RESULTADOS DE LAS ENCUESTAS INTERNAS

In this period from 2001–2004, rationalisation of Telstra’s IT groups transformed its IT delivery model and developed new partnerships (LeMay, 2005). Telstra’s annual IT budget had grown to over $1.5 billion per year (Thomsen-Moore, 2002). The perception within the organisation was that business units’ spend on IT and IT departments’ total spend was out of control, with Telstra in 2004 paying IBMGSA $130 million to exit contractual commitments (Telstra Financial Report 2004). A new CIO was appointed to replace Mr King who had extensive IT offshore outsourcing experience in the USA. In 2005/06 the emerging Indian IT service firms, Satyam and Infosys, won work with Telstra as a result of competitive tenders (Sainsbury, 2006b). This was a reversal from the approach in the previous two and a half years prior to 2004, when Telstra had cut back its outsourcing to restock its internal technology resources. In 2004, Deloitte, IBMGSA and EDS all lost large contracts with Telstra for underperformance.

By 2005, the Telstra found itself with over 1,400 major IT systems on its systems register, despite attempts to rationalise systems over the previous 10 years.

In an article published in The Australian newspaper on 15 February 2005 and headlined, ‘Telstra short of $1.5bn savings’, the chief financial officer, John Stanhope, stated that, ‘Telstra’s outsourcing of jobs to Indian software development operations run by IBM, Infosys, Satyam and EDS had been slower than planned’. Stanhope also stated that in 2003 Telstra had aimed to cut $750 million from its annual IT operating and capital expenditure (Sainsbury, 2005). Telstra Australia’s 2005 annual report (p. 34) highlighted that Telstra Corporation Limited had, as of 2005, the remainder of a 10-year contract with IBMGSA to provide technology services worth $1,596 million (Telstra Financial Report, 2005). It cost Telstra $130 million to change this contract, which is only one of many IT outsourcing contracts that it had (Sainsbury, 2005).

In November 2005, a new management team led by Sol Trujillo was appointed, focused on leading Telstra to full privatisation. The CIO was then the subject of a complaint from computer maker Hewlett-Packard in 2006, and Telstra’s then technology chief was forced to bring in a deputy CIO to handle operational weaknesses in the IT group. The CIO was replaced by the deputy CIO shortly afterwards. This was accompanied by the departure of senior IT management; in the period 2001–2007 there were four different CIOs. In 2006, a comprehensive review of IT systems was undertaken and consolidations of IT business units into a single IT group were undertaken. As a result of problems in the IT arrangements, a transformation project was initiated in 2006 with the aim of consolidating and simplifying the IT systems. Adam Kerr. a Telstra transformation manager, stated: ‘Telstra’s strategy for improving its business involves deploying a company-wide, market-based management system, adopting a one-factory approach to managing operations and delivering integrated services to customers’ (Kerr 2006).

The Chief Operations Officer (COO), Greg Winn, as part of Sol Trujillo’s new management team, said in a November 2005 briefing, ‘We’re going to remove some 80 per cent of our systems, mostly in the next three years. When I say remove them, we’re removing them. They’re going to be cut dead and no longer will be available. Multiple benefits: we get less complexity, less costs for your outages and easier training for our front-end employees’ (Corner, 2006).

Andrew Maiden, Telstra’s public relations chief in early 2006, said: ‘Telstra has pledged to reduce our 1,252 business and operating systems by 75 per cent over three years and by 80 per cent over five years. Telstra is happy with the progress being made against these targets’ (Sainsbury 2006a).

Greg Winn in 2006 was in the midst of trying to rationalise the duplicated systems inside the organisation, so as to make Telstra’s operations more efficient. Under Telstra’s then silo model, each division of the organisation had its own IT systems and network operations support service (OSS). There was a separate OSS for internet, fixed-line voice, traditional data services and each mobile network (Sainsbury, 2006a).

Offshore outsourcing by low-cost providers was forced onto Telstra by the IT leadership, with little regard to actual service delivery and as a cost-cutting exercise (A8, 2007). The Human Resources department believed it was paying for a premium service but receiving cut-price delivery (A2, 2006; A9, 2007).

Senior management within Telstra felt that engaging in outsourcing too quickly had resulted in a loss of intellectual capital. Outsourcing partners were preparing business cases that affected Telstra’s ability to make informed decisions. This was detrimental to Telstra’s values, so the model was changed to bring some expertise and knowledge back in-house (A6, 2006). This affected service quality to internal organisational units. Vendors worked to meet service quality and delivery in line with ‘service level agreements’, but had little local knowledge of Telstra’s processes or requirements. This created the perception by internal staff that organisational units were being forced to accept whatever the outsourcing provider delivered, rather than what was agreed to. The Telstra IT business unit saw itself as a facilitator of IT systems and the outsourcing partner as the developer and maintainer, but individual business units saw Telstra IT as a full service provider (A4, 2006). The Telstra IT business units felt that the service quality varied among business units because different outsourcing suppliers had different service level agreements, and little effort was made to enforce them by the Telstra contract management unit (A9, 2007).

In 2004, Vish Padmanabhan from IBM joined Telstra as deputy CIO. On becoming acting CIO he was charged with consolidating some 50 unwieldy billing systems that had been an impediment to the development of a much-desired single-

customer view within Telstra (Bajkowski 2005). The Telstra IT organisation was entering a new era with a new senior management team that mooted initiating cuts of around 10 per cent to Telstra’s IT management structure. More focus on operational performance, IT governance, and IT end-to-end process re-engineering was instigated.

With the arrival of a new management team in late 2005, Greg Winn was appointed Chief Operations Officer (COO) and immediately assumed tight control of key information decision-making and communication technologies (LeMay, 2006). With the organisation conducting an extensive review of IT in conjunction with the consultancy firm Accenture, speculation mounted about the extent to which Mr. Padmanabhan had been sidelined under the new regime and relegated to custodian of the organisation’s existing systems. Service quality was questionable as outsourcing partners attempted to cope with the changing structures and new processes. Due to the changes taking place in the organisation, the roles of the CIO and IT needed to be justified. It was perceived that Mr Padmanabhan was part of the previous management team and this may have been a factor in why he was not promoted to the permanent CIO role and subsequently left the organisation (LeMay, 2006). In 2006, Fiona Balfour was appointed CIO directly reporting to the CEO.