Sleepless in Davos.

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<Copy> Thomas van Zütphen

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<Copy> Thomas van Zütphen

TODAY’S ICT HEADS FACE CHALLENGES INCLUDING

SECUR ITY, DIGITIZATION AND TRANSFORMATION, PLUS

IN-HOUSE CHANGE, BUDGET AND VENDOR MANAGE-

MENT. SMALL WONDER CIOS STRUGGLE TO SWITCH OFF.

BUT A PROBLEM SHARED IS A PROBLEM HALVED. AND

WHERE BETTER TO VENT THEIR CONCERNS THAN ON A

TRAIN JOURNEY – BACKED BY A PROGRAM DESIGNED

TO HELP THEM ADDRESS KEY INDUSTRY IMPERATIVES?

WITH 40,000,000 SAPS and 2.6 million users, T-Systems operates the world’s largest SAP cloud environment.

IT – THE INDUSTRY THAT NEVER SLEEPS. Wherever you are, whatever the time, the working day is in full swing somewhere in the world. And this is certainly true for the millions of app developers, inventive startups and pro-viders that roll out new solutions on a daily basis. Now, CIOs are starting to mirror the IT world itself – by struggling to switch off as they settle down for the night. Helmut Krcmar, a professor at TU Munich, wants to know just what it is that prevents them from nodding off. Against this background, he estab-lished CIO Move – an annual event that invites IT heads to ‘hop on the train’ for a few days. Destinations include CeBIT in Hanover, London (in 2016) and – this year – the World Economic Forum in Davos, Switzerland. En route, economist Krcmar interviews participants, always asking two key questions: “What keeps you awake at night?” and “How digitized is your business, on a scale from 1 to 5?” – where ‘1’ represents a lack of digitization, and ‘5’ a company that has truly embraced the digital age.

Horst Ellermann, editor-in-chief of the German edition of CIO Magazine, explains; “If you rate your company around ‘5’, you’re generally getting enough sleep.” However, the average rating is just 3.7. Ellermann, who has followed the industry for many years, believes the poor score comes down to one major issue: “Every CIO wonders how they will be able to digitize their company’s business model.” You could write a book about all the aspects that business digitization entails – or, as Ellermann describes them, “the huge range of business challenges that honest, hard-working CIOs fi nd so exciting – or so threatening – that they cannot drop off for thinking about them.” It doesn’t take much for a brief sleep interruption – caused by a single thought – to become a regular occurrence.

RETAIL INDUSTRY IN THE PROCESS OF DIGITALTRANSFORMATIONSThe retail industry is constantly evolving. Silvester Macho, CIO at METRO GROUP, has recognized the importance of digital transformation at his en-terprise, and is working hand-in-glove with his colleagues to make the

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Silvester Macho, METRO

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PAIN POINT: DIGITAL TRANSFORMATION

Edgar Aschenbrenner, E.ON

I T s e c u r i t y i s v e r y i m p o r t a n t , e s p e c i a l l y i n o u r d o w n s t r e a m o p e r a t i o n s :- > s a l e s-> r e t a i l-> d i s t r i b u t i o n

EVERY 24 HOURS,1,500 Deutsche Telekom security experts protect the corpor ation’s network from up to one million cyber attacks. According to a study by FireEye, it takes enterprises an average of 205 days to discover IT security compromises.

changes a reality. “We are focusing on innovative industry trends, and the latest technology and methods. Everything we do focuses on enhancing cross-enterprise collaboration and boosting our overall efficiency,” he explains. However, this is not Macho’s only goal: “To safeguard our digital transformation, we need to integrate all key stakeholders into the process – customers, employees, providers, and the business as a whole. A digital transformation needs to actively involve and serve everyone involved.”

Later this year, analysts at US consultancy Robert Half Technology will survey 1,400 IT executives in North America, to gain a clearer overview of the situation across the IT landscape. They will pose a simple question: “What makes CIOs toss and turn at night?” The previous edition of this study – which is conducted every four years – delivered a surprising result: 63 per-cent of CIOs said understaffing at least partly hinders their companies’ abil-ity to implement innovative technologies. In this regard, their primary con-cern is being able to find suitably skilled professionals, rather than getting the go-ahead to expand their IT departments. Moreover, one in four CIOs said their biggest worry was keeping their organization’s sensitive data out of the wrong hands; while one in ten respondents had particular concerns about the amount of funding available to them for IT. A further nine percent of surveyed IT heads were particularly fearful of falling behind the leading innovators in their industries. But whatever the reason, one thing is clear – CIOs face a myriad of potential pitfalls, each more than capable of bringing their night’s sleep to a shuddering halt.

