Many CIOs trace their career ascent with stints as a technology team member, project manager and business analyst. But Simon Clarke of Trustpower came to his CIO role via a different route, as corporate lawyer and then CEO.
Clarke has been general manager of business solutions and technology for just over three years at Trustpower, and reports directly to the CEO. He is responsible for business systems, technology strategy and services, project delivery/project management office and the metering and field service team.
It is, essentially, a CIO-plus role, and was an expansion of his title, general manager ICT. He held this role for 10 months, until it evolved to his current post, a reflection of the general transformation of the company.
Trustpower is listed on the New Zealand Stock Exchange with a market capitalisation of over $2.5 billion. It provides electricity, gas and internet services across New Zealand and has over 230,000 customers. It also owns and operates 36 hydro power stations and two wind farms in New Zealand, two large wind farms in South Australia and a number of small hydro power stations in New South Wales.
Traditionally, Trustpower has largely been a provincial electricity supplier but in the last three years it has been moving into metro markets and transitioning into a true multi-utility provider, with products across power, gas, phone and internet. It's also been increasing its generation footprint offshore.
This shift meant Trustpower had to undergo major systems changes and company-wide rebranding.
In this new business model, Trustpower used the confluence of changes to move to digital channels to grow its customer base, while increasing the number of services used by customers.
Clarke says this also brings a different dynamic to the ICT team, and his role.
"The expectations around the technology function now is to go beyond supporting the business," says Clarke. "It is now more into leadership strategy space where it is starting to drive change and be part of the leadership story in organisations.
"The rest of the organisation is more reliant and accepting of us coming up with ideas and executing or making the change projects.
"Technology is now more at the centre of our business rather than a service function," he says.
"It is a key enabler of strategy. Without strong technology capability and an innovative and collaborative mindset, we cannot execute our business strategy."
Clarke leads a technology team of 50 which is focused on actively working with other business units at all levels.
Thus, he sees the imperative of the technology leadership and teams working with staff across the organisation.
He says he makes sure he has good technology leaders who are good communicators working with other business leaders at all levels.
"We also have a customer insights team in our marketing team and they work with a dedicated business intelligence team that sits within technology," he states. The two teams are jointly responsible for full business intelligence and operational reporting.
"The marketing team will say, 'We have these insights. How can we use these in existing data to drive opportunity that is good for us to improve our business or our customer's experience?'"
These joint projects between technology and other business units were not necessarily the norm when Clarke first came in.
"When I first arrived, a lot of people in the technology team were talking about, '"The business wants this.'"
I tried to change the language, he states. "Our business is the organisation, we are a part of the organisation," he stressed to the team.
An important component of their job is to ensure ICT delivers quality services.
"You have got to get all the basic IT stuff right. That's hygiene," he states. He says the team focused on a lot of these services in the first year of his term, and after that, he felt the team was getting into a better space to be "trusted to start leading change".
Essential executive skills
Being a participant at Board meetings and being on the executive level team ensures technology is involved in setting the strategic direction of the organisation, and has influence and early visibility of strategic programs, he states. "I think it's fair to say that ICT has repositioned itself from being thought of as a reactionary IT service provider, to becoming a business solutions focused team that is intimately involved in the business direction and strategy."
Thinking strategically and working with different stakeholders are skills Clarke honed in his days as corporate lawyer and CEO.
Before joining Trustpower, Clarke was CEO of Arc Innovations, a leader in advanced metering infrastructure and smart grid devices, based in Christchurch. Before Arc, he was assistant general counsel at another energy company, Meridian.
He started his career as a general commercial lawyer, based in Tauranga, his home town, which is also the headquarters of Trustpower. After this, he moved to Dublin, Ireland, as a senior corporate solicitor for large law firm William Fry. It was during the dotcom era, and he worked on IPOs, mergers and acquisitions and commercial contracts. "The Irish certainly knew how to play hard and work hard!" he says.
ICT has repositioned itself from being thought of as a reactionary IT service provider, to becoming a business solutions focused team that is intimately involved in the business direction and strategy.
Back in Wellington, he worked as an associate corporate lawyer at Kensington Swan before moving to Meridian.
He says having the commercial business experience while acting as the interface for technology into the executive team and the board is critical.
"It is difficult for some CIOs who have grown up in a technology world to show up at the management and board tables and talk more broadly on other areas," says Clarke.
"I came in from the other way and I can talk more broadly about other things than technology," he states. "I have more experience in understanding how boards and executives think and what issues they need to be across and what is important to them. That means I can present the right information, have the right conversations and make sure they have a fuller understanding around a particular issue."
His work in corporate law provided him very strong commercial and contractual experience. "When I was a lawyer, I was always doing deals, doing transactions, focusing on outcomes and making sure stakeholder relationships have been built.
Building a digital business
The technology team needs to always be thinking about how what they are doing is creating value for Trustpower, explains Clarke. "That might be de-risking a particular issue, improving a business process or creating new margin through a new product."
This focus was important when they were working on moving the company to become a digital business.
Trustpower's main digital channel was the new website, which was launched in 2013. Clarke says the new platform enables Trustpower to appeal to more digital focused consumers and hopefully make life easier for them.
"We've been a bit slow to move in the digital area but now that we've made the first step, we're delighted with the new platform and how it's going," he says. "While there is still plenty to do, for us it's about making sure that our customers can engage with us in the way that they want to. For an increasing number that means online, and the experience has to be simple and enjoyable."
