Technology Movements Second Quarter 2018

Chief Information Officers Practice Quarterly Newsletter April 2018 – June 2018 Movements



BACKGROUNDBlenheim Partners specialise in:▪ Executive Search;▪ Non-Executive Director Search;▪ Board Strategy and Structure Consulting;▪ External Succession Planning; and▪ Executive Re-Engagement / Transition.Founded in 2012, our team have acted as specialist Psychologists, Coaches and exceptionallyadviser to many of the world’s leading experienced Researchers.corporations on Board and Executive performance,capability and succession planning. Blenheim Partners is continually investing in knowledge and understanding as exemplified byOur consultants have worked with clients from all our Thought Leadership “The Challenges ofsectors and a broad range of geographies. They Attaining Growth”, Industry Papers and monthlyinclude over 80 of the ASX 100, 10% of the FTSE Market Intelligence reports.100, Private Equity, Multinational, Private Familyand Mutually Owned Companies. Our philosophy is to develop deep and committed relationships with a select number of clients andOur work includes assignments that are both local help them deliver a superior performance byand international in scope. optimising the composition of their Board and Executive team.Our team consists of senior SearchConsultants, Human Resource Directors, Our culture is built on pride, professionalism, esprit de corps and client service.

BLENHEIM PARTNERS TECHNOLOGY MARKETS PRACTICEThe Technology Markets Practice is dedicated to providing Executive Search consultancyservices to organisations for the following roles: • Chief Information Officer; • Chief Technology Officer; • Chief Digital Officer; • Security Officer; • Data Officer, Data Analytics and Business Intelligence; • Strategy and Architecture; • Business Relationship Partners • Governance and Program/Project Office; • Business Process Transformation and Change Management; and, • Infrastructure, Operations, Development and Service Delivery.For further information please contact Joseph Marsella, Partner Technology [email protected] and Tenure of Current ASX300 Chief Information Officers: • Female: There are 24 female CIOs out of 295, which is 8% of the CIO population. This is a decrease of 1% from last quarter. • Non-Caucasian: There are 18 Non-Caucasian CIOs out of 295, which is 6% of the CIO population. • Over 5-year tenure: There are 58 CIOs with tenure over 5 years in the same company, which is 20% of the CIO population.Diversity and Tenure of Current ASX300 Chief Information Officers (%)100 Non-Caucasian Over 5-year Tenure 80 60 40 20 0 Female

NEWS – WHO’S MOVING? • ABN Group: Gerard Hart recently departed as Chief Information Officer. • ADCO Constructions: Douglas Zuzic has been appointed as Chief Information Officer. • AGL Energy Ltd: Samantha Macleod has been appointed as the Chief Information Security Officer. • ANZ Banking Group Ltd: David Hall has departed the company. He was the Head of Technology, Data Engineering. • AUCloud: Bradley Bastow has been appointed as Chief Technology Officer. • Australia Post: Andrew Walduck has resigned as Executive General Manager, Product and Innovation, effective 6 July 2018. • Base Resources Ltd: Dennis Zuvela has been appointed as Group Information Technology Manager. • Bega Cheese Ltd: Samantha McIntyre has resigned as Information Technology Business Solution/Operations Manager and has joined Sussan Group as Group Chief Information Officer. • Beyond Bank: Robert Aitken has resigned as Chief Information Officer. • BHP Billiton Ltd: Jake Stride has resigned as Project Director/Digital Trials Lead and has joined Horizon Power as Chief Technology Officer. • Boral Ltd: Kathleen Mackay has resigned as Head of Digital Delivery and has joined NSW Department of Finance, Services and Innovation as Executive Director – Transformation, Revenue NSW. • Clayton Utz: Andrew Fisher has been promoted to Director of Information Technology. • Commonwealth Bank of Australia Ltd: Pascal Boillat has been appointed Group Executive Enterprise Services and Chief Information Officer effective 1 October 2018. • Competitive Foods Australia Pty Ltd: Wayne McMahon has been appointed as Chief Digital and Technology Officer. • CrownBet: Mark Gay has been appointed as the new Chief Digital Officer, effective 18 April 2018. • Cuscal Ltd: Colin Mapp has been appointed as Chief Information Officer. Darren Argyle has departed as the Group’s Chief Information Security Officer. He has since been appointed as Chief Information Security Officer at icare NSW. Paul Keen has been appointed Head of Software Engineering. • Domino’s Pizza Enterprises Ltd: Terry Powell has been appointed as Group Chief Information Officer. • Engenco Ltd: Brett Robinson has been appointed as Group Information Technology Manger. • Everlight Radiology: Andy Donaldson has been promoted to Global Chief Technology Officer. • Foxtel: Brian Kelly has been appointed as Infrastructure Architecture Manager. • Greenstone Ltd: Sanjeev Gupta has been appointed as Chief Information Officer.

