How one company has really married its marketing and IT functions.
Ask many business users what they need on their desktop and they'll tell you that you just have to realise that they, and they alone, are unique. They'll tell you that it's almost certainly quite fair enough for everyone else's PC to be standardised in the name of good IT governance, because everyone else can get the job done regardless.
They understand perfectly the logical argument for standardisation. They can certainly see why such standards should be imposed on everyone else. It's just that when it comes to them, you have to realise the job they do and the pressures they're under just about mandate that they be the exception to the rule. And after all, if you'll just excuse them, and them alone, from the imposition of a standardised desktop, it can't possibly cause you too much trouble, can it?
Like higher taxes and lessons in morality, standards are for other people, never them.
It's an issue that Kaz Computer Services CIO Stephen Pearson has become very familiar with since joining the company from IBM. Pearson joined Kaz with extensive line management and IT consulting experience. His most recent role was with IBM Global Services Australia as principal for the global medium business sector within the enterprise resources group. Now, with some months under his belt at Kaz, Pearson claims to see clearly that the answer for CIOs fed up to the back teeth with user-driven IT politics is selective outsourcing. [Editor's note: That strategy is consistent with his employer's. Kaz computer services specialises in outsourcing and facilities management.] Pearson and Kaz's director of business development David Knox believe truly canny CIOs realise it's often far better to outsource individual processes rather than complete business operations, in the name of operational efficiency.
"The internal desktop support structure that the CIO has to manage is a very complex area," Pearson says. "It is also very personal to the individual: a bit like your desk and your car park space," Pearson says. "Managing the desktop environment is very difficult for somebody internally because of the pressures from user departments and individual demands. They all seem to be special, so they say. All their areas are unique, so they say. In reality of course they're not.
"If a CIO has got particular problems in, for example, desktop infrastructure support and management, then he may choose to outsource just the desktop support to an outsourcer. By doing that he's able to impose standard operating environments. It's all managed through service level agreements" In short, Pearson says outsourcing should be all about a layered approach, with an organisation only outsourcing the functions where it or a business unit gets a real payback, as opposed to outsourcing simply because it's policy.
Keeping a Lid on It
Offloading one or a handful of specific maintenance tasks through selective outsourcing allows the organisation to put existing IT staff to more strategic uses, saves space and keeps a lid on costs by increasing system reliability.
Over the last couple of years studies have consistently shown dismal levels of customer satisfaction with single-source outsourcing. Giga especially blames the laggardly approach large end-to-end outsourcers like IBM, EDS, CSC, and Perot Systems took in adopting new technologies, particularly in the e-business arena. Giga says it's already seen some defections from the large end-to-end providers in favour of some of the more "sexy" boutique firms. It claims there's data to show customers tend to be happier with selective outsourcing because of the way it can provide best-of-breed solutions at reduced costs.
Gartner forecasts that by 2003 50 per cent of global 2000 enterprises will selectively outsource their application maintenance, new application development and distributed service, while less than half will outsource other IT functions. According to Gartner, increasing numbers of information systems executives are looking at outsourcing just pieces of the data centre equation, while retaining control over key functions such as application development and help desks. Those organisations will use outsourcing vendors to augment internal skills or offload repetitive tasks such as PC upgrades. In this scenario cost reduction is increasingly irrelevant. Instead organisations want to tap into skills internal IS shops can't or don't have time to provide themselves.
Kaz believes many IT departments are already evolving into more business-centric teams that will look at improving business processes, adopting new ways of doing business with customers, partners and suppliers, and having bottom line responsibility for delivering efficiencies to the business. In line with that trend, Pearson sees his as a highly strategic CIO role, focused to a large extent on effectively putting together strategies that make sense across the extremely diverse Kaz group as a major priority.
Leadership by Example
Since coming on board to guide and lay the foundations for Kaz's technical infrastructure, internal systems, business continuity planning, and real estate assets last August, Pearson has been focused on getting on top of a number of internal housekeeping issues. While his responsibilities do not include the desktop or the LANs because they have been internally outsourced to the Kaz IT team, Pearson does set standards and looks after Lotus Notes and the WAN, working with a series of managers who pull in resources as required. While demarcation issues remain, he says they are being dealt with sensitively and progressively.
