In today’s rapidly evolving technology landscape, organizations must not only keep pace with the latest advancements, such as AI, Cloud, Data Analytics, and Metaverse, but also assess their potential and impact on operations. To navigate this complex terrain, the role of the Chief Information Officer (CIO) and their respective IT organizations have become more critical for the company’s success than ever. This article explores the evolving role of the CIO in advancing a technology-enabled organization and discusses key elements that drive success at the Electronics business of Merck KGaA, Darmstadt, Germany.

Frank Ott, describes the impact of the IT organization with a mindset shift. IT organizations move away from being mostly service providers towards acting as strategic partner. Managing and living this shift requires clear guidance and organizational adjustments to be successful. Therefore, the IT organization at the Electronics business of Merck KGaA, Darmstadt, Germany has revisited its key functions and implemented an effective IT Business Partner network aligned with the respective business organization to focus on scaling digital technologies while meeting demands of the respective business units. The CIO’s ambition was to “make partnering with IT easier”, which is a common business request confirming the high interest to increase interactions with IT.

Focusing on the CIO’s Key Functions

The role of the CIO has changed in recent times. To be truly accepted as a strategic partner, the modern CIO must fulfill two fundamental functions within an organization, being the technology enabler and at the same time the solution provider.

1. Being the trusted partner of choice (technology enabler function): The CIO must empower the IT organization to become and remain the trusted partner of choice for the business concerning all classical as well as new technology areas around digital, data and IT topics. By establishing a strong foundation of technological competence and business know-how, the CIO can ensure that the IT organization becomes a valuable resource for the entire organization. This is going hand in hand with bringing the technology driven IT organization close into the business functions.
2. Starting with the value potential (solution provider function): The CIO is deemed to ensure that the organization invests in the right technologies and solutions that address specific opportunities and needs of the respective business functions. This involves prioritizing the right challenges to be addressed rather than being distracted by too many new solutions. By starting with the root problem and understanding the conditions for success, the CIO can guide the organization towards the most suitable solutions. This approach ensures that the organization’s technological investments align with its objectives and deliver tangible value. It is also crucial to ensure meaningful scaling, allowing technology investments to serve multiple purposes and optimize return on investment.

Creating a Skilled Network of IT Business Partners

To effectively address both, the technology enabler and solution provider functions, the CIO at the Electronics business of Merck KGaA, Darmstadt, Germany has established a network of IT Business Partners. These IT Business Partners act as single points of contact for the business, providing guidance and expertise on digital, data and IT matters.

To be successful in their role, IT Business Partners are equipped with a deep understanding of both technology and the business, enabling them to translate business requirements into actionable technical concepts. With this knowledge, they can consult and advise the business in making informed decisions about technology investments. The IT Business Partner is not just an executor, but much more a partner to find and implement the best suitable technologies.

At the Electronics business of Merck KGaA, Darmstadt, Germany this skilled network is capable of adapting to rapid technological changes and has simultaneously adopted a business unit-oriented setup ensuring it is closely aligned with the corresponding business organization.

Addressing the Biggest Value Pools

It needs to be emphasized that different upcoming technologies can easily trap the organization running behind all sorts of technologies, often without scaling or synergy potential. It is easy to find a singular use case, which can be approached with new technology, but more important is to tackle the areas giving access to the biggest available value pools. By starting to emphasize the opportunity to be solved and to find suitable best-in-class solutions for these cases, companies can generate above average returns.

The Electronics business of Merck KGaA, Darmstadt, Germany  also looks at technology options beyond having the right use case available just in time. Nevertheless, overcoming the dilemma of just having pilot projects as well as not being able to scale technologies is a must-have change demand.

The IT Business Partner is the change agent in ensuring that the business case focus is kept during opportunity identification, solution selection and implementation. A mindset shift also needs to come from within the business organization that digital technologies are given a chance to prove their superiority against traditional technology changes more often.

Practical Example 1: Transitioning to Proactive Quality Control

To demonstrate the evolving role of the CIO as both a technology enabler and solution provider, let’s consider a practical example in the Chemicals sector. In this scenario, a company operates production sites that rely on manual, paper-based processes or has digitally isolated procedures. To enhance operational efficiency and gain a competitive advantage, the company aims to shift from reactive to proactive quality control measures and optimize its supply network by leveraging a digital enterprise twin.

