"The decade of the CIO is here." So says Tan Chee Hong, a CIO multiple times over who is now a COO. As he explains in my interview herein, the CIO is primed to be the path to the COO and CEO roles. Tan has the ideal background for the IT executive who would rise to a larger role. He has an MBA, he was educated on multiple continents, and he has worked on multiple continents, both as a consultant and as a CIO multiple times over. He was CIO of Jardine Cycle & Carriage when he was plucked by Hong Kong Air Cargo Terminals Limited (Hactl), one of the largest and most sophisticated air cargo terminals in the world, which operates as a gateway for air cargo to and from China. He joined Hactl as Executive Director of Information Services (CIO equivalent) & Operation Development. He was hired as a CIO-plus at the outset of his time with the company, which is a rare feat. No one had ever had that role simultaneously, but in Tan, Hactl had found a rare leader who could connect the dots between creative use of technology to stabilize the operation, and to delight an intricate web of customers and partners.
In March 2012, Tan was elevated to chief operating officer of Hactl, acknowledging his accomplishments in his prior role, and highlighting how deep the operations part of his role had become. He is yet another example of an executive who has moved "Beyond CIO."
(The “Beyond CIO” series kicked off with this article, and the all past interviews in the series can be found here. If you are interested in future articles in the series with executives from companies like HP, Symantec, Schneider National, Fifth Third Bancorp, Ameristar Casinos, and Aetna, among others, please click the “Follow” link above.)
Peter High: Chee Hong, having toured your facility, one really must see it to understand the scale and complexity of the operation. It is a colossus on an edge of Hong Kong International Airport and as one walks around and in the facility, one sees some of the largest planes on earth, a variety of machines used to carefully move freight into and out of those planes, and a particularly sophisticated web of technology used to sort out the cargo to ensure that it gets to the right place as efficiently as possible. Can you provide an insider's overview of the operation, as well as your role in it?
Tan Chee-Hong: Hactl is the world’s busiest air cargo terminal. We have been in business since 1976, and in 1998, we built SuperTerminal 1 – one of the most advanced air cargo facilities in the world, which we own and operate. Representing an initial investment of $1 billion, and capable of handling 3.5 million tons of cargo per annum, this massive six story facility covers an area of 390,943 square meters.
SuperTerminal 1 was designed and built to do one thing: manage our customers’ cargo in the smartest way. Employing state-of-the-art logistics technology and automated handling systems to control cargo precisely, efficiently, reliably and securely.
Hactl provides seamless, integrated logistics services throughout Southern China – enabling our customers to capitalize on the highly-attractive commercial opportunities presented by the vibrant Chinese market. We partner with more than 100 international airlines and over 1,000 freight forwarders.
As for my role, I am the chief operating officer of Hactl, and my primary role is to work and lead what we refer to as the “One Operation Team” of over 2,000 professionals from service delivery, information services, and operation services. Leverage the best of our people, technology, as well as the facility to serve our customers.
PH: What is the role of technology at Hactl?
TCH: Hactl’s automation and IT systems form the backbone of our entire operation. All cargo movement is managed via fully automated, computerized systems, which ensure the accuracy, efficiency, and security of our cargo handling processes.
One of the key ways in which we leverage IT is to streamline our multi-story facility, which was the first of its kind when it opened in 1998. Moving cargo vertically is much more challenging than doing so horizontally. Therefore, there were a number of systems and machines that were made especially for our complex facility. We monitor their health, and ensure that they are always up and available. If our systems go down it is not much of a stretch to say that the economy of Hong Kong will quickly be impacted. One of our team’s proudest accomplishments has been that we have not had a major systems outage in many years. This speaks to our information technology and operational excellence.
Hactl perpetually upgrades and expands our IT capabilities to stay ahead of customers’ constantly growing needs, and we cater to their future demands. We are committed to continuous enhancement of our IT systems. COSAC-Plus, our $31 million, next generation cargo management system that powers SuperTerminal1 and integrates with the air cargo community and government agencies was launched successfully in 2011. COSAC-Plus has since taken Hactl to a new level of systems sophistication, with enhanced functions and features that set new industry standards and brings major benefits to our customers.
