Transparency #01

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Transparency Insights and information from SMT Data

“Don’t tell everybody everything - but when you tell them something, tell the truth.”Pages 5-9

Insights and information from SMT Data – Specialists in IT Business Intelligence

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TRANSPARENCY

“Our customers rarely agree to pay us a percentage of our results. They think it would make us too rich too soon.”Pages 10-15

Specialists in IT Business Intelligence

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Jan VilstrupCEO, SMT Data A/S

To further the complexity, the business side which

needs the output from all those systems is com-

pletely at the mercy of the IT department which can

make them work more or less efficiently. Their only

means of control is that they most often decide the

budgets. In short: Business states the objectives,

but sets the limitations. IT provides the solutions if

they can. And if they can’t, they have the language

to confuse everybody.

It’s a balance of terror, in many ways.

And then there’s us. We’re the instruments of

diplomacy and co-existence. We sit business and

IT down at the same table and establish complete

transparency of the relation between them. We

create a common language for people who speak in

gigabytes per second and those who see the world

in millions of Euro per quarter.

We call it IT Business Intelligence. And in the fol-

lowing pages you’ll get a glimpse of the results it

can achieve: Fair distribution of IT-costs. Behavior

adjustment. Enhanced processes. And huge savings

that can be realized from day one, just to get things

moving.

I hope you’ll like reading about it. We intensely

enjoy telling it, because it’s all good news.

All good news

As a highly specialized IT company

SMT Data moves in a world of

huge corporations and financial

institutions. In such companies,

literally thousands of workstations

and cellars filled with mainframe

computers and servers create a

maze no single person can navigate.


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The advantages of telling the truth ...........................................4-9

When IT put on a necktie ..............................................................10-15

Effort and effect ................................................................................16-21

Getting started .................................................................................22-23

Publisher:SMT Data A/SHarbour HouseSundkrogsgade 21DK-2100 CopenhagenDenmark

Phone: +45 3962 8887email: [email protected]: www.smtdata.com

sMT data is represented in : • Denmark • Sweden • Norway • Finland • Germany • Netherlands • UK • Spain • Switzerland • Austria • Belgium • Luxembourg • Estonia • Latvia • Lithuania

editor-in-chief: Jan VilstrupManaging editor: Hanne Eichert

written and produced by:TBWA\Bredgade 6, 3 1260 Copenhagen K.

Printed in Denmark

iT business inTelligence

Insights and information from SMT Data Transparency


Front page illustration: The cover is an illustration to show relationships hiddenwithin the story of data. The visualisation tools at http://well-formed.eigenfactor.org where used to create this illustration.


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don’T Tell everybody everyThing- buT when you Tell soMeThing, Tell The TruTh

.. Interview with Michael Hillerstrøm, Chief

Technical Officer, JN Data, about time to

market, the bad guys out there and about

having been together with SMT Data from

the dawn of time

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Michael Hillerstrøm receives us in his bright and

accomodating office in JN Data’s headquarters on

the outskirts of Silkeborg in central Jutland. From

here and together with his department he’s re-

sponsible for the stable, secure and cost efficient

operation of the IT systems of the partners behind

JN Data – Jyske Bank, Nykredit, BEC, SDC and Bank-

data. All of them are major players in the Danish

finance sector, and they also rely on JN Data to

optimize their infrastructure so time-to-market

on new initiatives is as short as possible. Michael

Hillerstrøm explains:

”Our primary focus is the operation but almost as

important is the development of the infrastruc-

ture, so our partners can use IT as a competitive

tool against the bad guys out there.” The words

are spoken with a smile, but behind them lies the

realization that IT is a major consideration for this

entire industry.

“The secret is to operate iT with a

maximum of stability and a mini-

mum of costs – and at the same time

keep at the forefront of innovation.

Perhaps not up where the wave

crashes but at least high enough so

that your head is above the water at

all times.”

Keeping your head above water can be done in a

number of ways, some of them more intelligent

than others, Michael Hillerstrøm thinks.

”On one hand: If it ain’t broke, don’t fix it. And in

many cases, that’s true. It’s an attitude that might

not lead to much development, but you don’t

often go ‘oops’ with it. But these days it’s more

about trimming things all the time and keeping

an eye on everything. And one of the things you

keep an eye on is the price.”

