CIO100 2017 #31-100: Michael Dreyer, Contact Energy
Separation from its majority owner led to a 10-month programme that resulted in Contact Energy migrating all its systems to the cloud.
The migration to the cloud included changing operating systems, databases, numerous application upgrades and outsourcing both service desk and service management along the way.
“It was one of those once in a career opportunities and required a massive effort from all the team. While the separation had to happen quickly, it also gave us a great opportunity to transform and modernise our technologies.
“From the very start we saw the change as an opportunity to re-assess the entire technology and vendor landscape, and to think about how that could enable better service for our customers through technology, says Michael Dreyer, Acting General Manager ICT at Contact Energy.
The migration has resulted in a mix of private and public cloud under a services model which takes complexity away, allowing the business to focus on its needs at the application level. The changes has also provided real transparency around hosting and data storage consumption.
“This is allowing us to make informed value based decisions to rapidly tune and right size our environments even further.” he explains. “We are still learning how we can best use it to drive cost and efficiency, but the operational savings opportunities of up to 30 per cent are significant for a business where lower customer service costs are critical to remaining competitive.
“We are also reducing the operating costs of the technologies used by the teams building, running and maintaining our power stations. These engineers are very interested in collecting and leveraging the data to run our plants efficiently and safely, so we have to enable them to get low cost access to those insights.”
“The success of the programme came down to a handful of factors,” he adds.
“We had a strong mandate from the board and leadership team which helped get the business users right behind our goal. We also led the programme ourselves by placing our ICT leadership team in the key programme leadership roles and senior business stakeholders into governance positions.
“To ensure we remained focused we split our ICT team, dedicating half our people to the programme. This structure meant the people owning the outcomes were driving the delivery and solution and that made a big difference.”
“From a technology viewpoint, it was an emergent programme, as we started with a high level solution and worked on filling in the detail as the project progressed. To support this, we put in place rapid decision making governance around architecture and processes. On a project like this you always need a core of a dozen or so people who really know the technology.
“Having my colleague Hanno Schupp, with 20 years global SAP consulting background on the team was critical as he could facilitate the technical decisions required to migrate and stand our significant SAP platform up in the cloud without impacting our business.
“Finally, we got a strong set of vendors with individuals we could trust and put them on one floor of the building. I told them they could all leave their badges at the door and we created ‘one-team’, who saw it through successfully, on time, on budget and we are on track to exceed the forecasted benefits.
Energy retailing is an increasingly competitive and fast changing environment with a mixture of large incumbents and new entrants competing in a market evolving rapidly towards the use of real time data and digital channels for customer engagement and services.
A host of new technologies such as solar, batteries and electric vehicles are giving customers more options and placing evolving demands on a business’ technology platforms.
“Our world is rapidly changing and we are changing with it. Now that we have completed the migration project, we are starting to utilise our modernised technologies to add real value and innovation as we transform into a customer inspired, technology-driven business. A move to the cloud brings us into an evergreen platform, with all the benefits of agility and flexibility we need in such a fast-moving environment, Dreyer says.
“One thing we have found is our traditional waterfall approach to investment and delivery was creating challenges. Lead times were too long and solutions seemed to stagnate during delivery or failed to achieve the vision of our business. So, we have taken a new approach in the digital programme of work, using an agile approach to delivery for our web and mobile channels and the provision of self service.
“This has required us to create deep collaboration between our developers and our customer business, and empower the team to make design and solution decisions rapidly, led by the product owners. It is set up as a business programme not a technology programme.”
“It wasn't easy as it was an entirely new way of working, given our roots as an engineering focused power company working hard to shift our focus to our customers. However, we are now gaining traction in delivery and getting more effective with every sprint,” says Dreyer.
Finding better ways
He then moved on to explain some of the challenges Contact faced as they strengthened their cybersecurity programme. “We were managing elements of security in silos, without a common framework, goals or direction,” he says.
“It was easy to fall into a trap of just buying more technology as the answer, but then this could be costly to maintain effectively. We were struggling as a business to make informed investment choices and security was considered an expensive risk mitigation exercise full of mystery and tech buzzwords.
“Then we did a data gathering exercise and benchmarked our security posture and our strengths and weaknesses, against other utilities in the region. During this gap analysis, it quickly became clear throwing money at technology was not the best way to drive a rapid uplift in security. What we needed was a cultural awareness programme.”
They ran a six-month change programme across Contact, engaging at all levels from executive workshops with industry experts, to awareness campaigns at call centres about data privacy, and educational workshops with infrastructure and application development teams.
“All of this drove a massive cultural shift in awareness and focus around cybersecurity and brought security into the fabric of how we work, rather than an afterthought. Within six months, for very little cost, we had lifted our Forrester security maturity from 1.5 to 2.5 and this continues to climb."
Engaging a business
Dreyer has recently moved into the acting GM ICT role, after working across Contact for the past eight years as Head of Planning and Delivery for its technology and change portfolio. “With two quite distinct business areas within Contact, the trick for ICT is to have close relationships with each lead team and align our people and technology to enable their business needs,” he says. “For new investment, we are moving the conversation away from just ‘how much will the project cost’ to ‘how much value will the outcome deliver’. This is often a hard conversation to have, but it ensures we are prioritising areas that drive real value.”
He is keen to increase his department’s connection across the company this year. “Having spent a year with our ICT team absolutely focussed on transforming our underlying technology landscape, we now need to put a lot of attention back into getting the small things right. Underpinning this focus is a need for ICT teams to be more business focussed and to ensure we are meeting the needs of our internal customers”. He notes that ICT teams globally have usefully spent the last ten years centralising, simplifying and standardising technology. But somehow this mantra has become too ingrained in IT culture at a time when many businesses need to transform into technology businesses. “That’s not going to happen if the wider business is not empowered to lead value from technology, try new things and venture outside the core corporate systems. We should help them go out and experiment, instead of stifling them with IT governance.”
“ICT is the third biggest team and cost centre in Contact, but it is easy to get lost in our own world and language of technology. The deeper we are integrated into our business, the more aligned our focus and outcomes will be to business need. And of course it’s highly motivating for our people to be able to see the value they deliver.”
It has been a massive year for us and yet it feels like we have only just begun. Our customers are constantly raising expectations and it is exciting to lead an IT team that is stepping up to meet that challenge. We have changed much of our technology, we are changing the way we work and we are changing how we define success. It is fun to be a part of it.