Shape shifter

Shape shifter

David Yuile, chief operating officer at AAPT, has ridden into the top position on a wave of mergers, acquisitions and restructures.

Just as the 1990s were kicking off, David Yuile found himself at one of those all-important crossroads: armed with a degree in electrical engineering and an innate interest in mathematics, he had to decide what to do with the rest of his life. Now chief operating officer at Australian telco AAPT, he says that as a kid he invested all of his spare coins into arcade games, and he credits the emergence of microcomputers with having rescued him from a career in finance.

"I had a good Scottish dad with his eye on the dollar who encouraged me to go into the financial markets," he says. "I had this vague idea I'd end up working in the financial sector of London, but then computers came out and electrical engineering was just far more interesting."

However, by the time he graduated, the full consequences of his career choice had begun to dawn on him.

"I didn't go into information technology after university because I didn't want to be one of those geeky guys who couldn't get a date," he says. "I thought if I met a girl in a bar and said I did IT there's no way she'd go out with me. Then I had this vision of being chained to a desktop writing code for the rest of my life with no girlfriend."

In a sideways career move, which was to become a regular ocurrence, he opted for a more romantic line of work - confectionary. He took up a graduate traineeship with chocolate company Mars in Glasgow in a series of different management roles.

"Suddenly I was put in charge of 30 or 40 people, most of whom were a lot older than me and had probably seen four or five graduate trainees come and go," he says. "My main challenges were how to motivate people and win their respect."

After working in several different roles with Mars he settled into a sales position before being poached in 1992 to work with the much larger and more formal Pepsi-Cola Company in New York.

Initially staggered at the company's size and scope, he travelled widely, working in China and Brazil as well as the United States. But as it turned out, escaping from a career in the realm of IT was not going to be so easy. Working in sales at Pepsi eventually led him into work on sales force automation, which became a path back into IT project management.

Merger mover

These odd sideways career shifts have been more common in Yuile's background than many IT professionals, none more so than his shift into AAPT from PowerTel in 2007.

Twice in his professional career he has moved from a corporate role in a company being acquired to a similar role in the acquiring company.

In 2002, as chief executive of Peakhour, he became the chief executive of 90East, despite the fact that it was 90East doing the acquiring. Then later, when PowerTel was acquired by AAPT, he became part of the management team of the combined entity together with PowerTel chief executive Paul Broad.

At the time he was shifting to New York, Australian media rivals John Fairfax Holdings and News Corporation were getting into the long-distance telephone space by launching a communications division for Australian Associated Press.

Initially offering international calls, by 1997 AAPT had received a carrier licence and had listed on the Australian sharemarket just as the telecommunications industry hit a phase of rapid growth.

When the dotcom bubble burst three years later, telco stocks were hit hard and fast. AAPT held its value in the initial sell-offs but the Australian sharemarket was no place at that time for a technology stock, and by November 2000 it had been bought and delisted by trans-Tasman raider New Zealand Telecom.

Thousands of miles away, Yuile had followed a couple of IT projects back into a full-time role running the British division of a sales software company in the heady dotcom days.

"It was a really exciting time because the internet was booming," he says. "I could see it having a role to play in all aspects of business.

"We were doing quite well and looking to invest in some larger infrastructure when out of the blue we had a call from some guys from the Nasdaq, and within about two hours we'd sold the company."

He stayed on to oversee the building of a data centre and other projects as the boom peaked and subsided, but found himself drawn to a distant land on the far side of the globe, for no other reason than it seemed like a nice place to be.

Having holidayed in Australia each year, he found himself talking his way into a job with Asia Online in Hong Kong, just to get a little bit closer to Sydney's beaches.

"They'd bought a bunch of ISPs and were trying to develop the hosting business, but at that stage it was just impossible to get any funding together," he says. "All business investment was stagnant."

When Asia Online was abruptly closed in October 2001, he hopped on a plane and headed to Australia.

"The whole geographical isolation of Australia makes it an interesting place to work," he says, suggesting that the tyranny of distance has enabled Australia to develop a unique and healthy approach to the corporate treadmill.

"People think about work-life balance in this country in a way that's just not an option in other places," he says. "Here the focus is on outcomes and achievements, not just sitting at your desk and pretending to be busy until your boss goes home."

The greater corporate flexibility enabled him to settle down and start a family, while professionally he was moving through a series of challenging roles in the IT sector.

