Alcatel-Lucent is a global telecommunications equipment company, headquartered in Paris, France. It provides telecommunications systems to service providers, enter-prises, and governments. The company focuses on fixed, mobile, and converged net-working hardware, IP technologies, software, and services.
Richard Sykes was impressed with the levels of transformation Dargue had achieved in his career at Alcatel-Lucent, while Mike Altendorf felt it was another SAP project for the CIO.
IT leader: Robin Dargue, EVP, Business and Information Technology Transformation.
In role since: Joined Alcatel-Lucent two years ago, July 21, 2010.
Reporting line: Report directly to the CEO, Ben Verwaayen, and a member of the Alcatel-Lucent Executive Committee. The role is also accountable for Alcatel-Lucent business process transformation in addition to IT transformation. Both initiatives are core to returning Alcatel-Lucent to sustainable profit. At their core both programs are leveraging simplification and standardisation to provide agility, speed and reduced costs.
The role is broader in scope than a pure IS/IT leadership responsibility.
Board level seat: Member of the company’s Executive Management Committee.
How often does the CIO meet with the CEO: In addition to monthly executive committee meetings, regular scheduled weekly and as needed one to one sessions.
IT budget: IT operational spend compared to company turnover as a percentage is 4.6%.
IT estate and or number of log on accounts under the control of the IT leader: From an IS/IT standpoint, the department manages both hardware and software solutions serving approximately 80,000 users across 130 countries.
IT staff currently employed: 1000, including a captive development centre in China.
Split between in-house/outsourced staff: The overall ratio is approximately 40/60, with 40% in-house. We use outsourced partnership for infrastructure and application support as well as application development.
IT management team and reporting structure: 10 direct reports organised as follows:
- Four VP’s for Business Process Domains (Customer Experience, Supply Chain, Business Support and Product Lifecycle).
- One VP Architecture and methods.
- One VP Compliance and Security.
- One VP Global Service Management.
- One VP Application Development.
- One VP Vendor Management.
- One VP Operational Excellence PMO.
Primary technology platforms at the organisation: The core technology for the company is centred on SAP, utilising Microsoft for our collaboration, email, and Office suite
Primary technology suppliers: SAP, Microsoft, Oracle, HP, TCS, Accenture, Capgemini.
Significant strategic technology deals struck in the last 12 months: In 2010, we signed a 3 billion Euro global partnership with HP. This partnership, one of the largest of its kind in the world is in year two and remains the most important technology deal we manage.
In 2012, we signed a SAP development deal with Accenture and we are currently undertaking the selection of a new global telecoms provider.
Percentage of your applications/infrastructure run from the cloud: We utilise both private and public cloud offerings, including the utilisation of our own cloud provisioning software CloudBand.
Infrastructure is up to 50% on our private cloud; and in terms of applications approximately 15-20% depending on measurement.
Major technology or transformation project recently completed and how did it transform operations, customer experience or the organisation: Business Transformation:Over the last two years Alcatel-Lucent has removed over 1 billion euro from the cost base, as well significantly reduce inventory by 600 million euro.
Single ERP (SAP): In 2009 Alcatel-Lucent launched a key transformational program, the Principal Operating Model (PrOM) to ensure best in class operational performance and continually increase customer satisfaction. PrOM’s objectives are threefold: 1) to improve our speed and ability to serve our customers better, 2) to simplify business operations, 3) to optimise and harmonise all processes. In order to achieve these objectives, PrOM is addressing the following key areas: offer preparation, customer order execution chain, supplier contract management and related procurement activities, project financial analysis and reporting, as well as business intelligence reporting tools.
With the creation of a new legal entity in 2011, Alcatel-Lucent International, the end-to-end delivery of all Alcatel-Lucent & OEM solutions managed by the Customer Delivery Units are now internally sourced through one Principal Unit serving EMEA, CALA and APAC (except China) Regions. Program Managers and Order Managers now benefit from “one stop shopping” for equipment supply.
Improving pre-sales and post-sales interaction enabled significant acceleration and simplification of our order entry flow, speeding up customer order processing and lead-time delivery.
By simplifying the supply and the delivery flows into a unique customer-focused supply chain, the company can provide firm commited delivery dates to each customer for the complete order as well as manage more efficiently our inventory, now concentrated in three Regional Distribution Centres.
We now have the capability to provide end-to-end margin visibility per customer/project and cross country cost control.
Global Procure to Pay (SAP):
Going to a unique, worldwide procurement-to-pay process enables us to reduce expenditures through the rationalisation of supplier lists, to optimise the invoice management and to harmonise and automate worldwide the processes.
Supply Chain Visibility:
Plan is to provide full visibility on product inventories in our warehouses, and end to end tracking of customer deliveries from order to delivery to customer premises. In addition the inclusion of statistical forecast capabilities. This has helped reduce inventories, and facilitated the pass though of lower component prices.
In addition, other major projects over the last two years successfully completed include:
- Disposal of our Genesys business division to private equity
- Selling of our core manufacturing operations to EMS partners, reducing inventory, and increasing cycle times.
In addition to all the transformation in the business process domains, we are simultaneously executing a global IT landscape transformation.
Data centre Operations:
Decommission over 200 data centre/server rooms by moving equipment to three twin-DC sites in USA, France and Singapore.
