Change management and getting support from senior management are key priorities.
Numbers nine and 10 on the MIS UK list of CIOs’ top concerns are about partners: change management, (which did not make the top 10 last year) and dealing with senior management, (which was in seventh place). To manage change and integration effectively, CIOs need the support of their senior management team.
The fast moving pace of technological innovation means that change is a guaranteed part of the IT director’s role. But the way they manage its effect on the business is more critical. Ashley Braganza, director Nexus, The Knowledge Exchange, Cranfield School of Management, believes probably the most significant management issue IT directors have to face this year is change management.
“I am not talking about the technical versions of change management, like moving networks, or from Microsoft to open source, but the sort of change management that has a far greater emphasis on the whole business,” Braganza says. “Business process change, and changes in the organisation’s culture and how it affects the people who work in it are very high on the IT director’s agenda at the moment.”
Braganza thinks that organisations still struggle with major programmes of change that have IT elements in them – which is most of them. “We are still managing them like IT projects. These are not business or IT projects, but often complex initiatives and programmes of change for the whole business, which has an impact on many people. If they are clear programmes of change in the technical arena where programming might solve the problems, that is quick and easy to solve. But where it involves the whole company, this is a very different thing.”
As expected, many companies MIS UK spoke to for this year’s MIS 100 are going through massive change and integration programmes, all of which need the support of the board to succeed.
"The integration of SAP into the energy division of the company has been very successful and is now a standard template"
Jonathan Mitchell, CIO, Rolls-Royce
Rolls-Royce sees the benefit of change
Jonathan Mitchell, CIO and director of business process improvement (BPI) at Rolls-Royce, says the company has been undergoing a huge change programme. It has consolidated its operations, improved its product lifecycles, reduced its cost base and is beginning to see the benefits. “We have begun to increase our investments with a multi-year programme, and have started with process improvements to reduce product lifecycles,” says Mitchell. “Of course this involves a huge change of processes and has to be closely supported by IT.”
Rolls-Royce has begun a massive 18-month SAP implementation programme. “The integration of
SAP into the energy division of the company has been very successful and is now a standard template,” says Mitchell.
AstraZeneca, one of the world’s leading pharmaceutical companies, is also undergoing huge IT organisation driven changes. Last year its strategic IT objectives concentrated on delivering business value to the company, improving its own IS productivity and developing its IS people and talent. It also successfully implemented SAP and CRM systems, as well as a number of clinical research technologies.
It says it will continue its CRM implementation and its PeopleSoft HR system to support its drug discovery and development activities. It is implementing global SAP, CRM, HR and email upgrade systems, along with a range of technological solutions designed to improve the drug discovery and development process. If that was not enough, it is also executing major change programmes, which are designed to improve its efficiency and productivity.
Co-op arms merge operations
Sometimes the change programmes are the result of technology improvements, but nowadays they are often the result of a strategic management decision. Last year IT for the Co-operative Group and the Co-operative Financial Services (CFS) was merged, and Gerry Pennell – who had been acting director of IS for the Co-operative Group as well as ICT director for CFS – became CIO of the single IT organisation.
“We had two completely separate IT teams, so we have spent the last 12 months uniting the team and its functions,” says Pennell. “The focus has been on consolidating the systems infrastructure where we
can and looking for synergies across datacentres, desktops and similar areas.” There is now an
integrated IT management structure reporting to Pennell, looking at running the operations and then working with the businesses to form systems strategy at a group-wide level.
In the case of ntl, change programmes have been driven by acquisitions, obviously supported by senior management, and involve extensive integration. In March this year ntl agreed a merger with Telewest, and a month later reached a takeover agreement with Virgin Mobile for £962.4 million. Although merging the operations of all three companies, getting ready to cross-sell their services next year, will be difficult. The process is already underway and Howard Watson, CTO and CIO at the company, is well placed to consolidate the systems and platforms, having already built one organisation at Telewest from 35 companies.
"He [CEO Phillipe Varin] understands IT and this is really useful in carrying out such major changes to an IT organisation"
Bruno Laquet, CIO, Corus
Watson believes the merger will clearly create some challenges for the IT department. “We need to use IT to support our internal customers in the business as they deliver the merged company to the market,” he says. At Telewest, where Watson was managing director of networks and IT, he had focused on a programme of consolidation of Telewest’s business support systems (BSS) and providing a single customer care system, and this will continue at the merged organisation. “We will now have to balance the needs of the merged business with continuing to provide the single customer system for an additional three million customers,” he says.
Steel maker Corus has been undergoing a massive change programme since the arrival of its new CEO Philippe Varin in 2003, and its CIO Bruno Laquet believes the progress the IT organisation has made since then would not have been possible without the support and drive of Varin.
Laquet says the relationship with his CEO is very helpful in what he is trying to achieve. “He understands IT and this is really useful in carrying out such major changes to an IT organisation. It helped us start at the beginning, and because he knows that IT can be a key enabler for everything in the business, it gives us an added impetus.”
Laquet reports to the COO and says he finds that works very effectively. “The relationship I have with the COO and CEO is based on trust. Heads of the business units trust me to provide IT that enables their businesses. I spend a lot of time working with them, so that I understand what they need.”
The Corus executive committee meets regularly and is really interested in what is going on with IT, according to Laquet. “IT is often on the agenda. They debate the changes, and get very involved, which is great.” Every six months Laquet reports to the main board. “Before I reported recently, the board last heard what IT was doing in 1999, and that was mainly because of Y2K. It means they now understand that using IT in a better way will lead to more success. They want to know what is going on, which is great
for the IT department.”