Of course you can put pressure on your supplier

to make him come up with the product at a lower

price, Michael Hillerstrøm explains with a mean-

ingful glance at SMT Data’s Country Manager,

Knud Skriver, who’s following the conversation

from the other side of the table.

”But you can also try to make better use of what

you already have. Or you can let something go.

We have chosen the first two approaches in most

cases where we engage in long and thorough

discussions before we enter into contracts. Of

course they need to be beneficial to both parties

– but we also invest a lot of energy in looking

after our own backyard. We don’t want machines

trigging over at a load level of 2-3 %. We need them

going at full tilt when we’re talking VMware

servers. And on the host side we make every effort

to ensure that we don’t waste cycles on doing

nothing,” says Hillerstrøm.

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JN Data is a Danish IT operation and technical data centre with facilities in various parts of Denmark.

The company is responsible for creation and operation of the technological foundation for Jyske Bank, Nykredit, Nordisk Finans IT and Bankdata, all major Danish financial institutes.

JN Data is a subsidiary, jointly owned by Nykredit and the Jyske Bank Group. Nordisk Finans IT and Bankdata are partners in JN Data. JN Data services around one third of the workplaces in the Danish financial sector. More than 200 banks run on its infrastructure and 43,000 PCs are connected to its network. Its customers account for half of Denmark’s total real estate financing and 35% of the bank market.

In 2010, JN Data had total billings of around 1 billion Danish Kroner (App 135 million Euros) and employed 345 people.

AbouT Jn dATA

He continues: ”That’s exactly where SMT enters

the picture. We have used different stages of this

software for more than twenty years and we have

co-developed on it along the way. For instance,

what we call shadow invoicing, which is to say

internal settlement of various services, which we

use to explain why IT costs money – but also for

the purpose of behavior adjustment. A lot of people

were doing stuff that was inappropriate and you can

track this if you follow things and have a history of

your transactions. We have used SMT accounting

software for this and we have been part of devel-

oping it. We still use it for that purpose. But of

course we also use the other modules for instant

overviews – so we’re not just looking at history.”

We ask Michael Hillerstrøm if, according to him,

SMT Data is correct when they say that at present

they are alone in the market with a through-and-

through IT Business Intelligence solution.

”These days I think you can find alternatives – at least

for this or that detail. But I don’t think that anybody

has connected mainframe and open systems like

they have. I think you can find a lot of companies

that bang their drums in this or that respect, but

I don’t think you can find anybody who is equally

good at both sides.”

Michael Hillerstrøm explains: ”Everything grew

out of the mainframe environment where a lot of

the focus was on how much a transaction would

cost. Remember, just a few years ago the prime

cost was the hardware. Today, it’s the software.

So knowing about mainframe and optimizing its

cost structure also calls for insight into the way

your applications are put together, structured and

used. And that is one of the things SMT’s tools

make possible for us.”

”in the old days you went out and

bought a new server when the need

arose. but the software providers have

also learned something about pricing.

As more cores and processors have been

added to the machines, more and more

licenses seem to be needed.”


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Installing the complete SMT Data solution and working

together with JN Data to develop a cost distribution

programme. To use and co-develop SMT Data’s IT

Business Intelligence platform to provide complete trans-

parency of the interaction of businessdrives and

IT-initiatives.

An environment of common language and common truth

has been established. Substantial savings in

operational costs are realized. Kompass rates JN Data in the top of its industry in terms of cost control and turnover per

employee.

AcTion

resulTs

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”But as price becomes more central to the decision process, it’s increasingly impor-

tant to have some monitoring software. What’s unique about SMT is that they can

bridge the gap between mainframes and open systems. In principle they can give

you the same information, no matter the environment. That leads to transparency

and you can see whether it would be best to run a job on a mainframe or perhaps

on four smaller servers. And at the same time you can explain the cost and why, for

instance, it takes four technicians to do the job. Or perhaps discover that part of the

installation goes unused. There is any number of aspects and every question can

be turned on its head. But SMT’s solutions will always provide you with a qualified

answer.

On one hand it’s not JN Data’s job to involve itself in the business development of

its partners. On the other they are called for to provide support so that the applica-

tion developers of each partner can produce what the businesses need.

