Stuart Beesley: We’re starting to create social networks in
Smiths, so the network is vital. We are creating communities of
people, to connect engineers together. We’re trying to push the
innovation agenda, to get people talking to each other
| A voice for the industry’s corporate customers |
For most of our 20-year history, Global Telecoms Business has interviewed the senior executives of the world’s leading telecoms operators and of selected vendors. We have no plans to change that. In GTB you will continue to read interviews with the men and women who decide the future of the industry.
But now, we plan to start talking to a few of those people who are responsible for providing operators with most of their income: the corporate giants.
In each issue from now we will be interviewing a CIO of one of the industry’s leading corporate customers. What do they expect from their telecoms providers? What are the challenges they face? What will they want out of them in the future?
This interview with Stuart Beesley, CIO of one of the world’s big engineering groups, is the first of what we hope will be a successful series.
Stuart Beesley is centralising all the systems that global technology group Smiths uses. “Everything we’re doing involves moving to more globalised, centralised solutions,” he says. “The network is absolutely vital. It’s like dialtone. It’s just got to work.”
Smiths is a £3 billion engineering company, based in the UK but with more than 50% of its business in the US, a quarter in Europe including the UK and the rest in emerging markets.
“We’re active in 400 locations in 53 countries, and our business is changing significantly with the shift to emerging markets,” says Beesley, the interim CIO at the group.
The company’s tagline is “bringing technology to life to make the world safer, healthier and more productive” and its key divisions include John Crane, Smiths Medical, Smiths Detection, Smiths Interconnect and Flex-Tek, which makes engineered components that heat and move fluids and gases for the aerospace, medical, industrial, construction and domestic appliance markets.
Smiths Group has been working with AT&T for around six years as its worldwide communications provider. The two initially signed a five-year agreement to support Smiths’ business transformation programme and help the corporation to make the most of its global scale, delivering improved productivity and cost reductions across the group’s five business divisions.
Back in 2008 Smiths said it expects to achieve annual savings of at least $5 million on its IT and related communications costs.
Two years later, well before the expiry of that initial five-year deal, the two signed a further contract, this time for six years. That 2010 agreement was designed to allow Smiths to take rapid advantage of new and emerging technologies, such as cloud computing and unified communications, and meet its extensive mobility requirements, while being able to reduce operating costs.
AT&T and Smiths valued that contract at $150 million. Today Beesley won’t give detailed costs, but says that telecommunications accounts for 25% of the group’s IT budget.
The network drives all of Smiths’ enterprise resource planning systems, which use SAP and Oracle, as well as electronic trading systems and collaboration worldwide.
“These enable us to work global processes. A customer support person needs access to ERP. We have real-life trading and need the ability to move files around,” he says.
“And we’re starting to create social networks in Smiths, so the network is vital. We are creating communities of people. As you would expect in a big technology organisation the idea is to connect engineers together. We’re trying to push the innovation agenda, to get people talking to each other. We are trying to create a culture and an identity so people can communicate easily.”
The company is using Microsoft Sharepoint already “and we are exploring Yammer”, a social network system designed for businesses. “And we are looking at Jive,” another enterprise-focused social network system.
That is all putting a lot of pressure on the corporate network. “As these services become more mainstream the network becomes more critical,” says Beesley. At the same time, security and privacy are vital. “We have deals with governments. Security, privacy and data protection are paramount.”
Centralisation is also central to Smiths’ plan. “Over the years we have gradually moved to central systems and storage. We are leveraging AT&T’s data centres on the network and we get value from being together.” And Smiths is looking towards private cloud service.
Five years ago all IT was managed within each division, but in 2009 — the year after the first deal ws signed with AT&T — the company started “looking to leverage solutions across the group”, he says. “We can now share capacity across all of Smiths.”
There is a centralised contract with AT&T, he says. “That gives us greater spending power and greater leverage. As a global IT organisation we can manage that for the benefit of the organisation.”
AT&T is the main provider, “but we always try and keep everyone on their toes so we benchmark them and make sure they are competitive”.
But there are benefits in getting most of the service from one provider, he adds. “We want the best partnership and that means with as few [suppliers] as possible. AT&T carries the vast majority of our traffic.”
There are places that AT&T doesn’t reach — especially, he notes, the emerging markets where Smiths is focused on expansion. “But that is a challenge for all global corporations trying to move into emerging markets.”
Smiths’ expansion plans are focused on “on the BRIC countries”, says Beesley — an abbreviation meaning Brazil, Russia, India and China — and he adds: “India, absolutely China and a bit of Russia.”
So what are his gripes? “I’m finding that 4G is much slower to develop in Europe than in the US,” he grumbles. “We are seeing our consumption of bandwidth increase. Our sales people are seeing the benefits of using tablets. Their consumption is going up and they want it faster.”
And he’s finding it irritating that his staff see more advances in their consumer life than at work. “As consumers they can see the developments faster and quicker. They are saying they can do things at home. I would suggest that telcos should worry about making services more like consumer services.”
He’s also worried about complexity in billing and reporting. “It’s hard for people to understand what they’re consuming.” Some users will use wifi when they’re travelling, but others use 3G roaming. “How can carriers make it much simpler for individuals to manage?”
AT&T manages the mobile contracts for Smiths and the US “and we use other phone companies outside the US, but we try to keep it as centralised as it can be”. Smiths tries to manage local mobile phone contracts through the IT group. “We may have a local contract in a specific country, but we try to manage it centrally.”
Even though there’s a mobile workforce, the service inside buildings is important, “and we are moving to more managed solutions”, he says. “We want AT&T to manage the local area network as well as the wide area network.”
That ideally means being able to give AT&T relatively straightforward instructions — “For example, put wifi in that location” — and the company will do it as a project, without Smiths’ local teams having to get involved in the detail. “That’s starting to work well for us.”
The reason behind this is that Beesley’s IT team doesn’t “have the reach to be at every location in the world”, but AT&T should have the ability to look after these projects.
“I would like to see a more horizontal network service, so we just say we need a network, and they deploy it.”
But he’s hampered by the quality of the internal networking in many locations. “Home users experience very fast broadband fibre, and we’re finding it’s difficult to get that into the office.” The company does not have a specific policy to encourage people to work from home, “but from an IT perspective we want to implement technologies so that it is a lot easier to work from outside the office”.
His unit needs to handle the technology for that, “but it’s up to the divisions to set the policy. The trend is going that way.” The system “has to be accessible outside the four walls of the office. The perimeter isn’t Smiths, the perimeter is the world, and we need our telecommunications provider to help with that.”
And what are his frustrations? “Not specifically with AT&T, but generally we get stuck with older technology. The phone is dead. I want to be able to talk to people on my laptop. “We’ve deployed [voice and data messaging technology] Microsoft Lync and it has just gone viral. It’s an absolute phenomenon. We are shifting phone calls to data.”
But meanwhile the old technology is still there. He still has to worry about voice-only PBXs. “We’re leapfrogging whole generations. We were moving to IP telephony but I’m starting to question that. We’ve moved to Lync globally. It makes you question your entire strategy. How do we keep current and not invest in dead-end technology?”
And that’s a question telecoms operators as well as their corporate customers ask all the time.