CMA CGM’s Journey from Digital Transformation to Business Transformation
We recently had a conversation with Francois Bottin, Director, Digital Factory, CMA CGM, on the company’s digital and business transformation journey. CMA CGM is a French container transportation and shipping company headquartered in Marseille. It is a leading worldwide shipping group, operating 200 shipping routes between 420 ports in 160 different countries.
Here are a few excerpts from the conversation:
Infosys: As the head of the Digital Factory at CMA CGM, could you share with us the company’s journey to a digitally transformed group?
Francois: We have been working with legacy applications for many years for functions such as shipping, finance, etc. Digitization is one of the key priorities of the strategy implemented by Rodolphe Saadé, CMA CGM’s Chairman and CEO. As part of this strategic move, Saadé decided to create, about 18 months ago, a dedicated digital organization, with Infosys as our transformation partner.
We already had a few teams working on small digital projects. But whenever there was any need for prioritization, the decisions were always in favor of legacy because they were already in production.
We decided to form a dedicated team by re-skilling and upskilling some of the existing employees to lead our digital initiatives. We made a conscious decision to drive 80 percent of the transformation effort with our existing staff because we wanted to provide them with new opportunities. Also, we realized it was the most efficient way as the staff already knew our systems well. We hired a few young data scientists to compensate for some of the missing skills.
The digital team interacts regularly with other teams. As people come up to speed both in terms of new technologies and methodologies, the objective is to bring together the teams to build a mature digital organization.
Infosys: What were the challenges and opportunities in your digital transformation plan? Can other legacy companies (irrespective of the industry they belong to) take any lessons from your experience?
Francois: One primary challenge was to change the way business viewed IT. IT is usually seen as a support function. To become digital, it was important for the business to see IT as an enabler for new opportunities. It could potentially be a revenue-generating unit. For example, with digitization, there could be a way for us to monetize our APIs.
One area where we are driving change is standardization. In fact, we have been working on it for the past 20 years. Unlike banking for example, where there are global standards, there are no such standards for the shipping industry. If we look at different domains within the container shipping industry such as booking, pricing, optimal routing, etc., everything is specific to each organization. There are typically huge teams within organizations that work on customizations, due to lack of standards. Digital transformation can help bring standardization in the business, which is very important for this industry and for CMA CGM to become a pioneer on this transformation and reinforce our leadership.
Infosys: In a traditional industry, where the workforce is accustomed to working in rigid, process-driven methods, what would you recommend are the top three things that organizations should take care of when it comes to change management of people in a digital transformation project?
Francois: The first requirement is to reorganize to reduce hierarchies. While earlier there were three or four layers between top management and the doers, now with digital there is only a single layer. For example, if a business user needed any feature, he or she would earlier send the specifications to the IT team for translation into a language that a developer could understand. Then, there would be someone responsible for the graphical interface, etc. As a result, there would be too many layers between the end user and developers. Through digital, IT has brought the doers and the end users much closer.
In another example, we had a small team working on automation of release/test management. Earlier, other teams were unaware of their work. Today, people realize the value of this team’s contribution to digital transformation.
The most difficult part of the effort was communication – explaining what digital means. People usually have stereotypical assumptions about IT teams and fail to understand the value of what they do. It is typically believed that they run their own agenda and experiment around innovative technologies.
It was important for us to employ communication channels such as newsletters, presentations, etc. to change this. Saadé decided to organize ‘digital days’ in the Group’s headquarters in Marseille, where we invited employees to help them understand what we are doing. We reached out to everyone from top management to the bottom rank. Even external audiences like our partners, customers, etc. needed to understand what digital transformation meant to them. We’ve had several informal conversations with all the stakeholders to convey what digital can do.
Discipline is very important in any digital transformation effort. For example, if you organize a daily Scrum meeting, everyone needs to be present on time. True changes happen only after they are discussed with the business team and once we have their buy in. We are not here to break the rules; we are here to change the game.
Infosys: CMA CGM has been in the news for the several acquisitions and alliances it has made. Did this pose a challenge to your digitization plans considering alliance structures vary and can make implementation difficult?
Francois: Saadé’s strategic priorities are to not only continue the development of the Group in maritime transportation but to also develop our inland and logistics activities in order to become an end-to-end player. This is important for us so that we can offer end-to-end solutions to our customers. We have now entered into the supply chain business. Digital is the only way to bring together all the people working in container shipping and the supply chain division.
We used to have centralized and uniform IT systems across the world that did not allow our remote teams to customize the systems to meet their local requirements. Today, we have learnt the importance of localization to achieve true globalization. For example, some IT features could be managed out of Singapore if they are primarily used by the Asian teams. We are giving more ownership to the local teams.
Similarly, we have shared detailed guidelines on giving out APIs to third parties. Local teams are free to give out APIs to third parties, as long as they follow these guidelines. The transformational foundation we are building with digital can help the company achieve standardization along with localization that is backed both by IT and business.
Infosys: What are your future plans to ensure that digitalization and innovation continue to be central to CMA CGM’s existence?
Francois: Digitalization is already one of the main drivers given by Rodolphe Saadé. Still, the most important thing for the next two years, is for us to ensure that the new style of working becomes more mainstream within the organization. This means that all teams within the organization need to adapt and adopt this model. Also, the journey needs to translate from digital transformation into a true business transformation which will be the game changer.