Welcome to the era of two-speed IT

Australia Post, more so than most organisations, knows how to live with a split personality.

On the one hand, Australia operates a taxpayer-funded, highly regulated service - the physical delivery of post to Australian residences and businesses.

On the other, a parcels business and a range of new digital services that have the potential to deliver stronger revenues in the longer term - especially in the context of a world in which physical mail services are being shut down.

Andrew Walduck, CIO at Australia Post, has spent the last three years rationalising the systems that power these services and creating a ‘digital delivery’ discipline within the organisation to embrace this future.

Walduck believes - and many IT leaders agree - that embracing change quickly enough to meet a demanding market requires a separate “digital delivery” function to IT operations.

This creates a “two-speed” delivery of IT. Just as Australia Posts’ regulated mail business and burgeoning parcels business move at different speeds, so too do the online services and core systems functions that report into Walduck.

The digital delivery function at Australia Post embraces the agile software methodology, delivering bespoke online services in small, regular iterations, testing the market’s response and adjusting accordingly. IT operations remains focused on larger systems of record, more often than not purchased off the shelf from a vendor and upgraded at intervals of months or years.

Walduck told the CIO Strategy Summit last week that the days of delivering a large, complex, ‘complete’ software solution within a specified timeframe is over.

"The number of times I've seen operating models where you start with requirements on one side, you dump it into operations on the other, and it fundamentally misses the point..." he said.

Australia Post's digital team uses continuous delivery, an ideal of the agile software development methodology, to deliver many hundreds of small changes to its online services within what would have been a defined timeframe for a software delivery project.

This allows for rapid experimentation when the business isn't entirely sure on the business outcome, he said.

“We can adapt and listen and work with our business colleagues in a far more integrated way to evolve ideas rather than define everything upfront,” he said.

“We must move to a model in which we are more granular in how we execute and deliver. We need to test, try and learn. Only then do we decide what is our core - what we standardise on.”

Walduck said Australia Post’s scaled agile framework is “embedded inside the appropriate areas of the business," even within the regulated mail operations, "but it isn’t necessarily what you’d approach for your core legacy systems.

“But as we reinvent our business, as we push into new products and services, as our environment becomes less certain, adaptive and iterative techniques that are grounded in customer research enable you to realise outcomes sooner.”

Walduck told iTnews agile required a different approach to both governance and funding.

He managed to win six months of funding to stand up a first product using agile - a developer centre (list of APIs) that allows e-commerce sellers to extend Australia Post’s postage calculators and ordering service into their web stores.

“We used this first product to demonstrate agile could be trusted,” he said. “Now we have multiple continuous delivery teams funded.”

Walduck urged his fellow CIOs to move to a model in which they serve the end customer, rather than business users.

“The business is not the customer,” he said. “The business is the business. The customer buys our product and services. We need to see things the way they do. They have to be at the centre.”