Efficiently achieving this digital transformation requires seamless access and processing of data generated throughout multiple enterprise processes. The utilization of diverse IoT devices, sensors and actors necessitates an automated approach, with the physical equipment integrated into a standardized network. Addressing these technological challenges requires the convergence of IT and OT technologies and robust Cybersecurity measures. To unlock valuable insights using a digital twin, closed feedback loops must be established, which seamlessly integrate horizontal and vertical core business processes. Additionally, the digital architecture must be lean and scalable, accommodating newly built sites as well as retrofitting environments.

Identifying technical solutions aligned with business needs demands a collaborative “One Team” approach that integrates various disciplines, including IT, OT, Engineering, Data Science, Process Development, Manufacturing and Supply. In this context, the IT Business Partners at the Electronics business of Merck KGaA, Darmstadt, Germany play a pivotal role. They oversee and connect different disciplines within the realms of digital, data and IT, ensuring effective coordination, alignment, collaboration and a holistic approach throughout the digital transformation journey.

Practical Example 2: Move to more Cloud Usage

IT Business Partners encounter a constant influx of external inputs. Among these discussions, the prevailing theme is that cloud technology is the future. However, merely migrating on-premises activities to the cloud doesn’t automatically yield the anticipated value-add. Cloud adoption, in and of itself, is not inherently superior or more cost-effective. Considering the technology enabler and solution provider function, the IT Business Partner needs to find the right balance between a cloud first vs. cloud smart strategy.

To successfully transition to the cloud, the IT Business Partner must again embrace the role of a change agent working hand-in-hand with the business. This shift involves more than a straightforward migration – it’s a profound transformation. Not only must internal IT processes be reevaluated, but equally critical are the adjustments to business processes. Once this awareness takes root, the journey towards cloud-like behaviors within business operations can commence.

Key Considerations for Cloud Adoption:

1. Defining the End Goal:
   Every cloud migration should have a clear purpose. Without a well-defined objective, organizations risk being caught “between the chairs” – struggling to decide between full cloud adoption and maintaining on-premises infrastructure. Bold cloud moves, coupled with a commitment to decommissioning data centers, can unlock the true cost and operational advantages of the Cloud.
2. Innovation:
   Cloud usage demands a fresh perspective. Even with a defined end goal, there is no real end state. Regular system updates on the cloud introduce new functionalities. These functionalities need careful evaluation by the IT Business Partner in collaboration with relevant business functions. Most importantly these new functional options must be seen as advantages and not as hassles.

The Cloud journey transcends technical shifts. It’s a holistic transformation that aligns IT and business processes. By embracing innovation and strategic goals, organizations can fully realize the benefits of the Cloud.

Conclusion

As technology continues to evolve at an unprecedented pace, the CIO’s role in building a tech-enabled organization is multi-faceted and crucial for organizations to stay ahead. By focusing on enabling the IT organization to be the trusted partner of choice and keeping the value potential at the center of solution-seeking, the CIO can guide the organization towards effective and impactful technology investments.

The Electronics business of Merck KGaA, Darmstadt, Germany has implemented an effective network of IT Business Partners to translate business needs into technological solutions. By nurturing the skilled network and fostering a digital mindset, the CIO empowers the organization to adapt to technological changes, identify valuable opportunities, and drive successful digital transformation.

The Authors:

Dr. Frank Ott serves as Chief Information Officer (CIO) for the Electronics business at Merck KGaA, Darmstadt, Germany, and is based in Germany. In this capacity, he is responsible for strategic planning and implementation of IT initiatives to support the company’s growth. Dr. Ott has held several executive roles at Merck KGaA, Darmstadt, Germany, with extensive experience in strategic planning, business operations, change and sales management. Dr. Ott holds a Ph.D. and Master’s degree in Industrial Engineering and Management.

 

 

Nico Cremer leads the CIO Office (Chief of Staff) at the Electronics business of Merck KGaA, Darmstadt, Germany, and is based in the USA. As part of this role, he aligns technology initiatives with overarching business strategies. Prior to joining Merck KGaA, Darmstadt, Germany, he worked as a Strategy Consultant across Germany, Switzerland and the UK. He holds a Master’s degree in Industrial Engineering and Management from the Karlsruhe Institute of Technology.

 

 

Dr. Sebastian Kaune leads the IT Business Partnering for Semiconductor Materials as part of the Electronics business at Merck KGaA, Darmstadt, Germany, and is based in Germany. He has over 10 years of experience in global IT Business Partnering within the Chemicals and Healthcare sector at Merck, coupled with a broad background in different IT technologies. Prior to joining Merck KGaA, Darmstadt, Germany, he earned a Ph.D. in Electrical Engineering and holds a Master’s degree in Computer Science from the Technical University of Darmstadt.