IT modernization in the global ecosystem

IT modernization has become a matter of fact. While years ago, upgrading equipment and updating software may have been a stepwise process that enterprises could conduct at their convenience, digital transformation is now a must. Not taking technology to its next level could mean systems fail, cybersecurity weakens, compliance falters, talent quits, and, ultimately, business stagnates – or stops.

In a digital-first era, when economic, political, and social disruptions have become the norm, IT needs to be steady. Paradoxically, that steadiness is enabled by constant evolution. And by evolution, we refer not just to replacing legacy systems. IT modernization is equally about embracing new organizational structures that make work better, finding mutually enriching innovative ways to collaborate with partners, and forging more meaningful, tailormade connections with customers.

As for our own customers, each is on a unique digital transformation journey. However, as organizations all contributing to the Netherlands’ vital infrastructure, they share common ambitions, pain points, and strategic inflection points. To hear details, we spoke with representatives from payment solution service CCV, financial service Geldmaat, and logistics companies NewCold, Port of Rotterdam, and PostNL.

Translating the transformation
For many organizations, one of the biggest challenges of IT modernization is not the technology itself. Their in-house IT specialists have exceptional domain knowledge and, if branching out to pursue new capabilities, they can partner with comparably skilled experts. What requires tremendous effort is translating the technological changes into organizational changes in a way that makes sense to everyone. From the top floor to the shop floor, employees need to understand the value of shifting toward decentralized IT, digital strategies, and data-driven decision-making.

“The thing that we’re concentrating on is not so much the digital part, but it’s the reason behind the need for the transformation,” said Richard Hofstede, Shared Services Manager at Geldmaat, the company whose current-day mission is making cash available nationwide via its iconic yellow ATMs. “Our primary focus had been on logistics. So first and foremost, our business was about warehouse locations, keeping stock, and managing distribution. And now, within a few years’ time, we’re designing customer interfaces to explain how to use our ATMs. This requires a completely different business focus compared to five years ago.”

After years of providing backend physical services – storing and distributing cash – much of Geldmaat’s attention now goes to improving frontend user experience and seamless transactions. “Yes, that comes with digitization, which is a very interesting journey in itself. But next to that, we’re making sure that our organization understands that we are now a service-focused company, focusing on end consumers – cardholders who use our systems and are contacting us for support. In the past, we didn’t have a contact center or anything like that, but now our phone number is on each individual device,” Richard Hofstede elaborated. “Meanwhile, our logistics capabilities continue to be an essential part of our services, and people who joined 20 or 30 years ago are still with us, so it takes a leap of imagination to understand what is happening to our business and our organization.”

The time and thought that goes into translating a domain transformation resonated with Frits Snijder, IT Manager at PostNL, the 220-year-old company that serves as the Netherlands’ main parcel deliverer. “We are now calling ourselves a software tech company within logistics. So one of the challenges is to adopt new frameworks that work in a tech company. Software needs a different style of management,” he said.

Emphasizing a more holistic, less hierarchical approach to organizational decision-making, Frits Snijder relayed the kinds of questions that help put the new frameworks into sharp relief. “We’re considering: if our board takes certain decisions, what does it mean three or four layers down for those involved teams? What impact does it have? And we’re looking at always connecting the DevOps teams with the management team and the board, building from up-down and down-up. In short, how to align business and IT?”

Although electronic payment services provider CCV hasn’t recently expanded its domain, the migration of their datacenter to AWS and IT modernization have also brought the need to reinterpret roles and responsibilities. “We changed from being an organization with a governance of different departments – such as software development and hosting services, each with a responsibility for parts of the whole chain – to now having more production service or proposition teams,” said Jochem Somers, Transaction Processing Director at CCV. “That’s a challenging journey because you need to have a discussion about the change with everyone who had been responsible for the different departments before. But we are now at a point where it helps to talk about governance and define the structure and processes for decision-making and accountability.”

Among the customers we spoke to for this article, cold storage and advanced logistics company NewCold is the youngest, at 10, with little legacy to report on. However, new projects still require getting buy-in, as described by Gunther Cleijn, Cyber Security VP at NewCold. Of a hyperconverged infrastructure solution implemented with Schuberg Philis, he recalled: “We had challenging discussions about the investment that we were about to make on IT. I knew it was important to take other perspectives into account when communicating decisions and considering how to explain things to colleagues in a way that they could relate to. As I’ve talked about with the Schuberg Philis team, in mission-critical IT, we use a common language, and investing a lot in technology is common practice. But for our company, that’s been totally new.”

Optimizing the ecosystem amidst global dynamics

As the COVID pandemic and the war in Ukraine made unmistakably clear, IT modernization is not about any single enterprise at work. The entire ecosystem in which it operates affects, and is affected by, the digital transformation. When value chain partners have overlapping technology priorities, the ecosystem can become more resilient and mutually supportive. At the same time, the more globally interconnected and interdependent that organizations become, the more leaders can leverage the external pressures of geopolitics and international regulations to pursue smart, sustainable strategies.

Ecosystem interdependence is felt acutely by the Port of Rotterdam, the authority that manages Europe’s largest port. “We are not a company acting on its own. When the ships leave the port of departure anywhere in the world, different parties and different digital platforms play an important role. The chain is as strong as the weakest link and relies on the availably of those within the chain,” stated Marijn van Schoote, Head of IT Operations & Services Management and CISO at Port of Rotterdam. “We can say we are as resilient as we want, we can say we are available 24/7. However, we rely on our partners. If, for example, the pilots or the tugboats are not available due to an IT outage or a pandemic, as we saw with Corona, then parts of our process also get delayed.”

