Do more with less. It's every CIO's nightmare, but for Telstra's Dwight King it's a reality. He's charged with protecting the company's most valuable asset -- its customers -- but he must do it in a new "leaner and meaner" environment.
King is Telstra's executive director of Customer Process and Information (CP&I), a division which was formed in May last year as part of the company's preparations for privatisation and the deregulation of the Australian telecommunications industry. Like the company's CEO, Frank Blount, King also hails from the US. He began his career in information technology with EDS in 1970 as a systems engineer trainee following five years with the US Airforce as a fighter pilot.
King filled a number of roles at EDS, including responsibility for developing a "relationship" with US telecomms giant AT&T. This eventuated in King being loaned to the company in 1988 in a "senior management" position.
During his tenure at AT&T, King successfully implemented a billing system for servicing over 90 million customers. He was also responsible for effecting a more customer-oriented focus at AT&T through a reorganisation of the company's "management structure for billing".
In 1994 King moved to Australia to become the local managing director of EDS and then chairman. In March 1995, he was seconded to Telstra, primarily to oversee implementation of its troubled FlexCab billing system. (See, "Taking Ownership".) Eventually Telstra CEO Blount approached him to take on his current position.
As executive director of CP&I at Telstra, King is responsible for all the organisation's processes and information technology in Australia and overseas.
CP&I is part of Telstra's Network Technology Group and Multimedia and has over 6500 staff, including 2700 who are part of the outsourcing agreement between Telstra and IBM Global Services.
Arriving in the middle of a profound period of change at Telstra, King must juggle a massively restructured organisation while also delivering the goods on an aggressive mandate from the people who ultimately dictate the business decisions: its new shareholders. But that's not the only thing on King's plate.
In addition to dealing with leaner and meaner times, King and his team must convert what has for many years been essentially an insular approach to IT into a strategy which focuses on the customer and is responsive to the immediate needs of the business.
King says that Telstra needs to address a number of misconceptions about IT, which were permitted to flourish within the company long before Telstra even had to think about competition. Not unlike many organisations, Telstra has been guilty of pigeonholing its IT department as being solely responsible for the running of the company's internal systems, King says. This thinking tended to sabo-tage the competitive advantage that IT investment is supposed to yield -- such as enhanced customer service.
Share and Share Alike
With privatisation and the deregulation of the Australian telecommunications industry, Telstra is attempting to reel in control of its systems to contend with the completely altered playing field. IT project funding and approval is being squeezed as the company attempts to more tightly align all company activity with a radical and evolving business plan. The mandate for IT is to improve the efficiency of the company's operations, and indeed its overall competitiveness.
"The fact that Telstra now has shareholders means that my department is being forced to view its role in a new light," King says. "We are far more accountable to the business."King suggests that this has cost his department much of its freedom. "Our department is now subject to a new requirement brief," King says. "Not only has it become more difficult to gain approval for new projects, but all IT-related activity is subject to rigorous impact analysis."One reason behind this requirement is that Telstra is reluctant to perpetuate an environment where systems are developed independently and therefore unable to communicate with each other. "Before we can make any sort of changes to our systems, we have to talk about how it will have an impact on the business," King says. "Otherwise we end up with a bunch of silos." Along the way, the "IT people" are learning that dealing with "the business people" is simply another part of the battle. "You have to fight for your right to exist every day and constantly earn your credentials," King says.
For example, when the decision was made to standardise on Windows NT and the Microsoft Exchange messaging platform (in which King played a role), the move attracted internal criticism. It's not uncommon when blanket standardisation is proposed that the perceptions of the cost savings in the executive suite end up threatening the field-level technical evaluation.
"Often when we suggested technical changes, the business overrode them," he says. "That's why we were on Windows 3.11 for so long."However, when CP&I explained the need for NT and Exchange in plain business terms his department got the green light. The IT department calculated that by standardising on the Exchange messaging system, the company could eliminate "hundreds" of mail servers and save hundreds of thousands of dollars in maintenance and support, according to King. "We proved a business case," he says.
Proving the "business" value of migrating to NT was a little harder. In the end, the IT department secured approval by focusing on the needs of "front-of-house-staff" (the company's many customer service and sales representatives) because this is where Telstra is directing most of its energies at the moment. "That's where we saw the best business benefit," King says.
The Mobile Customer
But whether it's Windows or Unix, SAP or Oracle, thin or fat clients [the product] is of secondary importance, King says. What really matters, he explains, is the protection of the company's most valuable asset -- its customers -- and Telstra has realised the important role IT can play in the management and delivery of information towards achieving high levels of customer service"We now see the need to harness the potential of an already vast IT infrastructure to turn information into something we can use, as well as something which represents value in the eyes of our shareholders," King says.
"Generally speaking, this is essentially anything which makes Telstra a better value proposition than its competitors."Customer loyalty is always a fickle thing, but no more so than now with so many companies vying for business. Telstra is responding to this threat by dramatically re-engineering the business. More notable is the increased emphasis on IT as a means to better management and to deliver information to the public.
The first casualty of this decision, according to King, was preciously guarded notions of technology's role in the organisation. Business has smashed the glasshouse and grabbed technology by the throat, demanding that it hand over the goods in the form of solutions that have a demonstrable financial value.
While this situation is creating interesting challenges for the IT department, King maintains that the business itself is also being forced to be more accountable. "Previously business people thought about IT as technology in a box," he says. "This perception is being forced to change very quickly, as the business demands that it be much, much more."Gone are the days, King says, when the business would say: "Here, have the money, we don't understand."Toughing IT OutCertainly tough times have demanded tough measures at Telstra. For starters there is the company's legacy as one of Australia's largest organisations and also one of its more complex and cumbersome bureaucracies.
