Savvy Investments

After spending two years in the US helping to rebuild Barclays Global Investments' IT infrastructure, Craig Squires was ready to come home to Australia. His solution to a home transfer? Put BGI's new technology to the test by managing the company's IT operations from Sydney.

Craig Squires is glad to be back in Australia. When he left Sydney two years ago, Squires was head of IT in Australia for one of the world's largest asset management companies, Barclays Global Investments (BGI). He was travelling to BGI's San Francisco offices to work on some application development projects that had gone sour in the US. He expected to stay a few months at most.

It didn't take long, however, for Squires to realise that the application problems he had been sent to America to fix were, in fact, infrastructure problems. Soon after, BGI's new head of IT promoted Squires to worldwide head of IT infrastructure, enlisting his help in a grand plan to overhaul the company's massive, far-flung IT operations. Before he knew it, " a few months" had become two years.

Now Squires is back home in Sydney, where he continues to plan and maintain BGI's fundamental underlying IT infrastructure as well as manage the company's 10 data centres around the globe. When CIO last visited BGI, the company's new global head of technology, Wall Street veteran Paul Stevens, was busy working through cultural hurdles as he tried to bring the IT function of several disparate offices into alignment (see ‘How to Win at International Politics', CIO March). Those efforts were part of a much larger campaign initiated by Stevens to totally revamp BGI's global IT infrastructure - a campaign that Squires insists is now complete.

How can Squires be so sure? The fact that we're talking face to face in the boardroom of BGI's ritzy Sydney offices is proof, he says. The best evidence that BGI has successfully renovated its global infrastructure is Squires' own return to Australia.

"I've reasoned with a number of people that if we can't do my job from Australia - or anywhere else in the world - then there's no job we can do inside of Barclays, because our IT infrastructure isn't global, " he says. "And if our IT infrastructure isn't global, then we're in trouble."

Global Consistency

A few years ago the idea that someone like Squires could manage the support and infrastructure needs of a global investment company like BGI from Australia would have been considered impossible. "For one thing, our business was not integrated enough," Squires says. "This role didn't even exist 18 months ago. The reason it exists now is that we've recognised the need for us to get things consistent around the world."

One of eight international businesses run by London-based financial services giant Barclays PLC, BGI handles more than £530 billion (approaching $1.5 trillion) in assets for some 2000 clients in 37 countries - mostly pension funds for large multinationals. BGI is also the product of several mergers and acquisitions, including Japanese bank Nikko Securities and San Francisco-based fund manager Wells Fargo. New offices in Japan and San Francisco were grafted on to the company, but never fully integrated.

Communication between BGI's London home base and its recently-acquired offices overseas was not what it should have been. Data redundancy was rife. Information silos began to mount in business units around the world.

"Twelve months ago we had fundamental stability issues, " Squires says. "We were using hardware inefficiently and didn't know what we owned from a licensing viewpoint. We're now at the point where we have a single global platform across most of our technologies and I'm able to do my job " from here. " Squires says he can now run the shop from Australia because technology has finally rendered regional differences meaningless. Most of his time is spent on the phone or in video conferences anyway, he says, so why should it matter where he is in the world?

Squires is also quick to acknowledge the debt BGI owes to Stevens, whose appointment in 1999 as global head of IT marked the beginning of a new era in IT/business alignment. Stevens reports directly to CEO Patricia Dunn and also sits on BGI's management committee, which consists of the company's product heads, channel heads and functional heads, including risk and operations. Together, they run BGI's business.

It didn't take long, Squires says, for Stevens' seniority in the organisation to be felt by those who worked in the IT area. The new boss hit the ground running, prompting a radical transformation in the way the company deployed its technology resources. "BGI was short of a global head of technology for many years, " Squires says. "There was a search for quite a long time to find somebody to run that function before we found Paul Stevens. He has been very effective in changing IT from a ‘necessary evil' to a partner in the whole exercise. The level of cooperation and trust that exists in the IT management team is much, much higher, and that can only be attributed to Paul. " Since Stevens came on board at BGI the watchword has been "consistency " . With offices in so many different locales, not surprisingly each group had developed its own technology preferences. Desktop irregularity was a nagging problem and database standards were also lax. Stevens introduced consistent builds and tighter controls on software distribution. BGI also reduced the number of NT domains from more than 15 down to one, enabling Squires to put all underlying objects in the same active directory and leaving him with only a single security domain to worry about.

