Tuesday, 14 April 2009

BT - and Global Services, again and again

So far in this blog we have shown that BT Global Services (GS) is a major problem that has been tolerated and allowed to cause massive problems for BT for too long. We reported last September, and have written to Mr Livingston, Chairman of BT, that the problems with GS are still buried and will continue to cause massive losses unless something radical is done. To their credit BT has put hard-nosed number crunchers in place to try and halt the slide. But this is only half the problem. GS also needs good professional IT services management in place to manage what’s left of GS, to recover from the bad technical decisions, and to ensure the number crunchers will work with them for a recovery. Paradoxically this insertion of financial may well not work. By this we mean IT Services is alien to BT Group as a whole. It is not understood, it is too different, it evaluates business on a different basis to BT Group, it requires different investment profiles to BT Group, it needs different staff to BT Group, it has different business processes to BT Group, it has signed up business and made promises it cannot keep re NHS IT, and it will bring the company down unless it is brought under control. We submit that while BT Group chases the Chimera of services growth, something that no other Telco has pulled off. It will be diverted from its core business which is to provide communications capability to consumers and business. The core is the one area that all the financial press say BT is world class at and the one area that does make and will continue to make BT’s fortune. Actually there is proof positive of this in that BT has two NHS IT contracts. One for the telcomms backbone, which is a success, and the other for IT systems, which is a costly failure. Need I say more?
In many ways Global Services is like the creature in Ridley Scott’s sci-fi film, Alien. The Alien was brought on board, with the best of intentions by decent people (shades of NHS) yet after chewing its way through a crew member’s chest (shades of GS Management recently fired) it wrought death destruction on the space ship. It was left to one person to deal with it. Therefore; for BT to be cured it needs a Ripley to hunt down and dump the Alien, Global Services. Is there a Ripley in BT and does the new management team have the guts (no pun intended) to do so?

PS. Are the major pension funds with large holdings of BT stock going to ask for the bonuses to be returned that were paid to Global Services Managers who knowingly oversold and under costed too many projects, including NHS IT?

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