While many CIOs worldwide still run IT as a support function, the IT chief at Brazilian paper manufacturing giant Klabin is focusing on repositioning technology as a value generator to the business.
Klabin is the biggest paper producer, exporter and recycler in Brazil with revenue of $2.3bn. The company is currently experiencing a top management reshuffle, so there is a renewed drive to deliver results and more value for money – and IT is a key actor in the process.
The company already has a fairly lean and standardized IT set-up – most of its systems, from the factory floor to customer service are SAP-based and infrastructure is outsourced to HP – so the main goal of the IT department led by CIO José Geraldo Antunes is to bring in further simplification, driving cost reduction and providing clever solutions to business issues.
“IT is currently experiencing a ‘probation period’ – the time when we had to automate and roll out large platforms has passed. In this set-up, either IT needs to become strategic or it will be relegated to being a support area,” Antunes told IT Decisions in an exclusive interview.
“So I am spending a good chunk of my time evangelizing and trying to get that mindset across, that IT is indeed strategic. It is a process of staking a claim to space for the department and consequently for me as well,” he said.
“Delivering value is much more complicated than delivering technical work. You need to have business competences, be able to constantly negotiate partnerships and never lose focus, as well as being a strategist all the time.”
In order to reduce overall cost, as well as IT spend at the company – which currently accounts for 1% of the company’s turnover – Antunes is constantly reviewing his portfolio of technology work and what can be done cheaper elsewhere.
Much of Klabin’s IT is outsourced, but the CIO has recently found that it would be cheaper to bring some work back in-house. An example is the company’s service desk, which had been outsourced four years ago and was insourced last year.
“We use a lot of outsourced services, but the government has strongly gone against that by raising taxes and you also get increasingly worried about labor liabilities. The cost of controlling all becomes very high and it starts to make sense to leave some things in-house,” said Antunes.
Klabin had outsourced the service desk for its offices spread along the entire Brazilian coast in order to streamline processes, reach higher levels of service and replace high salaries paid internally by third-party staff.
However, the scope of the contract widened as well as cost, so the department was insourced, already with stabilized processes and improved service levels and economies generated.
According to Antunes, the IT skills gap in Brazil was also one of the reasons prompting the decision to bring the service desk back in-house.
“We looked at that lemon differently and just made a lemonade. We brought in people at the start of their careers and without vices – I can train these people, use them in different areas and feed my internal base of talent and using our standards and values” said Antunes.
“Nowadays the [IT talent] scarcity is much more pronounced in terms of quality than quantity. But we are also fortunate in that people enjoy working here, as Klabin is seen as a stable company with a solid set of values, so my turnover is quite low,” he said.
According to Antunes, a strong partnership with the company’s human resources department, which focused on recruiting the right mix of technical, business and soft skills was essential to making the insourcing process happen successfully.
Bringing agility to the business
Despite the fact that large software implementations are already a thing of the past at Klabin, some systems are still being rolled out, but with a view of bringing agility to business areas.
One such project is the implementation of a enterprise resource planning supplied by SAP across the company’s human resources department, which will replace another off-the-shelf product supplied by Brazilian firm Senior Software.
According to Antunes, the intention is to introduce the system to, for example, enable staff working night shifts at the firm’s factories to use self-service kiosks to perform admin tasks.
“The idea is to allow people to do things via a self-service system so HR can focus on higher value tasks such as training and people development and spend less time on bureaucracy,” Antunes said.
The customization of the SAP-based systems and creation of what the CIO calls “input optimizers” is another important area of activity for Klabin’s in-house staff around making things simple to the business.
“We used to think that it was a deadly sin to change SAP’s standards because upgrades become more difficult and so on. We then found a way out, which I recommend, which is to create these optimizers,” said Antunes.
“Because it is global, the SAP set-up is quite square and Cartesian, sometimes you have to go through 15 screens to complete a task. We created layers that simplify that process for the users: they may be prompting several operations but the front-end process is just seamless” he said.
“And when the time to upgrade comes, there are no issues since I didn’t touch on anything that was fundamental.”
Despite these activities around systems, the CIO admits that he is spending less and less of his time on purely technical jobs.
“Some things, like deciding when the desktop upgrade is going to be done, are still part of the job. However, as you create procedures and a solid IT base, you can make time to focus on what really matters.”
Changing attitudes of IT
Antunes commented that there has been a noticeable shift in the attitude of his 80-strong IT staff in the last couple of years. “Sometimes my peers from other business areas ask if I plugged my staff into an electrical plug – questioning the value of this or that [IT] project is something that has become very prevalent in the team,” he said.
“We now measure the IT contribution not by the delivery of a certain tool, but the return of what has been delivered to the business.”
According to the CIO, the habit of finding out whether IT tools are bringing value to the business is a healthy attitude, but it is also something that requires a great deal of soft skills.
“We have become challengers in various situations that initially required an IT solution, by questioning processes and other things that were not always related to IT and making people realise that a system on its own doesn’t always change everything,” said Antunes.
“However, you need to have a certain credibility as an IT department to allow these conversations to happen – if you are seen as an area that is in debt, it becomes difficult to take part in a debate where the specialists are from other business areas,” he said.
Being up-to-date with the basics is something that Antunes advises to any CIO wanting to claim “their seat on the table” – and remain seated.
“If you do not have a technological base that is solid, it becomes very difficult to focus on delivering value. You have to get your homework done first,” he said.
The future of the CIO
In a business setting where IT has to generate value, Antunes reckons that it is possible that Nicholas Carr’s theories will become reality and IT will become a complete utility, so CIOs will need to revisit their career strategy.
“For a long time, [IT] was the department that translated the language of IT to the other areas, but this doesn’t make any more sense, especially now with the Generation Y entering the workforce,” said Antunes.
“In that set-up, the CIO needs to be the orchestrator, who captures all the opportunities that the business can take advantage of, bolts them all together and steers them towards the common strategy,” he said.
“IT is a key part of any business and that will be even more so in future, what will change is the way you use it to bring in competitive advantage. In that scenario, there will be two types of CIOs: the helpdesk boss and the one that uses IT to make a difference – I chose to go for the latter option.”
Image by DG Jones licensed under Creative Commons.