The CIO Leads Innovation And Purchasing At $8 Billion Ferrovial

Federico Florez Gutierrez is the Chief Information and Innovation Officer, and he is also the Global Purchasing Chairman at Ferrovial , an $8 billion Spanish company involved in the design, construction, financing, operation and maintenance of transport and commercial infrastructures. In his current role he is responsible for IT, innovation, and is the chairman of the purchasing committee at the company. From Flores Gutierrez’s perspective, it is natural that IT leaders should take on responsibilities in areas that have not historically been under IT’s control, as information and technology now are dramatic sources of innovation for any company. IT has a hand in driving both revenue augmentation and cost efficiency. As a result, he believes more IT executives will follow in his footsteps to become a CIO-plus.

(This is the 20th interview in the CIO-plus series.  To read past interviews with CIO-pluses from companies like ADP, McKesson , Walgreens, and P&G, please visit this link.  To read future articles in the series, please click the “Follow” link above.)

Peter High: Please describe your responsibilities as chief information and innovation officer of Ferrovial.

Federico Florez Gutierrez:  As CIO , I am responsible for managing IT within the company trying to provide the best value to the business. During the last six years, we have looked for synergies, integrating the infrastructures communications. We externalized them, changing the cost from fixed to variable, and looking for cost reduction. We developed vertical applications for the core business process and use SaaS for non-core applications. We centralized the purchasing function of IT and the IT security.

As Innovation Officer, I am the person responsible at the Executive Committee to lead innovation. That means, to coordinate this function in Ferrovial, we developed a methodology to implement it in the whole company in an open innovation model, looking for projects of business innovation which have impact in the P&L, and we launch projects for business challenges.

High: How did you and your company come to the conclusion that the CIO should also lead the innovation function?

Florez Gutierrez: We thought, Innovation was critical for us so we could differentiate from our competitors. In fact, innovation is part of our culture. We are looking always for new ways of doing things trying to find the best technologies and procedures for our business, but we could do more in this function. So, at Executive Committee we decided that a person should lead it. I was a logical person and technology was a tool for it, so, I took that role also five years ago.

High: How is innovation defined and measured within the context of Ferrovial?

Florez Gutierrez: Innovation is an invention which creates value for Ferrovial. We launch only projects which improves the P&L. We have 100 patents and have around 100 projects of innovation during a year. We have an innovation awards that provides 700 internal ideas, and because of our open innovation model, we work with external stakeholders looking also for ideas externally at the company.

High: How do you collaborate with the other divisions of the company to facilitate innovation?

Florez Gutierrez: We have a methodology based in three layers, the first one is that the business must demand business challenges, and innovation must look to fulfill these challenges, so it is business based. The second layer is culture. Innovation must be in every employee, so , we have to provide them the education they would need and motivation to facilitate the way they work in the innovation arena. And the third one are the tools to help for innovation, that means: University agreements, social networking, intranets, scouting, startups, entrepreneurship programs, and so on.

High: How have you assembled your innovation team?

Florez Gutierrez: We have an Innovation Committee with members from all the business, and with that Group, we think in the best practices to launch and follow up the initiatives. Innovation must be totally distributed, the target should be to integrate all the employees.

High: What are some examples of what your team has produced?

Florez Gutierrez: We have many examples. We have developed a software to measure and control all the indicators for managing the energy of a facility trying to improve the energy efficiency in several cities, we have implemented intelligent lighting. We have produced a car, that with infrareds cameras during the night, we can detect energy wasting of the building, after that, we know how to change the materials and construction to save energy. Several projects try to look for money because of the use of our assets: transforming car movement into energy, steps in corridors into energy. Big data is important in aggregating external data for traffic and weather in our highroads, or to calculate the optimal route for our trucks...

There are many projects but one common issue, which is improving our business.