Philip Morris International (PMI) chief technology officer Michael Voegele said the organisation’s self-disruption requires a full end-to-end transformation of the company’s technologies and capabilities.
Voegele was speaking at Tech Monitor publisher New Statesman Media Group‘s Virtual CIO Symposium, discussing how the company was committed to cannibalising its core business of manufacturing and selling “combustible tobacco” products as it switched to selling risk-reduced products as part of its stated 2016 mission to deliver a “smoke-free future”.
With tobacco being the largest cause of preventable death globally, PMI has declared the best thing legal adult smokers can do is stop smoking, and that the next best thing is to help smokers quit by moving to less harmful products – primarily electronic cigarettes.
The former Adidas CIO, who joined PMI as CTO in February 2019, said that he arrived to “an incredible focus and energy that this whole organisation is putting in place to execute the PMI strategy”.
“We are really disrupting a existing – very successful – business model, and really starting something from scratch that the whole organisation is focused around,” Voegele said.
“We have set ourselves to actually completely transform our business from a traditional manufacturing and distribution business that only had a single product, into a science and technology company that has a pipeline of electronic products, that becomes an omnichannel player, that adds retail stores and B2C online services.
“The technology journey and technology itself is really a decisive element of this transformation,” which Voegele said required a complete shift of the business model and the underlying capabilities in almost every area of its operations.
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CIO crisis management – the Covid-19 response
With more than 70,000 employees operating in 85 markets, the $80bn revenue company has a truly global footprint. The CTO said that at the start of 2020 he brought his senior technology leadership team together to prepare its “fire drill” business continuity plans, with the company making the move to full remote working outside of its manufacturing operations in March.
Voegele said the next phase was to move from immediate crisis management to “not managing business as normal, but business in a different world”. He cited focus, communication and reassurance as his three pillars for keeping employees engaged and coping with what were incredibly challenging circumstances.
Indeed, employee engagement measures, specifically in the technology and IT function, increasingly significantly in that period. “It was confirmation we did the right things, but also confirmation of what we need to sustain going into the ‘new normal’,” Voegele said, explaining the focus on cloud computing and API-based integration to bring scale and flexibility to the PMI technology infrastructure was cemented in his thinking as the right strategy for the company.
“We have been clearly communicating that the destination is not changing; but maybe, and potentially in the future as well, the way we get there will change based on these external influencing factors,” he said.
“Almost like sailing; it depends how the wind is but you don’t change your destination.”
Diversity and talent
Continuing to hire and retain the best people will be one of the core tenets of PMI achieving its goals, Voegele said, adding that looking beyond where an organisation’s traditional operations and headquarters are located would help “liberate and federate” it in these aims.
With more than 100 nationalities working for PMI, Voegele said that diversity was “a strong asset we can build on, and one of our strengths we have already within the organisation”.
“We are committed to building an inclusive culture, and in a world where your consumers are diverse around the globe, this is ‘non-discussable’ and core to our strategy,” he said.
Voegele explained that in the technology function specifically, the organisation and his predecessors had helped shift the dial on gender diversity in particular, with female representation in management roles increasing from about 28% to almost 37% in half a dozen years.
“It indicates that we can overshoot a target of 40% and become a balanced organisation from a gender perspective,” Voegele said.
Executive leadership
Part of the multinational’s executive leadership, Voegele said that his initial conversation and interview with the CEO made a significant impression of the perception of technology at PMI.
Voegele said that he saw this as confirmation that the right technology capabilities and infrastructure were seen by the whole executive as a decisive element in the disruptive change to the PMI business model.
As such, the role of the technology leader was primarily a business role looking at how tech innovations could help an organisation realise its visions, and furthermore how that might be done “better, faster, and at a much greater scale”.
Data and supercomputing
Included in Tech Monitor‘s inaugural Technology Leaders Index in October 2020, PMI was noted by analysts GlobalData for its strategic data investments, as well as the technologies being implemented in its manufacturing operations.
Part of Tech Monitor’s Technology Leaders Index, PMI is cited by GlobalData for the emerging technology investments in its manufacturing processes, and recognised as a data pacesetter for its approach to the company’s broad business transformation.
At the Virtual CIO Symposium event Voegele cited innovations in the data space as the technologies that provided the biggest opportunities for the company, and said that he believed developments in high-performance computing and machine learning had the potential to have as big an impact as steam ushering in the industrial revolution.
“Data and every technology that’s related to data is our focus area,” Voegele said, mentioning predictive and prescriptive analytics, the use of data in robotic process automation and the potential of machine learning algorithms.
“It’s a broad area that is and has become really mature over time; there are more technologies that can actually help you to utilise data coming out almost every week, and I truly believe it’s a technology that brings benefits across the entire PMI organisation, at all levels, quickly.
“The area that I’m getting most excited about is really the combination of supercomputing with machine learning.
“I think it’s a very rare moment of time that we can potentially be part of – it’s almost like the invention of the steam engine or electricity.
“These things really lead to a fundamental shift for the society.”
Cloud priority
With an eye on such future innovations, the CTO’s current focus is on getting the most value out of the company’s use of public cloud as PMI’s default for compute and storage, as well as how the hundreds and thousands of business applications run in PMI data centres are migrated – and how this is done.
Alongside this, is how differently technology operations will run in this new business cadence and IT operating model – and in particular developing skills, capabilities and competencies in the department, with perhaps different career paths, that Philip Morris technology employees feel confident they can be part of the company’s transformation.
“How do I get everybody on board; what is it they need to know and need to learn so they are relevant, and feel competent and confident in the journey?” he said. “And more immediately, how do I get my computer and storage into the public cloud as quickly as possible.”
