EXECUTIVE INSIGHTS ON APPLICATION LANDSCAPE MANAGEMENT: CIO INTERVIEW

Catherine Doran joined Royal in September 2011 as Chief Information Officer from Catherine Doran Network Rail, where she led the company-wide transformation programme. Before that CIO Group she had been CIO for BT Retail and Capital One (Europe) as well as holding senior IT management positions at NatWest Bank and British Telecom. Catherine is a member of the CIO Board for the Tech Partnership, a growing network of employers creating the skills for the digital economy and working to inspire young people about technology.

▌Q. Could you provide an overview of Logistic Services which has operations Royal Mail Group and how the various in 37 countries. In terms of scale, we postal services are organised within it? employ 143,000 people in the UK and hire additionally about 19,000 temporary ▌A. Royal Mail is one of the oldest staff for about six weeks to deliver the companies in the world and we will Christmas peak. We deliver in excess of be celebrating our 500th anniversary 13 billion letters in the UK and 1.1 billion next year. Under our Universal Service parcels every year. Obligation we are required to deliver letters to twenty nine million ▌Q. Where does technology fit in the UK, six days a week, with the cost into Royal Mail’s operations? of a stamp being the same regardless of the distance that the has to travel. ▌A. For at least 15 years now, we have used letter sorting and The Group is split into three brands: Royal interpretation machines in the mail Mail, its core letters and packets delivery centres to process the huge volumes of network, and GLS, Global mail handled every day. If any one of 2 EXECUTIVE INSIGHTS ON APPLICATION LANDSCAPE MANAGEMENT Catherine Doran

these machines goes down, we are retained organisation as being the budget for IT was about £200 million able immediately to re-route the mail. ‘conscience of the business’, as its with headroom to be as high as £350 The system was designed as a kind ‘corporate memory’ and owning million, but the ability to invest was of node system which meant that the future. Royal Mail had retained severely constrained by the fact that business continuity was built-in from an internal IT organisation in 2003, the IT department was sub-scale. We the start. Since the core operations but by the time I joined in 2011, of needed a rapid infusion of talented systems were inherently resilient, it had the 400 people retained in 2003 people to work alongside our existing given the business an inaccurate belief numbers were down to just 119 staff. teams who could maintain and extract in the resilience and the robustness We had a small set of individuals the best out of a legacy environment of information technology systems. with huge amounts of knowledge and build for the future needs of the in their heads which is both very business, which would need to operate It is really only in the last decade or so powerful and risky in equal measure. in an increasingly competitive and that IT has come to the fore with for deregulated market environment. example, the success of systems like We did not even have capabilities such the OBA, Online Business Account as a fully resourced and functioning The second task was a programme ordering platform used by our largest architecture team or security team. that we called Get Safe, named as corporate customers. The OBA Everything was cut back to the core such to emphasise to non-technical platform processes a huge volume of of what was needed to be done ‘to people its importance in managing transactions in just a few hours every keep the lights on’. Looking back, day-to-day operations. For many years day and accounts for a large proportion when I consider how the 119 people under public ownership, Royal Mail had of company revenues. managed to keep the whole ship afloat, under-invested in its annual care and I am stunned and full of admiration maintenance of its physical estate. Due ▌Q. How was IT organised when for them. to this successive under-investment, you joined the business? four years ago many of the servers ▌Q. You embarked upon a multi- were over 5 years old, and a few ▌A. Over an extended period of time, year transformation programme were even older. While these servers IT had been under invested in, like soon after joining. What were its continued to function perfectly well, many other parts of the business. I main priorities and their impact it meant that in some instances there joined Royal Mail from Network Rail on the application landscape and were databases, applications and even in 2011, but some years before in other aspects of IT operations? operating systems which were out 2003, nearly all of Royal Mail’s IT had of support. Any ageing IT estate poses been outsourced including most of its ▌A. We had four things to a potential risk to business operations people, the buildings, the machines balance and any of the four by and so we deliberately used the and all the applications. There was themselves were big asks. term Get Safe to help the rest of the a view, which was pretty common business understand the need to invest at the time, that having outsourced The first priority was to rebuild in our physical IT assets, like they had the IT you could outsource the risk. the IT function itself. At that time, to do with engineering systems for mail the application landscape was 388 sorting operations in the mail centres. ▌Q. How were the IT outsourcing systems, but it took us about four arrangements being managed? months to find that figure out since The third task in 2011 was that the nobody had a complete picture. major service contract with our ▌A. Often when companies go through Therefore, one of the immediate incumbent supplier at the time was a major outsource programme, they business needs was to get a clearer scheduled to finish two years later will put a great deal of care into the idea of the landscape itself. The annual in 2013. The business had not even started to think about what would be the desired shape of any replacement contract or set of contracts. At the Since the core operations systems were inherently time, as a publicly-owned body resilient, it had given the business an inaccurate belief we also needed to go though the government procurement process, in the resilience and the robustness of information OJEU (Official Journal of the European technology systems. Community) which itself can be a time 3

consuming process. For these reasons, we decided to extend the existing contract by two years to give us time to decide on what we wanted to do in the longer term.