With the competitive writing on the wall in big print, Telstra is seeking to eliminate dead wood and transform an overweight organisation riddled with archaic business notions into a lean, progressive organisation equipped for what is shaping up as one of the most dynamic industries this century: communications.
And there can be no questions as to Telstra's determination to rationalise.
Last year, the company began preparations to drastically reduce its workforce.
According to a company spokesperson, Telstra had 73,392 staff in 1994/95. By 2000, it plans to reduce that down to 59,000.
And this strategy, while earmarked as a key peg in the company's transition from a public to a private company, represents more to the CP&I group than a bill for several thousand redundancy packages. "One of the problems we had was grappling with the paradox of raising customer service with drastically reduced labour resources," King says.
But the lessons being learned at Telstra are not specific to any particular kind of organisation. "Most CIOs focus on the ability of an organisation to support internal processes. This is not how I see my job," King says. (See, a "CIO by Any Other Name".) "Increasingly we are seeing a shifting emphasis from the management of technical procedures to the management of business procedures," King says.
Having identified a direct correlation between the quality of information and the levels of customer service attainable, the IT department and business decision makers at Telstra are working closely towards improving this aspect of the organisation, via FlexCab naturally, in addition to a number of other initiatives.
Telstra has enormous repositories of data collected over many years. Within a wide collection of huge but disparate databases lies a wealth of customer information "that all of our competitors would love to have", King says. The company also has an array of diverse IT systems -- from mainframe to Unix and NT -- spread out across numerous business divisions that service a broad spectrum of different individual users and organisations.
In the day-to-day running of the business King is looking to consolidate data storage and deliver mechanisms to reduce the amount of transactions which are conducted via the company's internal systems.
King says that one of the biggest problems facing CIOs today is the existence of overlaps and duplication of processes throughout the organisation. The nature of large heterogeneous IT environments makes it difficult to separate and streamline individual processes. Essentially, he says, it is hard to know "what information is where" and "where overlaps exist".
Ultimately, the IT department must provide Telstra employees the high-quality information they need to do their jobs, says King. The company is in the process of completing its Customer Database of Records (CDR) which, he says, is a giant step towards this goal. Also, in conjunction with deployment of Windows NT and Exchange, Telstra is working with Microsoft to develop tools to improve its customer service and product delivery capabilities.
A CIO By Any Other Name . . .
For Telstra, the appearance of shareholders and several armies of aggressive enemies represents the primary impetus to change, but the underlying message is something that many CIOs are failing to hear, according to Dwight King.
While IT is clearly recognised as one of the most important tools in creating competitive advantage, many IT managers fail to appreciate the fact that the systems and applications themselves have no intrinsic value. "Unless they are directed towards specific business processes, there can be no guarantee that a company's expectations are not undermined," King says.
In fact, King believes that the term "CIO" is an anachronism these days, and contends that this title is absent on his business card for good reason. "The role of the CIO is undergoing universal readjustment," as business executives gain a better handle on the potential for IT to shape the course of a business, he says.
Such is the weight of King's responsibility at Telstra, that he has joined the ranks of those IS executives who sit on their companies' senior executive committees. He is a member of the Telstra Senior Management Team and of the Operations Management Group, which oversee Telstra's overall business performance.
King sees his role in Telstra's business decision making process as absolutely essential to ensuring that IT and the business understand each other. "The more we are included in the process, the easier it is for us deliver and support the solutions, as well as the products and services which are essentially the backbone of the company."Taking OwnershipDwight King says that while CP&I is responsible for developing the IT side of the business at Telstra, these days the success of a project, especially a large one, depends greatly on there being an even balance of responsibility between technology and business decision makers. "When executives sign off on a project, it belongs to them too," he says. "I want the business to feel ownership of IT," he says, "otherwise it is just another 'IT problem' as soon as something goes wrong."King cites Telstra's much maligned FlexCab billing system as an example. The project had all the earmarks of a bottomless pit, with the government tossing in near on half a billion dollars. A large part of King's charter when he joined Telstra was to lift FlexCab over a number of hurdles the company had come up against. "The system did have problems," King admits, "but people were blaming the system only."The situation was so frustrating, King coined the term "system excuse syndrome" to refer to the tendency for a business to point the finger at the technology (and those with direct responsibility for implementing it) when a project struggles to find its feet. But often, as was the case with FlexCab, King says, the business fails to uphold its part of the bargain.
"Telstra underestimated how difficult it would be to install FlexCab," he says.
"The project was so much bigger than the company realised -- massive amounts of training were needed. The company's whole mindset had to change."King saw that an attitude change was in order at Telstra almost from day one.
Early on he observed that the patterns of perception and behaviour there [regarding FlexCab] were similar to other billing projects he had been involved with at AT&T and elsewhere. King also knew that to secure FlexCab's success, it was crucial to preserve confidence in the system.
"With any major project, you will go through tough times," he says, "The mistake many organisations make is that they ask the wrong questions to understand why things aren't going to plan.
"As with any project, be it IT or otherwise, you need to conduct 'expectation calibration'," he says. King explains that organisations must weigh the business benefit against the cost of a project rather than just focusing on cost alone. He says that because the business is ultimately the sponsor behind a project, practices and policies must change to support the endeavour.
Ultimately, under King's stewardship FlexCab came to fruition and is a key element in Telstra's efforts "to offer its customers better, more efficient and flexible billing solutions". Telstra has also marketed it successfully to organisations in Australia and worldwide.
"Once the system was up and running, people then went hunting for other things to blame," he says.
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