From pillar to post

Efforts to modernise the UK’s Royal Mail Group have prompted crippling industrial action and political controversy. But for the man charged with making the changes, CIO, Robin Dargue, the show must go on. BM reports.

For a man at the helm of an organisation facing the biggest crisis in its history, Robin Dargue, CIO of Royal Mail Group is remarkably upbeat. We meet as thousands of postal workers are mounting industrial action across the country to protest against modernisation plans. It's familiar territory for Dargue and his team. In recent months Royal Mail has rarely been out of the newspaper headlines in the UK, with political controversy dogging efforts to modernise the service in the face of plummeting mail volumes and fierce competition from private operators. Dargue, however cannot afford to lose his cool. Behind the scenes of the drama unfolding in public he and his team are tasked with delivering the technology to support a raft of cost savings and service improvements.

Describing why the modernisation is crucial to the Royal Mail's survival, he says: "We clearly operate in market of falling mail volumes. We're losing that to other forms of communications, be it email or text messaging. And we're certainly operating in a market where there is competition. So what's the transformation project all about? Well one is to get a cost base that is appropriate to falling mail volumes. Angle B is that we're creating new products and services to our customers to replace falling revenue so that we are offering an edge against the competition."

A 21st century challenge

The transformation project covers supply chain visibility, mobile technology for front line staff and people systems and includes new products and innovations to improve customer relations, interoperability and the technical capabilities of physical products. The precariousness of Royal Mail's situation means that it cannot afford to wait to replace its core IT infrastructure before new products and services can be put in place. Dargue describes therefore how it is delivering new core business processes using its legacy infrastructure while simultaneously replacing its core IT foundations to build the new set of products and to replace its entire e-business environment: "We're keeping the ship afloat by delivering some cost savings and some new products now. That's bought us time to replace those core foundations. Then we've got the right platforms and foundations to deliver the next set of products on."

He admits the process is one of "orchestrated chaos" particularly due to the need to speedily invest in the business following agreement with the government over funding for the modernisation project.

The delay means there is a tight time frame in which the project must be delivered: "It's an issue in that everything has to be done at once versus if we'd go it (the funding) a year earlier. We could have phased it a bit more. It's not an issue about the funding per se. It's just that the projects all got stuck on the docket and then magically, they all need doing at once. Well, that's not really a world that holds much credence. You could call it orchestrated chaos. We're trying to do in three to five years what most companies have had the luxury of ten years to do."

On the front line

The challenge was made tougher by the fact that historically little money was available within the Royal Mail to modernise services, meaning that when Dargue took on the role in last year, having headed up IT for Diageo, he inherited a department that was operating with virtually no resources at all: "It wasn't necessarily that investment in IT was low and everything else was high. There was no money in the corporation at all, so no investment anywhere. We had a phenomenally good IT function that was about ensuring the systems were stable and they operated everyday. And they did that in an environment where we had no money to invest. And I think they did a superlative job. They kept a £9 billion corporation going for next to nothing." It was a far cry from the global corporations Dargue had been accustomed to working for and a situation that meant the CIO had some tough decisions to make. Across the board the Royal mail has made around 40,000 job cuts. Within the IT department, says Dargue, this meant refreshing the skills base available to carry out the modernisation project: "In terms of making these tough decisions it was in recognition of the fact that the world we were entering was different to the one we were in before. So we needed new skills around architecting, information security, business analysis, programme and project delivery. So was that a hard choice? Well it's always a hard choice when people's livelihoods are in the balance but the business direction was clear. We just had to make sure we had the new skills for the challenge."

Luckily for Dargue, when it comes to making these changes and in securing the necessary resources to carry out the modernisation processes, he was backed up by the Royal Mail management, which he says place IT at the top of their agenda: "In this company IT sits on the Group Executive Board, the Letters Executive, the Post Office Executive board. It's got the right seat at the table and it's now got the right money in the plan." Part of the reason for this is that IT has become core to the Royal Mail realising its objective of introducing high tech services that compete with those of its competitors. These include the rolling out of 27,000 PDAs to frontline staff which required it to build the UK's largest wireless network to receive software downloads to the mobile devices. The company has also introduced Tracked Plus, which allows customers to track the progress of their deliveries online.

It has also branched out to extend its offers in marketing to small to medium enterprises and has launched mailshots online – a service which allows companies to design a direct marketing campaign online which is then sent out using address lists from the Royal Mail.

Cultural clash

The introduction of these high tech products and services as well as changes to working practices also mean a change in working culture at Royal Mail. The key to ensuring that the workforce embraces the changes the management is introducing is to stress the benefits it offers to them, says Dargue: "This is like change management in any company. There's good ways of doing it and bad ways of doing it. With any change we have to make sure that we are clear about the benefits they bring to individuals. For instance with the PDAs we've introduced two functions to help workers. One is that we've enabled the voice call facility so if you have a problem like you're in an accident, you can use your PDA to call for help and raise the alarm. We've also put in sat nav functionalities. You've got to make it a win/win situation. Any successful change is usually routed on that premise."

And Dargue has a very large workforce to win over. Royal Mail has a massive 180,000 people across the UK, which constitutes around one percent of the whole UK workforce, making it the second largest employer in the country after the NHS). And he says one of the biggest challenges of introducing new technology into a traditionally paper based organisation is the fact that the workforce has such different technology skills levels: "There is a very large working population at Royal Mail but actually before we put PDAs out to the frontline staff, their interaction on a day to day basis with technology was very low. Within the organisation we have everything from the super users in departments like finance that are using complex technology, to the frontline staff using PDAs."

Daunting prospect

Given the scale of the challenge Dargue admits it's not always easy to recruit staff to his department and that many are scared off by newspaper stories depicting a chaotic state of affairs at Royal Mail: "

"I'm very clear. I tell people how large the challenge is and how broken our foundations are. But I invite them to be part of the challenge so they can say they were there and they turned this company around. Some people are honest; they read the newspaper stories,  Whether it's Government, industrial action, or the network closure programme and some of these things put people off. However other people look at it and say they are attracted to the challenge and it's people that are attracted to the challenge that we want to talk to."

Dargue himself wasn't put off the challenge either, and left a lucrative position as CIO of the world's biggest drinks company Diageo, a role he assumed aged just 36, to take up his position at Royal Mail. At the time, he said, the fact that he was joining an organisation that had such large challenges, was actually an attraction: "I was attracted by the scale of the challenge. I also joined, very simply, because IT sits at the table here and is core to the strategy of the company here." And what keeps him going, he says, despite the organisation's ongoing, high profile struggles, is a passionate belief in the heritage of this embattled institution and a determination that its legacy should continue for future generations: "I actually am motivated each and every day by the fact that the royal mail group has been going for about 360 years and I don't accept that we should fail to future generations. Every single day I'm doing my utmost to ensure we improve our revenue, our position, our products and our services. I see it as the duty of every single senior manager here to bequeath a better company to future generations."