”So what we’re offering is an insight into what’s possible with what we’ve got. But

we also like to provide a view of what could be done if we went one step further.

So a couple of times a year we organize a workshop with opinion-makers from the

various partners. And then we ask questions like: ’what should you know?’ and

’what should you wish for?’ And then we sit down and swap ideas on how to put

everything to the best possible use.”

”sMT gives us deep insight and a sensible explanation for a lot

of things. in turn, that gives us the opportunity to see things in a

structured manner and to communicate with our customers in

a way they can accept.”

”To me it is important that you should not have to tell everybody everything. But

what you do choose to tell should always be the truth. And the more you can back

up whatever you say with facts the more you can avoid the kind of discussions

where everybody has a truth that is different from everybody else’s. So to me it’s

extremely important to have a tool that gives us a common truth and a common

way to interpret things. It’s pure gold. It makes things so much easier at meetings.

And we even use it to forecast trends and tendencies as well as for our budgeting.

And that has been practically spot on for the past four years.”


JN Datas mission is to ensure competitive power for a variety

of different organizations through providing operation

of internal and external IT-operation that is safe,

stable and efficient. On a practical level, the challenge for SMT Data was to ensure a

fact-based and highly detailed cost distribution between the

owners/customers.

chAllenge

The cAr AnAlysis

Jn dATA

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when iT PuT on A neckTie.. There was a time when visiting the IT department

meant putting on a lab coat and trying to under-

stand as much as possible of the tech jargon. But

more and more often today, the CIO is one of the

directors of the company and everybody listens

while he speaks.

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“It was bound to happen. Today, IT is so integral

to the business that having it on the same floor

as finance, marketing, business development and

general management is the only natural thing.”

Nils Kierkegaard makes the statement and leans

back in his chair as if to make room for an opposing

point of view. But of course it’s hard to argue against

the fact that modern banks, insurance companies,

internet shops, airlines and a growing number of

other businesses are little more than extensions of

their IT platforms.

“iT is where you meet the customer,

create the customer experience and

close the sale”, says Jan vilstrup,

summing it up.

We are in Copenhagen’s north harbor, in the offices

of SMT Data, a company whose relatively modest

size belies the fact that it works with some of

Northern Europe’s biggest companies – and has

its eyes set on an international growth rate of rare

• Denmark • Sweden • Norway • Finland • Germany • Netherlands • UK • Spain

• Switzerland • Austria • Belgium • Luxembourg • Estonia • Latvia • Lithuania

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dimensions. Across the table sit Nils Kierkegaard,

chairman, and Jan Vilstrup, CEO of SMT Data.

business intelligence applied to iT

What SMT Data does can best be described as IT

Business Intelligence, says Nils Kierkegaard who

coined the term.

“Most major companies today use business intelli-

gence in some form. They analyse various transac-

tions to better forecast future trends, run efficient

logistics, plan marketing campaigns and do all the

other things that make up a well-run company.

What lies behind is a software solution which tracks

various sources of information in the company and

presents them in an easy-to-read manner – like a

dashboard – so the people who run the company

can make the necessary corrections to course and

speed as they go along. And we do exactly the

same – but exclusively for the processes in the IT

department.”

The core of SMT Data is a ‘Law Book’ of more than

200,000 rules and policies. These rules and policies

are the basis for the processing of millions of indi-

vidual measuring points which is integrated into

the customer’s IT framework. The result is a desktop

dashboard analysis, serving the CEOs as decision

support, general insight and transparency of the

relation between IT and business.

Transparency is a window to value

“Transparency is what it’s all about”, says Jan Vil-

strup. ”Everybody knows that decisions about the

business – should we run this marketing campaign

or not? – affect IT. As in: If we run the campaign and

get so-and-so many new customers, what will it

cost and how long will it take to integrate them

in our IT systems? And decisions in IT – should we

introduce this new application for claims man-

agement? – affect the business. As in: if we do,

our lead time for this particular task will change

and our ability to service customers will change

accordingly. But without specialist tools such as

ours the real relation between one and the other

will remain hidden.”

Nils Kierkegaard adds: “There’s always a quid pro

quo. What the business does will make something

happen in IT. And whenever IT lays an egg, it hatches

in the business. What we do is opening a window

and providing complete transparency of that rela-

tion.”

