Computacenter: a clear view on its CIO relationships

A key research thread for K2 Advisory is understanding how the role of the CIO will evolve in the coming years: for example, we are considering which skills will be required, what the career ‘route’ might look like, and how the relationship with suppliers will change. With regards to the latter point, the evolving provision of IT services (i.e. via outsourcing and the cloud computing model) has the potential to radically change the role of the CIO – for example by reducing the size of the department. For IT suppliers, this poses something of a political challenge: how do you position services to a prime budget holder in the customer organisation when those services might ultimately lead to that person’s job changing quite significantly?

On the one hand, CIOs are trying to figure out how to steer and future-proof their careers, while suppliers are trying to understand how they will fit into this changing scene. I thought about this issue again recently at the first ever Computacenter conference for industry analysts. I was struck by just how cemented the company’s view is on how it works with the buying organisation. Computacenter’s long-time CEO, Mike Norris, with reference to the company’s services business, said: “The large, global outsourcing firms are obtuse competitors. We are not a full outsourcer, we are not looking to replace the IT director. We want to be the IT operations company of choice.” Simon Walsh, the company’s UK MD, added that: “Our customer is the IT director, first and foremost. We only talk to the business line when the IT director tells us to.”

Changes behind the scenes at Computacenter
Given its heritage in resale, a very large spotlight has been on the development and performance of Computacenter’s services business over the years. In terms of IT services offerings, Computacenter does what it calls “the grunt work”. The ‘sweetspot’ target market for it is companies with 2,000>10,000 users delivering services from maintenance, network support, data centre support, professional services, managed services and, in a very small number of cases, what it describes as transformational outsourcing. It does not do application management/development or BPO.

Executive management has been driving to ensure the services business can ‘play with the best’. Behind the scenes, it has been developing various methodologies and tools to help it to do this. One example is its Shared Services Factory - a collection of processes, tools and physical assets (e.g. service centres) that industrialise the delivery of IT services to customers. Another example is its Tempo methodology, which aims to systematically capture, apply and reuse best practice around service delivery.

Having spoken with a Computacenter client recently (Severn Trent Water) it is clear that the attention paid to ensuring services are delivered consistently, and to time, is paying off.

Like many companies looking to save costs, STW is reducing the number of properties it owns. It is building a new main office (named Severn Trent Centre) that will open in Autumn 2010 and will house 1,800 members of staff - bringing together multiple business functions under one roof. The building is actually designed to comfortably fit 1,500 people – not an oversight on the company’s part, but a tactic to push forward remote/home working. As part of this move, the company worked with Computacenter on a large transformational programme to create a virtualised desktop platform to enable 5,500 people to work at any desk, at any time. There was a concerted effort to reduce the number of devices people use, and to match more closely the device with the occupational profile of the employee.

STW’s Board strategy is to create an environment where all projects are delivered to time, and where quality does not slip – and it wants to inject more dynamism in the organisation. This is increasing the pressure on the IT department and its suppliers to also deliver to cost and to time. When we spoke to STW CIO, Myron Hrycyk, about the work he has been doing with Computacenter, he was satisfied that the supplier was hitting the milestones in this regard.

Hrycyk’s view is that suppliers work best when CIOs take a ‘carrot’, rather than a ‘stick’, approach. In other words, he understands that vendors need to make money from contracts, but believes there is a way for both parties to win. And in the case with Computacenter, this has worked.

This ‘carrot’ approach is a worthy outlook for IT buyers to take. We see many examples where focusing on a positive outcome for both your organisation and your supplier can bear fruit. Regardless of how the role of the CIO evolves down the line, K2 Advisory’s view is that this more collaborative approach will enable you to get better value from vendors in the long run.