The role of the CIOby the year 2020

Illustrated using a large semi-governmental organisation

Dirk De BoeckHead of ICT Innovation

- Winston Churchill

“The electric light bulb was not invented by constantly improving the candle”

So, what is the market situation for bpost?

Why CIO’s are being pushed towards innovation

Postal markets:a lightspeed athanor of 2 worlds

“Facebook teams with Deutsche Post to preserve memories”

“eBay acquires Magento eshop”

“SingPost launches global ecommerce platform”

“bpost launches Do My Move Online”

“TNT Express goes mobile with tracking solution app”

“New DHL tool helps shippers track and cut carbon emissions”

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“The incorporation of e-services in the logistics business has reached

a staggering exponential footprint since 2000”

The eBattle

The battle has 3 main fronts

- Post & Parcel -

BATTLE ONE

CHURNChurn from physical to enhanced, faster and

cheaper digital communication media

BATTLE TWO

COMPETITION

Competition entering postal markets with physicaland/or digital alternatives

BATTLE THREE

DEMATERIALIZATION

Vanishing volumes as part of a green, digital economy

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But we are aware of the threat.

The CIO and Innovation

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Why Innovation has become the CIO’s priority in postal services

Customers find postals too expensive

Aging infrastructure

Customers don’t care about the postal network

They only care about the content it ships

Vertical postal sectors will become obsolete (retail, business & government)

No innovation = give away the market to other sector leaders

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Some already have a head start

• Operational efficiency

• Pay as you go• Keep latest

standards

Correos (Spain) orders a EUR 41m cloud-based IT system

• Product development with partners (Motorola, Zetes, …)

• More campus thinking

Deutsche Post DHL expands innovation centre in Germany

• Simpler access to package shipping

• Track & Trace anywhere you are

FedEx widens mobile access as customer usage evolves

• Protect market share

• Push for more online sales

DPD launches tool for felixible delivery windows in Germany

• Control the parcel market at the source

• Claim percentages on sales

Rakuten Group buys Play.com and Priceminister as logistics triggers.

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What does this evolution predict?

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2020 CIO must be a service integrator

• Telecom & ICT• Multiple access to multiple

services

2020 CIO must to techno-visionary

• ICT & telco giants penetrate our market

• We penetrate their market• Boundaries become vague• Invasion by larger postal

countries with new hi-tech offerings

2020 CIO must be enterpreneurial

• To leverage new markets (shopping, egov, food chain, medical logistics, …)

• While increasing service levels in existing businesses

How all this shapes the future job description

of the CIO

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Business drivers that will influence the future CIO’s profile

How will ICT be part of the ecosystem?Follow or lead business initiatives, or

both?

Which integrators will play a role in our market?

What is our role in theirs?

Is it better to team or to battle?

Is it better to focus or to be diverse?

Do you really need to be the first? After all, it’s the second mouse that gets the

cheese.

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Technology visioning

Competition analysis

Deal architecture

Portfolio management

Release marketing

The future job description… focus

Manage data to feedbusiness decisions

Structure data to measureOperational performance

Minimize number of IT systems, or bridge them

Adopt external market ICT standards, even in your core

business

Build disruptive technologies to attract new types of customers

Investigate the competitor ICT as well as your own

Even more cost reductionAnd go cloud

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The 2020 CIO’s profile quadrant

ChiefIntelligence

Officer

Chief Integration

Officer

ChiefInfrastructure

Officer

Chief Innovation

Officer

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CIO

• Reduce Infrastructure costs• Manage legacy technology• Ensure smooth IT operations

• Eliminate "shelfware”• Adopt virtualization and cloud• Renegotiate contracts

• Another term for this might be "Chief Connection Officer”

• Connect various IT systems• Bridge legacy and cloud

services

• Get the right data to the right people on the right devices

• Establishing and measure key performance indicators

• Improving data quality• Choose the right business intelligence and

analysis tools

• Identifying disruptive technologies and find ways to apply them in the enterprise (=INVENT NEW STUFF!)

• Investigate the ICT setup of the competition

• Watch sector trends and filter them• Manage all R&D for ICT based

products• Improve the ICT customer

interfaces

INTEGRATION

INTELLIGENCE

INFRASTRUCTURE

INNOVATION

ChiefIntelligence

Officer

Chief Integration

Officer

ChiefInfrastructure

Officer

Chief Innovation

Officer

CIO

• Reduce Infrastructure costs• Manage legacy technology• Ensure smooth IT operations

• Eliminate "shelfware”• Adopt virtualization and cloud• Renegotiate contracts

• Another term for this might be "Chief Connection Officer”

• Connect various IT systems• Bridge legacy and cloud

services

• Get the right data to the right people on the right devices

• Establishing and measure key performance indicators

• Improving data quality• Choose the right business intelligence and

analysis tools

• Identifying disruptive technologies and find ways to apply them in the enterprise (=INVENT NEW STUFF!)

• Investigate the ICT setup of the competition

• Watch sector trends and filter them• Manage all R&D for ICT based

products• Improve the ICT customer

interfaces

INTEGRATION

INTELLIGENCE

INFRASTRUCTURE

INNOVATION

In reality …

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So, what are the priorities for the near

future?

Don’t shoot at everything at once

But the question is:

In which areas will the CIO need to look first?

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Using Royal Mail (UK) as example

Which segments to go for first

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Source: 2010, Lausanne Business School, UK Postal Market

CIO priority setting in the UK postal market for 2015-2018

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Most crucially identified in the UK are:

Customer Service:• = Existing services to customers• = based on existing ICT offering• = IMPROVE what you have

= QUALITY

New Services• = Hunt for new markets• = Hunt for new customers• = Market share• = Market development• = INVENT / ACQUIRE what you don’t have

= SALES

Bpost potential area’s for new business ICT as of 2012

Integrated Track & Trace

(incl. via syndication)

Total integration for

Document Management &

Worklow

Large government automation

deals(FEM)

Combined eBusiness solutions

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By 2020 the CIO will have to re-writethe complete tech-sales story

The CIO and the cloud.Be prepared.

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Rising server-to-admin ratio’s• from 25:1 to 250:1

… 1000:1 … 10000:1 (Google)

ICT becomes a variable cost• CAPEX:OPEX• Is ICT still strategic

at board level?

End-user auto provisioning• SaaS-IaaS-PaaS

Infrastructure becomes commodity• Business

knowledge is the new key

Here comes “The Cloud” …

Overall view on expansion

Or not ….

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Bpost expansion so far

Currently present in 10 EU

countries

2009: USA• Washington• Chicago

2011: Asia• Hong Kong• Singapore

Rumors about bpost

expanding to East-Europe

through acquisitions are

not correct. There are no

plans (anymore) at this point.

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Expand or Innovate

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As postal operator we need to stay inside the government mandate. This influences our economic model

ICT solutions will however:• Open up new potential markets• Expand customer base in existing markets

Key factor will be FIRST on becoming a very solid supplier internally to the business

And THEN become a partner of our business lines… with possibility to re-sell ICT services to the end market

Let’s share some ideas

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So what does the future look like to you, as a CIO? Does this sound familiar?