Aligning the business and digital agendas
Jay Crotts, group CIO at Royal Dutch Shell, on how digitalization has dissolved the lines between business and IT strategy.
When it comes to the exploitation of cutting-edge technology, Royal Dutch Shell operates on a different scale to most other businesses. As Europe’s largest company and ranked number 5 in the Fortune Global 500, the energy giant has always relied on innovation in engineering and digital technologies to drive growth and efficiency across its global, vertically integrated operations — whether hunting for new gasfields by analysing vast quantities of seismic data or optimizing customers’ retail experience on its forecourts.
To help deliver that Shell looks to one of the largest IT departments on the planet — an IT team of more than 8,000 in-house staff and contractors, backed by a multi-billion dollar annual budget, and overseen by EVP and group CIO Jay Crotts, a career-long employee who took on the top IT job in July 2015.
But the scale of his challenge is growing exponentially. Digitalization now presents Shell with a host of new opportunities — not only to embrace digitally inspired business models but to extend advanced IT right across its organization, a development that has put digital at the top of the business as well as IT agenda.
“The digital agenda has been at the forefront of Shell’s thinking for years,” says Crotts in an exclusive video interview with I-CIO, “from the automation of oil field [production] to the engagement with our end-customers. What the new digital revolution does is give us a much more pervasive platform. So no longer do we just have to focus on the application of cutting-edge digital technologies to our major assets: we can do that for all of our assets.”
That means being able to extend technologies such as IoT and big data analytics to all levels of its production and supply chain as well as enhancing all aspects of its engagement with consumers. “Digital transformation gives us huge opportunities: the opportunities for new business models and the opportunities to dramatically enhance the way we operate our businesses,” says Crotts.
That is already changing the relationship between the IT organization and the rest of the business it serves — permanently. “The digital journey at Shell has been phenomenal,” says Crotts. “ It has helped us engage with the business in a new way. They know that to be successful they have to be able to embrace information technology. Indeed, for any company today, what major change can it actually undertake without that being directly connected to the digital agenda?”
And that means a merging of outlooks. “No longer do we have business strategy and IT strategy; we have a business and digital linkage that makes sure we are able to deliver all the business value that IT can bring to bear,” he says.
Digitalization is being led from the top of the company, with business executives such as CEO Ben van Beurden “fully embracing the digital agenda,” Crotts highlights. “They may still be driven by KPIs and metrics focused on business activities but they look for the knowledge of IT and digital professionals to partner so we get the maximum value from our assets or deliver the most value to our customers.”
For the technology team, that has involved a shift in thinking. “Technology has never been more innovative, exciting and rapidly changing. But it is important that IT professionals get more excited about the business outcome they deliver than the actual technology. I encourage my teams to explore new technologies and innovate, to look at how they can apply those to solve business problems and deliver value. But, ultimately, to celebrate the success of the business group.”
That means a redrafting of the management board invitation list. “CIOs now have to be in the room when the major business decisions are being made,” says Crotts. “It is very difficult for a company today to make any big decision without there being an IT implication: what are the digitalization opportunities going to be for new business models or for better engagement with our customers? What optimization can we deliver? It is all about the business value that the digital agenda can bring.”
• Photography: Bram Belloni