HOW CAN DIGITIZATION ENDANGER THE CORE OF YOUR BUSINESS?Edgar Aschenbrenner, CIO at E.ON, knows the risks of digitization all too well. IT security occupies his mind on a regular basis – day and night. The utility is firmly in the midst of a fast-paced, multi-faceted digital transform-ation, and is increasingly shifting its focus to digital business models and solutions. To this end, the corporation has recently established a Digital Solutions Unit to promote the use of customer-driven technologies across the enterprise, particularly in its sales organization. E.ON’s new Data Analyt ics Lab and Smart Grid Solution Center, meanwhile, aim to help the enterprise streamline and increase the flexibility of its power grids. What’s more, E.ON is forging alliances with startups whose ideas could help the company expand its utility-based business model. In total, E.ON has ac-quired shares in 13 startups across Europe and the USA – and eight are based in Silicon Valley. As Aschenbrenner explains, all these activ ities re-volve around IT security: “Security is fundamental to our organization – and we’re investing heavily in this area. Our goal is to ensure that we enjoy all the benefits of the digital revolution, without putting our core business at risk.”

Philipp Lübcke, CIO at Frankfurt-based utility company Mainova, shares Aschenbrenner’s concerns. “Digitization will pose a number of real chal-lenges for us in the next few years,” he cautions. “But in our organization, my IT department will have sole responsibility for IT security solutions. That is going to be a real help – particularly because digital projects often have to be implemented in very short order.” Over one-third of Mainova’s customers have switched to the company’s online service, which enables users to access archived meter readings, alter invoicing details or switch to a new tariff – any time, day or night. As Lübcke says, “The online service is customer-driven and provides us with improved consumer data. What’s more, the feedback we re-ceive allows us to target areas for further development – such as a mobile-friendly version of the site, and a new, enhanced user experience.”

All this allows Lübcke to sleep easy – most of the time, at least. But he’s in a minority among his CIO peers, especially in Germany. According to a study by technology enterprise Brocade, 76 percent of German IT heads find it ‘difficult’ or ‘impossible’ to switch off after their working day is done, com-pared to a global average of 67 percent.

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PAIN POINT: IT SECURITY

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EXPERTS IN LARGE-SCALE TRANSFORMATION

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TO THE CLOUD (SEE NEWS ON PAGE 66).

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ICT PAVES THE WAY FOR NEW BUSINESS MODELSUrsula Soritsch-Renier, the Austrian-born CIO of Swiss engineering and manu facturing specialists Sulzer, is one IT executive who finds it easier to unwind after a day at the office. She tackles issues in a pragmatic, proactive way – keeping stress at bay. “Agility is more important to me than perfection,” she says – “but not at the expense of quality.” It is common know ledge that concerns over speed and flexibility are two of the most frequent reasons behind CIO insomnia, particularly during business transformations. When Sulzer opted to transition from a decentralized organization to a business with stronger global alignment, Soritsch-Renier and her colleagues could be seen rubbing their eyes. “Senior management decided that IT would pave the way for the transformation, and two things immediately became clear to us,” Soritsch-Renier explains. “First, we couldn’t do everything ourselves. And sec-ond, it would all come down to people – even in IT terms. Technology is a tool, first and foremost.”

What did this mean for the CIO and her team? “If I were responsible for eliminating legacy technology, enabling IT to support the new business model and enhancing our overall agility, it would be impossible to manage and oper-ate all of our data centers as well,” Soritsch-Renier reflects. “The cloud makes my work a lot easier – and frees up more of our budget, too.”

But which cloud provider would best fit their needs? “We have over 15,000 employees – so if a service provider treats us as a second-priority customer, we will quickly look elsewhere,” says Soritsch-Renier. And providers that simply offer functionality and service levels are “of little use to me”, she adds. “I need more than that and I want to know how their solution will integrate with organ-izations, processes and responsibilities.”

ASSESSING DIGITAL READINESS AS PART OF DUE DILIGENCEDirk Müller, CIO at family equity specialist Haniel, faces a completely differ-ent challenge. A long-term, sustainable approach is a must if the company is to increase the value of its diverse portfolio. Following the sale of Celesio, a pharmaceuticals retailer, to the USA’s McKesson Corporation in 2014, Haniel is now turning its attention to investments. In June 2015, for example, it successfully acquired Belgium-based Bekaert Textiles.

Haniel assesses the digital readiness of potential acquisitions as part of its due diligence. This is a crucial phase of the process, and as Haniel is currently undergoing its own digital transformation, it becomes even more import ant to

assess each target company’s long-term development plans. Haniel’s portfolio currently includes five divisions, each one responsible for managing its own business operations – and each a market leader in its respective segment. As Müller explains, “In our department, we offer our colleagues support for services and management tasks relating to digital transformation. We work with them to analyze potential ways of incorporating the latest digital tech-nology into the design of processes, applications and entire organizations.” Müller and his team also take care to separate pie in the sky from sustainable high-tech trends that could genuinely aid business transformation. He adds, “Essentially, my role is to identify the true trends, and then use them to generate ideas that then can be applied to the business. In that sense, I am almost like a sparring partner for the CEO.”