Using private cloud to reduce servers by 40 per cent
Upgrade all applications/db’s/operating systems to at least n-1 (over 70% today are older than n-1)
Whitelisting of all servers and end devices
Upgrade LAN’s in over 400 sites around the world
Upgrade 300 video conference suites, including installation of Halo suites
Implement 30,000 VoIP phones
Tender for new global MPLS network
Move 80, 000 users to HP global Helpdesks
80,000 new laptops over four years and upgrade to Windows 7
Global printing contract for 190 sites across the world
Lync On-LineOffice 2010; Sharepoint 2010
Did the above project reach its cost, timing and transformation objective: The overall transformation program is on track, and over 1 billion of savings realised to-date coupled with a 600 million euro reduction in inventory. In terms of customer experience there has been a marked increase in our performance of on-time deliveries (right first time). Current phases of the business transformation are on track to deliver a further 500 million euro savings. IT transformation is on target with our financials/costs business projections and timings of all streams are executing to time except DCO currently 12 months behind schedule.
Business transformation programme – beyond technology – that the CIO owns or is a major contributor to: Provision of global project management system to our customer installation teams. [3,000 project managers in 60 countries], designed to increase profitability/margin on project delivery.
- Roll out of remaining countries to single ERP system (40 countries e.g Nigeria, Senegal, Egypt, Turkey etc).
- Supply Chain Visibility for other product divisions beyond OPTICS.
- Provision of a single master product data structure as a core foundation block to end to end process efficiency.
- Re-engineering of Trouble To Resolve process for customer support.
Strategic aim of the CIO and IT operation for the next financial year: We will continue to accelerate business transformation with enhanced discipline to maximise internal productivity and improve customer experience: In tough economic times, there is a need to drive down lights-on costs while protecting the discretionary funds to drive business transformation.
So strategic aims:
- Deliver business transformations to further reduce costs and increase customer performance.
- Drive down lights-on costs to preserve (discretionary funds).
- Enhance security to protect Alcatel-Lucent in the face of ever more APT attacks.
Strategy in the use by employees of their own technology, use of mobiles and how social networking is impacting operations, customer experiences or the organisation: BYOD: Supporting users who prefer their own technology (i.e., smartphones, laptops and PCs) has presented Alcatel Lucent with measurable opportunities to improve satisfaction, productivity and even reduce expenses. Alcatel Lucent offers a programme allowing employees to Bring their Own PC which enables users to get full to corporate applications and resources and provides policies for legal and security protection. We found that users prefer their own PC because of the convenience of managing one device instead of two and because of superior capabilities of their own PC (e.g., speed, OS, battery, storage, etc). This also demonstrates to our customers that BYOPC is feasible which encourages them to select Alcatel Lucent solutions.
Mobility: Mobile devices (i.e., smartphones and tablets, corporate-issued and user-owned) are ubiquitous in Alcatel-Lucent and are an explicit component of its transformation strategy. As a communications company we must encourage the ‘anywhere and anytime’ revolution. By providing a Mobile Device Management solution to users, we’ve made it easy to safely access corporate resources with mobile devices. This means that whenever a need or opportunity arises with a customer or colleague, resources are at people’s fingertips to respond.
Social Networking: We deployed a corporate-wide social media platform three years ago using a SaaS solution that Alcatel Lucent calls Engage. This solution has become a tool that is used every day by employee from all business units, regions and job functions to collaborate and communicate. The impact of this is a transformation of existing organisational silos as information flows unimpeded across the teams. We serve our customers more effectively because a question can be raised to a broader community to retrieve the most informed answer faster. Moral of employees is improved because they have made new contacts and connections by participating in the Engage communities.
Strategy for dealing with shadow IT and BYOD including influence and engagement with executives, to place the right controls around employee choice: Shadow IT in Alcatel Lucent has undergone a significant transformation over the last three years. The company has moved from many organisations providing various IT functions through a focused effort to minimize this practice. The result is the elimination of most shadow IT operations. Those that remain are well understood and an ongoing assessment is conducted to determine if and when they should be consolidated. Buy-in to support this effort was helped by the top executives agreeing that redundant IT operations have been an inhibitor to success.
BYOD represents a significant opportunity and initiative for Alcatel Lucent. Projects have been executed and are in process to address all aspects of BYOD including: smartphones, tablets, PCs, security policies, infrastructure impacts, licensing rules, provisioning and management process, help desk support, etc. BYOD support is offered as an option in the services catalog which encourages people to work within the corporate frameworks. Plus IT manages several very active social media communities where ideas, issues and opportunities on BYOPC are aired.
Technologies being considered to enable transformation: These include core packages from SAP, Microsoft including Sharepoint, Oracle, Kinaxis (RapidResponse) being deployed to support business process simplification/standardization and knowledge management.
In terms of more pure IT, hyper V technologies (VMware/Citrix), solid-state disks technology, mobile device management from Motive and SaaS.
Transformational inspiration sources: Our employees are at the heart of all our transformational actions, as they are the primary actors in every phase of our end-to-end process. Their “pain points” and observations provoke suggestions and actions. Everything we do in the transformation space is done with the goal of improving our end customer (internal or external) experience. Of course, external benchmarking is critical as well, and we have benchmarked practices with Accenture from a governance perspective, just as one example.