In August of 2012, we launched COSAC-Mobile. With this app available on the iPhone and on Android-powered smart devices, users can check their cargo movements, flight schedules, truck paging, and track shipments more closely and reliably. We have also developed COSAC-AWB (Air Way Bill) and COSAC-Customs, to facilitate the industry adoption of digital air way bills and eventually e-freight.
There are a lot of partners of ours who rely upon this information: shippers, truckers, freight forwarders, airlines. The entire information flow has to be very smooth, and each needs to have access to up-to-date information. I am thrilled to note that our customer satisfaction rates with the overall COSAC-Plus solution are higher than 90%, which is unheard of in our industry for technology solutions.
PH: The importance of the role that IT plays was underscored by the fact that when you joined Hactl, you did so as Executive Director, Information Services & Operation Development. What was the logic at that time in having you oversee IS and Operation Development? Had those roles been combined under one person previously?
TCH: The Information Services & Operation Development role was newly created. My predecessor had responsibility for Information Services only. Hactl previously depended heavily on IT, but frankly IT was playing a service provider role to the operation. I was asked by the Hactl chairman to move to Hong Kong from Singapore in August 2008 and my clear mandate was to better integrate IT into the operation. Now that we have done so, and due to the increased significance of IT in Hactl, the two cannot be separated. IT and the operation are one. We felt a provider and a recipient relationship did not provide the most efficient use of our core resources.
PH: In early 2012, you were promoted to chief operating officer of HACTL. This is a path that relatively few people have gone down previously. What do you draw from your past experience as a CIO and IT executive in your current role as COO?
TCH: With the great success of COSAC-Plus and the fact that Hactl is driven by IT, I was asked to become the first chief operating officer with overall responsibility for all the operation teams including Service Delivery (Cargo Terminal Services, Airline Services, Cargo Services, Ramp Services), Information Services, Operation Services (Engineering Services, Building Services, Security Services, Operation Management Services, and Operation Training Services).
As CIO, I was fortunate enough to focus on developing technologies and processes to enhance business performance and customer service. This provided me a very broad perspective. Also, I spent a lot of time working directly with customers. This helped me understand our business to a better degree than an average CIO might. I constantly had reason to contemplate how we could creatively apply IT to address our customers’ needs. My team and I were problem solvers.
PH: Is this a path you think more CIOs are likely to take?
TCH: I certainly do. Businesses are more and more dependent and driven by IT. This will increasingly become the norm in my view. IT touches every aspect of the business from Operations to Finance to HR to Marketing to Customer Services and the list goes on. IT professionals with strong business sense are well placed in moving into business roles. There has been a precedent of Finance people moving into various business disciplines outside of Finance, but today, knowing IT is as important as knowing Finance in my estimation. Increasingly, senior business leaders must understand the value and how to use technology in their business. That is to the business-savvy CIO’s advantage.
The other factor that will enhance this trend is that the next generation of business leaders will be much more tech savvy than the baby boomers are on average. Their familiarity with and interest in technology will bolster the need to have leaders in multiple disciplines who appreciate technology, and perhaps have had a role in an IT department or in a technical discipline of some sort.
In the past, CFOs had a distinct advantage in ascending to the CEO role. Now, given the training that we go through, and given the complex, international web that makes up many businesses, strategic problem-solvers with technical skills have the distinct advantage in my mind. The ‘80s and ‘90s were the decades of the CFO. The decade of the CIO is here, and I think CIOs will increasingly become COOs and CEOs.
Peter High is the President of Metis Strategy, a business and IT advisory firm. He is also the author of World Class IT: Why Businesses Succeed When IT Triumphs, and the moderator of the Forum on World Class IT podcast series. To read his previous Technovation series on the “CIO-plus”, click this link.
