cio forum - kn presentation - alejandro vlasich

11th Logistics CIO and Supply Chain Forum

Amsterdam

p. 2

Some personal marketing...

Alejandro Vlasich

Born in Argentina

Located in Austria, Vienna

12 years in Kuehne + Nagel

8 years as Regional IT Manager for South and Central America

2 years as Demand Manager for Corporate IT (Germany)

Since 2 years VP for Eastern Europe

3 years in Lotus Corporation as Country Manager in Chile

3 years in Unisys Corporation as Services Manager for the Financial LOB

Agenda

Eastern Europe: facts and figures

• Overview of KN in Eastern Europe

• Geographical issues

• Cultural issues

• Economical issues

• Legal issues

• Infrastructure issues

Challenges for IT

Approach and results

Questions & Answers

p. 3

Introduction Program EE p. 4

LT

PL

LV

EE

AT

BY

CZ

SK

HU

HR

RS

GR

BG

RO

UA

MK

BA

RUS

SI

AL

HQ Vienna

• 21 Countries

• 75 Locations

• Headquarter in Vienna

• 4515 Employees

Eastern European Region

Key Figures

p. 5


Key Figures

p. 6


Running a show in Eastern Europe is...

p. 7


Geographical Issues

10 time zones

> 75 offices , many of them far from standard routes or urban areas

p. 8


Cultural and Political issues

4 Official Religions

4 different alphabets plus many variants of Latin alphabet

18 languages plus many more dialects

Ethnic and historical issues that remain present even today

Disparity of cultural and educational levels

Disparity of wealth distribution and income

Unstable political situation in some countries

p. 9


Economical issues

Huge impact of the recent economic crisis

Recession still visible in Russia, Ukraine, Greece, Baltics

Economical crisis in Greece is still explosive

Overall volumes decreased during 2009 to record levels

Non Euro countries suffered high exchange rate impact

Many small and medium local players went bankrupt

Slow recovery in Q1 2010, but still not constant

p. 10

LT

PL

LV

EE

AT

BY

CZ

SK

HU

HR

CS

GR

BG

RO

UA

MK

BA

RUS

SI

AL

HQ Vienna

MD

GDP Growth over 2%

GDP Growth from 2% to 1%

GDP Growth from 1% to 0

GDP Negative Growth

Source: The Economist/ Economist Intelligence Unit /2009

Expected average Real GDP Growth in Eastern

Europe lies by 1.5% for 2010


Economical Issues

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feis

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RE

SE

AR

CH

0

10

20

30

40

50

60

70

80

90

100

PL

HU

CZ

SK

SI

RO

BG

HR

RS

BA

AL

RU

UA

CE SEE CIS

2001

2008

Average 2008

Manpower cost

comparison

EE will stay

competitive


Economical Issues

p. 12


Legal Issues

Of 21 countries, 8 are not members of the EU.

Countries like Russia, Ukraine and Belarus have very complex regulations and laws for taxes and accounting booking procedures.

Some non EU countries do not admit commercial documents in other language and alphabet than their own.

Even EU countries have complicated rules when it comes to taxes, numbering of invoices, etc.

Customs regulations are dissimilar. Even the Customs Nomenclature is not standardized and requires complicated association tables.

Insufficient and outdated official communication in non EU countries when it comes to changes in tax calculations and reporting.

p. 13


Infrastructure, Resources and Software Issues

Disparity of communications’ infrastructure.

High costs for communications in some countries or specific locations.

Low quality and/or availability of resources in suburban or country areas in most of the countries.

Few English speakers, even in management positions.

Absence of proper mobile solutions in some countries/locations.

Regulations: e.g. in some countries is forbidden the use of K9 encryption devices (Russia, Belarus, probably Ukraine joining soon to the ban).

Import regulations increase costs and delivery times dramatically. E.G. it takes up to 2 months to import a server in countries like Serbia, Russia or Belarus .

Existence of “de facto” enforcements regarding Accounting Software in some countries (Russia, Ukraine, Belarus).

