People get driven by technology sometimes. Sometimes you have got to put technology in place and force people to use it or even force people to get trained on this stuff enough, such as the upgrade to Office 365 and Lync.

Take our Lync system. It is integrated into our computers. This is not a phone, if I wanted you to have a phone, I would just have put mobile phones in place. These are systems that improve productivity and collaboration. You sort of got to force people to uptake that technology because you have lots of different types of people in organisations. You don’t get productivity if you don’t get people to use something like that.

We have people that say,’ I don’t like that system. I will use my own spreadsheet.’ It is not actually connected to the server or it is on desktop. If that is the way it runs, how do we transition that approach into a proper approach as opposed to just allowing everyone to do whatever [they want to do] because nobody knows when somebody leaves the organisation. Everyone is going around, how do we do that again? ‘Oh, it is on somebody’s desktop.’ Educate people to think what is good for the company, not just what is good for the individual.

We have a lot of discussions about what is the best way to practically implement this process, not how can we use IT to fix it?

And so the sophistication in planning for IT is about the open and honest discussions. We have a lot of discussions about what is the best way to practically implement this process, not how can we use IT to fix it? The solution is not always to throw IT at it, therefore a robust discussion is needed to address issues.

If I showed you the map I asked Andries to do, we had stuff everywhere. We had lots of different companies so they used different financial systems, asset management systems. And the question wasn’t how we integrated it at all. The question was: Which of these companies are we going to have in the long term and therefore what money do we need to spend as opposed to not need to spend? I might have a company that says, “We need to get involved in the ERP system, but if you are not going be around for much longer you may as well stay separate.”

If Andries comes to see me from an IT perspective we need to do this, I say, how you are going to get through the next 12 months without doing it? Or what is the business benefit or risk that a solution will address right now? So the IT plan, what you are allowed to do, will be driven by the strategy for the company. Stevenson is changing all the time and IT needs to adopt to accommodate constant change

The biggest discussion we are always having at the moment is about cloud services. So the conversations we have got now is what do we need to keep in-house, or what someone else should be doing. I am not talking about this because I want to outsource everything. I want to say, ‘What is the best way of doing this?’

The business technology investments that made a difference to the group

Mark Franklin: From the head office, it was about how do we make sure we have information from the different companies or different unites in a central environment so we can make decisions? We have been spending time and effort on things like a dashboard (business intelligence) to measure performance, being able to get information automatically and putting that into a dashboard. It is not just a dashboard, but what is behind that, how can managers go in and trawl (drill down) for information about where trends are occurring? Changes are driven through improved BI.

One part of the investment is information sharing and being able to manage businesses better and with more information.

The other side of it is we have been investing in pure on the ground application stuff that makes businesses more productive. We have new weighbridge software (hybrid cloud) at the quarries so you get better information (internal and to customers) and more control over what trucks are coming in, how many people you need, what are production requirements?

In our concrete plants, we invested in systems for better customer information and relationship, and Lync and call recording.

From a group level, it is really about better reporting and business intelligence at the right levels. The business unit level is about productivity and cost/revenue.

We have got lots more plants in our mining areas. How do we make sure we manage those assets? The condition of a monitoring plant, when do they need servicing, when do they need maintenance? Because if a plant goes down, it affects our productivity. How can IT help to improve asset management, from the “cradle to the grave”?

That is where we are spending money. Every company has a lot of legacy systems. What we need to do in any company is have a look at legacy systems and make sure from the company’s perspective – we have quarries, big concrete plants or mining operations – the people are working better.

From a group level, it is really about better reporting and business intelligence at the right levels. The business unit level is about productivity and cost/revenue.

Next up: Why the CIO should be on the executive team

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The CEO and CIO working relationship

Mark Franklin: From a CEO perspective, one of the critical things is to at least try to stay on top of what is happening in trends in IT. If you don’t, you miss out on so many areas.

I have my CIO on the executive team. We should be able to have a discussion at the executive level with somebody who is up to speed, saying, ‘Listen, I can help you with that.’ And that is the CIO. To me that is what it is all about and why it is critical for a CEO not to be a technical expert but to be open to what is going on in the world, what the trends are and getting advice all the time on that.

In a lot of companies IT is seen as a problem. People go to their computer and if does not work, it is an IT problem. So IT people get called up whenever there is a problem. If you have got a really good system that someone has implemented, people just use it.

CEO Mark Franklin and CIO Andries van der Westhuizen of Stevenson Group

We should be able to have a discussion at the executive level with somebody who is up to speed, saying, ‘Listen, I can help you with that.’ And that is the CIO.

I spend a lot of time with IT here. I tell them, “I want you to see yourself as a solution. So let us come up with stuff and not just because it might be interesting, but because it has a really good application.”

Should we put automatic systems on trucks? Should we have GoPro (cameras) on the front of our trucks? Cars are cutting into our trucks on the motorway and are complaining. If we invested in some of this stuff that people might think are toys, they might actually save us a lot of time, energy and effort because we have got facts.

Most of the stuff we trial are things to do with mobile. What sort of information can we get on the mobile that we need? If I am down in Southland, and I need to know what is going on in Auckland, rather than checking my email or sending a text to my PA, what information would I like to have access to? Or, what has changed from yesterday to today? How do we put that in some sort of system? It is not just for me but everybody else can get access as well.

I don’t think we are in any way near to trialling as many opportunities as we have got with existing technologies. We can move on and on. It is a bit like television, when do you buy the television? We have all this amazing amount of capability in our mobile device, I don’t think we are in any way near to [maximising all of it].

How could Google Glass change the way we do stuff? What if you have got a watch where you can push a button and it tells you something that you might need to know? Even it could tell you something you don’t need to know but would be nice to know at any time.

Those things sometimes don’t cost much money. They might be very different, or disruptive. It is like crossing a chasm, you go through disruptive technology. Some of it is not toys, but could actually be interesting. How do we implement it and how do we transition from the way we do things now to use some of that stuff?

The things that made the biggest difference are the things that you do at the site. A lot of times you are in the head office, you are dealing with an ERP system, a dashboard in front of you.

If you go onsite, there are people doing very, very important basic jobs like trucks going over weigh bridges. That is all about how much product is going, how do we account for these products, how do we invoice things?

You go onsite, there are people doing very, very important basic jobs like trucks going over weigh bridges. The new weigh bridge system is more modern, with touch screens and improved throughput of trucks. It also improved management and customer information. That is all about how much product is going, how do we account for these products, how do we invoice things?

If you implement systems that make it easier for people, you can see their eyes and they say, ‘This is so much better than what we have been used to.’That is really important.

Send news tips and comments to divina_paredes@idg.co.nz

Follow Divina Paredes on Twitter: @divinap

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