BAT shares to gain

With its IT shared services model going places, British American Tobacco has bigger ambitions for its Group Service Delivery unit.

Dominic Holand, BAT GSD head

CIO 1-on-1 Sharing is good, especially when it comes to IT services.

Long-serving British American Tobacco (BAT) executive Dominic Holland understands this philosophy very well. The head of Group Service Delivery (GSD), which is the global shared services organization for BAT, proudly reports that his unit has delivered cumulated cost savings of more than £30 million (US$58.4 million). This translates into an average cost saving of between 10 percent and 30 percent annually.

Holland, who has been with the tobacco giant for the past 18 years, oversees the management and operations of all in-sourced and outsourced IT services for the BAT group.

Since its inception in 2001, GSD has grown globally into a multimillion-dollar business. Today, GSD supports 32,000 global customers in more than 130 countries. It has over 450 employees, more than half of whom are based in Malaysia, its largest operational base.

In an e-mail interview with ZDNet Asia, Holland shares his long-term vision and strategy for GSD, which is to deliver 100 percent of all IT services by 2009.

Name
Dominic Holland
Job title
Head of Group Service Delivery, British American Tobacco
About BAT GSD
GSD is the global shared services arm of BAT. Set up in 2001, GSD manages IT services for the Group, supporting 32,000 global customers in more than 130 countries. It has over 450 employees, two-thirds of whom are based in Malaysia, its largest operational base. GSD currently delivers 45 percent of BAT's global IT services needs and aims to increase the percentage to 100 by 2009.
Work experience
As the head of Group Service Delivery (GSD), Holland oversees the management and operations of all in-sourced and outsourced IT services for the BAT group. He is responsible for helping BAT achieve its vision of being a global shared services organization, and leads the way in demonstrating the benefits of shared services to the rest of BAT. Holland has held several senior IT positions at BAT, including as CIO of BAT Mexico (1998-2000), CIO of Souza Cruz, Brazil (2000-2001), as well as the regional IT director for BAT in Latin America and the Caribbeans (2002-2003).

Holland, who has successfully led the implementation of a number of large-scale SAP implementations for BAT, also shares his top three priorities for 2007 and highlights the need for "knowledge workers" to ensure the continued growth of GSD. He explains the objectives of the Business Technology Associates (BTA) programme, its first large-scale graduate training programme introduced in 2005.

BAT GSD held its inaugural graduation ceremony for its first batch of BTAs in Kuala Lumpur in November 2006, and plans to work with relevant government bodies such as Multimedia Development Corporation and universities to showcase the BTA programme and help spur the growth of Malaysia's IT workforce.

Q. GSD was set up five years ago. What's different about GSD's agenda today?
Since our inception in 2001, GSD has grown globally into a business that's worth around £70 million (US$136.4 million), supporting 32,000 global customers in more than 130 countries, and we have already delivered cumulative cost savings of more than £30 million (US$58.4 million).

GSD has implemented a number of projects in various countries. GSD's services are now mission-critical to our customers, and with our ability to assure quality and speed, we have continued to impress customers and we are well on our way to becoming a truly global end-to-end service provider.

GSD is the first company in Malaysia in 2003 to receive SAP CCC certification, which means that the company has all its best practices in place to provide the highest level of support to its customers.

How is GSD meeting the needs of the BAT Group?
GSD achieved a total of 20 percent in cost reduction for end markets (customers) in 2003. This figure saw a 25 percent increase in 2004 and 2005. Based on the current year, total cost savings delivered till the first half of 2006 is £3.5 million (US$6.8 million). The main contribution to this saving came from our technical strategy, which contributed 31 percent or £1.1 million (US$2.1 million), and our data centers, which contributed 26 percent or £900,000 (US$1.7 million).

The organization has expanded significantly; its volume has grown as a result of increased IT services being taken over. Through all this, GSD has been able to add value to the organization via knowledge sharing and management. For example, GSD makes business IT systems and knowledge easily and cheaply available.

We have set ourselves the challenge of enabling BAT's drive to lead the tobacco industry by driving business improvements that will offer irresistible value to BAT's operations.

GSD also adds value through world-class services, which means through the sharing of best practices with the rest of BAT, everyone will function on common systems--thus, effecting increased seamlessness and efficiency across the board. Customer appreciation is also at a high level as GSD is able to implement SAP's software in a mere three months, compared to what it would have taken with third-party consultants.

Also, equipped with a business model that revolves around our customers, GSD's intention is to maintain a customer-focused mindset at all times. On the quality front, GSD provides a host of services to serve the needs of end-markets (customers), and its aim is always to improve these services so that they are available at the highest levels. GSD is between 20 percent and 40 percent more cost efficient than its peers or industry benchmarks.

What is GSD's No. 1 challenge today?
We have set ourselves the challenge of enabling BAT's drive to lead the tobacco industry by driving business improvements that will offer irresistible value to BAT's operations. Over time, we aim to make our organization an acknowledged leader in the shared services field.

There is growing emphasis on IT service management in Asia. Does GSD put to practice ITIL (IT Infrastructure Library) or best practices to ensure higher standards of IT delivery?
We do use ITIL and identify best practices to ensure higher standards of delivery. We hope to benefit our global customer base through our efforts. Accordingly, we will provide quality services in terms of IT delivery to the BAT group.

We currently invest 5 percent of our revenue base into a range of activities from data center to people development.

What will your top 3 business priorities be for 2007?
The first is to continue optimizing our IT operations and demonstrating irresistible value to our customers. The second is to transform our current IT operations into a global shared services organization and lead the way in demonstrating the benefits of shared services to the rest of BAT. The third is to deliver 100 percent of all IT services by 2009.

What's the idea behind the Business Technology Associates (BTA) programme? What are the plans for 2007 and beyond?
The BTA programme was initiated in 2005 to cater to GSD's demand for knowledge workers, as well as equip them with critical business skills. It is a structured one-year programme especially designed for high-achieving graduates from all fields of business, IT and engineering.

The BTA programme is essential to the continued success of GSD. Our plan is to transform the way IT services are provided to the group, and I believe the quality of BTAs we have will enable us to do that. Indeed, it is my expectation that within 10 years, a number of the BTAs will form part of the leadership team of GSD.

The first batch of 38 BTAs have just been recruited into GSD. The programme is expected to continue with an annual intake of another 20 to 30 graduates, depending on the demand internally within organization. GSD is currently training its second batch of 19 BTAs who are expected to complete the programme next year. The next batch of BTAs will be enrolled in June 2007.

GSD Malaysia accounts for over 50 percent of GSD's overall staff strength. Do you intend to continue to tap Malaysia's labor pool? What are your hiring plans?
GSD believes that Malaysia is a sustainable base; we want to make sure that we have quality talent to deliver the services to the rest of the group. That means we will continue with the BTA programme for both the short term and long term.

GSD will continue to tap into Malaysia's graduate pool. The BTA programme will continue to be a staple of GSD's on-going recruitment plans and an increasingly significant feeder for its leadership pipeline.

Do you plan to tap the workforce of other Asian countries?
We are always improving the talent base through recruitment or investment in other types of graduate recruitment programmes. We are generally on the look out for talent who have the drive and quality that is required by GSD. We will consider graduates from other countries if they have the right qualities and also look into developing similar training programmes elsewhere, should the need arise.