RENE VAN ZUNDERT – CIO DHL SUPPLY CHAIN BENELUX René van Zundert IT Head of EMEA Technology Sector & CIO Benelux, DHL Supply Chain

Business Transformation

IT Enterprise Value Creation

CIO Forum

IT & Operations Transformation

Introduction

“IT is just a cost center … and we spend far too much on it.”

“I have no clue on what they do … but definitely not something which helps us doing business.”

“The IT folks don’t have a clue about our business.”

This is what I heard when starting in the new role …

“They position themselves as if they were another company.” MANY PEOPLE AND

THEORIES TALK ABOUT

BUSINESS & IT ALIGNMENT

“As IT we are not aligned enough to the business.”

2. VALUE OF IT IN A DIFFERENT PERSPECTIVE

OK, but …

Has anyone ever heard of

„Business & Finance alignment‟?

… or

„Business & HR alignment‟?

Alignment defined?

„IT doing things in the same way as Business?‟

GARTNER WHITE PAPER “STOP TALKING ABOUT IT AND BUSINESS” SUGGESTS THAT IT NEEDS TO STOP ASKING HOW “WE ALIGN BETTER WITH THE BUSINESS” AND START UNDERSTANDING THE “GOALS AND OBJECTIVES OF THE BUSINESS” THEY ARE PART OF.

1. TALKING ABOUT BUSINESS & IT ALIGNMENT … STOP talking about Business & IT alignment.

“US and THEM”

2. VALUE OF IT IN A DIFFERENT PERSPECTIVE WHAT WE DID – 3 KEY PILARS

2. VALUE OF IT IN A DIFFERENT PERSPECTIVE 1. GET THE BASICS RIGHT

• 38% IT cost reduction from 32.5mE in 2008 to 20.2mE in 2012.

• 45% FTE reduction from 130 FTE in 2008 to 72 FTE in 2011.

• Business partner index improved from 5.6 in 2008 to 7.4 in 2011.

• Strong increase in employee satisfaction results, particularly on

Strategy, EOS follow-up and Communication.

• Migration of 1600+ users to 1 central service desk, clean up of

mailboxes, harmonisation of 3 mailsystems to 1.

• Operations stability increased: #high-prio incidents reduced >50%

with quicker recovery times to >95% of SLA. #calls decreased >60%.

• Realisation of full IT cost transparency and introduction of new IT

cost allocation model.

• >60% reduction of # applications (600 to 210).

• >50% reduction of # suppliers (211 to 102).

• Globally first in bringing DHL high-end supply chain solution

successfully live.

2. VALUE OF IT IN A DIFFERENT PERSPECTIVE 2. BE IN THE BUSINESS

ENSURE IT IS CONTINUOUSLY INVOLVED IN ALL CRITICAL PROCESSES AND ACTIVITIES ALONG THE VALUE CHAIN.

• Senior Infomation Mgt in Finance and HR MTs

• Senior Information Mgt in all Business Unit MTs

• IT SLMs connected to Ops mgt

• (IT) Architecture in Solutions Design

• Integrated Project Mgt and Ops Implementation under CIO supervision

2. VALUE OF IT IN A DIFFERENT PERSPECTIVE

STRATEGY for IT

BU

SIN

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= Primary motive for IT initiative = Secondary motive for IT initiative

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Enha

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odel

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Stream

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IT o

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Business objectives

Improve customer intimacy

Customer Retention

Increase pipeline / hit ratio

Implement key customers / insource

……

Embed

state-of-the-art Delivery

(Strengthened

IT Capability)

EOS: People

Development

(Strengthened

IT Capability)

Innovation

(Sector focus

& Innovation)

Customer & Business

Ptnr Relationship Mgt:

Value of IT

Investment of Choice Employer of Choice

Provider

of Choice

Investment of ChoiceInvestment of Choice Employer of Choice

Provider

of Choice

Investment of Choice

Financials / budget(Simplification &

Cost reduction)

Improve customer intimacy

Customer retention

Increase pipeline hit ratio

Implement customer operations / insource capability

…………

3. “YOUR CUSTOMER = MY CUSTOMER”

ALL OBJECTIVES SHOULD BE COMMON OBJECTIVES, MEANING EACH IT COMPONENT IS LINKED TO AT LEAST 1 OVERALL BUSINESS COMPONENT.

2. VALUE OF IT IN A DIFFERENT PERSPECTIVE Inspired by Ndugu Chancler – Drums on „Billy Jean‟

Drummer

or

Musician?

2. VALUE OF IT IN A DIFFERENT PERSPECTIVE TALKING ABOUT ALIGNMENT …

Act as a business leader, focusing on IT.

Act as an IT leader, delivering IT services to the business.

BE PART OF THE BUSINESS

3. WHAT IS YOUR EXPERIENCE …? SO HOW WOULD YOU LIKE TO SEE YOUR ROLE?

René van Zundert rajp.van.zundert@gmail.com

Project Name IRR Payback NPV ($M)

Revenue

Gross

Margin

Increase

Gross

Expense

Reduction

Operating

Expense

Reduction

Working

Capital

Expense

Reduction

Project 1 58.400$ -$ -$ -$

Project 2 -$ 113.100$ -$ -$

Project 3 -$ 6.288$ 2.695$ -$

Project 4 10.146$ -$ -$ -$

Project 5 12.950$ -$ -$ -$

Project 6 -$ -$ -$ -$

Project 7 8.000$ -$ -$ -$

Project 8 -$ -$ 1.764$ -$

Project 9 0.857$ 50.889$ 138.879$ 13.972$

Project 10 -$ 0.630$ 1.058$ -$

Project 11 -$ -$ -$ -$

Project 12 -$ -$ -$ -$

Project 13 -$ -$ -$ -$

Project 14 -$ -$ 0.450$ -$

Project 15

Project 16 -$ -$ -$ -$

Project 17 -$ -$ -$ -$ Guad PBX -$ -$ -$ -$

90.353$ 170.907$ 144.846$ 13.972$

Financial MetricsProjects

P&L Business Impact

(2008-2014)

Subtotal

Total P&L Benefits $420m

Source: Sam Coursen, CIO, Freescale Semiconductor (hypothetical example)

2. VALUE OF IT IN A DIFFERENT PERSPECTIVE 3. “YOUR CUSTOMER = MY CUSTOMER”

ALL IT INVESTMENTS ARE DIRECTLY LINKED TO THE P&L.