Hydro pursues digital transformation on multiple fronts
Jo De Vliegher, CIO at the Norwegian aluminium and energy giant, discusses the business potential of AI, technology’s role in supporting sustainability and the imperative for digital co-creation.
Technology megatrends such as AI and IoT are high on the agenda of many CIOs. And Jo De Vliegher, CIO at aluminium and energy giant Hydro, is no exception. But while such technologies are still mere buzzwords to many, De Vliegher is acting to exploit them now in a bid to sharpen Hydro’s competitive edge and ward off new challengers.
“We want to be part of the disruption rather than being disrupted,” he says. “We have to be both leaders and fast followers.”
To help Hydro fulfill those ambitions, De Vliegher is looking to apply a broad set of tech: AI, smart robots, robotic process automation (RPA) and blockchain, as well as more mainstream tools such as portals and apps.
AI: Refining quality
But the promise of AI and big data is a particular focus, especially when applied to the wealth of data that Hydro collects and stores. As De Vliegher explains: “To date, we haven’t had the tools to make sense of our historical data, to find the signal in the noise. With these technologies we start to see patterns in areas such as product quality and production processes that are often surprising. There are correlations that we never thought were possible between, for example, the prevailing weather [and production cycles]. That is allowing us to make improvements to our quality parameters.”
One core technology vital to De Vliegher’s digitalization journey is cloud. Its elastic nature makes a highly economical base for the investigation and application of other digital business arenas. “In a company like ours, starting on a digitalization journey, cloud is a godsend,” he says. “We can experiment, start to use new functionality and data sources without prohibitive upfront cost. So it really helps us move forward.”
While the potential for AI in business is being explored, there is societal concern that its broad implementation will result in widespread job losses. That is not a view De Vliegher takes. He is confident the technologies he’s implementing won’t necessarily have such a negative effect at Hydro. He expects technology will free employees from repetitive tasks so they can make better use of their talents in new, value-adding services, he says. Indeed, while technologies such as AI will inevitably be disruptive, he believes there will be positive as well as negative effects on the jobs market.
“More and more external research points at artificial intelligence possibly being a job creator. Of course, a number of people will have to change their skillsets, which is a transition that can be challenging,” he says.
Product with a provenance
These new technologies tie directly into Hydro’s strategic goals to be more productive and commercial. But De Vliegher also credits technology with helping the company to fulfill its ambitions for a neutral carbon footprint by 2020.
He explains: “Hydro has always been good on compliance and global citizenship but digital helps. Customers are asking more often for green products and for details about where products are produced. If digital can help us track and trace what we do to prove that our products are ethically produced then that creates a strong business case [for technology investment] as well as a competitive advantage. So for us digital responsibility is not something that competes with other goals; it’s actually helping us [meet them].”
Hydro offers certified low-carbon aluminium products designed to help its industrial customers reach their sustainability goals and meet demand from ever more climate-conscious consumers.
Imperative for co-creation
The pace of digital change, coupled with the global shortage of technology expertise, increasingly means businesses need to work hand in hand with technology partners to achieve their digitalization goals. “Digital is becoming more and more central to Hydro’s vision and strategy. That means there are more capabilities we need that we can’t build ourselves,” De Vliegher says. “So co-creation is a necessity.” It also demands new ways of working.
“The idea of partnering up is, at least for our company, relatively new,” he says. “So it requires a cultural change. Some of our own people might have seen partnering as too complex; so the challenge is to make them comfortable with the process of partnering up so we achieve results together.”
Trusting in partners
A good example of this approach involves Hydro’s work with long-term partner Fujitsu. Since 2012, the global technology company has provided Hydro with a full set of IT services both on-site and remotely across all the company’s business areas, including server/storage hosting and systems administration, end-user support, network operations, security services and multilingual helpdesks.
Having acquired large-scale mining and refinery facilities in Brazil, involving 5,000 employees, the aluminium company asked Fujitsu to bring the operation’s IT into line with the rest of the business’s IT services quickly and smoothly.
That new infrastructure was ready in six months and included the deployment of Fujitsu’s PalmSecure biometric authentication system which gives employees easy and convenient access to Hydro’s IT even when in dirty and dusty factory environments. The system scans an individual’s unique palm vein patterns to allow them to log on to PCs and thin clients.
“We had 3,000 users who had never used a company PC before but we wanted everyone to have access to a digital platform,” says De Vliegher. "However, passwords are easily forgotten and swipe cards lost or stolen. Fingerprint ID might work in a clean office environment, but in the dusty conditions of the [bauxite] mine, PalmSecure provides a robust, accurate non-contact solution.”
Reflecting that consistent delivery of IT services across the business – in Brazil and beyond — Hydro’s user satisfaction ratings are now running at 93%. Moreover, operational costs have reduced by 20% through the standardization on a single vendor IT services platform.