Similar progress was made in the notoriously tempestuous province of Unix. "We had 38 models of Unix boxes last year and by the middle of this year we'll be down to fewer than 10, " Squires says.

BGI places a new importance on uniformity, a philosophy that manifested itself in the company's recent adoption of Windows 2000 as a single, global desktop. Squires says that the Windows 2000 rollout is all about standardising the environment and controlling the distribution of software. He also says the new emphasis on standards is already making his support duties easier, and claims call volumes are down by half in some geographies.

How does BGI do it? By managing its applications centrally. At last count Squires and his team had assembled 1113 different pieces of software, all packaged and ready to be pushed out to individual machines automatically. "I can go to any machine anywhere in the world, sit down and choose from a list of applications that I, personally, am licensed for and are available to me. That's resulted in a 20 per cent drop in the number of people we've got on desktop services, for example, because we just don't need to [physically] go out to the machines to get things done."

Squires admits that like a number of companies, BGI talked about globalising its applications a lot more than it has acted over the years. Nevertheless, he is adamant that this is the first time during his five years tenure at the company that he's seen "tangible progress".

"The argument that I used originally was: if you know your starting point, you know the change that you make to something, and you can then predict the outcome," he says. "We couldn't do that before. We didn't know the configuration of the machines or what software was being installed directly from CDs. Now, because they're packaged and scripted, I can predict exactly what the impact will be on the hardware, so the stability is much higher.

"It means we can minimise the underlying infrastructure. And hopefully it means that we won't end up with duplicate infrastructures around the world, which we still have today."

In fact that is exactly how Squires' bosses measure his performance; his two chief objectives are to minimise cost and to stop those silos from coming back. Nevertheless, it's a constant battle to keep up with the pace of change. "As new business opportunities pop up, we may spawn a group in order to go and deal with them " that's what creates these issues," he says.

Traffic Jam

As part of the global overhaul, BGI also redesigned its networks, changing all of the company's wide area networks from frame relay servers to virtual private networks (VPNs). At the time BGI was running out of bandwidth, largely due to the company's rapid growth. BGI's London office had doubled in size in 18 months and the network was clogged with traffic between San Francisco and the UK.

"When we got inside and had a look at the traffic flow, there was an awful lot of traffic that was destined to be Internet traffic," Squires says. "We found that we were soaking up our wide area bandwidth for people to get out to the Internet."

Putting a VPN in place has enabled BGI to drive down the cost significantly. Squires claims he pays less than half of what he used to for 10 times the bandwidth. Adopting a VPN solution also allowed the company to build local Internet connectivity into every site, which Squires says helps to "take the load off our internal circuits".

Next on Squires' agenda is voice over IP (VoIP). "We've got the bandwidth and the network, and now we're at the point where I have an entire office in California that's voice over IP infrastructure. Now we're starting to trunk our data switches across the data network, which is going to help cut costs."

Surviving the Down Economy

According to Squires, the reforms instituted by Stevens could not have come at a better time. As companies around the world struggle to get their shops in order in the down economy that has followed in the wake of the September 11 tragedy, BGI has already done most of its pruning.

"We've looked at paring back some of our IT spend, but interestingly it hasn't been hard because most of what we cut back we'd already done the hard work on in 2001," says Squires. "Most of the initiatives to make sure that we were getting maximum bang for our buck were started well before the economic crisis hit. We'd already dropped head count where necessary. My budget targets are down, but they would've been down anyway because of the work we've been doing."

Squires says now that BGI has its infrastructure ducks in a row, he's facing an entirely new set of challenges. "The issue has shifted from being a fundamental technology problem to one of achieving consistency in the service that we offer," he says.

As the organisation becomes global - as more applications are deployed globally and as the business processes become less regionally focused - Squires is starting to spot differences in the way BGI provides service and support around the world. "We can ask a question in one geography and get an answer, but if we ask it in another geography we get a different answer," he says. "The problem has shifted from a fundamental infrastructure issue to: how do we organise ourselves? And how do we do things consistently globally, so we can offer a similar level of service everywhere?

