NYK Logistics| Mryon Hrycyk

Mryon Hrycyk, CIO, NYK Logistics UK

With annual revenue of $2.3bn NYK is one of the world's largest logistics companies with 17,000 employees and 330 depots and offices worldwide. The group has set aggressive growth targets to hit the $3.8bn turnover mark by 2011 and technology will play a key role in that growth. NYK Logistics' UK & Ireland CIO Myron Hrycyk talks to silicon.com about the challenges of managing such a complex IT environment and the opportunities for new mobile and wireless technologies.

Andy McCue: Myron, great to have you here on CIO Visions, thanks for joining us.

Myron Hrycyk: Thanks a lot.

Andy McCue: So, just to set the scene for our viewers who may not be familiar with your company, you are the UK CIO for NYK Logistics, which is part of the big Japanese NYK group.

Myron Hrycyk: That's correct, yes.

Andy McCue: So, given that, what's the scale of the IT operations here and the scope of your responsibility?

Myron Hrycyk: I joined NYK quite recently and I report into the CEO so I sit on the UK and Ireland logistics company's board. So the IT operation really is based in two sites - here at Northampton and also in our Nottingham offices, just north of Nottingham actually in Sutton Ashfield. As a unit we're responsible for the delivery of all of IT across the UK supporting our business colleagues who run contracts for our end clients. NYK's client list includes companies like Sony, PC World, LG, Bosch through to people like Yamaha, Casio, right the way through to automotive customers like Jaguar, Bentley, Aston Martin, Toyota. The IT unit is responsible for delivering projects, such as launching a new warehouse, enhancing a new system, and also day-to-day operational running of our systems to support the contracts.

Andy McCue: And so what's the actual size of your IT estate in terms of things like servers and desktops?

Myron Hrycyk: Well, I think I've lost count. We have hundreds of servers. We're a very big AS400 site, we have some large iSeries machines which are mirrored across the two sites. We don't run large ERP solutions like an SAP or an Oracle. We use specialist niche applications in the logistics sector, so we use Manhatten, Opus and our own in-house distribution systems. We use applications for transport management - we have a large fleet of trucks and containers, so that needs managing. We run finance systems, so it’s a whole raft of applications and the infrastructure underneath that.

Andy McCue: So what are the 'big ticket' technology projects you've got on the go right now? I'm thinking maybe legacy replacement, outsourcing, ERP or service-oriented architecture…

Myron Hrycyk: The big ticket projects at the moment are we are reviewing our data centre strategy. As I mentioned earlier we've got two data centres and we've kind of leveraged the fact we've got two quite wide apart but we need to look at what we do with those data centres, and our services are absolutely mission-critical to our customers so the fact that we need to mirror them, have back-up facilities across them, So we're looking at making a large investment in up-rating our data centres. Also the infrastructure as well - being a distributed business we are very reliant on wide area networks and we're having a whole review of that at the moment. On the application side we're looking at investing in a strategic transport management system because we believe we can get some cost efficiencies and savings in running that quite large part of our business.

Andy McCue: What are the challenges facing the logistics sector and NYK and how does that affect your IT strategy? I know the group has set some pretty aggressive growth targets over the next few years and presumably that's got some impact on your IT?

Myron Hrycyk: Absolutely right. NYK has enjoyed some quite heavy growth over the last few years and you're right we do have some plans to continue that growth path. The logistics sector itself is growing. Lots of our clients are looking for business advantage, competitive advantage to look at professional distribution companies to support them, so the marketplace has lots of opportunities. What that really translates into is I need to deliver sustainable, day-to-day, operational systems so that we can guarantee these services to our customers. What that also requires is that we need to be able to provide far more distributed systems, mobile type of computing systems that will hopefully give us a differentiator for our customers in what is a pretty tough marketplace.

Andy McCue: How do you fund new technology investments and innovation and what kind of technologies are driving that innovation? I'm guessing in an industry like logistics with lots of transport and cargo that we're talking about mobile, wireless, things like RFID?

