In an aggressive move to shared virtual infrastructures and cloud for Telefonica, Phil Jordan has been closing legacy datacentres at the rate of one a month. Around 2,000 legacy systems have also gone over two years, with millions saved by not reinvesting in the same capabilities in different markets, but developing once and deploying many, with little customisation between markets.

What the judges said

"He's the CEO of a facilities business. Yes he's running a very large scale of opperation and very efficiently. He's providing the services for the business to be digital." Mike Altendorf

"You sometimes have to take dollars out of how you operate and he's doing that well." Ian Cohen

"He's a smooth operator. But a CIO of the future has to both a revenue driver and take cost out." Ade McCormack

"Right now he's driving a massive technology transformation rather than a business transformation, so he's building the blocks for the business." Ian Cox

Job title
Global CIO of Telefonica.

When did you start your current role?
September 2011.

What is your reporting line?
COO/CEO.

Do you meet with and discuss business strategy with the CEO every week?
Not every week but frequently.

Are you a member of the board of directors?
No.

What other executive boards do you sit on?
Member of the executive committee, chairman of board for global technology company.

Does your organisation have a CDO?
Yes.

What different responsibilities does the CDO have?
CDO has P&L accountability for digital products and services. Principal focus is growth through new services. The design, architecture, build and run (eg enablement) of those products and services is in the technology remit.

What non-technology responsibilities do you have in the organisation?
Business process definition, transformation and management for the groups. I'm also responsible for information security and privacy, and I sponsor a global learning intervention on leading high-performing teams.

How many employees does your organisation have?
120,000 in TEF and 6,000 in IT.

Does your organisation carry out significant trade in the EU?
Yes.

What number of users does your department supply services to?
120,000 plus indirect workforce and partners.

How do you ensure that you have a good understanding of your business and how your customers use your business's products?
The CIO must understand the business as well as anyone, including the CEO. The CIO is one of the few roles that engages and enables a business end to end and as such has a privileged position. In Telefonica, I have pushed for a CIO on all the boards of our operating companies. I value highly the level of influence my CIOs have in each unit and I personally make sure I remain as connected and influential to the status and direction of the business as any of my CEO peers. Outside of that effort, I ensure my personal and Telefonica contribution into the industry through forums such as TMF, where I am a board member.

All my team are customers of our business in their respective countries. It is an extremely important experience and perspective to have as the leader responsible for the technical enablement of our customer experience.

Telefonica technology strategy and agenda

Is your organisation being disrupted by the internet, mobility or technology-oriented start-ups?
Yes.

Are you empowered by your organisation to disrupt from the inside?
Yes.

Describe a disruptive measure you’ve led or played a major part in
Our transformation strategy to make Telefonica the leading digital telco in the world means we are disrupting every element of our business and with it every part of technology. Last year we moved aggressively to shared virtual infrastructures and cloud; we closed legacy datacentres at the rate of one a month, and removed legacy systems at a rate that has seen around 2,000 disappear in two years.

The most disruptive measure of all has been the radical transformation of our business applications with a business-led approach based on reuse and global learning and leveraging. In 2014, the countries/markets engaged in this strategy went from four to 17. We are now transforming our entire applications estate. This is a business-led transformation and it's critical to ensure the CEO in each market retains ownership of the change and the strategy; architecture, business process blueprint, assuring reuse, etc, is my responsibility.

What major transformation project has been recently completed, or is underway at your organisation?
We are taking a standards-based, business process-led approach to transforming the business systems in each market, with three partners globally. Business impacts are already visible in time to market, cost efficiency, digital/online operations and customer experience. We are saving hundreds of millions of euros in the overall transformation spend by ensuring we don't keep reinvesting in the same capabilities in different countries, but develop once and deploy many, with low levels of customisation between markets. The implementation is in clusters, which groups markets that have a similar scale, business model, complexity and commercial characteristics irrespective of geography.

What impact will the above transformation have on your organisation?
This fundamental transformation will deliver a digital customer experience across all channels, drive the business online, automate end-to-end processes, deliver multiproduct and multisegment experiences and capabilities, unlock the data and insight opportunity in our business, simplify our core product and business, and reduce cost.

How has your leadership style contributed to the outcomes of the transformation project?
My leadership style is direct, honest and bold but pragmatic. Transformation of this magnitude and importance must have transparency otherwise it will be derailed and stopped by the forces in every business that resist change. I think my personal leadership and leadership style has been critical in getting Telefonica to face the need to transform IT and accept the way it is transformed, and now trusts in our ability to make IT transformation a success.

What key technologies do you consider enable transformation?
All technology can enable transformation if it is envisioned and implemented properly. At the moment, there is no doubt that the major trends of social, mobile, cloud and analytics are the most transformative technologies and business opportunities.