Clarke originally thought Trustpower could do the new website development using the waterfall strategy: "Give it to someone, finance it and come back to us with the delivered outcome."
It's an ongoing, evolving platform. The ultimate goal is to provide end-to-end service capability for customers who wish to engage exclusively online.
But then he realised the Trustpower team were innately not good at "being hands off" in major projects, and doing it this way would be "high risk".
The process included "deep dive" profiling of the customer base, and what they would want from a digital channel. "We were very careful upfront," he states. "We spent a lot of time on the design phase."
A lot of thinking went on the user experience, he says. The new site made it easy for customers to explore and select relevant services, view account data across all service lines in one place and access useful and relevant content for selecting services and managing each utility account.
It's a first for New Zealand, he says, by giving customers the ability to see all their electricity, reticulated gas, LPG bottled gas, phone and broadband services in a single view.
At the same time, the platform allows Trustpower's marketers to easily create and personalise content, as well as establish and run targeted campaigns, and optimise content while reacting to market changes much faster.
In the past, the website did not have the functionality for customers to sign up online and required customers to sign up via other channels, through the call centres or in person.
The new site simplified the sign-up process including integrated credit checking and pushing sign-up data into backend systems. It includes automated workflows which frees up time from manual processing of sign-up and service provisioning actions. As the site is built using responsive Web design, customers are also able to easily sign up on a mobile device.
Now, one year following the site launch, Clarke estimates between 10 to 15 per cent of new acquisitions each week are being completed through the website.
The website has also enabled Trustpower to increase the number of services purchased by each customer, as most customers signing up online take both energy and telco services.
There has been a 272 per cent increase in traffic to the site on average each month, with a 230 per cent increase in site traffic from search engines.
"When we sell our customers more than electricity, they get more value through a bundle and we get value because those customers are less likely to leave us," he says. "The cost of churn is huge so it is far better to retain existing customers."
He says the Government funded Electricity Authority website 'What's my number' has driven a whole lot of churn in the electricity market, as customers are able to check the best power deal for them.
"Customer churn in NZ sits between 20 to 25 percent on a per annum basis. That means more than 1 in 5 customers changes electricity suppliers each year. Along with Victoria, NZ has the highest churn rates in the world.
"Hopefully, providing our customers with multiple utility products and focusing on a high quality service will mean our customers will stay with us because they see more value with us."
The results of the new website have exceeded the targets Trustpower set prior to going live, with significant increases in the number of new customers acquired online and number of services used by each customer, as well as decreases in customer churn and the cost of customer acquisition.
Clarke says a number of online enhancements will be implemented in the upcoming months and years. "It's an ongoing, evolving platform," he says. "The ultimate goal is to provide end-to-end service capability for customers who wish to engage exclusively online."
He says it was necessary for Trustpower to develop innovative strategies to acquire and retain customers without competing solely on price.
ICT teams go on field work
Clarke advocates a strong customer focus among his technology staff, who are asked to "walk in the shoes" of other people in the business.
So the ICT team have spent time with meter readers, call centre staff, and the billing team, among others "to get an understanding about the application and the technologies those people use to do their job".
Thus, he says, the ICT team will know how to respond better and help resolve issues, particularly those from service desk people.
A formula for successful business technology projects
Clarke says an area where Trustpower has significantly improved over the last three to four years is in its approach towards business technology investments. He believes this gives Trustpower a competitive advantage.
"We make quite practical fit for purpose investment decisions," he states. "We are quite brutal upfront, we don't choose something just for technology's sake.
"We always look at all the different options to do things. Those options always need to include doing nothing."
For instance, we will ask, 'If we don't invest in technology and do it manually, what does that cost how does that sustain itself?'
This approach ensures solutions are 'fit for purpose' and not over-engineered, he states.
Trustpower took this approach when it replaced its Customer Information System two years ago. Called "Project Maunganui", the new Gentrack CIS system now provides the foundation for its retail business (including the online projects the company is implementing).
The CIS system represents the "heart and lungs" of a utility provider like Trustpower, and as a CRM and billing platform, it was their main mechanism for interacting with the electricity market says Clarke
Prior to Clarke's arrival, Trustpower had originally been working with a well-known CRM software system and implementation partner to replace its earlier version of Gentrack.
However, after a lot of hard work and some anxious moments, he says, Trustpower made the brave decision to "kill" the earlier project, take a write off on the money that had been spent and went back to their original provider Gentrack for the latest version of their software.
"That was an incredibly brave decision by our Executive and Board. It's all too easy to get 'summit fever' during a project and just keep going. I think when we look back on that experience, we can now acknowledge that we made the mistake of trying to customise a system to meet our existing business processes rather than changing our processes to meet the system. That just gets bigger than Ben Hur," he explains.
Project Maunganui, he says, took a "system led" approach instead which focused on site specific configuration, with minimal change to the base system. "A no customisation approach".
By minimising the development or customisation of the system and adapting business processes where required, the duration of and technical risks associated with the implementation of a major project were greatly reduced, he states. "It did, however, mean that we needed to focus more on the business change/readiness and training side of things because processes were changing".
But one of the biggest lessons he is happy to share with CIOs around projects and implementation of change is this: "Put your best business and operational people into projects that deliver that change...They become the leaders of change and everyone follows them."