Changing man

By Huw Thomas, Editor

In an exclusive interview with BT Group CIO Al-Noor Ramji, Huw Thomas hears about ambitious plans for a company in transition.

At one point during our interview Al-Noor Ramji jokingly likens his role as BT CIO to that of a particularly lowly cleaning operative. Though we can’t relate the exact job title he refers to, the implication is clear: it’s your mistakes that garner the most attention. “If you haven’t done a decent job, people notice,” he says. “If you have, nobody does.” It’s an uncomfortable truth, particularly for someone involved in a radical overhaul of a global business’ entire technology infrastructure.

Long known for simply being a telecoms company, recent years have seen BT undergo a dramatic transformation into a global provider of IT services. This is a business shift on the scale of IBM’s move from hardware to services and Ramji has been at the heart of the process. Commenced in early 2005, the first phase was to create ‘One IT for One BT’. “In effect we gathered the IT professionals who were sitting inside each of our lines of business into a central team,” Ramji explains. “We then concentrated on key transformation objectives based around a relentless focus on the customer, business alignment, teamwork and standardisation of our architecture.”

Early signs are that BT’s efforts have been a success. Business partner satisfaction has increased to over 80 percent, a virtually unprecedented figure for such a large company. Now approaching the end this metamorphosis’ second year, BT has made operational savings of 19 percent and devoted considerable resources to creating its revolutionary 21st Century Network (21CN), currently the biggest IT programme in the world.

Attention has now turned the second phase of the transformation. The IT team has become part of a new organisation called BT Design, of which Ramji is also CEO, that brings together networks, IT process and technical product design. Asked about his dual roles, Ramji seems unruffled by a set of responsibilities that you might think were too much for one man. “I have a fairly broad remit, with leadership responsibilities for our customer experience pan-BT, as well as BT Design. I wouldn't be able to tell you where one role begins and another ends.” The benefits of this approach are clear: a standardised architecture allows the reuse of component parts, leaving development resources free to work on the value-add elements rather than rebuilding the same parts over and over.

Complementing the work of BT Design, sister organisation BT Operate brings together the in-life management of networks, IT, and processes. It is a move that has greatly reduced the number of handoffs in each of the company’s business processes, enabling an increase in the speed of delivery, improved reliability and reduced costs.

On paper this all sounds fantastic, but what are the realities of effecting such an earth-shaking change in the business? Perhaps surprisingly for someone with such a technical background, Ramji’s first concern was the setup’s flesh and blood component. “The asset is no longer the network, the asset is the people,” he says. “When this is the case the transformation is a very different task. Because you can’t just write new processes and expect everything to fall into place as you might with technology, you have to take a completely new approach.”

To bring staff with the company as it changed focus often required Ramji to think more like an HR manager than a CIO. “We have a history of very long service, very decent professional people,” he explains. “On average, they’re probably in their late 40s and they’ve mostly joined BT not to have a very risky life. So, the first thing to do was to really appeal to their sense of corporate mindedness. We told them that the future of BT relied on their transformation as individuals. That really kick-started the whole process because there was a lot of pride in being people in BT.”

This change in attitude was an essential factor in the organisation’s drive to put the customer at the heart of their business. “This focus really meant that the whole company had to be re-engineered into three customer experiences,” says Ramji. He describes these as “lead to cash, try to resolve and concept to market” or more simply “selling things, fixing things and inventing things”. This meant changing the company architecture into something much more real-time, open and global. Where before you would find pieces of the firm only talking to one another through largely inflexible processes, the necessity now was to blend everyone into a team. “It was no longer possible to provide a full customer service without real teamwork in the firm,” continues Ramji. “And this is teamwork not just between IT people, which is a big enough feat in itself, but across the whole business.”

This sea change in staffing is all the more impressive considering that it was largely done with existing employees. “On balance, I think we bring in about 300 new people a year out of a workforce of fourteen and a half thousand,” Ramji explains. “That’s a fairly small ratio if you really think about the degree of change. So, these are not giant numbers, these are existing people doing decent jobs.”

Not costing the earth
As evidenced by many of the articles in this issue of CXO, green issues are no longer simply the preserve of treehugging environmentalists. In a business landscape increasingly shaped by such concerns, the role of the CIO takes on a new dimension. The data centre accounts for a major chunk of overall power consumption in any modern organisation and BT is no exception. Ramji tells us about his role in the company’s efforts to cut its carbon footprint, particularly in the use of virtualisation. In its traditional data centres, BT found that only about 10 percent of available computing power was being utilised. Varying demand throughout the day and applications spending long periods waiting for input resulted in tremendous amounts of wasted capacity. “If you look at our virtualised data centre program, one of the biggest benefits we get from it is power saving,” he says. In the new data centres every processor is set up to operate as a number of virtual computers, each running its own application. Because the busy and idle periods of these applications rarely coincide, much more of the available computing power is used. “Not only that, but you get terrific space savings and benefits because you don’t need to move as much equipment around,” Ramji continues. “Instead of using trucks to ship in thousands of servers, we can simply turn a piece of software on.”

But it’s not simply a matter of setting up virtual servers, sitting back and watching your power consumption decrease. “You have to do things like operating system and firewall standardisation, all at the same time.” Ramji explains. “You can’t have a few slow systems, you’ve got to go across the field if you want things to work.” To this end BT are reducing the 3500 applications that they were using in 2004 to a set of 14 standard software services that can be combined to meet different needs. Of course, the benefits of this consolidation aren’t simply environmental. One striking example concerns applications that had been running on 1503 separate servers migrating to just 100 computers, saving nearly €840,000 of electricity per year.

