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The most difficult part of being a CIO is to strike the right balance between operations and development, says Charlotta Nyström, CIO of Finnish chemical industry group Kemira.
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“Everything has to work and be efficient, and you have to drive down costs,” she says. “And at the same time you have to digitalise the company, and not neglect development.”
Today, 70% of the IT budget at Kemira is allocated to maintenance and operations, with most of the rest going to requests from development teams, and only a small part spent on enabling digitalisation.
“But we are increasing investment in digitalisation,” says Nyström. “We are going to focus on digital customer interactions – this is one of the most important things for us going forward.”
For example, the company is taking advantage of the internet of things by putting sensors into customers’ facilities and offering them services based on the collected data.
“We are also planning to provide digital information about order status, data sheets and so on, and to do more within market intelligence,” she says.
The CIO’s task is to make sure the IT function is a few steps ahead of the rest of the organisation, says Nyström. “You have to plan for the future. The rest of the organisation does not really understand this, but when they want mobility or the internet of things, you have to have built the capabilities for it in advance – otherwise it will take three years to give the organisation what it wants now.”
To be able to predict the business’ future needs and decide which trends to pursue, Nyström keeps a close eye on what other companies do. “I network with other Finnish and Nordic CIOs, as well as CIOs in the chemicals industry,” she says. “The networking is both informal and formal.”
Two networking groups
The formal part consists of being a member of two networking groups, one with a small members’ fee and the other self-organised. “In the self-organised group, we take turns to invite the other CIOs to show what their company has done IT-wise, and the inviting company also pays for the conference costs,” she says.
“These two formal networks are very valuable to me. Together with analysts, they are my best tools to look into the future.”
Nyström and the other CIOs do not just talk trends – they discuss how they work in most areas. “For example, we talk about governance models, how we organise IT, service centres and sourcing,” she says.
After completing a master of science in polymer technology, Nyström had not intended to work with IT. “I had planned to go into our family company, but we lost it in the mid-1990s, and instead I got into IT pretty much by chance in the late-1990s IT boom,” she says.
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In 2004, Nyström was hired by Kemira as a SAP specialist. “And then I worked my way up,” she says. “I became CIO in 2013, and it was my first real leadership position, so I have learned a lot within that area. Now I have 100 staff.
“I think being a good manager is about believing in people, coaching them and giving them tools to do a good job in their own area.”
It is also important for a CIO to help IT staff interact with the rest of the organisation, says Nyström. “I used to work in strategy in Kemira, so I have seen how the company operates. This means I have a good view of how things are best pursued. I also know how the rest of the organisation sees IT, and I can help build bridges.”
Outsourced 28% of IT
From a spend point of view, Kemira has outsourced 28% of its IT, says Nyström. “That is a higher percentage than the global average for chemical companies, according to Gartner. But compared to other companies in Finland, the percentage is low, according to the conversations I have with fellow CIOs.
“We are on the lower side because we insourced the service desk, SAP and SharePoint support, which are things many other Finnish companies have outsourced.”
Insourcing the service desk has greatly increased the quality, says Nyström. “We are measuring end-user satisfaction on a scale from 1 to 100. We began measuring when it was outsourced, and the overall end-user satisfaction was 60. Now we are at about 80, so it is a big improvement.”
Charlotta Nyström, Kemira
To Nyström, the big question is not why insourcing has increased the quality. “I think the question is why outsourcing meant such low quality,” she says. “It has to do with the structure of our company – we are very global, but not that big.
“If we are to outsource, we have to go with the big players, since the Finnish suppliers do not have the language and time zone capabilities. But for the big suppliers we are a small customer, which means we do not get the best resources or the most attention.”
SharePoint support was insourced in 2014, and SAP support at the beginning of 2015; Kemira has not yet measured changes in end-user satisfaction.
“But I believe the quality has increased, because there are few complaints,” says Nyström. “We insourced these functions after we had calculated the business cases, and saw that we both could save money and get better quality by having them in-house.”
For the moment, Nyström is not planning to insource any more functions. “We have looked at possible business cases for datacentre, and so on, but it did not make sense,” she says. “We have centralised to a single duplicated datacentre, and it is nearly fully virtualised now. This means we have already cut costs and increased efficiency.”