Myron Hrycyk: I think that's absolutely right. Customers are now bringing their requirements to us and demanding far greater visibility of what products are in the supply chain. So, at the moment we have some, I think, pretty innovative work underway for a couple of our clients in the healthcare industry to enable us to have far more accurate proof of delivery, far more easily accessible data. Because you have to remember maybe you are using third-party transport systems and you need to provide pretty basic technology to these guys. But actually that basic technology has got to be able to operate transactions, it's got to be able to record a signature, it's got to be able to record the products at a certain place and we've invested internally in quite a lot of that technology. So, mobile computing is really high up on my priority list in terms of innovation and in terms of trying to give the business a competitive edge. Also visibility, so a lot of our customers are now looking for a pan-European service not just UK so they want to see their products - where they are in the supply chain, where they can draw more product from to meet the customers need across the whole of Europe. There's great emphasis on understanding where the product is, where it is in the supply chain and I need to provide them with systems that can bring that data together from disparate systems and then surface it in a way over the web, say, that they can see where it is and we can track where it is. There's a lot of drive for that. Certainly maybe three or four years ago people were still looking for what business benefits this new RFID technology would deliver and also it was still priced at quite a high level per unit. What we have seen is the price of RFID coming down and that's made it more cost effective. I think also as we've looked at the technology we've looked at genuine, good business benefits that can be extracted. Something like passive RFID which is basically giving us information to know where the product is, the temperature it's been at etc, who's actually accessed it we are now deploying and some of our customers are asking us to look more into that, say in the pharmaceutical sector.

Andy McCue: There's always a lot of talk about how IT is perceived in the boardroom, the gap between business and IT. Do you think the CIO's expectation and perception of the job matches what the CEO expects of the person in the job?

Myron Hrycyk: That's a really great question, and it's one I feel quite passionately about, actually. The CIO operating at board level has to operate more like a businessman, you know. And as a bit of advice I could give to people is board meetings often take maybe two or three hours and traditionally the IT slot is positioned at the back-end of that meeting. And maybe some of my colleagues would be at the board meeting and really only contribute to that last five or ten minutes. When I first had the opportunity to work at board level I remember someone giving me some really sound advice, which was don't wait for those last ten minutes but contribute all the way through the meeting. Now, I've taken that advice and you have to have a lot of confidence and you do need to learn the business. And actually the CEO expects all his board members to contribute on all issues. So I think maybe CIOs have got to understand they are really expected to deliver into the board meeting all the way through it, not just at the IT piece and that can be quite difficult if maybe you haven't got the confidence or the knowledge of the business.

Andy McCue: What are the technology topics and issues that crop up in the boardroom and typically what does the company look to you for?

Myron Hrycyk: I think now, to be an effective board member in any discipline - finance, sales and marketing, operations - the business people have to have an appreciation of IT, rather like we were just talking about how a CIO needs to understand business, other disciplines need to have an appreciation of IT. I sense there's a general understanding of IT, however we all know in our industry the devil is in the detail and I think my colleagues don't always appreciate that a sweeping statement that 'we'll do this with technology' does require more detail, more understanding and, sometimes, as you get into the detail costs come out, hurdles arise etc. So I think there's an appreciation there but you have to work with your colleagues around the board table, and not to necessarily patronise them in terms of talking about technology but more work with them and explain it in layman's language and I think that's how you work with the board members. The kinds of issues that arise at board meetings are quite interesting actually. I often say to people, don't be misled boards don't talk about IT issues for two or three hours. They expect the IT director, the CIO to deliver an operational service. That's what they expect and really I would advise CIOs to ensure they have this operational excellence - the level that the business demands, obviously - running because that's the one thing you just have to deliver and I guess it's a real bad sign if you're round a board table and you're getting asked questions about poor delivery of service because that's what you need to fundamentally…

Andy McCue: So you need to have the credibility?

Myron Hrycyk: You do, on a day-to-day IT service. Other issues that get picked up on are projects and I do think CIOs should work very hard at trying to have business project focus rather than the IT stream of a business project. It is really better at a board level to be discussing the business transformation project rather than just the IT stream. It gives a far more balanced context. And really you don't get into lots of detail of technology in board meetings and it's best to keep it at quite a high level.

Andy McCue: Mryon, thank you.

Myron Hrycyk: Thanks a lot.