First Group Darin Brumby
With revenues of over £3bn a year First Group is the UK's largest transport company, carrying almost three million bus passengers a day as well as operating many rail franchises. silicon.com chief reporter Andy McCue recently caught up with First Group CIO Darin Brumby who explained how he turned around a failing IT operation suffering from years of under-investment and talked about the role of technology and innovation in the future growth of the business.
Andy McCue:Darin, how important is technology to an organisation like First Group whose core business is running buses and trains?
Darin Brumby: I think on the face of it Andy you look at a company like First Group and you think there's not much technology to it. You know, it's just old buses and some new trains running around the country. The reality is that technology runs through First Group in the same way a circulatory system runs through our body. It's absolutely dependant on information flow back and forth from one end of the company to another.
AM: What was your biggest challenge when you joined First Group as CIO three and a half years ago?
DB: The challenges were widespread. We had a failing infrastructure, rising IT costs, low value perception inside the business. Were the systems enabling the staff out in the field to do their jobs? So I think if you looked at it from one end of the IT spectrum to the other we probably thought generally, and I agreed when I had a good look, that most things were broken in terms of business process, people and just the general information flow in the company. So we had an over-arching view that said it all has to change here, not just one part of the jigsaw puzzle.
AM: Was that down to a lack of alignment between business and IT strategy?
DB: I think for us it was saying 'what do we want to be valued for as an internal service-providing model'? We needed to change the whole model from cost centre proposition to value centre proposition. So we saw a transition, a transformation and that's where we started our strategic thinking from.
AM: So you've already managed to cut the IT budget for First Group from £42m to £37m within the space of about a year. How much more cost do you think you can take out of the IT budget and how will you achieve that?
DB: I think initially we saw some fairly classic cost reductions you know, some leverage of our current investment. We knew we could drag some money back to the bottom line. I think to answer your question that says 'where do we go from here' what I'm most pleased about is that we can now grow our business for a known cost. We can inject new franchises, we can buy more bus businesses, we can expand into Europe, we'll know exactly what our IT services should be costing us. We know exactly what we can plan to a five year period in the raw commodity areas of IT and that gives us a better investment portfolio for new ideas and innovations inside the organisation.
AM: You're at the beginning of a five-year plan to transform your entire IT operation. What are the key goals of this plan?
DB: The key goals are really flexibility and agility at the infrastructure layer, rationalise our business systems portfolio down to a very manageable single-bodied almost suite of applications we know would run our business succinctly over the next five to six years, to really get the information from the decision-takers back in ready access. Very convoluted systems architecture existed through the years of our growth without a clear strategy, so we plugged it in, we glued it together, we made it all work. Now we have to simplify some of that complexity. So it's really around the basics, get the fundamentals back - simplicity, ease of access, ubiquitous networks, more flexible working environments and make sure our systems are additive to our own goals of transforming travel in the UK.
AM: Is it all just about consolidation, streamlining, and cost-cutting or does innovation through technology have a role to play in giving you competitive edge over your rivals?
DB: Innovation's a big part for us. We're a small IT team so we've got to be very flexible, very agile and through our change programme and through those areas we've been able to siphon off some of the money we would always have spent on maintenance historically and now move that towards growth, productivity and innovation areas. So it's a 'more with less' strategy, you know it's re-distributing the IS investment rather than saying 'can I have more money'. There is enough funding around we've just got to spend it more wisely and get greater bang for the buck back.
AM: And how do you build that culture of innovation into your processes and your IT department and in fact is it just about the IT department?
DB: I think there's much more innovation in the transport sector to be extracted out not just within First Group but within the industry sector on a wider scale. And we're leading that path in some degree. We don't want to be at the bleeding edge but we certainly want to be pushing enough innovation in things like the future bus initiative, in CCTV technologies for safety on stations, to really making the whole customer experience of travelling on public transport once again more tasteful, more pleasant, and very safe, and the IT systems that underpin that are a strategic element of it.
AM: And finally, your future vision. What are the emerging technologies and trends that you see out there on the horizon that have the potential to have a big impact on your business and the wider transport industry?
DB: I see the UK as one big commuter country. You know, everyone's travelling for hours on public transport but it's not the most efficient use of their time. I think in the next three to five years we're going to see more internet on trains, we're going to see services really come back and make a splash to really differentiate some of the providers out there. But people are going to want more information - more information at the station, they're going to want to know if the services are on time, if they are going to be delayed, where the alternative solutions are going to be. I think we'll see ticketing on mobile phones being used more widely. I think we'll see people now carrying around a single device that's going to allow them to move in a sort of through-ticketing sense on multi-modal transport.