Going the Distance

If Telstra CIO Jeff Smith can live up to his promises, within 18 months Telstra's IT operations will be as well-oiled and efficient as Toyota's production line, which Smith calls "the best in the world". Application and services will spew forth like widgets from conveyor belts, standardisation and lean manufacturing concepts will be ingrained, and the old cycle of evaluate/assess/proof-of-concept will be as outmoded as the factory whistle. Integration will be something other companies have to do. Existing platforms will consistently provide the leverage for new initiatives, which will roll out in quick time according to pre-set blueprints.

And in a move certain to put them under enormous pressure, all Telstra partners will have to operate at Capability Maturity Model (CMM) Level 5 (CMM is the framework organisations use to determine their ability to development and maintain software from Carnegie-Mellon's Software Engineering Institute) and face rigorous assessment by Telstra against Balanced Scorecards around quality, cost and cycle time. Telstra meanwhile will reclaim skills like requirements definition and business process analysis from its outsourcers

. The IT press has been abuzz in recent times with stories claiming thousands of jobs could go under Telstra's IT Transformation Project, which sees control of IT recentralised under Smith. The Australian reported in April that Telstra was chasing annual cost savings of almost $1 billion over three years by cutting its information technology budget in a move that could cost thousands of jobs - both internal and external. Two weeks later The Australian Financial Review reported up to 2400 of Telstra's technology staff would be "affected" by the carrier's move to centralise its IT, claiming to cite a leaked internal memo.

Those reports have entirely missed the point, Smith insists, adamant they relied on "made up numbers". He points out that Telstra only employs around 2400 staff internally, so if the reports were right every job in IT would have to go. And Smith vehemently denies Telstra has any target on job numbers at all. Rather, he says, the targets are around the Balanced Scorecard the company is creating around quality, cycle time and cost. "We want to drive the quality up 60 per cent in terms of reduction in defects. We want to take the cycle time out of our idea generation and feasibility and solution definition by 60 per cent. So if we look at what we're really trying to do, the key drivers are around the metrics program, and then that's going to drive us to do the right things," Smith says.

"I can tell you honestly there's no specific number around reduction in people . . . What I can tell you is that we have a goal of a substantial reduction in cost for the current content of work that we do, in order to reinvest those monies into our Web services infrastructure. That's the real key: our goal isn't to really reduce our overall spend, our goal is to reduce what we spend on the current content of services that we do today because we're going to make a big thrust into Web services."

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