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Tata Steel IT Director Nick Reeks, the company's vendor management expert, discussed how graduates are growing the organisation's skills portfolio and what digital transformation means for the European arm of the steel manufacturer in a Q&A with CIO UK.

Recognised in the CIO 100, Reeks shared his ideas on best practice for successful partnerships with key technology partners, information security, the impact of cloud and data analytics capabilities, and how emerging technologies like augmented reality, blockchain and artificial intelligence might have a significant impact on the manufacturing sector.

What do terms like digital and digital transformation mean for an organisation like Tata Steel; and what have been the biggest challenges and opportunities in undertaking initiatives in these areas?
Digital can mean many things, but fundamentally it is about applying technology to processes which improve both the user experience and productivity. For Tata Steel, the emphasis is on how we change the customer experience through portals, ecommerce, EDI, track and trace, and so on. Of course, as a manufacturing organisation, we are equally keen to develop the potential of the Internet of Things and how this can support engineering and operational effectiveness.

Opportunities for digital are not the issue – it's more about how we select and prioritise. Additionally we have to deal with a multitude of legacy (dare I say heritage?) systems and the complexities of data alignment, interfaces and consistency. We have invested in enterprise service bus capabilities to help move data more efficiently and provide a baseline for more connectivity from old to new, but as this requires in-depth knowledge of both old and new technologies, achieving rapid progress can often be elusive.

In the recent 2018 CIO 100 business technology leaders in the UK overwhelmingly responded they were struggling to recruit the necessary IT and digital skills to drive transformation. How much of a challenge has this been for Tata Steel, and where have you had successes in this area?
For a number of years we did little if any IT recruitment, especially of graduates. This has changed in the past two years where we have now recruited around a dozen new graduates with varying backgrounds. They are making an impact by bringing new ideas and new ways of working. I have not quite agreed to installing a table tennis table yet, but they are working on me!

We have opted to increase graduate numbers to improve our pipeline and grow our skills. The cloud capabilities are all fine, but when you get to the brass tacks of actually coding, the pool of skills is just too small. It has struck me as odd that a number of the larger partners and vendors we work with have been talking to us about their shift to digital and how they have 're-shaped their team profile', but when you stand back, it seems operational or traditional IT skills have been let go and more consulting and advisory skills on-boarded.

When you then come to shift from concept to production, you're faced with the "oh, we don't have those skills" dilemma. Tata Steel outsourced two years ago, but like all companies who go through this process, we will always look at the profile of tasks and skills we need to maintain cost and delivery targets.

How do you see the role of cloud services and data analytics capabilities in innovation and transformation initiatives at Tata Steel?
Tata Steel Europe was one of the first major enterprises to take up Office 365 in 2012, so we are not averse to the opportunities in the cloud. We have since moved to take advantage of many SaaS platforms such as Hybris, Ariba, Success Factors and Anaplan, for example, to complement our on-premise application landscape. In terms of new could services, we are working with our current partners and Microsoft to create cloud services which will reduce our traditional data centre load.

While it is of course de rigeur to claim "we're shifting to cloud", my personal view is that the philosophy should not be taken slavishly. In Tata Steel we have a large estate of applications which have almost no data spikes and grow gently year on year; the variable cloud cost seems attractive but the crossover point against on-premise can be reached quite quickly. Of course we have to take the investment profile into account which helps, but it does focus the mind on the target areas.

Similarly, the speed of availability can make a substantial difference for certain applications which may have a short shelf life – as long as you then manage this new estate aggressively. Here one of our challenges is to apply traditional estate management skills to the 'new world'.

Analytics is a major driver for us right now. We are in the middle of a major build for a data lake which can be used for multiple functions and manufacturing teams and which will complement existing reporting and analytics tools. What has been very marked here is the drive in the business to support the initiatives and bring data management to the fore as a business, rather than an IT issue. This provides us in the IT team with the space to focus on providing the platform to run the use cases. Of course, the downside is the pressure is absolutely on us to deliver this.

