Patrick Eltridge on Telecom-IT Transformation

Patrick Eltridge on Telecom-IT Transformation

          
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Patrick Eltridge on Telecom-IT Transformation Down Under

An Interview with the CIO of the Australian Telecommunications Company Telstra
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  • About This Podcast

    Recorded

    14 Feb 2013

    Speaker(s)

    Michael Hitz, Partner and Managing Director

    Patrick Eltridge, CIO Telstra

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    Can you briefly describe the mandate and size of Telstra's IT organization?

    Telstra's IT organization provides technology support and solutions companywide. We are focused on a number of areas, including the build, expansion, and integration of communications networks and systems; the provision and support of IT infrastructure, architecture, and applications; and IT business integration for all Telstra lines of business. We have a physical presence in all major cities across Australia and more than 2,500 employees, contract labor, and professional-services personnel working to service the needs of the organization. We also have another roughly 5,000 people working for our partner organizations.

    You recently launched a fairly substantial transformation of the company's IT. What were your objectives?

    When I started with Telstra, it was clear that, to meet the company's strategic ambitions, the IT function would have to strengthen its capabilities on multiple fronts—broadly themed: people, change, and the future. To facilitate a deeper engagement with the business, we moved from a systems- or functionally organized structure into a business-aligned one. We changed the way we deliver—previously, we were too expensive and were taking too long—and sought in particular to strengthen our agile capabilities. We reformed many of our financial and program-governance practices. Setting a course for the future, we started to build deeper technical practices to better support the business and began to bring intellectual property and capability back in-house. Most importantly, from a people perspective, we focused more deeply on our culture, our leadership values, and the empowerment of our teams.

    The reorganization introduced a new operating model and a new way of working with the business units. What challenges did that pose?

    We had to design a model that reflected the interests of our business sponsors to the greatest extent possible. We built natural connection points into the model to encourage interdependence and collaboration among the IT teams and businesses. Finding the right IT leadership for those teams was critical. The leaders needed to be commercially savvy, very strategically minded, able to communicate with both the business and their teams, and able to provide direction through visionary leadership. We also needed to build new architecture practices, focusing on business solutions and capability roadmaps. Finally, we needed to ensure that the leaders of the IT teams had a seat on the business's executive teams.

    Talk a little bit about performance measurement. What metrics do you use to gauge how well IT supports the business? And what sort of progress have you seen?

    We started with the usual traditional measures of operational stability, reliability, and alignment of capacity with demand. From there we moved rapidly to measuring business stakeholder satisfaction with our end-to-end services. Our metrics confirmed that our ability to support the business has improved dramatically year on year. We're now moving toward developing a measure of value delivery, both cycle time and overall value delivered in a period, to raise the bar even higher. In the process, we're building what we call a twenty-first-century project-management office, or PMO, based on lean principles. This effort is very much a work in progress but appears to be already pushing quite a few boundaries. And the feedback from the business has been overwhelmingly positive.

    You've placed considerable emphasis on agile methodologies. Why agile?

    First and foremost, agile has proven to improve the quality of what we deliver. It reduces risk; it also reduces waste in the cycle, meaning we get more bang for the buck from our capital programs. We either deliver more for less or we spend less, depending on what's required. We're also finding that, through agile, the business sponsors are far more engaged and involved in the delivery process and have a much higher sense of ownership. So when challenges inevitably arise, the resolution is achieved via a joint collaborative effort, rather than blame and finger-pointing.

    How do you see the role of IT infrastructure in telcos changing over the next few years? What do you think is most critical for IT organizations, including your own, to get right?

    Telcos' legacy architectures have encouraged the duplication of application and infrastructure stacks by telco product. Over time, this has translated into a very complex infrastructure environment. The challenge now, as we move to IP-based application delivery over a common control plane, is to aggressively pursue standardization and automation and shift toward a services orientation across our entire infrastructure. This would have been very difficult to pursue previously. What stands to be even more important for Telstra specifically, going forward, is our increasing emphasis on cloud and other services in our go-to-market strategy, and capabilities accompanied by a culture that can adapt quickly to change and in some instances be a change maker.