• Iluka Resources Ltd: Matt Mueller has been appointed as Chief Information Manager replacing Melissa Roberts, who has been appointed as Commercial Manager of Sands Operations at Iluka Resources Ltd.• Insurance Australia Group Ltd: David Earls has been appointed as Executive General Manager, Infrastructure.• Iron Mountain Australia: Interim Chief Financial Officer of Australia and New Zealand Richard Manson has recently departed. Kelly Ferguson has been appointed as Director of Information Technology and Infrastructure.• Monash IVF Group Ltd: Alan Pritchard has departed as Chief Information Officer. He has since been appointed as Chief Technology Officer of Austin Health.• National Australia Bank Ltd: Brent Southey has been appointed as General Manager of Digital Channels.• News Corporation Australia: Suzie Cardwell has been promoted to General Manager, Data Commercialisation.• Nufarm Ltd: Ashley Gresswell has been appointed as Global Applications Manager.• OFX Group Ltd: Chief Technology Officer, Chris Pendleton-Brown has departed the company. Chris has since been appointed as Chief Technology Officer at WorldFirst.• Origin Energy Ltd: Shane Thatcher has been promoted to Chief Information Officer.• PepsiCo Australia and New Zealand: Ursula Phillips has resigned as Chief Information Officer.• Qantas Airways Ltd: Andrew Plunkett has resigned as Head of Office of Group Chief Information Officer and has joined Airbus as Vice President Digital Workplace.• QBE Insurance Group Ltd: Matt Mansour has been appointed Chief Information Officer.• Qube Holdings Ltd: Oliver Karovski has been promoted to General Manager, Information Technology.• Reserve Bank of Australia: Gayan Benedict has been appointed Chief Information Officer, replacing Sarv Girn. Sarv Girn has resigned as Chief Information Officer and has joined MLC Life Insurance as Chief Innovation and Transformation Officer.• SAP Australia Pty Ltd: Steven Moraitakis has been appointed as Transformation Lead, Consumer Goods and Retail.• Seven Group Holdings Ltd: James Scott, Group Executive Director of Technology and Innovation has departed the organisation. He has since been appointed as the Managing Director of Digital at Accenture.• Sirtex Medical Ltd: Craig Ulrick has resigned as Global Head of Information Technology and has joined LandMark White Ltd as Chief Information Officer.• Southern Cross Austereo: Stephen Haddad has been promoted to Chief Technology Officer.• Spark New Zealand Ltd: Jean-Louis Acafrao has departed as the General Manager, Technology. He has since been appointed as Chief Technology Officer at Television New Zealand Ltd.

• Sutton Motor Group: Sam Caltabiano has been appointed as Chief Information Officer.• Sydney Water: George Hunt has been promoted to General Manager of Digital Business and Chief Information Officer.• Tabcorp Holdings Ltd: Kim Wenn has departed as Chief Information Officer. Kim has recently been appointed as Non-Executive Director for Eating Disorders Victoria.• Telstra Corporation Ltd: Justin Spyridis has been appointed as Acting General Manager, IoT Product Engineering, replacing Alan Crouch who will be joining Verifone as Vice President Engineering, Asia Pacific Application Development.• TravelEdge: Senthuran Jegadheesa has resigned as Chief Information Officer and has joined Clinic to Cloud as Chief technology Officer.• Treasury Wine Estates Ltd: Ashley Peck has been promoted to General Manager, Global Business Services. Con Mandalios has been promoted to Global Corporate Solutions and Governance Manager. Edward Burnes has been promoted to Global Business Services, ITR Process Lead.• Visy Industries: David Peano has been promoted to Chief Technology Officer.• Vocus Group Ltd: Scott Carter has resigned as Chief Executive – Enterprise and Government.• Westpac Banking Corporation: Travis Tyler has resigned as General Manager of Consumer Digital and has joined :86 400 as Chief Product and Marketing Officer.

