Straight talk

It has taken 25 years for Vodafone to mushroom into the world’s largest mobile telecoms firm. But with the company looking to slash huge costs on the back of the recession, we catch up with Group CIO Albert Hitchcock to discover how he is making cuts and why the telecoms industry is racing into a “rich world of capabilities”.

What is the role of IS in these challenging times?
Albert Hitchcock. I think IS has a very valuable role to play in companies that are going through a lot of change, and my view is that the IT function actually has a unique position. It looks right across the business, understands how the business runs, understands the business processes, and has a unique viewpoint really on how to optimise business. So in challenging times, obviously the ability to configure the business processes, look at how business functions get optimised together, look at the whole as opposed to each of the parts is quite a valuable thing to be able to do, so IS is quite well positioned to do that.

Within Vodafone, as within all businesses, you have the sales side, the revenue generation side, and then you have the business side, and there must be, in essence, I suppose two slightly different dynamics. One is quick, demanding immediate responses. The other is slightly more thorough. Do you find that I.S. has to sit and manage the tension between the two?

Within Vodafone, as within all businesses, you have the sales side and you have the business side. They have different dynamics – one is quick, demanding immediate responses while the other is slightly more thorough. Do you find that IS has to manage the tension between the two?
AH. Yes, it's interesting really. I think there are a number of different facets to how we manage a business such as Vodafone. Clearly we have to run a very tight operation. We have to deliver very high quality service to our customers, and so there's a very quality focus within the environment in terms of driving continuous improvement and driving the KPIs (key performance indicators) and the key metrics of how we deliver a quality service. At the same time, we have to be agile. We have to do a lot of new things – experiment with new technologies, bring about business change and drive new revenue streams. So we have to manage that duality, all this solid, down to earth business processes to drive the quality aspects but at the same time respond to new internet trends, new revenue opportunities and move very quickly in a fast development cycle.

So how can the CIO be a better business partner?
AH. My view is IS has to be at the forefront of the business. I think in the past, it was very easy for the IT function to be a back office function sitting remote from the business running things like data processing or ERP systems. I think businesses were quite comfortable with that in a way because it was almost a necessary evil. In 21st century business, IT really drives a lot of business, and most businesses around the world could not survive without an effective IT function. I think because of the way business is carried out today and because of the reliance of business and IT on each other, it's very important that the CIO and the IT leadership team in an organisation are very much at the forefront of driving business change.

With it having moved from being a back office function very much being a front office function it puts a lot of emphasis on the skills and the capabilities of the IT organisation. No longer is it adequate just to get a computer science degree and to just focus on the technical aspects of the job. I think increasingly IT professionals have to be confident at communicating. They have to be good leaders. They have to inspire their teams. They have to be able to understand the business dynamics of the business they're in and contribute to those business decisions, those business discussions, so it requires a much more rounded set of skills and a much more business orientated set of skills. A lot of IT professionals are perhaps not so comfortable with that aspect. So a 21st century business has to be at the forefront, has to be contributing to business decisions and business outcomes in a very different way.

But what about the so-called 'legacy' employees who have been in IT for a number of years and perhaps don't have those skill sets at time when IT is changing incredibly quickly?
AH. I'm a firm believer in giving people lots of experience in their careers, so moving people around between functions, both within technology and outside of technology. The traditional approach would be that you joined and IT organization as a systems analyst and you typically rose through your career in a stovepipe. If you started off as a UNIX administrator, you may become a UNIX programmer and then you may run a data centre team before becoming a data center manager. This keeps people very siloed in their experiences and their knowledge when we're looking for very rounded people in technology, so we're looking for people to understand infrastructure, but we're also looking for them to understand applications. We're looking for them understand business processes. We're looking for them to become very comfortable working with business managers and people in other functions.

So getting people to move around in technology is one thing that we're trying to encourage between networks and infrastructure applications, but also getting people to move in and out of technology. Why don't we take people out of technology and put them into marketing? Why don't we get some marketing people in technology? Why don't we move some finance people into technology? It will create a much richer base, really, of experience because I think it's through this widening of experience that we become more rounded in our outlook. We get a better understanding of how business operates end to end. We become much more comfortable with contributing to business decisions. We become more consultancy based, not in a bad way, but in a way of being able to understand how you blend technical requirements with business requirements. At the end of it not only do we want very well rounded, seasoned technology professionals, but also business professionals.

Vodafone has plenty of technology partnerships. How much is developed in house and how does the CIO decide what to build and what to buy?
AH. I split that into two areas. Clearly we are very much involved in the build side as it relates to new technologies that are at the forefront of changing our customer experience, and so we do have an R&D function. We are developing products and services very much at the leading edge. If I contrast that with what I will call the more traditional IT focus of running internal systems like BSS, OSS, ERP, we're moving much more into a packaged, out of the box type environment. Because Vodafone is a relatively young company, we don't have the encumbrance of the mainframe legacy era so a lot of our applications are packaged applications anyway.