Are you increasing the number of cloud applications or infrastructure in use at your organisation?
Yes.

What is your information and data analytics vision for the organisation?
We believe that information and analytics is the main future source of differentiation for our business. Our transformation strategy and plans contain much heavy lifting to transform IT in the group but the end state we are targeting is a business and IT function heavily focused on information and insight. This is what drives the IT to I3 strategy I have set for our business that is seeing us commoditise and standardise the T to allow much greater focus on the I. 

How is mobile and social networking impacting operations and customer experience?
Mobile, social networking and CRM are playing an increasingly important part in our customer experience. This is a response to changes in customers' preferred engagement channels but also a proactive adoption as we think data and insight will be the main source of future differentiation and our customers are increasingly moving to social and mobile channels. 

Describe your strategic vision towards shadow IT and BYOD. How do you influence and engage executives and employees around choice?
We have been following BYOD for some years and in many parts of the group have deployed BYOD capabilities including mobile data management and virtualisation. This has been sporadic and hasn't delivered on any of the promise really apart from bridging the gap between consumer devices and those in the enterprise. Strategically I now see a different future that is not BYOD. Consumer devices are in the enterprise and the quality of enterprise devices has improved significantly. The future challenge will be more about managing multiple social and mobile identities and less about the physical devices. I think we will stop talking about BYOD and focus much more on manage your own identity (MYOI? You heard it here first!): rather than create capabilities to enable devices to move from home to work, we will manage multiple identities, both professional and personal, on any device, securely and privately.

Shadow IT has been an issue in enterprise IT for as long as enterprise IT has been around. What I have seen in the last few years and in a business that has been under a lot more pressure and in transformation is a reluctance in the business to continue investing in shadow IT. It is a good indication of credibility and trust in the CIO and the IT team that there is a movement to give back to IT the area of shadow responsibility. Strategically, I want to encourage a two-speed IT at all levels; in this context, I want to see the business experiment and innovate in some key areas such as analytics and big data. In these areas, I will encourage flexibility and freedom to build capabilities where it is needed and try to ensure that the technical architecture is managed in the meantime and in parallel. However, in core areas and areas of business where the standardisation and commoditisation is part of our transformation, I am very intolerant of shadow IT.

I am not against shadow IT of all types – it merely has to match and fit with the business and IT strategy. Where there is differentiation and the future of your business lies there, then let a thousand flowers bloom.

What strategic technology deals have been struck and with whom?
We are heavily optimised in our run spend. This optimisation has led us to around 70% of our external opex in global deals for activities such as operations, multivendor hardware support and major software deals with the likes of IBM, Oracle and Microsoft.

More recently and to enable the business apps transformation I have outlined here, we are doing clustered global deals for application transformation and management with new partners such as Amdocs.

Who are your main suppliers?
IBM, HP, Oracle, Microsoft, Amdocs, Huawei, Accenture, Indra, Everis, Netcracker/NEC, Ericsson, Lenovo.

Telefonica IT security and budget

Has your organisation detected a cyber intrusion in the last 12 months?
Yes.

Has cyber-security risen up your management agenda?
Yes.

Does your organisation understand the potential cyber-security threats it faces?
Yes.

Has this led to an increase in your security budget?
Yes.

What is the IT budget?
€2.0–2.5bn.

How much is the IT operational spend compared with the revenue as a percentage?
2%.

What is the strategic aim of the CIO and IT operations for the next financial year?
Enable the business to become the best digital telco in the world based on our transformation plans.

Are you finding it difficult to recruit the talent you need to drive transformation?
Yes.

Has recruitment and retention risen up your agenda as a CIO?
Yes.

Are you looking for recruits in the EU to fill the skills shortage you have?
Yes.

Does your IT organisation operate an apprenticeship scheme?
Yes.

Telefonica technology department

How would you describe your leadership style?
Direct, bold, transformative, honest, pragmatic, transparent.

Explain how you’ve supported and developed your senior leadership team to support your overall objectives and vision
I am a big believer in teams needing to evolve constantly according to the demands and goals of the period. What made one team successful might not be relevant for the next challenge, so I make personnel changes to freshen the team and ensure it is equipped to meet the challenges we are setting ourselves. What does remain constant, and is a big support and development aid, is the vision. Our target destination is not changing all the time and with that comes continuity and momentum. As a leader, you have to be ready to adjust your view of the end point or designation, but probably more important is that you must have the confidence and conviction to lead a business to a target, and it helps if that is a constant for everyone to focus on.

How many employees are in your IT team?
6,000.

What is the split between in-house/outsourced staff?
1:7 approximately.

Does your team include key skilled workers from the EU?
Yes.