Auckland’s Nuffield Street in Newmarket isn’t the place that springs to mind when you think of the city’s water operations. You imagine a building camouflaged by dense bush, perhaps, overlooking a dam or a reservoir in the Waitakeres. But the upmarket suburb is the location for Watercare Services’ new corporate headquarters and you can find Mike Foley, its CIO, in the former Mercury Energy building; an open-plan office accommodating 200 people from operations, asset development, IS and corporate finance. Foley sees Nuffield Street as a fresh start for Watercare. Operations and management had previously been spread across two sites in Onehunga and the Auckland CBD.
One effect of relocation for this least-cost service provider is cultural change: “We had a canteen in Onehunga where you could get lunch for six dollars. In Newmarket you’re lucky if can get a coffee for four dollars,” he says, ruefully. But it’s Watercare’s business — delivering clean, grade-A water to 1.2 million people — that is more likely to be keeping Foley awake than the product of the nearest Starbucks. “It sounds simple, but there are a lot of processes behind it,” he says, suggesting a trip to the treatment plant to show me the sewage outfall and what he diplomatically describes as “the result” of the organisation’s efforts. I politely decline.
“You turn on the tap and expect the water to come out and don’t even think about where it goes,” he says, clearly resigned to such public ignorance. “But if you think about what we do, we affect the whole of the Auckland region. If we get it really wrong, we affect approximately 1.2 million people within several hours, and that’s always in the back of my mind — it’s a 24-hour a day, 365-day a year operation.”
Why pay for rain?The lack of public appreciation must frustrate the suppliers of this essential service no end. Watercare’s customers are local network operators and, as a 2005 AC Nielsen survey into the quality of its relationship with the public points out, the network operators have a limited understanding of the end user. Ask, for instance, if they think their water company is well-managed and you might find the odd ratepayer who doesn’t want Auckland to take its water from the Waikato: “I don’t like the water quality and taste”. Responses to a question about whether Watercare can be trusted include: “Why should we pay for something that comes out of the sky?” Yet only about 12 per cent of respondents think their water company is not well-managed, and only 16 per cent say they do not consider it trustworthy. An impressive 77 per cent are satisfied with the water supply to their homes.
A mature industry, then, with customers who might not value the service but who also tend to be uncritical of it until the product stops running. So I ask Foley whether he had anything akin to a ‘Eureka moment’ for Watercare’s future IS strategy. He laughs. “It was more of a ‘Jesus Christ what have I got myself into?’ moment.” Before Foley’s appointment, the responsibility for IS delivery lay with an IT manager who now works for the organisation in another role. Foley says it’s the first time he has ever been in a situation where an incumbent manager has had a new executive appointed over him. The situation contributed to a culture of doubt in the IS team. “The fear that everybody had when I first joined was, ‘Will we all still have a job?’ But why would I want to get rid of a team of people that has been here and who understands this organisation better than I did?”
Good point, and it’s a pity more managers don’t think that way. Foley not only kept his team, he added to it, and his previous work in similar utilities helped him to clarify a five-year strategy using the resources at his disposal. Within the first 10 months, Foley replaced Watercare’s PC, DOS-based payroll and HR system with some application service provider-based software he outsourced to a third party. As Foley says understatedly, “That’s one not to get wrong.”
The big move
Towards the end of 2006, Watercare relocated. But it was far from a straightforward office move: The continuity of Auckland’s water supply depended on the new system being operational before the old one was taken off-stream. This required a joint effort between IS, the control systems team and operations to ensure continued availability. “The plan was that at 8am on 9 October 2006 we had to be fully operational in the new location. Along with the usual systems and infrastructure, we had to relocate operations. We have a 24-hour, 365-day-a-year control centre that can’t go offline. We have a back-up, but we can’t lose it.”
Executives hear war stories about failed projects and over-budget IT implementations. “They’re always conscious that IT projects have the potential to fail if there isn’t a strong governance model applied to manage them,” says Foley. While a large part of his job involves persuading senior colleagues that investment in technology is worthwhile, he also has to ensure that once the investment is made, it is sustained. “You can’t just buy it once and that’s it; you have to maintain that expenditure. It’s a continual process of enhancement and update. A CIO has to maintain the repeat business.”
Within the overarching relocation programme there were other projects that were critical to its overall delivery. For example, Foley outsourced server management to a third party. There was a migration of diverse PC operating systems to Microsoft XP. The IS team also implemented a new wide area network between the data centre, one of Watercare’s main treatment sites and Nuffield Street. And a couple of months before the move Foley’s team oversaw a changeover of the phones to voice over IP. “We brought in VoIP early because it was one less thing to think about when we got here. Where we could take the risk away, we did. We took away a lot of the physical desk phones, implemented the Vodafone Integrated Talk-zone solution and linked the mobile number to the DDIs.”
