Bien plus qu’un prestataire de services… quel est le véritable rôle des technologies de l’information et de la communication dans la transformation de l’entreprise ? Manfred Immitzer, DSI de la division réseau de Nokia, analyse les évolutions opérationnelles, les transformations IT et le concept de “zero distance” adoptés par sa société. (Article en anglais)
Dr. Immitzer, Nokia’s Networks division (formerly NSN) has undergone extensive restructuring with transforma- t ions across the business and IT – what came first?
Good question. The starting point was our overall business strategy, and this was the foundation for our IT roadmap. But in many ways, it’s the IT transformation that paves the way for achieving strategic goals – by turning ideas and changing business imperatives into real-world processes, and by redefining productivity. That means IT needs to set the pace from the get-go. Because from this moment on, it begins to transcend its supporting role to perform an entirely new function as a business enabler. Going forward, it makes a crucial contribution to strategic development.
In your case, ‘going forward’ means you have realigned your IT to embrace the concept of zero distance to the business. You’ve consolidated around 100 ERP systems onto a central One SAP platform; you’ve cut down the number of applications by 75 percent; slashed the number of providers by 95 percent; and opted for outsourcing, or to be more precise, for an innovative partner model, to externalize all your IT processes. Why such a radical shake-up?
The post-merger integration of Nokia and Siemens and, in a subsequent step, of Motorola Networks gave us a unique opportunit y to have a thorough spring clean – in terms of applications, providers and infrastructure. To achieve this, close collaboration and effective partnership between business units were absolutely essential. The program established to consolidate our ERP systems was given the name Quote to Cash. We leveraged the initiative to harmonize our processes from end to end – from the initial customer inquiry through to invoicing. Within the company, we positioned the undertaking as a unique business opportunity, not as an IT project. This kind of thing would never fly as an IT program.
So you’ve learned that IT always needs to be a means to an end?
If you like, yes. I believe successful IT repositioning is based on three elements: a strong vision, a resilient culture of trust, and a clear signal from the CIO that underlines his willingness to implement the defined changes. Our vision in IT began with the roll-out of a new business model and introduction of next generation IT. As soon as you make it clear internally that IT offers a whole new world of opportunity, a platform to base the entire reorganization of the business on, people start to understand what you’re doing.
So we need to stay as close to the business side as possible. We need to understand the direction the company is moving in and the parameters it has defined to meet its objectives. And then we need to act fast and deliver proposals that show which routes can lead to these goals. Our role is not simply reactive; we need to be a pro-active business partner. We don’t just create solutions for processes that have already been defined. Instead, we actively shape concepts and data architectures. It ’s a very exciting task and is excellent motvation for our team – with the clear message that this radical shift, this transformation, will turn us from a service provider into a true business enabler.
Your own resources were dramatically cut within the scope of the restructuring process. What impact has this had?
IT is always under threat of cost-cutting. And, to a certain extent, that isn’t a bad thing. But this time around, it did seem to be mission impossible. The team was much smaller than before and we had a very limited budget – but were expected to achieve more. The decisive factor, though, is where exactly the cuts are made. Today, we’re generating real value added for the business in areas such as process acceleration, time-to-market and asset reduction, and this is worth significantly more than the cost savings themselves. If you’re looking to radically streamline your IT portfolio and make strategic decisions on where to invest your resources, it’s essential to define where the company is headed and what IT mechanisms will help it reach its goals and generate value. We measure our contribution in terms of net present value, which is the same benchmark used by financial experts in other fields. If we perform well, we enable transformation, paving the way for the company vision to progress from PowerPoint presentation to day-to-day reality.
But you can’t achieve all this alone. How do you go about finding the right partners who share your view of IT as a business enabler?
First, all stakeholders should be aware that in a conventional outsourcing model, there is no escaping the service provider role. So we need to ask: how can we replace this network of suppliers with an ecosystem of partners that understand us and where our priorities work well together? They must cultivate their competitive relationships in terms of the interests and goals they share with us. This is the kind of model we have developed for applications. And now we’re working on our infrastructure. We have defined a performance-related payment system where 20 percent of the annual revenues that our partners generate from us depends on whetherwe reach our targets. It’s similar to the clauses found in top executives’employment contracts. As a result, our partners identify with our organization. They are not just tied to us by conventional SLAs. They share responsibility for the success of ourcorporate IT – and the corresponding SLAs cover all elements of service delivery.
How long does it take to negotiate a model like this, where your partners truly understand the customers’ way of thinking?
