Designing a digital transformation
When Andrew Quail took over as Director of IT for SGN four years ago his job, he says, was to ‘keep the lights on from an IT point of view’. As a gas distribution network, SGN keeps the gas flowing safely and reliably, making sure there’s availability of systems, availability of the supply of gas and – crucially – availability of engineers to respond to public reports of the smell of gas. Fast-forward to 2016 and it’s impossible to overstate the rise in importance of IT within SGN. Not only is it the backbone of the organisation when it comes to keeping gas customers warm and safe, it’s now driving SGN’s growth and efficiency strategy. Quail explains: “So my role now is to not only perform a supporting role to the business but to help drive excellence around customer service and innovative ways of working across our operational business. My role has changed massively in those four years to the point that I am required and expected to absolutely improve both the top line and the bottom line of the company. This has been driven by the changing demands and expectations of our customers, our business and the regulator and the wealth of opportunities now available given the disruption brought about by digital technology.”
SGN is responsible for safe and reliable gas supply to 5.8 million homes, looking after 74,000km of gas pipeline across the south of England, Scotland and, starting this year, is building new gas pipelines in Northern Ireland as well. Quail says: “If you smell gas, we have to be at your home within an hour and we achieve that over 97 percent of the time.” SGN is also undertaking an extensive update to its infrastructure, replacing the ageing pipes across the network. At the same time, it’s going through a huge change in the way it uses technology.
Listening to Quail describe SGN’s digital transformation, it’s clear to see it has been through some monumental changes – while keeping costs down. A particularly tough challenge. The starting point, he says, was people. “I've had to bring in new people and I've also had to change our ways of working. I've started with the customer-facing side of our business with business solutions and business relationship management. So, just as SGN is focussing more and more on improving our customers’ experience, I need to do the same internally. The next wave of capability I'm developing is around the focus on architecture and data management which are fundamental given the different type of IT that's being put in place now and the heavy leaning of our CEO and the company overall, towards technology innovation. Of course, just like SGN, our day-to-day operational performance has to be completely reliable and rock solid. It is vital that we don’t take our eye off the ball. So, bringing in new capabilities and more experience in these areas, while retaining and indeed reducing my overall operating cost base is really the challenge I'm facing but it's something we're achieving.”
The new people Quail mentions have been found in a variety of ways. “It’s not a quick process finding the right people for the long term and reorganising at the same time, so we've taken our time. We’ve been working with recruitment firms we know but also using networks and different methods of connection to professionals as well, including social media.” A similar journey has been undertaken when it comes to how SGN manages the relationships it has with suppliers and partners, taking time to expand its circle of knowledge with carefully chosen third parties who can help SGN on its journey of continuous improvement.
Within Quail’s team, there has also been a change on how the employees are organised. He says: “I've got a group of people who look at future demand and work with our business on prioritising that work. Then there’s a group responsible for design and architecture and also a group responsible for projects, building and testing plus the traditional ‘run’ part of the organisation. We still have those capabilities, but now we are putting in place cross-functional and cross-skilled teams. So those guys getting together in a single team with different parts of the business to deliver the specific solutions that are of real value to our customers, faster and at lower cost, becomes the order of the day rather than just passing work from one team to another as we used to. This may seem obvious to many web-based or smaller organisations but for a more traditional utility organisation, this has meant some real challenges in how and even where people work with each other. A good example is in customer service area where we are now delivering a number of initiatives in a much more agile and lean way. We are all working to a common outcome of improved customer experience through a number of connected initiatives and driven by the end customer. What I'm driving now is much more about collaboration, communication and cross-functional team working and that's a fundamental part of changing our operating model longer term.”
This increased speed of delivering solutions is a significant change for SGN and another of Quail’s projects is a huge migration of the majority of its services to cloud providers. “We’ve had our strategy signed-off by our board and it’s a very large two to three-year programme of IT transformation. Now that programme demands my team to work differently because it's not just about moving services to another location it’s also about operating differently. Looking at far more automation around the management of IT, being able to start services up literally within minutes rather than months and managing our consumption based on what we use today, not what we bought several years ago.” Not all SGN’s services are moving to cloud providers, though, as Quail explains: “We’ve some parts of our services which are considered critical national infrastructure and so for now, those are services won’t be moving but I see that changing soon. Particularly when we see the leading IaaS providers such as AWS and Microsoft Azure now building major service centers in the UK for government IT services.”
