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Steering through change and growth

Steering through change and growth

Nigel Prince turns cost-cutting pressure into a positive phase of restructuring and development at the Ministry of Agriculture and Forestry.

Three days after Nigel Prince joined the Ministry of Agriculture and Forestry as CIO, his ambitions were reined in. “The chief financial officer told me about all the money I didn’t have to spend on all the whizzy stuff I thought I could do in the MAF environment,” he told a recent CIO Insights luncheon.

This was a year ago and MAF was hit by a confluence of several downstream effects of the global recession.

“We had been through this dramatic economic downturn in volume, revenue and cost; especially in MAF, where a lot of our income is from industry funding,” he says. As MAF is a border agency, its operational areas experienced a dramatic decline in business, particularly the volume of imported cars.

The business obviously expected improvement in the operational side of IT. As well, says Prince, “We were at the urgent end of a technology refresh cycle and some of our commercial agreements were expiring. We needed to do something and the clock was ticking.”

In contrast to the pressure, he made one particularly positive discovery on joining the ministry. “There was a lot more cross-agency collaboration than I expected and that has ramped up even more; and there was a challenge being put out by the new government around developing into a world-best public service.”

Towards shared services

Analyst firm Ovum claims it has identified a shift in government IT thinking away from visionary e-government plans and the idea of IT as a change agent towards fixing the core systems, the IT and communications “plumbing” and seeing IT as a necessary but risky activity and a cost to be minimised. The New Zealand government, like others, expects some of these economies to come from more sharing of services among agencies and less specialised single-agency infrastructure.

Much of what Ovum claims resonates with the direction Prince wants to give MAF information management. “We’re starting to focus on fixing some of the key systems and some of the IT plumbing. We’re looking at the potential of shared services and, wherever possible, looking to standardise and improve on [existing] standardisation.”

MAF had already had its value-for-money review when he joined “and some expectations had already been set.

“There were existing contractual commitments that we had to untangle; some technical constraints that bound us in our SAN and server environment and a crying need for organisational change because there weren’t the clear accountabilities I like to see in an organisation.”

Core drivers for change could be grouped into three areas:

  • The business drivers included cost pressures and a drop-off in demand. The business was looking at IT very much as a fixed cost;

  • MAF needed to prepare itself for key initiatives that were not approved at that point – such as the Joint Border Management System with Customs.

  • “And we needed to redefine our whole service delivery model,” with clearer lines of accountability between MAF IT, its service providers and the business, Prince says.

“Our commercial drivers included contracts coming up for renewal. We needed to look at building in greater levels of flexibility and contestability. We had to look at where all-of-government initiatives were positioned in their life-cycle and how to leverage that; then what was happening in software licensing.”

As a Microsoft shop, MAF found itself with the consequences of the government’s and Microsoft’s failed G2009 discussions, having to negotiate its own licensing, rather than piggybacking on an all-of-government arrangement.

“Then there were the technical drivers. The clock was ticking on our infrastructure and we couldn’t wait around for too much longer, before we had to change it out and consider how we could leverage into some other technology advantages.”

Taking stock

The primary purpose of the transformation was controlling the long cost run of IT, not just short-term decisions, Prince says, “aligning our environment around the business demand with more flexibility and agility, to get us into a position that actually enhances MAF’s flexibility both technically and commercially, and hence its competitive strength”.

He didn’t want the organisation bound by arrangements that had been locked into historical commercial contracts. Moreover, MAF had to be ready for new initiatives coming down the line. “So we entered into due diligence with Unisys, looking at our total environment from soup to nuts and how we needed to change it.

“In conjunction with Unisys, we came up with a pretty significant transformation programme that started looking at our desktops servers and storage, pushing ourselves into changing these for more commoditised items. We did that in conjunction with Revera and TelstraClear.

“We’re an advocate of moving into the cloud and infrastructure as a service. I would rather take us out of the three-year cycle we had got ourselves into. In capital and people commitment, I would rather that money and those people were concentrated on essential services and delivering greater frontline value.”

MAF has just completed its server rationalisation and virtualisation programme, which converted more than 190 servers, decommissioned 98 and moved 146 development servers into the Hyper-V environment. “We’re going to achieve what we feel will be anywhere between 15 and 20 percent cost reduction, on both our storage and server capacity.”

Service delivery has been reorganised with Unisys playing the role of “service aggregator”. Under a contractual relationship with MAF information management, it provides an integrating layer between on the one side its own provision of IT services, telecoms provider TelstraClear, storage provider Revera and the various applications providers; and on the other the various units of the MAF business – including the NZ Food Safety Authority, with which MAF has a shared-service arrangement.

Transformation

Unisys made what Prince calls a “bold move” in taking on experienced former CIO Warwick Sullivan to manage the service aggregation process. “This was great from my point of view,” says Prince, “because he was somebody who had worked on both sides of the fence, and being another former CIO, understands the pain of the customer and can represent that back into the business, and align the delivery model on that basis.”

Delivery of new services will be more streamlined and coordinated under the new structure, Prince says. “When I first arrived any one of the directors could have come to me and said: ‘I’ve got a project I want to get done and I’ve got it signed off; please go do it’.

“Now the first stage will be to understand the demand, then work out a way of managing it on the basis of a defined strategy and architecture, “which is fundamental to any organisation, the heart and the DNA.”

Migrating to the new arrangement requires careful change management and Bryce Johnson, another former CIO, has been recruited to help the migration.

“We are substantially through all the technology transformation,” Prince says. “There are nine sub-projects in that area, which are on target for delivery.”

“So in summary, in 12 months we have had a substantial change of focus, sorting out the back yard in conjunction with Unisys and with the support of Revera and TelstraClear.

“Never be afraid to do something new,” he concludes. “Remember, amateurs built the ark and professionals built theTitanic.”

Sidebar: Riding out the storm

Unisys NZ CEO Brett Hodgson prefaced Nigel Prince’s Insights Luncheon address with a survey of the “perfect storm” now affecting IT in general. He sees several waves coinciding to raise challenges for CIOs and their staff over the next few years.

Businesses are starting to emerge from the financial crisis and the atmosphere of “lock everything down and sweat the assets” has yielded to a different mindset of “getting on with our job”, says Hodgson. That’s adding a lot of complication to the daily work of a CIO. IT staff are being asked to do more and to provide tools for the business’s staff to improve their productivity, on a stable or shrinking IT budget.

Another factor is the migration to Windows 7 in the face of the withdrawal of Windows XP support, Hodgson says.

“According to Gartner, it will take IT departments between 12 and 15 months to take their applications preparation and testing through a cycle, so that you can actually deploy into the Windows 7 environment and they recommend to transition as soon as you can,” he says. PC hardware is likely to be coming up for renewal at the same time.

The third wave is a demanding and increasingly mobile workforce, says Hodgson. “We have got a new group of people coming along who want technology as good as they have at home.” To retain these sought-after people, the business and IT team will have to change to accommodate their preferred working style.

This in turn presents challenges in security. “We have to adopt a new security posture to manage a flexible workforce without stifling them through inappropriate security; these are all balances that we learn day in day out.”

Unisys sponsored the CIO Insights Luncheon on ‘Transformation and Optimisation to Drive Productivity’ in Wellington.

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Tags leadershipministry of agriculture and forestrychange managementcio luncheonoutsourcingCIO rolestrategyunisys

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