Questions raised about Post IT transformation

news Australia Post has issued a statement staunchly defending the progress of its IT transformation program, Building Future Ready IT, as questions are being raised about some aspects of the project’s ability to meet its goals on time and while avoiding significant risks associated with any such corporate technology renewal effort.

The overarching Future Ready initiative is a business renewal strategy which kicked off in 2010 shortly after the appointment of former National Australia Bank executive Ahmed Fahour. Broadly, it seeks to position the two hundred-year old organisation for the next wave of digital services, including electronic delivery of some services as well as integration of Post’s fast-growing parcel business with the Internet retail sector.

One of the key planks of the program is an IT transformation program dubbed Building Future Ready IT, commenced in 2012. Australia Post has appointed a new chief information officer to lead the strategy, Andrew Walduck, who was previously the head of shared technology at gambling and entertainment group Tabcorp, which has recently gone through its own internal transformation, including a high-profile switch into cloud computing infrastructure. Walduck was previously a long-term partner at Accenture.

Building Future Ready IT is a key program for Australia Post because it underpins much of the business transformation that the overarching Future Ready program aims to deliver to the organisation. For example, Post recently launched its so-called ‘Digital Mailbox’ system, which aims to provide a more secure form of digital communication between governments, companies and consumers in Australia. Late last month, Post revealed it was in “active discussions” with the Government for the platform to be mandated for use by Australians.

Probably the best overview of the Building Future Ready IT project is an extensive article published by iTNews in late May on the project, based on an interview with Post CIO Walduck. It outlines the fact that the project is made up of five work streams — IT infrastructure renewal (known as its ‘Enterprise Compute Platform’ track), implementing a new IT operating model, implementing a new digital delivery centre, developing IT leadership and training, and a new IT security approach.

According to Post, the program is on track to deliver on its aims, with the various streams under the Building Future Ready IT project in general progressing as expected. However, the project is about to enter several key delivery phases, and rumblings are emanating from insiders at the organisation concerned that not all is as well as Post is portraying the program externally.

For example, Post is about to undergo a major overhaul of its core datacentre infrastructure under the ECP track, with a sizable Tier 3 facility operated by NEXTDC in Melbourne about to come online, replacing several other outdated datacentres.

“The ECP program and the data centre relocation are on track to meet their major scheduled milestones and benefits to our business and customers,” Post said in a statement to Delimiter late last month. “As with any major project, we have comprehensive plans in place to ensure the integrity of the relocation process and the continuity of both IT production and data recovery systems during the move and have engaged the expertise needed from the IT industry to support this process.”

However, internally there are concerns that risk associated with the datacentre upgrade program and the migration of key Australia Post services to the new infrastructure is not being managed to the extent that it could be, with a risk of outages associated with the migration. In addition, there are concerns that Post is planning redundancies in its IT department following this key migration, due to the more modern infrastructure not needing the same level of support as the old. Australia Post had already imposed a temporary recruitment freeze in general in April this year, as it attempted to contain costs.

Another aspect associated with the migration is a key one for modern organisations — disaster recovery. According to Australia Post’s official statement, the organisation has “a comprehensive Disaster Recovery (DR) capability for our business critical applications that undergoes routine testing and validation.”

“The Disaster Recovery capability encompasses primary and redundant data centre capability and includes active redundancy for our most critical applications,” the organisation told Delimiter in late May.

However, again there are rumbles emanating from the organisation that its disaster recovery approach may not be up to scratch, and that this issue may be starkly highlighted during the datacentre migration process. Insiders allege that previous initial datacentre migration efforts within Post had resulted in some production systems being run from disaster recovery facilities as Post’s production systems hadn’t proven adequate to handle migrations.

One specific system causing concern in this area is Australia’s Post’s internal email platform. However, Post has again denied there are any issues with the platform. “Our email platform operates an active disaster recovery capability, where it runs from two different sites in an Active-Active configuration,” Post said in its statement. “An active-active configuration provides the highest level of DR capability available.”

Underlying some of the concerns is also the high degree of management changeover which has taken place within Australia Post’s IT organisation over the past several years. CIO Walduck acknowledged in the iTNews article that about 50 percent of Post’s IT leadership list of about 125 had changed. Some of that number had chosen to leave the business.

Some of those positions have been filled by staff who held senior executive staff at Tabcorp during Walduck’s tenure at that company. For example, a program director on the Enterprise Compute Platform initiative, Martin Shaw, previously held a similar role at Tabcorp, as did Post’s general manager of portfolio delivery services, Ayten Ozenc. Post’s chief information security officer Troy Braban previously held the same role at Tabcorp. All have joined Post from Tabcorp within the past year or so.

There are a number of other executives at Post who didn’t join from Tabcorp. For example, the organisation’s general manager of enterprise application services, David Crombie, came from ANZ Bank and has also held senior roles at a number of other major organisations such as NAB and IBM. Post’s general manager of service integration and operations, Claire Bourke, was previously the regional director of UXC’s consulting business, and has also held senior roles at ANZ.

Ultimately, if there are indeed issues with Post’s ongoing IT transformation effort, they have not yet played out externally, with the organisation successfully delivering its Digital Mailbox project this year, and other recent implementations going ahead such as the adoption of Salesforce.com in some areas of Post’s business (the organisation has long been a key local customer of German software giant SAP).

However, it’s also true that Australia Post is currently a major Federal Government-owned organisation undergoing a fundamental IT transformation. In similar examples of such large IT transformation projects in government departments such as the Australian Taxation Office (with its Change Program), the Department of Immigration and Citizenship (with its Systems for People initiative), and the Australian Customs and Border Protection Service (with its Integrated Cargo System/Cargo Management Re-engineering project), all were ultimately delivered successfully, but all also suffered problems along the way.

opinion/analysis
What I’m seeing here with respect to Australia Post’s IT transformation is two wildly divergent views. On the one hand, I’m seeing Australia Post claiming that it has absolutely no issues with its IT infrastructure and upgrade program — a case of nothing to see here, and everything is on track. Well, I’m sorry, but I’ve been around the block more than a few times, and I don’t believe that to be the whole story at all. I’ve never come across an example of a government-owned organisation which didn’t have some problems with its IT infrastructure, applications and/or processes, and usually — like an iceberg — most of the problems lie under the surface. Australia Post is ancient and bureaucratic. I’m sure there are some issues in its IT department. This, in fact, was very likely one of the reasons Walduck was brought in as CIO — to fix things up and modernise everything.

However, I also don’t believe things are quite as bad as I’m hearing from Post insiders at the moment. With an organisation the size and with the level of resources as Australia Post, things don’t usually tend to get catastrophically out of control to the level where mainline business processes start failing wholesale. There are usually too many checks and balances for that. We’ve only really seen this a handful of times over the past decade in Australian Governments (think Customs’ ICS catastrophe or the Queensland Health payroll debacle). The far more normal situation is that major bodies of IT transformation work are usually successfully delivered, but a bit late, probably a fair bit over-budget, and perhaps not quite as they were initially envisioned. Things fall apart to a moderate — but not catastrophic — degree. And they come together in the end.

What I think we can take away from Australia Post’s IT transformation project at the moment is that it is an ambitious body of work with a great many risks. It looks like Walduck and his team, with a few hand-picked staff, are keeping the ball broadly within bounds for now, to the extent that that iceberg hasn’t had any public implications just yet. It’ll be interesting to see how that situation evolves over the key next six months. I will be keeping a close eye on the situation and wish the organisation the best of luck with the challenges ahead.

Image credit: Australia Post