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Change in Perspective

Change in Perspective

AMP's London-based CIO, Warwick Foster, heads up IT@AMP. Foster, previously Group Chief Information Officer at Colonial Limited, was appointed in August last year. Reporting to Foster are Barnett and the IT directors for Asia, UK/Europe, Henderson Global Investors and Cogent, plus three corporate functions: Global IT Business Strategy, Technology Strategy and Operations. Barnett's Australia and New Zealand group is still the largest in IT@AMP and also provides support to some of the other groups. "We're looking to globalise and standardise some processes, architectures and aspects of infrastructure," Barnett explains. "Also, given the cost differential between Australia and the UK, if there are any applications that we want to deploy globally, such as in e-commerce, we're looking at developing and supporting them here. You couldn't truly call us a global company yet as we don't have a substantial presence in the US, but we're definitely becoming more international and are looking to better leverage our skills base and be more efficient through this shared services model."

In March 2001, AMP announced that it had extended its relationship with CSC for it to provide IT infrastructure services for AMP's UK operations in a five-year deal worth $550 million. This was similar in size and scope to the new agreement AMP struck with CSC last year for its Australian and New Zealand operations, and some 220 AMP employees in the UK transferred to CSC in the process. According to Barnett, it was a competitive process; but as CSC had the best bid, the opportunities created by having one global provider were also attractive. In Australia, AMP also outsources the running of its AS/400s and set of corporate superannuation products to Kaz Computers. As in the UK, development generally takes place internally at AMP in Australia and New Zealand. However, Barnett says that the company's applications strategy is one of global reuse first, if practical. If it can't reuse, then it buys, and only as a last resort does it build.

"We've moved very much more towards being systems integrators rather than builders," she says. "For some time our policy has been that we should outsource infrastructure. Beyond that, I'm quite happy to look at outsourcing applications for platforms I consider to be non-strategic or if I can make a business case for it. It comes down to the commercial: if somebody can do it better and cheaper, I'm happy to do that." Barnett also believes in establishing partnerships with boutique vendors with specialist skill sets and services, which, she says, is more effective on certain projects than just "buying more bodies". In addition, her [internal] clients determine what they are going to spend on IT and Barnett then looks to resource that appropriately. To this end, she likes to maintain about a 25 per cent to 75 per cent mix of contractors versus permanent IT staff, which she can juggle depending on requirements. Then if the requirements do peak, she can look to the marketplace to buy in skills to support the demands of the business and not constrain it.

Barnett agrees with the prevailing wisdom that organisations should not outsource just for cost. As is the case with CSC, she also thinks it is of real benefit for companies with an overseas presence to work with a global provider, not least because it enables them to enter new markets faster. And while most companies would see the ability to manage partnerships and alliances as a key competency these days, Barnett does not think it comes easily or naturally for most Australian or British organisations, which like to maintain firm boundaries around themselves and jealously guard what is theirs. "In the heat of negotiations, it's also easy to cut off your nose to spite your face. If you're a tough negotiator, you can negotiate something to the point where you might appear to have secured a fantastic deal, but the reality is that the other party is never going to be able to deliver on it. "I think that happens a lot now and then, of course, you have a real expectation problem. The worse thing is to start off a relationship in a situation where you're both doomed to failure and, at the end of the day, it is both of you," she says.

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