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information outsourcing technology
Judging value
Burden associates value with the way IT expenditure is managed across business services and the decision-making process surrounding new IT investments.
Royal Mail is going through its second year of a three-year restructuring programme, and is in the process of changing from being a big government organisation into a functional, competitive, commercial entity. IT is being used to improve every part of the organisation’s business, from sorting the mail to delivering digital services.
Burden has placed an IT member in the leadership structure of each major operating unit (Royal Mail UK, Royal Mail International, Parcelforce Worldwide, Logistics, and the Post Office).
“My philosophy is that the IT unit must be very tightly aligned to the business unit,” says Burden, who has broken up his responsibilities into IT, postal automation and engineering, the ebusiness environment and purchasing. This has allowed him to deal more effectively with the IT challenges across the organisation’s many business units.
His priorities, against which he will be judged, are simple: To improve operational productivity and retain customers.
Essential service
“IT has become an essential service, like air. If you don’t have it, an organisation is not going to survive. First, you make sure you only provide the things that are essential, and then second, you provide them as cheaply as you possibly can,” says Burden. “We apply a great deal of scepticism and discipline when making any technology investment – what it’s going to cost, and whether it will be delivered within the right timeframe.
We look at how we can deliver real benefits in terms of improved productivity, cost saving, retaining customers, and gaining new ones. It is this focus which preoccupies us far more than some of the traditional measurement issues.”
At Royal Mail, metrics are used more to keep suppliers on their toes than they are as an internal measurement of success.
“It’s much more about determining whether or not we’re going to do something, and then subsequently making sure that you do in fact extract the benefits, rather than trying to keep track of total levels of expenditure,” he says. “Projects are so different, and often the IT component of a project is only a small part of it.”
Typically Burden would be surprised to find a project whose IT elements accounted for more than 30-40 per cent of the total. “Technology investment these days is mostly about large scale change, cultural change, work practice change, and so on. It’s almost irrelevant to think of the IT expenditure as being separate, distinct from any of the other expenditures that go into exercising these kinds of changes,” he adds.
A company of Royal Mail’s size and complexity has many processes and procedures. “It takes quite a while to understand and evaluate them, and decide whether one should carry on doing them,” says Burd.
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