Global Cio Survey 2008 - Innovator Vs

Capgemini Consulting

the way we see it

Global CIO Survey 2008 The Role of the IT Function in Business Innovation

Innovator vs Operator Abstract

Capgemini Consulting

the way we see it

Foreword

In today’s business world, innovation is inseparable from technology. Individuals are moving ahead of organisations in their ability to exploit new information and communication technologies and are increasingly able to create business value with minimal support. This fast-changing relationship between business and technology creates a major new opportunity for today’s CIO to build an IT function that delivers more value than ever before. However, we believe that the opportunity will not just ‘arrive’ but will require carefully thought through actions to become reality. The purpose of this survey is to explore the views of CIOs across the globe on how this increased access to new technologies and information is changing their role, and the role of their IT function. Among the issues addressed are: n Why is it that the IT function is so rarely seen as a driver of innovation? n What is the appropriate balance of focus between innovation and operational efficiency? n How can a CIO create the space and culture to foster innovation? n What is the “right” role and strategy for the CIO and IT function in the future? As well as reporting and commenting on the findings of the survey, this report proposes strategies that CIOs may wish to adopt to work more effectively with the rest of the organisation and enable business innovation.

The survey, the latest in a series of international CIO surveys undertaken by Capgemini Consulting1, is based on one-to-one interviews with nearly 400 CIOs across the world, representing all industry sectors. We thank all the CIOs who participated in this year’s study for sharing their opinions with us, and hope that this publication stimulates thoughtful discussion.

Olivier Sevillia Capgemini Consulting West Europe CEO

Paul Nannetti Capgemini Consulting Continental Europe and Asia Pacific CEO

Eric Monnoyer Capgemini Consulting Vice President BIS Global Leader

1 Last year’s survey (IT Agility - Enabling Business Freedom) explored the views of CIOs of major organisations on agility and its impact on IT.

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Participating Companies and Organisations Capgemini Consulting would like to thank all 395 participating CIOs and senior managers who gave time to be interviewed for this CIO survey. Besides the organisations listed below, 30 additional companies participated in the survey but requested to remain anonymous. Business Services

Energy & Utilities

Adecco Agapes Restauration Capgemini CB Richard Ellis Descours et Cabaud Det Norske Veritas (DNV) Fast Search & Transfer Group 4 Securicor Messe München GmbH Open Text Pon Equipment & Power Systems Prosegur Securitas SSP

Aker Kværner AREVA Arkema ASERCO / Grupo Agbar AVR - Van Gansewinkel BJ Services Brabant Water Centrica CEPSA CGNPC Clariant DONG Energy S&D E.ON UK Elyo ENAGAS Enbridge Endesa Eneco Fortum Gas Natural Gaz Métro Göteborgs Energi Kuwait Petroleum Italia Lyonnaise des eaux Manitoba Hydro National Oilwell Varco Distribution Services Neste Oil NTE (Nord-Trøndelag Everk) Petrofac Petrom S.A. Red Eléctrica de España (REE) Repsol ypf Rowan Companies RTE RWE AG RWE Dea Shell Gas & Power Sibelga Suez Energy North America, Inc. Tennet Terna UNION FENOSA Vattenfall Veolia Environnement Viesgo Enel Vitens

Consumer Products & Retail Ace Hardware Ahold Europe Bonduelle Coca-Cola Erfrischungsgetränke AG Coop Cora Dick’s Sporting Goods Euromaster Findus Sverige AB Friesland Foods Grolsch Groupe Go Sport ICA Ikea Nederland JD Group Julius Maske Kelloggs Iberia Marine Harvest Nestlé Waters Norauto Office Depot Europe Office Max Paulig Coffee Division Philips Electronics Premier Farnell REXEL Rieber og Søn Rudolf Wöhrl AG SAB Miller Schuitema Sony Ericsson Mobile Communications STIME (Filiale informatique du Groupement des Mousquetaires) Swedish Match Nordic Systembolaget TomTom Tradeka Ulta Cosmetics Vandemoortele 2

Financial Services ABN AMRO ABP Agrupació Mutua Allianz Allianz Elementar VersicherungsAktiengesellschaft

Allianz Nederland Atlantis Seguros Banco Caixa Geral Banco Sabadell Atlántico Bank of Cyprus BNbank BNP Paribas CAIFOR Cardif España CCR CEC Credit Agricole Belgium Crédit du Nord CZ Badenia DSW Folksam Fondiaria Sai GE Money Bank Genworth Financial Groupama Handelsbanken HBOS Corporate Banking Industriens Pension International Card Services Jyske Bank KBC Group Kuntien eläkevakuutus Länsförsäkringar Leasint S.p.A. Luottokunta MAIF MAPFRE Menzis zorg en inkomen Millennium Bank Mutua Pelayo Paylife Bank GmbH PGGM ProCredit Bank Raiffeisenbank Austria Zagreb Sanitas Siemens Financial Services Sparebank1 Midt-Norge Splitska banka Societe Generale Group Swedbank TD Meloche Monnex Texas Medical Liability Trust UBP UniCredit Tiriac Bank Univé Universo Servizi Univé-VGZ-IZA-Trias Värdepapperscentralen VVAA