Müller’s important role means he does not count among the 28 percent of IT heads in Germany – and 38 percent of CIOs worldwide – who fear a loss of influence at C-level, according to Brocade’s findings. However, he is in a very different position to retail-industry CIOs – many are locked in a struggle to keep their companies’ cash registers and ERP systems up to date. One of the most challenging and significant tasks retail players currently face is the integration of on-site and online systems. But in many parts of the world, retailers are still some way from being able to sell their goods online. As Horst Ellermann says, “If the industry as a whole were to be graded using the CIO Move ranking sys-tem, it would do well to scrape a ‘3’.”

HACKERS TARGET RESEARCH-DRIVEN ITHans-Joachim Popp, CIO at the German Aerospace Center (DLR), is not fa-miliar with this problem. Popp has headed his organization’s IT team for ten years, delivering services that meet the needs of 8,000 research colleagues.

Ursula Soritsch-Renier, Sulzer

a ) C o n s o l i d a t e I T d i v e r s i t yb ) S i m p l i f y , p e r f o r m , c o l l a b o r a t ec ) G e n e r a t e c a s h t o g r o w t h

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T-SYSTEMS RUNS 42,000 cloud-based systems around the world. More than 250 busi-nesses leverage the Deutsche Telekom subsidiary’s dynamic cloud platform. This secure, standard core solution is operated in twin-core data centers in Germany, in line with the country‘s strict data protection legislation.

PAIN POINT: FINDING THE PERFECT CLOUD SOLUTION

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Hans-Joachim Popp, DLR

He comments: “First and foremost, digitization means an increase in the number of simulations that we complete. We need more computing power, plus cap acity to handle large volumes of data, and an extremely stable, high-perform ance network. We need to address these areas so that our electrical engineers can perform high-resolution simulations across multiple research centers.” When drafting plans for prototype aircraft, the DLR can now use its virtual environment to test ways of reducing noise pollution and fuel con-sumption long before construction begins. As Popp remarks, “This approach will benefi t people across the globe. What’s more, it will save millions ofeuros and signifi cantly cut carbon emissions.” At the same time, the re-searchers bear an extremely large responsibility: if their project calculations go awry, the cost of rectifying errors could run into the millions. Moreover, it is imperative that draft designs are kept well away from prying eyes.

Against this background, the security of the DLR’s IT infrastructure is a real pain point for Popp – and an issue that’s given him more than one sleepless night. “At the moment, you could compare the Internet to the Wild West. And it’s high time we started improving our defenses,” he says. E-criminals are be-coming more resourceful, more resilient and more dangerous all the time. And as Popp explains, “We need to defi ne global agreements that will increase transparency across data fl ows – it’s the only way we’ll be able to protect our data from hackers. We can’t just track down a hacker’s ID card, we can’t secure evidence, we have no data traffi c regulations, no credit records – nothing.”

A NIGHTMARE SITUATION FOR CIOS Even when IT heads do manage to catch some shuteye, they are not com-pletely out of the woods. To fi nd out what’s giving them nightmares, Sungard AS carried out a survey of almost 300 USA-based IT executives in early 2015. 51 percent of respondents cited security leaks and the growing peril of cyber-crime as their chief concerns, followed by server outages and/or inadequate disaster recovery plans. However, in these situations, it is not the technical problem itself that has CIOs breaking out in a cold sweat – it is the terror that security incidents will severely damage the company’s reputation. According to the survey’s fi ndings, the third greatest concern for CIOs is the challenging task of talent acquisition in a business environment where the ‘war for talent’ continues to rage – adding one more anxiety to the long list of sleep-stealers.

<Contact> bestpractice@t-systems.com

<Links> www.t-systems.com/industry-4-0

ciomove.com

600 MILLION TRANSACTIONS will be processed every minute by a federal cloud platform that T-Systems plans to introduce in 2016. The Deutsche Telekom subsidiary is collaborating with a host of partners to develop the solution, which will be based on 20,000 virtual machines.

PAIN POINT: MORE POWER, MORE SCALABILITY

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QUALITY IS KEY

BUSINESSES HAVE NO TIME FOR

SUPPLIERS THAT SIMPLY PROMISE THE

MOON. THEY NEED TO DELIVER ON THEIR

PROMISES – WITH A DEEP UNDERSTAN-

DING OF PROCESSES, A HIGH QUALITY OF

SERVICE, AND THE ABILITY TO DELIVER

END-TO-END MANAGEMENT OF APPLICA-

TIONS, NETWORKS AND DEVICES.