WHAT INVESTMENT IN INNOVATION – WE ARE FOOLING OURSELVES?Innovation is the implementation of a new or significantly improved product (good orservice), process, new marketing method or a new organisational method in businesspractices, workplace organisation or external relations.Is Australia investing enough in innovation or are we fooling ourselves?According to the latest Organisation for Economic Co-operation and Development (OECD)figures, it shows that Australia does not fare well compared with other OECD countries.Australia earns only a relatively modest proportion of its total income from the sale ofinnovative goods and services compared to other OECD countries. In 2014–15, income fromnew or significantly improved goods and services was around 7.2% of total sales. With thisestimate, Australia ranks 20th out of 23 countries in the OECD. The average of the top fiveOECD countries is 19.1%.Reasons for Australia’s lack of innovationThe discrepancy between Australia’s poor performance compared to its OECD peers, may beexplained by factors such as: 1. Lack of access to additional fundsLack of access to additional funds is the most commonly reported barrier to thedevelopment or introduction of new or significantly improved goods, services, processes ormethods. 2. The size of the business innovatingThe proportion of large Australian businesses that are innovation-active (undertook any

innovative activity irrespective of whether the innovation was introduced, still indevelopment or abandoned) is relatively small. This means that it is less likely that theirsales will result from innovative goods or services. 3. The type of innovations being undertakenMany Australian businesses are process innovators. This means that their innovations mayreduce their operating costs or improve efficiency instead of producing a new product formarket. 4. The proportion of earnings retained in the business for reinvestmentDividends paid by Australian listed companies have grown substantially since the globalfinancial crisis (GFC), most notably among large resources companies and the banks.According to the Reserve Bank of Australia, in 2015, Australian-domiciled listed companiespaid $78bn in dividends. These payments represented 81% of these companies’ underlyingearnings for the same period (the ‘payout ratio’). In comparison to global peers, UnitedStates had a payout ratio of 48%, Europe had a payout ratio of 55% and the United Kingdomhad a payout ratio of 61%.The increase in dividends over recent years could reflect an increase in shareholderpreferences to receive income payments amid lower yields on traditional cash-paying bond-like investments or a perception among company managers that there are fewer viableinvestment opportunities.Why is innovation important?Innovation is a key driver of business competitiveness, economic growth, and improvedliving standards. The OECD estimates that as much as 50% of long-term economic growth inits member countries can be attributed to innovation, and this contribution is expected togrow. On average, every $1 invested in innovation returns $2 in sales.Data from the Business Characteristics Survey (BCS) reveals that innovation-activebusinesses outperform non-innovation-active businesses on a range of measures.Innovation-active businesses in Australia makeup 45% of all employing businesses butcontribute to over 60% of sales and employment. Compared to non-innovation-activebusinesses they are 40% more likely to increase income and profitability, twice as likely toexport, and two-to-three times more likely to report increased productivity, employmentand training.The positive impacts of innovation on performance become stronger the more regularlybusinesses innovate. High-growth businesses drive the majority of employment, sales,exports and economic growth in Australia. In particular, start-up businesses that are lessthan three years old make a disproportionate contribution to growth on every indicatorexamined.In December 2015, the Australian Prime Minister, Malcolm Turnbull launched a four year,

$1.bn, “ideas boom” initiative to promote business-based research, development andinnovation. His plan was focused around strengthening ties between the businesscommunity, Universities and scientific institutions. His innovation agenda recognised thatAustralia wasn’t investing enough in innovation and that the changes would help Australiatransition “away from the mining boom” to a modern, dynamic 21st-century economy. Hestated that “we have to be prepared to do things differently tomorrow than yesterdaybecause the pace of change and the world in which we live is unprecedently fast”.Although, Australia’s economic performance to date has proven to be remarkably resilient,particularly when global economic recovery in the wake of the global financial crisis remainsfragile. Australia’s future output and employment performance will be determined by ourability to find new sources of growth. Without another resources boom, growth is likely torely on greater use of knowledge, innovation and entrepreneurship. To facilitate this process,businesses should also lower the payout ratio in line with international peers and reinvest ahigher proportion of its profits into growing the business with the goal of generating moreearnings in the longer term. The most successful corporate innovation strategies to date arethe ones that predominantly focus on people and human capital issues.Types of innovationInnovation investment can include external expenditures on ‘tangible’ items such as newequipment, machinery or technology; or purchases of ‘intangible’ items such research,consulting or design services, technology licences or patents. Alternatively, internalinnovation investments include expenses on development activities within the business,such as for staff training or in-house software development. 1. Product innovationProduct innovation is the introduction of a good or service that is new or significantlyimproved with respect to its characteristics or intended uses. This includes significantimprovements in technical specifications, components and materials, incorporated software,user-friendliness, or other functional characteristics.Example: Smartphones. Although smartphones are ubiquitous now, smartphones havebecome our digital hub, consolidating our communication, entertainment and utilitarianfunctions into a single device. Future generations may revise history into two areas – beforesmartphones and after smartphones. A key product introduced in 2007 was Apple’s iPhone.Its designers did not create a telephone with some extra features, but rather a full-fledgedhand-held computer that could also make calls and browse the internet. It is arguably themost world-changing product of the last 30 years.Examples of recent Australian product and service innovations include: DuluxGroup’s SelleysSTORM Sealant which delivers a waterproof seal on any surface, wet or dry. It’s speciallyformulated to perform where conventional sealants fail, meaning it can be applied in thepouring rain and even underwater to stop active leaks instantly. In addition to this, IkonServices Australia’s Battery Operated High-Pressure Washing Unit is the world’s first battery-powered commercial grade pressure washer unit. It plugs into an electric battery for

