After just over a year at telecoms giant TalkTalk, chief information officer (CIO) David Cooper is pleased with the work he has done so far under his IT transformation plan, but there are still many challenges ahead.
Cooper was hired by the telecom firm's managing director Wendy Becker last summer and tasked with creating an IT strategy for the firm and overseeing the integration of internet provider Tiscali, which TalkTalk acquired in May 2009.
To that end, a three-year plan was introduced to rationalise the company's IT estate, and also to create value.
According to Cooper the programme is progressing well, despite the intricacies involved in dealing with multiple business cultures and improving the image of the IT team.
"There was a lack of leadership and strategy - no one knew where we were heading from an IT standpoint. [When the transformation was introduced] there was surprise in terms of how much we can transform, the company had never seen anything like that before," Cooper told Computer Weekly.
"We are still breaking some barriers within the organisation, but the perception of the IT team has improved and we are delivering more than ever before."
"This is all about creating values for the organisation and getting people to align with them. If you are customer-focused, your team will be as well. If your style is too laid-back, the department won't care either, so you have to set the tone and expectations," he said.
The staffing aspect of the transformation, which is 70% complete, already involved a headcount reduction from about 500 people - including contractors, outsourced staff and in-house personnel inherited from Tiscali and former parent Carphone Warehouse - to less than 300 employees.
This reduction was partly achieved through further outsourcing in areas such as reference data management, systems operation and other areas of development such as testing. Many employees have been transferred to the firm's outsourcing partners such as Tata Consultancy Services (TCS), under Tupe agreements.
Cooper - formerly a senior IT executive at mobile operator Hutchinson 3G - also hired three new senior managers externally from organisations he had worked with in the past and promoted two existing team members, all directly reporting to him. He also sought to reduce the number of contractors and empower in-house staff, while outsourcing to handle peaks of demand (see box).
"[Previously] permanent employees were sitting at the end of the lifecycle and the contractors were determining where our strategy was, where we should spend our capital: the wrong way round," said Cooper.
"I am getting our own employees to steer the ship and determine where we are going and outsourcers will help us, flexing up if we need more resource - you have to be in charge of your own destiny, you can't just employ a lot of contractors determining the way you do business," he said.
In technical terms, TalkTalk's main milestones for the next 18 months are to do with the integration with Tiscali, which is due to complete by year end. The goal is to retire many legacy applications and add new features to core systems such as its Chordiant customer relationship management (CRM), Intec-provided billing system and Tibco provisioning software. The firm will also need to clean customer data to avoid any discrepancies and then migrate it to the new systems.
These changes are also intended to accommodate new product offerings around areas such as IPTV - the firm is one of the companies involved in the Project Canvas, an initiative geared at creating an internet-connected television platform built on common standards.
Additionally, there is work going on in the infrastructure. Though TalkTalk is now demerged from Carphone Warehouse, some infrastructure is still shared by the two companies, such as transmission capability and some datacentre space.
TalkTalk is now in the process of consolidating its datacentres into its two new facilities in Birmingham, which went live at the end of May. The project, due to complete in mid-2011, will generate a reduction of about 50%-60% in rackspace.
Though the new facilities are cheaper by a long way, Cooper maintains that cost reduction is not the only motivation for aiming for total infrastructure independence.
"We were always competing for space [with Carphone Warehouse] and had to lock changes together, go through a whole set of processes and approvals for things like changing Lan infrastructure and that slowed both sides down. So it makes sense to move, as the business has grown, to be able to do its own thing," he added.
TalkTalk's datacentre estate houses a plethora of technologies from both a software and hardware perspective, but making choices about equipment ranks pretty low in Cooper's to-do list though the business will be making further use of server virtualisation.
"I have bigger problems to handle than choosing hardware. Besides, you can always negotiate equipment price. The issue for us is deciding what is going to be our target platform and collapsing multiple applications," he said.
TalkTalk is also finishing off the replacement of several telephony systems, some analogue and some digital, with a single voice-over-IP system provided by Cisco, which will underpin the company's call centre operation.
"The basics [in telephony] were all missing, such as call-monitoring and information-management. Now we will be able to benefit from the efficiency of one single seamless system," said Cooper.
In a year's time, it is expected that the personnel aspect of TalkTalk's transformation plan will be complete and the systems consolidation and improvements will be well under way.
Though leading IT change can be challenging at times, Cooper says the progress made by the technology function so far is certainly pleasing top management.
"We are a lot faster, cheaper and more flexible to support the organisation right now. But this transformation is not just about IT, it is about finding solutions - and most of them not high-tech - to ensure we have streamlined, seamless operations with a single set of systems," said Cooper.
"Sometimes, people can be afraid and defensive, but change is not always welcome by everybody, so the most testing aspect is to lead people through the next phase of transformation," he said.
"I can say that I have made a difference: you can see that other people in the business recognise IT is in a much better state.
"But we are our harshest critics and push ourselves to provide the best and most cost-effective IT service. That is our goal and we will get there."
Indian outsourcers still at the forefront
TalkTalk has achieved significant efficiencies by continuing to outsource IT tasks such as performance management and testing under its transformation plan.
The company will outsource more work where appropriate, and Indian suppliers such as Tata Consultancy Services and Patni are still the first choice.
"People say that the Eastern block and China are cheaper, but when I was at Hutchinson 3G, we attempted [outsourcing to China] and failed dismally, because of the culture, language barrier and timezones," said the firm's CIO David Cooper.
"India is easier to deal with since it is a Commonwealth country, there are no issues with language, there are a lot of commonalities in behaviour, and the Indian companies have a great depth of skills that you can tap into at a very short notice," he said.
"It is getting more expensive [to outsource to India], but the savings that we are making are still of the order of 50%, even with the overheads you have to carry because you are doing work offshore," he said.
Cooper said that most of his outsourcing contracts have moved to an outcome-based, fixed-price model and that the suppliers have welcomed the change.
"Under the traditional model, [suppliers] were blown around all over the place and had an idea of what their revenues would be, so that's beneficial to them as it allows them to be in charge of their own destiny," he said.