Capgemini Consulting

Manufacturing AB Volvo ABB North Europe Region Alfa Laval Arc International Arcelor Stainless Astellas Pharma Bayer Business Services Black & Decker Hardware and Home Improvement Bluestar Silicone BMW China Automotive Trading Ltd. BMW España Bosch Rexroth China British Vita Canon Europe Cooper Standard Automotive Cosun EADS DS Forbo Group Freescale Global Dinamics Grupo Uralita Gruppo Radici Hendrix Genetics Holmen Hospira Huaxin Cement Company Ltd. Kemira Komatsu Europe International Kverneland Lafarge Lanxess Corp Lennox Europe Merck Farma y Química, S.A. Metals USA MTS Group NCC Roads Norske Skog NXP Semiconductors Océ Organon PG Group Plastic Omnium Renault Trucks Rhodia Rockwell Automation RONAL GmbH Saab AB Sanofi Pasteur MSD SCA AB Scania Schneider SEAT SKF Solvay Pharmaceuticals Stora Enso AB Trelleborg AB UPM-Kymmene Volvo Bussar Volvo Cars Volvo Trucks Yamaha Motor Corporation, USA ZF Group NAO

CNAM-TS CWI Danish Commerce and Companies Agency Dataport Department for Children, Schools and Families Erasmus MC FEDICT Försvarsmakten / Armed Forces Gemeente Den Bosch General Teaching Council for England Göteborgs Stad HM Revenue & Customs Home Office IND INE - Instituto Nacional de Estadística Kadaster Land Berlin Land Hessen Lantmäteriet Learning and Skills Council Leids Universitair Medisch Centrum London Borough of Greenwich Ministère des Affaires étrangères Ministère des Finances Ministerie van Buitenlandse Zaken Ministerie van Economische Zaken Ministerie van Justitie Ministerie van Landbouw, Natuur en Voedselkwaliteit, Dienst Landelijk Gebied Ministerie van Onderwijs, Cultuur en Wetenschappen Ministerie van Sociale Zaken en Werkgelegenheid Ministerie van Verkeer en Waterstaat Ministerie van VROM Ministerio de Administraciones Publicas Ministerio de Justicia Ministerium des Innern und für Sport Ministry of Justice National Offender Management Service NTNU (The Norwegian University of Science and Technology) Octrooicentrum Nederland Office for Criminal Justice Reform Openbaar Ministerie Oslo Kommune (City of Oslo) Region Skåne Rijkswaterstaat Rikspolisstyrelsen SINTEF Skatteverket SoZaWe Rotterdam Stockholms Stad SVB Unédic Universitair Medisch Centrum Groningen Universitair Medisch Centrum Utrecht Universiteit Utrecht Västra Götalandsregionen Vereniging van Nederlanse Gemeenten Ville de Lyon vtsPN Youth Justice Board Ziekenhuis St Jansdal

Public, Government & Social

Telecom, Media & Entertainment

ANPE AntoniusMesosGroep Bergen Kommune (City of Bergen) Bundesministerium des Innern (BMI) Capio Centre des Technologies de l’Information - Etat de Genève

Acision Belgacom BT DN Endemol Holding Entertainment UK Ericsson AB

Global CIO Survey 2008

the way we see it

Gruppo Mondadori KabelNL KPN NetCom Nokia O2 Orange Nederland Breedband PCM Uitgevers RTL Nederland Sanoma Uitgevers SEAT Pagine Gialle S.p.A. SOGECABLE Tele2 Nederland Telegraaf Media Groep TeliaSonera Tiscali S.p.A. T-Mobile Netherlands Vodafone Vodafone Libertel Wegener WEKA

Travel, Transport & Logistics AENA Alstom Ferroviaria ANWB APRR Banedanmark Broström Tankers Norway BVG (Berliner Verkehrsbetriebe) BW Gas Correos de España Deutsche Post World Net DHL Express DHL Iberia DHL Logistics Farstad Shipping Fritidsresor GEFCO Geodis Hyatt Corporation Iberia Inex Partners Oy Infrabel Italferr JO Tankers Leif Höegh & Co. London Underground, Transport for London Lufthansa Flight Training GmbH McKesson Corporation NSB Posten Logistikk Posten Norge Railion Nederland RENFE Rohde & Liesenfeld SAS Schenker SEUR SNCF Southwest Airlines Stena Line TNT Post Torvald Klaveness Group Transport for London Vopak

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Executive Summary

With new technologies redefining the way we do business, one might expect the CIO and the IT function to play a leading role in business innovation. However, our survey results indicate that they are not. Moreover, the future role of the IT function is under threat. An Economist Intelligence Unit report2 showed that over a third of CIOs agree with the statement that within five years standalone IT departments will have ceased to exist. One of the reasons for this is that a new generation of IT-literate business staff and managers is now able to exploit new technologies and market services to innovate without the help of in-house IT professionals. Nevertheless, we believe that there is an opportunity for CIOs to take a key role in business innovation. Our survey found that organisations where the IT function has a leading role in business innovation share a number of common traits. They are characterised by business leaders who understand IT, effective relationships between the IT function and the rest of the business and strong delivery of fundamental IT services. Their CIOs tend to report into the CEO or COO rather than the CFO, and their IT functions view themselves as partners to the business rather than suppliers or utilities. Interestingly, culture and leadership seem to have more impact on the IT function’s ability to innovate than KPIs and financial incentives.