To what extent has information security risen up your agenda, and how has your organisation been tackling cyber threats?
No matter which sector you operate in or whether it is B2B or B2C, you cannot afford to ignore the issues associated with security. Of course, we have had long term initiatives around policies, behaviours, practices, processes and so on, but I think what marks out the importance today is the speed and impact a security issue can have relative to even three to five years ago. Hence we have invested in traditional areas – like end-point and network security – and replaced very old systems (XP went largely 18 months ago, but we still have some apps on this platform) to reduce risk.

Ultimately, without being fatalistic perhaps, it is about risk reduction as some form of cyber threat is ever present. To help us in this area, we are working with our partners to introduce a security operations centre which will provide greater insight to manage the network and landscape. Hopefully we will also be able to develop the right use cases, automation and intelligence to actually cope with the overwhelming volume of data which could arise from such an operation.

Naturally IT on its own is not the answer – the human factor is vital as well to ensure good practice and the reduction of risk either through inadvertent link-clicking from phishing, or even accidental data breach by adding the wrong recipient to a long mailing list.

What do you think are some of the most important ways of working with your technology and IT suppliers to ensure successful partnerships and benefits for your organisation?
Tata Steel Europe went through a major outsourcing process in 2016 involving IBM, TCS, Capgemini and Vodafone. With a five-year timeframe and virtually all areas of infrastructure, network, workplace, application support, service management and application development in scope, this was a major transformation on a Europe-wide basis. Central to the approach was the ability for the partners to work with each other and understand their roles and responsibilities within this new ecosystem. We introduced governance for operational, service and contract review meetings which provided the central backbone to manage cost and service.

Naturally in any such large-scale change, we have seen the traditional phases of outsourcing but equally we have taken some key steps forward including the complete refresh of 16,000 workplaces from XP to Windows 8, a transformation programme on applications to clean up the landscape, the introduction of ServiceNow as a core platform to support SIAM and transform the user experience - plus the start of a programme to move from traditional PABx telephony to VoIP using the Skype for Business application. In parallel, all our partners are contributing to a Digital Innovation Centre to provide a common area for them to showcase new technology and identify areas where they could collaborate.

There is no secret formula to this area – it's about continuous hard work and the recognition that under any circumstances, failures in basic services means the hard-earned seat at the top table to drive digital and innovation can be devalued or even taken away. This recognition has underpinned a new initiative with all our partners to drive 'silence' in operations where each partner is working on eliminating any service hotspots which can impact the basic capability.

This exercise has perhaps also triggered my team to reflect on how much time we invest in projects to help the business look at automation and analytics yet how little time we spend in IT on where we could leverage these in the service arena; only recently I was road testing a new bot for raising an incident via a smartphone, and we hope to have this rolled out by the summer. Silence of course is a sound goal, but this does not necessarily mean a service provision has to be invisible. Now, more than ever, the partner network we work with has a tremendous role to play with us to create a positive reputation for IT in every aspect.

What emerging technologies are you investigating or watching which you expect to have a significant impact on your sector and organisation?
Although I would not tempt fate, I am not sure steel itself is likely to be disrupted as a producing industry – the barriers to physical entry are pretty significant. But crucially, there are many areas where disruption could occur in the supply chain, in substitute products, in the data exchanged with customers, in further processing and so on.

So in terms of emerging technologies outside the (now traditional) digital initiatives, we are very keen on the opportunity for Internet of Things; our plant in the Netherlands is in the pilot phase with a LoRa network to provide the infrastructure for low-powered sensors which can be deployed around the site and used for any number of applications to support operations, engineering and monitoring, for example.

Of the other hot topics, AI and AR applications are showing promise. For the latter, some of the teams have developed test applications which combine Microsoft's HoloLens and digital drawings so engineers and especially new apprentices can experience planning an engineering task in near reality, and have greater insight into both the practicalities of the task and any safety risks which would need to be taken into account.

Finally our good friend blockchain; this is very much a watching brief but the concept of supply chains which can track the lifecycle of steel from first use to the point of recycling has perhaps infinite potential to apply. However, how to realise and monetise it may prove a more significant challenge.