Russell Morris has implemented a new IT operating model, recruiting 30 staff while awarding a new multisourced IT ecosystem, ending the previous 15 years of a single outsource contract. His new ecosystem of five suppliers has reduced opex by more than 20% while offering a much improved level of service.

Job title
Head of information technology

Company name
Northern Powergrid

How are you influencing the products, customer experience and services your organisation offers to its customers?
It’s really motivational for my team to see the IT function becoming the first point of contact when new business innovations, which improve how we serve our customers, are being discussed.

Our customer-first strategy has seen us evolve, tailoring our services to what makes the best experience for our customer, not necessarily what is easier for us. Our engineers now have Wi-Fi hotspots in all their vans, ensuring they are always connected to our control centre. In this way we can fix faults faster, as well as prioritise vulnerable customers, who may be dependent on electricity. In addition, we are utilising proactive messages to communicate with anyone that has a power cut, letting them know how long the outage is likely to be. Looking forward, we are already planning to leverage predictive analytics to fix faults before they occur. The future world of smart metering and the IOT presents a fantastic opportunity to create new services as well as drive new sources of revenue.

Define the key business outcomes that you have delivered over the last 12 months and their impact on your organisation’s performance
We have implemented a new IT operating model, recruiting 30 new staff while awarding a new multisourced IT ecosystem, ending the previous 15 years of a single outsource contract. This new ecosystem of five suppliers has truly delivered more for less, reducing opex by more than 20% in addition to offering a much improved level of service. We have also developed a number of initiatives to improve our whole-company awareness of cyber threats and how important their role is as our first line of defence.

On a national stage, we played a key role in delivering the 105 single emergency number. This provides a single phone number for people anywhere in Britain to contact their electricity network operator to report a power cut or safety concern, or receive reassurance during a blackout.

We have also invested in a new digital supply chain platform to provide inventory visibility in real time both in our warehouses and out in the field.

What has been your involvement with innovation at your organisation – in particular, with products, business model and technology – over the last 12 months?

  • Products: As a regulated monopoly we have a social responsibility to continuously look for new ways to drive innovation that ultimately translates into better serving our customer without raising prices. We build an innovative culture across the organisation. It’s a company-wide ethos, not limited to one specific department.
  • Business model: Our investment in a smart grid, combined with smart meter data, is already revealing some very powerful innovation opportunities. We have strengthened our team in the last 12 months to collaborate further with internal business teams, review existing processes and look for ways that technology can enable the removal of waste and increase efficiency.
  • Technology: We are focusing on the challenge of big-data to deliver a dynamic and proactive insight to customer demands, and how to leverage the significant opportunity and competitive advantage it presents.

How have you delivered cultural and behavioural change as a CIO within the IT department and/or more broadly across the organisation?
I lead a results-driven working culture within my team. Stopping to reflect is an important part of this. If you can constructively challenge the status quo, then nothing is off the table. I’m spearheading a transformation, and that means encouraging questions like, ’why are we doing that?’, or ‘how could that be done more efficiently?’. Asking those questions has helped my team achieve greater clarity of purpose.

The best results are achieved from a long-term investment in people. This leads to confident and empowered team members who take ownership of tasks. In line with this belief, this year I’ve invested time and resources delivering training and awareness sessions across the business focused on cybersecurity. With an emphasis on risk awareness and personal accountability, this training reinforces everyone’s role within the business to do their part in keeping it cybersecure.

How have you worked with your CEO and/or board to communicate whatever ‘digital’ and IT means to your organisation/sector and improve digital literacy at the highest levels of the organisation?
We now handle the majority of our power cut enquiries through digital channels, reducing our cost to serve and increasing our efficiency. This has been a real team effort, partnering with our internal communications function and including the whole exec team in redefining our target operating model for digital last year.

We have also held sessions with our senior managers, explaining what digital really means, and how it can be leveraged as a source of innovation and competitive advantage. As a result of feedback, we plan to use gamification and apps to better drive awareness and adoption. Investing in new FTE within enterprise architecture and securing a new digital partner will drive time to market efficiencies as well as greater business resilience.

How have you worked with the technology and IT vendor market to achieve your business goals? How have you been able to influence IT suppliers and successfully manage your partnerships/relationships with large IT companies, SMEs and startups?
The transformational approach we have taken with our new multisupplier ecosystem has made the ability to share and innovate a key measure to selection. We have a ringfenced innovation fund set up to allow us to test new technology and services with a ‘fail fast, fail cheap’ ethos. This brings great agility, quickly ruling something out if it doesn’t deliver the benefit we expect, and moving onto the next thing. When it comes to investing customers’ money, we have no desire to fail slowly or at great cost. Furthermore, we have set a target to bring one new innovation linked to business outcome back to the board every quarter.

How have you tried to develop the diversity of your team?
Following the Northern Power Grid commitment to diversity, I’ve ensured that all roles within my team are allocated based solely on merit. The has resulted in an increased number of women working within our team, and more women in leadership roles. This is something I’m particularly proud of, given the male-dominated nature of IT.