The language barrier

SMT Data has heard it argued – especially from

experienced IT people – that such a transparency

has always been there for anyone who would care

to look for it. Business management has always

been welcome in the IT department to discuss how

various decision alternatives would impact opera-

tions, they say.

“True, but the language barrier between the two

functions is a fundamental obstacle”, argues Jan

Vilstrup. “IT people talk in gigabytes per second and

business people talk in millions of Euro per quarter.

And both are quite correct in assuming that they

look at things from the right angle, because from

the point of view of the job they are tasked with,

they do. But today’s businesses and the IT systems

that support them are far too complicated for anyone


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person or department to have a full overview over

them. Without specialists tools that is simply im-

possible.

“our solution introduces a common

language that both parties can readily

understand and in which they can

easily express the most complicated

issues so that the other party can

understand them, too. This creates

a unified version of the absolute truth

about what’s happening in the inner

workings of the company. And the

value of everybody adhering to the

same truth and acting upon it without

prejudice is immense.”

value is what you make of it

Nils and Jan both hasten to add that value here

should be defined in the broadest possible terms.

“Of course value is about money. But how the com-

pany chooses to leverage the insight it gets from

the new-found transparency – that’s totally up to

the company. It may choose to look for savings, and

our tool is incomparable for that, as our case with

Danske Bank (pages 16-21) illustrates. But it may

also, for instance in periods of growth, choose to

use it to optimize processes towards more efficient

delivery and shorter time to market. Or it may look

for benefits from a human resource angle – or any

combination of a number of advantages.”

works both ways for outsourcing

And then there’s a whole different angle – namely

the benefit that comes from being able to negotiate

the best possible contract if one chooses to out-

source IT.

“Many companies seek the savings that are easily

picked up when you choose to outsource. It does,

however often turn sour in just a year or two, be-

cause the very decision to outsource has a tendency

to rob a company of the expertise to negotiate

From complexity... ...through transparency...


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sound IT deals. With our solution – and perhaps one

of our senior people as your consultant at the nego-

tiating table – you can actually reach outsourcing

deals that are long-term beneficial to both parties.”

At the same time, more and more outsourcing provid-

ers have come to accept SMT Data’s input as a strategic

benefit. They use the transparency the solutions pro-

vides to tailor their own products towards even great-

er customer satisfaction and competitive strength.

A strength and an obstacle

SMT Data has been in business for more than two

decades and enjoys long-standing relationships with

a number of customers in the Nordic countries. Now

the time has come for international expansion and the

company has established bridgeheads in the Ger-

man, UK, Benelux and Spanish markets. The three-year

objective is to close deals with major players in each

of these markets and to make SMT Data’s solutions

the industry standard for transparency of the relation

between IT and business.

“The reason we can do this is simple – we are with-

out any real competition in so far as we have inven-

ted this niche ourselves and none of the solution

providers in the business intelligence community

has been able to emulate it yet. But it is also the

biggest obstacle we have to overcome”, says Nils

Kierkegaard.

“When you’re a specialist company alone in a market

it means that you have to educate the customers all

by yourself. Frankly, as business sides and IT depart-

ments both grew within companies, complication

rose to staggering heights. Many companies came

to accept that there were grey areas of interaction

between IT and business which would never be

fully charted. We don’t accept that. And we spend

every waking hour of the day trying to persuade

customer’s that they, too, shouldn’t accept that. It is

possible to know it all. And when you do, the boost

it brings to your competitive power is quite over-

whelming.”

..

...to action!


..eFForT And eFFecT

Niels Simanis is a cost hunter for Danske Bank,

one of the largest banking groups in the Nordic

countries. He leads a task force of less than ten

experts at finding needles in haystacks – and

since 2004 they have facilitated savings of more

than 150 million Euros.

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Danske Bank is Denmark’s largest bank. It has 2.2 million private customers and services a significant part of the private, institutional and public sector in Denmark. It also has banking activities in Sweden, Norway, Finland, Ireland and Luxembourg.

Danske Bank has more than 300 branches, six agricultural centres and 1,000 ATM’s across the country. The bank employs 6,000 people in Denmark and it is a part of the Danske Bank Group, which employs 22,000 people in 15 countries.