At Kaz, selective outsourcing hasn't relieved its CIO of the problems involved in imposing standards. The CIOs of the company's clients may have adopted selective outsourcing as a means of managing standards, but Pearson still has to worry about them, and lots of them. That's because as CIO of an IT services company his job is to set standards to meet clients' needs, as well as standards that internal users require to get the job done. That means maintaining everything from Windows 95 through to the new XP version, and a host of software to boot.
"We actually employ more than one standard because our standards have to be flexible enough to comply with our client standards," Pearson says. "There's no single solution for anybody: each client will have a different solution because obviously his or her operating environment will be different. So internally we also have to be flexible in supplying desktop standards, because we can't sell things that we don't apply to ourselves."
Pearson says his challenge is to ensure the standards he requires are applied not just in the areas to which he has direct contact but also at some of Kaz's more remote sites. In an ideal world Pearson would like to see the organisation standardising more, but recognises that the company must maintain expertise and skills in a range of operating systems, software and hardware in order to look after client requirements.
Internal Outsourcing
The Kaz IT team comprises almost 400 staff working out of seven offices in NSW, Victoria, South Australia, Western Australia and Queensland (Kaz has subsequently agreed to acquire Aspect Computing pending shareholder approval this month - Ed). Pearson's own team, by contrast, is quite small. He started with just eight direct reports, but says the number is growing rapidly as the organisation works through demarcation issues.
Internal outsourcing definitely makes for some complexity, he admits. For one thing there were many times in the past when people working on internal projects were taken off them to focus on client issues. Even today, whenever a new opportunity arises, everybody, including Pearson, starts working on it immediately.
"Everybody here will quite happily and readily work on a client issue and the expectation is that they're available to do so, but I think that focus has now changed. I'm part of that change, and the team that I have is absolutely focused on putting in place the right infrastructure and systems and applications for us. Even as late as last year this reorganisation was still occurring, so it's only recently that the resources have been applied consistently to internal issues."
The tendency to focus more on client needs than its own in past times has left Kaz in catch-up mode when it comes to addressing its own infrastructure requirements and needs. "I think it hasn't been an issue up until the group actually grew," Pearson says. "The Cobbler's [children] scenario certainly has not harmed Kaz, but now the group is of a size and dimension it needs to have that internal infrastructure set up. If it doesn't, then it's putting at risk its ability to continue to grow in the way that it has," he says.
Addressing those needs while ensuring alignment in a diverse and complex outsourcing company is forcing Pearson to take a more conceptual and high-level view of particular issues than might otherwise be the case. Take security. As CIO, Pearson says he needs to lay down security standards and solutions that can be readily communicated and applied to the entire group of companies, without being overly specific.
"If I'm too specific then it's not going to be appropriate for one part of the group, but applying a common standard on passwords can be achieved across the group," Pearson says. "It's really looking at what can be done to ensure that we are applying common standards and common principles without getting down to specific issues within a particular entity. [It's also about] giving them at least a conceptual framework and principles they can apply to a specific issue or problem."
Been There, Done That
With so many IT proficient employees spread across Kaz, Pearson says he tends to hear some familiar themes. Like the one that says: been there, done that, and it didn't work. That is, whenever a problem arises and Pearson suggests a solution he's likely to have someone suggest he look at the solution they came up with in 1997. When he does, he often finds the solution has not been sustained to everyone's disappointment, especially after probably being launched with great fanfare.
"My experience is that if I come up with a solution, someone will tell me that it's already been applied at Kaz," Pearson says. "The situation is that it probably has been applied, but it's not been maintained. The person who is, say, maintaining a contact management solution has either left, or is now working at a client site. The solution degrades and it becomes inefficient and then it isn't used, and all of a sudden we're probably back to spreadsheets or some alternative as opposed to actually using the application.
"Anything I do, I feel very strongly must be sustainable, and I would much rather produce something that was more basic than try to complicate a solution and then see it fail."
Pearson sees his job as making sure both external services needs and internal needs are fully met. Keeping both balls up in the air is particularly difficult for a CIO in an IT services organisation, he says. For one thing, clients are increasingly looking to Kaz to set the example in particular situations. For another, as the CIO in an IT service business there are continual issues of whether the responsibility for certain functions is in his court or a client team's. While he says there's no lack of good will when it comes to sorting such issues out, they do have to be sensitively and progressively managed.
Pearson aims to ensure they are.
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