From fragile to agile

Maria Pardee is well accustomed to making big decisions. As part of the BT Retail leadership team, she drives and develops the business by continually seeking opportunities to win strategic or operational advantages through the use of IT solutions. She and her CIO team manage IT to drive real return on investment via strict analysis of risk and reward, and also act as proactive peers of the business leaders working across the line of business, synthesising their commercial and technical knowledge into the portfolio of programmes.

She also has a unique perspective, having joined BT Retail from BearingPoint Inc, a company that provides business consulting, systems integration and managed services to Global 2000 companies, medium-sized businesses and government organisations. She has over 20 years telecommunications and IT experience, and at BearingPoint she was Managing Director of the Communications and Content Division where she quickly and significantly increased revenues, pipeline and engagement opportunities. Prior to that, she was Vice President at American Management Systems Inc. where she managed over 20 software development and management consulting initiatives. In her earlier career, she also spent time at DEC and Honeywell Bull.

Here, she talks to CXO about why aligning the business with IT is a key focus for BT, and how a focus on maximising the value of IT will prove to be a competitive differentiator over the next few years.

CXO. In terms of IT, what have been your major accomplishments during the past 18 months? And what is your investment focus over the coming year?

MP. My focus as a CIO is first and foremost to be a senior executive leader on the organisational transformation that we’re going through right now, and our ‘One IT’ organisation is at the heart of that transformation. As a result, my focus has been around business alignment – taking our IT professionals and making certain that all their efforts and energies are directly associated with a business initiative that is either based around growth through cost reduction, cost efficiency or cost management, or based around growing revenue. This has been a big focus for us over the last 18 months: aligning our One IT organisation directly with the business.

Second to that has been a vision based on making commitments and meeting commitments. We have very strong accountability for the commitments we’re making for the business and how we’re delivering on these. Part of our transformation has been moving from what we call ‘fragile to agile’. In the past, there was a lot of really good IT work going on that was not necessarily aligned with true business objectives. To address this, first we took care of the alignment issue, and then we put in place a model for ways of working with the business that is really centred round how to act as a fast or agile business community.

CXO. I guess this is particularly important for a company of BT’s size – after all, large companies are not traditionally thought of as being the most agile…

MP. Exactly. One of my favourite soundbites as the CIO of BT Retail is “big doesn’t beat small, fast beats slow”. Speed is really important for us, and we’re encouraging an environment where we can rapidly roll things out – it’s a ‘win or fail fast’ type of framework where it’s okay to try new things, but that is focused on volume and quality.

To that end, we’ve adopted ways of working that really promote this agile way of responding to the business needs. We’re moving away from a ‘waterfall’ framework to a model based around 90-day, agile, end-to-end processes where you develop requirements, refine those requirements, develop a prototype, get buy-in for that prototype, and enter in to a multi-month (sometimes multi-year!) systems development project.

CXO. What challenges does the company face that the IT department can help address?

MP. As an IT executive, I believe One IT lies at the heart of this kind of agility-based business model. The biggest challenge is making sure that all parties have adopted the same way of working because, as you can imagine, moving into an iterative development cycle requires a lot more buy-in from the business. In the past, the business could hand you a set of requirements, walk away and return at a later date only to look at what you’ve developed and say ‘not quite right’, or ‘sorry, the business conditions have changed’. However, the new agile method is much more of a peer-to-peer process so your IT organisation has to be much more tightly aligned to the business. It’s really about initiating a cultural change – before it was a master-slave relationship, but if IT is going to be a change agent at the heart of your business and the differentiator that helps set you apart from your competitors, it needs to be a true partner to the business. The main challenge has been embedding those ways of working into the organisation.

CXO. One of the things you are currently involved in is implementing technologies that allow customers to order and configure their services entirely via the BT website. What has this involved from an implementation standpoint? What technologies are enabling this move to a self-service environment?

