Besides its effects on ICT, the impact of the digital transformation in a business context is crucial.
CIO Talk

CIO-Talk at Haniel

Dirk Müller, CIO at Haniel, and Thomas Henke and Jens Paprotny from T-Systems discuss digitization and the changing relationship between quality, speed and security.
Author: Thomas van Zütphen
Photos: Natalie Bothur

Mr. Müller, why do you feel that businesses unwilling to embrace digital transformation are putting themselves at risk?

Traditional companies such as ours are not always accustomed to doing things without being certain of the outcome. You have to be brave to invest in something that may ultimately fail. And the more successful you have been with a traditional business model – and this has a profound impact on all employees – the more courageous you need to be to try out something different.

What role does disruption play?

It quickly becomes an issue, sometimes too quickly. But we should not allow ourselves to be intimidated – by the thought that if we don’t make the first move, someone else will, rendering our business model worthless. It’s about having the right mindset. We need a culture that considers both sides of the coin. Digitization may give rise to new market entrants that threaten our business model, but it’s also an opportunity to improve. Disruption is a tool we can use to our advantage.
“Being allowed to fail is a key factor in every step of digital transformation.”
Dirk Müller, CIO Franz Haniel & Cie. GmbH

So what would be the first step?

First, we must understand that digital transformation is a business issue, rather than purely an IT issue. The question is: what impact does digital transformation have in a business context – especially for us as a B2B enterprise? And it’s not about creating the next Uber or Airbnb, either. We need to look at our existing business models and value chains, and find ways to generate what we call ‘sustainable innovation’.

As a B2B organization, how important is customer centricity?

A clear emphasis on customer needs is crucial in almost every part of the value chain. As a B2B enterprise, the concept of customer centricity is more abstract – and that doesn’t make this undertaking any easier. My customers, and those of my team, are our user departments in the holding company, plus the CIOs at Haniel’s portfolio businesses. We don’t have a typical structure where the holding company acts first and the individual businesses follow. Instead, we work together as partners. We offer our guidance, skills and a focus on emerging challenges and opportunities of interest to all our portfolio businesses. Digital transformation exemplifies this collaborative approach – and we have incorporated the CEOs of all Haniel businesses into this process.
Haniel Facts & Numbers
Franz Haniel & Cie. is a 100% privately-owned family equity company headquartered in Duisburg, Germany. Its diversifi ed business portfolio includes Bekaert Textiles, CWS-boco, ELG, TAKKT and METRO GROUP. Revenue (2014): €3.944 billion Employees (2014): 11,544

Can you give us an example?

The first step was to make the entire organization aware of the huge importance of digital transformation – even at companies with traditional business models, such as those in our portfolio. For example, we and T-Systems jointly hosted a Digital Transformation conference for our group at the T-Systems Innovation Center. This allowed us to work with our portfolio businesses to identify potential projects and develop corresponding prototypes. It was a fantastic and thought provoking experience.

How does an enterprise such as Haniel design its IT infrastructure? And is there any overlap between your role as a CIO and your role as a digital transformation pioneer?

Haniel’s IT is essentially a hybrid. We deliver services for the holding company and core business processes. But our program management team also offers the skills needed for invoking change – in other words, resources and expertise that can provide our portfolio businesses or the holding company with whatever support they require. And this is where I see myself as a driver of digital transformation. How can we shape this transition, and what are the next steps once we’ve raised awareness? Together with the CEOs of our portfolio businesses, we have devised a model that will be unveiled at our annual press conference in April. This will be an exciting narrative, one that reflects the concept of our portfolio – with subsidiary support, and a focus on added value and synergy.

Can you give us more detail?

The aim is to effectively consolidate and organize certain defined skills and resources, and operationalize them in practice – just as we did with our colleagues at the T-Systems Innovation Center in Munich. If you can experience digitization in action, it has much greater impact: instead of wondering if we really want to start something, we wonder how we could even consider stopping. This is a big step forward. We need to take highly abstract digital concepts, and generate concrete ideas. And then we must verify their viability from the customer’s perspective, and turn them into market-ready offerings. Only then should we address the technology; in other words, “How can I scale it, integrate it, and turn it into something that delivers a return on our investment?”

How important are external partners to this ongoing business digitization and transformation effort?

It can’t happen without partners. We fully intend to make use of a strong network of partners, such asT-Systems. You yourselves embrace the principle of partnerships, and are therefore well aware of the advantages it can bring to your own customers.

You mentioned scalability and integration: What role does the cloud have to play in this regard?

We have deployed a cloud delivery model since 2003, with T-Systems’ Dynamic Services for SAP platform. Back then, the term ‘cloud’ didn’t exist. We are a cloud pioneer in some ways – and we benefit from each and every innovation that T-Systems develops. It is a really fantastic partnership. But each of our portfolio businesses makes its own decisions on architecture and technology. For example, at the holding company, we employ Office 365 from the Microsoft Cloud, and share our experiences with the other Haniel businesses

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