As a new initiative this year we are performing learning needs analysis for each member of the team, having candid conversations about how each person can grow in their role and feel like they go home every day having made a difference. I am personally passionate about the future of young people in IT and have recruited two telecoms apprentices. Moreover, I’m currently recruiting for two cybersecurity apprentices. I’ve also spent some time working with local school pupils as a STEM ambassador, promoting science and technology careers among those who might otherwise disregard them. The impact of such work won’t be seen overnight, but ultimately we’ll be looking at a more diverse and skilled talent pool in our industry.

Describe how you organise and operate IT and how this aligns effectively with business strategy and operations
The last 12 months have been focused on completely redesigning the IT operating model, resourcing for success to ensure we have the right skills in the right areas. We are increasingly operating IT more like a business than a department. It matters what our customers think and we deliver in our role as a strategic trusted adviser. It is critical that IT continues to play a business-enabling role long into the future. One of the essential elements of this work has been the creation of our strategy document, which has business outcomes at its centre. One of the ways we are demonstrating how IT and business strategy are working in lockstep is to issue a ‘lite’ version, specifically written in under four pages, jargon-free and understood by employees, partners and customers alike.

What strategic technology deals have you made in the last year and who are your main suppliers and IT partners?
Our recently awarded IT ecosystem contains five key suppliers that we will partner with for the next five years. The suppliers are Capgemini, TCS, Wipro, CGI and Infosys. We also have existing partnerships with Oracle and Microsoft.

What are your key strategic aims for next year?

  • Establish a class-leading 24x7x365 security operations centre.
  • Transform digital operations to enhance customer service.
  • Implement a new data network to improve how the electricity network is managed.
  • Complete the transition of the IT service to our new strategic partners.
  • Move into our new datacentres to reduce server hosting costs.
  • Continue to provide leadership around the management of customer data and the classification of information assets.
  • Support the £83m smartgrid initiative to support business innovation.

How are you preparing for any impacts Brexit might have on your organisation?
There are some genuine obstacles that we’re likely to encounter after Brexit, but it’s important not to make knee-jerk reactions that create greater problems in the long run. In IT, one major obstacle facing many businesses is an increased cost for US-based services and software. As part of Berkshire Hathaway, we are able to leverage corporate agreements with key suppliers in the US or buy locally. This choice enables us to manage currency fluctuations better.

YOUR ROLE

When did you start your current role?
Mid 2012

What is your reporting line?
CFO

Are you a member of the executive leadership?
No

Are you a member of the board of directors?
No

How often do you meet with your organisation’s CEO or equivalent?
I have regular diarised slots with the CFO every week, and as and when needed with the CEO.

How many people at your organisation does your function supply services to?
We manage the electricity distribution network, including more than 60,000 substations and 91,000km of overhead power lines and underground cables, supplying power to 3.9 million customers in the North East, Yorkshire and northern Lincolnshire.

BUDGETS

What is your annual IT budget, or your spend as a proportion of the organisation’s revenue?
The IT budget is approximately 5% of annual revenue.

What percentage of your budget is operational spend (ie keeping the lights on) and how much new development (ie innovation, R&D, exploratory IT)?
50% of the budget is spent on keeping the lights on – very appropriate terminology for our industry. 45% is utilised for new capex projects, and 5% is retained for innovation.

CIO INFLUENCES

Rank the following sources of advice/information in order of importance:

  1. CIO peers
  2. Analyst houses
  3. Consultants
  4. Media
  5. Industry bodies

IT SECURITY

Has your organisation detected a cyber intrusion in the last 12 months?
No

Are you expecting an increase in budget specific to security in order to tackle the cyber threat?
Yes

Does your organisation have a designated security professional – CISO or otherwise – and what is their relationship to you?
IT security and risk manager as direct report on my senior management team.

RECRUITMENT

Are you finding it difficult to recruit the talent you need to drive transformation?
Yes

Has recruitment and retention risen up your agenda as a CIO?
Yes

Does your IT organisation operate an apprenticeship scheme?
Yes

How many employees are there in your IT team?
100

Are you increasing your headcount or planning to bring skills and the ability to react to needs in-house?
Yes

TECHNOLOGY

Which technologies or areas are you expecting to be investing in over the next year?

  • cloud
  • data analytics/business intelligence
  • CRM
  • datacentre/infrastructure/server
  • IoT
  • security
  • AR/VR
  • enterprise applications
  • social
  • devices (desktop)
  • wearables
  • networking/communications.

Which technologies or areas are you expecting to be investing in over the next one to three years?

  • ERP
  • machine learning/artificial intelligence
  • devices (mobile)
  • 3D printing.

What emerging technologies are you investigating or expect to have a big impact on your sector or organisation?
We are piloting the Oculus Rift virtual reality system that completely immerses you inside virtual worlds. We are planning to model complex substations and potentially hazardous scenarios in order to train our staff in the most realistic – and importantly, the safest – way.

THE EU

Does your organisation do a significant amount of trade with the EU?
No

Does your department include technology staff from the EU?
Yes

Are you or have you been looking to the EU to recruit key skills?
No