2 01 2006 – The changing role of IT in the business

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To create a long-term partnership with the business means, among other things, finding the right balance between two key roles. The Operator role is concerned with service quality, business continuity and cost containment, while the Innovator role focuses on competitive advantage. Though these roles have conflicting drivers, the majority of CIOs believe that they can (and in many cases must) be owned by the same person. Finding the right balance is often challenging, but the results show that operational effectiveness is a precondition of being allowed to innovate. For long term success, the CIO needs to develop an environment within the IT function that is conducive to innovation. As well as changing internally, the IT function must improve its profile within the business organisation. It should aim to help the business to use technology to transform business processes, and should proactively scan the marketplace for innovative technologies that can create business value. By enabling the business to capitalise on the combination of user-friendly technology and IT-literate users, the CIO can turn the IT function into an indispensable strategic tool for the organisation.

About the Survey – Intention and Method Methodology and Structure This survey is based on face-to-face interviews with CIOs and other IT executives in almost 400 companies and organisations in Europe, Africa, North America and Asia. 20 countries are represented and the respondents are spread over a wide range of industries. The interviews were

conducted between August and November 2007 by senior consultants from Capgemini Consulting. The average revenue of the surveyed companies is approximately 6.4 billion euros and the average IT budget is approximately 125 million euros (average IT budget measures 2% of total revenue).

Figure 18: Distribution per industry of the respondents

Number of Interviews per Industry

14

47

39

Business Services Consumer Products & Retail

33 52

Energy & Utilities Financial Services Manufacturing

73

Public, Government & Social 67

Telecom, Media & Entertainment Travel, Transport & Logistics

71

Figure 19: Distribution per country of the respondents Number of Interviews per Region

32 39

9

Asia Pacific 29

Central Europe

12

Eastern Europe

7

52

France Italy

26

Netherlands & Belgium 17

Nordic North America South Africa

86 87

Spain UK & Ireland

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About Capgemini Consulting

Capgemini Consulting is the strategy and management discipline of the Capgemini Group. With 5,000 consultants, Capgemini Consulting is a recognised global leader in largescale, enterprise-wide transformation. We collaborate with our clients to achieve tangible business results, sharing the risks and leading the transfer of skills and knowledge to client organisations.

Contact us: Global: Eric Monnoyer +33 (0) 1 49674650

France: Nicolas Gauthier +33 (0)1 4967 9904 Cyril François +33 (0)1 4967 5797

Belgium: Sanjay Jhamb +32 (02) 708 1111 Canada: Marc Finkelstein +1 (416) 365 4512

Germany, Switzerland: Oliver Bittner +49 3088 7030 Kestutis Ivinskis +49 3088 703257

China: Adrique Lee +86 2161053888 Hao Ding +86 2161053888

Austria, Eastern Europe: Alexander Kun +43 (1) 21163 8419 René Weichselbaum +43 (1) 21163 8143

Denmark: Daniel Paetsch +45 3977 8594

Netherlands: Eric Kruidhof +31 (30) 689 7545

Finland: Jukka-Pekka Riihelä +358 (9) 4526 7337

Norway: Eiulf Lian +47 24127392

For more information please visit: http://www.capgemini.com/services/ consulting/

Special thanks to the following in producing this report Core Project Team/Support Julie Metelko, Christian Mueller, Ivar Sinka, Sabrina Alili, Tom Blacksell, Gilles Camoin, Susan Donaldson, Stuart Edwards, Cyril François

Sweden: Ulf Larson +46 (8) 5368 5427 UK and Ireland: Julie Metelko +44 (0)870 238 2605 Ivar Sinka +44 (0)870 366 0702 USA: Steven Rogers +1 (714) 585 5844 South Africa: Stephen Asbury +27 (0) 11 280 6000 Michael Roussouw +27 (0) 82 787 4935 Australia: Andrew Williams +61 (0) 3 9613 3504

Project Steering Committee Nicolas Gauthier, Kestutis Ivinskis, Eric Kruidhof, Ulf Larson, Julie Metelko, Eric Monnoyer Marketing & PR Tom Barton, Valérie Brisac, Jo Coppins, Bea Kowalska, Kristin Waring

Spain: Christophe Jean Marc Mario +34 (91) 657 7828

About Capgemini and the Collaborative Business Experience Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working —the Collaborative Business Experience

—and through a global delivery model called Rightshore®, which aims to offer the right resources in the right location at competitive cost. Present in 36 countries, Capgemini reported 2007 global revenues of EUR 8.7 billion and employs over 83,000 people worldwide. More information is available at www.capgemini.com.

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