And fourthly, the UK coalition government had already stated its intention to privatise the RMG business. We knew that by early 2012, the Royal Mail would need to have built a long-term strategy to make the business more attractive to institutional and private investors. This meant IT needed to work more closely with the business and become more customer- centric, offering more products and services, and start to move the dial rapidly in terms of what Royal Mail was capable of doing.

We deliberately used the term Get Safe to help the rest of the business understand the need to invest in our physical IT assets.

▌Q. What problems did you face in bringing about these 350 people. In fact, we ended up hiring So instead, we worked out that there transformational changes in an more than that number because as were 67 critical roles which needed to organisation like Royal Mail? we went on, we realised we needed be filled almost immediately. These more people. Incredibly, we received 67 roles would give us sufficient ▌A. We had to keep the business more than 33,000 applications for the head room to be able to launch a full transformation relevant and interesting 240 positions, which is by any odds recruitment drive. We met with several for our own people while at the same just amazing. consultancies and told them that if time, organising a rapid programme they were interested in providing any to hire additional people. For both ▌Q. How did you do it from a of these roles, we would need to keep groups, we had the same story: that crawl, walk and run perspective? their people anywhere between six together with them we were going to and twelve months, but while their rebuild and transform an IT function. ▌A. We could not wait for the consultants were here, they had to That is pretty exciting for IT people. recruitment process to be fully up work for us and have our badge. and running because it would slow At the end of my sixth month here, I us down. As a business, we also could The second part was equally got sign-off from the board to grow not afford to get external consultants as important. There were 119 people the internal IT function from 119 to to come in and do all this work for us. internally who had each been through 4 EXECUTIVE INSIGHTS ON APPLICATION LANDSCAPE MANAGEMENT Catherine Doran

difficult circumstances over a long 100 contractors and 2,000 people who our business partners since if you are period of time. We needed to make we were working with from third- sitting in one of our offices anywhere sure everyone understood what we parties, then we would end up with in the country, we all need to work were doing, why we were doing it, and some form of organisational culture. together as a team. what we needed to do between us to However, if we did not think about make it a success. We knew that the culture beforehand, we may One way of measuring the extent to because they had stuck with the not like what we end up with. which all employees are committed to business through all the hard times, the organisation’s goals and values, they must want things to get better To institutionalise what we previously and feel motivated to contribute to and were willing to make it happen. carried out in the early days, over the its success, is to run an employee And they did it, more than any of us last 18 months or so within IT, we have engagement survey which Royal Mail could ever have dreamt. run what we call our Culture Crew. has conducted for all of its workforce These are people who get together for a number of years. Back in the 2011, ▌Q. How were you able to integrate to think about our culture and think IT was ranked lowest in the company such a large number of new about ways to make all of our working on the employee engagement score staff so quickly into a complex lives better. This group has developed by a country mile. A year later in 2012, organisation like Royal Mail? our three core values which are: be we caught the pack up a little, but we positive, be brilliant, be part of it. We were still at the back. In 2013 and 2014 ▌A. There is a Royal Mail vision and we have done exactly the same thing with IT employee engagement had risen are part of it. One of our tasks in IT is to tell the rest of the business how we can contribute to delivering that vision. Any organisational culture is something We needed to make sure everyone understood what we that sits underneath this. My view was that if we started with 119 people and were doing, why we were doing it, and what we needed we finished up with 400 plus another to do between us to make it a success. 5

to joint third place in the company. Most women regard working in technology as not In the 2015 employee engagement survey we are joint third again, but we creative and being very male oriented. are working hard as a department on improving that!