These savings sound very impressive, but when you factor in the cost of replacing aging infrastructure with the latest cutting edge technology, surely you are going to end up in the red? Not so, says Ramji: “It depends on how aggressive you are,” he explains. “It won’t help you if you pussyfoot around the place because you will spend at least 20 percent more in the first year in order to catch up, but if you are prepared to do a tenfold blast you can make a break even inside the same financial year.”

An essential element of this technology streamlining lies in reducing the number of applications the company is running. This is something which has characterised Ramji’s time at BT. “Since I’ve come here, we’ve shrunk a net result of about 500 to 700 systems a year,” he says. “So we’re killing a lot of applications and that translates into bigger savings. The important thing to remember about this is that these are net reductions. You often hear reports in the media about companies killing 1000 programs, but what they don’t mention is that they’re replacing them with 1200 new ones.”

As striking as the progress so far has been, BT and Ramji are in no way at the end of their journey. “Our next key goal is to be the best for customer service by March 2009,” says the CIO. “The focus moving forward is on improving our processes, enabling us to become a professional services culture with fully-embedded end-to-end processes. You will also see a much more collaborative BT, working with customers, suppliers and partners to deliver faster, simpler and cheaper solutions.” Ambitious stuff. Let’s hope that come this time next year Al-Noor Ramji’s work is being noticed for all the right reasons.

An unlikely competitor?
One of the main inspirations for undertaking this massive retooling of BT’s business comes from a slightly surprising source: search giant Google. At the very beginning of the programme, Ramji and the management team identified the California-based tech company as their biggest competitor. “When we launched this thing two years ago we realised that Google would definitely come into the consumer space and offer phone services, video services and all sorts of other software products that we wanted to offer.” Though they didn’t yet see them as a rival in the business sector, Google clearly needed to be watched on the consumer side. “We also thought that the bigger threat always came from companies with the biggest human capital assets or with just bundles of money,” continues Ramji. “That’s really why we put Google in the picture.” At the time, this identification of Google as a competitor raised a few eyebrows. Now it looks incredibly prescient. The web company’s recent acquisition of mobile software developer Android signals a clear intention to expand, particularly into the communication space.

BT in Europe

Germany
Active here since 1995, the company now has over 1000 corporate and public sector customers, more than 1400 employees and a turnover of €840 million

Italy
Broadcast Services operation is second only to Telecom Italia and works with major media organisations like RAI and Mediaset

The Netherlands
A domestic network more than 4000km long and over 200 corporate customers including PricewaterhouseCoopers, Shell, Ernst & Young and Unilever

Spain
Active since 1989, the company now commands an 18.3 percent share of the corporate data transmission market and has an 11,4000km nationwide IP network

Central & Eastern Europe
Key network Points of Presence in Czech Republic, Hungary, Poland, Romania, Russia, Slovakia, Slovenia, Ukraine and Kazakhstan providing services to 400 multinational companies

Belgium
Established in 1988, BT Belgium now has more than 600 key corporate customers including half of BEL20 companies. Operates a 1100 km fibre optic network with interconnection points in 13 cities

BT’s Director of Communications Joe Kelly tells us about the company’s award winning 21st Century Network (21CN), the world’s biggest IT programme:

For us 21CN is number one. It’s the next generation network so it’s about changing the way we create and deliver services, accelerating the time it takes to get new products to market and radically reducing cost. We’re aiming to reduce our costs by about $1billion a year. Rather than just replacing old technology we are making some fundamental changes. On the 20th century network you’d have with different platforms for every technology, so you end up with 16 or 17 networks sitting on top of each other. They all operate pretty well alone, but trying to get those different platforms to work together is both difficult and expensive. What 21CN does is replace multiple, pieces of hardware which each control a single service with a multi-service box.

You put in a set of 60 networks and you collapse them so that one network is capable of supporting all of the services. Because they’re all created the same way in the software, and they all run over a single platform, then getting those products to work together is easier. Also the way you build services as a software is much, much faster than the way we used to do it. We think that we’ll reduce the time to create and launch new services by at least two-thirds on 21CN.

The programme has won a number of awards of late. First there was a National Business Award for innovation, which we won for a few reasons. We were the first in the world to announce our plans and other companies around the world are now starting to emulate what 21CN is trying to achieve. Secondly, it’s about a level of openness that we haven’t had in the industry before. In the old world when people like BT went to buy equipment for networks, they went as a national company to their national equipment manufacturer. And they had equipment designed for them, which was proprietary, meaning that every country had a different kind of network.

This complicated the job of making these networks interconnect, but IP is a global standard and it’s an open platform. The equipment that we’re installing in the UK will work in the next generation network elsewhere in the world. You can also take the same piece of equipment from two manufacturers, unplug one, plug the other in and they should still work. Its about taking the idea of plug and play, which we’ve had in the PC and desktop world for a while and applying it to the telecommunications equipment industry.

We’ve also been recognised for work in other areas. We recently picked up a World Communications Award, with the 21CN programme beating telcos from around the world to win the convergence category.

A final feature of 21CN that’s worth mentioning is the openness of the whole enterprise. We’re going to open up the platform for third parties so if anyone has a particularly good idea he’ll be able to have that product service developed and delivered over 21CN. So, rather than just restricting innovation and new services to what we can think of, we’re throwing it open to other people.