While Port of Rotterdam spent the last two years engaged in its own digital optimization, these days the organization is planning how to realize ever wider ambitions. “The biggest impact that we can make is not optimizing our own processes as a company, but to see how we can contribute as a port authority to our ecosystem of approximately 5,000 companies,” Marijn van Schoote elaborated. “How can we open up the data processing that we’ve done to support others, sharing weather, tide, and other water information relevant for logistics companies? And how can we professionalize our data governance and data quality so that transport and logistics companies can use the data to optimize their own processes?”

Finetuned awareness of its place in the ecosystem – and, within it, how crucial fellow members are – is imperative for NewCold, too. “We build our warehouses at strategic locations from which we can serve our customers. We are located around the globe – from Australia to America and across Europe – and we’re expanding massively,” said Gunther Cleijn. And yet, he admitted, “One element that keeps me awake is the global dynamics of the cyber domain. The landscape dynamics dictate your strategies. We tend to automate as much as possible but, in the end, we still do need people on every continent if only to ensure we comply with local legislation.”

Our customers had varied experiences with international legislation and its impact on day-to-day operations. While some find Europe’s latest regulations, such as the NIS2 Directive and DORA, sometimes troublesome, others consider them a blessing in disguise. Jochem Somers, for example, described how through his responsibility for CCV’s transaction processing and the whole chain of services that comes with it, compliance expectations provide a clear narrative for internal and external communication.

“We have a license from De Nederlandsche Bank (DNB) and are supervised by them to ensure that we meet the requirements. Although these requirements sometimes offer a challenge for the commercial side of the business, we also take our responsibility as one of the country’s key payment providers very seriously. The DNB and CCV have constructive discussions about specific obligations and our chosen solutions,” Jochem Somers said. “It’s understandable that a regulator demands crystal-clear and valid reasoning about decisions we take. I enjoy having these consultations as they help our business evolve. Having the trust of our customers and partners is key to our success, and we see this cooperation as an important building block for being future-proof, reliable, and sustainable as a payment provider.”

Balancing business continuity and customer intimacy

IT modernization requires organizations to look inward, reevaluating their core business and, often, reconnecting with their core values. Yet, no matter which technology, models, or processes they adopt, a consistent objective remains business continuity. At the crux of that is the capacity to simultaneously look outward: to their own customers. This allows enterprises to keep doing what they do best while making business progress, which – particularly for our customers, delivering the world’s most essential services – is inevitably linked to the progress society can make.

“A lot of us are in logistics, so it’s really an emphasis on operational efficiency. And on the other hand, there’s the touchpoints with the customers and the consumers, and then it’s all about customer intimacy,” noted Frits Snijder. As he described it, PostNL is continuously seeking to strike a balance between being “really focused on operational efficiency in the thing you’re good at” and the “need to be more customer-intimate.”

Ensuring that operations meet consumer demands likewise incentivized CCV’s cloud migration to AWS, an undertaking for which it partnered with Schuberg Philis. “We have made promises to our customers about availability and reliability. So the motivation is there to look every day at how we can maintain business continuity,” said Jochem Somers. The decision, moreover, to collaborate with organizations to whom the company could, essentially, “outsource challenges” was another customer-centric milestone in its digital strategy, he shared. “CCV is a privately owned business. Historically, we did everything ourselves and have our own datacenter at the office in Arnhem. Going from doing everything by yourself to doing more things with partners is a huge step.”

For Geldmaat, too, IT modernization has been motivated by the demand for resilient operations. “When it comes to public perception regarding availability of our services, that’s quite intense – specifically during peak time, when most of the ATM transactions are performed,” said Richard Hofstede. “We also need to take care of safety,” he continued, in reference to a former pattern of ATM attacks. “The continuous development of security components focuses on maintaining a safe environment to provide our services, but also to contribute to a higher availability, of course.”

Everyday people are also the ultimate consumers of NewCold’s value chains. The company commits to its customers – food manufacturers with products sold across multinational companies and grocery stores – so they, in turn, can keep their commitments to all their customers. In a similar spirit of connectedness, Gunther Cleijn encourages his colleagues to not only understand the innovative technology powering their company, but literally embody it. “Within their first two weeks, I take new employees from our team to a warehouse to experience the cold,” he said. “That way they actually feel the environment that we operate in.”
While its direct customers aren’t the public either, the Port of Rotterdam is a key player in multiple value chains that circumnavigate the Earth, eventually reaching recipients everywhere. And yet, “The goods can only go smoothly around the world if the complete process is running,” Marijn van Schoote emphasized, highlighting the exponential impact of business continuity and customer intimacy within a global ecosystem.

A culture of resilience
So once again, we hear how despite having distinct critical missions and serving different critical masses, our customers share a purpose. Simply, it’s to make sure their services are always available and accessible. Our customers are therefore embracing IT modernization. They know the process is not primarily about the technology itself – much can be bought off the shelf or subscribed to as a service. Rather, IT modernization is about stimulating the organizational culture to grow and evolve. In supporting internal structures while nourishing and being nourished by those surrounding it, the organization becomes more resilient. And when our customers provide resilient services, their customers can go about fulfilling their own critical purposes, whether in work or life, via cash or credit, by land or sea.