The advantages of the shift to the cloud are numerous, says Quail. “It gives me cost transparency that I don't have at the moment. I’m predicting significant cost reductions through that efficiency. So there are financial benefits but more importantly, this strategy is driven by the demands of our business.” And SGN in 2016 is most definitely an innovative place to be, with an increasing focus on using technology throughout the business. “The innovative technology we're now seeing being applied in our business is genuinely transformational. We've got an innovation team that has won so many awards, they almost need a bigger trophy cabinet. Our team is now putting robots into our pipelines for video-based inspection as well as repair work and we are also looking at using much more sensor monitoring of our network. So that poses a challenge to us my business as to how do you bring all those services and the detail together in a meaningful way?” The detail Quail is referencing to is the enormous amount of data produced by an increasingly technological company. He adds: “Vast quantities of video and sensor data are great, but how do you access, share and more importantly, use it? What’s very clear to me is my current IT architecture and IT service provision won’t be fit for purpose in a very short space of time unless we radically change what we do and how we do it. The merging of IT and OT is already happening across SGN and we therefore need to develop and provide the services that will grow that phenomenon. This means a fundamental change in how we run our IT services and indeed challenging and changing our thinking on what IT even is.”
One of the major ways technology has affected SGN, is the way it works with customers, particularly when it comes to mobile devices. “The expectation from customers is they are updated instantaneously through social media when there’s a service disruption. This requires a digital platform which we just don't have at the moment. This will be a huge transition for us as our customers now want real-time information. They want to be informed before anything happens and they want it through numerous devices, operating systems and mechanisms; not just a website.” This is something all customer-facing organisations are dealing with, Quail recognises, from retailers to large-scale utilities such as a gas distribution network like SGN.
In order to provide this instant information to customers, SGN also has to change how it works in the field. It’s not just about having a sparkly new app or Twitter account, the data must be managed correctly in the first place. “We're now introducing all sorts of other enablers digitally to our field workforce to help them capture, access and share data which currently, can be quite onerous for them. Simpler tools to do that such as bar code reading and scanning devices through their mobile phones, which is then automatically uploaded to our cloud and when required, integrated to our enterprise systems.” But before this can happen, the workforce needs to find the problem they are dealing with and, once again, technology is playing a bigger part here. “We're heavily reliant on finding our pipeline, which of course is below the ground in most cases and so having real-time and up-to-date map data of our assets is important. So that's something again we're now delivering through a mobile service this year, which historically would have been collected back at the office, looking at paper maps. This detail will all be delivered real time to our employees’ new tablets and smartphones and they will have the facility to update that real-time, thus making our organisation safer as well as significantly more efficient,” says Quail. A practical example of how digital technology is driving efficiency at SGN. “These solutions will only get deployed to the business if they affect our top line or bottom line. We’re not just rolling technology out for technology's sake.”
It’s an exciting and challenging time to be in charge of technology at a company such as SGN. “I've had to completely change how I look at creating and delivering solutions and value into the organisation and I think any CIO who is not approaching the role in a much more open-minded manner is really going to struggle and get left behind. We're seeing completely different ways of delivering services in completely different cost models. I have to be open to completely new ways of working which I’ve never previously thought about. That’s not just about different demands from the business but a whole different way of leading an IT organisation.”
Part of this different way of working is the way Quail works with vendors and suppliers. He explains: “We've had to segment our vendors between traditional IT vendors, such as IBM, Oracle, SAP and a new set of digital enablers like, Amazon, Deloitte and Microsoft, which has also completely transformed itself recently from behaving like one of the more traditional ‘mega vendors’ to an organisation that is really helping us on our digital agenda to set up services very quickly and at a very low cost. And we're working with others, for example, we've got an app development platform run by a leading enterprise mobility company called Kony. Again, very low cost to deliver solutions; very agile and interactive with the business. It’s the same story with Sigma 7 field-based solutions for our field operatives. There is still a place for the traditional vendors to support our industrial, high availability systems of record but these digital enablers are the type of vendors we’re working with to learn how we do things differently. How we can deliver different type of solutions that perhaps we haven't thought about before.”
So, Quail says, a story was presented to SGN’s board about how the company needed to change to embrace the changing technology landscape, from mobility solutions, big data, cloud computing and social media to all the technology advancements such as robotics, drones, the Internet of things and more. And the board was, well, on-board. As an organisation, SGN is rising to the challenge of a digital transformation.