AbouT dAnske bAnk

”If we didn’t have SMT’s software, we’d have had to

spend a whole lot of time and effort in gathering

that knowledge in other ways.”

Niels Simanis’ life is a constant balance between

effort and effect. It doesn’t take long to identify an

effort – but accurately estimating its effect takes

some systems.

”You don’t get far in an organization

such as danske bank if you’re not able

to very precisely describe what you

want to do, what the results will be,

and what costs will be incurred.”

Niels Simanis uses his hands to visualize a given

effort.

”Here’s something we could do and which would

lead to more effectiveness”, he says. ”Do we want

it for 10 million Euros? No, we don’t. Do we want it

for 5 million? Still, no. How about 100,000? Yeah,

we’ll take it for 100,000 Euros. OK, so far so good.

And that’s exactly where SMT has contributed to

making the cost side of things very clear to us, so

we know what we’re looking at. It gives us a valu-

able sharpness to our focus when it comes to costs.

It makes it easy to achieve an overview of the best

potential for savings.

Niels Simanis’ department was founded in 2004

and tasked with finding and minimizing costs. As

for means and methods the limitations were few.

But the challenge was clear: To overcome a steep

learning curve and meet great expectations as far

as results were concerned. And to be able to fully

document everything they did.

”You have to be able to describe an effort and its

effect very accurately. Otherwise, it is very hard to

get a management like ours to approve anything at

all. But that’s where SMT’s software makes it pos-

sible for us to paint a scenario with the overview

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that’s asked for. We’d never be able to do that if we

didn’t know the costs. So in this way, SMT’s product

has been – and is – an enabler of cost reductions.

And we’re talking quite a lot of money. In the years

this department has been operative we have saved

Danske Bank more than 150 million Euros.”

In Danske Bank an economic boom – such as Den-

mark had for the first two-three years of Niels

Simanis’ time with this department – goes fine

hand in hand with a cost savings mindset. The

bank has no trouble rationalizing sizable invest-

ments in, for example, acquisitions of other banks,

while at the same time operating under a strategy

that calls for cost savings wherever possible.

”Solving our task has called for the development of

some pretty sophisticated processes”, Niels Simanis

says. ”First we looked at systems. Then we looked

at programs. Now we have dug ourselves all the

way down to looking at what the compiler of the

programs is doing – and we’re starting to look at

what can be done about the hardware. So we go

everywhere to find optimizations. We have found

ways to write programs more efficiently and learn

how that affects the processes within the machines.”

Even though the efforts to get inside the very fabric

of the system are important a lot of resources are

reserved for them, they have natural limitations,

Simanis explains:

“We have to admit our systems are so complex that

we can’t juggle them around in our heads. We need

to have in place systems to tell us if our systems are

running as they should or not. You may have heard

about fighter planes that have in-built instability

to their aerodynamic characteristics. They have to

be, in order for the planes to be able to withstand

all kinds of stress in combat. And then you add

computers that can compensate for the pilot’s in-

put. Only without the computers the pilot is not

able to fly the plane. That’s what you see in modern

IT systems – they are so complicated that we don’t

know their normal mode of operation. And when

we don’t know that it’s a question of are we run-

ning the systems – or vice versa.”

Danske Bank runs app. 100,000 transactions per day

– with upwards of six billion calls to databases. The

bank has programs that are called 75,000 times per

second, creating the occasional chaos, Niels Simanis

concedes.

”when an event occurs that makes

the system stop – just for a second –

it means we have backlog of several

thousand transactions when the sys-

tems starts up again. And even if it only

means that some people have to log

on to their online net bank again, that’s

not the kind of service the bank wishes

its customers to experience.”


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..

To establish and run a special task force for cost detection, elimination and prevention.

The task force combines a full SMT Data solution with serious in-house capabilities. New solu-tions are developed and added

continuously.

Since its inception in 2004 the task force has realized savings

of around 150 million Euros. Danske Bank’s developers use

SMT tools to regulate behavior and comply with budgets.

A new spirit of commonality and cooperation now exists

between Software developers and IT-operation.

chAllenge

AcTion

resulTs

”We constantly seek what we call normal state of operation. And I don’t believe

that’s something you can achieve by hard work alone. Putting your shoulder to the

grindstone doesn’t do the trick. We have to step back – far back – from the detail

to get the overview. An example is neural networks which we have been working

on since 2005. This year we have made our first delivery in the shape of a tool we

can give to our developers and which relates to the fact that we need to be able to

handle 10 megabyte metric data per second and still be in control.”

