Sydney Water chief information officer Tim Catley tells ZDNet.com.au in an in-depth interview how he restored the credibility of the organisation's IT department and exorcised its tech demons with strong governance and a simple 100-day plan.
When Tim Catley joined Sydney Water Corporation as its
new chief information officer back in 2005, he had $17 million to
'keep the lights on' — the group's board was reeling from
a failed billing system implementation in 2001. Today, armed with a
$60 million budget, Catley is taking on transformation again, only
this time with strong governance.
Catley joined the state-owned corporation during a tough period
for its IT department. "The credibility of the business was at an
all-time low," Catley recently told delegates at Gartner's 2008
Symposium in Sydney, where he detailed Sydney Water's three-year
IT makeover.
"There was no confidence that we could deliver. And there was
no trust between the business and IT. So [the relationship] was not
quite toxic, but not great either," he says.
That lack of trust was what was behind Sydney Water's paltry IT
budget of $8.4 million in 2003. By 2005 the budget had doubled to
$17.2 million, reflecting some growth in confidence. But this year,
Catley has $60 million to work with; mostly to remediate what he
says was a decade of underinvestment, which left the organisation
littered with small contracts and a raft of ageing
applications.
We built a simple 100-day plan that everyone could subscribe to and we started to execute on it. We focused on building confidence that we could deliver, so that we could extend beyond keeping the lights on.
Sydney Water CIO Tim Catley
"We should have been spending around $25 million to $30 million
a year," Catley explains to ZDNet.com.au. "We had been
really under-spending for around 10 years and so we have had a
significant amount of remediation to do."
A culture of poor governance and planning for IT projects had
culminated in a highly publicised failed billing system
implementation in 2001, which not only spooked Sydney Water's view
of IT, but sent
ripples across the entire state government.
Under a deal signed-off by then director of Sydney Water,
Michael Costa, PriceWaterhouseCoopers had been contracted to build
its Customer Information and Billing System (CIBS). The project was
estimated to cost $38 million, but blew out to $138 million and
ended up with Sydney Water deflecting blame to PWC as it wrote off
$61 million.
"We walked away from a multi-million dollar investment,"
Catley says of the billing system project. "That rocked confidence
from the board down."
"We really didn't have much of a strategy. Planning, at best,
was year to year. Because we had no discipline, priorities changed
all the time. It was really hard to get good delivery. And we were
pretty inefficient," he says.
First steps
Having entered such an environment, Catley understandably wanted
to change the board's perception that IT could not deliver.
"We built a simple 100-day plan that everyone could subscribe
to and we started to execute on it," he says. "We focused on
building confidence that we could deliver, so that we could
extend beyond keeping the lights on."
To reinforce the idea that IT could do more than keep the lights
on, Catley turned the department's approach to intellectual
property on its head. "Pre-2005 we used to outsource our really IP-intensive
processes," he says. "What we've done over the last couple of
years is in-source those high valued-add tasks. We moved very much
to an organisation model that tried to create intellectual property
within IT."
This has meant shaping the department's capabilities around
Sydney Water's business process groups: asset control, such as
maintenance scheduling; customer management and billing systems;
and corporate processes, such as human resources and finance.
"That allowed us to build IP and knowledge about those processes
and business units," he says. "That means our solutions
architects really understand the application road map in their
areas — how the applications connect with each other and how
they interact with infrastructure."
Catley admits, however, that change hasn't been all smooth
sailing. Some staff dissatisfied at the changes had left, while the
tight labour market in 2006 foiled Catley's plan to fill senior
roles first, which, if it had worked, would have allowed them to
shape the team around them.
The department has largely moved past this phase now, and
consists of around 180 staff, many of which come from Sydney
Water's IT service providers, Fujitsu and Oakton. The joint
workforce has three core units: projects, IT services, and the help
desk.
Recent user and customer surveys still show there is room for
improvement, but by and large feedback has indicated a growing
confidence in the IT department's ability to deliver projects and
services, according to Catley.
