Telstra believes working with startups is a “strategic necessity” if it wants to survive increasing competition from over-the-top players and other rivals, according to Telstra CIO Patrick Eltridge.
“We are way beyond the point where we build all this stuff ourselves,” Eltridge said at an Australian Computer Society Foundation lunch today in Sydney. Telstra has been working with startups as partners as well as through the telco’s ventures and acquisitions groups, he said.
“I want to be seen as a fit-for-purpose partner to a startup,” he said. At the same time, Telstra hopes to increase recruitment of “the sort of talent that startups attract,” he said.
Telstra isn’t the only telco or big business in Australia to open its arms to startups. Earlier this week, Optus announced it would begin accepting more applications to its Optus-Innov8 seed fund for startups. Banks are also increasingly looking at startup partnerships to keep ahead of the competition.
The startup initiative at Telstra is part of an effort by Eltridge to turn the giant incumbent into an agile business that can continue to be successful in the future, the CIO said.
“Unless Telstra changes—unless we become simpler, faster and [add] more customer advocates—our business model doesn’t make any sense in an all-IP, post-NBN world.”
“Telstra is at an extraordinary juncture in its history. The opportunities and challenges are really significant.”
He pointed to the rise of over-the-top providers, the transition of telecom to IP-based services, lower barriers of entry and an increasing number of competitors. “It’s requiring Telstra to change internally significantly,” the CIO said.
Going agile marks a significant business shift for Telstra, Eltridge said. The telco “hasn’t always been the easiest company in the planet to work with,” he admitted.
Eltridge said he has sought to overhaul IT delivery that had been slow, expensive and unreliable. From a cultural perspective, the CIO said he is promoting greater collaboration, transparency and risk-taking.
Allowing staff to take risks is important because even if they don’t succeed, the experience changes them for the better, said Eltridge. “If you’re not prepared to set somebody up for the possibility of failure, you’re almost entirely unprepared for the possibility of success.”
Eltridge described Telstra’s transition into an agile company as a journey of several years. “There’s no three-step plan to agile transformation.”
Pursuing agile does not mean Telstra has given up all old methods of business, Eltridge said.
“I am still held accountable to certain traditional expectations of project outcomes,” he said. “The large part of our work is still done to a more-or-less traditional business case.”
“We still do that. This is not some crazy land.”
There are also still limits to how much risk Telstra is willing to take, which are governed by regulations, customer privacy, information security, and financial considerations, he said.
However, agile methods are still making Telstra IT faster and more reliable, he said. “The way in which we do it is not disturbing the ability for the traditional methods of business to apply.”
Eltridge downplayed the significance of recent job cuts that came as part of a recent restructuring. He highlighted instead “the hundreds of new roles” the company is hiring in areas such as network applications and services.
Follow Adam Bender on Twitter: @WatchAdam
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.