”It is vital to understand that you cannot manually control a large IT system. We

have to build systems to watch the systems. And that’s exactly where there is a

tremendous growth potential for SMT. I am in contact with a major European sup-

plier to the German banking industry. They run 50,000 cash machines and 65,000

branch offices. They’re huge – twelve times our size. And they want to learn from

us how we have put up golems around our costs. We have arranged a workshop

to learn from one another. Obviously we also have a lot to learn from them, for

instance how to present and implement new solutions in a complex system.”

The cAr AnAlysis

dAnske bAnk

22

“We see each new customer as a golden opportu-

nity. There’s always a treasure which can be found

quickly and which, when delivered to the man-

agement, proves that working with us was a wise

decision in the first place.”

For this interview Nils Kierkegaard and Jan Vilstrup

are joined by Tony Franck, SMT’s front man for

product marketing. It’s Tony who paints the picture

of SMT as treasure seekers on behalf of the cusomer.

Nils adds:

“Tony is referring to the procedure we call the

Health Check. It’s a way to get started by looking

at the data flow in a company and making the

most obvious suggestions as to what could be

made more efficient rapidly. In most cases there

are some very easy pickings to be had some-

times even so easy and so ripe that we must

caution ourselves not to be satisfied with them

and risk losing the wider perspective.”

The three men from sMT data assert

that even though a health check rarely

costs more that 30-40,000 euros, they

regularly result in savings that are

measured in millions. but even that is

not good enough for them.

“We need more,” Jan Vilstrup states. “Our vision is

to change the way companies work by giving them

full transparency of the relation between IT and

business. That’s an ongoing process and something

far too valuable to let it be obscured by a quick fix

that just adds a million or two to the bottom line.”

.. geTTing sTArTed

Integrating a full SMT Data solution is a daunting,

but rewarding task – but there’s a way to get started

that produces immediate results and opens the

way for deeper immersion with a clear view of the

advantages about to be realized. Welcome to the

SMT Starter Kit.


23


That’s why, Tony Franck explains, SMT Data em-

ploys a second tool to support the customer in his

decision to go all in for a full scale cooperation.

“we call it the Proof of value, and in reality

it’s a piece of consulting that allows us to

fully comprehend the customers organiza-

tion and put enough of it through our system

that we can tell him with a very high degree

of certainty what he will get out of us in the

long term.”

It’s not, the three point out, just an SMT Data light, but

a program onto itself. It can be completed in less than

one month and SMT Data is to back its results with a

payment-by-result remuneration plan, if the customer

so desires.

“We call it the SMT Starter Kit, because it consists of two

elements – the Health Check and the Proof of Value – and

together they put you on the road to a new and more

efficient future. But we also considered the name The

Miracle Ingredient – because that’s actually what it is”,

says Nils Kierkegaard. “It documents how the customer

can save millions and millions on improved efficiency

through transparency in the relation between how he

runs his IT and what happens in his market place. And it

more than pays for itself, practically from day one. That’s

pretty miraculous, don’t you think?”

..

IT Business Intelligence is a clear and transparent window to the value of knowing exactly how IT affects

business and vice versa – and basing important decisions on that knowledge.

Value, in this case, can translate into many things, depending on the priorities of the company – and of

course different functions have different viewpoints.

Use your smartphone’s code reader to scan the either of the codes at the bottom of this page. It will take

you to a page that’s written especially for you – if you’r the CIO, the CFO or the CEO of your company.

And of course you’re welcome to sneak a peek at what we’re saying to the other two. They are probably

curious, too…

ceo

cio

cFo

Scan the code and get the technical nitty-

gritty on how the most advanced tools for

transparency, overview and insight can

make your voice heard at the top level of

your company.

Scan the code and experience example

after example of easy pickings and fast

savings. Still not convinced? Remunera-

tion by results is one of the options...

Scan the code and get the view from the

top. A huge part of the total budget of the

company goes to IT - here’s your chance to

get full transparency of its value.

iT business inTelligencewhAT’s in iT For you?


Transparency #01

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