Wales & West Utilities (WWU) was set up on June 1st 2005 to take over gas distribution in the Wales and West region previously managed by the formerly state-owned National Grid Transco. IT director Phil Pike was brought in to migrate the company from it's legacy systems to a completely new infrastructure in only 18 months.
Such a radical change in processes and systems requires an equally radical change of culture. And bear in mind that although this is a new company, it still retained a substantial number of staff from the regional Transco it replaced.
“Our working culture has changed dramatically,” confirms Pike. “We have tried to introduce a performance management culture and push autonomy out to the lower levels of the organisation.”
To help in this process the executive board holds an industrial round table each month at different depots across the region to take the new culture out to the shop floor and involve industrial staff and team leaders.
“When we first did this is was quite hard. We took a lot of flak. There was initial scepticism, blockers and so on,” Pike remembers. “Now it’s very different; the exec round tables are about productivity and costs,” he explains.
This change is backed up with much better performance management enabled by new IT systems. “We have a web view into the business warehouse. We get an IT granular view into someone’s performance,” says Pike.
Like all gas distribution firms, WWU is monitored and reviewed by the Office of the Gas and Electricity Markets (OFGEM) on a regular basis.
“We’ve been through one full price control review in 2008,” says Pike. “This creates cost challenges.” The next review is coming in April 2013, and WWU is already working towards this deadline to make sure it can meet the cost demands made by the regulator.
The implementation of the change programme outlined by Pike took place during 2005 and 2006. “We did what we set out to and didn’t de-scope anything important,” he says.
“We hit all our go-live targets between April 2006 and August 2006. We also had an unplanned move to our new office at Newport in the middle of this.”
At the same time Pike also had to bring the previously separate new connections business in house, shoehorning a vanilla SAP system for 100 people into an already busy implementation schedule.
Pike is justifiably proud of a record that shows that he hit his deadlines and stayed within budget but admits that he “threw the rulebook out of the window” to make it happen.
He believes the flat organisational structure at WWU is key to his success: he reports directly to chief executive Graham Edwards and there are no more than four or five levels of hierarchy across the entire admin side of the business.
At the peak of this huge change programme around a hundred people were involved in the implementation activity. Pike recalls that there was some risk of setting user expectations too high with such a major programme of change.
To make sure that users got what they needed he had a task force moving round the depots, fixing real and perceived issues and problems on site and staying until users were happy before moving on to the next location.
Early on WWU chose SAP to help deliver on its strategy, and in line with the objective of reducing the overall number of systems and suppliers, Pike admits “we use as much of it as we possibly can”.
In some cases other technologies were required to supplement this SAP core product with very specific features such as the GIS-based visualisation and pricing solution WWU uses alongside its CRM.
Now this big period of change is behind him, Pike’s focus is on IT developments that can bring clear benefits and he is focusing on lower cost projects with higher value outcomes. He has a rolling roadmap and has a portfolio management approach to IT strategy and projects.
WWU uses a value index system to assess the business value, IT efficiency and financial attraction of any proposed IT project, and has a benefits register process which allows him to revisit projects to track what benefits have actually been realised.
Finally, there are always key business stakeholders involved in every project, though Pike is uncomfortable with drawing too significant a distinction between business and technology.
Keeping a lean team
For an organisation that has done so much with IT in such a short time Pike’s full-time team is commendably tight — just nine people on the staff including himself. His two key lieutenants are a head of infrastructure — the techie on the team — and a business applications manager who focuses on outsourcing and support issues.
Together they help him set strategies, and provide knowledge and info about trends. He outsources WWU’s support, with Serco and Wipro currently looking after infrastructure and applications respectively.
Pike favours signing long-term deals with trusted suppliers — contracts are typically for five years — but thinks he can add some “underlying steel” when needed to keep costs under control.
This way he believes he can instil some of WWU’s cultural values into contracted organisations while still controlling his costs effectively.
He also prefers a one-team approach involving contracted support staff. “If we get a high-severity incident at the call centre I try to avoid a situation where the problem is being lobbed over the fence to the other team by having everyone look at it until a solution has been identified,” he says.
In spite of the number and complexity of the IT projects Pike has tackled since 2005 he suggests that WWU may not be bleeding edge but is certainly leading edge.
“We have already virtualised all our data centres, we have integrated GIS into our core systems, and we have never been afraid to be innovative,” he says. Technology is the servant of business is this organisation.
Pike’s key focus throughout has been on user perception and cost control. “My aim has been to change the perception of IT. I have a great team and we have been listening to people,” he says.
“It’s about attitudes more than anything else. Our leadership team has pulled together and set the tone: one of continuous improvement and performance management.”
His proudest boast is that he has stayed on top of costs throughout his tenure. “I have cut IT operating costs every year since I got here,” he says.
In raw numbers this means a cumulative 35 per cent cut, saving the business £3m per year. In addition, in the last two years 21 projects budgeted at £8.2m were delivered for £7.9m.
“My attitude is that you deliver on time and in budget, work with fixed-price contracts and monitor through a programme board to make sure it keeps on track.”
Pike suggests that anyone in his position ask two simple questions: what are we able to action, and what are the key deliverables?
And of that huge challenge set at the start of his time with WWU? Well he has delivered and has revelled in the process. “Every part of it I have enjoyed,” he says.