Downer EDI kicks off major IT transformation

Outsources IT infrastructure, plans application overhaul.

Downer EDI has outsourced its IT infrastructure to HP as part of a major transformation project that will centralise and present IT as a "single face" to the business.

The engineering and infrastructure management firm is in the second year of a business reform program called 'Fit for Business' that is targeting savings of $250 million across the group over five years.

Chief information officer Joseph Amoia told iTnews that the IT transformation is aligned with Fit for Business.

"What we're doing is completely aligned with our business strategy which is really about reducing risk while supporting the growing needs of the business," Amoia says.

"[We're] doing that by simplifying, consolidating, and enabling the business to provide a single face to its customers, while at the same time delivering savings, which we will."

The complex IT transformation is broken into multiple phases and concurrent projects.

Amoia has already brought together the IT organisation across the group, along with their respective budgets, under a body of work he calls a "pre-transformation program".

"Every Downer division had its own IT organisation, from the head of IT to its own infrastructure," Amoia says.

"We made a decision early on that we would come as a single [IT] organisation if we were going to get the right outcome from a transformational program."

The first part of the actual transformation project has seen Downer outsource its IT and network infrastructure to HP Enterprise Services in a six-year, multi-million dollar deal. 

The transition to HP infrastructure services started on December 1 last year.

Next steps include:

• Deploying new services including service desk and a hosted Exchange environment (in pilot phase) on HP infrastructure;
• "Forklifting" existing enterprise apps into the managed HP environment;
• Negotiating licenses for applications to operate on virtual servers;
• The eventual decommissioning of its eight existing data centres nationwide; and
• Application transformation, including a single enterprise resource planning (ERP) platform across the group.

Modelling the paths

Amoia came into the CIO role at Downer in late 2009, having spent the best part of the same year in a group IT strategy role at the firm.

He was immediately tasked with generating a "current status estimate" of the IT organisation and some reform options that could be presented to Downer's executive team.

"What was evident very early on is that it was obviously a very fragmented and inefficient model that Downer had," Amoia says. "It was quite siloed.

"We bought businesses and a lot of those businesses kept running as their own businesses. It was only in the last couple of years we looked at how we consolidate them."

The result was eight data centres, five data networks, 36 operating systems, 16 Active Directory databases, multiple email systems and five ERP systems.

From a pure technology platform perspective, Amoia says his approach was to re-build a common foundation before tackling the applications that sat on top.

"We focused on the infrastructure," he says.

The firm embarked on a total cost of ownership exercise to better understand its existing environment.

"We not only were able to determine what the fragmented infrastructure was costing us but what it actually looked like," Amoia says. "We were now able to articulate what the complexity was."

Amoia says that determining the "end-state" Downer wanted to achieve was the easy part.

"The issue was how do we actually get to that end-state?" he says.

The IT group modelled a number of dimensions to aid the decision-making process, prioritising "dimensions we wouldn't budge on".

"For example, it was clear we were going to virtualise, it was clear we were going to standardise," he says.

"What wasn't clear was, were we going to take an in-house or an outsourced approach? [And] were we going to centralise, decentralise or regionalise?"

Regionalisation in this instance refers to a model that would operate across Downer's businesses in Australia, New Zealand and Singapore.

Cost and operating models were drawn up for the various possible combinations - for example, outsourced-centralised, outsourced-regionalised, outsourced-decentralised, and the same modelling for insourced approaches.

The team culled decentralisation because it was too similar to Downer's existing state.

Regionalisation was also eventually removed as it became clear that New Zealand and Singapore had already outsourced their IT infrastructures.

"When we did the cost model - current and future state - the biggest savings were in Australia," Amoia says.

Read on for Downer EDI's new infrastructure and its plans to retire data centre assets.