Carillion is a relatively new name for a company that has been part of the construction and support services industry in some shape or form for over a century.
Although construction still plays a significant part in the Carillion business model, like many of its peer organisations Carillion has diversified.
As the business changed, expanded, acquired and entered new markets, so the technology operating the business has had to ensure that Carillion was built on sound foundations. Steve Connor, Group CIO for Carillion has built those footings.
The Carillion brand only came into being in 1999 following a de-merger with Tarmac, the company known for its road building materials.
Since then major construction and service-management organisations have been acquired by Carillion, including Mowlem in 2006, Alfred McAlpine in 2008 and energy services specialist Eaga in 2011.
“I had to rebrand all the websites, so I remember the 1999 name change well,” smiles Connor.
“The first acquisitions were more of the same to grow market share, and they fitted in well with what we do,” he says of the Mowlem and Alfred McAlpine deals.
With the Eaga acquisition Carillion is now a major player in the supply of solar energy and helping consumers become energy efficient with the supply of insulation.
But construction remains a significant part of the Carillion operation and it’s clear that Connor takes a great deal of pride in building physical structures that can often deliver benefits.
Recent projects have included the new John Radcliffe Hospital in Oxford, while it is working on the new Library of Birmingham and built the Beetham Tower that challenged the architecture of Manchester as well as the Grand Mosque in Oman.
“We are classified as a support services organisation on the FTSE. The organisation has grown organically and an intent to move from construction into support services. So the last acquisition was a move into the energy services space. That was a broadening of the company and that was our first large-scale B2C move, dealing with customers on fuel poverty, solar, boiler maintenance and installation.” he says.
Connor explains that the diversification of Carillion has enabled it to provide an end-to-end service to customers, especially in the case of PFI contracts.
Carillion has been involved in funding, building and then managing public buildings for customers in the health, education and defence spheres.
“That is the strength of facilities management and it makes the order book very solid and the City likes that. Construction is perceived as high-risk, but although we manage the risk, construction is low margin,” he says.
Connor believes that a set of values that are important to him, senior management and the whole organisation have enabled Carillion to retain large clients and move easily into facilities management.
These values include openness, collaboration, mutual dependency, professional delivery, sustainable and profitable growth and innovation.
UK clients include fellow CIO 100 members BT, the Ministry of Defence, Nationwide and Centrica, and Carillion has also managed to export its knowledge and values and has significant operations in Canada and the Middle East.
In Canada most of its business is in the construction and maintenance of roads and in the Middle East it is involved in construction and facilities management.
Technology used in the construction and services sector is often market-specific, but Connor has found benefits in a commodity solution.
“Construction firms have often used niche ERP platforms,” says Connor, but despite this prevailing trend, he says he didn’t find that a satisfying way to build the IT infrastructure for Carillion.
“In 2002 we took a look at Oracle and then took another look in 2005 and felt it was the right time to go with the Oracle E-Business Suite.
“If you are growing through mergers and acquisitions the integration of Oracle becomes a process rather than an event. We are seeking to have a single instance of Oracle across Carillion that is the real heart of our services and the way we manage customers, work orders, resources and assets and schedules. These are things we do, and must always do, well.”
Connor’s teams are currently automating the existing scheduling systems so that Carillion can dynamically reschedule work to ensure that priority jobs can be sent to the top in real time.
“You can’t be too good at that. We will keep doing this to maintain that competitive edge,” Connor says.
Its history of M&A means that Carillion has acquired a number of scheduling tools along the way. Connor and his team are decommissioning some while others are being maintained.
“Some clients have a scheduling solution they prefer,” he says of the standardisation challenge. “You should always have an eye on the propensity to collect systems so I am looking at how we can maximise what we have.”
Connor is responsible for 200 IT staff in the UK, and the Wolverhampton-headquartered company also uses some outsourced development in India.
“The quality of the people out of the Indian universities is top. Yes there is a cost advantage in India, although it is being eroded,” he explains.
Next on Connor’s strategic agenda is an infrastructure refresh across Carillion. He plans to standardise the desktop environment onto thin clients where possible and to provide Microsoft Lync and SharePoint 2010 to everybody.
As CIO UK met Connor in Wolverhampton he was busy with the design of the refresh and planned to begin implementation in the third quarter.
“The in-built collaboration is going to radically change the experience of the users,” he enthused.
“Unified Communications is coming as well with our 75 videoconferencing machines. Add this capability to Lync and it will take Carillion to the next level.
“We are making savings on the travel budget with desk-to-desk video conferencing. Creating the business case for the change was hard, but our existing infrastructure was old and worn out, so had to be refreshed and this way we can transform the organisation as we renew.
“We are looking at how we can exploit social media too. I think there is an untapped level of expertise out there for our sector,” he adds.
Connor’s transformative zeal doesn’t just include the hardware and software that Carillion employees use.
He has recently completed a re-organisation of the IT management structure, including the recruitment of several Business Information Officers (BIO) to complement the CIOs in the organisation.
With Connor as Group CIO there are a further five CIOs in the various divisions of Carillion that report both to Connor and their business unit leaders.
Carillion has just one development team for the entire organisation and one of the CIOs manages this and has a responsibility to all the others in the matrix.
Teams are then formed for projects and run by a particular CIO for the entire organisation.
Connor explains how Carillion got to this model.
“In 1998 we created an IT shared service across Carillion and sold through a service level agreement to the organisation. By 2010 there was a perception that this service was something delivered from HQ and somewhat disengaged with the business,” he says.
“In 2011 we decided to preserve the shared resource pools, but to establish a close operational and strategic link with the business so that the business felt they had a responsive and agile ICT operation they could call on.
“Change, even good change, is difficult for people and people were afraid of the matrix management the reorganisation brought. We are beginning to see the benefits of that as the various business units think there is an entire ICT operation at their disposal,” he explains.
Connor developed the plan with the senior management team as they all agreed Carillion needed an IT structure that was agile, closer to the operational business and which portrayed it as a leader.
“We were aware there was another level we could operate at. What we wanted was to get IT at the top table so that the businesses felt they were well served.
“IT was not seen as integrated 20 years ago, now it is totally central to what we do,” Connor says of the challenge.
Connor has been with Carillion for 12 years and in 2008 moved to the Middle East to be IT director of the firm’s operations there.
“We had three organisations in the Middle East that had to be brought together. They were behind in their IT and they wanted to be at UK levels and it was a chance to do a three-year secondment,” he says.
“It was hugely rewarding and the cultural aspects of living and working in the Middle East were really educating.”