MP. Well, I think the adoption of DSL has been a significant technology-enhancer for our customers. First of all it has meant that our customers are more likely to use the internet to transact with BT as a company, and secondly it has enabled us to create an added benefit to interacting with BT as your supplier through the web. We make it easy –for example, there are no waiting times, customers are able to service themselves and we can be more responsive to their needs. We want to create an environment that highlights to our customers that we are more than just a phone company; we have solutions that make their life easier and that are simple to use.

So it’s the ability for our customers to interact with us, it’s the quality of the tools that we can implement, and it’s the quality of the journey that we can present to our customers that is enhancing our ability to deliver services for them over the web.

In IT, we have what we call the ‘rule of one’: there’s not a lot of choice, you can only have the best. For instance, we’ve migrated our website from a combined multi-entity environment into a standard BEA version; we’ve consolidated from multiple CRM systems down to one standard Siebel solution; and we’ve standardised our billing on a Convergys Geneva platform. So we’ve mapped the standardisation and consolidation of a multitude of different vendors, which is what we call our rule of one. We’re seeking to rationalise our platform, standardise on the best and be able to quickly respond to trends in the marketplace and the needs of our customers.

CXO. As the CIO of a multimillion organisation, how do you ensure that IT strategies are aligned with core business strategies?

MP. I come from the consulting business, so I’ve spent large chunks of my career outsourcing IT organisations and have a pretty relevant skill-set for a CIO. First and foremost you have to be able to quantify value. You can’t just say we’re reducing costs year-on-year – how do you quantify your output or your productivity? At the end of the day it comes down to business value. If you’re going to put the value of your IT assets firmly in the camp of delivering business value (which comes in one of two ways: growth through cost leadership or growth through top-line revenue) it all comes down to business alignment. And it’s not just about the CIOs. At BT, we have internal IT executives that actually sit in the line of business; they sit in senior management team meetings, and their goals are aligned to business metrics, not IT metrics. For instance, some of my direct reports will have KPIs specifically aligned to top-line revenue growth, or how quickly they can roll out a new product or service directly for the business.

It is imperative to have this kind of alignment, because otherwise you’re just a commodity in the business. If you really can’t demonstrate your value to specific business goals as opposed to IT goals, then what’s to separate me and my organisation from a commodity service that dozens of other external providers could give to my customer?

We’re using a model that aligns IT costs directly with significant business value. We have a post-implementation revue process whereby we’re help accountable for what we actually delivered to the business, and we use best practices in terms of an end-to-end monitoring and testing environment. Service management is at the heart of our business in terms of being able to measure what we deliver as a service to our business – both as an internal business and also as an external business where our customers (especially our global and our business customers) are buying services from us that are beyond the traditional networked telephony business.

CXO. Are there any particularly interesting/innovative technologies out there at the moment that you are currently getting excited about? How will these benefit your organisation and add value to the IT function?

MP. What is really getting us excited right now at BT is the concept of ‘hothousing’. This is bringing business, IT and other interested constituents together for three days in an offsite or uninterrupted business environment to quickly accelerate the adoption and implementation of new technology. We might, for example, bring two or three competitors into this hothouse environment; they will bring their toolsets and methodologies with them, and we will articulate a business problem – with customers present – in order to dissect and address that problem. The interesting thing is that we actually make a selection, there and then, to take forward to the next stage. Something that might previously have taken months to thrash out is now taking three days. Admittedly, it’s three very hard days, but the business benefits are enormous because we’re collapsing what traditionally took months and months into a 72-hour period.

CXO. How have you seen the role of the CIO change over the last few years? Do you think that the CIO now plays a more strategic role within the organisation?

MP. The importance of the CIO has really escalated over the last few years, and will continue to escalate. How you implement technology is truly a differentiator in how you set yourself apart in the marketplace. Early in my career, your CIO would be a little bit more inward-focused – they would be more focused on keeping the train on the rails, or keeping the lights on. However, these types of things are considered an absolute minimum requirement from a CIO these days – of course you have to keep the infrastructure up and running, to spec and on budget – people expect that as a minimum competency. The most effective CIOs are commercially focused – you need to be a businessperson first and a technologist second, which is a massive shift in emphasis, certainly from when I started out.