▌Q. What actions are you taking to I am on the board for eSkills UK and ago when Royal Mail was running its promote IT as a career option to when we have carried out research main IT recruitment campaign online, a more diverse employee base? that involves talking with female we made sure that the job postings undergraduates, we have found linked to videos that featured people ▌A. This whole area is really important that most women regard working in who could be identified with different to me. Ethnic diversity I am pleased technology as not creative and being ethnicities and equally represented to say, is not so much of an issue very male oriented. When they think the genders. Since workforce diversity in IT compared with some other of IT, often they think of desktop is important for any business, we set professions, whereas gender diversity support and even people walking about ourselves a goal, but crucially not remains a major issue to be solved. with screwdrivers. What they do not a target since it is more important The proportion of women working see is the interaction that IT has with that people are able to do the job in IT in the UK is hovering between the rest of the business – working with and not whether they wear a skirt, to 15 and 16 percent of the workforce. the sales and marketing teams, working ensure 30 percent of our new hires I think the maximum figure it got to with finance, working with commercial were women. We thought that 30 was about 22 percent about 15 years operations, and understanding how to percent of our new hires were women, ago, but the proportion of women solve complex problems. it would be equivalent to double the working in IT is now going backwards. national average and it would help Part of the problem is a widespread There is also a practical issue about the make the working environment feel perception issue about working in IT language and the visual imagery that is more balanced. We ended up with 31 especially prevalent among women. often used in IT job ads. Several years percent women.

We are also working with Capgemini on several initiatives at an industry level to increase the number of women working in IT. As an employer, for the second year running, Royal Mail has also been included in The Times Top 50 Employers for Women.

▌Q. What were some of first IT initiatives delivered that the business benefited from?

▌A. I have already mentioned that it took several months after I started as CIO, to find out how many applications and systems we had. It also took a similar period of time to find out how many projects were running. One of the first things we had to do was to build a comprehensive reporting function. The number of projects delivered to the business also soon increased. By the end of 2012, we had delivered about 20 projects during that year and by the following year in 2013-14 we were able to deliver 40 business projects. Last year in 2014- 15 we delivered 61. And all of this has been achieved with a flat headcount. 6 EXECUTIVE INSIGHTS ON APPLICATION LANDSCAPE MANAGEMENT Catherine Doran

Past

We have been able to reduce the length of time it takes for a new large-scale corporate customer to integrate with us from months to weeks

In addition to the four key tasks which corporate customers which led to I referred to earlier, there has also been it needing to support more than a need to build the credibility of IT by 300 APIs. For each new API, it could making sure that the people from IT take several months to build the who engaged with the business would integration and to carry out all the work with them as equals, and who testing before the API could go-live. would willingly challenge business Last year, we implemented a shipping colleagues and bring new ideas to API and it has now become our the table. All this coincided with Royal standard interface. As a consequence, Core Platform Model Mail Group undergoing significant we have been able to reduce the length Royal Mail has identified the need for organisational changes in the run-up of time it takes for a new large-scale to the part-privatisation that took corporate customer to integrate with approximately 18 core, flexible and place in 2013, after which it became a us from months to weeks. There is also customisable platforms plus around publicly-listed company. programme running to look at how API 50 specialist systems management can be further improved ▌Q. Can you provide examples of based on a direction of travel requiring where you have removed complexity that integration should be completed from the application landscape? in a couple of days for complicated medium term goal is to have around 18 instances and a couple of hours for core enterprise platforms and between ▌A. In most large established simple cases. 50-60 specialist applications for niche organisations, irrespective of ownership business requirements. or industry sector, there will be certain More generally, Royal Mail has always systems that have been developed customised every application it uses ▌Q. How were you able to over a period of time that few people which means that anytime either IT measure the contribution IT know much about apart from their or the business wants to try to do was making to the business? core users. As an example, within Royal anything with those platforms IT Mail there was a Yard Management usually has a large-scale and complex ▌A. Let me provide a couple of System that was used by one of the job to do. To upgrade to any new examples across Sales and Marketing major distribution hubs which assigned release, we have to re-apply all of the and Commercial Operations a loading bay to the lorries or trucks existing customisations and conduct as they arrived. Managers knew that extensive regression testing. So Royal Mail has appointed a Chief if the system went down, apart from nowadays, we have a new philosophy Customer Officer, Mike Newnham the disruption to our own operations, to any customisation. First of all, the who came to us in 2012 from a mobile within a few hours lorries could be answer is “no”, but if there is something telecoms operator. Mike has helped us backed-up on nearby major roads. In we really have to do because of an focus better on how we think about situations like this, where IT needed overriding business requirement, we our customers and our customer’s to work closely with the business will do it on the edge of the product customer, and how we are going to owners to update a system to ensure rather than in the heart of it. simplify our products. A customer in it met current operational demands, it the Royal Mail’s view had in the past was encouraging that at board level, I mentioned earlier that in 2011, Royal always been the person who bought other senior executives were always Mail had 388 applications. As we sit the stamp and not necessarily the supportive and wanted to become part here now four years later, we have 220 recipients of letters and parcels. of the journey with IT to find a solution. and our direction of travel is that we do not need all of these applications. We Against that backdrop, the Business As another example, in the past reached this number because like many Digital Team was formed and at Royal Mail had a habit of creating a similar organisations, over a period of the same time in IT we set-up an point interface for each of its largest time people had built silos. Our e-Business team. Between us, we 7