Associates in Hong Kong gave him a letter of introduction and contact list, and he soon found himself knocking on the door of Technology Venture Partners, a venture capital firm with roots in Asia.

The visit paid off and within 12 months he was appointed chief executive of Peakhour. TVP had been a significant contributor to Peakhour's capital raising rounds and most of the subsequent companies to which Yuile was appointed in the following period.

Within a month of his appointment, Peakhour was acquired by 90East and he was named chief executive of the combined entity.

He then moved into PowerTel in 2005, after 90East was acquired by US-based security software developer beTRUSTed. Under chief executive Paul Broad, PowerTel survived the downturn but had embarked on an extensive building campaign to roll out fibre optic cables in Australian capital cities, which rarely made a profit.

Systems integrator

During the same period, AAPT was struggling to find its feet in retail telecommunications. Expanding largely through acquisition, the company was also struggling with integrating the business systems of the more than 40 companies it had subsumed.

By 2006, AAPT was reporting losses in the hundreds of millions of dollars and was forced into a $NZ897 million write-down. At the same time, PowerTel appeared to have turned the corner and was inching ever closer to profitability. The two companies began talking. Those talks led to a strategic alliance announced in September 2007, which eventually grew into a full-blown takeover of PowerTel by AAPT owner Telecom New Zealand just months later.

"At PowerTel I'd been responsible for overhauling the networking technology," Yuile says. "So when the takeover was complete Paul [Broad] asked me to come in again and work on the underlying integration. I was responsible for integrating both companies at the technological level and it was hard work."

The headaches of software duplication were driven home when his Christmas celebrations were interrupted, just three months after the acquisition, when its Hyperbaric billing system fell apart, sending the AAPT call centre into meltdown.

"AAPT had been more than 42 separate companies," he says. "It had all the classic problems over legacy systems and applications that didn't work together, and then the whole thing was compounded by the PowerTel deal.

"There were well over 500 applications all operating at the same time and crossing over each other. We needed to cut out all that complexity if we were ever going to start making money."

While he was kept busy fighting the occasional spot fire, Yuile was also engaged in a $30 million upgrade of AAPT's core network and the multi-protocol label switching layer which would ultimately enable the combined company to function more effectively.

"We've spent a lot of money rebuilding the core systems, and done a lot of work cutting back on the different applications to create a simple vision for customers and staff," he says. "People tend to think of AAPT as a consumer telco, but only about a third of our business is consumer generated. We also have a very large wholesale business and a significant line-up of business customers."

At the same time that the core system rebuild was under way, he managed to cut 90 per cent of the company's surplus applications. A total of 11 billing systems were reduced to two applications and data from 17 different mediation applications were drawn into a single piece of software.

"Hyperbaric, the billing system, cut us back from about 200 applications to about 10 or 20," he says. "And at the same time we were able to come down from 500 to about 50 applications overall. Now we're looking at virtualising a lot of the software we're still running.

"At the end of the day it's not just about the number of applications. It's really about the process engineering which needs to go on around it all.

"The whole IT transformation started about 15 months ago and we're about halfway through. The next step is looking at consolidation in the data centres."

Future thinker

With the rebuild of the underlying network now complete, Yuile is focusing on using it to launch a series of new products in coming months, driven largely by the more flexible infrastructure to which he now has access. At the same time, he and his team are concentrating on AAPT's underlying technical infrastructure and looking for ways to take cost out of the company's back end.

"We have four large data centres and hundreds of racks of dedicated space operating in other data centres around the country," he says. "I expect these to play a significant role in the future of the organisation.

"We're working through this phase so that we can move more into the role of an infrastructure player, which is possible now that we have the network and the underlying data centre capacity."

As chief operating officer, Yuile's biggest challenge is ensuring AAPT continues to play a central role in the provision of telecommunications services. Given the speed at which new products are being developed and the increasingly important role of online software and storage services, he believes the company's data centres will be fundamental to its future.

His data centre virtualisation campaign has already enabled the company to increase its data centre capacity by a factor of 10, and it is now looking to develop its business application suite.

"My logic tells me that small businesses will be the early adopters of this sort of technology, because big companies are going to be too concerned about security matters to buy into the technology early on," he says.

"If I were running a small business today, it would make sense to me to push my applications into the cloud.

"Eventually it'll all disappear into the cloud. Your desktop, your VCR, everything will be there and you'll never have to get it fixed because that will be our job." MIS Australia

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