recharging, consumes no fuel, has zero emissions and is comprehensively quieter with noisereduced by four times. 2. Process innovationProcess innovation is the implementation of a new or significantly improved production ordelivery method. This includes significant changes in techniques, equipment and/orsoftware.Example: Automation. For years, companies have automated specific manual tasks, such asfactory work or office functions. But today, they can automate whole processes. Ubermanages more than one million drivers around the world with software that allocates workand provides feedback on how the work was performed. Cloud platforms such as AmazonWeb Services have automated the provisioning of services, allowing end users to bypasscompany IT departments and sign up for software services with a credit card.Examples of recent Australian businesses process innovations include: The AustralianGovernment, MyServiceNSW digital platform which offers more control and autonomy forcustomers, to transact seamlessly with the NSW government through any device. It allowscitizens to manage their own single, secure profile to find 900 transactions from 50government agencies in three clicks or less. WorleyParsons, in partnership with a roboticscompany, has developed a robotic arm device to remove the need to manually unloadcatalyst. In the downstream oil industry, unloading catalyst is a necessary but dangerous andtime-consuming task. It has historically been a manual task, exposing workers to toxicenvironments. The robotic device completely removes the need to expose workers to suchenvironments. 3. Marketing innovationMarketing innovation is the implementation of a new marketing method involving significantchanges in product design or packaging, product placement, product promotion, or pricing.Example: Volvo. Volvo crippled the competition with their \"Interception” campaign duringthe 2015 Super Bowl. The Swedish automaker asked their followers to tweet using thehashtag #VolvoContest, whenever a competitor’s commercial was aired during the game,about someone you thought deserves a new car. While the competitors were showing whatmatters to them, spending $60m collectively, Volvo wanted to know who matters most totheir customers. The best tweets got a response from Volvo, and five lucky winners wereselected. The campaign drove significant impact and increased visibility for Volvo. Theyreceived over 50,000 tweets within 4 hours and increased sales by 70% for the Volvo XC60the month following the game (the highest in its segment).An example of a recent Australian businesses marketing innovation is media company, CHEProximity developed a way for Cochlear to test people's hearing, without them knowing.'Does Love Last Forever?' is a short film with two different endings, depending on theviewer’s hearing ability. Link

4. Organisational innovationOrganisational innovation is the implementation of a new organisational method in thebusiness’ business practices, workplace organisation, or external relations.Example: Toyota altered its organisation structure to further accelerate decision-making,strengthen management oversight, and boost its business innovation. To promote its goal ofmaking ever-better cars by continuing the development of a talented workforce, Toyotamade substantial changes to its structure in 2016 to create a company built around aproduct-based, rather than function-based, organisation. These changes were spurred bythe vital realization that sustainable growth cannot be achieved without tackling two majorchallenges the company was facing as it continued to grow. The first was how to develop asufficient number of people who can lead with quick judgment, quick decisions and quickaction through genchi genbutsu (on-site learning and problem-solving) because the changesthe company faced required a different way to think and act. The second was how to reducethe time and effort consumed by cross-functional coordination and establish work processesthat allow the company to focus on making ever-better cars for its customers. Toyota isrecognised as the leader in the global automobile industry.An example of an Australian businesses’ organisation innovation: E-commerce business,Kogan.com, founded by entrepreneur Ruslan Kogan in 2006, started a business by cuttingout the middleman, got a private label that used the same or similar components to the bigbrands, and to sell it directly to the consumer, in a way that is more price efficient. Herecently floated his business, that started off in his parent's garage, on the ASX, with amarket capitalisation of more than $160 million, with revenues projected to top $240 millionin the 2017 financial year. Kogan largely accomplished this by building a company andculture around his original insight: that the connections and scaling power of the internetare incredibly valuable, especially if you can move quickly on the insights. “Every singleperson that we recruit, whether they are in the marketing team or IT team or the call centre,they need to sit a logical and analytical reasoning test. We’ve got analytics as part of ourculture. We, as a business, act on stats,” says Kogan.