Present Future

PROJECT EBUSINESS MANAGEMENT PROJECT EBUSINESS MANAGEMENT FINANCE CRM

EVENT & CRM PRODUCTION FINANCE PRODUCTION EVENT & TRACKING CONTROL CONTROL TRACKING

decided to co-locate the business not measure it. Consequently, there is a company that got through this entire and IT people together and run these major project underway looking at the period without any major problems. programmes and their teams like Group’s entire commercial This was really important for me at a platform. This requires us to have a operations based on five pillars: data a personal level, because it was the standing team which includes some capture, production planning and first Christmas that IT went through Capgemini people, so that the size of control, supply chain feasibility, without touching the sides. the teams can adjust quickly to match network scheduling, and final the peak and troughs in demand. The mile optimisation. The goal is to use This year we expect again to handle same model is being implemented for information better to understand and higher parcel volumes compared to our HR platform where we have one of streamline operations. previous years and so I have been the most complicated payroll systems running a project all year to check in Europe, running a weekly payroll that we would not face IT operational for the vast majority of our staff. The issues if the parcel volumes were to platform model is also used for other The platform model be doubled. Throughout my career, I business-critical areas managing is also used for other have been used to working at scale, but complex, large–scale business what happens in Royal Mail for that five processes, some of which due to the business-critical and a half weeks is just eye watering. nature of our business, are subject areas managing to physical and operational factors ▌Q. How is Royal Mail’s beyond our control. complex, large scale business changing? business processes Our platform model has been running ▌A. A phrase I like to use to describe for the last three and a half years and Royal Mail is that “we are a 500-year- these efforts have played a part in the old start-up”. While it has a long Royal Mail Group being ranked 15th out ▌Q. How are you planning history of operating a successful postal of the Top 20 Business Superbrands in for the future? business, nowadays Royal Mail operates the UK. Four years ago, Royal Mail did in a highly competitive national not even get into the Top 100. ▌A. We have set-up a Strategic Change market as well as internationally. Forum to look at the most critical Like other businesses we face the With regards to commercial operations, things for our business through a power of digital and the challenge we know what ‘goes in at the top’ and lens of business change. Much of its of needing to be ‘always-on’ and we know ‘what comes out of attention has been focused on our taking account of people’s changing the bottom’. We also know that we peak period running up to Christmas working patterns and lifestyles. deliver 93% of 1st Class mail within one each year. Christmas at Royal Mail is working day of it having been posted five and a half weeks long and we start In recent years, we have also seen anywhere in the British Isles, but we do planning for it in the spring. Last year a number of new entrants into not know how it is done because we do we were the only national delivery our domestic market not all of 8 EXECUTIVE INSIGHTS ON APPLICATION LANDSCAPE MANAGEMENT Catherine Doran

Like other businesses which have been traditional postal or We also need to meet the expectations of we face the power of logistics businesses. None of them have more and more of our customers (myself to meet our Universal Service Obligation included) who want to receive letters and digital and the challenge which makes our business more parcels more quickly, and at a time and of needing to be geographically-dispersed, larger scale way that better suits them and and usually more complex. For many their lifestyle. This provides us with a ‘always-on’ years when the Royal Mail was publicly- tremendous opportunity to develop new owned, there had been under-investment and better services for our customers and in many parts of the business under for the benefit of mail recipients, built on successive governments. Fortunately, the an increased customer-centricity that historical under-investment in IT systems runs across the entire business. is now being addressed.

Capgemini’s next generation Application Management Platform is a business value- oriented, industrialized approach for managing client applications that provides always- on business transactional capability while pervasively reducing costs by creating a business aware and future proof IT application landscape.

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For more details contact: Ramesh Kumar Ramamurthy Global Lead, next generation Application Management Platform [email protected]