British Telecom's Tech Transformation

By Debra D'Agostino  |  Posted 02-06-2007

British telecom had a problem. Three years ago, as the U.K. telecom giant (now BT Group plc) sought to remake itself from a provider of traditional telephone services into a leader in network-centric IT solutions, it found its own IT shop was a mess. The $34 billion company, which operates in 170 countries, had no central IT department or global oversight. Instead, each business line had its own CIO and IT staff—and thousands of technology initiatives, each operating in its own silo.

BT needed a new IT approach. In May 2004, it lured Al-Noor Ramji away from his role as CIO, executive vice president and chief e-commerce officer at Denver-based Qwest Communications International Inc., and put him in charge of BT Exact, the London-based company's research, technology and IT operations arm. As CEO of BT Exact, as well as Group CIO for all of BT, Ramji was given a monumental task: reshape BT's IT efforts and unify the company's global technology strategy.

Ramji's first step was to identify and consolidate all currently operating technology initiatives. "When I arrived at BT," he says, "there were 4,300 technology initiatives across the company, all with random delivery dates. Only about 20 percent of them had an actual business case, but none of them were being tracked in any way."

Ramji quickly saw that a consolidation effort was necessary. He began the process of evaluating each project, prioritizing strategic initiatives, and killing off those that had little or no value to the company's overall strategic mission. "We cut out everything that had no return on investment," he says. A year after Ramji's arrival, BT had consolidated its IT initiatives down to 29 projects. At the same time, Ramji began working to standardize IT systems, closing down roughly 700 of BI's 3,000 legacy IT systems and settling on a service-oriented architecture (SOA) and .net and Java, giving BT a new platform from which to launch its own Web-based services.

Once the truly strategic initiatives were identified, Ramji implemented a project management system to continually monitor progress and ensure ROI. The system runs on 90-day cycles. "That means that projects have to deliver on a set of metrics, such as customer (client) satisfaction and ROI every 90 days," Ramji says. At the beginning of each new cycle, Ramji meets with his IT staff as well as people on the business side. During these meetings, IT staffers and business partners brainstorm ideas and set goals and deadlines for the coming cycle. Ninety days later, each project team reviews how well it performed against its goals. If all the goals are met and the project meets its objective for the cycle, staffers receive a bonus for their work. And to provide transparency across the business units, Ramji publishes a calendar of delivery dates, "so the whole company can see what we have promised," he says.

Getting BT's employees to think differently about their approach wasn't easy. "In the first few cycles, no one got bonuses because the projects weren't delivering," he says. But it wasn't long before the move began to pay off. "By mid-2005 we achieved 100 percent business coverage, which means that everything we do now has an ROI. We've seen about a 19 percent decrease in unit cost across IT—not just hardware costs but overhead, software, everything. And we've doubled the amount of work completed every year, a threefold increase," Ramji says.

The spike in productivity is also part of Ramji's plan to improve overall customer service. "BT is becoming much more of a professional services firm," he says, "and we have a relentless focus on the customer, which is a big deal for a telecom company." The strategy is working: In 18 months, business-partner satisfaction has increased from 65 percent to 80 percent. "In Britain, no one likes giving you good marks," Ramji notes. "Eighty percent is remarkable. It's the highest it's ever been."

IT's credibility has significantly increased across the firm. "Now," he says, "people want to be a part of our team." The strategy has worked so well that BT executives are exploring how the rest of the company might benefit from adopting IT's operating framework. "Historically, within the company, IT was the kicking dog, the poor cousin," Ramji says. "But now the culture is changing."