Absence of World Class hardware suppliers in some countries.

p. 14


Challenges for IT

How to provide adequate IT services in order to:

Manage IT Commodities

• Help Desk / Customer support

• Implement centralized hosting services

• Establish homogenous network and security setups

• Standardize operational and accounting applications

• Define and establish IT SLAs and IT Product Catalogues

Achieve costs saving

• Automate processes

• Find niches where to apply Economy of Scale

• Rationalization of IT resources

• Centralize solutions development

• Implement an offshore / onshore model for software coding

• Network Rightsizing

Add Value

• Establish proper business alignment processes

• Improve our time-to-market for business demands

• Implement a proper IT Governance model and process

Help Desk and User support

• 3 levels escalation process.

•Local: Native speakers plus English knowledge

•Regional: English speakers

•Corporate: English speakers

•Far from being perfect, but a centralized solution is not a cost efficient option due to language and cultural issues.

Centralized Hosting of:

•Email

•Mobile solutions (BES)

•Active Directory.

•Remote management and support.

•Shared and business applications (regional or corporate).

•Impact: Reduction of 40% of existing number of servers in the region.

Network and Security

•Standardization of network providers.

•Standardization of network technology, topology and accesses.

•Implementation and Enforcement of Security and Operational Policies.

p. 15


Approach and results

IT

Commodity

IT

Commodity

IT

Commodity

Discover Niches for Costs Savings• Printers Consolidation: a typical IT headache.

• Network Rightsizing: a typical financial black hole.

• Off shoring: coding and primary technical test is a commodity, and can be easily outsourced.

Use of Standard Applications

•Sea, Air and Overland operations use standard applications

•Accounting uses a standard system. Integration with local applications, where needed, is done via interfaces.

•Contract Logistics uses a standard application for shared warehouse operations.

•Non standard applications have been or are in the process to be removed.

•Important impact on efficiency: same tools, same processes. Reduction of TCO of non standard applications. Reduction of business continuity risk.

SLAs and Catalogue of Products

•Service Level Agreements were implemented for all the countries, with a detailed level of services, expected resolution times, escalation processes and deliverables.

•A catalogue of IT products was defined and distributed to the business fields.

•As a consequence of above, Business Units can plan better their time to market of solutions for customers.

•And, also, IT reduces the pressure and stress of providing solutions without previous notice.

p. 16


Approach and resultsCosts

Saving

IT

Commodity

IT

Commodity

IT / Business Alignment• Establish a trustee relationship with the Business Units.

• Change the mindset of the IT Managers from “Cable-guy” to “Business Orientation”.

• Introduce the concept of IT as a Business Partner for the Business Units.

• Enable a much earlier involvement of IT into Business Projects.

• Implement a Demand / Supply organization model.

Improve the Time-to-Market of IT solutions

•Implement a fast-track process to develop solutions faster: no cumbersome bureaucracy.

•Accompany the Business needs: no more “IT serves IT”.

•Educate the IT organization as a service provider.

•Take the lead and approach the problems proactively: IT proposes solutions before the Business realizes are needed.

Implement an IT Governance Model

•IT is represented in the Regional Board of Directors.

•The Region is represented in the Corporate level and participates in the IT strategy.

•A Regional IT Board is in place, constituted by the Regional CIO and the IT Managers of the top 5 countries: Jointly decided strategies = stakeholders always on board.

•A structured decision making process is implemented: No “just because” decisions.

•All project and IT decisions are based on Business Cases: Financial justification.

p. 17


Approach and resultsAdded

Value

Added

Value

Added

Value

p. 18


Some final Tips

Exercise your patience to the maximum of your capacity.

Be prepared to deal with different clashing cultures.

• Inter-Balkans

• Greeks and Macedonians

• Serbians and Albanians

• Baltic and Russians

• You name it…

Never minimize the ethnical issues.

Do not attempt to “cut and paste” Western European or North American management models into Eastern Europe.

Maximize the financial control to avoid overpricing.

Push hard for standards, no matter how much the local organizations push against them.

Implement an IT Governance model as soon as possible

Establish bridges with the local management

And, again, exercise your patience…

Thanks for your attention

Questions?

cio forum - kn presentation - alejandro vlasich

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