Most likely, Squires says, BGI will iron out such creases by rearranging its organisational structure. At the moment BGI has a series of regional heads of infrastructure who report to Squires and who cooperate and coordinate across the company's various functional disciplines. Squires expects that setup to change in the near future, with regional heads eschewed in favour of new divisions according to platform - a single Unix group, a single NT group and so on, regardless of geography.

"I think that will help with the consistency," Squires says. "We've got to make sure that we don't lose the service that we've been able to offer in those local regions, but I don't think that's going to be an issue. I think the risk we've got at the moment is that doing things differently could lead to confusion."

Still, Squires asserts that twisting BGI's organisational structure is easy compared to the work involved in finding reliable metrics upon which vital business decisions can be based.

"Apart from the service aspect, the other major area I'm interested in this year is to do with collecting data on what is going on," he says. BGI installed Peregrine service centre and a host of HP OpenView products to monitor its environment last year in the US, and that intelligence is now a factor in Squires' decision-making process.

"It's important to know if there's an issue ahead of time, before the phone rings. Monitoring tells us what's going on, what our repeat problems are, and lets us ask some questions about how we make them go away."

Squires collects a great deal of structured data which is used to inform his decisions. "Anything that is logged automatically is easy for me to see repeat trends in," he says. But information that comes in through BGI's help desks is much more difficult to categorise, because it tends to be more freeform. Squires considers discerning patterns in such activity to be one of his greatest challenges. He also claims to be making good progress.

"It's down to the point where we could see that a particular make of machine that we bought was causing us an unusually high number of problems," he says. "We were able to go back to [the manufacturer] and say: ‘Listen, there's something wrong with this model.'"Up With Down UnderRebuilding BGI's IT infrastructure might have enabled Squires to return to Australia, but homesickness is not the only thing that brought him back. He's also on a mission to raise Australia's profile on BGI's corporate radar.

"I have the benefit of being able to see what our money buys us around the world, both from an application development point of view and also from an infrastructure point of view, and I promise you that we can buy talent here that would cost us 50 to 60 per cent more in the US - even more than that in Japan," he says. "I just don't know why we can't leverage that more. We have a significant advantage over a number of other countries."

Squires raises the example of a successful pilot BGI recently fostered which relocated some important IT functions out of the US and into Canada. While Squires concedes there are time zone constraints, he sees no reason why similar projects can't be implemented in Australia. BGI already has six IT people working here who don't focus on Australian business at all, but instead concentrate solely on global issues.

"There are some time zone issues, which is part of the problem, but there's also a mindset problem," Squires says. "Businesses have to learn to accept that if they want good quality at a respectable price, then their IT person won't always be able to sit beside them."

Diplomatic Licence

Aussies make great corporate peacemakers.

Craig Squires, Barclays Global Investments' worldwide head of IT infrastructure, isn't the only Australian to find himself moving on to bigger and better things within BGI's global operation. In fact, Australia has a well-earned reputation as a region where many of the company's corporate stars first honed their skills.

"One of the strategic benefits of this office is that it contributes to the global talent pool," Squires says. "We have a relatively small office here, a little under a hundred people, but it's a microcosm of the entire world. We run the same sort of operations here as we do in other locations."

Several people have moved on from responsibilities in Australia to larger roles in BGI's global business. The person who runs BGI's fixed income business used to be head of the Australian office. The worldwide head of human resources used to be human resources manager in Australia. Another Australian runs BGI's "project office", a group focused on improving the company's internal IT processes.

Squires claims that in large multinational organisations like BGI, Aussies have a valuable contribution to make as mediators. "I'm not sure if it's a cultural trait or what it is, but Australians' ability to state our opinion frankly without offending people means that we find ourselves in those conflict resolution jobs a lot," he says.

Squires cites a recent article he read which mentioned the term "organisational ombudsman" as an accurate description of the type of role Australians often perform at BGI. The Australian who runs BGI's project office, for example, managed to implement a single change management/version control solution where cooperation was previously almost non-existent.

"We had 15 of the damn things," says Squires, "and to go from that to just one in four months is staggering to me. It all comes down to his ability to tell somebody what they're saying is wrong, basically. But in a polite way, without offending them.

"I think part of our advantage is that we're neither American nor British. We get a lot of organisational tension between those two parts of the organisation. We're in the middle, so we can say: ‘You're both partly right. Now let's talk about this and try to get somewhere.'"