An indication that confidence has returned is that today the
majority of expenditure is discretionary, says Catley. A case in
point is the this year's rollout of IBM's Maximo scheduling
system for maintenance staff, which came with around 600 new rugged
notebooks for remote access.
"The majority of investment now is actually discretionary
investment — around improving the business, and making us
more efficient. That's been a really important to the
transformation. It's a validation that IT can deliver," he
says.
Governance now the focus
The shift toward discretionary investment has forced Catley to show
his hand on the issue of project governance. It had been a key
point of failure in the CIBS project, which auditors had noted
lacked adequate documentation of processes and actions taken
throughout the project.
"Now governance is the big focus. We're better at delivery,
we've created an investment road map and a new set of governance
processes over the top of it. The challenge, now that we have
grown, is that we are still doing the right things," he says.
Now governance is the big focus. We're better at delivery,
we've created an investment road map and a new set of governance
processes over the top of it.
Sydney Water CIO Tim Catley
Catley's approach to governance over the next 12 months will be
critical as the board sweats over the possibility of another CIBS.
One of the biggest tasks for the year is ahead in the coming week
as he and the board select an integrator to implement Sydney
Water's Siebel-based CRM system.
"Probably the biggest decision I need to make is to pick
someone to help us get our CRM system up and running," he
says.
The Siebel system will replace a raft of ageing applications
which have been used to manage customer services. The new system is
planned to improve customers' self-service options, as well as
feed data back into its
business intelligence platform that Catley's team have worked
on since 2006.
The CRM system is also part of Sydney Water's attempt to reduce
the number of "atomised" vendor relationships it has maintained
over the years, which had caused it problems in the past,
particularly around defining responsibilities when something went
wrong.
"We've tended to have lots of small relationships, which was
really hard to manage," says Catley. "And there is still the
challenge of rolling those contracts into larger contracts, which
will move us from 15 atomised contracts to around three
contracts." While he will attempt to simplify those contracts Catley said he
would never rely on a single outsourcing partner.
What's in store?
As a state-owned regulated entity, Sydney Water's funding is
guaranteed, which means it can escape much of the turmoil related
to the global economy that is currently affecting businesses.
It has been argued that an economic downturn could make open
source software more appealing, however that is unlikely in the
case of Sydney Water, according to Catley, who said that Microsoft
was far too entrenched to even consider open source
alternatives.
"Look, we haven't done much in open source at the moment.
It's not something we have perceived there is a lot of value in at
the moment," he said. "And while we have more than enough Windows
servers to keep us happy, it's because we have to have Windows,
because we have products that want to run there. We're definitely
not going down the path of loading OpenOffice at the desktop level.
Microsoft will remain there for a while," said Catley.
Also off the cards for Sydney Water is Windows Vista. "I think
we might ... wait for 7 to come along," he said. "I don't think
the threat of hardware vendors pulling support for XP is going to
eventuate because now that they've announced 7 the heat will go
out of it. And for us, you get some benefits out of Vista, like
network roaming and better power management, but it's not really
enough for us to make the move."
However the weak Australian dollar has already impacted the
bottom line, said Catley, and could spell a change in how the
business treats expenditure on hardware. "What we are experiencing is that people who are based in the
US are putting their costs up. So we might get less for our dollar.
Because of the way the dollar has gone Cisco have just done a 12
per cent price rise across the board, while Sun has done 9 per
cent," he said, adding that it could see Sydney Water capitalising
its hardware expenditure in the future.
But while hardware prices give a clear indication of future
costs, the labour market, which hampered his top-down recruitment
strategy, has been harder to judge.
"I can't figure out the labour market at the moment," said
Catley. "I know some organisations are letting people go, but I'm
not getting any consistent feedback. I'll talk to some agents who
say that it hasn't come off at all and I'll talk to others who
say something different. My general view, regardless if the market
is really tight or has a lot of stock on it, it's still really
hard to get really good people."
Catley's story is not unusual in government circles; IT
projects gone wrong have spooked plenty into taking a cautious
approach to IT. But it does emphasise the importance of strong
governance in ensuring IT departments are run well in future.
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