We are focused on whether we can simplify that landscape because we have many packaged applications across the company. We're very much on a path to reduce the number of discreet technologies we have and move much more into a standardised footprint, which is packaged, off the shelf software not in-house written to reduce the cost and complexity of integration. So we have two contrasting situations: product development, where we're looking to be at the forefront where we're doing stuff in-house, but also working with best in class suppliers and providers in terms of evolving the whole customer experience and then the in-house applications - the in-house IT of how we run the business whilst moving to a much more standardized footprint.

What then for you would be meaningful IS metrics?
AH. I think there's always a combination. Clearly, we have to run a very high quality service delivery, and so there's a whole set of metrics around data centre performance, network performance, both for our internal employees as customers and our external customers. So those are traditional IT metrics that we would apply like most companies would apply, but increasingly we're also looking at business effectiveness metrics. In other words, how does IT influence revenue? How does IT help reduce churn? So we're increasingly looking at IT performance in a business context. Creating that linkage between the IT dashboard, if you like, and the business dashboard is something that we're very focused on.

And how do you balance the need for autonomy from each business line with the need for synergy across the entire enterprise?
AH. This is a challenge. Clearly, local country businesses or operating companies need to be very close to their customers so they arguably need to do things at a local level. This means driving customer relevancy and driving very high quality service to our customers. Each of the countries in which we operate have different statutory and legal and market conditions that have to be taken account of. Having said that, a lot of what we do in every single country can be very similar so we're looking at how can we blend the standardisation roadmap with the needs for local services and the needs for local requirements. We are driving a very big focus on standardization but we're also conscious that in certain situations there will be local country needs that have to be adhered to. It's about achieving that balance at the which achieve the benefits of standardisation plus the benefits of being able to respond to local market needs. There's still a long way to go in terms of further standardisation, which will drive a lot of benefit for us.

Vodafone plans to shave a mammoth €1.1 million off of costs by 2011, How are you looking to reduce operational costs and how are you working around any actual impact on the IS function?
AH. Like most businesses on the planet right now, we're looking at cost clearly, and it ranges right across the spectrum of technology – everything from the very standardised approaches of how you take out infrastructure costs, application costs. For instance, every company's probably considering things like data centre virtualisation. We've had a big programme looking at reducing cost in the data centres, driving out the utilisation of our equipment, putting in place standards across our infrastructure environment, moving to a standard PC image across the company, moving to a standard hardware across the company and driving procurement practices with our providers renegotiating contracts. All these things are not specific to telecommunications or Vodafone.

I think pretty much everyone's looking at this right now but we're doing a lot of that. We're also looking at our business processes and how we can simplify them. A lot of the technology complexity has come about because of complexity in the business processes and the fact that we do things differently, so we're looking at how we can standardise a lot of that and how we can start working much more in a single way across the globe. Once we start unifying those business processes and improving those areas and streamlining those areas, we can start to take away some of the technology complexity. So it's a very tight linkage here between complexity business processes and costs in technology. The more we can streamline and simplify the business and processes, the more we can take out in terms of technology cost.

Is it not the case that you would be doing this regardless of any economic downturn and this is simply a smart thing for Vodafone to do? 
AH. Yes, I think so. When I came into the role it was clear that we needed to simplify some of the aspects of IT and we have been on a simplification journey. The current economic climate has brought that more into acute focus so it's important we do those things faster than we would have done normally. It's important that we focus on those in terms of the priorities so that we can get costs out of the business quickly in order to put more emphasis on the speed of delivery of those cost saving programmes and improve the speed of how we drive the simplification agenda. I think it's a good IT practice in any company to be very conscious of cost. I'm not creating future legacy. I'm not creating future cost. The role of IT leadership in a company is to think business, to think shareholder, to think customer impact, and so cost is one of those very important aspects that needs to be managed as part of an ongoing, professional delivery of services.

You spoke about standardization and the more near-term goals. What is the longer-term vision for Vodafone and what are your key strategies to achieve these targets?
AH. It is very much about balancing the running of the business at an optimal cost base and a high degree of efficiency and we're doing a lot of benchmarking externally with the various benchmarking organisations around the world. The other side is the innovation side of the equation, which is how do we deliver the most compelling end user, end customer experience? How can we bring technology together to drive the convergence of services and capabilities, whether those are internet-based services, VoIP, presence, content, widgets, applications and so on. 

We're moving into a very rich world of capabilities that we're offering to our customers and technology needs to be at the forefront both in terms of creating the vision but also the roadmap of how we deliver it into the business, We're on the forefront of a very large change because we've spoken about these sorts of technologies for a number of years, but it's really happening now in 2010. These technologies are reaching a level of maturity where they're real for the first time, so it's quite exciting now that we can actually look at creating a roadmap where we know there are going to be tangible assets in the next few years that will make a substantial change to the environment.

Albert Hitchcock took over the reins as Group CIO Vodafone in August 2007, following some 14 years with Nortel where he saw it through its economic crisis in 2001. Hitchcock, who holds electronic engineering and systems engineering degrees, is responsible for Vodafone Technology Information Services Organisation and the IS strategy and functions within Vodafone and its operating companies.