When car parts supplier Unipart Automotive was spun out of the logistics company Unipart Group in 2011 it was making a loss.
The company had potential but needed to cut costs and invest in future services if it was to survive.
Dominic Ruscillo was brought in as turnaround CIO after senior management changed. The new CFO and CEO wanted the costly IT operation replaced to cut costs and give the company the IT it needed to grow going forward.
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Following his degree in computer science, Ruscillo worked in a wide range of IT and management roles, giving him good grounding for a CIO post. “I have worked through IT from the bottom up. I have worked in networking, development, project management and senior IT management roles,” he says.
Unipart Automotive has almost 200 retail outlets, two UK head offices and about 2,000 staff. Ruscillo says 99% of the staff are IT users. He said when he joined, the IT team was made up of handful of project managers, a few more working in the separate business intelligence operation, a service delivery manager and a CIO.
“At the time, Unipart Automotive outsourced everything,” says Ruscillo. He said everything was outsourced to a single small supplier. “They outsourced everything including the management of their suppliers.
“This was not working. The supplier was too small.” The supplier had a turnover of about £50m a year compared to UA’s £170m.
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Ruscillo says the company’s board and shareholders said IT was not fit for purpose, not only from a cost perspective but because internal staff did not have the tools or expertise to drive IT changes to improve business and take advantage of opportunities.
“The holy grail for any CIO is to drive competitive advantage through technology. Unipart Automotive’s vision is for technology to become an enabler for profitable business growth,” says Ruscillo.
This, he says, was difficult because the company had given up control of IT.
“Unipart Automotive had outsourced everything and had no internal IT whatsoever. The supplier was not dynamic enough and only did projects based on their capabilities. We had to part company.”
Another major problem was that the internal IT did not have the right skills to take the company forward. “The IT team did not have strong technical IT backgrounds and were easily lead by the supplier. For example the service delivery manager was non-technical.”
The company, started the IT turnaround in January 2013 when it joined its BI operation with IT and embarked on a strategy of outsourcing in a more controlled way.
This meant outsourcing commoditized services and keeping core business competencies in-house.
“We do not want to be experts in running servers and VMware, but we do about moving products around the country. We needed to own the application space.”
To this end the company engaged with IT services company Getronics and, after agreeing a five year contract, embarked on a three phase turnaround strategy.
Phase one was to implement a plan to de-risk and improve the IT infrastructure. Phase two involved rationalistion with audits of software licenses and hardware estates. After controlling costs through the first two phases the company would embark on business application improvement to transform how the business operates.
Phase one was completed in January this year. It was delayed due to drawn-out exit negotiations with the previous supplier. The company is just embarking on rationalisation, which is made more difficult because no audits were done under the previous regime.
Ruscillo says the first part of the application improvement plan has been completed. For example, the old electronic data interchange (EDI), which was a Cobolt system has been rebuilt to fit its needs by Getronics.
Getronics has committed to a 20% reduction in IT operational spend.
Ruscillo estimates that had the company performed the de-risking of the IT infrastructure it would have cost £1m up front.
He says it is too early to put figures on cost savings but said the performance improvements are clear. “Using the old system it took 20 minutes to log on in the morning. Today it takes one minute". He also said as a guide to the rationalisation taking place the company has reduced the number of servers it has from 140 to 80.
Going forward the company is looking at projects including moving to voice over IP, managed print service and also in the plan is the deployment of Microsoft Lync to improve inter-branch communication and collaboration.