The built environment we live and work in, as well as the transport requirements to get between them is becoming increasingly complex thanks to legislation, environmental concerns and the pressures of modern life. As result the organisations that devise, create and manage our built environment have in themselves become large and complex organisations. One of the main players is British company Balfour Beatty. Darryn Warner is CIO at the global company and has the unenviable task of helping Balfour Beatty provide the infrastructure communities require as efficiently as possible.
"We are an infrastructure services provider, working on projects from cradle to grave," Warner explains. Today Balfour Beatty is involved in feasibility studies, architecture, project management, the engineering, construction and finally the support services of operating the building once it has been completed.
Although the construction services sector has been hit hard by the recent credit crisis, Balfour Beatty has weathered the global storm and continued to expand. In September 2009 it acquired Parsons Brinkerhoff, a US equivalent to Balfour Beatty providing professional construction services to a wide range of US clients including major airports. The £380m deal was the largest in Balfour Beatty's history. Warner and the rest of the management are under no illusions of the challenges of moving into being a more globally focussed organisation.
"We will have to support a changing environment; our challenge will be to connect services up and down stream to create more value. There is a high degree of IT co-ordination going on. We don't take an aggressive integration approach though. We like to consider the culture and they [Parsons Brinkerhoff] brought a lot to the table," Warner says of the IT role in the M&A. Usefully, both organisations are major users of the Oracle E-Business suite. "There are synergies in Oracle E-Business interpretation across both companies and we will share knowledge and look towards some rationalisation," he says.
The Oracle platform is the rigid structural joint that holds the Balfour Beatty IT strategy together. Balfour Beatty has a federated business model with up to 25 different companies within it. "They all have their own IT and their own P&L and are incentivised by the profit they put into the group," Warner explains.
Warner says of operating Oracle, "Once you get beyond the licence and implementation that is where there are challenges," by this he means not only the technology but mapping it to your business processes. "When looking at complex business implementations it's too easy to get hung up on the technology, it's often the governance. We learnt a lot from the previous Oracle implementations."
The latest implementation will broaden out the HR functions that Balfour Beatty can offer its workforce and provide the organisation with better analytics.
With a federated business model and a global footprint one of Warner's greatest challenges is to ensure IT enables the organisation to operate as efficiently as possible. "We are just starting to understand what collaboration could mean. In the UK the pressure is to help each of the UK operating companies to not re-invent the wheel and to use the IT we have. For us in IT it's about trying to support and anticipate business change."
One added complication for Warner is that in the construction services world major projects are often undertaken as joint ventures with rival companies. The M25 widening is a joint venture with companies such as Skanska and WS Atkins. The IT user base of such a diverse company is also an added complication, with a range from IT power users in the professional services side of the organisation through to construction workers. Warner describes his constituents as a "mixed bag of demographics" who keep his team on its toes. "They are less tolerant of IT, partly because of the consumerisation of IT."
As CIO he reports into the Group FD, which is the common structure at Balfour Beatty with each operating company reporting into the FD and the board of that operating company. The federated business model of Balfour Beatty means that Warner has a "dotted line" of reporting between himself and the MDs and FDs of each of the operating companies. But reporting lines mean little to Warner who believes they matter little to CIOs today. "It's about collaboration with the other management roles, 70 per cent of the problems are the same. CIOs are getting beyond seeing IT as problem solving, for us it's about optimising the flow of information."