Telstra CIO: We'll be the region's best IT shop

Telstra CIO Patrick Eltridge has sworn an oath to create the best IT shop in the Asia Pacific region, stating that such a lofty goal is a “strategic necessity” for Australia’s largest tech employer.

Eltridge, speaking at an ACS Foundation event in Sydney, provided deep insights on his efforts to bring about a culture change within the nation’s incumbent telco.

Eltridge has for several years been advocating agile within Telstra, not purely as a form of software development methodology but more generally as a means to improve staff satisfaction and outcomes for customers.

Agile involves the constant refining of an application or service with new features rather than delivery of a “completed” project within a fixed time period. It demands a rolling production of features, reviewed by product owners from the business at short, regular intervals (such as every fortnight), with a view to evolving a product in accordance with business and customer demands.

Eltridge spoke in awe of the agile programs run by Suncorp CIO Jeff Smith and REA (Realestate.com.au) CIO Nigel Dalton. He conceded Telstra’s journey is a few years behind.

“I won’t tell you how many years it will take us,” he said, but promised under his tenure to build “the best IT shop in Asia Pacific.

“I say that not as a value statement, but as a strategic necessity,” he said.

Telstra before agile

Eltridge joined Telstra in 2010 after the telco went through a period of “heavy lifting” – referring to the “legendary” Program of Work.

“This had seen IT gone through a period of outsourcing,” he said. “It had seen relationships with business stakeholders become a bit strained, as sometimes happens during big projects.”

Eltridge said the “command and control culture” used to deliver that body of work” meant that the telco lost key skills and experience and the aftermath resulted in “slow, expensive and unreliable IT delivery.”

Eltridge first restructured technology staff around business units rather than in technology silos.

His next step was to conduct a complete rethink of “method, process and delivery”.

This involved a transition away from a fixed price, 'statement of work' style outsourcing engagement with suppliers to a partnership billed on time and materials. 

It also required a wholesale embrace of agile methodologies across the business.

Building agile culture

Winning key Telstra stakeholders to the agile mindset has proven an exhausting task.

The conversation began with Telstra’s CFO, some two and a half years ago, to explain how agile works and how funding for IT delivery needs to adapt. "He immediately understood," Eltridge said.

The CIO has since worked with Telstra’s finance and capital planning group to introduce agile friendly business cases and capital release mechanisms.

He promised these stakeholders a new form of certainty.

“What I can give you is an iteration schedule of sequential drops,” he said. “Further, I will give you a not-to-be-exceeded capital burn rate that I can guarantee you I will never overrun. Because I am delivering value incrementally, you can tell me stop at a week’s notice and I'll drop the value into market and I won’t overrun the budget by a cent.”

Eltridge had also had to work with Telstra’s product teams, seeking what is termed the “minimum viable product constructs” – the smallest amount of functionality required before a service is delivered.

“That’s quite a challenge – to talk a product manager away from that mindset that you can't market incremental change,” he said. “[But] you can work effectively with a product group and say, 'Don't give me all the requirements — I don’t want to know — give me the minimum viable product to take to market, I will give it to you in a blindingly quick speed', so you can test and learn before you add to its feature set.”

Telstra’s IT delivery team is now well versed in showcases, stand-ups, test-driven development and other agile practices, as well as the use of kanban walls and collaboration tools from Thoughtworks and Atlassian.

Eltridge said agile methodologies were employed alongside waterfall for the delivery of an unnamed $60 million-plus IT project.

Telstra’s IT team has also “got its feet wet” with continuous delivery, he said.

But Eltridge said the value of adopting the agile mindset stretched far deeper into the business than the systems delivered to date.

“Agile is not just software development methodology,” he said. “Agile is a culture in the IT industry. It has a lot of functional and operational benefits. We know it drives better value, faster, it drives customer advocacy, reduces risk, improves quality, but it also drives culture change. It demands culture change.”

It drives ‘servant leadership’, he said. Rather than delivering a plan and “telling people what to do”, leaders are expected to remove barriers for their team.

“It is understanding that the best motivation for standout performance isn't a bonus or a pay packet. It's giving people the opportunity to be excellent, giving people a sense of autonomy, a sense of purpose through worthwhile work. Under those circumstances, people will do anything for you.

“We need to develop a that challenges whether we are delivering value. We must create a culture that avoids waste, not just one that tolerates it or learns to work with it, because ‘that’s how we do things’.  We must have an environment that harshly examines work and stops it in flight if necessary because there is something more valuable to do.

“We also need to take more risks with people and give them opportunities to try things,” he said. “They might just succeed and get a standout outcome, but even if they don’t nail it, they get the experience of taking a risk. Taking a big risk is a transformative experience — it changes people.”

Accountability

Eltridge told iTnews he was “still held accountable to a set of traditional expectations around project outcomes.

“A large part of our work is still done to more or less traditional business cases – they have cost take-out forecasts, revenue uptake forecasts, customer advocacy targets. This is not crazy-land. [But] delivering through agile methods typically enables us to drop that value earlier, to be more reliable and to deliver products that surprise on the upside in terms of quality and advocacy.”

We further asked Eltridge whether a more frequent delivery of value helps to protect Telstra’s IT shop, which has otherwise been under threat from outsourcing.

“This is not about protecting Telstra IT, it’s about being more effective in the way we work,” he said. “We will always work with partners, here and overseas, but we want to be work dramatically more effectively with them. This is about creating an IT function that is inherently more valuable.”