    Is your use of cloud different from that of other telcos?

    I doubt it's strategically different. But we may differ in how fast we're moving down the path and in how we are consuming those same services internally, which serves as a deliberate proof point to the market. Telstra now has a full range of commercial cloud capabilities that we've targeted at medium businesses and the enterprise and government segments. We're building those capabilities into our hybrid infrastructure, doing workload analysis, and putting different platforms into different types of infrastructure. A great example of this is our plan to move all of our new SAP capability into our commercial SAP-certified hosting environment. Telstra will be the largest anchor tenant of its own public offering.

    What role does IT play in Telstra's new-product innovation, and is that role changing?

    The IT organization plays an active role. In addition to leveraging cloud and other external sources to enhance our commercial capabilities, we're also partnering with our products and marketing group to iteratively develop new go-to-market products. For example, we have tens of thousands of seats of virtual desktop infrastructure internally—but we have no go-to-market VDI capability yet. We are working with the product group to converge our internal VDI with their VDI product roadmap and end up with a single solution that we can consume internally and also take to market.

    What do you consider the industry's greatest challenges going forward, and how is Telstra positioning itself to address those?

    I think the biggest challenge for telcos around the world is the big structural shift away from fixed-line revenues and voice over copper, in particular. We're also seeing a structural decline in our print and yellow-page revenues. Telstra is responding to these challenges with a growth strategy focused on managed-services businesses, including media, and on the expansion of those businesses into Asia. Within that context, the challenge for Telstra's IT is to become a source of competitive advantage by developing the nimbleness, responsiveness, and collaborative orientation that allow the business to develop new capabilities and respond very rapidly in the market.

    The other, perennial challenge for telco IT, including our own, is the pursuit of simplification, especially in architecture and infrastructure. This pursuit is definitely enabled by the macro shift to IP-based products and services over the common infrastructure. But for telcos to succeed, it needs to be pursued as a mandatory, strategic component rather than a discretionary or op-ex-driven nicety.

    What impact has Australia's National Broadband Network initiative had on Telstra?

    The NBN rollout of fiber forces every home and business residence in Australia to choose a telecommunications service provider. This has placed even greater urgency on our shift toward greater customer advocacy. It hasn’t changed our strategy, but it has accelerated it.

    Circling back to the transformation, what are your next steps?

    At times, it feels like the transformation is just starting. While we have a lot of wins on the board and a lot of satisfied stakeholders, there's so much more to do, especially in terms of maturing our agile capabilities and developing a deeper partnership with our business stakeholders. We also want to involve increasing numbers of our people in the journey to develop their capabilities as well as their boldness and appetite for risk. So this will keep us busy for a few years to come. Beyond that, we will continue to work to develop a truly enterprisewide view as we expand our offshore presence and will strive to be key driver of innovation to support the company's growth businesses.

    A final question: what do you enjoy most about your role as CIO of Telstra?

    First and foremost, I enjoy driving and supporting a successful business. And Telstra is enjoying terrific growth and success in the marketplace. Another big motivator for me is helping people achieve their maximum potential and even surprise themselves with what they can do, given the opportunity.

    Thanks, Patrick.




    About Patrick Eltridge

    Patrick joined Telstra as chief information officer and executive director of IT in 2010. He has responsibility for the end-to-end design and delivery of IT infrastructure and applications as well as for Telstra’s data centers and managed information services. His previous experience includes employment at Standard Chartered Bank from 2008 to 2010, with responsibility for strategy, architecture, and design, first for consumer banking and then as group chief architect; four years as the CIO for business and consumer banking at Westpac; and four years as CIO at Seek. He also spent time as a consultant with The Boston Consulting Group and held various positions with HSBC and National Australia Bank.

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