Everyone moved into Watercare’s new premises on the Monday morning as though it was just another working day — the kind of dream transition that would turn many chief executives green with envy, and even when pressed on whether it really went so smoothly, Foley says there were just 20 service desk calls that first day. “Everybody could log in, had email and a phone system. We were fully operational as of Saturday at 4pm. We were in there again on Monday morning, waiting for people. If there were any small issues we dealt with them then.”
The success of the relocation may even have helped erase management perceptions that IS was a black hole. “There were quite a few shocked faces on the day we moved in — that at eight o’clock in the morning they could already operate without any problems,” says Foley. “We did what we said we were going to do in a structured process.”
Gary Swift, Watercare’s general manager finance, validates the exceptional work of Foley and the IS team.
“These projects represented a ‘sea change’ in Watercare’s computer and telephone systems; the most significant IS change since the company was established, in fact,” says Swift.
“Mike’s background and experience meant he was ideally suited to lead this change. The execution of the projects — a combination of up-skilled existing IS staff, new staff and some specialist contractors — was planned to a very high degree. The fact that there were no problems on the day we moved into our new premises reflects Mike and his team’s commitment, skills and planning. They can be justly very proud of their achievements.”
A multifaceted experience
Foley says he comes from “a typical development-into-management background”. As well, Foley’s multifaceted experiences throughout his career are all proving useful in his current role. His brother enjoys ribbing him about having worked in all five vices: “Gambling, alcohol, tobacco, drugs, and as a consultant, according to him, I was a ‘prostitute’ selling to the highest paying client.”
He worked in London on production planning systems; moved into telecommunications with what was then Mercury and is now Cable & Wireless; then brewing with Budweiser; before going into management consultancy, working in supply chain, customer management and plant production management. He relocated to New Zealand in December 1999 to run the Siebel practice for what was then Ernst & Young, before being headhunted by Deloitte to set up and run its customer relationship management practice. Deloitte eventually commandeered Foley’s team to work for Telstra, consolidating its customer service solutions, and wanted to move it permanently to Melbourne. “Surprisingly enough, none of my team wanted to live in Australia, so we went our separate ways.”
Foley joined Sky City as business solutions manager before being appointed CIO of Watercare two years ago. His consultancy engagements have given him a breadth of experience from a number of countries and industries that he can now translate to Watercare. “Some of the best things I’ve seen were not in the industry I was working in at the time. You borrow them. The best customer management process I ever reviewed was actually in a pizza company.” Foley applied that knowledge to an engagement he had as a telecommunications consultant.
“Mike is a no-nonsense type of guy,” says a former colleague, Deloitte partner Keith N. McArley. “He has an enquiring mind and approaches all problem-solving in a structured and orderly manner.”
Plan for the worst, deliver the best
This skill set provides Foley an edge when dealing with a major part of his role as Watercare CIO — strategising for a disaster. The threat of avian flu last year caused Watercare to re-examine how it could securely supply water during a crisis. Plans also exist for many other types of civil disaster and large-scale emergency. “You have this differential between classic business systems, financials and asset management, and the control systems that monitor flow and pressure. If we lose those systems, then we have to fully man the plant 24x7, which has a huge impact on how we operate.”
Of the relationship between business and IS, two years into the role, Foley says it’s now about business priorities. He mentions attending a recent CIO lunch, at which he noted Fonterra CIO Greg James’s remark that there is no such thing as an ICT project. “I firmly agree,” says Foley. “We can facilitate, drive and manage it once we have chosen the right product and the capex signed off. But the business has to justify, select and review what they want and how they want it to work.”
For Foley, service culture and “repeat business” are perennial themes: “It’s all about them, not about IS.”
Watercare Services is New Zealand’s largest water and wastewater company. It supplies water to six retailers (Metrowater, North Shore City Council, Manukau Water, United Water, Rodney District Council and Waitakere City Council), which in turn supply it to Auckland consumers. The company supplies an average of 347,000 cubic metres of water daily, drawn from 12 sources: 10 dams, the Waikato River and Onehunga aquifer (a layer of rock through which groundwater flows to supply wells and springs). Watercare also operates a regional wastewater network for four of the region’s councils. It treats on average 288,000 cubic metres of wastewater a day at Mangere’s wastewater treatment plant. Watercare is owned by the city and district councils of Auckland, Manukau, North Shore, Waitakere, Papakura and Rodney. The owners appoint a shareholders’ representative group, which in turn appoints Watercare’s board of directors and determines objectives.
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