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CW500: The right skills, suppliers and vision are key to a great IT strategy

IT transformation should not be a one-off event. It should be a continuous improvement and exist in the DNA of everybody in the company

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While most would agree that a coherent and workable IT strategy is crucial in bringing an organisation into the digital era, actually making that strategy a success is easier said than done.

At the latest Computer Weekly CW500 Club gathering, IT leaders from very different organisations shed some light on how to find and develop the right skills, how to deal with suppliers and sourcing strategies to deliver a successful IT change.

As Louise McCarthy, IT transformation director at the European Bank for Reconstruction and Development (EBRD), put it: “IT transformation is not just for Christmas, it’s for life.

“It should be a continuous improvement. It should be there all the time. It should be in the DNA of everybody in terms of thinking about how they can save money, how they can be innovative and drive the business forward,” she said.

Having a good cleanse

McCarthy, who has worked on IT transformation projects in several organisations including Specsavers and HM Revenue and Customs (HMRC), said the main difference between organisations was he pace of change and culture.

Often, she said, changing the culture, both within the organisation and in terms of relationships with suppliers, was key to enabling IT transformation.

“For me, it’s all about transparency,” she said. “Do you have transparency around the services that you’re providing to your internal customers? About all the applications you’ve got? Your internal resources? Your contractors and what they’re working on?

“It’s a simple thing, but in all the organisations I’ve worked in, the answer was always ‘We didn’t have that information’,” she said.

The first thing to do is what McCarthy calls a “one-off cleanse”, which includes looking at your applications and supplier contracts and switching off the ones you aren’t using.

The next thing is the governance processes. “You’ll be the most hated person in the organisation when you adopt a governance process around every item of expenditure. However, they should all be challenged,” she said.

Scrutinise your suppliers

The process also includes challenging suppliers. Using transparency, she said, companies should build a contracts database.

“How many of you measure the performance of a supplier?” asked McCarthy. “How many look at the invoices that the suppliers are sending you, and say ‘Are those valid’. The number of times I’ve been in organisations where we’ve been paying for services we’re not receiving.”

The next step is to write a sourcing strategy, which could include getting out of “locked down contracts”, she said. She added that claiming you can’t do anything about them is “rubbish”.

If a contract isn’t delivering what you need, you should get rid of it, she said.

Taking a similar approach is Steve Nathan, human resources (HR) director for technology at the Department for Work and Pensions (DWP), where there has been a move away from monolithic outsourcing deals to the department taking control of its own technology.

The DWP’s sourcing strategy was completely focused on getting back control of the technology, said Nathan.

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“There are some really hard choices about how you’re going to set up your commercial relationships, but for us, the guiding light is that we had control of what was going on,” said Nathan.

It’s not necessarily about trying to bring everything in-house, he said, but about resetting the relationships with suppliers and having some “pretty tough commercial discussions to make sure we did have control, visibility and transparency”.

“It’s important that it was us making decisions about what was going on with our technology, and not having those decisions delegated out to our suppliers. You can’t always guarantee that the supplier is going to have your organisation’s best interest at heart,” he said.

Nathatn added that it’s also important to make sure the culture and values of the supplier match with those of your organisation, in order to work in “true partnership”. 

No magic people 

But taking back control also means you must have the right skills in place to do so. Nathan said that while recruitment can be a way of doing so, it’s important to invest in the people you already have. 

“I think there’s a really strong business case for making the investment in existing people. Sometimes we can get carried away with recruitment and think that there are some magic people out there who can make a massive difference to our organisation,” he said.

“But think about who you already have in the organisation. Where’s some of that untapped talent? Where’s some of that untapped passion to do something in a different way? How do we identify those people and pull them through so they can start making a difference for us?” he said.

“Recruitment is one of the hardest things you’re going to do in your organisation. It takes phenomenal effort and focus to do well,” Nathan said. “I’ve not yet talked to an organisation where there’s a queue of people and you just turn on the tap. It’s always going to take a huge amount of effort to sell your organisation.”

Put people first

Taking advantage of the skills you already have, as well as developing new ones, is something that applies to every organisation. In the telecoms industry, Telefonica UK CIO Brendan O’Rourke has experienced first-hand how working in a market where the pace of change is so rapid affects the skills needed in the organisation.

When he joined the company six years ago, it wasn’t interested in delivering cloud-based communication and connectivity to government and large enterprises – two things that are now among some of Telefonica’s major business areas.

When O’Rourke took over as CIO three years ago, he set out to create a different strategy of creating and using skills. “I have a very clear principle, essentially that you have to understand what you do that differentiates your business and enables it to lead in the marketplace,” he said.

“When it’s differentiating, I want to own it,” said O’Rourke. “I need the flexibility, so I need to have the people with the skills on my team who are going to make a difference. When it’s non-differentiating, I want to find the best value, highest quality way of sourcing it and having a great relationship with partners to deliver that on an ongoing basis.”

However, Telefonica’s attrition rate is low, so the opportunity to bring in hordes of developers, for instance, isn’t there. O’Rourke said creating a diverse team and using apprenticeships and graduates is key.

“The energy, the passion and the skills they have when headed by more experienced managers can really make a difference to the business,” he said.

Upskilling your staff

O’Rourke also wants to attract people who have left the industry and would like to return, but with more flexibility, such as through part-time roles and job sharing.

It’s a way of bringing key experience and skills back into the team without some of the cost of headhunting and recruitment.

Upskilling and training existing staff is also something O’Rourke has found beneficial. Together with colleagues, he has created a programme that allows staff to find the materials they need to train themselves, as well as allowing them to access professional qualifications and suppling them with internal mentors.

“It’s proving very popular. I might have an architect with expertise in billing. However, I don’t need that, I need an architect with expertise in data. This allows them to take their architecture skills and retrain and become the data architect of the future,” he said.

“What’s critical in this is to be friends with your human resources director. You need skills and your HR director has the strategies to get them,” added O’Rourke. 

Mix SMEs and big suppliers

When it comes to working with suppliers, Telefonica has more than 150 delivering services, a by-product of its project culture over the last 10 years, which has meant that every project leader has been able to choose their own supplier.

“We have a fragmented supplier base, so we’re now driving a strategy of consolidation, creating larger, fewer partners, which we can get more value from through commercial negotiation, as they’re getting more value from us through the contract,” he said.

However, for the innovation part of the business, O’Rourke is keen to work with startups that “really want to drive change and are on the path to success”.

“I find it very hard with the big suppliers to find the innovation. I know they have the labs and they produce a lot of reports, but we don’t get a lot out of them,” he added.

Read more on CW500 and IT leadership skills

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