Our shared philosophy is that everything my competitors and peers at the Nokia table do is not just of benefit to themselves and to Nokia, but to me, too. This avoids conflicts of interests among partners, and between them and us, from the get-go. But it also calls for a particular mindset. In the short term, it may sound like a greater risk, but in the long run, it creates a solid foundation for partnership and is the better option. Tough negotiations are needed to develop the right mode of operation and governance models. At the end of the day, you need the full commitment of all partners. In return, they get to play a significant role, and heavily influence our processes and our business. That’s what I like about zero distance – it’s so multifaceted.
So, for example, if there’s a problem or an escalation, zero distance means all stakeholders are involved in finding a solution?
That’s right. If an employee encounters an issue that stops them from working, we no longer have the back-and-forth to pinpoint whether the cause is the desktop system, the data center or the network. Everyone works together to resolve the issue immediately. This is a key characteristic of our transformation approach and is reflected in our end-to-end SLAs.
How close would you say you are to achieving zero distance to the business?
We’re getting there – in our customer operations, for example in sales, we are already very heavily involved in process development. The same goes for financials and logistics. In R&D, we built an engineering environment cloud designed to accelerate continuous integration cycles. Since then, we’ve been concentrating on software development processes.
Do you think the idea of IT as an enabler of zero distance is as widely accepted as it should be?
The world of telecommunications, in other words the world of our customers (the 400 largest cell phone and landline network operators globally), is starting to embrace the cloud as a technology and business model, something the IT industry did some years ago. For our customers, the telco cloud has an innovative but disruptive impact. They need to move fast – and we need to keep close to them as our customers. Five years ago, we would have said the trend is to commoditize infrastructures, networks and data centers, and to focus on applications and value-added services. That is why an increasing number of businesses have outsourced infrastructure. Today, however, IT infrastructure is no longer a mere commodity for telcos such as Deutsche Telekom and equipment manufacturers such as Nokia. It’s not just something that I buy in the most cost-efficient way possible. It has the potential to be a genuine business enabler – in terms of how I deliver services in the future, and how I can develop a value proposition that was simply not possible in the past because the market mechanisms were completely different.
So you think infrastructure is experiencing a renaissance?
For sure. Systems integration, cloud service orchestration, insight into data centers, and the question of how I combine legacy on-premises services with native cloud offerings could all become core issues and important competitive differentiators again.
To strengthen your competitive differentiation, you’ve developed a program called Networks goes Cloud. What is that all about?
First, it’s the foundation for our own cloud transformation. To accelerate time-to-market for our R&D activities, we recognized the need to deliver infrastructure as a service. But as we’re dealing with patents and intellectual property, we opted for the private cloud solution I mentioned earlier.
Second, the program aims to revitalize cloud-based infrastructure at end-user level. Within the scope of our infrastructure renewal program, we want to enhance the scalability, flexibility and cost benefits of end-user services.
A further goal is to consolidate data center activities that were, until now, partly in the cloud, and partly on premises. These are all enterprise IT issues.
In addition, the initiative addresses our own service delivery; the network services we provide to customers, for example. Our Global Delivery Centers need a flexible, secure environment that supports increasing automation. So we want to provide them with a state-of-the-art cloud architecture.
Networks goes Cloud addresses one aspect of your own cloud requirements and multiple requirements that you have identified among your customers?
That’s right. It’s about deciding on the direction of travel, and improving our internal IT systems. These changes create new imperatives in terms of capacity, speed and the protection of intellectual property – and these, in turn, define our architecture requirements. Networks goes Cloud addresses all aspects of telco clouds, including the virtualization of network functions and SaaS models for customer experience management. Some of these areas overlap, and that ’s why we’re taking a holistic look at architecture.
What does that mean for your partner ecosystem?
The current model comprises three elements; and as a result, three partners: one for enterprise applications, one for R&D systems, and one for infrastructure. We are planning to extend this ecosystem, adding a number of strategic partners for project-based tasks. Our primary partners are responsible for everyday IT operations: but to ensure a broad knowledge base, and avoid lock-in, we like to spread projects across multiple players.
You’ve just outlined the collaboration model. What do you expect of your service providers, their infrastructures and services, in terms of quality?
Nokia’s business is based on the extremely high quality of its products. And I demand the same standards of our providers, their services and their networks – with zero downtime. Our partners are 10 0 percent behind our model. That is the only way it can work. I’m in a similar situation myself. I expect our partners to contribute value to the company; and our internal customers expect the same from me and the IT department. We have many users – but we also need to consider the value we’re adding for their customers. This applies across the board to costs, productivity, availability, business parameters, and stakeholder satisfaction.